JU
TREATISE
ON THE
LAW or PARTNERSHIP.
BY
THEOPHILUS PARSONS, LL.D.
Ill
DANE PROFESSOU OF LAW IN HAKVAKD UNIVERSITY, AT CAMBRIDGE.
FOURTH EDITION, REVISED AND ENLARGED,
BY
JOSEPH HENRY BEALE, Jr.
ASSISTANT PROFESSOR OF LAW IN HARVARD UNIVERSITY.
BOSTON:
LITTLE, BROWN, AND COMPANY.
1893.
T
Entered according to Act of Congress, in the year 1866, by
Theophilus Parsons,
in the Clerk's OflSce of the District Court of the District of Massachusetts.
Entered according to Act of Congress, in the year 1870, by
Theophilus Parsons,
in the Clerk's Office of the District Court of the District of Massachusetts.
Entered according to Act of Congress, in the year 1878, by
Theophilus Parsons,
in the Office of the Librarian of Congress, at Washington.
Entered according to Act of Congress, in the year 1893, by
David L. Webster, Francis A. Dewson, and Charles M. Reed, Trustees,
in the Office of the Librarian of Congress, at Washington.
TTniversitt Press:
John Wilson and Son, Cambridge, U. S. A.
3^
a
u.
PREFACE
TO THE LAW OF PARTXERSHIP.
I HAVE followed the same plan in this as in my former
works, judging from the favor they meet with and all
I can learn about them that it is satisfactory to the
profession.
It may be briefly described thus : In the text, I state
the law as clearly and succinctly as I can, enlarging upon
the reasons and principles involved "when I treat of ques-
tions more than usually important, difficult, or uncertain.
In the notes, I give all that the complete library of this
Law School could supply me with, of authorities needed
to verify the law as stated, or exhibit the qualifications or
modifications to which it is subject, and enable an inquirer,
with a library at command, to make a thorough investiga-
tion of any question. The great and still growing
increase in the number of reports makes it very difficult
for any individual to have a full collection of them ; and .
leads me to believe that a work intended, on the one hand,
to supply on its specific subjects the want of a library
so far as any single work can hope to do this, and, on the
other, to facilitate the use of a complete library for those
who have access to one, will be found useful to students
and practitioners.
735706
iv PREFACE.
This work has been long in hand, and would have been
published some years ago, had I not thought, with my
publishers, that it was better to wait for peace. I shall
not regret this delay, if it has enabled me, by additional
labor and the use of recent authorities, to offer it in a less
defective condition to the profession, whose kind reception
of my other works gives me so much cause for gratitude.
T. P.
Cambridge, 1867.
PREFACE
TO THE FOURTH EDITION.
Ix preparing a fourth edition of this work, two things
have been kept in mind : first, to bring the work down to
date not only in the citation of authorities, but also in the
statement of principles ; second, to keep the work within
the limits of a single easily-handled volume. In collecting
new authorities the editor has attempted to give as many
as possible of the English and American cases decided
since the publication of the last edition, and to add such
earlier authorities as would establish or illustrate the
statements of principle added in this edition. Some such
statements, which seemed necessary to a complete pres-
entation of the subject, have been inserted in the text
or added in the form of notes. The recent development
in importance of new forms of business combination
seemed to call for a brief statement of the principles
governing such combinations, and a chapter has accord-
ingly been added upon that subject.
The important change in the conception of a partner-
ship held by many legal minds, which was caused by the
decision of the House of Lords in the case of Cox v.
Hickman, — a change, the full significance of which is even
yet scarcely apprehended, — made it necessary to rewrite
the first and fifth chapters of this work. Much of the
discussion in them was rendered unnecessary, and has
been omitted ; and the mercantile conception of a partner-
Vi PREFACE.
ship, which seems in consequence of that decision to have
become the legal conception also, has been carefully ex-
plained. A comparison with the earlier editions will show
with what sagacious legal insight the author himself
arrived at what we must think very nearly the true
conception of a partnership at a time when it had little
recognition from bench or bar. Great acknowledgment is
due to Prof. J. B. Ames, to whom" more than to any one
in this country we owe the acceptance of the doctrine.
With a view to prevent an increase of bulk, all that
seemed unnecessary or obsolete in the last edition, both
in the text and in the notes, has been omitted. Nothing
pertinent to the subject, however, has been stricken out
unless it was a restatement of matter found elsewhere in
the work. Many notes have been materially shortened
by compressing statements of cases contained in them.
That the book might be more conveniently consulted,
it has been divided into sections, and it has therefore been
necessary to abandon the original paging. The index has
been entirely rewritten and much enlarged, and no diffi-
culty, it is hoped, will be experienced in finding a
reference to an earlier edition. An appendix of Forms of
Articles of Copartnership has been annexed, as useful to
the practitioner.
All matter added to the text and to the author's notes
has been enclosed in brackets. The editor's notes are
distinguished by being numbered.
J. H. BEALE, Jr.
Cambridge, September 1, 1893.
CONTENTS.
PAGE
Table of Cases xi
CHAPTER I.
Definition and Nature of a Partnership 1
CHAPTER 11.
How Partnership may be made 5
CHAPTER III.
Of Partners 15
CHAPTER IV.
Of the Purposes and Kinds of Partnership 34
CHAPTER V.
Who are Partners 39
CHAPTER VI.
Who are liable as Partners as to Third Parties .... 72
CHAPTER VII.
Of the Rights and Duties of Partners between Them
selves
Sec. I. Rights and powers of a partner
Sec. II, Extent of the power of a single partner . .
Sec. III. Power of one partner to issue negotiable paper
Sec. IV. Of the power of a majorit}- of the partners .
Sec. V. Of the dut}^ of partners toward each other .
Sec. VI. Interpretation of partnership agreement . .
Sec. VII. Of the rights of property- of the partners inter se
127
127
140
lfi7
1«7
102
20.5
229
viii CONTENTS.
CHAPTER VIII.
Of the Remedies of Partners inter se ....... . 246
Sec. I. General considerations 246
Sec. II. Questions between partners cognizable at law . . 251
Sec. hi. Questions between partners cognizable only in
equity 269
Sec. IV. On the methods and processes of equity applicable
in cases of partnership 278
CHAPTER IX.
Of Remedies by Partners against Third Parties • . . . 307
CHAPTER X.
Of the Remedies of Third Persons against the Partner-
ship AND against Partners 324 ^
CHAPTER XI.
Of the Real Estate of a Partnership 348
CHAPTER XII.
Of Dissolution 370
CHAPTER XIII.
Of a Change in the Partnership 398
Sec. I. Of the effect of any change in the partnership . . 398
Sec. II. Of a retiring partner 400
Sec. III. Of an incoming partner 426
Sec. IV. Of the death of a partner 431
CHAPTER XIV.
Of Dissolution by Decree 454 /
CHAPTER XV.
Of Bankruptcy and Insolvency 463
Sec. I. When and how a bankruptcy dissolves a partner-
ship 463
Sec. II. Of the effect of the bankruptcy of a partner upon
solvent partners 465
Sec. III. How the funds are appropriated to the debts . . 475
Sec. IV. What debts or funds are joint, and what are
several 481
CONTENTS. IX
CHAPTER XVI.
Of an Account 505
Sec. I. When an account will be ordered 505
Sec. II. Of opening an account for error 511
Sec. III. How an account should be taken 517
CHAPTER XVII.
Of Limited Partnerships 532
CHAPTER XVIII.
Of Joint-stock Companies 549
CHAPTER XIX.
Business Combinations and " Trusts " 557
Appendix of Eorms 569
Index = . 579
TABLE OF CASES.
References are to pages.
A.
Aas V. Benham (1891, 2 Ch. 244)
Abat V. Penny (19 La. Ann. 289)
Abbot V. Bayley (6 Pick. 89)
V. Smith (2 W. Bl. 947) 254,
276,
Abbott V. Jackson (43 Ark. 212)
('. Jolinson C62 N. H. 9)
V. Omaha Smelting Co. (4 Neb.
416)
Abbott's Appeal (50 Pa. 234)
Abel V. Forgue ( 1 Root 502)
V. Sutton (3 Esp. 108) 381, 382,
Abell, Ex parte (4 Ves. 837) 478,
V. Phillips (13 S. W. 109)
Abernathy v. Moses (73 Ala. 381
363,
Abpt V. Miller (5 Jones .32) 172,
Abrahams v. Myers (40 Md. 499)
Ackerman, Ex />arte (14 Ves. 604)
Ackley v. Staehlin (56 Mo. 558) 98,
Adam, Ex parte (2 Rose 36, 1 Ves. &
B. 493) 21, 488,
Adams, Ex parte ( 1 Rose 305) 474,
V. Adams (7 Abb. N. C. 292)
V. Bankart (1 C. M. & R. 685)
V. Carroll (85 Pa. 209)
';. Carter (53 Ga. 160)
V. Eatherly Hardware Co. (78
Ga, 485, 3 S. E. 480)
V. May (27 F. U. 907)
V. Morrison (113 N. Y. 152, 20
N. E. 829)
r. Thornton (82 Ala. 260, 3 So.
20) 134,
V. Warren (11 So. 754)
Adams Bank v. Rice (2 All. 480)
Adamson, Ex parte (8 Ch. D. 807)
Addams i;. Tutton (39 Pa. 447) 259,
Adderly v. Dixon (1 Sim. & S. 610)
Addis t'. Wright (2 Mer. 117) 3.30,
Addison V. Overend (6 T. R. 766)
Adee v. Cornell (93 N. Y. 572)
Adickes v. Lowry (15 S. C. 128)
Aflalo V. Fourdrinier (6 Bing. 309)
Agace, Ex parte (2 Cox 312) 96, 99,
198
399
23
267,
336
23
191
50
359
144
402,
406
491
265
359,
364
173
159
479
100
496
497,
499
243
148,
152
66
58
89
334
68
1.35
201
5
487
875
209
444
320
135
476
499
147
Agawam Bank v. Morris (4 Gush. 99)
182, 485
Agnew V. Johnson (17 Pa. 373) 304
y. Piatt (15 Pick. 417) 468
Ah Lep V. Gong Choy (13 Ore. 205, 9
Pac. 483) 89
Airey v. Borham (29 Beav. 620) 530
Akhurst v. Jackson (1 Swanst. 85, 1
VVils. 47) 214, 276, 501, 528, 530
Ala. Coal Min. Co. v. Brainard (35
Ala. 476) 170
Alabama Fertilizer Co. v. Reynolds
(79 Ala. 497) 8.3, 103, 105
Albers i;. Wilkinson (6 G. & J. 358) 150
Albretcht v. Sussman (2 Ves. & B.
323) 26, 309
Alcock V. Taylor (1 Tam. 506) 372, 392
Alder v. Fouracre (3 Swanst. 489) 288
Alderson v. Pope (1 Camp. 404) 78, 105,
164
Aldrich v. Grimes (10 N. H. 194) 18
V. Lewis (60 Miss. 229) 249
Alexander, Ex parte (1 Glyn & J. 409) 109
V. Alexander (85 Va. 353, 7 S. E.
335) 1.55
V. Barker (2 Cr. & J. 133) 143, 272
316, 317, 498
V. Gorman (15 R. L 421, 7 Atl.
243) 478
V. Handley (11 So. 390) 68, 104
«;. Heriot (Bail. Eq. 223) 18
V. Hutcheson (2 Hawks 535) 19
V. Jones (90 Ala. 474, 7 So. 903) .309
('. Kimbro (49 Miss. 529) 3-54
V. King (87 Ala. 642, 6 So. 382) 309
V. Stern (41 Tex. 193) 145
Alexandria v. Patten (4 Cranch 317) 420,
421
Alfele V. Wright (17 Ohio 2-38) 138
Alger V. Thacher (19 Pick. 51) 402
Alkire v. Kahle (123 111. 496, 17 N. E.
693) 352
AUcott V. Strong (9 Cush. 323) 69, 164,
422, 425
Allegheny Nat. Bank v. Bailey (147
Pa. HI, 23 Atl. 439) 539
Allegre v. Insurance Co. (6 H. & J.
413) 219
Allen, In re (41 Minn. 430, 43 N. W.
382) 537, 542
xu
TABLE OF CASES.
Allen V. Blanchard (9 Cow. 631) 35
V. Gary (33 La. Ann. 1455) 98, 186
V. Centre Vale Co. (21 Conn.
130) 327, 332, 339
t'. Cheever (61 N. H. 32) 152
V. Coit (6 Hill 318) 181, 520
c. Davis (13 Ark. 28) 34,63
V. Dunn (15 Me. 292) GO, 346
V. Farrington (2 Sneed 626) 144
f. Hill (16Cal. 113) 434
V. Kilbre (4 Madd. 464) 503
V. Owens (2 Speers 170) 164
r. Rostain (11 S. & R. 362) 6
V. Second Nat. Bank (6 Lea 558) 442
V. Wells (22 Pick. 450] 329, 336, 338
414, 446, 478
V. Whetstone (35 La. Ann. 846) 351
V. White (Minor 365) 109, 312
V. Withrow (110 U. S. 119) 364
V. Woonsocket Co. (11 R. I. 288) 27
AUfrey v. Allfrey (1 McN. & G. 87) 514
Alliance Bank v. Keaseley (L. R. 6
C. F. 433) 147
Allison V. Ferry (130 111. 9, 22 N. E
492)
7,349
332
445, 452
339
11, 130
45
Anderson v. Pollard (62 Ga. 46) 445
V. Powell (44 la. 20) 9
V. Taylor (2 Ired. Eq. 420) 200, 384
V. Tompkins (1 Brock. 4-56) 131, 132,
133, 134, 135, 153, 154, 367, 508
f. Wallace (2 Moll. 540) 285
V. Wanzer (5 How. Miss. 587) 164
'•. Weston (6 Bing. N. C. 296) 406
Andrew, Succession of (16 La. Ann.
197) 464
V. Boughey (Dyer 75 a) 484
Andrews, Ex parte (25 Ch. D. 505) 497
V. Brown (21 Ala. 437) 349, 356, 362,
366, 367
V. Conger (26 U. S. L. Co-op. Ed.
87
258,
277
5
325
82
Alpaugh V. Savage (19 Atl. 380)
Alsop V. Mather (8 Conn. 584)
Alter I'. Brooke (9 Fhila. 258)
Alvord V. Smith (5 Pick. 232)
Ambler v. Bradley (6 Vt. 119)
V. Whipple (20 Wall. 546) 455
America, Bank of v. Shaw (142 Mass.
290, 7 N. E. 779) 187
American Bank v. Doolittle (14 Pick.
126) 143
American Bank Note Co. v. Edson
(56 Barb. 84) 216
American Biscuit & Mfg. Co. v. Klotz
(44 F. R. 721) 559, 568
American Exch. Bank v. Ga. Const.
& Inv. Co. (87 Ga. 651, 13 S. E. 505) 98
American Linen Tliread Co. v. Wor-
tendyke (24 N. Y. -550) 402
Ames V. Ames (37 F. R. 30) 352, 366
V. Downing (1 Brad. 321) 436, 439,
534, 543
Amidown v. Osgood (24 Vt. 278) 406, 407,
408
Amory v. Francis (16 Mass. 308) 485
Amoskeag Mfg. Co. v. Spear (2 Sandf.
599) 244
Amplilett V. Hubbard (29 Mich. 298) 491
Anderson v. Ackerman (88 Ind. 481) 248.
433
V. Anderson (25 Beav. 190) 455
V. Clav (1 Stark. 405) 6
V. Henshaw (2 Day 272) 95
I', Holmes (14 S. C. 162) 418
V. Lemon (8 N. Y. 236, 4 Sandf.
552) 196
V. Levan (1 W. & S. 334) 69, 76, 93, 107
V. Maltbv (4 Bro. C. C. 423, 2
Ves. Jr. 244) 489
V. Moncrieff (3 Desaus. 124) 209
I'. Norton (15 Lea 14) 136
90)
V. Ellison (6 J. B. Moo. 199)
V. Garstin (10 C, B. n. s. 444)
V. Keith (34 Ala. 722)
V. Lehott (10 Barr 47)
V. Planters' Bank (17 Sm. & M.
192) 185
V. Schott (10 Barr 47) 543, 545
Andriessen's Ajjpeal (123 Pa. 303, 16
Atl. 840) 305
Angler v. Webber (14 All. 211) 239
Anon. (2 Ca. Ch. 38, 16 Vin. Abr. 242)
132, 147, 290
(12 Mod. 446)
(W. Jones 253)
(Styles 370 a)
(2 Eq. Abr. 12)
(1 Ves. 476)
(2 Ves. Sen. 629)
(1 Madd. Ch. 525)
(2 K. & J. 441)
434)
Ansell
(Taylor 113)
(2 Hayw. 99)
Lay field (1
142, 144, 466
320
2, 168
515
291
209, 279
209
284
150
150
Salk. 292, Holt
2, 142, 163, 185
Waterhouse (6 M & S. 390) 254,
267, 268. 269
Anten v, Ellingwood (51 How. Pr.
359) 57
Anthon i'. Fisher (Doug. 649) 26
Anthony v. Butler (13 Pet. 423) 150
Apperly r. Page (1 Phil. 779) 510
Ai)pleby, Ex parte (2 Deac. 482) 419. 484
Apsey, Ex parte (3 Bro. C. C. 265) 123
Arbonin, Ex parte (1 De Gex 359) 488,
493, •194
Arden v Sharpe (2 Esp. 525) 168, 170,
180
V. Tucker (4 B. & Ad 815) 317
Areall v. Smith (3 Den 435) 547
Arkwright, Ex parte (3 Mont. D. & D.
129) 495
Arlington v. Merrick (2 Saund. 412) 315
Armsby v. Farnam (16 Pick. 318) 312,
313, 416
Armstrong v. Armstrong (2 M. & K.
45) 8
V. Fahnestock (19 Md. 59) 138
V. Hussey (12 S. & R. 315) 74, 409
TABLE OF CASES.
XIU
Armstrone )•, Lewis (2 C. & M. 274) 8, 10
r. Kirbinson (5 (i. & J. 412) 14'J
Arnold v. Arnold (UO N. Y. 580) 248
V. Brown (24 Pick. 80) 132, 179, 301,
392, 4(34
V. Camp (12 .Johns. 400) 417
V. Danziger (30 F. K. 898) 543
V. Hagerman (45 N. J. Eq. 186,
17 Atl. 03) 332
Artisans' Hank v. Treadwell (34 Barb.
553) 540, 542, 545
Artman r. Ferguson (73 Mich. 146,
40N. W. 907) 24
Arton V. Booth (4 J. B. Moore 192) 142,
145, 307
Ash V. Guie (97 Pa. 493) 52
Ashley v. Williams (17 Ore. 441, 21
Pac. 550) 508
Ashton V. Robinson (L. R. 20 Eq. 25) 354
Ashuelot R. R. v. Elliot (57 N. H. 307) 203
Ashworth v. Munn (15 Ch. D. 363) 360
Askew V. Springer (HI 111. 602) 201, 300
Aspinall v. London & N. W. Ry. (11
Hare 325) 312, 342, 375, 392
Aspinwall v. Williams (1 Ohio 38) 12,
103, 110
Astle V. Wright (23 Beav. 77) 530
Astley V. Weklon (2 B. & P. 346) 224
Atchison u. Jones (1 S. W. 406) 136
Atchison Savings Bank v. Templar
(26 F. R. 580)
Atchison, T. & S. F. R. R. ;;. Roach
(35 Kas. 740, 12 Pac. 93)
Atherton v. Tilton (44 N. H. 452)
Atkin V. Berry (1 Lea 01)
Atkins f. Atkins (Buck 479)
V. Hunt (14 N. H. 205)
I,-. Prescott (10 N. H. 120)
V. Tredgold (2 B. & C. 23) 156, 157,
159, 448
Atkinson v. Farmers' Bank (Crabbe
529) 470
V. Laing (D. & R. 16) 109, 312, 313,
388
V. Mackreth (L. R. 2 Eq. 570) 54, 118,
247
Atkyns v. Kinnier (4 Ex. 776)
Atlantic Glass Co. v. Paulk (83 Ala.
404, 3 So. 800)
Atlantic State Bank v. Savery (82
N. Y. 291)
Atlas Nat. Bank v. Savery (127 Mass.
75) 99, 187
Attaway v. Third Nat. Bank (15 Mo.
App. 577) 8
Attorney-General v. Brooksbank (2
Y. &j. 42) 518
V. Burges (Bunb. 223) 124, 125
V. Heelis (2 Sim. & S. 67) 553
V. Hubbuck (13 Q. B. D. 275) 360
V. Pamther (3 Bro. C. C. 441) 27
V. Siddon (1 Cr. & J. 220) 124
V. Strongforth (Bunb. 97) 124
V. Wilson (Cr. & Ph. 1) 269
Attwater v. Fowler (1 Hall 180) 260
145
65
98
470
345
225
124
187
Attwater v. Fowler (1 Edw. 417) 519
Attwood V. Banks (2 Beav. 102) 94
V. Rattenbury (6 J. B. Moo. 579) 316
Atwood V. xMaude (L. R. 3 Ch. 369) 530
Aubert v. Maze (2 B. & P. 371) 9, 269
Auld ('. Butclier (2 Kas. 135) 508
Auley V. Osterman (65 Wis. 118, 25
N. W. 657) 480
Ault V. Goodrich (4 Russ. 430) 157, 193.
384, 448
Aultman v. Fuller (53 La. 60) 344
Austin V. Appling (88 Ga. 54, 13 S. E.
955) 409
V. Bostwick (9 Conn. 496) 160, 162
V. Holland (69 N. Y. 571) 407
V. Vandermark (4 Hill 261) 184, 185
V. Walsh (2 Mass. 401) 313
V. Williams (1 Ohio 282) 12, 103
Averill v. Lyman (18 Pick. 351) 143; 416
Avery v. Louve (1 La. Ann. 457) 12, 13
V. Myers (60 Miss. 367) 65, 452
V. Rowell (59 Wis. 82, 17 N. W.
875) 83
Axe V. Clarke (2 Dick. 549) 290
Ayer v. Tilden (15 Gray 178) 203
Ayrault v. Chamberlin (26 Barb. 89) 409,
428
Ayres v. C. R. I. & P. R. R. (52 la.
478, 3 N. W. 522) 435
V. Gallup (44 Mich. 13) 429
B.
Babb V. Read (5 Rawle 151) 553
Babcock c. Brashear ( 19 La. 404) 444
V. Stewart (58 Pa. 179) 429
V. Stone (3 McLean 172) 180, 247,
308
Babonneau v. Farrell (15 C. B. 360)
Bachurst ;;. Clinkard (1 Show. 169)
320
324,
339
168
476
320
404
Backhouse v. Charlton (8 Ch. D. 444)
Backus V. Murphy (39 Pa. 397)
V. Richardson (5 Johns. 483)
V. Taylor (84 Ind. 503)
Badeley v. Consolidated Bank (38 Ch.
D. 238) 42, 43, 47, 58
Baer v. Wilkinson (35 W. Va. 422,
14 S.E.I) 332
Bagley v. Peddie (5 Sandf. 192) 223, 225
v. Smith (10 N. Y. 489) 259
Bagshaw v. Parker (10 Beav. 532) 460
Bailey v. Clark (6 Pick. 372) 61, 78
V. Ford (13 Sim. 495) 457
V. Lyman (1 Story 396) 311
V. Moore (25 111. 347) 506
V. Starke (6 Ark. 191) 252, 257, 267
Bainbridge n. Wilcocks (1 Bald. 536) 515
Baird v. Baird (1 Dev. & B. 524) 280, 509
V. Cochran (4 S. & R. 397) 97, 172
V. Planque (1 F. & F. 344) 103
Bake v. Smiley (84 Ind. 212) 476
Baker, Ex parte (8 Law Rep. 461) 485
V. Biddle (Bald. 418) 612, 515
SIV
TABLE OF CASES.
Baker v. Charlton (1 Peake 80) 106,
182,
V. Jewell (6 Mass. 460)
V. Mayo (129 Mass. 517)
V. Middlebrooks (81 Ga. 491,8 S.
E. 320)
V. Nachtrieb (19 How. 126)
V. Nappier (19 Ga. 520)
V. Plaskitt (5 C. B. 2(52)
I'. Slieelian (29 Minn. 235. 12 N.
W. 704)
V. Stackpoole (9 Cow. 420)
r. Wheaton (5 Mass. 509)
Baker's Appeal (21 Pa. 76)
Baldey v. Bra';kenridge (39 La. Ann.
660, 2 So. 410) 103,
Baldney v. Ritchie (1 Stark. 338)
Baldwin v. Johnson (Saxt. Cli. 441)
V. Leonard (39 Vt. 260)
V. Useful Knowledge Society (9
Sim. 393)
Ball V. Britton (58 Tex. 57) 372,
V. Farley (81 Ala. 288, 1 So.
253)
Ballam i;. Price (2 J. B Moore 235)
Ballard v. Callison (4 W. Va. 326)
Ballon V. Spencer (4 Cow. 163)
Balmain v. Shore (9 Ves. 500) 127,
Balmer, Ex parte (13 Ves. 313)
Baity de v. Trump (1 Md. Ch. 517)
Bamford v. Baron (2 T. R. 594)
Banchor v. Cilley (38 Me. 553)
Bandier, Ex parte (1 Atk. 98)
Bangor v. Warren (34 Me. 324)
Bank, Appeal of (32 Pa. 440)
, Ex parte (2 Glyn & J. 363)
, (12 Ch. D. 917)
I'. Alberger (101 N. Y. 202)
V. Almy (117 Mass. 476) 50,
V. Altheimer (91 Mo. 190, 3 S.
W. 858) 68,
V. Andrews (2 Sneed 535)
V. Astor (11 Wend. 87)
V. Avmar (3 Hill 262)
V. Bailey (147 Pa. HI, 23 AtL
439)
V. Bangs (10 S. W. 633)
V. Bank of Commerce (94 III.
271) 475, 476,
V. Barnes (86 Mich. 632, 49 N. W.
475)
V Baugh (9 Sm. & M. 290)
V. Bavless (35 Mo. 428)
V. Bayliss (41 Mo. 274) 89,
V. Bigler (83 N. Y. 51)
V. Binney (5 Mas. 176) 29, 36,
212, 394, 443,
V. Bowen (7 Wend. 158)
V. Bradner (43 Barb. 379)
V. Breese (39 la. 640)
V. Brooking (2 Litt. 41)
V.Burt (93 N. Y. 233)
V. Cameron (7 Barb. 143)
169,
184,
113,
163,
170,
193
313
627
363
37
106
650
335
163
468
327
805
272
367
118
278
393
252
144
293
53
432
9
200
493
48
479
483
327
146
442
168
550
187
433
206
180
539
526
487
187
381
181
181
451
114,
520
185
177
170
180,
206
488
180,
184
Bank v. Campbell (75 Va. 534)
V. Carrollton K. R. (U Wall.
624) 231,
V. Carter (20 S. W. 836)
u. Case (8 B. & C. 427) 113,114,
181,
V. Christie (8 CI. & F. 214)
V. Clark (32 N. E. 255)
V. Clarke (4 Leigh 603)
V. Colgate (120 N. Y. 381, 24 N.
E. 799)
V. Collins (28 Eng. L. & Eq. 7)
V. Conway (67 Wis. 210, 30 N.
W. 215) 68, 69,
V. Cox (38 Me. 500) 75,
V. Davis (2 Hill 264)
V. Day (12 Heisk. 413)
V. Dearborn (20 N. Y. 244)
V. Delafield (126 N. Y. 410, 27
N. E. 797)
V. De Puy (17 Wend. 47)
V. Doolittle (14 Pick. 126)
V. Dumell (5 Mas. 56) 381,
V. Eaton (5 Humph. 499) 89,
V. Fitch (49 N Y. 539)
V. Foster (44 Barb. 87) 87,
V. French (6 All. 313)
V. Frye (148 Mass. 498, 20 N. E.
325) 170,
V. Furness (114 U. S. 376)
V. Ga. &c. Inv. Co. (87 Ga. 651,
13 S. E. 505)
V. Gore (15 Mass. 75)
V. Gould (6 Hill 309) 538, 540,
V. Gray (14 Barb. 479)
V. Green (30 N. J. 316)
V. (40 Ohio St. 431)
95,
414
V. Greely (16 Me. 419)
V. Hackett (61 Wis. 335, 21 N.
W. 280)
('. Hale (8 Bush 672)
V. Hall (101 U. S 43)
V. (35 Ohio St. 158)
V. ( 1 Harp. 245) 376,
V. Hennessey (48 N. Y. 545)
V. Herz (89 N. Y. 629)
V. Hibbard (48 Mich. 452, 12 N.
W. 651)
V. Hildreth (9 Cush. 359)
V. Hine (49 Conn. 236) 49,
V Hooper (36 Me. 222)
V. Horn (17 How. 157)
V. Horton (1 Hill 572)
V. Howard (35 N. Y 500)
V. Hume (4 Mack. 90)
V. Humphreys (1 McC. 388)
V. Hyde (11 Me. 196) 270.271,
V. Johnson (79 la. 290, 44 N. W.
551) 134,
V. (47 Oh. St. 306, 24 N. E.
603)
98
340
30
168,
206
425
642
159
543
206,
216
405
114
413
89
408
247
143
143
403
170
345
180
170
405
427
98
119
546,
547
28
412
380,
415
171
335
354
427
50
377
114
404
114
382
427
420
465
381
403
186
381,
413
807
146
351
TABLE OP CASES.
XV
Bank v. Jones (119 111. 407, 9 N. E.
885) 347
V. Keasley (L. R 6 C. P. 433) 147
V. Keech (2G Md. 521) 187
y. Keizer (2 Duv. 109) 477
V. Kendall (7 R. I. 77) 170
V. Kenney (79 Ky. 133) 477, 487
u. Klein (64 Miss. 141) 332
V. Knapp (3 Pick. 113) 511
V. Landon (45 N. Y. 410) 49, 51, 550
V. Law (127 Mass. 72) 99, 187
V. Lewis (13 Sm. & M. 226) 168, 180
V. Locke (89 Iiid. 428) 476
V. Luinbert ( 10 Me. 416) 180, 185, 186
V. McCaskill (16 Col. 408, 26 Pac.
821) 109, 171,404,405
V. McChesney (20 N. Y. 240) 408, 411
V. Matthews (49 N. Y. 12) 403
V. Meader (40 Minn. 325, 41 N.
W. 1043) 87, 89, 163
V. Messenger (9 Cow. 37) 143
V. Mitchell (58 Cal 42) 331
V. (8 Yerg. Ill) 307
V. Monteath ( 1 Den. 402) 110, 113,
114,169,206
V. Moore (13 N. H. 99) 69, 164
V. Moorehead (5 W. & S. 542) 420
V. Morgan (73 N. Y. 593) 96, 171.445
V. Morris (4 Cush. 99) 182, 486
V. Mudgett (44 N. Y. 514) 187
y. (45 Barb. 663) 411
0. Mumford (2 Barb. Ch. 696) 312
V. My ley (12 Pa. 544) 361
V. Needell ( 1 F. & F. 461) 410
V. Norton (1 Hill 572) 379, 408, 413
V. Noyes (62 N. H. 35) 83
y. Ogden (29 III. 248) 28
V. Osgood (4 Wend. 607) 144
V. Padgett (69 Ga. 159) 50
V. Page (98 III. 109) 168, 374
V. Palmer (47 Conn. 443) 60
V. Parsons (128 Ind. 147,27 N. E.
486) 136
V. Phetteplace (8 R. L 56) 354
I'. Pratt (51 Me. 563) 380
V. Rice (2 All. 480) 5
V. Richardson (33 La. Ann. 1312) 98
V. Ritter (12 Atl. 659) 136
V. Rollins (13 Me. 202) 417
V. Root (4 Cow. 126) 165
V. Rudolf (5 Neb. 527) 118
V. St. John (25 Ala. 566) 32, 273
V. Saffarans (3 Humph. 597) 174, 184
('. Savery (127 Mass. 75) 99, 187
V. (82 N. Y. 291) 187
V. Sawyer (38 Oh. St. 339) 351, 366
V. Seton (1 Pet. 299) 469
V. Shaw (142 Mass. 290, 7 N E.
779) 187
V. Shryock (48 Md. 427) 344, 345
V. Sirret (97 N. Y. 320) 537
y. Smith (26 W. Va. 641) 49
V. Sprague (20 N. J. Eq. 13) 364, 490
V. Stall (15 Wend. 364) 180, 185
V. Stewart (4 Bradf. 254) 331
Bank v. Stone (38 Mich. 779) 50
i>. Strauss (32 N. E. 1066) 536, 540
V. Templar (26 F. R. 580) 145
V. Thomas (47 N. Y. 15) 89
V. Tracy (77 Mo, 594) 432, 451
V. Treadwell (34 Barb. 553) 540,
542 545
1-. Underbill (102 N. Y. 336, 7
N. E. 293) 98, 99
V. Vanderhorst (32 N. Y. 553) 432
V. Walker (66 N, Y. 424) 50
y. Warren (15 N. Y. 577) 173,187
V. White (30 F. R. 412) 83, 87
V. Whitney (4 Lans. 34) 540
V. Wilkins (9 Me. 28) 137, 320, 325,
327, 339, 344, 346, 500
V. Williams (128 N. Y. 77, 28 N. E.
33) 331
V. Wilson (36 U. C. Q. B. 9) 171
V. Winship (5 Pick. 11) 114, 171
Bankhead v. Alloway (6 Cold. 56) 139,
170
Banks, Ex parte (1 Atk. 106) 487
. (2 J. & La T. 212) 488
V. Gibson (34 Beav. 566) 243
V. Gould (Edw. Rec. 316) 301
V. Mitchell (8 Yerg. Ill) 246
V. Steele (27 Neb. 138, 42 N. W.
883) 497
Bannatyne v. Leader (10 Sim 350) 494
Banner Tobacco Co. v. Jeni.son (48
MiclL 459, 12 N. W. 655) 84
Barber v. Backhouse (1 Peake61) 97, 176
V. Hartford Bank (9 Conn. 407) 446
Barclay, Ex parte ( 1 Glyn & J. 272) 485
V. Gooch (2 Esp. 571) 269
('. Lucas (1 T. R. 291) 314
". Phelps (4 Met. 397) 470, 476, 486
Barckle v. Eckart ( 1 Den. 337, 3 N- Y.
1.32) 60
Barcroft v. Snodgrass (1 Cold. 430) 96
Bardwell v. Perry (19 Vt 292) 329, 3-36,
.3.38, 36.5, 476
Barfield v. Loughborough (L. R. 8 Ch.
1) 202
Barfoot v. Goodall (3 Camp. 147) 412
Bargate v. Shortridge (5 H.L. C. 297) 130
Barhydt v. Perry (57 la. 416, 10 N. W.
820) 427
Baring v. Crafts (9 Met. 380) 113, 128,
416
V. Dix (1 Cox 213) 455, 457, 462
V. Lyman (1 Story 423) 247
Barker r. Blake (11 Mass. 16) 96, 416, 422
V. Burgess (3 Met. 273) 97
V. Buttress (7 Beav. 134) 448
V. Goodair (11 Ves. 78) 290, 391,
463, 464, 466, 468, 470, 476, 503
V. Parker (1 T. R. 287) 314, 452, 503
V. Richardson (1 Y. & J. 362) 142,
145
Barklie v. Scott (1 H. & B. 83) 17, 48, 49
Barlow v. Reno (I Blackf. 252) 155
V. Wiley (3 A. K. Marsh 467) 22
Barnard, In re (32 Ch. D. 447) 183
XVI
TABLE OF CASES.
Barnes v Boyers (34 W. Va. 303, 12
S. E. 708) 418
V. Jones (91 Ind. 161) 293
u Union Ins. Co. (51 Me. 110) 236
Barnett, Ex parte (1 De Gex 194) 494
V. Smith (17 111. 565) 107
Barnewall, Ex parte (6 De G. M. & G.
795) 487
Barney v. Currier (I D. Chip. 315) 165
r. Smith (4 H. & J. 485) 443
Barnley v. Rice (18 Tex. 481) 167
Barnstead v. Empire Mining Co (5
Cal. 299) 454, 507
Barratt y. Collins (10 J. B. Moo 446) 320
Barrett v. Furnish (21 Ore. 17, 26
Pac. 861) 336
V. McKenzie (24 Minn. 20, 1
N. W. 123) 340, 344, 345
V. Swann (17 Me. 180) 58, 171
Barring v. Dix (1 Cox 213) 371
Barringer v. Sneed (3 Stew. 201) 162
Barrow, Ex parte (2 Rose 252) 10, 70,
128, 129, 138
V. Rhinelander (1 Johns Ch.
550) 511
Barrows v. Downs (9 R. I. 446) 540, 547
Barry i-. Nesham (3 C. B. 641) 40
Barstow r. Adams ( 2 Day 70) 465
V. Gray (3 Me 409) 273
Barter v. Wheeler (49 N. H. 9) 65
Bartle v. Coleman (4 Pet. 184) 8
Bartlett v. Jones (2 Strobli. 471) 45, 56
Barton v. Hanson (2 Camp. 97, 2
Taunt. 49) 88, 103
V Williams (5 B & Aid. 395) 54,
131, 132, 303
Barwis, Ex parte (6 Ves. 601) 21
Bascom v. Young (7 Mo. 1) 142, 143
Bass V Estill (50 Miss. 300) 331
V Taylor (34 Miss. 342) 383
Bassett v. Miller (39 Mich. 133) 333, 434
a. Percival (5 All. 345) 239
V. Shepardson (52 Mich. 3, 17
N. W. 217) 388
Batard v. Hawes (2 E. & B, 287) 254
Bate, Ex parte (3 Deac. 358) 488
Bates V Callender (3 Dak. 256, 16
N. W. 506) 335
V. Forcht (89 Mo. 121, 1 S. W.
120) 206
V Lane (62 Mich. 132, 28 N. W.
753) 252
Batson, Ex parte (1 Glyn & J. 269) 480
, (Cooke, B. L. 503) 497
, (2 Ca. Ch. 139) 499
Battaille v. Battaille (6 La. Ann 682) 542
Battley v. Bailey (1 Scott N. R. 143) 12
Batty v. Adams Co (16 Neb. 44, 20
N. W. 15) 352, 367
V. McCnndie (3 C. & P. 202) 78
Bawden v. Howell (3 M. & G. 638) 316
Baxter v. Clark (4 Ired. 127) 74, 78
V. Connoly ( 1 Jac. & W. 580) 240
V. Plunkett (4 Houst. 450) 170
V. Rodman (3 Pick. 435) 60, 61
Baxter v. West (1 Dr. & Sm. 173) 454
Baylis v, Dineley (3 M & S. 477) 16
Bays V. Conner (105 Ind. 415, 5 N E
18) 84
Beacannon v. Liebe (11 Ore. 443, 5
Pac. 273) 271
Beach v. Hay ward (10 Ohio 455) 273,443
f. Hotchkiss (2 Conn. 425) 250, 260,
264, 507
V. (2 Conn. 697)
V. State Bank (2 Ind. 488)
Beacham v. Eckford (2 Sandf.
116)
Beak v. Beak (3 Swanst. 627)
313
111, 169,
185
Ch
507, 524
380, 383,
384
521
293,
114, 316
439, 527
131, 425
225
426, 430
105
V. (Cas. t. Finch 190)
Beakes v. Da Cunha (126 N. Y
27 N E. 251)
Beale v. Beale (2 N. E. 65)
V Caddick (2 H. & N. 326)
V. Hayes (5 Sandf. 640)
V. Mouls (10 Q. B. 976)
Beall V. Lowndes (4 S. C. 258)
V. McCullough (27 Md. 645) 426
Beaman v. Whitney (20 Me. 413) 12
Bean v. Morgan (4 McC. 148) 23
Beard v. Webb (2 B & P. 93) 22
Beardsley v. Hall (36 Conn. 270) 160
Beatson v. Harris (60 N. H. 83) 98
Beatty v. Bates (4 Y. & C. 182) .34
V. Wray (19 Pa. 516) 201, 439
Beaumont r. Bramlev (1 Turn. 51) 512
V. Meredith (3 Ves. & B. 180) 35,
456, 462, 553
Beauregard r. Case (91 U S. 134) 13, 58
Beaver v. Lewis (14 Ark. 1.38) 371
Beck, In re (19 Ore 503, 24 Pac. 1038)
399, 431, 523
V. Martin (2 McMull. 260) 142, 147
Beckett v. Ramsdale (31 Ch. D. 177) 409
Beckham v. Drake (9 M. & W. 79) 90
V. Knight (4 Bing N. C. 243) 90
V. Peag (2 Bail. 133) 178
Beckford v. Wade (17 Ves. 87) 514
V. Wildman (16 Ves. 438) 520
Beck with v. Manton (12 R. I. 442) 350
V. Talbot (95 U. S 289) 63
V. (2 Col. 639) 57, 63
Bedford v. Brutton (1 Scott 245, 1
Bing. N. C. 407) 257, 258, 277
V. Deakin (2 Stark 178, 2 B &
Aid. 210) 387,416,417,418,482,485
Beebe v. Rogers (3 Greene 319) 89
Beech f. Eyre (5 M. &G. 415) 426
Beecham v. Dodd (3 Harr. 485) 6, 45, 55
V. Eckford (2 Sandf. Ch. 116) 199
Beecher v. Bush (45 Mich. 188. 7
N. W. 785) 46, 47, 51
V. Guilhane (Mos. 3) 194
Beers v. Reynolds (12 Barb. 288, 11
N Y. 97) 539, 543, 544, 545
Beitz V. Fuller (1 McC. 541) 159, 160
Belknap v. Gibbens (13 Met. 471) 270
Bell, Ex parteil M. & S. 761) 9, 269
TABLE OP CASES.
XVU
Belly, Ansley (16 Kast 141) 318
y. Banks (3 M. & G. 258) 91. 92
.;. Baniett (21 VV K. 11<J) 204
V. Hep worth (134 N Y. 442, 31
N. E. 918) 451
0. Hudson (73 Cal 285, 14 Pac.
791) 512
r. Laginaiis (1 Men 40) 304
V. Morrison ( 1 I'et. 31J7) 150, 160, 102
l: Newman (5 S. & R. 78) 327, 440,
478, 500
. i: riiyn (7 Ves. 453) 357
Bellairs v P^lswortli (3 Camp 53) 315
Belote V. Wynne (7 Yerg. 534) 100
Belton r. Hodges (9 limg. .-JOo) 21
Bendell r. Hettrick (45 H.nv. Pr. 198) 57
Benedict v. Davis (2 McLean 347) 104,
107
Benfield ;'. Solomons (9 Ves. 76) 350
Benhain o. Bishop (9 Conn. 330) 19
r. Gray (5 C. B. 138) 377
Benjamin u. Covert (47 Wis. 375, 2 N.
W. 025) 409
V. Porteus (2 H. Bl 590) 00
■'. Stremple (13 111. 406) 304
Bennet, Er parte (2 Atk. 527) 465
, (Cooke B. L. 229) 4t)7
Bennett, Re (2 Low 400) 463
/■. Marsliall (2 Mills 436) 155
0. Kiissell (34 Mo. 524) 200
r. Smitli (40 Mich. 211) 249
o. Stickney (17 Vt. 531) 145
r. Woolfolk (15 Ga. 213) 9
Bennett's Case (18 Beav. 339, 5 De G.
M. & G. 284) 384
Benmnger i'. Clarke (10 Abb. Pr n s.
264)
r. Hess (41 Oh. St. 64)
Bensley r. Bignold (5 B. & Aid. 335)
Benson, Ec parte (Cooke B. L. 278)
IV Hadfield (4 Hare 32)
V. Heathorn (1 Y. & C 326)
V. McBee (2 McMuIl. 91)
Bentley v. Bates (4 Jur. 552)
c. (4 Y. & C. 182)
r. Craven (18 Beav. 75)
u. Harris (10 R. 1. 434)
u. White (3 B. Mon 263)
240
87
9
496
419
384
37, 50.
59, 82
281
298
197
47
37, 59,81,
82, 163
Benton v Chamberlin (23 Vt. 711) 409,
410
V. Roberts (4 La. Ann 216) 84
Bergamini v. Bastian (35 La, Ann.
60) 237
Bergland v. Frawley (72 Wis. 559,
40 N. W. 372) 99
Berkeley v. Hardy (5 B. & C. 355) 150
Berkshire v. Evans (4 Leigh 223) 9
Berksliire Woolen Co, i: Juillard (75
N. Y. 535) 182
Bernard v. Torrance (5 G. & J, 383) 402,
406, 410
V. Wilcox (2 Johns. Cas. 374) 109
Berryw. Cross (3 Sandf, Ch. 1) 450
Berry v Folkes (60 Miss. 576) 293, 352,
300, 367, 527
V. Jones (11 Heisk. 200) 299
Berthold v. Goldsmith (24 How 536) 00
Besch V. Frolich (1 Phil. 172, 7 Jur.
73) 38y, 460, 461
Best V. Givens (3 B Mon. 72) 18
Beste r. Burger (110 N. Y. 044, 17 N.
E 734) 130
V. His Creditors (15 La. Ann.
55) 194
Bethel v. Franklin (57 Mo. 460) 249,250
Betts V. Bagley (12 Pick 572) 468
L\ Letciier (40 N. W. 193) 351, 300
Bevan, Ex parte (9 Ves. 222, 10 Ves.
107) 480, 487, 488
y. Lewis (1 Sim 370) 88,90,181,
290, 344
Be vans v. Sullivan (4 Gill 383) 09, 199,
200
Bewley v. Tarns (17 Pa. 485) 154
Biddlecombe r. Bond (4 A. & E. 332) 219
Biernan /■. Brasiies (14 Mo. 24) 252
Bigelow, fn re (3 Ben. 146) 487
V. Graniiis (2 Hill 120) 18
r. Reynolds (08 Mich. 344, 36
N. W. 95) .320
Bigg, Et parte (2 Rose 37) 488, 496
Biggs V. Fellows (8 B. & C. 402) 471
V. Hubert (14 S. C. 620)
V Lawrence (3 T. R 454)
Bignold, Ex jiarte (2 Mont. & A. 655) 146
t: Waterhouse (1 Moo. & S. 249) 86,
142, 164, 413
Bill a Porter (9 Conn. 23) 483
Billings V. Meigs (53 Barb. 272) 97
Binford r. Domniett (4 Ves. 756) 302,406
I'. Dormnett (4 Ves 434) 498
Bininger r. Clark (00 Barb. 113) 237,243
Binney r. Le Gal (19 Barb. 592) 155
r. Mutrie (12 App. Cas. 160) 222,
8.3, 139
323
525
98
224
Binns v. Waddill (.32 Gratt. 588)
Birch V. Stephenson (3 Taunt. 409)
Birchett v. Boiling (5 Munf. 442) 209, 279
Bird i: Bird (77 Me. 499, 1 Atl. 4-55) 272
i- Caritat (2 Johns. 342) 468
V. Hamilton (Walk. Ch. 361) 5, 13
;•. Lanius (4 Wis. 615) 88
i: McCoy (22 la. 549)
V. Morrison (12 Wis. 138)
Birdsall v Colie (2 Stock. 63)
Birks V. French (21 Kas. 238)
Birtwhistlo r Woodward (95 Mo. 113,
7 S. W. 405)
Bisel V. Hobbs (6 Blackf. 479)
Bishop V. Austin (66 Mich. 515,-33 N
W. 625)
V. Breckles (1 Hoff. Ch. 534)
272
7
293, 297
116
340
74
49
396,
455
109
61
r. Hall (9 Grav 4-30)
/■. Shepherd (23 Pick. 492)
Bisphain r. Patterson (2 McLean 87) 160,
162, 104
Bissell 1-. Adams (35 Conn, 299) 160
XVIU
TABLE OF CASES.
Bissell V. Foss (114 U. S. 252) 3i
Bitter v. liatlinian (01 N. Y, 512) 24
liuztT v. yiiuiik (1 \V. & S. 340) 155
Black V. Black (15 Ga. 445) 34'J
V. Bush (7 B. xMuii 210) 327, 337
Black's Appeal (44 Ta. 503) 470, 477
Blackburn*, Er pane (10 Ves. 204) 400
r McCallister (Peck 371) 150
Blackett v. Weir (5 B. & C. 3^• ) 254, 207
Blades v. Free ('J B. & C. 107) 387
Blain v. Agar ( 1 Sim. 37) 277
Blair V. Bioiuiey (5 Hare 542, 2 Pliil.
354) 110, 142
V. Snover (1 Halst. 153) 313
v. Wood (108 Pa. 278) 445
Blair Miller v. Douglas (Coll. Part
495) 180
Blake, A'.r fjarte (Cooke B. L 503) 490
V. Dorgan (1 Greene 540) 371
V. Nutter (19 Me. 10) 349
V. Sweeting (121 III 07, 12 N. E.
67) 306, 392
V. Wlieadon (2 Hayw. 109) 308
I'. Williams (0 Pick. 286) 468
Blakeley r. Graham (111 Mass. 8) 259
Blakeney i: Dufaur (15 Beav. 40) 294,
295, 298, 456
Rlaker v. Sands (29 Kas. 551) 84, 393
Blanchard v. Coolidge (22 Pick. 151) 45,
66,60
V. Floyd (93 Ala. 53, 9 So 418) 351
V Kaull (44 Cal. 440) 50
V. Parteur (2 Hayw. 393) 93
V. Paschal (68 Ga. 32) 335, 351
Bland r. Haselrig (2 Vent. 152) 156
Blankenliagen, £j: parte (Cooke B. L
257) 487
Blew V. Wyatt (5 C. & P. 397) 387, 419
Bliuh V. Brent (2 Y. & C. 268) 554
Blight V. Tobin (7 Mon. 617) 117
Blin V. Pierce (20 Vt. 25) 272
Blinn v. Evans (24 111. 317) 175
Blisset V. Daniel (11 Hare 493) 193, 207,
217, 391, 395, 399
Bloch V. Price (32 F. R. 562) 404
Blodgett, In re (10 N. B. R. 145) 335, 491
V. Amer. Nat. Bank (49 Conn. 1) 451
I'. Sleeper (67 Me. 499) 99
V. Weed (119 Mass. 215) 87, 170
Blood r. Goodrich (9 Wend. 75, 12
Wend. 525) 1-50
Bloodgood V. Zeily (2 Cai. Gas. 124) 511,
512
Blnomfield r. Buchanan (14 Ore. 181,
12 Pac. 238) 524
Blount V. Hipkins (7 Sim, 51) 555
Bioxam v. Hubbard (5 East 407) 320
Bloxham, Ex jmrte (6 Ves. 449) 485
Bluck V. Capstick (12 Oh. D. 863) 214, 530
Blue v. Leathers (15 111. 31 ) 53, 63, 262
Blumer, In re (12 F. R. 489) 478
, (13 F. R. 622) 487
Blundell v. Winsor (8 Sim. 601 ) 384, 550,
552. 554, 556
Blytli V. Fladgate (1891, 1 Ch. 337) 121
Blythe, Ex parte (16 Cli. D. 620) 497
Board of Trade i;, Hayden (4 Wash.
St. 203, 30 Pac. 87) ' 24
Boardman v. Gore (15 Mass. 331) 78, 119
122
1-. Keeler (2 Vt. 65) 273, 498
V. Mosman (1 Bro. C. C. 68) 123
Bobo ('. Hansel! (2 Bail. 114) 18
Bodenliam v. Purchas (2 B. & Aid.
39) 425, 522
Bodle V. Chenango Co. Ins. Co (2
N. Y. 53) 235
Boekle'n v. Hardenburgh (37 N. Y.
Super. 110) 67
Boggess V. Lilly (18 Tex. 200) 9
Bogget c. Frier (11 East 301) 23
BoKgs V. Curtin (10 S. & R. 2il) 317
Bo'hler v. Tappan (1 F. R. 469) 135
Boire i-. McGinn (8 Ore. 466) 519
Bolitlio, Ex parte (Buck 100) 75, 89, 113,
114, 181
Bolland, Ex parte (Mont. & M 315) 121,
122
Boiling r. Boiling (5 Munf. 334) 512
Bolton, Ex parte (Buck 18) 470
V Puller (1 B. & P. 539) 70, 311, 491
Bonbonus, Ex parte (8 Ves. 540) 99, 175,
177,496
Bond, Ex parte (1 Atk. 98)
V. Aitkin (6 W. & S. 165)
487, 496
89, 92,
151, 152
V. Gibson (1 Camp. 185) 139
V. Hayes (12 Mass. 34) 266
V. Milbourn (20 W. R. 197) 529
V. Nave (02 Ind. 505) 470
r. Pittard (3 M. & W. 357) 54, 107
Bonfield v. Smith (12 M. & W. 405) 272
Bonnaffe v. Fenner (6 Sm. & M. 212) 6, 255
Bunnell v. Chamberlin (20 Conn. 487) 95
Bonner v. Campbell (48 Pa. 286) 357
Bonney v. Ridgard (1 Cox 145) 514
f. Stoughton (122 111. 536, 13
N. E. 833) 306
Bonsall v. Comly (44 Pa. 442) 491
Bonsteel v. Vanderbilt (21 Barb 26) 66
Boor r. Lowrey (103 Ind. 468) 105
Booth V. Clark (17 How. .322) 296
V. Farmers' «Sb Merchants' Bank
(74 N. Y. 228) 204
V. Hodgson (6 T. R. 405) 9, 269
V. Merer ( 14 N. B. R. 575) 403
V. Parks (1 Moll. 405) 212, 394, 436,
438, 521
V. Smith (3 Wend. 66) 483
Borden v. Cuyler (10 Cush. 476) 487
Boro i\ Harris (13 Lea 30) 344
Bosanquet v. Wray (6 Taunt. 597) 70, 217,
209, 271, 307, 309
Boston & Col. Smelting Co. v. Smith
(13RL27) 44,46,61
Bostwick i\ Champion (11 Wend. 571,
18 Wend. 175) 124
Bosvil 1-. Brander (1 P. Wms. 458) 479
Bos well r. Dunning (5 Harr. 231) 316
I'. Green (1 Dutch. 390) 131, 134
TABLE OF CASES.
XIX
Botifeur v. Weyman (1 McC. Ch. 15C)
611, 512, 514
Bottomley v. Nuttall (5 C. B. n. s 122)
'Jo, 90
Rousliner r. Black (83 Ky. 521) 303, y2'J
Buuldin V. Page (24 Mo. 5y4) 165, 187, 413
Boulter v. Peplow (9 C. B. 493) 255
Bound V Lathrop (4 Conn. 38(3) 159, 164
V. Freeth (9 B. & C 032) 105, 107
Bourne -f. Wooldridge (10 B. Mon.
4'.»2) 98
Boussmaker, .Ex /var<e (13 Ves 71) 26
Bovill V. Hammond (6 B. & C. 148,
9 D & li. 186) 35, 55, 58, 248, 250, 203,
205
Bowas V. Pioneer Tow Line (2 Sawy.
21) 06
Bovvden v. Schatzell ( 1 Ball. Eq. 360)
330, 444
Bowen V. Argall (24 Wend. 496) 538, 545,
546, 547
V. Billings (13 Neb. 439, 14 N. W.
152) 350,
V Mead (1 Midi. 432)
V. Kuthertord (OU III. 41)
Bower v. Twadlin ( 1 Atk. 294)
Bowers v. Still (49 Pa. 65)
Bowie V. Maddox (29 Ga. 285) 103, 104
Bowker v. Bradford (140 Mass. 521,
5 N. E. 480) 24
V. Burdekin (11 M. & W. 128) 154
V. Smith (48 N. H. Ill)
Bowler v. Huston (30 Gratt. 260)
Bowman v. Bailey (20 S. C. 550)
V. (10 Vt. 170)
u. Spalding (2 S. W. 911) 231, 332
Bowyer v. Anderson (2 Leigh 550) 35, 4-5,
62, 63
Bowzer v. Stoughton (119 111
9 N. E. 208)
Boyce v. Burcliard (21 Ga. 74)
V. Coster (4 Strobh. Eq. 25)
V. Owens (I Hill S. C. 8)
V. Watson (3 J. J. Marsh, 498)
Bovd V. Cann (10 Md. 118)
— - l: Emerson (2 A. & E. 184)
r. Mvnatt (4 Ala. 79)
r. Ki'cketts (60 Miss. 62)
r. Tliompson (25 Atl. 709)
Boyden v. Boyden (29 N. H. 519)
352
172
08
143
95
336
334
363
45
47,
248
295
337
23
103
412
148
211,458
69
153, 155
18
Boyers i'. Elliott (7 Humph. 204) 361
Boynton v. Page (13 Wend. 425) 199
Boys V. Ancell (7 Scott 304) 223, 224
Bozon r. Farlow (1 Mer. 459) 240, 241
Brace i-. Taylor (2 Atk. 253) 517
b: Washburn (43 Me. 504) 55
Braches v. Anderson (14 Mo. 441) 74, 139
Bracken v. Dillon (04 Ga. 243) 4, 427
c. Kennedy (4 111. 558) 240, 268, 507,
508
Bracket v. Winslow (17 Mass. 153) 384
Bradbury, Ex parte (4 Deac. 202) 484
V. Barnes (19 Cal. 120) 355
I'. Dickens (27 Beav. 53) 237
V. Smith (21 Me. 117)
545, 546
Bradford v. Kimberly (3 Johns. Ch.
431) 200, 384, 500
V. Taylor (01 Tex. 508) 168
Bradford Com. Banking Co. v. Cure
(31 Ch. D. 324) 136
Bradley v. Brigiiam (137 Mass 545) 527
V. Chamberlin (16 Vt. 613) 212, 384,
394, 443
V. Ilarkness (26 Cal. 76) 128
V. Holdsworth (3 M. & W. 422) 554
V. White (10 Met. 303) 45
Bradner >: Strang (89 N. Y. 299) 125
Bradstreet ;•. Baer (41 Md. 9) 23
Brady v. Calhoun (1 P. & W. 140) 35, 53,
349
V. Hill (1 Mo 315) 103
Braithwaite v. Britain (1 Keen 200)
444, 445, 482
V Power (1 N. D. 455, 48 N. W.
354) 105
Bralev f. Goddard (49 Me. 115) t,0
Brand v. Boulcott (3 B. & P. 235) 253
Brandon v. Hubbard (4 J. B, Moore
307) 36
V. Nesbitt (6 T. U. 23) 26
V. Kobinson (18 Ves. 429) 407
Brandred v. Muzzy (1 Dutch. 268) 57
Brandrum v. Wharton (1 B. & Aid.
463) 157, 159
Brannon v. Hursell (112 Mass. 63) 203
Brasfield c. French (59 Miss. 632) 451
Brasier v. Hudson (9 Sim. 1) 144
Brassington v. Ault (2 Bing. 177) 273,498
Braun's Appeal (105 Pa. 414) 222
Bray v. Fromout (6 Madd. 5) 10, 128, 138,
555
Brazier v. Bryant (2 Dowl. Pr. 477) 420
Brecher v. Fox (1 F. R. 273) 98
Breckenbridge i-. Ormsby (1 J. J.
Marsh 236) 16
Breckinridge v. Shrieve (4 Dana 375) 82, 84
Breen c. Richardson ((> Col. 605) 364
Bremner i'. Chamberlayne (2 C. & K
500)
Brenan v. Prestsn (2 DeG. M. & G.
813)
Brenchley, Ex parte (2 Glyn & J. 127) 499
Brennan v. Pardridge (67 Mich. 449,
35 N. W. 85)
Brent i-. Davis (9 Md. 217)
Brett r. Beckwith (3 Jur. n. s. 31)
Brettel v. Williams (4 Ex. 623)
Brewer v. Browne (08 Ala. 210) 222. 306,
361, 363
V. Worthington (10 All. 329) 414
V. Yorke (46 L. T. x. s. 289) 530
Brewster v. Hammet (4 Conn. 540) 291,
325, 344
V. Hardemnn (Dud. Ga. 138) 100
V. Mott (5 111. 378) 97, 99, 100, 173.
179. 274
V. Keel (74 la. 506, 38 N. W. 381) 99
i: Wakefield (22 How. 118) 203
Briar Hill Coal & Iron Co. v. Atlas
Works (146 Pa. 290, 23 Atl. 326) 539, 549
426
298
115
78
330
186
XX
TABLE OF CASES.
Briee's Case (1 Mer. 620) 387
Brickhouse v. Hunter (4 Hen. & M.
3(5o) 520
Brickwood v. Miller (3 Meriv. 279) 468
Bridge v. Grav (14 Pick. 55) 6y, 162, 104
V. McCudough (27 Ala. 601) 331
Brierly v. Cripps (7 C. & P. 709) 260, 204,
265
Briggs V. Vanderbilt (19 Barb. 222) 60
Brigham, Ex parte (Cooke B L. 538)
428
V. Clark (100 Mass. 430) 55
V Dana (29 Vt. 1) 51, 55, 200
V. Eveletli (9 Mass. 538) 254, 263
Bright V. liiitton (3 H. L C. 341) 52
V. Rowland (3 How. Miss. 398) 225
v. Sampson (20 Tex. 21) 145
Brill V. Hoile (53 Wis. 537, 11 N. W.
42) 414
Brinley v. Knpfer (6 Pick. 179) 261, 265,
522
Brisban v Boyd (4 Paige 17) 163
Briscoe i'. Anketell (28'Miss. 361) 161
Bristow V. James (7 T. R 257) 469
V. Tavlor (2 Stark. 50) 307
IV Towers (6 T. R. 35) 26
British N. America, Bank of r. Dcla-
field (120 N. Y. 410, 27 N E. 797) 247
Broad v. Joilyfe (Cro. Jac. 596) 401
Broadbent,£'j://ar^e (I Mont &A. 635) 508
]?roadus v. Evans (63 N. C. 633)
Brock v. Bateman (25 Oh. St 609)
97
331,
478
Brockenbrough v. Hackley (6 Call
51) ' 100
Brockwav r. Burnap (16 Barb. 310) 45
Brbda i-. Green wald (66 Ala. 538) 248
Brooke v. Enderby (2 Br. & B. 70) 425
V. Evans (5 Watts 190) 102
V. Washington (8 Gratt. 248) 74, 350
Brooks r. Martin (2 Wall. 70) 8, 193, 195
Broom c. Broom (3 M. & K. 443) 350,
364
Broome, Ex parte (1 Rose 69) 11, 103, 277,
. 455, 473, 499
Brothrovd, In re (14 N. B. R. 323) 491
Brown, 'Ex parte ( 1 Atk 225) 89, 92
v. Agnew (6 W. & S. 235) 262, 266,
268
23, 168,
38s
r. Clark (14 Pa. 469) 381
1-. ])e Tastet (Jac. 284) 10, 70, 128
129, 438, 443, 466, 468, 501, 523
r. Duncan (5 B. & C. 93) 8
V. Duncanson (4 H. & McH. 350) 172
r. Gordon (16 Beav. 302) 419
I'. Grant (39 Minn. 404, 40 N. W.
268) 104
r. Hardcastle (63 Md. 484) 203
V. Heathcote (1 Ves. 239) 137
r. Hicks (24 F. R. 811) 60
V. Higginbotham (5 Leigh 583) 45
r. J.Tquette (94 Pa. 113) 53
r. Jewett (18 N. H. 230) 23, 24, 389
Chancellor (61 Tex. 437)
Brown v. Lawrence (5 Conn. 397) 142
V. Litton (1 P. Wms. 140) 194, 443,
600
v. (1 P. Wms. 224) 438
V. Leonard (2 Chit. 120) 78, 403, 407
V. McFarland (41 Pa. 129) 439
17. Marsli (7 Vt. 327) 143
V. Rains (53 la 81, 4 N. W. 867) 69,
104
V. Tapscott (6 M & W. 119) 57, 248,
258, 264, 269, 507
V. Turner (7 T. R. 630) 9
V. Vidler (15 Ves 223, 2 Russ
340) 443, 501
f. Watson (66 Mich. 223, 33
N. W. 493) 364
V. (72 Tex. 216, 10 S. W.
395) 60
Brown's Appeal (89 Pa. 139) 201, 438.
439, 526
Browne v. Carr (7 Bing 508) 470
V. Gibbins (5 Bro. P. C. 491) 101, 276
Brownel v. Brownel (2 Bro. Ch 62) 515
Srownell v. Steere (128 111. 209, 21
N. E. 3) 522, 527
Browning v. Marvin (22 Hun 547) 469
Brownlee i'. Allen (21 Mo. 123) 63, 354
Brownrigg v. Rae (5 Ex. 489) 133
Brozel v. Poyntz (3 B. Mon. 178) 76
Brubaker v. Robinson (3 Pen. & W.
295)
Bruen v. Marquand (17 Johns. 58)
265
152.
307
103
65
Brugman v. McGuire (32 Ark. 733)
Brundred v. Muzzv (1 Dutch 268)
Brunson v. Morgan (76 Ala. 593) 351, 367
V. (84 Ala. 598, 4 So 589) 352
Brutton v. Burton (1 Chit. 707) 151, 153,
155
Bry V. Cook (15 La. Ann. 493) 515
Bryant r. Wardell (2 Ex. 479) 55
Brvce v. Joynt (63 Cal. 375) 69, 164
Bryden v. Taylor (2 H. & G. 400) 48
Brydges v. BranfiU (12 Sim. 369) 116, 117
Bryson v. Whitehead (1 Sim. & S. 74) 401
Buchan v. Sumner (2 Barb. Cii. 165) 349,
358, 361, 367,369
Buchanan v. Curry (19 Johns. 137) 148,
Buchoz V. Grandjean (1 Mich. 367)
Buck V. Mosley (24 Miss. 170) 97, 98,
r. Smith (29 Mich. 166)
V. Winn (11 B. Mon. 320)
Buck Stove Co. v. Johnson (7 Lea
282)
Bucki V. Cone (25 Fla. 1, 6 So. 160)
149
148
274
279
362
231
125,
338
Buckingham v. Burgess (3 McLean
364) 103, 104
V. Hanna (20 Ind. 110) 127
V. Ludlum (29 N. J. Eq. 345) 526
V. (37 N. J. Eq. 137) 445
Buckland r. Newsame (1 Taunt. 477) 146
Buckley, Ex parte (14 M. & W. 469) 113,
183
TABLE OF CASES.
XXI
Buckley v. Bramhal (24 How. Pr. 455) 545,
546
V. Buckley (11 Barb. 43) 349, 354,
358, 301
Bucknal v. Roiston (Free. Ch. 285) 137
Bucknam v. Barnuin (15 Conn. 67) 45, 53,
164
Buckner v. Lee (8 Ga. 285) 46, 114
V. Kies (34 Mo. 357) 255
Buell V. Cole (54 Barb. 353) 251
Buffalo City Bank v. Howard (35
N. Y. 500) 403
Biiffum V. Buffum (49 Me. 108) 6, 3-50
Biifkin v. Bovce (104 Ind. 53) 293
Biifurd V. Nccly (2 Dev. Eq. 481)
Biilfiiich u. Winclienbach (3 All. 161)
391
66.
346
Bulger f. Rosa (119 N. Y. 459, 24 N. E.
8')3) 332
Bulkley r. Dayton (14 Jolins. 387) 152
u. Marks (15 Abb. Pr. 454) 539, 544,
545, 546
Bull V. Coe (77 Cal. 54, 18 Pac. 808) 252
r. Scliuberth (2 Md. 38) 60
BuUard v. Smith (139 Mass. 492, 2
N. E. 86) 55
Bullen v. Sharp (L. R. 1 C P. 86) 42, 61,
129
V. (18 C. B. N. s. 614) 129
Bullock i: Boyd (1 Hoff. Cli. 294) 515
V. (2 Edw. Ch. 293) 515
V. Crockett (3 Giff. 507) 529
Bumage v. Prosser (4 B. & C. 247) 320
Bumpass v. Webb (1 Stew. 19) 252
Bundy v. Bruce (61 Vt. 619, 17 AtL
796) 69
f;. Youmans (44 Mich. 376, 6
N. \V. 851) 438
Bunn i: Grey (4 East 190) 401
Bunnel v. Taintor (4 Conn. 568) 7
Burbauk v. Wilev (79 N. C. 501) 134, 231
Burden v. Burden (I Ves & B. 170) 200,
201. 384, 4.36, 439, 448
Burdick i;. Green (15 Johns. 247) 483
Burdon n. Dean (2 Ves. Jr. 607) 479
Burgan v. Lyell (2 Mich. 102) 406
Burgess, In re (83 Me. 339, 22 Atl.
222) 254
V. Atkins (5 Blackf. 337) 338
r. Badger (124 111. 288, 14 N. E.
850) 201, 222
v. Burgess (3 DeG. M. & G. 896) 242,
243
v. Lane (3 Me. 65) 70
r. Merrill (4 Taunt. 469) 22
Burgue '•. Finnin (3 Stark. 53) 69
Burk '•. McClain (1 H. & McH. 233) 468
Burke V. Fuller (41 La. Ann. 740, 6
So. 557) 512, 522
r. Noble (48 Pa. 168) 144
c. Roper (79 Ala. 138) 52
r. Winkle (2 S. & R. 189) 23
Burleigh v. Parton (21 Te.x 585) 173, 178
V. Stott (8 B & C. 36) 157
Burley «-. Harris (8 N. H. 235) 270, 271, 309
Burmester v. Norris (6 Ex. 706) 82
Burn, Ex parte (1 Jac. & \V. 378) 4W,
493
V. Burn (3 Ves. 578) 150, 151
V. Morris (3 Cai. 54) 313, 317
Burnell v. Hunt (5 Jur. 650) 5, 55
r. Minot (4 J. B. Moo. 340) 254,265.
267, 268
Burnes v. Penned (2 H. L. C. 497) obo
Burnett v. Eufaula Ins. Co. (46 Ala.
11) 236
V. Snyder (76 N. Y. 344, 81 N.
Y. 550) 104, 128
Buruham v. Whittier (5 N. H. 334) 169,
311
Burnhisel v. Firman (22 Wall. 170) 203
Burns v. Harris (67 N. C. 140) 491
r. McKenzie (23 Cal. 101) ■ 162
V. Nottingham (60 III. 531) 261, 264
v. Rowlands (40 Barb. 368) 77
Burnside y. Merrick (4 Met. 537) 349,356,
361, .364, 436
Burr V. De La Vergne ( 102 N. Y. 415,
7 N. E. 366) 198
r. Williams (20 Ark. 171) 160
J Burrell, Ex jxirte (Cooke B. L. 503) 497,
499
Burson v. Kincaid (3 Pen. & W. 57) 143
Burt V. Lathrop (52 Mich. 106, 17 N.
W. 716) 52
Burton, Ex parte (1 G. & J. 207) 406, 494,
495
V. Baum (32 Kas. 641, 5 Pac. 3) 335
V. Goodspeed (69 111 237) 46
V. Issitt (5 B. & Aid 267) 145, 382
196, 198,
286, 287
327, 328.
329, 339
Burwell v. Mandeville (2 How. 560) 432.
447, 451
Bury V. Allen (1 Coll. 589) 530
Busby V. Chenault (13 B. Mon. 554) 446
Bush y. Clark (127 Mass. HI) 438
V. Crawford (9 Phila. 892) 170
V. Linthicum (-59 Md. 344) 17
Bushell, Ex parte (8 Jur. 937) 180
Butchart r. Dresser (10 Hare 45-3,
4 De G. M. & G. 542) 295, 376, 378,
382, 383, 434
V. (4 Russ. 430) 376
Butcher, Ex parte (13 Ch. D 465) 442
V. Forman (6 Hill 583) 25-3, 471,499
Burler v. Amer. Toy Co. (46 Conn.
136) 27
f. Burleson (16 Vt. 176) 441
V. Stocking (8 N. Y. 408) 185
Butlin, Er parte (Cooke B. L. 257) 487
Butte Hardware Co. r Wallace (59
Conn. 3.36, 22 Atl. 330) 69
Butterfield v. Hartshorn (7 N. H. 345)
482
V. Hensley (2 Gray 226) 77
Button V. Hampson (Wright 93) 150
Butts V. Dean (2 Met. 76) 483
V. Wookey (6 Madd. 367)
Burtus V. Tisdall (4 Barb. 571)
XXll
TABLE OF CASES.
Buxton V. Edwards (134 Mass. 567) 160,
162. 383
V. Lister (3 Atk. 383) 209, 279
Buzard v. First Nat. Bank (67 Tex.
83, 2 S. W. 54) 60
v. Jolly (6 S. W. 422) 69
Bybee v. Hawkett ( 12 V. R. 649) 13, 128
Byers v. Dobie (1 II. Bl. 2o6) 469
V. Van Ueusen (5 Wend. 268) 462
Byrd v. Fox (8 Mo. 574) 11, 210, 265
Cabell V. Vaughan (1 Sannd. 291) 316, 320
Caddeck v. Simpson (2 De G. & J. 52) 7
Cadwallader v. Blair ( 18 la. 420) 9U. 427
V. Kroesen (22 Md. 200) 98, 147
Cadv 1-. Kyle (47 Mo. 340) 165
'v. Shepherd (11 Pick. 400) 150, 151,
162
Calder v. Rutherford (1 Br. & B. 302,
7 Moo. 158) 444
Calder & H. Nav. Co v. Pilling (14
M. & W. 200) 551
Caldicott V. Griffiths (8 Ex. 898) 52, 277
Caldwell v. Bloomington Mfg. Co.
(17 Neb. 489, 23 N. W. 336) 332
v. Gregory (1 Price 119) 468
V. (2 Hose 149) 494
('. Lawrence (20 Ga. 94) 161
V. Lieber (7 Paige 483) 36, 198, 200,
201,216,217,384,520
V. Miller (127 Pa. 442, 17 Atl.
983) 44, 46
V. Scott (54 N. H. 414) 98, 332
V. Siffourney (19 Conn. 37) 159
r. Sitliens (5 Blackf. 99) 111
V. Stileman (1 Rawle 212) 380
Calkins v. Smith (48 N. Y. 614) 171, 180
Callender v. Robinson (96 Pa. 454) 74
Calhimb v. Reed (24 N. Y, 505) 358
Calvert v. Marlow (6 Ala. 342) 260
V. Miller (94 N. C. 600) 435
Calvit r. Markham (3 How. Miss.
,343) 270, 514
Cambefort v. Chapman (19 Q. B. D.
229) 334
Camblat v. Tupery (2 La. Ann. 10) 280, 509
Cambridge v. Hobart (10 Pick. 232) 159
Cameron v. Blackman (39 Mich. 108) 140
V. Havemeyer (25 Abb. N. C.
438) 567
Cammack v. Johnson (1 Green Ch.
163 ) 1 1 5, 29 1 , 330, 344, 346, 444, 498
Camp V. Gant {21 Conn. 41) 476
Campanari v. Woodburn (15 C. B.
400) 387
Campbell v. Bowen (49 Ga. 417) 189
V. Pol. Coal & Iron Co. (9 Col.
60, lOPac.248) 113
V. Coquard (16 Mo. App. 552) 527
v. Dent (54 Mo. 325) 57
r. Flovd (25 Atl. 10:«) 160, 378, 418
V. Hastings (29 Ark. 512) 68, 463
Campbell v. Mathews (6 Wend. 551; 143
V. Mullett (2 Swanst. 551) 230, R07,
327, 328, 338, 4S6, 468, 490, 500, 501
V. Pence (118 Ind. 313, 20 N. E.
840) 170
K. Stewart (34 III. 151) 86
Canada r. Barksdale (76 Va. 899) 35, 59
Canadian Bank v. Wilson (36 U. C.
Q. B. 9) 171
Candler v. Candler (Jac. 225) 15, 241
(,. (0 Madd. 141) 55
Canfield r. Hard (6 Conn. 180) 36,432,447
Cann v. Cann (1 P. Wms. 727) 511
Cannan v. Bryce (3 B. & Aid. 179) 9
Cannon v. Alsbury(l A. K. Marsh. 76) 21
V. Lindsey (85 Ala. 198, 3 Ho.
676) 97, 347
Cape Sable Co.'s Case (3 Bland 606) 871,
375, 459
Capen v. Alden (5 Met. 268) 425
V. Barrows (1 Gray 376) 257, 258, 261
Capp V. Lacey (35 Conn. 463) 542
Garden v. General Cemetery Co. (5
Bing. N. C. 253) 553
Carev v. Burruss (20 W. Va. 571) 23
Cargiil r'. Corby (15 Mo. 425) 78, 82
Carico v. Moore (29 N. E. 928) 110
Carlen v. Drurv (1 Ves. & B. 154) 267,
457, 549, 553
Carleton v. Jenness (42 Mich. 110, 3
N. W. 284) 168
Carlisle r. Mulhern (19 Mo. 56) 364, 366
Carlock v. Cagnacci (88 Cal. 600, 26
Pac. 597) 228
Carlton v. Coffin (28 Vt, 504) 159
V. Cummins (51 Ind. 478) 529, 530
V. Ludlow Woolen Mill (27 Vt.
496) 161
V. (28 Vt. 504) 160
Carmichael v. Greer (55 Ga. 116) 103, 463
V. Latimer (11 R. I. 395) 242
Carpenter, Ex parte (1 Mont. & McA.l) 489
Camp (39 La. Ann. 1024, 3 So.
269)
519
42
247
225
7
263, 264
V. Greenop (74 Mich. 664
N. W. 276)
V. Lockhart (1 Ind. 434)
Carr v. Leavitt (54 Mich. 540)
V. Smith (5 Q. B. 128)
Carrie v. Clovcrdale B. & C. Co. (90
Cal. 84, 27 Pac. 58) 132, 231
Carrier v. Cameron (31 Mich. 373) 171
Carrington v. Cantillon (Bunb. 107) 14i\
Carroll v. Blencow (4 Esp. 27) 2ii
V. Gayarre (15 La. Ann. 671) 160
V. Little (73 Wis. 52, 40 N. W.
582) 529
Carson v. Byers (67 la. 606, 25 N. W.
826) 182
V. Gillitt (50 N. W. 710) 69
Carter, Ex parte (2 Glvn & J.233) 473, 499
V. Flexner (17 S." W. 851) 363
V. Galloway (36 La. Ann. 473) 333
r. Home (1 Eq. Ca. Abr. "Ac-
count" 13) 196
TABLE OF CASES.
XXlll
Carter v. Roland (53 Tex. 540) 128, 389
V. Soiithall (:'> M. & W. 128) 164
V. Wluilley (1 li. & Ad. 11) 104, 403,
40 J, 410
Carver v Dows (40 III 374) 'JO
Carver (iiii & Macli. Co. v. Bannon (85
Tenn 712, 4 S. W. 831) 98, 332
Carvick /;. Vickery (Doug. 653, Holt
•207, March 61) 38, 48, 168, 532
Cary v. Williams (I Duer 607) 303
Casey Ai)eel(i Paige .303) 430
V. Beauregard (00 U. 8. 110) 331,
332, 442
r. Maxey (6 Cal. 276) 255
/'. Seger (4 Wash. St. 492, 30 Pao.
616) 7, 352
Casebolt o. Ackerman (46 N. J. 1) 160
Casey v. Brusli (2 Caines 293) 262, 51!)
V. Carver (41 III. 22-5) 07, 100
Casli V. Tozer (1 W. & 8. 519) 1-55, 150
Cassels v. Stewart (0 App. Cas. 64) 13J,
193, 204
Cassidy v. Hall (97 N. Y. 159) 61
Castell, Ex parte (2 Glyn & J. 124) 474.
4'.)9
Castle, Ex parte (3 Mopt. D. & D. 117) 493
Caswell u. Cooper (18 III. 532) 253, 255
V. Hazard (121 N. Y. 484. 24
N. E. 707) 238,243
Cater v. Everleigli (4 Des. 19) 363
Catron v. Shepherd (8 Seb. 308) 204
Catskill Bank r. Gray (14 Barb. 479) 28
u. Messenger (0 (^ow. 37) 143
V. Stall (15 Wend. 304) 180, 185
Catt r. Howard (3 Stark. 5) 428
Caudell r. Shaw (4 T. R. 361) 22
Cavanaugh v. Riley (19 S. W 745) 65
Cavitt V. .James (39 Tex. 189)
Cecil ('. Hicks (29 Gratt. 1)
Central Bank v. Walker (6G N. Y
424)
Central Nat. B;ink v Frye (148 Mass.
498, 20 i\. E. 325) 170, 405
Central Trust Co. v. Ohio Central
R. R. (36 F. R. 520) 559
Chadsev v. Harris (11 111. 151) 262, 263,
264
Chadwick v. Clarke (1 C. B. 700) 246, 5-53
(':hafEe r. Ludeling (27 La. Ann. 607) 50
Chaffraix v. Lafitte (30 La. Ann. 631) 46,
47
r. Price (29 La. Ann. 176) 60
Chalfant v. Grant (3 Lea 118) 351, 366
Chalmers v. Bradlev (1 .lac. & W.51) 514
Chamberlain v. Dow (10 Mich. 319) 3H7
V. M.idden (7 Rich. 395) 76
r. Walker (10 All. 429) 252, 253
Chambers v. Clearwater (1 Abb. App.
341) 119
V. Goldwin (9 Ves. 2.54) 514, 515
V. Howell (11 Beav. 6, 12 Jur.
905) 437
Champion v. Bostwick (18 Wend. 175) 46,
55, 66
V. Munford (Kirby 172) 169
381
203
50
Champion v. Rigby (1 Russ. &M. 5.39) 514
Champlin v. Tilley (3 Day 307) 164
Chandler, Ex parte (9 Ves. 35) 478, 479
c. Brainard (14 Pick. 285) 48
V. Herrick (19 Johna. 129) 144
V. Jessup (31 N. E. 1109) 352
V. Parkes (3 Plsp. 76) 22
Chaimel ('. Fassit (16 Ohio 166) 10, 128
Cliannell v. Ditchburn (5 M. & W.
494) 157
Chapin v. Coleman (11 Pick 331) 69
Chapline «. Conant (3 W. Va. 507) 46, 57,
62
Chapman v. Beach (1 Jac. & W. 594) 455,
456, 510
V. Koops (3 B & P. 289) 250, 290,
324, 33», 475
r. Lipscomb (18 S. C. 222) . 53
V. Thomas (4 Keves 216) 376
V. Wilson (1 Rob. Va. 267) 5, 1U7
Chappedelaine v. Dechenaux (4
Cranch 306) 511,515
Ghappel ;;. Brockway (21 Wend. 157) 401
Chappell r. Allen (38 Miss. 213) 378
Chappie «. Cadell (Jac. 537) 221, 510
Charlton v. Poulter (19 Ves. 148) 2»5,
286, 292
v. Sloan (76 la. 288, 41 N W.
303) 195
Charman v. Henshaw (15 Gray 293) 115
Charrington v. Laing (6 Bing. 242) 224
Chase r. Barrett (4 Paige 14«) 55, 60, 63
V. Bean (58 N. H. 183) 144
V. Buhl Iron Works (55 Mich.
139, 20 N. W. 827) 98
V. Garvin (19 Me. 211) 264, 266
v. Stevens (19 N. H. 465) 48
Chavany v. Van Sommer (1 Swanst.
512) 210, 285, 291, 371, 391, 395
Chazournes v. Edwards (,3 Pick. 5) 96, 100,
116, 172, 173
Cheap V. Cramond (4 B. & Aid. 663) 35.
40,41, .55, 58, 143, 164
Cheddick v. Marsh (1 N. J. 463) 225
Cheeny r. Clark (3 Vt. 431) 52, 82, 252
Cheeseman v. Sturges (9 Bosw. 246) 131
Chenango, Bank of, r. Osgood (4
Wend. 607) 144
('. Root (4 Cow. 126) 165
Cheney r. Newberry (67 Cal. 126, 7
Pac. 445) 228
Chenowith i-. Chamberlin (6 B. Mon.
60) 184
Cheshire v. Barrett (4 McC. 241) 18
Ches-son v. Chesson (8 Ired. Eq. 141) 512
Chester r. Dickerson (54 N. Y. 1) 7, 35, 3t)7
V. (52 Barb. 349) 116, 119
Chesterfield v. Janssen (2 Ves. Sen.
155) 514
Chevalier, Ex parte (1 Mont. & A.
345) 487, 496
Chicago Gas Light & Coke Co. r. Peo-
ple's Gas Light & Coke Co. (121 111.
530, 13 N. E. 169) 567
Chidney v. Porter (21 Pa. 390) 107
XXIV
TABLE OF CASES.
CJiild V. Hudson's Bay Co. (2 P. Wms.
309) 551
Chilton V. L. & C. Ry. (IG M. & W.
212) 551
Chippendale v. Thurston (4 C. & P.
9«, 1 M. & M. 411) 158
V. Tomlinson (Cooke B. L. 431) 441
Chissum v. Dewes (5 Kiiss. 29) 240
Ciiittenden v. W'itheck (50 Mich. 401,
15 N. \V. 526) 204, 236
Chitty V. Naisli (2 Dowl. Pr. 511) 420
Christ V. Firestone (11 Atl. 395) 131
Christian v. Ellis (1 Gratt. 396) 508
V. Lenhouse (19 Vt-s. 157) 298
Christie, Ex parte (8 Jur. 919) 183
I'. Bishop (1 Barh. Ch. 105) 69
Chuck, Ex parte (8 Buig. 469) 30, 55, 65,
494
Church V. Knox (2 Conn. 514) 137, 291,
325, 3.37, 345, 346, 446, 475
V. Sparrow (5 Wetid. 223) 74, 89, 143
Churton v. Douglas (Johns. 174) 236,237
Cincinnati, H. & D. R. R. v. Spratt
(2 Duv. 4) 65
Cirkel v. Croswell (36 Minn. 323,
31 N. W. 513) 103
Citizens' Ins. Co. v. Kountz Line (4
Woods 268) 65
V. Ligon (59 Miss 305) 65, 168, 442,
452
V. Wallis (23 Md. 182) 479
Citizens' Nat. Bank v. Hine (49 Conn.
236) 49, 427
,: Johnson (79 la. 290, 44 N. W.
551) 134, 146
V. Williams (128 N. Y. 77, 28
N. E. 33) 331
City Bank r. Dearborn (20 N. Y 244) 408
V. McChesnev(20N. Y.240) 408,411
Claflin c. Behr (89' Ala. 503, 8 So. 45) 476.
487
I'. Bennett (51 F. R. 693) 97, 512
V. Ostrom (54 N. Y. 581) 95, 96
Clagett r. Hall (9 G. & J. 81) 516
Claggett r. Kilbourne (1 Black 346) 35
Claiborne v. Creditors (18 La. 501) 456,
462
Clancarty v. Latouche (1 Ball & B.
428) 518
Claiicey v. Onondaga Fine Salt Mfg.
Co. (62 Barb. 395) 568
Clancy v. Craine (2 Dev. Eq. 363) 7
Clap, In re (2 Low. 226) 95
Clapp V. Rogers (12 N. Y. 283) 405, 406,
408
Clark, In re (3 D. & R. 260) 15
V. Allee (3 Harr. 80) 344
'•. Barnes (72 la. 563, 34 N. W.
419) 61, 62
V. Clement (6 T. R. 525) 144
V. Cullen (9 Q. B. D. 355) 333
o. Gushing (52 Cal. 617) 344
V. Dibble (16 Wend. 601) 260, 265
V. Fletcher (96 Pa. 416) 32, 409
V. Flint (22 Pick. 231) 209
Clark V. Hooper (10 Bing. 480) 158
V. Houghton (12 Gray 38) 77
V. Howe (23 Me. 560) 312, 443
V. Huffaker (26 Mo. 264) 163
V. Johnson (90 Pa. 442) 140
V. Jones (87 Ala. 474, 6 So. 362) 50
!•. Leach (8 L. T. n. s. 40) 213
V. Miller (4 Wend. 628) 273
V. Reid (11 Pick. 446) 48
V. Sidway (142 U. S. 682) 59
V. Sigourney (17 Conn. 511) 159
V. Smith (52 Vt. 529) 60
V. Taylor (68 Ala. 453) 87, 89, 347
V. Van Reimsdyk (9 Cranch 153) 69
V. Wilson (19 Pa. 414) 136
V. Worden (10 Neb. 87) 527
Clarke, Ex parte (1 De Gex 153) 488
V. Hogeman (13 W. Va. 718) 131
r. Imperial Gas Co. (7 Bing. 95,
4 B. & Ad. 315) 555
V. McAuliffe (81 Wis. 104, 51
N. W. 83) 7
V. Mills (36 Kas. 393, 13 Pac.
569) 249
V. Richards (1 Y. & C. 351) 36, 230
V. Slate Valley R. R. (136 Pa.
408, 20 Atl. 562) 192
V. Tipping (9 Beav. 282) 515
V. Wallace (1 N. D. 404, 48 N. W.
339) 83
Clarke's Appeal (107 Pa. 436) 254
Clarkson, Ex parte (4 Deac. & Ch. 56)
494
V. Carter (3 Cow. 84) 273, 498
Clay, Ex parte (6 Ves. 833)
V. Cottrell (18 Pa. 408)
V. Field (34 F. R. 375)
V. Freeman (118 U. S. 97)
329, 478, 491
88, 97, 172
363
433, 435,
439
69
322
132
V. Lanslow (1 M. & M. 45)
V. Rufford (8 Hare 281)
Clayton v. Hardy (27 Mo. 536)
Clayton's Case (1 Mer. 572) 123,421,425,
426, 522
Cleather v. Twisden (28 Ch. D. 340) 121
Clegg V. Fishwick (1 McN. & G. 294) 204,
300, 383
V. Houston (1 Phila. 352) 491
Cleghorn v. Ins. Bank of Columbus
(9 Ga. 319) 327
Clement v. British America Assur.
Co. (141 Mass. 298, 5 N. E. 847) 539
V. Brush (3 Johns. Cas. 180) 91, 92,
150, 154
V. Clement (69 Wis. 599, 35 N.
W. 17) 160, 403
V. Ditterline (11 S. W. 658) 202, 508
V. Foster (3 Ired. Eq. 213) 510
V. Hadlock (13 N. H. 185) 4.5
Clements v. Hall (2 De G. & J. 173) 204,
V. Jessup (36 N. J. Eq. 569) 56,
I'. Norris (8 Ch. D. 129)
Clemontson v. Blessing (11 Ex. 135)
383
332,
344
192
26
TABLE OF CASES.
XXV
Cleveland v. Battle (68 Tex. Ill, 3 S.
VV. 681) 480
0. Woodword (15 Vt. SO'i) 272
Cleveland Paj)C'r Co. v. Courier Co.
(()7 Mich. 152, 34 N. W. 65G) 28
Clifford V. Brooke (13 Ves. 131) 277
Clift V. Moses (112 N. Y. 426, 20 N. E.
392) 98
Clifton V. Howard (89 Mo. 192, 1 S.
VV. 2(3) 46, 53
Clough V. Radcliffe (1 l)e G. & S. 164) 450,
402
Clowes, Ex parte (2 Bro. C. C. 595) 428
V. Hawley (12 Johns. 487) 305
Coakley v. Weil (47 Md. 277) 132
Coate V. Williams (9 C. B. 481) 56
Coates V. Coates (6 Madd. 287) 217, 287
Coats V. Ilolbrook (2 Siuidf. Cli. 580) 244
Cobb V. Abbot (14 I'ick. 289) 06, 124
i;. Cole (44 Minn. 278, 46 N. W.
804) 512
V. 111. Cent. R. R. (38 la. 601) 107
V. New Enjfland Ins. Co. (0
Grav 192) 148
Cobham, Ex parte (1 Bro. Ch. 576) 496
Coiihran v. Anderson Co. Bank (83
Ky. 30) 115
V. Bartle (91 Mo. 636, 3 S. W.
854) 52
V. Perry (8 W. & S. 202) 11, 130,
391
Cochrane v. Allen (58 N. H. 250) 260
Cock V. Bailey (146 Pa. 328, 23 Atl.
370) 538
Cockburn v. Thompson (16 Ves. 321) 553
Cocke V. Branch Bank (3 Ala. 175) 82, 84
17. Bank of Tennessee (6 Humph.
51) 105,187
Cockerell v. Aucompte (2 C. B. n. 8.
410) 62
V. Cholmeley (1 Russ. & M. 425) 514
Cocks I'. Nash (9 Binjj. 341) 143
Codding, In re (9 F. R. 849) 359, 300
Coddington v. Hunt (6 Hill 595) 400
V. Idell (29 N. J. Eq. 504) 201
V. (30 N. J. Eq 540) 527
Coder V. Huling (27 Pa. 84) 309
Codman v. Rodgers (10 Pick. 112) 518
Coffee u. Brian (10 J. B. Moo. 341, 3
Bing. 54) 255, 256, 264
Coffin r. Day (34 F. R. 687) 332
V. Jenkins (3 Story 108) 61
Coffin's Appeal (106 Pa. 280) 542
Cofton v. Horner (5 Price 537) 291
Coggswell V. Davis (05 Wis. 191, 26
N. VV. 557) 405
Cogswell V. Wilson (11 Ore. 371, 4
Pac. 1130) 46, 51
V. (17 Ore. 31, 21 Pac 388) 344
Cohen •-. Gibbs (1 Hill S. C. 206) 465
V. Hannam (5 Taunt. 101) 318, 319
V. N. Y. Ins. Co. (50 N. Y. 610) 26
Coit V. Tracy (9 Conn. 1) 159
Colbeck, Li vp (Buck 48) 40, 65
Colburn v. Phillips (13 Gray 64) 317
Cole V. Albers (1 Gill 412) 490
V. Pennell (2 Rand. 174) 22
V. Pennoyer (14 111. 158) 17
V. Reynolds (18 N. Y. 74) 307
c. Sackett (1 Hill 516) 94, 483
V. Terry (2 Dev. & B. 252) 304
Coleman v. Coleman (78 Ind. 344) 50
V. (12 Rich. 183) 254
V. Darlmg (00 Wis. 155, 28 N. W.
367)
V. Fobes (22 Pa. 156)
V. Pearce (26 Minn. 123, 1 N. W.
840) 125
Coles c. Coles (15 Johns. 159) 349, 367
V. Gurney (1 Madd. 187) 145
Collamer v. Foster (26 Vt. 754) 252, 255
Collender v. Plielan (79 N. Y. 366) 527
Coller V. Porter (88 Mich. 549, 50
N. W. 658)
Colley V. Smith (2 Moo. & R. 96)
Collier v. Hanna (71 Md. 253, 17 Atl.
390)
V. Leech (29 Pa. 404)
V. McCall (84 Ala. 190, 4 So.
307)
Collingwood v. Berkeley (15 C. B. n. s
145)
Collins V. Barker (1893, 1 Ch. 578)
135
160
165
99
248
480
92
121
103
293
352
143
361, 362
300
V. Decker (70 Me. 23)
V. Prosser (1 B. & C. 682)
V. Warren (29 xMo. 230)
V. Young (1 Macq. 385)
CoUins's Appeal (107 Pa. 590)
CoUner v. Greig (137 Pa. 606, 20 Atl.
938)
Collumb V. Read (24 N. Y. 505)
Coliver V. Collyer (38 Pa. 257)
Cohmghi v. Bluck (8 C. & P. 464) 377, 388
Colt V. WooUaston (2 P. Wms. 154) 277,
455
Colton V. Stanford (82 Cal. 351, 23
Pac. 16)
Columbia Land & Cattle Co. v. Daly
(46 Kas. 504, 26 Pac. 1042)
Colwell V. Britton (59 Mich. 350, 26
N. W. 538)
V. Lawrence (38 Barb. 643)
V. Weybosset Nat. Bank (16 R. I.
288, 15 Atl. 80, 17 Atl. 913) 182, 347,
475, 476, 480
Combs V. Shrewsbury Ins. Co. (34
N. J. Eq. 403) 235
Commerce, Bank of, v. Meader (40
Minn. 325, 41 N. W. 1043) 87, 89, 163
Commercial Bank v. Lewis (l3 Sm. &
M. 226) 168, 180
V. Mitchell (58 Cal. 42) 331
V. Warren (15 N. Y. 577) 173, 187
V. Wilkins (9 Me. 28) 137, 320, 325,
327, 339, 344, 346, 500
Com. V. Bennett (118 Mass. 443) 57
Commonwealth, Bank of, v. Law (127
Mass. 72) 99, 187
V. Mudgett (44 N. Y. 514) 18?
V. (45 Barb. 663) 411
231
350
351
505
37
543
46
469
XXVI
TABLE OF CASES.
Compton V. Greer (2 Dev. Ch. 93) 615
Coinstock V. Smitli (23 Me. 302) 483
Conant v. Frary (19 lad. 530) 333, 3G5,
360
Condrey v. Gilliam (60 Mo. 86) 305
Conely v. Wood (73 Mich. 203, 41
N. \V. 259) 83
Conery v. Hays (19 La. Aun. 325) 103
Congdon v. Morgan ( 13 S. C. 190) 167
Conldin v. Barton (43 Barb. 435) 60
Conkiing r. Washington University
(2 Md. Ch. 497) 61
Conley v. Chapman (74 Ga. 700) 334
Connally v. Lyons (82 Tex. 064) 562
Connecticut River Bank v. Frencii (6
All. 313) 170
Connelly v. Cheevers (16 La. 130) 444
Conner v. Abbott (35 Ark. 365) 50
Connolly v. Davidson (15 Minn. 519) 66
Conrad V. Buck (21 W. Va. 396) 160, 168,
383, 893
Conro V. Port Henry Iron Co. (12
Barb. 54) 405, 407
Consequa v. Fanning (3 Johns. Ch.
587, 17 Johns. 511) 515
Const V. Harris (T. & R. 496) 188, 191,
211, 294, 295, 29(5, 518
Contee v. Dawson (2 Bland 264) 219, 516
Continental Nat. Bank v. Strauss (32
N. E. 1066) 636, 540
Converse v. Norwich & N. Y. Tr. Co.
(33 Conn. 166) 65
V. 8hanibaugh (4 Neb. 376) 69
Conwell V. Sandidge (8 Dana 278) 137,
234, 326, 391, 443, 500, 531
Cook, Ex parte (2 P. Wnis. 500) 329, 479,
491
, (8 Ves. 353)
, (Mont. 228)
V. Beech (10 Humph. 412)
467
474, 499
312, 313,
319
5
164
439, 443,
^ V. Carpenter (34 Vt. 121)
V. Castner (9 Cush. 266)
V. Collingridge (Jao. 607)
467, 504, 509, 514, 523, 524, 531
V. Fowler (L R. 7 H. L. 27) 203
V. Jenkins (35 Ga. 113) 379
V. Penrhyn Slate Co. (36 Oh. St.
136) 104, 409
V. Rogers (3 F. R. 69) 451
Cooke V. Bachellor (3 B. & P. 150) 320
V. Seeley (2 Ex. 746) 91, 312, 316
Cookingham v. Lasher (2 Keyes454) 272
y. (38 Barb. 656) 337
Cookson V. Cookson (8 Sim. 529) 357,
467, 509
Coombs V. Boswell (1 Dana 473) 385
Coomer v. Bromley (5 De G. & S.
532) 116
Coons V. Renick (11 Tex. 134) 146
Coope V. Bowles (42 Barb. 87) 132, 135
V. Eyre (1 H. Bl. 37) 34, 53, 54, 7'-,
89, 532
Cooper, Ex parte (1 Mont. D. & D.
358) 494
119
217
402
476
Cooper V. Henderson (6 Binn. 189) 465
V. McClarkan (22 Pa. 80) 180, 187
V. Prichard (11 Q. B. D. 351)
V. Watlinglon (2 Chit. 451, 3
Doug. 413)
r. Watson (3 Doug. 443, 2 Chit.
451)
Cope's Appeal (39 Pa. 284)
Copeland, Ex parte (2 Mont. & A.
177, 3 1). & Ch. 199) 133
Coppard r. Page (For. 1) 60
Coover's Appeal (29 Pa. 9) 331, 345
Corbett, In re (5 Sawy. 206) 335
V. Poelnitz (1 T. R. 5) 22
Corbin r. McChesney (26 111. 231) 99
Corey v. Cad well (86 JNlich. 570, 49
N. W. 611) 35,46,47,51,58
V. Perry (67 Me. 140) 470
Cork & B. R. R. v. Cazenove (11 Q. B.
935) 20
Cornells v. Stanhope (14 R. I. 97) 98, 308
Cornhauser v. Roberts (75 AVis. 554,
44 N. W. 744) 68, 103
Cornwall v. Cornwall (6 Bush 369) 360
V. Hoyt (7 Conn. 420) 23
Corpe V. Overton (10 Bing. 252) 17
Corps V. Robinson (2 Wash. C. C.
383) 164
Corwin v. Suydam (24 Oh. St. 210) 87
Cosio V. De Bernales (R. & M. 102) 310
V. (1 C. & P. 266) 22. 24
Coslake v. Till (1 Russ. 376) 240, 441
Costeker v. Horrox (3 Y. & C. 530) 517
Coster V. Clarke (3 Edw. Ch. 238) 349,
352, 361, 362
V. Thomason (19 Ala. 717) 187
Cothay v. Fennell (10 B. & C. 671) 272,
317, 318, 498
Cothran v. Knox (13 S. C. 496) 201
V. Marmaduke (00 Tex. 370) 46, 60
Cottle V. Leitch (35 Cal. 434) 455
Cotton V. Bettner (1 Bosw. 430) 124
V. Evans (1 Dev. & B. Eq 284) 97,
99, 100, 172, 173
Cottrell V. Mfg. Co. (64 Conn. 122, 6
Atl. 791) 237
Cottrill V. Vanduzen (22 Vt. 511) 77, 107
Couch V. Mills (21 Wend. 424) 144
V. Woodruff (63 Ala. 466) 47
Couchman v. Maupin (78 Ky. 33) 331
County V. Gates (26 Mo. 315) 160
Course v. Prince (1 Mill 416) 248, 262, 263
Coursen v. Hamlin (2 Duer 513) 200
Coursey v. Baker (7 H. & J. 28) 169, 185
Court r. Cross (3 Bing. 329) 157
Cousten v. Burke (2 H. & G. 300) 255
Cowan V. Burgess (Cooke 58) 303
V. Creditors (77 Cal. 403, 19 Pac.
755) 335
('. Gill (11 Lea 674) 442, 472
V. Iowa State Ins. Co. (40 la.
551) 235
V. Kinnev (33 Oh. St. 422) 69
Coward r. Clanton (79 Cal. 23, 21
Pac. 359) 7, 223
TABLE OF CASES.
XXVU
Cowell V. Sikes (2 Russ. 191) 330, 482
Cowen V. Eurtlierly Hardware Co. (11
So. lyu) 98
Cowles V. Garrett (30 Ala. 341) 127, 129, 3U2
Cox, Kx parte (1 Glyn & J. 355) 146
V. iimlfisli (35 Me. 302) 553
I). Delano (3 Dev. 8'J) 45, 4G, 03
V. iliekiiian ( 8 11. L. C. 268) 41, 05
0. Hubbard (4 C. B. 317) 109
V. Mcliiirney (2 Sandf. 501) 350
y. Volkurt (rfO Mo. 505) 2:»2
ij. VVillougliby (13 Ch. J). 803) 213
Crabtree v. May ( 1 IJ. Moii. 289) 10, 17, 20
V. Randall (133 Mass. 552) 52/"
Craft V. McConoughy (79 111. 346) 9, 560
Uragin c. Carleton (21 Me. 41)2) 70
V. Gardner (64 Mich. 399, 31
N. \V. 20(i) 333
Craig V. Alverson (0 J. J. Marsh 609) 163
: V. llulscliezer (34 N. J. 363) 274
Cramer r. Baeiiniann ((J8 Mo. 310) 201
V. Noonaii (4 Wis. 231) 322
Crane v. Ford (Hopk. 114) 290
('. Frencli (1 Wend. 311) 155, 3J3
V. Morrison (4 Sawy. 138) 344
Crater v. Binninger (45 N. Y. 545) 252
Craven v. Kniglit (2 Chan. 226) 49'.)
V. Widdows (2 Ch. Ca. 139) 200
Crawford v. Austin (34 Md. 49) 57
V. Bauni (12 Ricii. 75) 345, 470
V. Collins (45 Barb. 209) 109, 227
V. Hamilton (3 Madd. 251) 399
V. Sterling (4 Esp. 207) 185, 186
Crawshay v. Collins (15 Ves. 218, 2
liuss. 342) 191, 200, 208, 212, 215, 240,
241, 378, 394, 398, 434, 438, 440, 441,
463, 400, 468, 501, 502, 501, 500, 509,
523, 531
V. Maule (1 Swanst. 495, 1 Wils.
Ch. 181) 34, 127, 210, 294, 298, 299,
371, 372, 378, 383. 388, 392, 390,
398, 432, 434, 443, 448, 449, 459,
463, 504, 531
Creath v Sims (5 How. 192) 417
Credit-Mobilier v. Com. (07 Pa. 233) 558
Creel c. Bell (2 J. J. Marsh. 309) 310, 317
Cremer v. Higginson (1 Mas. 338) 420
Crescent Ins. Co. v. Bear (23 Fla. 50,
1 So. 318) 10, 345
V. Camp (64 Tex. 521) 236
Cribb V. Morse (77 Wis. 322, 46 N. W.
120) 3.32
Crisdee v. Bolton (3 C. & P. 230) 224
Crisp, Ex parte (1 Atk. 183) 479
, (Willes467) 479
Crispe v. Perritt (Willes 407, 1 Atk.
133) 391, 464
Crites V. Wilkinson (65 Cal. 559, 4
Pae. 567) 1.32
Crocker v. Colwell (46 N. Y. 212) 170
V. Higgins (7 Conn. 342) 469
Crockett V. Grain (33 N. H. 542) 331, 336
Croft, In re (8 Biss. 188) 491
■ V. Pyke (3 P. Wms. 112, 180) 137.
330, 475
Crompton v. Conkling (15 N. B. R.
417) 469
Cromwell v. County of Sac (96 U. S.
51) 203
Cronise v. Clark (4 Md. Ch. 403) 16
Cronkhite v. llerrui (15 F. R. 888) 160
Crooker v. Crooker (46 Me. 250) 344, 369
V. (52 Me. 207) 95, 470, 482
Cropper v. Coburn (2 Curt. 465) 344
Crosbie v. Guion (23 13eav. 518) 432
Crosby i;. Timolat (52 N. W. 520) 271
Cross V. Burlington Nat. Bank (17
Kas. 336) 3
I'. Cheshire (7 Ex. 43) 25-5, 256, 259
263, 264, 508
V. Jackson (5 Hill 478) 2-58
V. Langley (50 Ala. 8) 09
Crossgrove c. Himmelrich (54 Pa. 203J 09
Crossley v. T<iylor (83 Ind. 337) 248
Crosthwait v. Ross (1 Humph. 23) 82, 84
Crottes V. Frigerio ( 18 La. Ann. 283) 228
Crouch V. Bowman (3 Humph. 209) 111,
183
V. Emmerson (3 Humph. 209) 182
Croughton v. Forrest (17 Mo. 131) 132
Crowder, Ex ]>arte (2 Vern. 706) 329
Crowe V. Clay (9 E.x. 004) 483
Crowther v. Thorley (32 W. R. 330) 557,
561
Croxton, Ex parte (1 De G. M. & G.
600)
Crozier v. Kirker (4 Tex. 252) 112
Cruess i\ Fessler (39 Cal. 330)
Cruinless v. Sturgess (6 Heisk. 190)
Crusader, The (1 Ware 437)
Cruttwell V. Lye (17 Ves. 335) 236, 237,
239, 440
V. (1 Rose 123)
Cullen V. Queensbury (1 Bro. C. C.
103)
Cullum V. Bloodgood (15 Ala. 34)
Cumming v. Forrester (1 M. & S. 497)
V. Hackley (8 Johns. 202)
Cummings ('. Howard (03 Cal. 503)
V. Parish (30 Miss. 412)
V. Powell (8 Tex. 80)
Cummings's Appeal (25 Pa. 268)
Cummins r.Cassily (5 B. Mon. 75) 150, 153
V. Cummins "(8 Ired. Eq. 723) 385
Cumpston v. McNair (1 Wend. 457) 37,
58,59
Cunliffe v. Dyerville (7 R. L 325) 201
Cunningham v. Bragg (37 Ala. 436) 3«()
V. Green (23 Oh. St. 296) 527
V. Gusliee (73 Me. 417) 345
V. Littlefield (1 Edw. Ch. 101) 144,
507, 508
V. Munro (15 Grav 471) 383, 409
V. Ward (30 W. Va. 572, 5 S. E.
646) 333, 366
V. Woodbridge (76 Ga. 302) 123
Currier r. Cameron (31 Mich. 373) 88
V. Rowe (46 N. H. 72)
V. Silloway (1 All. 19)
V. Webster (45 IS. H. 226)
207
168
237
163
01
239
553
1.34
318
269
203
77
17
336
252
30
252
XXVIU
TABLE OF CASES.
Curry v. Fowler (87 N. Y. 33)
V. Kurtz (33 Miss. 24)
V. Larer (7 Barr 470)
f. Wliite (51 Cal obO)
Curtis V. Belkuap (21 Vt. 433)
273,
61
163
225
IGU
317,
318
53
3
496
478
152
312
103
4(3
489,
497
451
6
63
164
247
22
482
V. Cash (84 N. C. 41)
V. HoUingshead (2 Green L. 403)
V. Perry (ii Ves. 747) 494,
V. Woodward (58 Wis. 499, 17
N. W. 328)
Curtwel V. Brown (5 Jones 263)
Cusliing V. Marston (12 Cusli. 431)
V. Smith (43 Tex. 261)
Cushnian v. Bailey (1 ildl 526)
Cust, Ex parte (Cooke B. L. 548)
Cuibush V. Cutbush (1 Beav. 184)
Cutler V. Thomas (25 Vt. 73)
V. Winsor (6 Pick. 335)
Cutt V. Howard (3 Stark. 3)
Cutting ?.'. Daigneau (151 Mass. 297,
23 N. E. 839)
Cutts V. Gordon (13 Me. 474)
Cuxon V. Cliadley (3 B. & C. 591)
D.
Dabney v. Stidger (4 Sm. & M. 749) 165,
187
Dacie v. John (McClel. 206, 13 Price
446) 520
y. (McClel. 575) 302
Dages 1-. Lee (20 W. Va. 584) 95
Dailey v. Coons (64 Ind. 545) 103
• (.-. Hall (5 Bush 549) 57
Dain v. Cowing (22 Me. 347) 304
Pakin v Demming (6 Paige 95) 512
V. Graves (48 N. H 45) 255, 266
V. Williams (17 Wend. 447, 22 .
Wend. 201) 224
Dale V. Hamilton (5 Hare 369) 6, 7, 35,
349
Dalton V. Dalton (33 Ga. 343) 55
Dalton City Co. i: Hawes (37 Ga.
115) ' 62
Daly V. Bradbury (46 Minn. 396, 49
N. W. 190) 333
Dame v. Kempster (146 Mass. 454, 15
N. E. 927) 51
Dana v. Lull (17 Vt. 390) 134, 135
V. Stearns (8 Cush. 342) 20
Dance r. Girdier (1 B. & P. n. s. 34) 315
Danforth r. Corter (4 la. 230) 163
l^aniel '■. Cross (3 Ves. 277) 419
r. Daniel (9 B. Mon. 195) 98, 99, 274,
275, 337
V. Nelson (10 B. Mon. 316) 163
V. Owens (70 Ala. 297) 344
V. Townsend (21 Ga. 155) 331
Daniel Kaine, The (35 F. R. 785) 66
Daniels, Petitioner (14 R. I. 500) 135
V. Hammond (154 Mass. 165, 28
N. E. 12) 99
Dann v. Spurrier (7 Ves. 231)
Darby v. Darby (3 Drew. 495)
349,
V. Gilligan (33 W. Va. 246, 10
S. E. 400)
Darling.?,-. Boston & C. R. R. (11 All.
295)
V. IMarch (22 Me. 184) 97, 99,
172, 174, 376,
Darracott v. Penington (34 Ga. 388)
Darst V. Roth (4 Wash. C. C. 471)
Dart V. Walker (3 Daly 136)
Darthery v. Lee (2 Y. & C. 5)
Davenport v. Gear (3 111. 495) 262,
V. Rackstrow ( 1 C. & P. 89)
V. Runlett (3 N. H. 386) 96, 100,
David V. Birchard (53 Wis. 492, 10 N.
W. 557)
V. Ellice (5 B. & C. 196, 7 D. & R.
690, 1 C. & P. 369) 94, 387, 415, 482,
Davidson v. Bridgeport (8 Conn. 472)
r. Robertson (3 Dow 22!>)
Davies v. Atkinson (124 111. 474, 16
N. E. 899)
V. Games (12 Ch. D. 813) 360,
V. Hawkins (3 Moo. & S. 488)
272,
V. Hodgson (25 Beav. 177)
V. Penton (6 B. & C. 216)
V. Spurliug (1 Tam. 199, 1 Russ.
& M. 64)
Davis, Estate of (5 Whart. 530)
V. Allen (3 N. Y. 168)
V. Berger (54 Midi. 652, 20 N. W.
629)
l: Briggs (39 Me. 304) 246,
V. Burton (4 111. 41)
V. Christian (15 Gratt. 11) 349,
356, 362, 366, 367,
I'. Church (1 W. & S. 240)
V. Coleman (7 Ired. 424)
v. Cock (14 Nev. 265)
V. Davis (93 Ala. 173, 9 So. 736)
V. (60 Miss. 615) 351, 352,
V. (1 N. & McC. 290)
V. Delaware & H. Can. Co. (109
N. Y. 47. 15 N. E. 873)
V. Desauque (5 Whart. 530)
i: Howell (33 N. J. Eq. 72)
V. Keyes (38 N Y. 94) 387, 402,
V. Lane (10 N. H. 161)
V. Mason (5 T. K. 118)
V. Merrill (51 Mich. 480, 16 N.
W. 864)
r. Patrick (122 U. S. 138)
V. Smitli (82 Ala. 198, 2 So. 897)
V. (27 Minn. 390, 7 N. W.
731)
V. Sowell (77 Ala. 262) 435,
Davison i^. Holden (55 Conn. 103, 10
Atl. 575) 131,
Dawes v. Head (3 Pick. 128)
Dawson v. Ward (71 Tex. 72, 9 S. W.
106)
492
357,
358
332
65
165,
3«0
54
150,
151
119
514
264
109
172
332
484
483
169
332
364
258,
554
238
225
515
381
406
148
308
151
355,
432
443
159
139
333
508
320
331
96
476
407
460
401
247
65
364
98
436
549
468
10
TABLE OF CASES.
XXIX
Day V. Lafferty (4 Ark. 450) 151
V. Lockwood (24 Conn. 185) 202
V. McQuillan (V.i Minn. 205) 4(38
V. Stevens (88 N. C. 8;i) 53
Dayton v. Bartlett (88 Oil. St. 357) 435
V. Wilkes ( 17 How. Pr. 510) 237, 238
Deal V. Bogue (20 Ta. 228) 320, 321, 325
342, 343
Dean v. Macdowell (8 Ch. D. 345) 198
V. New hall (8 T. R. 1«8) 316
I'. Plunkett (13G Mass. 105) 115
V. Riclinioiid (5 Pick. 401) 23
Deane i: Hutchinson (40 N. J. Eq. 83,
2 Atl. 292) 344
Dear, Er parte (1 Ch. 1) 514) 444
Deardorf r. Tliacher (78 Mo. 128) 83, 84
De Herensjer v. Hammeli (7 Jarm.
Conv. 20) 45'5
De Berkora v. Smith (1 Esp. 29) 37, 69,
77, 81, 103, 107, 492
De Caussey v. Baily (57 Tex. 005) 332,
345
Deckard v. Case (5 Watts 22) 133, 135,
153
Decker v. Howell (42 Cal. 63G)
Decreet v. Burt (7 Cash. 551)
Deering v. Flanders (49 N. H. 225)
57,84
247
406,
407
22
Deerly v. Mazarine (I Salk. 116)
Deeter v. Sellers (102 Ind. 458, 1
N. E. 854) 97, 231
Deford r. Reynolds (36 Pa. 325) 405,
407, 410, 411
De Gallou r. L'Aigle (1 B. & P. 357) 23
Degan v. Singer (41 111. 28) 69
De Graura v. Jones (23 Fla. 83, 6 So.
925) 23
Degroot v. Darby (7 Rich. 117) 312, 313,
319
Deitz ('. Regnier (27 Kas. 94) 84, 171
De Jarnette v. McQueen (31 Ala. 230)
182, 183, 253, 266, 268
Deland v. Amesburv Mgf. Co. (7 Pick.
244) ' 416
Delaney v. Hutcheson (2 Rand. 183)
349, 359, 364
V. Timberlake (23 Minn. 383) 57
Delano v. Blake (11 Wend. 85) 18
Delauney v. Strickland (2 Stark. 416)
35, 52
De Leon v. Trevino (49 Tex. 88) 9
De Lizardi v. Gosset (1 La. Ann. 138)
545
Delmonico v. Guillaume (2 Sandf.
Ch. 336) 325, 349
Dl- Mautort v. Saunders (1 B. & Ad.
398) 271, 272
De Mazar v. Pvbus (4 Ves. 644) 36
Deming v. Colt (3 Sandf. 290) 134, 135
De Montmorency v. Devereux (1 Dru.
& VV. 119) 514
Demoss v. Brewster (4 S. & M. 661) 145
Demott V. Swaim (5 St. & P. 293) 162
Denithorne v. Hook (112 Pa. 240,
3 AtL 777) 104
Denman v. Dosson (18 La. Ann. 9)
403, 407
Deanery, hi re (89 Cal. 101, 26 Pac. 639) 4
Dennett v. Chick (2 Me. 191) 76
Dennis v. Green (20 Ga. 386) 339
Denny v. Cabot (6 xMet. 82) 45, 46, 47, 78
V. Metcalf (28 Me. 3»9) 270
Denton v. Richmond (1 Cr. & M. 734) 224
c. Rodie (3 Camp. 493) 89, 181
Denver v. Roane (99 U. S. 355) 201, 202
De Pusey v. Du Pont (1 Del. Ch. 82) 219
Dermani v. Home Ins. Co. (26 La.
Ann. 69) 235
Descadillas v. Harris (8 Me. 298) 483
Desha /•. Sheppard (20 Ala. 747) 200, 202
Desher v. Holland (12 Ala. 513) 317
Despatch Line v. Bellamy Mtg. Co.
(12 N. H. 234) . 92
DeTastet, Ex parte (1 Rose 10, 17
Ves. 247) 479
, (1 Rose 323) 485
V. Bordenave (Jac. 516) 286, 302
(;. Carroll (1 Stark. 88) 142, 471
V. Shaw (1 B. & Aid. 664) 246, 250,
271 309
Deval V. Burbridge (6 W. & S. 529) ' 194
Devan v. Fowler (2 Paige 400) 287
Devaynes ('. Noble (1 Mer. 529) 320, 387,
419. 421, 425, 426, 482, 522
r. (2 Russ. & M. 495) 330, 445
Devin v. Harris (3 Greene 186)
Devore v. Woodruff (1 N. D.
45 N. W. 701)
Devoss V. Gray (22 Oh. St. 159)
De Wahl v. Braune (1 H. & M. 178) 26
Dewdney, E.v parte (15 Ves. 499) 479
Dewey v. Chapin (156 Mass. 35, 30
N. E. 223)
V. Dewey (35 Vt. 555)
Dexter v. Arnold (2 Sumn. 108)
r. (3 Mass. 284)
De Zeug v. Bailey (9 Wend. 336)
Dial V. Agnew (28 S. C. 454, 6 S. E.
295)
Dickenson v. Holland (2 Beav. 310)
V. Lockyer (4 Ves. 36) 385, 420
Dickinson >:. Bold (3 Desaus. 501) 213, 443
V. Dickinson (29 Conn. 601) 503
V. (25 Gratt. 321) 387
V. Granger (18 Pick. 315) 261, 263,
266, 522
V. Legare (1 Desans. 537) 135, 508
V. Valpy (10 B. & C 128) 12, 82, 104
Dickson, Ex parte (2 Mont. & A. 99) 485
V. Alexander (7 Ired. 4) 142
V. Indianapolis C Mgf. Co. (63
Ind. 9) .385, 400
Dietrichsen v. Cabburn (2 Phil. 52)
278 279
Diggs V. Brown (78 Va. 292) 352,' 360,
366
Dilk V. Keighlev (2 Esp. 480) 16
Dillon V. Brown (11 Gray 179) 366
Dilworth u. Mayfleld (36 Miss. 40) 349,
356, 367
206
143,
204, 249
438
362
512
526
143
333
514
XXX
TABLE OF CASES.
Dim on V. Hazard (32 N. Y. 65) 332, 401
Dimoiid V. Henderson (47 Wis. 172,
2 N. VV. 73) 199
Dinham v. Bradford (L. R. 6 Ch. 519)
Dinsniore i'. Dinsmore (21 Me. 433)
Disideri, Re (L. K. 11 Eq. 242)
Ditclibuni d. bpracklin (5 Esp. 31)
202
159
403
U9,
469
170
302
Ditts V. Lonsdale (49 Ind. 529)
Divine v. Mitcluim (4 B. Mon. 488)
Dix c. Mercantile Ins. Co. (22 111. 272)
230
13, 55
139
60
58
55, 96, 97,
V. Otis (5 Pick. 38)
Di.xon V. Alexander (7 Ired. 4)
I'. Cooper (3 VVils. 40)
Doak V. Swann (8 Me. 170)
Dob V. lialsey (10 Johns. 34)
126
469
129
100, 173, 312
Dobbin v. Foster (1 C. & K. 323) 313, 388
Dobbins v. Tatem (25 Atl. 544) 372, 512
Docker (;. Somes (2 M. & K. 656) 123
Dodd V. Bishop (30 La. Ann. 1178) 103
Doddington v. Hallet (1 Ves. Sen. 497)
66
Dodds V. Rogers (68 Ind. 110)
Dodge I'. Dicas (3 B. & Aid. 611)
Dodgson, Ex parte (Mont. & M. 445)
V. Bell (5 Ex. 57) 24, 25
V. (5 Ex. 967) 130
Doe V. Halme (2 M. & R. 433) 165
Doggett I'. Jordan (2 Fla. 541) 6
Dolman v. Orchard (2 C. & P. 104) 77,
107, 403, 407
Dolph v. Troy Laundry Machinery
Co. (28 F. R. 553) 566
Dommett v. Bedford (6 T. R. 684, 3
Ves. 149) 467
Domville v. Solly (2 Russ. 372) 517
Donaghue i'. Gaffy (53 Conn. 43, 2 Atl.
397) 321
Donaldson v. Kendall (2 Ga. Dec.
227) 508
V. Williams (1 Cr. & M. 345) 199
Donelson v. Posey (13 Ala. 752) 234, 235
Doner v. Stauffer (1 Pen. & W. 198) 137,
325, 327, 331, 446, 500
Doniphan v. Gill (1 B. Mon. 199) 92
Donnally v. Ryan (41 Pa. 306) 89
Donnell v. Harshe (67 Mo. 170) 53
Doo V. Chippenden (Abb. Ship.) 272
Dore V. Wilkinson (2 Stark. 287) 124
Doremus v. McC(.rmick,(7 Gill 49) 116,
14.3, 144, 307
V. Selden (19 Johns. 21-3) 253, 817
Doty V. Bates (11 Johns. 544) 112, 171,
183
Doiibledav v. Muskptt (7 Ring. 110) 103
Dougal y.'Cowles (5 Day 511) 111, 139,
169
Dougherty v. Van Nostrand (1 Hoff.
Ch. 68) 196, 200, 237, 239, 240, 241,
384, 440, 443, 531
Douglas V. Horsfall (2 Sim. & S. 184) 322
V. Winslow (20 Me. 89) 325, 338, 344
Dounce ('. Parsons (45 N. Y. 180)
Dow IK Phillips (24 111. 249)
V. Sayward (12 N. II. 271)
128
170
78, 86,
338
291
435
248
V. (14 N. II. 9)
Dovvd V. Troup (57 Miss. 204)
Oovvling V. Clarke (13 R. I. 134)
V. Exchange Bank (145 U. S.
512) .
Downer v. Whittier (144 Mass. 448)
Downhara v. Matthews (I Ves. Sen.
497)
Downing v. Linville (3 Bush 472)
Downs V. Collins (6 Hare 418) 127, 447,
450
V. Gazebrooke (3 Meriv. 200) 514
V. Jackson (33 111. 404) 269, 376
Dowzelot V. Rawlings (58 Mo. 75) 103
Doyle V. Bailey (75 111. 418) 508
Drake v. Elwyn (1 Caiues 184) 6, 110,
169
V. Hill (53 la. 37)
Moore (66 la. 58, 23 N. W
84
203
210
97
95
263)
350
61
136
132
144
Ramey (3 Rich. 37)
V. Rogers (6 Mo. 317)
I'. Thvng (37 Ark. 228)
Dran ?-. Nc-whall (8 T. R. 168)
Dreher v. ^.tna Ins. Co. (18 Mo. 128) 230
Drennan r. London Assur. Corp. (20
F. R. 657) 235
Drennen v. House (41 Pa. 30) 103
Drew V. Person (22 Wis. 651) 200
i;. Power (1 Sch. & L. 182) 515
Drewry v. Montgomery (28 Ark. 256) 354
Driver v. Burton (17 Q. B. 989) 312
Drucker v. Wellhouse (82 Ga. 129,
8 S. E. 40)
Drumrigiit v. Philpot (16 Ga. 424)
480
151,
152
295
41, 45, 55
315
20
271
532
Drury v. Roberts (2 Md. Ch. 157)
Dry V. Boswell (1 Camp. 329)
I'. Davy (10 A. & E. 30)
Dublin & W. R. R. v. Black (8 Ex
181)
Dubois v. Ludert (5 Taunt. 609)
V. Roosevelt (4 Johns. 262)
Dubois's Appeal (38 Pa. 231) 139, 154
Dubos V. Hoover (25 Fla. 720, 6 So.
788) 58
Du Bree v. Albert (100 Pa. 483) 350
Duckworth v. Alison (1 M. & W. 412) 224
V. Trafford (18 Ves. 283) 297
Dudley v. Littlefield (21 Me. 418) 35, 180,
349
Duff V. Baker (78 la. 642, 43 N. W.
463) 403
V. East India Co. (15 Ves. 198) 144,
385
V. McGuire (99 Mass. 300) 57, 248
Duhring v. Duhring (20 Mo. 174) 349,
358, 362, 364, 366
Dulles V. De Forest (19 Conn. 190) 426
Dumas v. Jones (4 Mass. 647) 318. 319
Dumont v. Ruejjprecht (38 Ala. 175) 454
TABLE OF CASES.
XXXI
257
47G
2U7
8
45, 102
Dunbar v. Lane (1 Bro. P. C. 3) 515
Duncan i\ Clark (2 Rich. 587) 180
V. Lewis (1 Duv. 183) 87
u. Lowndus ('i Camp. 478) 185
V. Lyon (3 Johns. Ch. 351) 252, 257,
2t)7, 507
V. Worrall (10 Price 31) 289
Dunihass v. Gallajjher (4 Barr 205) 184
Duniiani v. Gillis (8 Mass. 4G2)
V. Hanna (18 Ind. 270)
V. Jar vis (8 Barb. 88)
. Presby (120 Mass. 285)
V. Rogers (1 Barr 255)
V. Shindler (17 Ore. 256, 20 Pac.
320) 333
Dunlap V. Limes (49 la. 177) 168
V. McNeil (35 Ind. 316) 429
V. Watson (124 Mass. 305) 202, 527
Dunlop V. Gregory (10 X. Y. 241) 402
Dunman v. Coleman (59 Tex. 199) 333
Dunn V. Lee (1 J. B. Moo. 2)
Dunnica v. Clinkscales (73 Mo. 500)
Dunning's Appeal (44 Pa. 150)
Dunton v. Brown (31 Mich. 182)
Dupierris v. Hallisay (27 La. Ann.
132)
Dupuy V. Johnson (1 Bibb 502)
V. Leavenworth (17 Cal. 262)
V. Sheak (57 la. 3tJl)
Durant i: Abeiidrotli (69 N. Y. 148)
V. Rhener (26 Minn. 362, 4 N. VV.
610)
Durbin i-. Barber (14 Olno 311)
Durham r. Hartlett (32 Ga. 22)
Duryea v. Burt (28 Cal. 569)
Duryee v. Elkins (1 Abb. Adm. 529)
Dutton V. Morrison (17 Ves. 193)
290, 391, 463, 465, 468, 470, 475, 503
V. Woodman (9 Cush. 255) 164
Duvergier v. Fellows (5 Bing. 248, 10
B. & C. 826) 550, 554, 556
D wight V. Brewster (1 Pick. 50) 124, 142
V. Hamilton (113 Mass. 175) 236,
238
Dwinel *•. Stone (30 Me. 384) 6, 46, 55
Dyer v. Clark (5 Met. 562) 137, 349, 350,
351, 353, 354, 356, 358, 361, 362, 363,
364, 369, 399, 432, 434, 436, 521, 522
Dyke v. Brewer (2 C. & K. 828) 12, 73,
139, 427
Dyster, Ex parte (2 Rose 256) 494
E.
Eager v. Crawford (76 N. Y. 97) 61
Eagle V. Bucher (6 Oh. St. 295) 394
Early v. Reed (6 Hill 12) 185
Eason v. Cherry (6 Jones Eq. 261) 194
East India Co. r. Blake (Finch 117) 224
V. Vincent (2 Atk. 83) 492
Eastburn v. Kirk (1 Johns. Ch. 444) 292
Eastman v. Clark (53 N. H. 276) 44, 46, 57
V. Cooper (15 Pick. 276) 147
V. Foster (8 Met. 19) 485
269
488
542
17
165
269
350
23
539
456
529
58
60
154
Eastman v. Wright (6 Pick. 316) 142, 270.
307, 312
Easton *•. Courtwright (84 Mo. 27) 364
V. Strother (57 Ga. 506, 10 N. W.
877) 204
Eastwood V. Brown (1 Ry. & M. 312) 493
Eaton V. Boissoncault (67 Me. 540) 203
V. Walker (76 Mich. 579, 43
N. W. 638) 50
Ebbert's Appeal (70 Pa. 79) 6, 359
Eccleston v. Clipsham (1 Saund. 153) 207,
216, 257
Eddie v. Davidson (1 Doug. 650) 137, 446,
475
Edgar v. Donnally (2 Munf. 387)
V. Fowler (3 East 222)
Edger v. Knapp (6 Scott N. R. 707)
360
269
255,
269
18
Edgerly v. Shaw (25 N. H. 514)
Edison Electric Bluminating Co. v.
De Mott (25 Atl. 952)
Edmiston v. Wright (1 Camp. 88)
Edmondson v. Davies (4 Esp. 14)
Edmund v. Caldwell (15 Me. 340)
Edmunds v. Bushell (L. R. 1 Q. B
97)
Edmundson v. Thompson (2 F. & F.
564)
r. (31 L. J. Ex. 207)
Edwards v. McFall (5 La. Ann. 167)
c. Meyrick (2 Hare 60)
c. Parker (88 Ala. 356, 6 So 684) 347
V. Remington (51 Wis. 336, 8
N. W. 193)
c. Thomas (66 Mo. 468)
V. Tracy (62 Pa. 374)
Egbert v. Kimberly (23 Atl. 437)
Egberts v. Wood (3 Paige 517) 135, 136,
327, 436, 464, 468
Ehle V. Purdy (6 Wend. 629) 316
Eichel V. Sawyer (44 F. R. 845) 68
Eighth Nat. Bank v. Fitch (49 N. Y.
539)
Finer v. Beste (32 Mo. 240, 39 Mo.
69)
Elder V. Hood (28 111. 538)
Elderkin r. Winne (1 Chandl. 27)
Electric Tel. Co. of Ireland, In re (22
Beav. 471)
Elgie V. Webster (5 M. & W. 518) 5, 252,
507
Elkin V Green (13 Busli 612)
Elkinton v. Booth (143 Mass. 479)
Ellicott V. Nichols(7 Gill 85)
Elliot V. Davis (2 B. & P. 838)
Elliot's Appeal (60 Pa. 161)
Elliott V. Brown (9 Ves. 597)
i\ (3 Swanst. 489) 288,
v. Dudley (19 Barb. 326) 97, 99, 172,
173
V. Dvcke (78 Ala. 150) 367
V. Holbrook (33 Ala. 659) 144
V. Sleeper (2 N. H. 525) 483
^^ Stevens (38 N. H. 311) 340
Ellis, Ex parte (2 Glyn & J. 312) 473, 499
497
147
125
317
115
103
104
409
514
254
432
57,69
539
345
134
251
70
371
427
409
160
154
236
436
377
xxxu
TABLE OF CASES.
Ellis V. Allen (80 Ala. 515, 2 So. 670)
131, 132,
V. Bronson (40 111. 445) 403,
V. Ellis (47 N. J. 69)
V. Jameson (17 Me. 235)
c. Watson (2 Stark. 453)
Ellison V. Chapman (7 Blackf. 224)
V. Dezell (1 Sel. N. P. 385)
V. Lucas («7 Ga. 223, 13 S. E.
445)
V. Moffat (1 Johns. Ch. 46)
c. Sexton (105 N. C. 356, 11 S. E.
180)
EUston u. Deacon (L; R. 2 C P. 20)
Ellsworth V. Tartt (26 Ala. 733)
Elmer r. Hall (28 Atl. 971) 248,
Elmira I. & S. R. M. Co. v. Harris (124
N. Y. 280, 26 N. E. 541 ) 32, 408,
Elton, Ex parte (3 Ves. 238) 329, 477,
Elverson v. Leeds (97 Ind. 3-36)
Emanuel v. Bird (19 Ala. 596)
V. Draughn (14 Ala. 303)
Emberson v. McKenna (16 S. W. 419) 61
Emerick v. Moir (124 Pa. 498, 17
Atl. 1)
Emerson v. Harmon (14 Me. 271) 142,
V. Knower (8 Pick. 63) 152,
V. Senter (118 U. S. 3)
Emery v. Wilson (79 N. Y. 98)
Emly V. Lye (15 East 7) 89,
Emmet v. Butler (7 Taunt. 599)
Enderby, Ex parte (2 B. & C. 389)
England v. Curling (8 Beav. 129) 193,
211,
V. England (1 Baxt. 108)
England, Bank of. Ex parte (2 Rose
82) 487,
Englis V. Furniss (4 E. D. Smith 587)
271,
English Society, Tn re (1 H. & M. 85)
Ennis v. Williams (30 Ga. 691)
Ensign v. Wands (1 Johns. Cas. 171)
53, 81,
Ensminger v. Marvin (5 Blackf. 210)
Entwisle v. Mulligan (12 Atl. 766)
Espy V. Comer (76 Ala. 501) 160,
Essex V. Essex (20 Beav. 442) 357,
Estabrook v. Messersmith (18 Wis.
545)
r. Smith (6 Grav 570)
Estes r. Whipple (12 Vt. 373) 246,
Estwick V. Conningsby (1 Vern. 118)
300, 302,
Etheridge v. Binney (9 Pick. 272) 74,
143, 170,
Etnyre r. McDaniel (22 111. 201)
Eubanks v. Peak (2 Bail. 497)
Eustis V. Bolles (146 Mass. 413, 16
N. E. 286)
Evans v. Bennett (1 Camp. 303)
V. Bicknell (6 Ves. 174) 276,
78,
193
409
155
70
69
257
152
332
512
405
lOU
66
346
409
478,
491
405
446
58
8,69
223
143,
180
307
136
255
181
407
493,
494
209,
456
62
496
270,
307
65
403
37,
532
171
105
361,
364
358
391
311
258
294,
436
114,
171
203
18
403
316
512
Evans v. Biddleman (3 Cal. 435) 88
V. Bryan (95 N. C. 174) 98, 525
r. Corriell (1 Greene 25) 69
V. Drummond (4 Esp. 89) 69, 73, 95,
387, 409, 416, 482, 484, 485
V. Evans (9 Paige 178) 300, 434, 437,
443, 504, 531
V. Gibson (29 Mo. 223) 354, 364
V. Silverluck (1 Peake 21) 275, 312
r. Wells (22 Wend. 325, 20 Wend.
251) 180
V. Winston (74 Ala. 349) 475
V. Yeatherd (2 Bing. 133) 254, 267
Everard v. Heme (Litt. 191) 143
Everet v. Williams (1 Lind. Part. 93) 9
Everett v. Coe (5 Den. 180) 45, 46
r. Stone (3 Storv 446) 470
Everhart's Appeal (100 Pa. 349) 6
Everit v. Strong (5 Hill 163, 7 Hill
585) 134, 153
i: Watts (10 Paige 82) 23
Everitt v. Chapman (6 Conn. 347) 6, 53,
74, 102, 229
Evernghim v. Ensworth (7 Wend.
326) 97, 178
Ewing V. French (1 Blackf 353) 317
V. Osbaldiston (2 My. & Cr. 53) 8, 9
Exchange Bank v. Tracy (77 Mo.
594) 432, 451
V. White (30 F. R. 412) 83, 87
Evrich v. Capital State Bank (67
'iMiss. 60, 6 So. 615) 347
F.
Fagely v. Bellas (17 Pa. 67)
Faikney v. Reynous (4 Burr. 2069)
Fail r. McRee (36 Ala. 61)
Fairburn v. Pearson (2 McN. & G.
144)
Fairchild v. Fairchild (64 N. Y. 471)
V. Holly (10 Conn. 184) 421,423,
Fairland v. Percy (L. R. 3 P. & D. 217)
Fairthorne v. Weston (3 Hare 387)
457,
Faith V. Richmond (11 A. & E. 339)
111,
Falkland v. Cheney (5 Bro. P. C. 476)
Fall River Whaling Co. v. Borden
(10 Cush. 458) 7, 35, 349, 350, 353,
Fancher v. Bibb Furnace Co. (80 Ala.
481, 2 So. 268) 148,
Fanning v. Cliadwick (3 Pick. 420)
261, 263,
Fanshawe t'. Lane (16 Abb. Pr. 71)
Farber v. Granard (4 B. & P. 80)
Fargo I'. Ames (45 la. 491)
Farina v. Silverlock (1 De G & J. 434)
Farley v. Moog (79 Ala. 148) 344,
Farlovv, Ex parte (1 Rose 421)
Farmer v. Russell (1 B. & P. 296)
Farmers' Bank v. Bay less (35 Mo.
428)
154
9
53
294
350
425
563
294,
510
110,
112
188
354,
356
308
260,
266
542
23
98
244
436
468
269
181
TABLE OF CASES.
XXXlll
Farmers' Bank v. Bayliss (41 Mo. 274) 89,
181
V. Clarke (4 Leifjh 603)
V. Green (30 N. J. 316)
V. liitter ( 12 Atl. Gu'J)
c. Smith (20 \V. Va. 641)
Farmers' Ins. Co. v. Ross (29 Oh. St
429)
Farnam v. Boutelle (13 Met. 159)
Farnliam v. Bro.)k.s (9 Pick. 212)
Farniim, /;( re (6 Law Kep 21)
V. I'atch (tiO N. IL 294)
Farr v. Johnson (25 111. 522)
V. I'earce (3 Madd. 74) 241,242,440,
441
V. Smith (9 Wend. 338)
Farrant r. Ohiiius (3 B. & Aid. 692)
Farrar v. Beswick (1 M. & W. (585)
V. (1 M. & \i. 527)
V. Deflinne (1 C. & K. 580)
V. Ilutciiinson (9 A. & E. 641)
142, 178, 179
Farrington v. Harrison (44 N. J Eq.
232, 10 Atl. 105)
Farwell r. Metcalt (63 N. H. 276)
r. St. Paul Trust Co. (45 Minn.
495, 48 N. \V. 326)
Faulkner v. Bailey (123 Mass. 588)
V. Wiiitaker (3 Green L. 438)
Fawcett v. Osborn (32 111. 411)
V. Wliitehouse (1 K. & M. 132)
Fay V. Davidson (13 .Minn. 523)
V. Noble (7 Cush. 188)
Fayette Nat. Bank v. Kenney (79 Kv.
123) 47"7,
Fearns v. Young (9 Ves. 549) 443,
Featiierstone v. Hunt (IB & C. 113) 387.
418
Featherstonhaugh v. Fenwick (17
Ves. 298) 196, 204, 212, 240, 372, 373,
384, 388, 392, 394, 443, 467, 504, 509, 531
. f. Turner (25 Beav. 382) 530
Feigley v. Sponeberger (5 W. & S.
464)
V. Whitaker (22 Oh. St. 606)
Felichy i'. Hamilton (1 Wash. C C.
491)
Fell, Ex parte (10 Ves. 347) 326, .328, 338,
490, 493, 494
Fellows V. Wyman (.33 N. H. 351) 378,
381 382
Felton V. Deall (22 Vt. 170) ' (52
Fenn i'. Bolles (7 Abb. Pr. 202) 243
0. Craig (3 Y. & C. 216) 322
V Timpson (4 E. 1). Smitli 276) 69
Fennings i;. Grenville (1 Taunt. 241) 303,
304
Fenton v. HoUoway (1 Stark. 126) 27
Fereday v. Hordern (Jac. 144) 52
I'. Wightwick ( 1 Tam. 2.50) -34, 443,
502, 503, 504, 531
V. (1 R. & M. 45) 364
Fereira i: Sayres (5 W. & S. 210) 383
Ferguson v. Baker (116 N. Y. 257, 22
N. E. 400) 254
159
412
136
49
53, 58
425
514
487
49
232
303
224
303
234
409
97,
512
98
159
3
60
196
66
50
487
.501
79
162
54
Ferguson v. Bell (17 Mo 347)
V. Hanauer (19 S. W. 749)
Fern r. Cusliing (4 Cush. 357)
Fernald u. Clark (is4 Me. 234, 24 Atl.
823)
Ferris v. Burrows (.34 Hun 104)
V. Myrick (44 N. Y. 315)
Ferry v. Henry (4 Pick. 75) 47,
Fessler v. Hickerneli (82 Pa. 150)
Feucht r. Evans (52 Ark. 217)
Fichtliorn v. Boyer (1 Watts 159)
Fickett r. Switt (41 Me. 65)
Fidgeon v. Sliarp (1 Marsh. 198)
Field V. Carr (5 Bing. 13)
V. Clark ( t Ves. 396)
V. Crawford (6 Gray 116)
u. Holland (6 Cranch 8)
Fielden v. Lahens (9 Bosw. 436)
Fife, Ex parte (2 Mont. & A. 577)
Fifth Ave. Bank r. Colgate (120 N. Y.
381, 24 N. E. 799)
Figes, Ex parte (1 Glyn & J. 122)
V. Cutler (3 Stark. 139) 11,
Figgins V. Ward (2 C. & M. 424)
Fightmaster v. Beasly ^7 J. J. Marsh.
415)
Filbrun v. Ivers (92 Mo. 388, 4 S W.
674)
Filley v. McHenry (71 Mo. 417)
t' Phelps (18 Conn 294) 111,
Finckle v. Stacy (Ca. Ch. 9)
Finlay v. Stewart (56 Pa. 183)
249,
Finley i;. Fay (17 Hun 67)
V. Lycoming Ins. Co. (30 Pa.
311)
Finney v. Bedford Ins. Co. (8 Met.
348)
r. Warren Ins. Co. (1 Met. 16)
Fireman's Ins. Co. v. Floss (67 Md.
403, 10 Atl 139)
First Nat. Bank v. Almy (117 Mass.
476) 50,
V. Breese (-39 la. 640)
V. Clark (32 N. E. 255)
V Conwav (67 Wis. 210, 30 N.
W. 215) ■ 68, 69,
V. Hackett (61 Wis. 33-5, 21 N.
W. 280) 135,
(•. Hall (101 U S 4.3)
v: Morgan (73 N Y. 593) 96, 171
V. Parsons (128 Ind. 147, 27 N.
E.486)
V. Whitney (4 Lans. 34)
Fisher v. Bowles (20 III. .396) 77,
('. Mowbray (8 East 380)
I'. Murray (1 E. D. Smitli .341)
V. Sweet (67 Cal. 228, 7 Pac.
657) 58,
V Taylor (2 Hare 218)
V. Tucker (1 McC. Ch. 169) 150,
17
368
468
414
438
663
520
248
98
151
164
470,
490
425
446
346
•69
170.
173
146
543
503
210
164
.304
204
69
183,
445
64
256.
266
136
235
318
318
2-36
,550
170
642
,405
427
445
1.36
540
103
16
135
248
147
1.59,
508
XXXIV
TABLE OF CASES.
Fisk V. Copeland (1 Over. 383) 164
V. Herrick (G Mass. 271) 137, 33'.l,
345, 340, 44t)
Fiske V. Foster (10 Met. 697) 468
r. Gould (12 F. K. 372) 445
Fitch V. Hall (25 Barb. IH) 45
c. Harrington (13 Grav 4G8) 104,
128, 474
V. Stamps (6 How. Miss. 487) 1U4
Fitzell V. Leaky (72 Cal. 477, 14 Pac.
198) 53
Fitzgerald v. Grimniell (64 la. 261, 20
N. W. 179) 335
Fitzpatriek o. Flannagan (106 U. S.
648) 442
Flack V. Charron (29 Md. 311) 332
Flagg V. Upham (10 Pick. 147) 173
Fliinaj>an (•. Shuck (82 Ky. 617) 360
Fhuiagiu v. Champion (I Green Ch.
51) 69, 162, 164
Fleischmann v. Gottsclialk (70 Md.
52:^, 17 Atl. 384) 222
Fleming v. Uunbar (2 Hill S. C. 532) 150,
151
I'. McNair (1 Mont. Part. 37) 106
Flemyng v Hector (2 M. & W. 172) 35, 52
Fletcher v Dyche (2 T. K. 32) 224
c. Pollard (2 Hen & M. 544) 520
V. PuUen (70 Md. 205, 16 Atl.
887) 105
o. Reed (131 Mass. 312) 392, 393
Vandusen (52 la. 448)
Flood (.'. Yandes (1 Bhickf. 102)
Flournoy r. Williams (68 Ga. 707)
Flower r. Barnekoff (20 Ore. 132, 25
Pac. 3;0)
r. O'Connor (7 La. 194)
Flovd V. Wallace (81 Ga 688)
Fo.sg V. Green (16 Me. 282)
V. Johnston (27 Ala. 432) 11,
284
151
69
444
123
70
276,
V. Lawry (68 Me. 7
Foil r. McArthur (31 Ala 26)
Folds r. Allardt (35 Minn. •:
N. W. 201)
Foley V. Hobards (3 Ired. 177)
Folk V. Ru-sell (7 Baxt. 591)
V. Wilson (21 Md. 538)
277, 455, 456
343
164
29
17
88
160
70, 89, 181
16
Forrester v. Bell (10 Tr. L. 656) 551
Forsaith v. Merritt (1 Low. 336) 468
Forster i\ Hale (5 Ves. 308) 302
Forsyth r. Hastings (27 Vt. 646) 18
V. Woods (11 Wall. 484) 4, 488
Furtune o. Brazier (10 Ala. 791) 252, 258
316
Fosdick V. Van Horn (40 Oh St. 459) 114
Foster v. AUanson (2 T. li. 479) 262, 267,
507, 619
V. Andrews (2 Pen. & W. 160) 169,
173
V. Barnes (81 Pa. 377) 361
V. Donald (1 Jac. & W. 262) 214, 516
i\ Hall (4 Humph. 346) 88, 89
V. Jackson (Hob. 59) 144
0. Lawson (3 Bing. 452) 320, 321
y. United States Ins. Co (11
Pick. 85) 146
Foster's Appeal (74 Pa. 391) 359
Fougner v. First Nat. Bank (30 N. E.
442) 61
Fourth Nat. Bank v. Altlieimer (91
Mo. 190, 3 8 W. 858) 58, 187
Foute V. Bacon (24 Mi.-^s. 156) 161
Fowke V. Bowie (4 H. & J. 566) 420
P'owle V. Harrington (1 Cush. 146) 381
Fowler r. Bailey (14 Wis. 125) 350
r. Lud«ig (34 Me. 455) 96, 483
Fowlkes V. Bowers (11 Lea 144) 476, 487
Fox V. Clifton (6 Bing. 776) 12, 30, 108,
130, 140,252,554, 556
V. (9 Bing. 115) 6, 11, 130, 554,
556
V. Hanburv (Cowp. 445) 129, 131,
134, 136, 304, 324, 391, 463, 464, 465,
466,471, 475, 531
155
68
24
427
249
.24,
247
118
354
Fonda V. Van Home (15 Wend. 631]
Foot >\ Goldman (68 Miss. 629, 10 So.
62) 17
r. Sahin (19 Johns. 154) 96, 185
Forbes a. Marshall (11 V.x. 176) 113
V. Webster (2 Vt. 58) 269
Ford r. Clark (72 Ga. 76(1) 160
;• H ift (Writrht 118) 150
r. Pliillips (1 Pick 202) 19
Forde c. Herron (4 Munf. 316) 350, 867,
369
Fore r. Hittson (70 Tex. 517, 8 S. W.
2' "2) 83
Forkner i\ Stuart (6 Gratt. 197) 131
Forman v. Homfray (2 Ves. & B. 329) 280.
Forney v. Adams (74 Mo. 138)
508, 510
97
V. Norton (9 Mich. 207)
Francis, In re (2 Sawy. 286, 7 N. B.
R. 359)
V. Dickel (68 Ga. 265)
r. Smith (1 Duv. 121)
F>ancisco v. Fitch (25 Barb. 130)
Frank v. Anderson (13 Lea 695) 23
Blake (68 la. 760, 13 N. W.
50)
V. Branch (16 Conn 261)
V. Webb (67 Miss. 462, 6 So
(-.20)
Frankland v. McGusty (1 Knapp Pr
274) 99, 175, 176
Franklin v. Brownlow (14 Ves. 550) 467
V. Robinson (1 Johns Ch. 156) 200,
384
V. Thomas (3 Mer. 225)
Franklin, The (6 C. Rob. 127)
Franklin Bank v. Hooper (36 Me
222)
Franks, Er parte (1 Moo. & R. 1)
r. De Pienne (2 Fsp. 687)
Fraser v. Gates (118 111. 99, 1 N. E
817)
Frazer, Tn re (1892, 2 Q. R. 633)
V Howe (106X11. 563)
201
290
26
420
22
23
66
405
429
TABLE OP CASES.
XXXV
Frazier v. Frazier (77 Va. 775)
Fret'land v. (Jocke (2 Miiiif. ',ib'2)
V. Heron (7 Crarich 147)
V. Stansfield (16 Jur. 792)
V. (2 Sm. & G. 479)
Freeman, Ex parte (liuck 471)
V. Bloomfield (43 Mo. 391)
0. Cairpbell (05 Cal. 107)
/'. Oarliart (17 Ga. 348)
r. Carpenter (17 Wis. 126)
i\ Ellison (37 Mich. 459)
V. Fairlie (3 Mer. 44)
0. Ross (15 Ga. 252)
V. Smith (2 Wall. 160)
('. Stewart (41 Miss. 138)
Freeman's Bank v. Rollins (13 Me
202)
Freese v. Meson (49 111. 191)
Freligh v. Miller (10 La. Ann. 418)
French v. Andrade (6 T. R. 582)
201
515
518
2'M
466, 530
428, 490,
499
10,47
182
151
177
99
123
180
70, 279
500
417
57
71
438
V. Chase (6 Me. 166)
V. Fenn (3 Douf?. 257)
V Price (24 Pick. 13)
c. Rowe (15 la. 5()3)
V. Styring (2 C. B. n.
346, 446, 498
500
63, 66
125, 163
8. 357) 67,
252
94
16
84
525
Frentress v. Marble (2 Greene 563)
Fridge v. State (3 G. & J. 103)
F>ien<l v. Duryee (17 Fla. Ill)
Frigerio v. Crottes (20 La. Ann. 351)
Frink v. Ryan (4 111. 322) 220, 262, 265
Fripp ('. Williams (14 S. C. 502) 162
Frisbie v. Larned (21 Wend. 450) 483
Fronime v. Jones (13 la. 474) 131
Fromont v. Coupland (2 Bing. 170) 248,
262, 519
Frost V. Moulton (21 Beav. 596) 128, 373
V. Wolf (77 Tex. 455, 14 S. W.
440) 367
Fry, Ex parte (1 (^ilyn & J. 96) 428, 490
• y. Bennett (4 Duer 247) 322
y. Potter (12 R. I. 542) 249
Fuch V. Blakiston (15 Alb. L. J. 288) 623
Fuldo ('. Griffin ( 1 F. & F. 147)
FuUagar v. Clark (18 Ves. 481)
Fullam V. Abrahams (29 Kas. 725)
Fuller r. Ferguson (26 Cal. 546)
V. McHenry (53 N. W. 896)
V. Percival (126 Mass. 381)
Fulmer's Appeal (90 Pa. 143)
40
514
336
24, 36
24
168
193, 199,
222
Fulton V. Central Bank (92 Pa. 112) 168,
378
331
V. Huglies (63 Miss. 61)
V. Loughlin (118 Ind. 286, 20
N. E. 796) 131
I'. Williams (U Cash. 108) 246
Furber v. Carter (11 Humph. 271) 77, 103
Furlong v. Bartlett (21 Pick. 401) 304
Furnival v. Weston (7 J. B. Moore
356) 142, 145, 307
Furze v. Sharwood (2 Q. B. 388) 114
G.
Gable v. Williams (59 Md. 46)
136, 284,
435, 480
5, 6
Gabriel v. Evill (9 M. & W. 297)
Gage V. Parmalee (87 111. 329)
V. Rollins (10 Met. 348)
Gail V. Leckie (2 Stark. 107)
Gainsborough v. Stork (Barn. Ch.
312) 207.215,511
Galbraith v. Gedge (16 B. Men. 631) 361,
362
V. Moore (2 Watts 86)
Gale V. Leckie (2 Stark. 107)
V. Miller (44 Barb. 420)
V. Reed (8 East 80)
V SuUoway (62 N. H. 67)
Galigher v. Lockhart (11 Mont. 109,
27 Pac. 446)
Gallagher's Appeal (114 Pa. 353, 7
Atl. 237)
Galsworthy v. Strutt (1 Ex. 659) 224, 225
Gait ('. Calland (7 Leigh 594) 94, 508
Galway v. Matthew ( 1 Camp. 403) 79,
111, 113, 183,387,402
V. (10 East 264) 79,80,387,
402
Gamble v. Grimes (2 Ind. 392)
Gannett v. Cunningham (34 Me. 56)
Gano y. Samuel (14 Ohio 592) 184
526
312
252
254
210
87
401
525
393
332
176
380
185,
206
Gansevoort v. Williams (14 Wend.
133) 96, 99, 100, 172, 173, 174, 184
Ganson v. Lathrop (25 Barb. 455) 184,
331
Garbett v. Veale (5 Q. B. 408) 344
Gardenhire v. Smitli (39 Ark. 280) 53
Gardiner v. Childs (8 C. & P. 345) 13, 101
Gardner v. Baker (25 la. 34.3) 144
v. Cleveland (9 Pick. 334) 66
V. Conn (34 Oh. St. 187) 168, 380,
400
V. Northwestern Co. (52 III. 367) 69
Gardom, Ex parte (15 Ves. 286) 142
Gardon v. Slowden (12 CI. & F. 237) 8
Garland, Ex parte (10 Ves. 110) 65, 450,
451, 452, 503
I'. Agee (7 Leigh 362) 162
V. Davidson (3 Munf. 189) 150
Hickey (75 Wis. 178, 43 N. W.
832)
Jaeomb (L. R. 8 Ex. 218)
Noble (IJ B. Moore 187)
146
82
148,
320
550
Garrard v. Hardey (5 M. & G. 471)
Garretson v. Weaver (3 Edw. Ch.
385) 293, 295, .371, 456
Garrett v. Handley (3 B. & C. 462) 312
V. (4 B. & C. 664) 146, 316, 317
V. Miss. & A. R. R. (1 Freem.
Ch. 70) 289
V. Robinson (80 Ala. 192) 525
V. Taylor (1 Esp. 117) 313
Gartside Cole Co. v. Maxwell (22 F. R.
197) 60
XXXVl
TABLE OF CASES.
Garvin v. Paul (47 N. H. 158) 339, 340
Gass V. N. Y. P. & B. K. R. (99 Mass.
220) 65
V. Stimson (3 Sumn. 98) 425
Gassie, Succession of (42 La. Ann.
239, 7 So. 454) 508
Gaston v. Kellogg (91 Mo. 104, 3 S.
W. 589) 201
Gates V. Bennett (33 Ark. 475) 134
V. Fisk (45 Mich. 522, 8 N
558)
Graham (12 Wend. 53)
V. Hughes (44 Wis. 332)
V. Pollock (5 Jones 344)
V. Watson (54 Mo. 585)
Gathright v. Burke (101 Ind. 590)
Gavin v. Walker (14 Lea (543)
Gay V. Bovven (8 Met. 100)
V. Jolinson (.32 N. H. 167)
V. Seibold (97 N. Y. 472)
V. Waltnian (89 Pa. 453)
Gaylord v. Imhoff (26 Oh. St. 317)
W.
160, 101
154, 155
95, 414
307
90
405
74,87
162
22
228
149
335,
491
Geddes v. Wallace (2 Bligh 270) 60, 107,
269, 518
Geerv v. Cockroft (33 N. Y. Super.
140) 97
Geise V. Ragan (80 Ga. 732, 6 S. E.
697) 254
Cellar, Ex parte (1 Rose 297) 59, 73, 133
George (■. Claggett (7 T. R. 361) 272
Geortner v. Trustees, &c. (2 Barb.
625) 295, 381
Gerard r. Basse (1 Dall. 119) 150, 155
V. Bates (124 III. 150. 16 N. E.
258) 343
Gering, Ex parte (1 Ves. Jr. 168) 503
German Mining Co., In re (27 Eng.
L. & Eq. 158) 200, 203
, (4 De G. M. & G. 19) 200, 202
Gernon v Hoyt (90 N. Y. 631) 114
Gervais v. Edwards (2 Dr. & W. 80) 278
Gestons v. Brooke (Cowp. 793) 62
Cetchell V. Foster (106 Mass. 42) 55
V. Heald (7 Me. 26) 159
Gibbons v. Wilcox (2 Stark. 43) 48, 60, 69
Gibbs i\ Baltimore Gas Co. (130U S
396)
r. Bryant (1 Pick. 121)
V. Merrill (3 Taunt. 307)
Gibson v. Lupton (9 Bing. 297)
566, 567
76
22
48, 53,
54,88
V. Minet (1 C. & P. 247) 482
V. Moore (6 N. H. 547) 255, 264, 265
r. Smith (31 Neb. 354, 47 N. W.
1052) 46, 51
V. Stevens (7 N. H. 352) 320, 325, 343
V. Stone (43 Barb. 285) 45
V. Warden (14 Wall. 244) 150
Giddings v. Palmer (107 Mass. 269) 328
Giffin V. Ashby (2 C. & K. 139) 157
Gilbert v. Dickerson (7 Wend. 449) 304
Gilchrist ?•. Brande (58 Wis. 184, 15
N. W. 818) 87, 143, 404
Gildersleeve v. :Mahony (5 Duer 383) 180
Gilfillan v. Henderson (2 CI. & F. 1) 15
Gill V. Ferris (82 Mo. 156) 60, 111
V. Geyer (15 Uhio 399) 221
V. Kuhn (0 S. & R. 333) 47, 107, 263
V. Lattimore (9 Lea 381 ) 335
Gillaspy v. Peck (46 la. 461) 336
Gillbank v. Stephenson (31 Wis. 592) 58
Gille V. Hunt (25 Minn. 357, 29 N. W.
2) 351
Gillespie v. Hamilton (3 Madd. 251) 432
Gillett V. Hall (13 Conn. 426) 507, 508
V. Thornton (L. R. 19 Eq. 599) 213
Gillighan v. Tebbetts (33 Me. 360) 163
Gilly V. Singleton (3 Litt. 249) 164
Giiman v. Cunningham (42 Me. 98) 53
V. Vaughan (44 Wis. 646) 526
Gilmore v. Black (11 Me. 485) 53, 127,
138, 555
Gilpin V. Enderbey (5 B. & Aid.
954) 47, 51
V. Temple (4 Harr. 1) 69
Ginesi v. Cooper (14 Ch. D. 596) 237
Given v. Albert (5 W. & S. 333) 48, 74,
444
Glasscock v. Smith (25 Ala. 474) 382
Glassington v. Thwaites (1 Sim. & St.
124) 70, 194, 197, 198, 216, 217, 220,
285, 286, 294, 510
Gleason v. Chicago, M. & S. P. R. R.
(43 N. W. 517) 196
V. Clark (9 Cow. 57) 163
V. McKay (134 Mass. 419) 501
V. Van Aernam (9 Ore. 343) 512
i: White (34 Cal. 258) 434
Glen V. Arnold (56 Cal. 631) 470
Glossop V. Colman (1 Stark. 25) 17, 109
Glover v. Austin (6 Pick. 209) 320
V. Tuck (24 Wend. 153) 211, 257
Glyn V. Caulfield (15 Jur. 807) 520
Goble V. Howard (12 Ohio 165) 260
Goddard v. Bulow (1 N. & McC. 45) 439
V. Hodges ( 1 Cr. & M. 33, 3 Tvrw.
209) 10, 128, 248,' 252, 553
V. Ingram (3 Q. B. 839) 157, 158, 162
V. Lyman ( 14 Pick. 268) 311
V. Pratt (16 Pick. 412) 5, 29, 58, 375
406, 410, 412
Godfrey v. Browning (2 Ves. Sen. 33)
431
V. Macauley (1 Peake 155) 412
V. Templeton (86 Tenn. 161,
6S. W. 47) 201
V. TurnbuU (1 Esp. 371) 402, 412
V. White (43 Mich. 171, 5 N. W.
243) 201, 361
Goembel v. Arnctt (100 111. 34) 332
Goepper v. Kinsinger (39 Oh. St. 429)
352
Goesele v. Bimeler (14 How. 589) 37
Gold V. Canham (1 Cas. Ch. 311,
2 Swanst. 325) 287, 516
Golden State & M. I. W. r. Davidson
(73 Cal. 389, 15 Pac. 20) 366
Goldsmid v. Cazenove (7 H. L. Cas.
785) 487
TABLE OF CASES.
XXXVll
Goldsmith v. Eichold (94 Ala. 116,
10 So. bO) 4, 204, 331
V. Sachs (17 F. R. 726, 8 Savvy.
110) 12, 259
Gomersall v. Gomersall (14 All. 60) 248
Good, J'! X parte (5 Ch. D. 40) 57, 144
Goodbar v. Gary (16 K. K. old) 99, 332
Goodburn v. Stevens (5 Gill 1) 350, 361,
362
Goodcliap V. Roberts (14 Ch. D. 49) 203
Goode V. Harrison (5 B. & Aid. 147)
10, 19, 103, 108
V. Linecurn (1 How. Miss. 281)
147
y. McCartney (10 Tex. 193) 60,98,
179, 274
Goodenow ;;. Jones (75 111. 48) 429
Gooding v. Morgan (37 Me. 419)
483
Goodman, Ex parte (3 >radd. 373) 485
('. W'liitconib (1 Jac. & W. 674)
199, 278, 284, 285, 293, 295, 2'JO, 455,
456, 457. 510
V. White (25 Miss. 103) 82, 147
Goodnow V. Smith (18 Pick. 41G) 144
Goodsell '•. Myers (3 Wend. 479) 19
Goodspeed v Wiard Plow Co. (45
Mich. 322, 7 N. W. 902) 380, 400
Goodtitle V. Woodward (3 B. & Aid.
689)
Goodwin V. Parton (41 L. T. Rep. 91,
42 L. T. Rep. 568)
Gordon v. Buchanan (5 Yerg. 71)
t'. Cannon (18 Gratt. 387)
V. Ellis (7 M. &G. 607)
r. (2 C. B. 821)
V. Freeman (11 111. 14)
c. Gordon (3 Swanst. 476)
'■. Kennedy (36 la. 167)
Gorham v, Thompson (Peake 42)
165
Gorman v Russell (18 Cal. 688)
159
147
135
179, 274
116, 272
386, 392
511
327
406,
411
549
Goss i: Duiresnoy (Davies B. L. 371) 49y
510
550
19
38
335
419
144
234, 235
559, 564
394
Gossini v. Terazzo (66 Cal. 545)
Gott V. Dinsraore (HI Mass. 45)
Goudv V. Werbe (117 Ind. 154,
N. E. 764)
Gougli V. Davies (4 Price 200)
Gould V. Gould (4 N. H. 173)
r. (6 Wend. 263)
>•. Head (38 F. R. 886)
>■. Horner (12 Barb. 60l)
Guuldmg, Ex parte (2 Glyu & J. 118)
96, 175
/•. Bain (4 Sandf. 716) 294, 297
Gouthwaite v. Duckworth (12 East
421) 73,102,229
Gowan v. Jackson (20 Johns. 170) 165
r. Jeffries (2 Aslim. 296) 294, 295,
297, 300, 371, 391, 456, 463
Gower v. Saltmarsh (11 Mo. 271) 225
Grabenheimer v. Rindskoff (64 Te.x.
49) 104, 475
Grace v. Shurter (1 Wend. 148) 444
V. Smith (2 W. Bl. 998) 39
Graeflf v. Hitchman (5 Watts 454) 74, 89,
114, 181
Grafton v. United States (3 Story 640) 76
Grafton Bank v. Moore (13 N. H. yt»)
69, 164
Graham v Harris (5 G. & J. 489) 270
V. Holt (3 Ired. 300) 249, 262, 264
V. Hope (Peake 154) 406, 412
V. Robertson (2 T. K. 282) 253, 254,
266, 268, 40«
v. Selover (59 Barb. 313) 160
V. Taggart (11 Atl. 652) yy
L\ Thornton (9 So. 292) 254
V. Wichels (1 Cr. & M. 188) 385
Gram c. Cadwell (5 Cow. 489) 78, 97, 178
V. Seton (1 Hall 262) 151, 153
Grant, In re (5 Law Rep. 303) 485
0. Hawkes (Chit. Bills 42) 168, 179,
206
r. Jackson (Peake 203) 163
V. Watts (10 Paige 82) 12
Grasselli u Lowden (11 Oh. St. 349) 401
Gratz V. Bayard (1 1 S. & R. 41) 127, 194,
286, 300, 432, 455
Graves v. Boston Ins. Co. (2 Crancli
419) 146, 318
V. Hall (32 Tex. 665) 135
V. Kellenberger (51 Ind. 66) 170
V. Key (3 B. & Ad. 318) 492
V. Merry (6 Cow. 701) 403, 405
V. Sawcer (T Raym. 15)
Gray, Ex parte (4 Deac & Ch. 778)
, In re (HI N. Y. 404, 18 N. E.
719)
V. Brown (22 Ala. 262)
V Chiswell (9 Ves. 118)
Church (84 Ga. 125, 10 S. E.
303
488
478, 487
143
330
539)
118
117
223
543, 547
163
Cropper (1 All. 337)
V. Crosby (18 Johns 219)
V. Gibson (6 Midi. 300)
V. Hodson (1 Esp. 135)
c. Palmer (9 Cal. 616) 349, 356, 359
V. Portland Bank (3 Mass. 364) 221
V. Smith (43 Ch. D 208) 242, 243,
360
V. Ward (18 111. 32) 82, 84
r. Washington (Cooke 321) 511
V. Wilson "(4 Watts 39) 220
Grazebrook, Ex parte (2 Deac. & Ch.
186) 473
V. McCreedie (9 Wend. 437) 155
Greathouse »'. Greathouse (60 Tex.
.597) 254
Greatrix v. Greatrix (1 De G. & S.
692) 286
Greddes v Wallace (2 Bligh 295) 207
Greeley v. Wyeth (10 N. H. 15) 96, 97,
140,178, 179, 274,312
Green r. Barrett (1 Sim. 45) 11, 277, 455
V. Beals (2 Caines 2-54) 150, 155
V. Beesley (2 Bing. N. C 108) 57
V. Bostwick (1 Sandf. Ch. 185) 302
V. Bradfield (1 C. & K. 454) 490
V. Briggs (6 Hare 395) 66
XXXVlll
TABLE OF CASES.
Green v. Chapman (27 Vt. 236) 270, 307
(• Drakin (2 Stark. 347) 96, 174
V. Gieen (1 Ohio 24-4) 354, 'SCI
V Tanner (8 Met. 411) »y, 181
I'. Waco State Bank (78 Tex. 2) 392
c. Waring (1 W. Bl 475) ^02
Greene v. Butterwortli (45 N. J. Eq.
738, 17 All. 949) 445
I'. Greene (1 Ohio 244) 137, 3.io,
302
Greenleaf v. Quincy (12 Me. 11 ) 100
Greenslade v. Dower (7 B. & C. 635) 82,
84, 147
Green wald v. Raster (86 Pa. 45)
Greenwood v. Marvin (HI N. Y. 423,
19 N. E. 228)
Greer c Ferguson (19 S. W. 966)
Gregg V. Brower (07 111. 525)
c. Hord (129 111. 613, 22 N. E.
528)
I'. James (1 111. 107)
Gregg Township v. Half-Moon Town-
siiip (2 Watts 342) 55
Gregory o. Bailey (4 Harr. 256) 273
I'.'Forrester (McC Ch. 318) 512
V. Gregory (Coop 201,Jac. 631) 514
144
366
368
251
212
144
i\ Menefee (83 Mo 413)
f. Paul (15 Mass. 31)
V. Pierce (4 Met. 478)
Grellier v. Neale (Peake 146)
Gridiey v. Dole (4 N. Y. 486)
201
23
23
272
255, 208,
508
Grieff v. Boudousquie (18 La. Ann.
631) 72
Grier v. Hood (25 Pa. 430) 155, 156
Griffin v. Doe (12 Ala. 783) 6
Griffith V. Buck (13 Md. 102) 328, 338
r. Buffum (22 Vt 181) 58, 74, 102
V. Chew (8 S. & R 30) 270, 307
V. Wilbing (3 Binn. 317) 507
Grigsbv v. Nance (3 Ala. 347) 255
Grill, E.r parte (Cooke B. L. 503) 497
Grim's Appeal (105 Pa. 375) 433, 434,
43ti
Grinnan v. Baton Rouge Mills Co.
(7 La. Ann. 638) 408
Gri.«soni I'. Moore (106 Ind. 296, 6 N.
E, 029) 363
Griswold v. Haven (25 N. Y. 595) 125, 161
r. Waddington (15 Johns. 57) 10,26,
12'.t, 403, 432, 459, 555
(;. (16 Johns. 438) 26, 309, 310,
390, 403, 463, 501
Grosvenor, Er parte (14 Ves. 589) 503
r. Lloyd (1 Met. 19) 74, 410
Groth 1-. Payment (79 Mich. 290, 44
N. W. 611) 457
Grove v. Dubois (1 T. R. 112) 318
Grover r Hall (3 H. & J. 43) 515
V. Hugell (3 Russ. 432) 289
Grow V Seligman (47 Mich. 607) 239
Grozier v. Atwood (4 Pick. 234) 61
Grand v. Van Vlack (69 III. 478) 118
Gruner r. Slacken (39 La. Ann. 1076,
3 So. 338) 206
Gae'ringer v. His Creditors (33
Ann. 1279)
Guice V. Thornton (76 Ala. 466)
La.
476
12, 89,
98
Guidon v. Robson (2 Camp. 302) 77, 107,
108, 109, 273, 316, 492
Guild V. Welch (119 Mass. 257) 87
Guillon V. Peterson (9 Phila. 225) 120, 123,
167
,.. (89 Pa. 163) 123
Gulick V. Gulick (2 Green 578) 260, 262
Gunn V. Central R. R. (74 Ga. 509) 27
Gunter v. Williams (40 Ala. 561) 93
Guptil V. McFee (9 Kas. 30) 335
Gurney, Ex parte (3 Mont. D. & D.
541) 494
V. Evans (3 H. & N 122) 103
Guyther v. Pettijohn (6 Ired. 388) 303
Gwinn v. Rooker (24 Mo. 290) 151
Gwynn v. Gwynn (27 S. C. 527, 4 S. E.
229) 23, 24
G Wynne v. Estes (14 Lea 662) 434
Gyger's Appeal (62 Pa. 73) 203, 526
H.
Haas V. Shaw (91 Ind. 384) 24
Habershon v. Blurton (1 De G & S.
121) 342,375,391,392
Hacker v. Shepherd (2 Chitty 652) 469
Hackett v. Multnomah Rv. (12 Ore.
124, 6 Pac. 659) 27
V. Stanley (115 N. Y. 625, 22 N.
E. 745) 44
Hackley v. Patrick (3 Johns. 536) 163
Haddock v. Crocheron (32 Tex. 276) 160
1-. Grinnell Mfg. Co. (109 Pa. 372,
1 At!. 174) 543
Hadfield r. Jameson (2 Munf. 53) 74,
117, 124
llagar v. Mounts (3 Blackf. 57, 261) 97,
172
V. Stone (20 Vt. 106) 272
Hage V Campbell (78 Wis. 572, 47 N.
W. 179) 98, 134
Hagedorn v. Oliverson (2 M. & S.
426) 318
Haggart v. Morgan (4 Sandf. 198) 220
Haggerty v. Foster (103 Mass. 17) 538
V. Taylor (10 Paige 261 ) 544, 545
Hague V. Rolleston (4 Burr. 2174) 129,
391, 463,464,479
Hahlo V. Mayer (102 Mo. 93, 13 S. W.
804) 104
Haldeman v. Bank of Middleton (28
Pa. 440) 172, 187
Halderman v. Halderman (1 Hempst.
558) 264
Hale V. Gerish (8 N H 374) 19
V. Hale (4 Beav. .369) 295, 456
y. (12 Beav. 414, 3 McN. &
G. 79) 294
V. Henrie (2 Watts 145) 369
V. Wilson (112 Mass. 444) 805
TABLE OF CASES.
XXXIX
Haley v. Case (142 Mass. 316, 7 X. E.
877)
Rallied v. Marke (3 Swanst. 444)
Halifax, Ex parte (2 Mont. U. & D.
544)
Haipenny v. Pennock (33 U. C. Q. B.
229)
Halseliam v. Young ;5 Q B 833)
Halsey v. Norton (45 Miss. 703) 463,
V Whitney (4 Mas. 200) 150,
Halstead v. Sliepard (23 Ala. 558) 97,
132,
HaUted c. Sclimelzel (17 Johns. 80)
Halsy V Fairbanks (4 Mass. 206)
Hall, At parte ('J Ves. 341») 478,
, (1 Kose 2)
V. Bainbridge ( I M. & G. 42)
('. Barrows (33 L J. Ch. 204)
V. Clagett (48 Md. 223) 231,
V. Cook (69 Ala »7)
i: Digbv (4 Bro. P. C 224)
>•. Franklin (3 .M & \V. 259)
r. Hall (12 Beav. 414) 295, 396,
457,
r. (2 McC. Cli. 302) 327,
145,
113,
257,
/■. Kimball (77 Hi. 101)
c. Lanning (91 U S 160)
V. Leigh (8 Crancli 50;
r. Kichanlson (20 Atl. 978)
r. Smith (1 B. & C 407)
r. Stewart (12 Pa. 213)
Hall's Appeal (60 Fa. 458)
Hallack r. March (25 111. 48)
Hallett r. Cumston (110 Mass. 29) 47,
r. Dowdall (18 Q. B 2)
r. Hallett (2 Paige 432)
Hallidav i: Doggett (6 Pick. 359)
316,
r. Ward (3 Camp. 32)
Halls V Coe (4 McC. 130) 142 178,
Hallsted i-. Coleman (143 Pa. 352, 22
Atl. 977)
Hambidge r. De la Croue'e (3 C. B
744) 148,
Haniblin v. Dinnoford (2 Edw. Ch.
52<J)
Hamer, Ex parte (1 Rose 321)
Hamil v. Flamil (27 Md. 679)
Hamill v. Purvis (2 Barr 177)
r. Stokes (Uaniell 20, 4 Price
161)
Hamilton, In re (1 F. R. 800)
V. Benbiiry (2 Hayw. 385)
I--. Cummings (1 Joiins Ch 517)
295,
276,
29,
125
511
494
143
185
469
152
131,
276
58,
262
307
479
146
149
237,
244
248
333
68
15
456,
458
330,
444
271
148
54
331
183
508
2:-i8
147
242
552
520
512,
317
157
179
68
155
278
480
465
185
530
472
420
276,
289
V. Halpin (68 Miss. 99, 8 So 739) 37.
Hamilton (18 Pa. 20) 262,
Seaman (1 Ind 185) 379,
Stokes (4 Price 161)
Summers (12 B. Mon. 11)
363
508
381
455
163,
170
Hamilton c. Van Rensselaer (43 N. Y. 244)
203
Hammatt v. VVyman (9 Mass. 139) 384
Ilanimoii r. Roll (March 202) 143
Hammond, Ex jjaile (L. li. 16 Eq.
614) 470
y. Douglas (5 Ves 539) 240, 438,
441, 443,501
V. Hammond (20 Ga. 556) 249
Hamper, Ex parte (17 Ves. 403) 40, 46,
56, 272, 498, 505
Hamper's Appeal (51 Mich. 71, 16
N. VV 236) 60
Hanchett v. Gardner (138 111. 571, 28
N. E. 788) 134
Hand >j. Armstrong ( 18 la. 324) 203
Haney Mfg C<>. r. Perkins (78 Mich.
1, 4.; N. \V. 1073) 125
Haiiff c. Howard (3 Jones Eq. 440) 361,
367, 369
Hanford i'. Prouty ( 133 111. 339, 24
N E 565) 332
Hankey r. Becht (25 Minn 212) 56
V. Garrett (1 Ves. 236) 123, 489
Hannigan v. Allen (127 N Y. 639, 27
N. E. 402) 429
Hanning u. Ferrers (1 Eq Cas. Abr.
356) 492
Hanover Nat. Bank v. Klein (64 Miss.
141) 332
Hanson ?•. Metcalf (46 Minn. 25, 48
N. W. 441) 136, 364
Hapgood V. Cornwell (48 111. 64) 332
Haralson v. Campbell (63Ala. 278) 333, 334
Harbster's Appeal (125 Pa. 1, 17 Atl.
204) 439
Harding r. Butler (156 Mass. 34, 30
N. E. 168) 159
i: Fo.xcroft (6 Me. 76) 48, 54, 66
i: Glover (18 Ves. 281) 294, 295
V. Norfolk Mfg. Co. (80 Va.
Hardy
403)
r. Sproule (29 Me. 258)
c. Waters (38 Me. 450)
Hare, Ex parte (2 Mont. & A. 478)
y. Waring (3 M. & W. 362)
Harford r. Street (46 la 594)
Hargrave v. Conroy (4 Green 281 )
Hargreaves, Ex parte (1 Cox 440)
143, 366
66
Hargroves >•. Cooke (15 Ga. 221)
Harman v. Johnson (2 E. &. B. 61)
Harmon !• Clark (13 Gray 114)
17
490
555
334
57
474,
499
420
82
481
Harper i: Fox (7 W. & S. 142)
1-. Lamping (33 Cal. 641)
148, 155
123, 420,
454
'•, Ravmond (3 Bosw. 29, 7 Abb.
Pr. 142)' 555
r. Wrigley (48 Ga. 493) 171
Harries v. Jamieson (5 T. R. 556) 414
Harrington >• Churciiward (29 L. J.
N. s. Ch. 521) 47
r. Higham (13 Barb. 660) 148, 149
Harris, Er parte (2 Ves. & B. 214, 1
Rose 129, 437) 489, 491, 497, 498
xl
TABLE OF CASES.
Harris, Ex parte (1 Madd. 583) 78, 79,
88, 383, 500
, Succession of (39 La. Ann. 443,
2 So. 3i)) 222
V. Baltimore (73 Md. 22, 20 Atl.
Ill)
84
205
542
384
478
356
18
164
66
512
109
Crary (67 Tex. 383, 3 S. W
316) 29, 103
V. Farwell (13 Beav. 403) 330
V. (15 Beav. 31) 96,387,416,
417, 419, 482
V. Harris (153 Mass. 439, 26 N. E.
1117) 352, 359
V. (39 N. H. 45) 248
V. Lindsay (4 Wash. C. C. 98,
271) 95, 414, 410, 417, 418, 484
V. Lloyd (11 Mont. 390, 28 Pac
736)
V. Murray (28 N. Y. 574)
V. North Devon Ry. (20 Beav
384)
V. Peabody (73 Me. 262)
V. Pollard (3 P. Wms. 348)
V. Wall (1 Ex. 122)
V. Wilson (7 Wend. 57)
Harrison, Ex parte (2 Rose 70)
V. Arniitage (4 Madd. 143) 280, 281,
293, 457, 508, 510
. V. Bevington (8 C. & P. 708) 321
V. Clare (2 Johns. 449) 143
V. Dewey (46 Mich. 173, 9 N. W.
152)
V. Fitzhenry (3 Esp. 238)
0. Gardner (2 Madd. 198) 237, 239,
240, 287, 441
V, Heathorn (0 M. & G. 81) 550, 554,
556
V. Jackson (7 T. R. 208) 145, 150,
152, 167
V. Sterry (5Cranch 289) 131, 134,
135, 153, 408, 476, 479
V. Tennant (21 Beav 482) 371, 456,
462
Harry man v. Roberts (52 Md 64) 165
Hart V. Alexander (2 M. & W. 484) 95,
320, 406, 407, 416, 417, 419, 482, 484, 485
V. (7C. &P. 746) 387
r. Clark (19 Beav. 349) 298
r. Clarke (0 De G. M. & G. 232) 390
V. Fitzgerald (2 Mass. 509) 320
V. Kelley (83 Pa. 286) 61
V. Palmer (12 Wend. 523) 164
y. Tomlinson (2 Vt. 101) 427
V. Withers (1 Barr 285) 94, 150, 154
Hartford Ins. Co. v. Ross (23 Ind.
179) 230
Hartlev v Kirlin (45 Pa. 49) 427
v'. Wharton (11 A. & E. 934) 18
1-. White (94 Pa. 31) 98,3-33
Hartman v. Woehr (3 Green 383) 374
Hartness v. Thompson (5 Johns. 160) 22
r. Wallace (106 N. C. 427, 11
S. E. 259) 97
Hartridge v. Rockwell (R. M. Charlt.
264) 291
Hartung v. Siccardi (3 E. D Smith
560) 179
Harvey v. Childs (28 Oh. St. 319) 44, 46,
51,90
V. Crickett (5 M. & S. 336) 250, 391,
463, 464, 471
V. Varney (98 Mass. 118) 215, 276,
323, 506
V. (104 Mass. 430) 296,523
Harwood i'. Edwards (Gow Part. 65)
145
Haskell v. Adams (7 Pick 59) 261, 208
Haskins v Warren (115 Mass. 514) 57
Haslet V. Street (2 McC. 310) 145
Haslett V. Witherspoon (2 Rich. Eq.
395) 375
Hassels r. Simpson (Doug. 92) 470
Hastings v. Hopkinson (28 Vt. 108) 545
Hastings Nat. Bank v. Hibbard (48
Mich. 452, 12 N. W. 651) 114
Hatch V. Crawford (2 Port. 54) 151
Hatcher v. Seaton (2 M. & W. 47) 257
Hatchett v. Blanton (72 Ala. 423) 352,
353, 354, 427
Hathaway v. Haskell (9 Pick. 42) 159
r. State Ins. Co. (64 la. 229, 20
N. W. 164) 236
Hatheway's Appeal (52 Mich. 112) 163
Haughey v. Slrickler (2 W. & S 411) 68
Haupf V. Howard (3 Jones Eq. 440) 7
Haven v. White (39 111. 509) 270
Havens v. Hussey (5 Paige 31) 134, 135
Haviland v. Chace (39 Barb 283) 539
Hawes r. Dunton (1 Bail. 146) 169
V. 'I'illinghast (1 Gray 289) 67
V. Waltham (18 Pick. 451) 345
Hawken v Bourne (8 M. & W. 703) 140,
142, 206
Hartz V. Schrader (8 Ves. 317) 2b8, 291,
292, 300, 430
Hawkins v. Appleby (2 Sandf. 421) 1 16
V. Capron (24 Atl. 400) 434
V. Hawkins (4 Jur. n. s. 1044) 377
V. Lee (8 Lea 42) 103
Hawkshaw v. Parkins (2 Swanst, 539) 152.
154, 290
Hawley v Campbell (62 Cal. 442) 470
V. Cramer (4 Cow. 717) 273, 409
V. Keeler (02 Barb. 231) 57
Hawn V. Land & Water Co. (74 Cal.
418, 16 Pac 196) 378
Hawtayne v. Bourne (7 M. & W 595) 82
Hay, Ex parte (15 Ves. 4) 485, 488
V. Fairbairn (2 B. & Aid. 193) 493
V. Mair (Ross Part. 639) 410
Haycock v. Williams (54 Ark. 384, 16
S. W. 3) 44, 53, 60
Hayden. Ex parte (1 Bro Ch. 454) 329
;;. Cretcher (75 Ind. 108) 168
Hayes v. Bement (3 Sandf. 394) 540, 541
542
V. Flowers (25 Miss 168) 257
V. Hayes (19 Atl. 571) 223
(• Hever (3 Sandf. 293) 1.35, 542
V. — - (4 Sandf. Ch. 485) 292, 295
TABLE OF CASES,
Xli
Hayes v. Knox ^41 Mich. 529, 2 N.
W. 670) 429
L\ Ueese (34 Barb. 151) 508
Ilavman, Er parte (8 Ch. D. 11) 475
Haynes v. Brooks (IIG N. Y. 487, 22
N. E. 1083) 136
V. Short (88 Ala. 562, 7 So. 157) 213,
306, 434
Haythorn v. Lawson (3 C & P. 190) 320,
322
Hayward v. French (12 Gray 453) 87
V. Harmon (17 111. 477) 164, 413
Hazard v. Caswell (93 N. Y. 259) 244
('. Hazard ( 1 Story 371) 47, 60
Heald y. Warren (22 Vt. 410) 90
Heane v. Rogers (9 B. & C. 580) 492
Heap y. Dobson ( 15 C. B. n. s. 460) 170
Heard v. Bowers (23 Pick. 4-55) 223, 224
Heartt v. Corning (3 Paige 566) 215, 511,
619, 520
V. Rankin (41 la. 35) 354
Heath, Ex parte (4 Jur. 28) 494
V. Hall (4 Taunt. 326) 470
V. Hubbard (4 East 110) 303
r. Percival (1 P. Wms. 682, 1 Str.
403) 387
r. Sansom (2 B. & Ad. 291) 96, 179
V. (4 B. & Ad. 172) 69, 375, 391,
410, 462
('. Waters (40 Mich. 457) 202, 4.35, .527
Heathcote v. Hulme (1 Jac. & W. 722) 123,
438
Heaton, Ex parte (Buck 386) 123
Heckert v. Fegely (6 W. & S. 139) 45, 63
Heckman v. Messinger (49 Pa. 465) 477
Hcdderly, Ex parte (2 Mont. D. & D.
487) 485
Hedge's Appeal (63 Pa. 273) 58, 550
Hedges r. Armistead (60 Tex. 276) 334
Hedley v. Bainhridge (3 Q. B. 316) 82, 84
Heenan v. Nasli (8 Minn. 407)
Hefferman v. Brenham (1 La. Ann.
146)
Heffron v. Hanaford (40 Mich. 305)
Heflebower v. Buck (64 Md. 15)
Hefner v. Palmer (67 III 161)
Heimstreet v. Howland (5 Uen. 68)
111
35
83
293
104
45,
46
223
Hellebush v. Cougldin (37 F. R. 294)
Heline v. Smith (7 Bing. 714) 2.52, 254
Heliuore i'. Smith (35 Cb. I). 436) 204, 237
IleLsby v. Mears (5 B & C. 504, 8 D.
& R. 289) 142, 427
Hembree v. Blackburn (16 Ore. 153,
19 Pac. 73) 134
Henderson, Ex parte (4 Ves. 163) 21
V. Barbee (6 Blackf. 28) 151
/•. Hudson (1 Munf. 510) 6
V. Wild (2 Camp. 561) 142, 144, 179
Hendrick v. Gunn (35 Ga. 234) 75
Hendricks r. Isaac (117 N. Y. 411, 22
N. E. 1029) 24
Hendry v. Turner (35 Ch. D. 355) 405
Hendy v. March (75 Cal. 566, 17 Pac.
702) 66, 306
Henecy, Ex parte (1 Sch. & L 44) 467
Henkel v. Hey man (91 111. 96) 546
Henley v. Soper (8 B. & C. 16) 219, 260,
262, 265
Henn v. Walsh (2 Edw. Ch. 129) 284, 285,
293, 294, 295, 455
Hennegin v. Wilcoxon (13 La Ann.
576) 248
Hennessy i'. Griggs (1 N. Dak. 52, 44
N. W. 1010) 375
V. Western Bank (6 W. & S.
300
135, 153
424, 425
o03,
293
4, 350
59, 202, 393
457
Henniker v. Wigg (4 Q. B. 793)
Henning v. Raymond (35 Minn
29 N. W. 1.32)
Henry v. Anderson (77 Ind. 361
V. Bassett (75 Mo. 89)
V. Birch (9 Ves. 357)
c. Chapman (16 S. W. 543) 512
V. Jackson (.37 Vt. 431) 552
V. Willard (73 N. C. 35) 69
Henslee v. Cannefax (49 Mo. 295) 125
Hepburn, In re (14 Q. B. D. 394) 497
V. Curts (7 Watts 300) 270
Heran v. Hall (1 B. Mon. 159) 222
Herbert v. Hanrick (16 Ala. 581) 151
Herberton v. Jeperson (10 Barr 124) 383
Hercy v. Birch (9 Ves. 357) 209
Herfort v. Cramer (7 Col. 483) 237
Hergman v. Dettlebach (11 How Pr.
46) 290
Herkimer, Tiie (Stew. Adm. 2.3) 55
Herrick, In re (13 N. B. R. 312) 96, 182
y. Ames (8 Bos w. 115) 511
Herries v. Jamieson (5 T. R. 556) 254, 267,
336
Herrin v. Eaton (13 Me. 193) 303
Herzog v. Sawyer (61 Md. 344) 150, 151
Hershfield v. Claflin (25 Kas. 166) 343
Hesham, Ex parte (1 Rose 146) 474, 499
Hesketh v. Blanchard (4 East 144) 40, 60,
2.54
Hess V. Werts (4 S. & R. 3-56) 549, 552
Hewes v. Bayley (20 Pick. 96) 312
Hewitt V. Sturdevant (4 B. Mon. 453) 66
Heyden, Ex parte (Cooke B. L. 2-54) 496
Heydon v. Heydon (1 Salk. 392) 324, 339
Heyhoe r. Burge (9 C. B 431) 5,40
Hey wood v. Watson (4 Bing. 496) 180
V. Wingate (14 N. H. 73) 308
Hiard v. Bigg (xMann Ind. P., A. (a) 5 ) 88
Hibbert v. Hibbert (Coll. Part. 203)
209,
279
318
196
514
171
V. Martin (1 Camp. 538)
Flicliens v. Congreve (1 R. & M. 132)
Hickes v. Cook (4 Dow. 16)
Hickman v. Kunkle (27 Mo. 401)
V. Reineking (6 Blackf. 387) 97, 172
Hicks V. Cram (17 Vt. 449) 30, 104, 107
Hickson v. Aylward (3 Moll. 14) 515
Higgins y. Rector (47 Tex. .361) 445
V. Thomas (8 Q. B. 908) 303
Higginson v. Air (1 Desaiis. 427) .300
V. Fabre (3 Desaus. 93) 516
Higinbotham v. Holme (19 Ves. 88) 467
xlii
TABLE OF CASES.
Hill, Ex parte (1 Cox 300) 467
, (3 Mont. &, A. 176) 488
V. Bell (19 S. W. 959) 17
v. Burniiam (15 Ves. 218) 501
V. Draper (54 Ark. 395, 15 S. W.
1025) 437
Hollister (1 Wils. 129) 219
V. MoPlierson (15 Mo. 204) 247, 309
V. Manchester & S. W. W. Co.
(5 B. & Ad. 800) 555
V. Marsh (40 Ind. 218) 307
V. Miller (78 Cal. 149, 20 Pa.
304) 204
V. Palmer (56 Wis. 123, 14 N. W.
20) 259
V. Southerland (1 Wash. Va. 133)
421
V. Stetler (127 Pa. 145, 17 Atl.
887) 538
V. Voorhies (22 Pa. 68) 74, 95, 96,
142
V. Wiggin (31 N. H. 292) 291, 325,
338, 343
Hilliker v. Francisco (65 Mo. 598) 97
V. Loop (5 Vt. 116) 273
Hillock V. Trader's Ins. Co. (54 Mich.
531) 146
Hills v. Bailey (27 Vt. 548) 248, 258
V. McRae (9 Hare 297) 330
V. Nash (10 Jur. 148) 281
V. Ross (3 Dall. 331) 145
Hilton V. Eckersley (6 E & B. 47) 401, 402
V. Granville (4 Beav. 130) 291
V. Vanderbilt (82 N. Y. 591) 378
Hinds V. Backus (45 Minn. 170, 47
N. W. 655) 97
V. Terry (Walk. 80) 304
Hindy v. Margarity (3 Barr 428) 19
Hine v. Lart (10 Jur. 106) 244
Hinkie v. Reid (43 Ind. 300) 206
Hinton, Ex parte (14 Ves. 598) 467
, (De Gex 550) 487
f. Law (10 Mo. 701) 66
Ilirbour v. Reeding (3 Mont. 13) 7
Hiscock V. Phelps (49 N. Y. 97) 333, 354,
366
Ch.
135
384
403
501
223
431
26
Hitchcock V. St. John (Hoff
511)
Hitew. Hite (1 B. Mon. 179)
Hixon V. Pixley (15 Nev. 475)
Hoadley v. County Comm'rs (105
Mass. 519)
Hoag V. McGinnis (22 Wend. 163)
Hoard v. Clam (31 Minn. 186, 17
N. W. 275)
Hoare v. Allen (2 Dall. 102)
V. Dawes (1 Doug. 371) 32, 53, 73,
89, 107, 272
V. Oriental Bank (2 App. Cas.
589) 331, 488
Hobart r. Andrews (21 Pick. 526)
V. Howard (9 Mass. 304)
Hobbs 0. Memphis Ins. Co. (1 Sneed
444)
V. Wilson (1 W. Va. 50)
Hoby V. Roebuck (7 Taunt. 157) 385, 429
Hodenpyl v. Vingerhold (Chit. Bills
489) 164
Hodge V. Twitchell (33 Minn. 389, 23
N. W. 547) 196
Hodges V. Dawes (6 Ala. 215) 45
V. Harris (6 Pick .360) 134
V. Hohnaii (1 Dana 53) 137, 500
V. Parker (17 Vt. 242) 527
r. Tarrant (31 S. C. 608, 9 S. E.
1038) 68
Hodgkinson, Ex parte (19 Ves. 291)
40, 55, 95, 146, 271
, (2 Rose 174) 146
, (1 Coop. 101) 485, 498
467
520
289
8
493
514
96
274
Hodgson, tx parte (2 Bro. Ch. 5)
, (19 Ves. 206)
, (2 Glyn & J. 21)
V. Murray (2 Sim. 515, 3 Sim.
382)
V. Temple (5 Taunt. 181)
Hodsden v. Staple (2 T. R. 697)
Hoe V. Richards (2 Beav. 305)
Hoeflinger v. Wells (47 Wis. 628,
3 N. W. 589)
Hoff 1-. Rogers (67 Miss. 208, 7 So.
Aetna Ins. Co. (32 N
515
414
235
401
358)
Hoffman
405) ■ 235
V. Duncan (17 Jur. 825) 296
V. (18 Jur. 69) 298
V. Pitt (5 Esp. 25) 493
V. Toll (28 N. E. 567) 84
Hogaboom v. Herrick (4 Vt. 131) 417
Hogan r. Reynolds (8 Ala. 59) 143, 147
Hogg V. Ellis (8 How. Pr. 473) 542, 544
V. Orgill (34 Pa. 344) 163, 171
Hogle V. Lowe (12 Nev. 286) 354
Holbrook, In re (2 Low. 259) 182, 481, 488
c. Ins. Co. (25 Minn. 229) 110
V. Lackey (13 Met. 1.32) 4.37
r. O' Berne (9 N. W. 291) 60
V. Wight (24 Wend. 169) 124
Holcroft V. HofTgins (2 C. B. 488) 88
Holden v. McMakin (1 Pars. Cas 270)
242, 297, 440
V. Peace (4 Ired. Eq. 223) 194, 527
t: Trust Co. (100 U. S. 72) 203
Holdernen v. Shackels (8 B. &C. 612)
66, 137, 3.38, 500, 501, 503
Holdredge v. Gwynne (18 N. J. Eq.
26) 204
Holdsworth, Ex parte (1 Mont. D. & D.
475) 65
Holifield V. White (52 Ga. 567) 53
Holladay v. Elliott (8 Ore. 84) 4(i2
Holland v. Drake (29 Oh. St. 441) 135
V. Fuller (13 Ind. 195) 349, 361
V. Holland (6 Ired. Eq. 407) 515
V. Teed (7 Hare 50) 315
V. Weld (4 Me. 255) 313
HoUiday v. Camsell (1 T. R. 658) 304
Hollister, In re (3 F. R. 452) 476
HoUoway v. Rrinkley (42 Ga. 226) 63
V. Turner (61 Md. 217) 306, 522
TABLE OF CASES.
xliii
Holme V. Green (1 Stark. 488) 157
V. Hammond (L. R. 7 Ex. 218)
41,65
Holmes v. Blogg (8 Taunt. 35) 17, 19
V Burton ('J Vt. 252) 85, 88, 90
V. Hawes (8 Ired. Eq. 21) 328, 338
V. Higgins (1 B. & C. 74) 37, 59,
200, 248, 252, 532, 549, 55;^
r. Holmes B. & A. Mfg. Co. (37
Conn. 278) 243
V. Kortlander (64 Mich. 591, 31
N. W. 532) 83
V. McCray (51 Ind. 358) 7
c. Mentze (4 A. & E. 127) 338
V. Old Colony li. U. (5 Gray 58)
28,62
V. Porter (39 Me. 157) 107
V. Self (79 Ky. 297) 360
V. United Ins. Co. (2 Johns. Cas.
329) 54
0. Williamson (6 M. & S. 158) 254,
267, 268
Holt u. Kernodle (1 Ire. 199) 46
V. Ward (2 Stra. 937) 20
Holt's Appeal (98 Pa. 257) 352
Holyoke v. Mavo (50 Me. 385) 260
Homer v. Wood (11 Cush. 62) 172, 179,
246, 274. 275
Homfray v. Fothergill (L. R. 1 Eq.
567) 208,519
Honore v. Colmesnil (7 Dana 201) 439,
524
V. (IJ. J. Marsh. 506) 194, 200,
234
Hood V. Aston (1 Russ. 412) 181, 286,
288 322
Hook V. Stone (34 Mo. 329) ' 134
Hookham v. Pottage (L. R. 8 Ch. 91)
237, 240, 243
Hoop, The (1 C. Rob. 196) 26
Hooper v. Baillie(118 N. Y. 413, 23
N. E. 569) 135
IJ. Lusby (4 Camp. 66) 146
Hope 1-. Cust (1 East 48) 96,174,176,
185
Hopkins, Ex parte (104 Ind. 157, 2
N. E. 587) 335, 480
V. Banks (7 Cow. 650) 163
V. Ciiittenden ( 10 Tex. 189) 203
(•. Forsvtl) (14 Pa. 34) 66
V. Smith (11 Johns. 161) 38, 48
V. Thomas (61 Mich. 389, 28 N.
W. 147) 143
I'. Walt (13 111. 298) 195
Hopkinson v. Smith (1 Bing. 13) 15
Horbach v Huey (4 Watts 455) 312, 313
Horn /;. Baker (9 East 215) 490, 493
V. Clarkson (1 Cai. 276) 319
V. Newton City Bank (32 Kas.
518, 4 Pac. 1022) 84
Horsey v. Heath (5 Oiuo 353) 445
Horsley v. Rush (7 T. R. 209) 150
Horton v. Child (4 Dev. 460) 92
tj. New Pass Gold & Silver Min.
Co. (27 Pac. 376) 46
243
144
516
327
65
170
136
387
262
476
160
76, 93
163
Horton v. Soyer (4 H. & N. 613) 148
Horton's Appeal (13 Pa. 67; 128, 129,
138, 391
Horton Mfg. Co. v. Horton Mfg. Co
(18 F. R. 816)
Hosack V. Rogers (8 Paige 229)
V. (9 Paige 468)
Hoskins v. Johnson (24 Ga. 625)
Hot Spring R. R. v. Trippe (42 Ark
465)
Hotchkiss V. English (4 Hun 369)
Houghton, Ex parte (n Ves. 252) 490, 493
c. Houghton (11 Sim. 491) 350, 362,
364
Houk V. Walker (30 N. E. 1080)
Houlton's Case (1 Mer. 616)
Hourguebie v. Girard (2 Wash. C
212)
Houseal's Appeal (45 Pa. 484)
Houser r. Irvine (3 W. & S 345)
How V. Kane (2 (Jhaudl. 222)
Howard i; Cobb (3 Day 309)
V. Priest (5 Met. 582) 349, 350, 351,
361, 362, 364
Howe V Dupoyster (7 S. W. 627) 44, 46
f. Lawrence (9 Cush. 553) 332, 478
V. Thayer (17 Pick. 91) 370, 398,
408, 412
Howell V. Adams (68 N. Y. 314) 407
V. Brodie (6 Bing. N. C 44) 11, 12,
252
r. Com. Bank (5 Bush 93) 344
V. Harvey (5 Ark. 270) 11, 276, 371,
394, 455, 456, 457
I'. Howell (15 Wis. 55) 355
V. Moores (127 111. 67) 182
V. Reynolds (12 Ala. 128) 312, 313,
319
V. Sewing Machine Co. (12 Neb.
177, 10 N. W. 700) 99
V. Teel (29 N. J. Eq. 490) 336
Howken v. Bourned (8 M. & W. 703) 82
Howland, In re (L. R. 1 Ch. 421) 491
Hoxie V. Carr (1 Sumn. 173) 327, 352,
353, 354, 356, 358, 500
I'. Chaney (143 Mass. 592, 10 N.
E. 713) 237, 238, 244
Hoyt V. Holly (39 Conn. 326) 236
V. Hoyt (69 la. 174, 28 N. W.
500)
V. McLaughlin (52 Wis. 280, 8
N. W. 889)
V. Sprague (103 U. S 613)
Hubbard, Ex parte (13 Ves. 424)
V. Callahan (42 Conn. 524)
V. Curtis (8 la. 1) 325, 328, 331, 344
V. Guild (1 Duer 662) 298, 300, 466
350
512
442
478
203
V. Matthews (54 N Y. 43
V. Winsor (15 Mich. 146)
Hubbell V. Woolf (15 Ind. 204)
Hubert v. Nelson (Dav. B. L. 8)
Hudson V. Barrett (1 Pars. 414)
Huey V. Hoobach (4 Watts 455)
Huggett V. Montgomery (5 B.
446)
281,
& P.
187
360
181
168
509
312
126
xliv
TABLE OF CASES.
Iluglies, Ex parte (6 Ves. 617) 503
V. Ellison (6 Mo. 4c;3) 134, 154
V. Wheeler (8 Cow. 77) 483
Huiskamp v. Moline Wagon Co. (121
U. S. 310) 332
Hulett V. Fairbanks {40 Oh. St.
233) 35, 59
Hull V. Garner (31 Miss. 145) 155
V. Young (30 S. C. 121, 8 S. E.
695) 150, 151
Human v. Cuniffe (32 Mo. 316) 154
Hume V. BoUand (1 C. & M. 130,2
Tyr. 575) 122
V. (R. &M.371) 123
V. Watt (5 Kas. 34) 187
Humes v. O'Bryan (74 Ala 64) 69, 87,
Humphre3-s v. Mooney (5 Col. 282)
Humphries v. Chastain (5 Ga. 166)
V. McCraw (5 Ark. 65)
Hundley v. Farris (103 Mo. 78, 15 S.
W. 312)
Hunnicutt v. Sumney (63 Ga. 586)
Hunsden v. Cheyney (2 Vern. 150)
Hunt V. Benson (2 Humph. 459) 349,
V. Bridgham (2 Pick. 581)
V. Chapin (6 Lans. 139)
V. Clark (6 De G. M. & G. 232)
V. Colorado M. & E. Co. (1 Col.
App. 120. 27 Pac. 873)
V. Gookin (6 Vt. 462)
V. Hall (8 Ind. 215)
V. Morris (44 Miss. 314)
V. Ueilly (50 Tex. 99)
i\ Royal Exch. Assur. Co. (5
M. & S. 47)
V. Waterman (2 R. I. 298)
Hunter, Ex parte (1 Atk. 223)
103
50
G81
433
476
351
492
353
159, 417
82
458
404
507
143
266
258
— (Buck 552)
— (2 Rose 382)
Galliers (2 T. R. 133)
Pfeiffer (108 Ind. 197)
Rice (15 East 100)
164
328, 338
88, 181,
496, 499
472
490
467
9
494
776)
Waynick (67
la. 555, 25 N. W.
134, 135
Huntington v. Potter (32 Barb. 300) 383
Hurd y. Darling (14 Vt 214) 303
V. Haggerty (24 111. 171) 172
Hurley v. Walton (63 111. 260) 53
Hurt V. Salisbury (55 Mo. 310) 50
Husband, Ex parte (2 Glyn & J. 4, 5
Madd. 419) 487, 495, 496
Hussey ;;. Dole (24 Me. 20) 469
V. Jewett (9 Mass. 100) 21
Hutehins v. Bank of Tenn. (8 Humph
418) 405, 408, 413
V. Hope (7 Gill 119) 512
V. Hudson (8 Humph, 426) 143, 408
V. Sims (8 Humph. 423) 407, 408
V. Turner (8 Humph. 415) 125
Hutchmson v Smith (7 Paige 26) 123
V. Whitfield (Hayes 78) 375
Hutton V. Eyre (6 Taunt 289) 144, 253,
269
Hutzler v. Phillips (26 S. C, 136, 1 S.
E. 502) 476
Huvver v. Dannenhoffer (82 N. Y.
499) 244
Hyat V. Hare (Comb. 383) 139
Hyde v. Brashear (19 La. 402) 444
V. Stone (9 Cow. 230, 7 Wend.
354) 303, 304, 321
Hyues v. Stewart (10 B. Mon. 429) 11,
276, 277
Hyrne v. Erwin (23 S. C. 226) 125
I.
Ibbotson V. Elam (L. E. 1 Eq. 188)
208,
519
417) 302
182, 404
162, 380
187
159, 483
Iddings V. Bruen (4 Sandf. Ch
V. Pierson (100 Ind. 418)
Ide V. Ingraham (5 Gray 106)
Ihmsen v. Negley (25 Pa. 297)
Ilsley V. Jewett (2 Met. 168)
Imperial Refining Co. v. Wyman (38
F. R. 574) 549
Inbusch V. Farwell (1 Black 566) 338
India Bagging Assoc, v. Kock (14 La.
Ann. 168) 566
Indian Chief, The (3 C. Rob. 22) 26
Indianapolis Board of Trade r. Wal-
lace (117 Ind. 599, 18 N. E. 48) 477
Ingliss V. Grant (5 T. R. 530) 491
Ingraham v. Foster (31 Ala 123) 12, 277
Lines V. Lansing (1 Paige 583) 430, 540
V. Stephenson (1 M. & R. 145) 143
Insurance Co. v. Bear (23 Fla. 50, 1
So.
318)
. Bennett (5 Conn. 574)
10, 345
87, 180,
184, 185
315
V. Bold (6 Q. B. 514)
V. Camp (64 Tex. 521)
V. Cotheal (7 Wend. 72)
V. Drennan (116 U. S. 461)
V. Floss (67 Md. 403, 10 Atl. 139)
V. Hildyard (37 N. J. L. 444)
V. Kountz Line (4 Woods 268)
V. Ligon (59 Miss. 305) 65, 168, 442,
452
V. Murpliy (5 Minn. 56)
V. Noves (32 N. H. 345)
V. Railroad (104 U. S. 146)
V. Richardson (33 La. Ann. 1308)
V. Riker (10 Mich. 279)
V. Ross (29 Oh St. 429)
V. (23 Ind. 179)
V. Scott (1 Johns. 106)
V. Statliam (93 U. S. 24)
V. Towle (65 Wis. 247)
V. Treat (58 Me. 415)
I'. Wallis (23 Md. 182)
International Bank v. Jones (119 111.
407, 9 N. E. 885)
Iowa Seed Co. v. Dorr (70 la. 481, 30
N. W. 866)
Irby V. Brigham (9 Humph. 750)
236
318
128
236
26
65
652
20
65
08
236
63, 58
236
64, 57, 65
26
165
170
479
347
242
165
V. Graham (46 Miss. 425) 445, 446
TABLE OF CASES.
xlv
Irbv V. Vining (2 McC. 379) 407
Irvin V. Nashville, C. & S. L. Ry. (92
III. 103) 65
Irvine v. Forbes (11 Barb. 587) 189, 553
Irving V. Excelsior Ins. Co. (1 Bosw.
507) 146, 222, 319
V Young (1 Sim. & St. 333, 1
L. J. Cli. 108) 618, 519
Irwin V Conklin (36 Barb. 64) 77
v. Williar (110 U. S. 499) 206
Isaacs. Ex parte (3 Sawy. 35) 429
Isler V. Baker (6 Humph. 85) 416, 417,
461
Ives V. Miller (19 Barb. 196) 248, 251,
254, 255
Ivey V. Hammock (56 Ga. 428) 225
Ivy V. Walker (58 Miss. 253) 249
J.
Jacaud v. French (12 East 317) 144
Jackson, Ex parte (1 Ves. Jr. 131) 429,
483, 490
15
273
803
492
477
157
67
67, 436
E.
172) 293
333
, In re (1 B. & C. 270)
r. Alexander (8 Tex. 109)
y Anderson (4 Taunt. 24)
V. Cator (5 Ves. 688)
f. Clymer (43 Pa. 79)
V. Fairhank (2 H. Bl. 340)
I'. Jackson (7 Ves. 535)
r. (9 Ves. 591)
V. Lahee (114 111. 287, 2 N.
V. Litchfield (8 Q B. D. 474)
V. McLean (100 Mo. 130, 13 S.
W. 393) 8, 9, 10
V. Mayo (11 Mass. 147) 21
v. Porter (2 Mart. La. 200) 151
V. Robinson (3 Mas. 138) 48, 54. 64,
■ 66
V. Sedgwick (1 Swanst. 460) 207, 208,
211, 215, 282, 500, 518
i: Sheldon (9 Abb. Pr. 127) 540
V. Stanford (19 Ga. 14) 154, 356
V. Stopherd (2 Cr. & M. 361, 4
Tyrw. 330) 255, 263, 264, 607
>:. Todd (56 Ind. 406, 75 Ind.
472) 119
Jacky V. Butler (2 Ld. Raym. 871) 324,
339
Jacobs V. Fatherstone (6 W. & S. 346) 23
(• McBee (2 Mc.VluU. 348) 91
Jacobsen v. Hennekenius (1 Bro. P
C. 4.;2) 30, 302
Jacobson v. Williams (1 P. Wms. 382) 479
Jacquin v. Buisson (11 How. Pr. 385) 300,
437, 536, 643
Jaffe V. Krum (88 Mo. 669) 542
Jaffray v. Frebain (5 Esp. 47) 22
Jaggers I'. Binnings (1 Stark. 64) 164
James v. Bostwick (Wright 142) 93, 608
V. Stratton (32 111. 202) 338
V. Woodruff (2 Den. 574) 556
Janes v. Whitbread (11 C. B. 406) 66
Jannev v. Springer (78 la. 617, 43
N. W. 461) 98
Jaques v. Hulit (16 N. J. 38) 262
r. Marquand (6 Cow. 497) 88, 89, 123,
181
Jarvis v. Brooks (23 N. H. 136) 336, 478
V. (27 N. H. 36) 350, 352, 369
V. Hyer (4 Dev. 367) 338
V. Peck ( 1 Hoff. Ch. 479) 401
Jauncey v. Knowles (29 L. J. n. s. Ch.
95) 529
Jefferson, The (1 C. Rob. 325) 602
Jefferson County v. Lewis (20 Fla.
980) 203
Jefferson Ins. Co. v. Cotheal (7 Wend.
Jefferys v. Smith (3 Russ. 158)
Jeffreys v. Small (1 Vern. 217)
318
391, 555
2, 348,
436
V. Smith (1 Jac. & W. 298) 34, 298,
372, 375
Jeffries V. Castleman (76 Ala. 262) 163
Jell V. Douglass (4 B. & Aid. 374) 312
Jenkins v. Blizard (1 Stark. 418) 407, 412
I'. Morris (16 M. & W. 877) 111
Jenness v. Carleton (40 Mich. 343) 168
Jennings v. Chandler (10 Wis. 21) 284
V. Estes (16 Me. 323) 68, 107
Jennings's Anpeal (16 Atl 19, 2
Monag. 184) 192
Jennison v. Hapgood (7 Pick 1) 603
Jepson, Ex parte (19 Ves. 224) 480
V. Beck (78 Cal. 540, 21 Pac.
184) 268
Jervis v. White (6 Ves 738) 517
V. (7 Ves. 413) 288, 322
Jessup V. Carnegie (80 N. Y. 441) 50
V. Cook (1 Halst. 434) 194, 518
Jewell V. Ketchum (63 Wis. 628, 23
N. W. 709) 254
Jevvett, In re (15 N. B. R. 126) 72, 103,
463, 469, 480
Jewson V. Moulson (2 Atk. 420) 479
Johnes' Case (1 Mer. 619) 387
Johns, Ex parte (Cooke B. L. 634) 499
V. Battin (30 Pa. 84) 151
Johnson, /« re (16 Ch. D. 648) 663
v. Barry (95 111. 483) 140
I'. Beardslee (15 Johns. 3) 159
V. Bernheim (76 N. C. 130) 540
V. Boone (2 Harr. 172) - 423
V. Buttler (31 N. J. Eq. 35) 610
V. Byerly (3 Head 194) 121
V. Corser (34 Minn. 355, 25 N. W.
799) 50, 52
V. Crichton (56 Md. 108) 97
V. Curtis (3 Bro. C. C. 226) 515
V. Evans (7 M. & G. 240) 338, 339,
340. 375. 392
V. Hartshorne (52 N. Y. 173) 526,627
y. Hudson (11 East 180) 8
V. Kaiser (40 N. J. L. 286) 437
V. Ketchum (3 Green Ch. 364) 511
V. King (6 Humph. 233) 345
V. Lewis (6 F. K. 27) 667, 661
xlvi
TABLE OF CASES.
414
204
476
Johnson v. McClary (131 Ind. 105,
30 N. E. 888) , 08
r. McDonald (2 Abb. Pr. 290) 546
c. Miller (16 Ohio 431) 45, G2
r. Peck (3 Stark. 66) 145, 179
V. Robinson (68 Tex. 399, 4 S.
W. 625) 134, 135
r. Shrewsbury &c. Ky. (3 De G.
M. & G. 927) 279
v. Totten (3 Cal. 343) 406, 413
v. Wilson (54 111. 419) 248
V. Young (20 W. Va. 614)
Johnson's Appeal (115 Pa. 129, 8 Atl
36)
Johnston, In re (17 F. R. 71)
V. Dutton (27 Ala. 245)' 79, 189, 190
(.-. Freer (51 Ga. 313) 305
r. Straus (26 F. R. 57) 332
V Trask (116 N. Y. 136, 22 N. E.
377) 1.39
V. Warden (3 Watts 101) 68, 88
Jonan v. Blanchard (2 Rob. La. 513) 540
Jones, Ex parte (18 Ves. 283) 480
, (4 M. & S. 450) 490, 493
V. Bailey (5 Cal. 345) 148, 149
V. Booth ( 10 Vt. 268) 99, 173
V. Butler (87 N. Y. 613) 223
r. Caperton (15 La. Ann. 475) 35
V. Clark (42 Cal. 180) 656
v. Clavton (4 M. & S. 349) 336
V. Dexter (1-30 Mass. 380) 204
V. Dwyer (15 East 21) 493
r. Fletcher (42 Ark. 422) 331
V. Harraden (9 Mass. 540) 254
V. Herbert (7 Taunt. 421) 142, 145
V. Howland (8 Met. 377) 490
r Jackson (14 Ala. 186) 125
f. Jones (1 Ired. Eq. 332) 234, 527
V. (13 la. 276) 474
r. Latimer (1 Jur. 980) 515
»'. Lees (1 H. &N. 189) 402
V. Lusk (2 Met. Ky. 356) 327, 328,
338 339
IV McMichael (12 Rich. 176) 7, 432
V. Mars (2 Camp. 305) 183
V. Maund (3 Y. & C. 347) 420
V. Morgan (16 Jur. 238) 276
r. Neale (2 Pat. & H. 339) 349, 361, 362
r. Noy (2 M. & K. 125) 458, 459
r. Parsons (25 Cal. 100) 138
V. Perry ( 10 Yerg 69) 289
V Phoenix Bank (8 N. Y. 228) 20
i\ Shaw (67 Mo. 667) 251
r. Smith (31 S. C. 527, 10 S. E.
340) 366
v. Thompson (12 Cal. 191) 344
V. U. S. (7 How 681) 425
V. Walker (10:5 U. S. 444) 65, 461
V. Yates (9 B. & C. 532) 98, 175, 179,
270, 274, 275, 312, 455
Jonge Pieter, Tiie (4 C. Rob. 79) 26
Jons V. Perciiard (2 Esp. 507) 36
Jordan, Tn re (2 F. R. 319) 123
V. Lpwis (2 Stew. 426) 224
V. Miller (75 Va. 442) 7, 293, 306
Jordan v. Wilkins (3 Wash. C. C. 115) 78
Joseph V. South wark F. & M. Co (10
So. 327) 404. 405
Josephs V. Pebrer (3 B. & C. 639) 650,
554, 556
.loslvn r. Smith (13 Vt 353) 159
Joy V. Campbell (1 Sch. & L. 328) 494
.Joyce V. Williams (14 Wend. 141) 172
Judd V. Gibbs (Hill. Bkr. 114) 479
V. Harris (6 Vt. 185) 250
Judge V. Braswell (13 Bush 67) 83, 84
Judson r. Adams (8 Cush. 556) 45
V. Gibbons (5 Wend. 224) 22
Julia, Tiie (1 C. Rob. 181) 26
, (8 Cranch 195) 310
Julian V. Wrightsnian (73 Mo. 569) 335
Julio t'. Ingalls (1 All. 41) 7
K.
Kahn r. Boltz (39 Ala. 66)
V. Central Smeltmg Co. (102 U. S.
641)
Kaiser v. Lawrence Savings Bank (56
la. 104)
V. Wilhelm (2 Mo. App 696)
Kallenbach r. Dickinson (100 111. 427)
Kane v. Scofield (2 Cai. .368)
Kansh, Ex parte (32 S. C. 437, 11
S. E. 298)
Karthaus v. Ferrer (1 Pet 228)
Kaskaskia Bridge Co. v. Shannon (6
III. lo)
Kasson v. Brocker (47 Wis. 79, 1 N.
W. 418)
Katsch V. Schenck (13 Jur. 668) 47,
Katz V. Brewington (71 Md. 79, 20
Atl. 139) 199,
Kauffman v. Fisher (3 Grant 302)
Kay V. Pienne (3 Camp. 123)
Kayser v. Maugliara (8 Col. 3-39, 7
Pac. 286)
Kean v. Johnson (1 Stock. 401)
Keane r Boycott (2 H. Bi. 511)
r. Fisher (9 La. Ann. 70)
Keasley v. Codd (2 C. & P. 408)
Keating v. Marsh (1 Mont. & A. 670)
Kedie, Ex parte (2 Deac. & Ch. 321)
Keeler v. Niagara Ins. Co. (16 Wis.
623)
Keene v. Harris (17 Ves. 342)
Keene's Executors, Ini-e (3 l)eG. M.
& G. 272)
Keeney v. Home Ins. Co. (71 N. Y.
396) 236,
Keesley v. Cadd (2 C. & P. 401 )
Kehoe v. Carville (51 N. W. 166)
Keith V. Armstrong (65 Wis. 225, 26
N. W. 445)
V. Fink (47 III. 272) 332,
Kelby v. Steel (5 Esp. 194)
164
34
50
523
160
168
.351
148
164
151
295,
605
280
160
23
204
106
16
273
553
122,
123
483,
484
2.35
242
25
292
649
404
332
490
253
TABLE OF CASES.
xlvii
Kell V. Nainby (10 B & C. 20) 22, 108,
109
Kelloy V. Bourne (15 Ore. 476, 16 Pac.
40) 351
r. Flory (51 N. W. 181) m2
V. Greenleaf (3 Storv 93) 97, 194,
200, 205, 276, 3S4
V. Ilurllmrt (5 Cow. 534) 32, 74, •iO )
V. Kaiiifinun (18 Pa. 351) 266, 208
Kelloffg V. Faiicher (23 Wis. 21) 97
. Griswol.l (12 Vt. 291) 60
r. Laveii.lcT (15 Neb. 256) 203
r. Moore (97 111. 282) 254
t.: Olson (31 Minn. 103, 24 N. W.
364) 231
Kellogg Newspaper Co. v. Farrell
(88 Mo. 594) 46,47
Kelly r. Eckford (5 Paige 548) 283
Kelsliaw i: Jukes (8 L. T. n. s. 387) 57
Kenil)le v. Farren (6 Bins?. 141) 223, 224
c. Kean (6 Sim. 333) 278, 279
Kemegs v. Hicliards (11 Barb. 312) 173
Kemiiierer v. Kemnierer (52 N. W.
194) 526
Ketnp ('. Carnley (3 Duer 1) 135
V. Coffin (3 Greene 190) 381
Kendall, Ex parte (17 Ves. 614) 827, 330,
482, 485, 603
V. Hackwortb (66 Tex. 499) 350
V. Rider (35 Barb. 100) 350
Kendrick v. Campbell (1 Bail. 522) 162
V. Tarbell (27 Vt. 512) 111, 182, 183
Kennebec Co. r. Augusta Ins. & B.
Co. (6 Gray 204) 147
KenTiedy v. Boliannon (11 B. Mon.
120) 409
c. Kennedy (3 Dana 239) 371, 456,
509
V. Lee (3 Mer. 441) 237, 238, 240,441
V. McFadon (3 H. & J. 194) 266, 268
c. Porter (109 N Y. 526, 17 N. E.
426) 205, 374
Kenney v. Altwater (77 Pa. 34) 140, 407
Kenniston c Avery (16 N. H. 117) 159,
160
Kensington, Ex parte (14 Ves. 447)
329, 478
. (2 Ves. & B. 79) 315
Kenton Fiirnaoe R. R. & Mfg. Co. v.
McAlpin (5 F R. 737) 146
Kentucky, Bank of, v. Brooking (2
Litt. 41j 169, 180, 184, 206
Kepler v. Erie Dime Sav. & L. Co
( 101 Pa. 602) 368
Kerper v. Wood (48 Oh. St. 613, 29
N. E. 501) 160,161
Kerr i\ Haverstick (94 Ind. 178) 203
('. Hawthorne (4 Yeates 170) 447
V. Potter (6 Gill 404) 47
Kerrick v. Stevens (55 Mich. 167, 20
N. W. 888) 13
Kerridge v. Hesse (9 C & P. 200) 426
Kershaw y. Kelsey (100 Mass. 661) 26
V. Matthews (2 Russ. 62) 295, 432,
449
Ketcham v. Clark (6 Johns. 144) 127, 138,
403, 405, 407
Ketchum, In re (1 F. R. 815) 121, 125
V. Durkee (1 Ilotf. Ch. 528) 88, 426
V. ( 1 Barb. Ch. 480) 436
Keye's Appeal (65 Pa. 196) 624
Kibbler v. De Forest (6 Ala. 92) 185
Kidd V. Johnson (100 U. S. 617) 244
Kidder o. Page ( 48 N. H. 380) 185, 332
Kidwelly Coal Co. v. Raby (2 Price
93)
Kieran v. Sanders (6 A. & E 515)
Kiffin V. Willis (4 Mod. 379)
Kilbreth v. Root (33 W. Va. 600, 11
S. E. 21)
Kilby V. Wilson (R. & M. 178)
Kilgore v. Powers (5 Blackf. 22)
Kilgour V. Finlyson ( 1 H. Bl. 155)
Killam v. Preston (4 W. & S. 14) 262, 264",
619
Killefer v. McLain (70 Mich. 508, 38
^ N. W 455) 525
Kimball v. Hamilton Ins. Co (8 Bosw.
4'.i5)
6-. Walker (30 111 482)
V. Whitnev ( 15 Ind. 280)
Kimberly v. Arms (129 U. S. 512)
554
109
126
293
120
203
4U2,
406
135
87
445
193.
196
278
82,84
r. Jennings (6 Sim. 340)
Kimbro v. Bullitt (22 How. 256)
Knig. See Re.v.
\ Ex parte (17 Ves. 115) 472, 499
, (1 Rose 212) 497
, (Cooke B. L. 634) 499
V. Accumulative Ass. Co. (3
C B jj. s. 151) 373
r. Faber (22 Pa. 21) 97, 172
V. Hamilton (16 111. 190) 200
'•. Hoare (13 M. & W. 494) 92
V Leighton (100 N. Y. 386, 3
N. E 594) 378, 435, 512
V Lowry (20 Barb. 532) 66
V. Rock (2 Price 198)
V Sarria (7 Hun 167)
V. Smith (4 P. & C. 108) 144,
476
547
383,
385
354
I'. Weeks (70 N. C. 372)
r. White (63 Vt. 158, 21 Atl.
535) 376, 512
v. Winants (71 N. C. 469) 9
Kingman v. Spurr (7 Pick 235) 10, 11,
127, 128, 129, 130. 138, 555
Kingsbury ;;. Tharp (61 Mich. 216, 23
N. W. 74) 97
Kinkead, In ?v (3 Biss. 405) 24
Kinloch v. Hamlin (2 Hill Ch. 19) 607
Kinnersley r. Mussen (5 Taunt 264) 155
Kinney v. Maher (156 Mass. 252, 30
N. E. 818) 202
V. Robinson (66 Mich. 113, 38
N. W. 172) 505
V. Hobison (49 Mich. 247. 18
N W 120) 252
xlviii
TABLE OF CASES.
Kinsman v. Barker (14 Ves. 579)
V. Dallam (5 Mon. 382)
Kirby, Ex parte (Buck 511) 97,
V. Cannon (9 Iiid. 371)
V. Carr (3 Y. & C. 184) 459,
y. Coggs well (1 Cai. 505) 16y,
V. Hewitt (26 Barb. 007)
V. IngersoU (1 Doug. Mich. 477,
1 Hare Midi. 172) 134,
V. L. S. & M. S. R. II. (8 E. K.
462)
V. (14 F. R. 261)
Kirk V. Blurton (9 M. & VV. 284)
r. Hiatt (2 Ind. 322) 160,
V. Hodgsdon (3 Johns. Ch. 400)
Kirkley v. Hodgson (1 B. & C. 580)
Kirkman v. Booth (11 Beav. 273)
V. Xewstead (1 Esp. 117)
V. Snodgrass (3 Head 370)
Kirkpatrick v. McEIroy (41 N.J. Eq.
539, 7 Atl. 647)
r. Turnbull (Add. 259)
Kirkwood v. Cheetham (2 F. & F.
798)
Kirwan v. Henry (16 S. W. 828)
V. Kirwan (2 Cr. & M. 617, 4
Tyrw. 491) 95,387,414,419,429,
Kitchen v. Bank (14 Ala. 233)
r. Bartsch (7 East 63)
Kittrell i'. Blum (77 Tex. 336, 1 4 S. W.
69)
Kleinhaus v. Generous (25 Oh. St.
667)
Kline r. Bebee (6 Conn. 494)
Klotz V. Macredy (39 La. Ann. 638,
2 So. 203)
Klumpp V. Gardner (114 N. Y. 153,
21 N. E. 99)
Knapp V. Edwards (57 Wis. 191, 15
N. VV. 140)
V. McBride (7 Ala. 19) 171,
Knebell r. White (2 B. & C. 15) 280,
Knerr v. Hoffman (65 Pa. 126)
Knight V. Marjorihanks (11 Beav.
322, 2 McN. & G. 10)
V. Plymouth (3 Atk. 480, Dick.
120)
Knott V. Morgan (2 Keene 213) 244,
Knowles v. Haughton (11 Ves. 168)
9, 281, 508,
Knowlton v. Reed (38 Me. 246) 66,
Knox V. Buffington (50 Li. 320)
V. Campbell (1 Barr 366)
V. Simmons (4 Yeates 477)
Kountz V. Holthnnse (85 Pa. 235)427,
Kramer v. Arthurs (7 Barr 165) 35,
Krapp V. Aderholt (42 Kas. 247, 21
Pac. 1063)
Krebell v. White (2 Y. & C. 15)
Krebs v. O'Grady (23 Ala. 726)
Kritzer v. Sweet (67 Mich. 617, 24
N. W. 764)
514,
515
112
175
22
460
311
69
135
435
935
110,
113
162
189
493
458
313
407
293
132
103
199
482.
484
203
465
135
87
20
439
135
199
432
281
339
195
453
322
510
433
81
66
476
429
369
527
510
23
103
Krueger, In re (2 Low. 66) 103, 108, 387,
403, 475
V. Speith (8 Mont. 482, 20 Pac.
664) 136, 437
Kruschke v. Stefan (53 N. W. 679) 350,
351
Kuhn V. Newman (49 la. 424) 231
V. Weil (73 Mo. 21-3) 125
KuU V. Thompson (38 Mich. 685) 131
Kutz c. Dreibelbis (126 Pa. 335, 17
Atl. 6U9j 249, 434
Kyle V. Kyle (1 Gratt. 526) 520
V. Roberts (6 Leigh 495) 508
Labouchere v. Dawson (L. R. 13 Eq.
322) 237
Lacey, £"x;;a>Ve (6 Ves. 628) 514
Lachaise v. Marks (4 E. D. Smith 610) 539,
642, 543, 544, 546
La Choraette v. Thomas (1 La. Ann.
120) 639. 543, 545
Lacy (,-. Le Brun (6 Ala. 904) 307, 309
V. McNeile (4 D. & R. 7) 142, 162,
163, 164
V. Waring (25 Ala. 625) 349
V. Wolcott (2 D. & R. 458) 180, 467
Ladbroke, Ex parte (2 Glyii & J. 81) 487
Ladd V. Griswold (9 111. 25) 327
La Flex v. Burss (77 Wis. 538, 46
N. W. 801) 60
Laflin & Rand Powder Co v. Steytler
(146 Pa. 434, 23 Atl. 215) 538
Lafon V. Chinn (6 B. Mon. 305) 88
Laiond v. Deems (81 N. Y 507) 62
LaForet, Ex parte (Cooke B. L. 251) 488
La Forest, Ex parte (Cooke B. L. 276) 496
Lagow I'. Patterson (1 Blackf. 262) 1.55
Lake v. Argyll (6 Q. B. 477) 103
>\ Gibson (1 Eq. Abr. 290) 2-32, 436
i-. (3 p. Wms. 158) 4.36
Lamar r. Hale (79 Va.l47) 34, 204, 205, 393
Lamalere v. Caze (1 Wash. C. C. 435,
2 Browne 128) 260, 262, 264, 518, 519
Lamb r. Durant (12 Mass. 54) 66, 131
V. Grover (47 Barb. 317) 222
Lambden v. Sharp (9 Humph. 224) 151
Lambert v. Griffith (50 Mich. 286, 15
N. W. 458) 136
Lambert's Case (Godb. 244) 131
Lambeth v. Vawter (6 Rob. La. 127) 163
Lamoille V. R. R. v. Bixby (55 Vt.
235) 345
Lamont v. Fullam (133 Mass. 58.3) 53
Lancaster Bank ;;. My ley (12 Pa. 544) 361
Lancaster Canal Co., Ex parte (1
Deac. & Ch. 411, Mont. 116) 554
Lanckton v. Wolcott (6 Met. 305) 485
Lane, Ex parte (De Gex 300) 484, 488
f. Felt (7 Gray 491) .346
I'. Jones (9 Lea 627) 360
V. Lenfest (40 Minn 375, 42 N.
W. 84) 344
TABLE OF CASES.
xlix
Lane v. Tyler (49 Me. 108) 260
V. Williams (2 Vern. 277) 168, 170
Lang V. Keppell (1 Biun. 123) 414
V. Oppenljeim (90 Ind. 47) 248
(,'. Waring (17 Ala 145) 184
l: (25 Ala. 025) 34'), 356, 361,
363, 365, 366, 367
Langan v. Hewitt (13 Sm. & M. 122) 78,
185
Langdale, Ex parte (18 Ves. 300, 2
Hose 444) 40, 51, 107, 302, 492
Lange v. Kennedy (20 Wis. 279) 402
Langliam (;. Bewett (Cro. Car. 68) 22
Lanier i'. McCabe (2 Fla. 32) 82, 84, 97,
172
Laiisdale i'. Brashear (3 T. B. Mon.
330) 34
Lansing v. Gaine (2 Johns. 800) 82, 100,
172, 381, 403, 406, 532
I'. McKillup (7 Cow. 416) 145, 164,
413
V. Ten Eyck (2 Johns. 300) 81, 96
Lapham v. Green (9 Vt. 407) 273, 317
Larazzabcl y. Gorbea (2 Swanst. 572) 502
Larkins v. Rhodes (5 Port. 195) 6
Lascaridi v. Gurney (11 C. B. n. s.
890) 5
Lash V. Lambert (15 Minn. 416) 203
Lassiter r. Jacknian (88 Ind. 118) 201
Latham i-.Kenniston (13 N. H 203) 70, 254
Lauder i\ Logan (123 Pa. 34, 16 Atl.
44) 538
LautTer v. Cavett (87 Pa. 479) .360
Laugher v. Pointer (5 B. & C. 570) 124
Lausldin v. Loreng (48 Pa. 275) 433
Laverty v. Burr (1 Wend. 529) 96, 172,
174, 185
Law V. Cross (1 Black 533) 198
V. Ford (2 Paige 310) 131, 297, 298,
300
Lawe's Case (1 De G. M. & G. 421) 207
Lawless y. Mansfield (1 Dru. & W.
557) 516
Lawrence, Ex parte (1 De Gex 269) 493
i-. Clark (9 Dana 257) 268
V. Dale (3 Johns. Ch. 23, 17
Joiins. 427) 147
V. Sebor (2 Cai. 203) 318, 319
V. Taylor (5 Hill 107) 153, 367
V. Trustees of Orphan House (2
Den. .577) 3-30
Lawson v. Lovejoy (8 Me. 405) 16, 18
V. Morgan (1 Price 303) 286, 291,292
Leaf, Ex parte (1 Deac. 176)
V. Coles (1 De G. M. & G. 171)
406
Laycock, Ex parte (1 Kose 32)
Layfield's Case (1 Salk. 292)
Layton, Ex parte (6 Ves. 438)
i: Hnstings (2 Harr. 147)
Lea V. Guice (13 Sm. & M. 656)
480
79
272
150, 1.54
74, 82,
164
95
95, 4M4
Leabo v. (I ode (67 Mo. 126)
Leach i: Church (15 Oh. St. 169)
1-. Leach (IS Pick. 68) 196, 204,-384,
443, 531
V Milburn Wagon Co. (14 Neb.
106, 15 N. W. 232) 334
459
360
2
126
'2-2
Leaf's Appeal (105 Pa. 505)
Leake v. Craddock (3 P. Wms. 158)
Leame ". Bray (3 East 593)
Lean v. Schulz (2 W. Bl. 1195)
Learned v. Ayres (41 Mich. 677, 3
N. W. 178) 248
Leather Cloth Co. v. Lorsont (L. R.
9 Eq. 345) 566
Leavitt v. Peck (3 Conn. 124) 78, 80, 108
Leaycraft v. Dempsey (15 Wend. 83)
515
Lechmere v. Fletcher (1 Cr. & M
635) 92, 487
Ledam v. Hodges (4 McLean 51) 76, 93
Lee, Ex pane (2 Rose 54) 478
V. Davis (70 Ind. 464) 201
V. Dolan (39 N. J Eq. 193) 522
V. First National Bank (45 Kas.
8, 25 Pac. 196) 84
r. Gibbons (14 S. & R. Ill) 317
V. Lashbrooke (8 Dana 214) 202,
234, 384, 527
V. Onstott (1 Ark. 206) 151
V. Page (30 L. J. Ch. 857, 7 Jur.
768) 5.30
i". Reed (4 Dana 112) 511
V. Stowe (57 Tex. 444) 380, 400
V. Wilkins (65 Tex. 29.5) 344
Leeds & T. R. R. y. Fearnley (4 Ex.
26)
Lees, Ex parte (1 Deac. 705)
v. Laforest (14 Beav. 2.50)
Le Fanu v. Malcomson (1 H L. C.
637) 320, 321
Lefever v. Underwood (41 Pa 505)
193
Lefevre v. Boyle (3 B. & Ad. 877)
■ V. Castagnio (5 Col. 564)
Lefevre 's Appeal (69 Pa. 123)
Leftwich v. Clinton (4 Lans. 176)
Legge v. Harlock (12 Q. B. 1015)
Leggott V. Barrett (15 Ch. D. 306)
Leidy v. Messinsrer (71 Pa. 177)
Leigh V Everhart (4 T. B. Mon. 379)
20
21
383
316
46, 60
6
3>8
244
237
248
Leighton v. Wales (3 M. & W. 545)
289
224
3:14
Leinkauff v. Munter (76 Ala. 194)
Leiserinan v. Bernheimer (113 N. Y.
39, 20 N. E. 869) 522
Leithauser v. Baumeister (47 Minn.
151, 49 N. W. 660) 414
Lemiette u. Starr (6Q Mich 539, 33
N. W. 8.32) P3
Lenow r. Fones (48 Ark. 557, 4 S W.
5f^) 3f.:;
Lcri'ck V. Shaftoe (2 Esp. 468) 273
Le Rov r. Jolm>on (2 Pet. 186) 88, T",
111, 169, 180, 228, 40.;
Lesernian r. Bernheimer (113 N. Y.
3'.t. 2') \ v.. S(V.i) ■J->3
Le^he u. Wil^y (47 N Y. 649) li'.t
TABLE OF CASES.
Lessig V. Langton (Bright. N. P. 191)
McMaster (49
292
Levy V. Alexander (10 So. 394)
V. Cadet (17 S & R. 126)
V. Lock (5 Daly 46)
V. Pyne (1 C & M. 453)
V. Walker (10 Ch. D. 436)
V. Williams (79 Ala. 171)
Lewis, In re (8 N. B. H. 546)
V. Alexander (51 Tex. 578)
V. Anderson C^O Oil. St. 281)
N.
Letts-Fleteher Co.
N. W. 1035) 134
Levally v. FAWs (13 la. 544) 474
Leverson v. Lane (13 C. B. n. s. 278)
97, 173
Levett, Ex parte (1 Glyn & J. 185) 520
Levi y. Karrick (8 la. 150) 237
V. Latham (15 Neb. 509, 19 N. W.
4b0) 83, 84
Levick's Appeal (2 Atl. 532) 144
Levine v. Michel (35 La. Ann. 1121)
284
104
160
537
82,84
243
350, 351
336
432
333,
366
Chapman (19 Barb. 252, 16
Y. 369) 320, 322
V. Cline (5 So. 112) 333
V. Conrad (11 la. 153) 474, 476
('. Culbertson (11 S. & R. 48) 437
V. Greider (51 N. Y. 231) 57. 60
V. Langdon (7 Sim. 421) 240, 241,
242, 243, 244, 289, 440, 441
I'. Lee (3B. & C. 291) 23
(,'. Moffett (11 111. 392) 201
V. Pead (1 Ves. Jr. 19) 511
y. Reilly (IQ. B. 349) 376,380
V. Westner (29 Mich. 14) 87
Liberty Savings Bank v. Campbell
(75 Va 534) 98
Liddel, Ex parte (2 Rose 34) 272, 487,
496
Liddell v. Crain (53 Tex. 549) 118
Liddiard, Ex parte (4 Deac. & Ch.
603) 95, 484
Lieb V. Craddock (87 Ky. 525, 9 S. W.
8.38) 68, 105, 409
Ligare v. Peacock (109 111. 94) 201, 222,
374, 376, 393, 527
Lightfoot V. Heron (3 Yoim^e 586) 27
Lightoller, In re (1 Madd. 346) 474
Lill (• Egan (89 111. 609) 89
Lilly r. Kroesen (3 Md. Ch. 83) 515
Lime Rock Bank v. Phetteplace (8
R. I. 5(i) 354
Lime Rock Ins. Co. i'. Treat (58 Me
415) 170
Lindli r. Crowly (29 Kas. 756) 171
Lindley v. Davis (6 Mont. 45-3, 13
Pac. 118) 350, .351
Lindsey v. Edminston (25 111. 359) -30
V. Stranahan (129 Pa. 635, 18
Atl. 524) 201
Lindus V. Bradwell (5 C. B. 583) 111
Lineweaver v. Slagle (64 Md. 465, 2
Atl. 693) 537, 538, 543
Cox (6 Barr 360)
Hastie (2 Caines 246)
Linford v. Linford (4 Dutch. 113) 345,476
Lingard v. Bromley (1 Ves. & B. 114) 269
Lingen v. Simpson (1 Sim. & S. 603) 137,
278, 338, 489, 504
Lintner v. Milliken (47 111. 178) 57
Linton v. Hurley (14 Gray 191) 118
Litchfield, In re (1 Atk 87) 473
Littell r. Fitch (11 Midi. 525) 172
Little V. McPherson (76 Ala 552) 335,361
V. Snedecor (52 Ala. 167) 354
Littlewood v. Caldwell (11 Price 97) 28-3,
291, 45-5, 520
Livermore v. Rand (26 N. H. 85) 425
Liverpool B. & R. P. Nav. Co. v. Agar
(14 F. R. 615, 4 Woods 201) 2
Livingston v. Blanchard (130 Mass.
341) 222
35
96, 172
5.32
r. Lvnch (4 Johns Ch. 573) 191,553
V. Radcliff (6 Barb. 201) 94, 96
V. Roosevelt (4 Johns. 251) 37, 84,
85, 86, 96, 132
Livingston n- Ralli (5 E. & B. 132) 148,
219 220
Lloyd, Ex parte (1 Mont & A. 494) ' 133
, In re (22 F. R. 88) 478
, (22 F. R. 90) 476
V. Archbowie (2 Taunt. 324) 32, 273,
498
V. Ashbv (2 C. & P. 138) 75
V. (2 B. & Ad. 23) 170
(,'. Bellis (37 Eng. L. & Eq. 545) 124
V. Loaring (6 Ves. 773) 188, 553,
V. Passingiiam (Coop. 156) 512
Lobb, Ex parte (7 Ves. 592) 483, 485
Lobdell r. Slawson (90 Mich. 201, 61
N. W. 349) 99
Locke V. Lewis (124 Mass. 1) 98, 115
V. Stearns (1 Met. 560) 116, 118,
124
Lockwood r. Bartlett (130 N. Y. 340, 29
N. E. 257)
V. Comstock (4 McLean 383)
125
379,
381
68
V. Doane (107 111. 235)
v. Middlesex Assur. Co. (47
Conn. 553) 235
Lockyer ;;. Savage (2 Str. 947) 467
Lodge, Ex parte (1 Ves. Jr 165) 489, 491,
497
r. Dicas (3 B. & Aid. 611) 94,387,
414,41.5,416, 482,484,486
V. Weld (139 Mass. 499, 2 N E.
95) 242, 243
Loeb I). Morton (63 Miss. 280) 113
V. Pierpoint (58 Ga. 469, 12 N.
W. 544) 134, 135
Loeschigk v. Addison (19 Abb Pr.
169) 4.34
Logan V. Bond (13 Ga. 192) 88, 89
V. Dixon (73 Wis. 533, 41 N. W.
713) 306
V. Greenlaw (25 F. R. 299) 363, 364
TABLE OF CASES.
315
128
1»5
404
197,
287
381
32 "2
■34(5,
479
Logan V. Mason (6 W. & S 9) 425
V. Trayser (77 Wis. 579, 46 N.
W. 877) 2G8
Lomas v. liradshaw (9 C. B. 620) 255
Loomis V. Loomis (26 Vt. 198) 162
V. McKenzie (31 la. 425) 293, 425
V. Marsliall (12 Conn. 69) 45, 47, 53
V. rierson (Harp. 470) 145
London Assur. Co. v. Bold (6 Q. B.
614)
V. Drennan (116 U. S. 461)
Long V. Carter (3 Ired. 238)
y. Garnett (59 Tex. 229)
V. Majestre (1 Johns. Ch. 305)
V. Story ( 10 Mo. 636) 378,
Longman v. Pole (1 D. & L. 126, 1 M.
& M. 223) 117,179,275
Lord V. Baldwin (6 Pick. 348) 273
446, 498
Loring v. Brackett (3 Pick 403) 145
Loscombe v. Russell (4 Sim. 8) 280, 281,
285, 455, 458, 510
Lothrop V. Adams (133 Mass. 471) 119
r. VVigtitman (41 Pa. 297)
Lottimer v. Lord (4 E. D. Smith 183)
800
Louden v. Ball (93 Ind. 232) 336
Louisville, Bank of, v. Hale (8 Bush
672) 354
Love n. Moynehan (16 111. 277) 23
v. Payne (73 Ind. 80) 128
V. Rliyne (86 N. C. 676) 508
Lovejoy v. Bowers (11 N. H. 404) 137,337
V. Spoffurd (93 U. S. 430) 387, 405
Lovelace's Case (W. Jones 268) 150
Lovell V. Hicks (2 Y. & C. 481) 244
Lowe V. Fairlie (2 Madd. 102) 614
V. Lowe (13 Bush 688) 360
V. Miller (3 Gratt. 205) 304
V. Peers (4 Burr. 2225) 224
Lowell V. Hicks (2 Y. & C. 481) 117
Lowery v. Drew (18 Tex. 786) 151
Lowman v. Sheets (124 Ind. 416, 24
N. E. 351) 84
Lowndes v. Tavlor (1 Madd. 423) 290
Lowry v. Brooks (2 McC. 421) 55, 60
Loyd\;. Freshfield (2 C. & P. 325) 87, 88,
142, 143, 181
Lucas V. Bank of Parien (2 Stew.
280) 146, 153, 406, 412, 413
V. Beacli (1 Scott N. R. 350, 1
M. &G. 417) 252,553
/) De la Cour (1 M. & S. 249) 164
c. Laws (27 Pa. 211) 325, 339, 340
V. Sanders (I McMuU. 311) 150, 151
Lucht V. Behrens (28 Oh. St. 231) 451
Ludington r. Boll (77 N. Y. 138) 95
Ludlow V. Cooper (4 Oh. St. 1) 85, 349,
362
V. Simond (2 Caines Cas. 1) 150
Ludwick V. Huntsenger (5 W. & S.
51) 203
Lumberman's Bank v. Pratt (51 Me.
563) 380
Lumley v. Wagner (5 De G. & S. 485)
278, 279
Lunt V. Stevens (24 Me. 534) 143
Lupton V. Janney (13 Pet. 381) 612
Lusk V. Smith (8 Barb. 670) 381
Lutterloh v. Mcllhenny Co. (74 Tex.
73, 11 S. W. 1063) 400
Lyles V. Styles (2 Wash. C. C. 224)
131, 194
Lyman v Lyman (2 Paine 11) 37, 201
Lynch v. Bitting (6 Jones Eq. 238)
215, 513
V. Thompson (61 Miss. 354) 59, 87
Lyndon v. Gorham (1 Gall. 367) 325, 339,
345, 346
Lyon V. Haines (5 M. & G. 641) 376
V. Knowles (3 B & S. 656) 41
V. Tweddell (17 Ch. 1). 529) 529
Lyons v. Murray (95 Mo. 23, 8 S. W.
170) 248
Lysagt t'. Walker (5 Bligh n. s. 1) 424
Lyster v. Dolland (1 Ves. Jr. 434) 436
Lyth V. Auit (7 Ex. 667) 416, 482, 484
M.
Mabbett v. White (12 N. Y. 442) 135
McAUester v. Sprague (34 Me. 296)
144
McAllister v. Montgomery (3 Hayw.
94) .362
McArthur v. Ladd (6 Ohio 614) 60, 151,
257
V. Bloom (2 Duer 151) 23
McBride v. Hagan (1 Wend. 826) 149, 152,
15.5, 307
V. Protection Ins. Co. (22 Conn.
248) 107
V. Stradley (103 Ind. 465, 2 N.
E. 358) 201
McCall V. Moss (112 111. 493) 393, 527
McCart v. Lewis (2 B. Mon. 267) 151
McCarty v. Emien (2 Yeates 190, 2
Dall. 277) 345
V. Nixon (2 Dall. 65) 443
V. Seisler (130 Ind. 63, 29 N. E.
407) 134
McCauley v. Cleveland (21 Mo. 438) 55
V. McFarlane (2 Desaus. Ch.
239) 489, 497
McCleery v. Thompson (130 Pa. 443,
18 Atl. 735) 155, 168
McClelland v. Remsen (14 Abb. Pr.
332) 184
McClung V Capehart (24 Minn. 17, 1
N. W. 123) 306, 506
McClure v. Hill (.36 Ark. 268) 125
McClurg V. Howard (46 Mo. 365) 160
McClurkan v. Byers (74 Pa. 405) 119
McCoU V. Oliver (1 Stew. 510) 260, 263
McConkey v. Rogers (Bright. N. P.
450) 270
McConnell v. Denvers (35 Cal. 366) 556
V. Hector (3 B. & P. 113) 26, 309
lii
TABLE OP CASES.
McConnell v. McConnell (11 Vt. 290)
McCoombe v. Dunch (2 Dall. 73)
McCord V. Field (27 U. C. C. P. 391)
McCormick's Appeal (55 Pa. 252)
(57 Pa. 54)
V. Stofer (12 S. VV. 151)
McCov V. Brennan (61 Mich. 362, 28
N. W. 129)
McCracken v. Ware (3 Sandf. 688)
McCrillis v. How (3 N. H. 348)
McCulloh V. Dashiell (1 H. & G. 96)
330, 444, 446, 479,
McCuUough V. Sommerville (8 Leigh
415) 131, 135,
McCuUy V. McCully (78 Va. 159)
McCutchin v. Bankston (2 Ga. 244)
McCutchon v. Davis (8 S. W. 123)
McDermot v. Lawrence (7 S. & R.
438) 354,
McDonald v. Eggleston (26 Vt. 154)
V. Holmes (22 Ore. 212, 29 Pac.
738) 248,
V. Matney (82 Mo. 358)
V. Millandon (5 La. 406)
McDowall V. Wood (2 N. & McC.
242)
Mace V. Heath (30 Neb. 620, 46 N. W.
918)
McElroy v. Ludlum (32 N. J.Eq. 828)
V. Swope (47 F. R. 380)
McElvev V. Lewis (76 N. Y. 373) 293,
McEvoy V. Bock (37 Minn. 402,34 N.
W. 740)
McEwan v. Western Ins Co. (1 Mich.
N. P. 118)
McFadden v. Hunt (5 W. & S. 468)
;;. Leeka (48 Oh. St. 513, 28 N.
E. 874) 131, 549,
McFarland v. Bate (45 Kas. 1, 25 Pac.
238)
V. Crary (8 Cow. 258)
V. Stewart (2 Watts 111)
McGar v. Drake (5 Rep. 387)
McGaw V. Marshall (7 Humph. 121)
McGee, Ex parte (9 Ves. 697)
MacGeorge v. Harrison Chemical
Mfg. Co. (141 Pa. 575, 21 A.tl. 671)
McGhees v. McCutchen (82 Ga. 788,
9 S, E. 785)
MoGill V. Brown (Bald 66)
McGinn v. Shaeffer (1 Watts 412)
McGinnis v. Farrelly (27 F. R. 33)
McCrowan v. Bank of Ky. (5 Litt.
271)
V. Myers (66 la. 99, 23 N. W.
282)
McGowan, &c. Co. v. McGowan (22
Oh. St. 370) 240,
McGraw v. Pulling (1 Freem. Ch.
357) 5,
McGregor v. Bainbrigge (7 Hare 164)
V. Cleaveland (5 Wend. 475)
469
476
82
474,
476
368
223
335
296,
297
16
327,
500
153
352
69,
164
344
369
151
306
46
74
23
168
162
7
392
235
270
554
480
117
237
90
16
315
554
98
553
21
538
168
293
242
211
234
82
McGregor v. Ellis (2 Disn 286)
McGuire v. Ramsey (9 Ark. 418)
McGunn v. lianlin (29 Mich. 476)
Machell, Ex parte (2 Ves. & B. 216)
V. Kinnear (1 Stark. 499)
Mcllreath v. Margetson (4 Doug.
278)
Mcllroy v. Adams (32 Ark. 315)
Mclntire v. McLaurin (2 Humph. 71)
V. Oliver (2 Hawks 209)
Mclver v. Humble (16 East 169) 48,
412,
McKacy v. Hebb (42 Md. 227)
McKay v. Bloodgood (9 Johns. 285)
V. Joy (70 Cal. 581, 11 Pac. 832)
V. Overton (65 Tex. 82) 251
526,
V. Rutherford (6 Moo. P. C. 413,
13 Jur. 21)
McKee v. Bank of Mount Pleasant (7
Ohio 175) 93, 149,
V. Hamilton (33 Oh. St. 7)
r. Stroup (Bice 291) 142,144.
Mackeller v. Wallace (8 Moo. P. C.
378)
Mackenna v. Parkes (36 L J. n. s. Ch.
366)
McKenzie v. Garrison (10 Rich. 234)
V. Nevins (22 Me. 138)
McKinney v. Alvis (14 111. 34)
V. Baker (9 Ore. 74) 231,
V. Brights (16 Pa. 399)
McKnight v. McCutcheon (27 Mo.
4.36)
V. Ratcliffe (44 Pa. 156)
117,
McKowan u. McGuire (15 La. Ann.
637)
Maclae v. Sutherland (3 E. & B. 1 )
113,
McLanahan v. Ellery (3 Mass 269)
McLane v. Abrams (2 Nev. 199)
McLean, In re (15 N. B. R. 333) 330,
r. Fleming (96 U. S 245)
McLellan v. Cumberland Bank (24
:\Ie. 566)
McLinden v. Wentworth (51 Wis 170,
8 N. W. 118)
McMaster v. Vernon (3 Duer 249)
McMillan r. Hadley (78 Ind. 590)
McMinn v. Richmonds (6 Yerg 9)
McMuUan v. McKenzie (2 Greene
368)
McNamara v. Eustis (46 Minn. 311,
48 N. W. 1123)
McNaughten v. Partridge (11 Ohio
223) 91, 92, 93, 149. 151,
McNaughton's Appeal (101 Pa. 550)
McNair y. Fleming (3 Dow 229) 170,
V. Piatt (46 111. 211)
r. Rewey (62 Wis. 167, 22 N. W.
339)
V. Wilcox (121 Pa. 437, 15 Atl.
575) 98,
McNeely v. Haynes (76 N. C. 122)
131
352
9
478
316
194
125
311
160
107.
492
508
150
434
255.
527
155
165,
182
179
511
530
470
425
482
335
173
250
540
4.34
110,
183
312
203
500
243
144
427
92
368
16
107
69
508
99
182
97
335
308
119
TABLE OF CASES.
liii
McNeil V. Congregational Society (66
Cai. 105) 368
V. Reid (9 Bing. 68,2 Moo. & Sc.
89) 11,210
McNeish v. Hulless Oat Co. (57 Vt.
316) 131, 433
McNutt V. K'ng (59 Ala. 597) 469
V. Stravhorii (39 Pa. 269) 134
Macon Co. o. Kodgers (84 Mo. 66) 203
McPlierson v. Katlibone (7 Wend.
216) 69, 107
McUae v. McKenzie (2 Dev. & B.
232) 280, 509
McSherry v. Brooks (46 Md 103) 255
McStoa V. Mattliews (50 N. Y. 166) 103
McVicker v. Cone (21 Ore. 353, 28
Pac. 76) 49
McWiiorter i'. McMahan (1 Clarke
Ch. 400) 150, 153
Macy V. Combs (15 Ind. 469)
/•. De Wolf (3 W. & M. 193)
Maddeford y. Austwick (1 Sim. 89)
Maddick v. Marshall (16 C. B. n. s.
387, 17 C. B. N. s. 829)
Maddock v. Asibury (32 N. J. Eq
181)
Maddox i-. Dent (4 Md. Ch. 543)
Madgwick v. Wimble (6 Beav. 495)
60
66
195,
199
103
360
516
297,
300
Madison County Bank v. Gould (5
Hill 309) 538, 540, 546, 547
Maffet V. Leuckel (93 Pa. 468) 96
Magill V. Merrie (5 B. Mon. 168) 405, 406
Magovern v. Robertson (116 N. Y.
61, 22 N. E. 398) 61
Mahnke v. Neale (23 W. Va. 57) 512
JMainwaring v. Newman (2 B. & P.
120) 270, 307
Mair v. Glennie (4 M. & S. 240) 55, 60
Maise v. Garner (Mart. & Y. 383) 289
Major V. Hawkes (12 111. 298) 386
V. Todd (84 Mich. 85, 47 N. W.
841)
Malcomson v. Malcomson (L. R. 1 Ire.
228)
Maley v. Newman (5 D. & R. 317)
Mallory v. Hanauer Oil Works (86
Tenn. 598, 8 S W. 396) 27,
V. Russell (71 la. 63, 32 N. W.
102)
Maloney v. Bruce (94 Pa. 249)
Maltby v. N. W. & R. Co. (16 Md.
422)
Manahan r. Gibbons (19 Johns. 109)
Manchester Bank, Ex parte (12 Ch. D.
917)
Manchester Co., Ex parte (L. R. 18
Eq. 249,
Manck v. Manck (54 111. 281)
Manderson's Appeal (113 Pa. 631)
Manderston v. Robertson (4 M. & R.
440)
Mandeville v. Mandeville (35 Ga 243)
Maneely v. McGee (6 Mass. 143)
393
183
462
564
366
537
253
442
481
354
563
157
52
483
Manhattan Brass Co. v. Sears (45 N.
Y. 797) 46
Manhattan Co. v. Laimbeer (108 N.
Y. 578, 15N. E. 712) 546
V. Ledyard (1 Cai. 191) 168
Manley v. Ins. Co. of N. Amer. (1
Lans. 20) 235
Mann v. Bowen (85 Ga. 616, 11 S. E.
862) 259
V. Connell (1 Whart. 388) 371
V. Flanagan (9 Ore. 425) 201
f. Locke (11 N. H. 246) 160,162
Manning i-. Gasharie (27 Ind. 399) 550
V. Hays (6 Md. 5) 171, 187
V. Wadsworth (4 Md. 59) 209, 210,
252, 257
Mansfield u. Watson (2 Clarke 111) 27
Manuf. & Mech. Bank v. Gore (15
Mass 75) 119
V. Winship (5 Pick. 11) 114, 171
Manville v. Parks (7 Col. 128) 34, 52, 87
Many, 7« re (17 N. B. R. 514) 125
Marble v. Lypes (82 Ala. 322, 2 So.
701)
Marietta Iron Works v. Lattimer (25
Oh. St. 621)
Marine Bank i: Ogden (29 III. 248)
Marine (l^o. of Chicago v. Carver (41
III. 66)
Mariott v. Shaw (Com. 277)
Markham v. Gehan (42 Mich. 74)
V. Jones (7 B. Mon. 456).
V. Merritt (7 How. j\Iiss. 487)
354, 355, 358, 362
Marks v. Stein (11 La. Ann. 509) 248
Marlett v. Jackman (3 AH. 290) 432, 433,
436, 446
Marquand v. New York Mfg. Co. (17
Johns. 525) 10, 127, 128, 129, 138, 391,
463, 465, 466, 555
Marsh v. Davis (33 Kas. 326, 6 Pac.
612) 7, 350
V. Gold (2 Pick. 285) 35, 147
V. Hutchinson (2 B. & P. 226) 22, 23
V. Keating (1 Mont. & A. 592, 2
CI. & F. 250) 122
V. N. W. Ins. Co. (3 Biss. 351) 57
.Marsh's Appeal (69 Pa. 30) 193, 201
Marshall v. Colman (2 J. & W. 266) 111,
227, 257, 284, 285, 288, 455, 456, 457,
507, 510
68, 104
203
28
100
324
345
104
349,
V. Johnson (33 Ga. 500)
V. Lambeth (7 Rob. La. 471)
216
544,
545
372
22
V. Marshall (2 Bell Com. 641)
V. Button (8 T. R. 545)
Marten v. Van Schaick (4 Paige 479) 237,
241, 293, 296, 297, 298
Martin v. Brydges (3 C. & P. 83) 157
V. Fewell (79 Mo 401) 49, 404
V. Kirk (2 Humph. 529) 379, 381
V. Mayo (10 Mass. 137) 18, 21
V. Meyer (45 F. R. 435) 334
1-. Morris (62 Wis. 418, 22 N. W.
525) 364
liv
TABLE OF CASES.
Martin v. Muncy (40 La. Ann. 190, 3
So. 640) 168
r. Hoot (17 Mass. 227) 159, 163
V. Smith (25 W. Va. 579) ^03
V. Thrasher (40 Vt. 460) 148
V. Walton (1 McC. 10) 378, 406
Martyn v. Gray (14 C. B. n. s. 824) 103
Marvin y. Trumbull (Wright 386) 353
Marx V. Goodnough (16 Ore. 26, 16
Pac. 918) 343, 344
Mason r. Oonnell (1 Whart. 381) 10, 128,
142, 3y6, 555
r. Eldred (6 Wall. 231) 76
r. Hafkt'tt (4 Nev. 420) 57
I'. Jouett (2 Dana 107) 144
V. Potter (26 Vt. 722) 45, 60
V. Kumsey (1 Camp. 384) 111
V. Wicl<ersham (4 W. & S. 100) 96
: V. Wright (13 Met. 306) 16
Masonic Savings Bank v. Bangs (10
S. W. 633) 526
Masson, Ex parte (1 Rose 159) 487
Master v. Kirton (3 Ves. 74) 286, 288, 874,
456
Mathews v. Felch (25 Vt. 536) 103, 107
Mathewson v Clark (6 How. 122) 10, 128,
138, 556
Matlock V. Matlock (5 Ind. 403) 325, 327,
349, 354, 361
Matteson v. Nathanson (38 Mich. 377) 168,
489
Matthews, Ex parte (3 Ves. & B. 125) 77,
106, 271, 498
r. Dare (20 Md. 273) 402
r. Hunter (67 Mo. 293) 364
I'. Wallyn (4 Ves. 118) 516
Mattison v. Farnham (44 Minn. 95, 46
N. W. 347) 65, 452
Maude v. Rodes (4 Dana 144) 456
Maughlin v. Tyler (47 Md. 545) 134
Mauldin v. Branch Bank (2 Ala. 511) 97,
172, 180. 184, 185, 406
Maund v. Allies (5 Jur. 860) 515
Maunev v. Coit (80 N. C. 300) 168
V.' (86 N. C. 463) 46
Mawman ik Gillett (2 Taunt. 327) 30, 278
Mawson r. Blane (10 Ex. 206) 18
Maxey v. Strong (53 Miss. 280) 103
Maxwell r. Day (45 Ind. 509) 94, 95
V. Deare (8 Moo. P. C. 368) 488
V. Jameson (1 B & Aid. 51) 269
V. Port Tennant Co. (24 Beav.
495) 384
May V. Chapman(16 M. & W. 355) 175, 181
V. Hewit (33 Ala. 161) 111
V. New O & C. R. R. (44 La.
Ann. 444, 10 So. 7.69) 351
Mayberry v. Bainton (2 Harr. 24) 185
V. Willoughby (5 Neb. 368) 160
Mayer v. Clark (40 Ala. 259) 327, 38'^
V. Garber (53 La. 689, 6 N. W.
68) 231
Mayhew v Earaes (1 C. & P. 550) 164
V. Herrick (7 C. B. 229) 303, 321,
338, 339, 340
Maymott v. Maymott ( 9 Jur. n. s.
4',)6)
Maynard v. Fellows (43 N. H. 255)
Maynoketa v. Willey (35 la. 323)
Mayou, Ex parte (4 De G. J. & S
664)
Mayrant v. Marston (67 Ala. 453)
Mead v. Nat. Bank (6 Blatcli. 180)
V. Tomlinson (1 Day 148)
>:. Wheeler (13 N. H. 351)
Meaders v. (iray (60 Miss. 400)
Meador v. Hughes (14 Bush 652)
202
170,
182
328
Meagham, In re (1 Sch. & L. 179)
332
47
487
89, 91
224
203
29, 59,
471
467
Meagher v. Reed (14 Col. 335, 24 Pac.
681)
Mealier v.
Cox (37 Ala. 201)
7, 12, 84
129, 371,
454, 566
150
249, 279
514
Mears v. Serocold (7 T. R. 208)
Meason v. Kaine (63 Pa. 335)
Mebane v. Mebane (1 Ired. Eq. 408)
Mechanics' Bank v. Barnes (86 Mich.
632, 49 N. W. 475) 187
V. Foster (44 Barb. 87) 87, 180
V. Hildreth (9 Cush. 359) 382
V. Seaton (1 Pet. 299) 469
Mechanics' & Traders' Ins. Co. v.
Richardson (33 La. Ann. 1308) 98
Medberry r. Soper (17 Kas. 869) 81
Medbury r. Watson (6 Met. 246) 313, 320
Medill V. Collier (16 Oh. St. 599) 50
Meech v. Allen (17 N. Y. 300) 836
Meehan v. Valentine (145 U. S. 611) 46,
58,61
Meggett V Finney (4 Strobh. 220) 162
Meguiar v. Helm (14 S. W. 949) 212, 231
Melioruchi v. Royal Ex. Ass. Co. (1
Eq. Abr. 8) 516
Mclledge v. B. Iron Co. (5 Cush. 170) m
Mellen v. Whipple (1 Gray 317) 317
Mellersh v. Keen (27 Beav. 236) 396, 460
V. (28 Beav. 453) 237, 238
Melville v. Brown (15 Mass. 82) 446
Menagh v. Whitwell (52 N. Y. 146) 331,
332, 310
Mendenhall v. Benbow (84 N. C. 646) 360
Meneely v. Meneely (62 N. Y. 427) 242
Menkins v. Lightner ( 18 111. 282) 27
Mercantile Bank v. Cox (38 Me. 500) 75.
104
Merchants' Bank v. Rudolf (5 Neb.
527) 118>
Merchants' & Manufacturers' Bank v.
Stone (38 Mich. 779) 5(!
Mercein v. Andrus (10 Wend. 261) 173
Mercer v. Saver (Anth. N. P. 162) 163
Meredith v. Ewing (85 Ind. 410) 217, 24^
Merrick v. Brainard (38 Barb. 574) 39]
V. Gordon (20 N. Y. 93) 65
Merrill, In re (13 N. B R. 91) 538
MeMt V. Pollys (16 B. Mon. 355) 160, 406,
407, 412
Merritt v. Day (38 N. J. 32) 160, 162
V. Dickey (38 Mich. 41) 363
TABLE OF CASES.
Iv
Merritt v. Walsh (32 N. Y. 685) 60
V. Williams (17 Kas. 2^1) 408
Merrivveather v. llarduman (51 Tex.
486) 248, 512
Merry ». Hoopes (HI N. Y. 415, 18
N. E. 714) 237,244
Merry weather v. Nixon (8 T. R. 186; 254,
267, 269
Mersereau v. Norton (15 Johns. 179) 304
Mershon v. Hobensack (2 Zab. 372) 108, 107
Messer n. Messer (50 N. 11. 375) 352, 366
Metcalfy. Bruin (12 East400, 2 Camp.
422) 316
V. Fouts (27 111. 110) 37'.)
u Officer (2 F. R. 640) 32, 68
y. Heiimon (43 111. 264) 10
V. Royal Exch. Ass. Co. (Barn.
343) 132, 302, 557
Metcalfe v. Rycroft (6 M. & G. 75) 149,
155, 316
Metropolitan S Q. Co. v. Hawkins (4
H. &N. 87) 322
Metropolitan Nat. Bank v. Sirret (97
N. Y. 320) 537
Meux V. Humphrey (8 T. R. 25) 145, 183
Meyberff y Steagall (51 Tex. 351) 344
Meyer v. Atkms (29 La. Ann. 586) 168
V. Krohn (114 111. 574,2 N. E.
495) 28, 128, 404
V. Larkin (3 Cal. 403) 88
V. Sharpe (5 Taunt. 74) 55
IMilbank v. Revett (2 Mer. 405) 294, 295
Milburn v. Codd (7 B. & C. 419) 248,219,
253, 2(57, 553
V. (1 M. & R. 238) 553
Michael u. Workman (5 W. Va 391) 110
IMickle 0. Peet (43 Coini. 65) 248
Mifflin V. Smith (17 S. & \l. 165) 37, 38,
74,88, 111, 114,212.443
Miles V. Thomas (9 Sim. 606) 194,388,510
V. Wann (27 Mmn. 56) 49
Millar r. Craig (6 Beav. 433) 515, 520
Millard o. Hewlett (19 Wend. 301) 19
Miller r. Andres (13 Ga. 366) 271, 508
V- Bailey (19 Ore. 539, 25 Pac.27) 254
V. Bartlet (15 S. & II. 137) 60
V. Chambers (73 la. 236, 34 N. W.
830) 393
V. Chandler (29 La Ann. 88) 60
V. Consolidation Bank (48 Pa.
514) 182
V. Estill (5 Oh. St. 508) 231, 327, 328,
335, 338
V. Fenton (11 Paige 18) 269
V. Harris (9 Baxt. 101) 306
V. Hines (15 Ga. 197) 82, 97, 99, 171
V. Hughes (1 A. K. Marsh. 181) 58
r. Jones (39 111 54) 293, 434
V. Maince (6 Hill 114) 75, 143, 170
V. Marx (65 Tex. 131 ) 23, 24, 25, 44
V. Miller (8 W. Va. 542) 95
0. Morrice (6 Hill 114) 88
V. Neimerick (19 111. 172) 162
V. Price (20 Wis. 117) 222
V. Sims (2 Hill S. C. 479) 20
Miller v. Thompson (3 M. & G. 576)
V. Thorn (R. M. Charlt. 180)
169
307,
309
515
435
94
615
380
V. Wornack (Freem. Cli. 486)
Miller's Appeal (7 Atl. 190)
Millerd v. Thorn (56 N. Y. 402)
MiUiken v. Gardner (37 Pa. 456)
i: Loring (37 Me. 408)
Mills r. Argall (6 Paige 577) 136, 540
V. Barber (4 Day 428) 131, 134, 139,
150
V. Boyd (6 Jur 943) 484
V. Fellows (30 La. Ann. 824) 303
v. Hanson (8 Ves. 08) 517
V. Hurd (29 F. R. 410) 559, 560
V. Osborne (7 Sim. 37) 219
V. Thomas (9 Sim. 609) 285, 286
Milmo Nat. Bank v. Carter (20 S. W. .
836) 30
Milne v. Bartlet (3 Jur. 358) 390, 461
V. Moreton (0 Binn. 353) 468
Milnes v. Cowley (8 Price 620) 512
.Milton V. Mosher (7 Met. 244) 133, 153
Miner r. Downer (19 Vt. 14) 106
V. Pierce (38 Vt. 610) 97
Minnit v. Whinnery (5 Bro. P. C.
489) 79, 383, 406
Minor v. Gaw (11 Sm. & M. 322) 98, 178,
179
Miser v. Trovinger (7 Oh. St. 281) 165
Missouri Pac. Ry. v. Johnson (7 S. W.
838) 60
Mitchell, Ex parte (14 Ves. 597) 146
v. Cockburne (2 H. Bl. 379) 9
V. Dall (2 H. & G. 159, 4 G. & J.
361) 32,273,410,420
/•. Harris (2 Ves. Jr. 134) 220
I'. Ostrom (2 Hill 520) 381
V. Read (61 N. Y. 123, 84 N. Y.
556) 196, 204
>'. Reynolds (Fort. 296, 1 P.
Wms. 181) 401
V. Roulstone (2 Hall 351) 69
r. Tarbutt (5 T. R. 649) 124, 125, 126
('. William (4 Hill 13) 124
Mitchum v. Bank of Ky. (9 Dana
166) 406
Mix V. Shattnck (50 Vt. 421) 160
Moale V. HoUins (11 G. & J. 11) 76
Mobile, Bank of, o. Andrews (2 Sneed
535) 433
Moddewell v. Keever (8 W. & S 63) 10,
127, 128, 138, 555
Mode V. Penland (93 N. C. 292) 120
Moderwell v. MuUison (21 Pa. 257) 309
Modisett v. Liiidley (2 Blackf. 120) 151
Moffat V. McKissick (8 Baxt 517) 111
p. Moffat (10 Bosw. 468) 77, 506
V. Van xMillenger (2 B. & P. 124) 270,
307
Moffitt V. Roche (92 Ind. 96) 78, 168
Mogul S. S. Co. V. McGregor, (1892,
A. C. 25) 500, 566
Mohawk & Hudson R. R. v. Niles (3
Hill 162) 66
Ivi
TABLE OF CASES.
17
477
55:^
4! (3
273
Moley V. Brine (120 Mass. 324)
Moline Co. v. Webster (26 111 233)
Moline Wagon Co. v. Rumniell (12
F. K. 658, 14 F. R. 155) 97, 404
Moller V. Lambert (2 Camp. 548) 316
Mollwo V. Court of Wards (L. R 4
P. C. 419) 42, 43
Molony v. Davis (48 Pa. 512) 251
Moneypenny c. Hartland (1 C. & P
352, 2 C. & P. 378)
Monkiiouse v. Hay (2 Br. & B. 114)
Monroe v. Ezzell (11 Ala. 603)
V. Conner (15 Me. 178) 80, 371
Mont c. Mainwaring (8 Taunt. 139) 69
Montague v. Hayes (10 Gray G09) 527
f. ^mitli (13 Mass. 405) 316
Montgomery, Ex jKirle (1 ulyn & J.
341) 503, 531
f. Boone (2 B Mon. 244) 150, 154
Montgomery & E. Rv. v. Culver (75
Ala. 587)
Montjoys v. Holden (Litt. 447)
Montreal, Bank of, v. Page (98 111.
109) 168,
Montz V. Morris (89 Pa. 392)
Moody V. Downs (63 N. H. 50) 475, 476
V. Lucier (62 N. H. 584) 836
V. Payne (2 Johns. Ch. 548) 290, 325,
338, 344, 391, 475
V. Rathburn (7 Minn. 89) 5
Mooers v. White (6 Johns. Ch. 360) 512
Moon (•. Story (8 Dana 2:33)
Moore, Ex parte ( 2 Glyn & J. 166)
V. Bare (11 la. 198)
V. Brink (6 Th. & C. 227)
V. Davis (11 Cli. D. 261)
V. Gano (12 Ohio 300)
n. Hill (2 Peake 10)
V. Huntington (17 Wall. 417)
;• Knight (1891, 1 Ch. 547)
r. Sample (3 Ala. 319)
V. Smith (19 Ala. 774)
r. Stevens (60 Miss. 809)
Moore's Appeal (19 Atl. 753)
Moorehead v Gilmore (77 Pa. 118) 168
Moran v. Palmer (13 Mich. 367) 350
Moravia v. Levy (2T. R. 483) 260, 262, 519
Moreau v. Saffarans (3 Sneed 600) 352, 354
65
304
374
347
439
473
138
550
59
247
312
524
121
291, 344
45, 60
150, 151
195, 523
Moredon v. Wyer (6 M. & G. 278)
Morehead v. Adams (18 Neb. 569, 26
N. W. 242)
V. Wriston (73 N. C. 398)
Moreton v. Hardren (4 B. & C. 223)
145
332
429
124,
126
293
146
Morey v. Grant (48 Mich. 326)
Morgan. Ex jmrte (Buck 109)
v. His Creditors (20 Mart. 599) 330,
444
V. Pierce (59 Miss. 210) 84
V. Richardson (16 Mo. 409) 155
V. Schuyler (79 N. Y. 490) 243
V. Skidmore (55 Barb. 263) 476
r. Stearns (41 Vt. 397) 57
Morganthau v. King (15 Col. 413, 24
Pac. 1048) 347
Morin v. Martin (25 Mo. 360) 249, 268
Morisset v. King (2 Burr. 891) 62
Montz V. Peebles (4 E. D. Smith 135) 217,
279
Morley, Ex parte (L. R. 8 Ch. 1026) 442
V. Gaisford (2 H Bl 442) 126
Moms V. Allen (1 McCart 44) 195, 203,
527
V. Barrett (3 Y. & J. 384) 350, 353,
354
216, 279
202
157) 449
450, 518
Colman (18 Ves. 437)
Griffin (49 N. W. 846)
Harrison (Colles P. C.
V. Hillery (7 How. Miss. 61) 309
V. Jones (4 Harr. 428) 150
V. Kearsley (2 Y. & C. 1B9) 362, 364
V. Peckham (51 Conn. 128) 7, 279
Morris Run Coal Co. v. Barclay Coal
Co. (68 Pa. 173) 9, 566
Morrison v. Atwell (9 Bosw. 503) 139
V. Blodgett (8 N. H. 231) 137, 291,
325, 337, 338, 342, 343, 345
V. Cole (30 Mich. 102) 57
V. Kentz (15 111. 193) 331
V. Stockwell (9 Dana 172) 255
Morrow v. Riley (15 Ala. 710) 263, 508
V. Saunders (1 Br. & B. 318) 211
Morse c. Bellows (7 N. H. 567) 152, 382
V. Hagenah (68 Wis. 603, 32 N.
W. 6-34) 168
V. Wilson (4 T. R. 35.3) 62
Morss V. Gleason (64 N. Y. 204) 333
Mortley v. Flanagan (.38 Oh. St. 401) 335
Morton v. Croghan (20 Johns. 123) 22
I'. Webb (7 Vt. 123) 273
Moser v. Libenguth ( 1 Rawle 255) 94
Moses r. Hatfield (27 S. C 324, 3 S.
E. 538) 131
Moss V. Jerome (10 Bosw. 220) 77
V. McCall (75 111 190) 203, 212
V. McCullough (5 Hill 1-35) 76
Motley V. Dounman (3 My. & C 1) 322
V. Frank (87 Va. 432, 13 S. E.
26) 115
V. Jones (3 Ired. Eq. 144) 60
Motteux V. St. Aubin (2 W. Bl. 11-33) 155
Moule, Ex parte (14 Ves. 602) 21
r. HoUins (11 G. & J. 11) 91
Moult, Ex parte (1 Deac. & Ch. 44,
2 id. 419, 1 Mont. 292) 444, 487, 495,
496
Mounstephen v. Brooke (1 Chitty 391) 142
Mo watt V. Howland (3 Day 353) 406
Mover v. Drummond (32 S. C. 165,
lb S. E. 952) 351
Mudd V. Bast (34 Mo. 465) 32
Mulford V. Griffin (1 F. & F. 145) 407
MulhoUan v. Eaton (11 La. 291) 516
Mullany v. Keenan (10 la. 224) 271
MuUett V. Hook (1 M. & M. 88) 272
Mumford v. McKay (8 Wend. 440) 376
r. Murrav (1 Paige 620) 479
V. Ni<'oir(20 Johns. 611) 37, 66, 81
Munroe v. Cooper (5 Pick. 412) 180
TABLE OF CASES.
Ivii
Munroe v. Ezzel (11 Ala. 603) 317
Munsey v. Butterficld (133 Mass. 492) 238
Munson v. Wickvvire (21 Conn. 513) 165
Munzesheimer v. fleinze (74 Tex. 254,
11 S. VV. 1094) 150
Murpliy, In re (1 Sch. & L. 44) 467
Murray, In re (13 K. R. 550) 104
r. Ayer (16 U. I. 6(35, 19 Atl.
241) 168
V. Bogert (14 Johns 318) 10, 127.
248, 260, 269, 555
V. Col. Ins. Co. (11 Johns. 302) 319
V. .Mumtbrd (6 Cow. 441 ) 304, 443, 447
V. Murray (5 Jolins. Ch. 60) 137, 325,
329, 330, 466, 469, 478, 500
V. Richards (1 Wend. 58) 12
V. Soiuerville (2 Camp. 99) 88
V. Stevens (1 Rich. Cas. 205) 53
V. Toland (3 Johns. Ch. 569) 518
Murrell v. Mandlebauni (19 S. W.
880) 350
Murrill v. Neill (8 How. 414) 331, 479
Murry v. Murry (5 Johns. Ch. 60) 436
Muse V. Donelson (2 Hiunpli. 166) 160
Musgrave v. Drake (5 Q. B. 185) 99, 180
Musier v. Trumpour (5 Wend. 274) 53,
265
Musselman's Appeal (62 Pa. 81) 236, 238
Musser v. Brink (68 Mo. 242, 80 Mo.
350) 53
Musson r. May (3 Ves. & B. 194) 447
Mutual Benefit Ins. Co. v. Hildyard
(37 N. J. L 444) 26
Mutual Institution v. Euslen (37 Mo.
453) 378
Mut. Nat. Bank v. Richardson (33 La.
Ann. 1312) 98
Muzzy V. Wiiitney (10 Johns. 226) 60
Myatts V. Bell (41 Ala. 222) 95, 160
Mycock V. Beatson (13 Ch. D. 384) 305,
529
Myers v. Buggy Co. (54 Mich. 215, 19
N. W. 961) 238
V. Edge (7 T. R. 254) 314, 315
V. Huggins (1 Strobh. 473) 379
r. Smith (14 la. 181) 385
V. (29 Oil. St. 120) 336. 345
V. Standart (11 Oh. St. 29) 162, 163,
380
V. Winn (16 IIL 135) 253
Myrick v. Dame (9 Cush. 248) 246
N.
Nadnay ;'. Harvey (9 Gratt. 466) 94
Nail V. Mclntyre (31 Ala. 532) 97, 274
Napier v. Catron (2 Humph. 534) 150,
151,508
i: McLeod (9 Wend. 120) 152, 383
Nason, Ex parte (70 Me. 363) 182, 487
National Exchange Co. v. Drew (2
Macq. 103) 116, 124
Natusch V. Irving (Gow Part. 398) 166,
191, 212, 285
Nay lor. In re (2 Deac. & Ch. 186) 473
i;. Sidener (106 Ind. 179) 293
Neale v. Turton (4 Bmg. 149) 246, 255, 553
Near v. Lowe (49 Mich. 482, 13 N. W.
825) 306
Nedliam's Case (8 Co. 136) 143
Nehrboss v. Bliss (88 N. Y. 600) 333, 434,
437
Neil v. Greenleaf (20 Oh. St. 567) 254, 255
Neilson v. Moesend Iron Co. (11 App.
Cas. 298)
Nelms V. McGraw (93 Ala. 245, 9 So.
719)
Nelson, Ex parte (1 Cow. 424)
V. Hill (5 How. 127)
V. Lloyd (9 Watts 22)
V. Tenney (36 Hun 327)
Nerot V. Burnand (2 Russ. 56)
V. (4 Russ. 247)
Ness 1-. Antjas (3 Ex. 805)
Newall V. Bartlett (114 N. Y. 399, 21
N. E. 990)
V. Hussev (18 Me. 249)
Newbiggin v. Pillans (2 Bay 462)
Newhigging v. Adam (34 Ch. D.
582)
Newbrau v. Snider (1 W. Va. 153)
Newburg Petroleum Co. v. Weare
(27 Oh. St. 343)
Newhurgh, Bank of, i-. Bigler (83 N.
Y. 51)
Newby v. Harrell (99 N. C. 149, 5 S.
E. 284)
Newell V. Cochran (41 Minn. 374, 43
N. W. 84) 7, 196
V. Humphrey (37 Vt. 265) 439, 447
v. Townsend (6 Sim. 419) 290
Newliall V. Buckingham (14 111. 405) 344
New Hampshire Ins. Co. v. No ves (32
N. H. 345) ■ 20
Newland v. Tate (3 Ired. Eq. 226) 129, 200,
384
Newman v. Bagley (16 Pick. 570) 446
V. Baker (9 Johns. 207) 81
V. Bean (21 N. H. 93) 60, 325, 338
V. McComas (43 Md. 70) 160
V. Milner (2 Ves. 483) 288
V. Morris (52 Miss. 402) 24
V. Payne (2 Ves. Jr. 199) 516
V. Richardson (9 F. R. 865) 99
Newmarch v. Clay (14 East 239) 421,424,
425
Newmarket Nat. Bank v. Locke (89
Ind. 428) 476
New Orleans v. Gauthreaux (32 La.
Ann. 1126) 46
New Orleans, Bank of, v. Matthews
(49N. Y. 12) 403
Newsome v. Coles (2 Camp. 617) 108, 403,
412
Newton v. Belcher (12 Q. B. 921) 427
New Vienna Bank v. Johnson (47 Oh.
St. 306, 24 N. E. 503) 351
New York, Bank of, v. Vanderhorst
(32 N. Y. 553) 432
213
57
22
445
69
136
504
389
25, 130
118
483
23
305
222
50
451
304
Iviii
TABLE OF CASES.
Kew York Ins. Co. v. Bennett (5 Conn.
674) 87, 180, 184,
(.'. Statliam (93 U. S. 24)
Nicliol V. Stewart (oG Ark. urj) 97,
Kicliolaus V. Thielges (50 Wis. 491, 7
N. VV. 341)
NiclioUs V. Dowding (1 Stark. 81)
163,
Nichols V. Anguera (2 Mills 290)
V. Cheairs (4 Sneed 229) 75, 76,
96,
V. Hughes (2 Bail. 109)
V. Sober (38 Mich. 678)
17. White (85 N. Y. 531)
Nicholson v. Janevvay (1 Green 285)
r. Moog (G5 Ala. 471) 404,
r. Kicketts (2 E. & E. 497)
NicoU i: Glennie (1 M. & S. 588)
V. Mumt'ord (4 Jolms. Ch. 522)
66, 128, 137, 138,
Niehoff V. Dudley (40 111. 406)
Niemann v. Niemann (43 Ch. D. 198)
Nightingale ?'. Scanimell (6 Cal. 506)
Niras, In re (16 Blatch.439) 113,
V. Bigelow (44 N. H 376)
Nirdlinger v. Bernheimer (133 N. Y.
45, 30 N. E. 561) 33, 128,
Nisbet V. Nasli (52 Cal. 540) 34,
1-. Patton (4 Kawle 120)
Niven v. Spickerman (12 Johns. 401)
258,
Nixon V. Nash (12 Oh. St. 647) 344,
Noble V. McClintock (2 W. & S. 152)
Nobles V. Eatea (7 Cow. 307)
Nockels V. Crosby (3 B. &C. 814, 5 D.
& R. 751 ) 252, 456,
Noel V. Bowman (2 Litt. 46)
'Nokes, Ex parte (1 Mont. Part. 114)
I'. Leppings (2 Phil. 19)
Nolte, Ex parte (2 Glyn & J. 295) 185,
Noonan v. McNabb (30 Wis. 277)
V. Nunan (76 Cal. 44, 18 Pac.
98) 10, 128, 343,
Norfolk, Ex parte (19 Ves. 458) 271,
Norman y. Huddleston (64 111. 11) 136,
Norment v. Hull (1 Humph. 320)
r. Johnson (10 Ired. 89)
Norris v. Vernon ( 19 Md. 13)
North V. Bloss (30 N. Y. 374)
North British Bank v Colhns (28 Eng.
L. & Eq. 7) 206.
Northern Bank of Ky. v. Keizer (2
Duv. 169)
Northern Co. v. Potter (63 Cal. 157)
North Penn. Coal Co.'s Appeal (45
Pa. 181)
North River Bank v. Aymar (3 Hill
262)
V. Stewart (4 Bradf. 254)
Northrup v. Phillips (99 111. 449) 9,
Northwestern R. R. v. McMichael
(5 Ex. 114)
185
26
231
60
164
76
,95,
206
147
99
163
193,
336
407
468
124
10,
555
58
139,
144
320
,488
260
506
508
124
257,
267
476
99,
173
401
462
251
392
516
482
213
344
498
509
60
179
138
32
216
477
144
350
180
331
198
20
563
111,
183
110
,366
295,
456
412
257,
258
406
515
222,
525
164
54
469
454,
507
150
Norton v. Phelps (54 Miss. 467)
V. Seymour (3 C. B. 792) 110,
r. Thatcher (8 Neb. 186) 77,
Norwalk Nat. Bank t'. Sawyer (38 Oh.
St. 339) 351
Norway v. Rowe (19 Ves. 144) 292,
298, 455,
Norwich Nav. Co. v. Theobold (M. &
M. 151)
Notley, Ex parte (1 Mont. & A. 46)
Nott V. Downing (6 La. G84) 165,
Nourse v. Prime (7 Johns. Ch. 69)
Nowell V. Nowell (L. R. 7 Eq. 538)
623^
Noyes v. Brumaux (3 Yeates 30)
V. Cushman (25 Vt. 390)
V. Sawyer (3 Vt. 160)
Nugent V. Locke (4 Cal. 318) 250,
Nunnely v. Dolierty (1 Yerg. 26)
Nutting, Ex parte (2 Mont. D. & D
302) 496
V. Colt (3 Halst. 539) 60
o.
Oakeley v. Pasheller (10 Bligh. 548,
4 CI. & F 207) 95, 417, 485
Oakley v. Aspinwall (2 Sandf. 7) 74
O'Bannon v. Miller (4 Bush 25) 344
O'Brien v. Currie (3 C. & P. 283) 21
V. Eoglesong (31 Pac 1047) 333
V. Smith (42 Kas 49, 21 Pac.
784) 248
O'Connor v. Stark (2 Cal. 155) 510
Odiorne r Lyford (9 N. H. 511) 303
V Maxcy (13 Mass. 182, 15 Mass.
44) 164
Ogden V Astor (4 Sandf. 311) 55, 60, 430,
438, 443, 512, 515
V. Kip (6 Johns. Ch. 160) 291
I'. Saunders (12 Wheat. 213) 468
Os:i\hy,Ex parteiSVes &B.133) 471,499
Ogilvy, Ex parte (2 Rose 177) 472, 499
Ogle, Ex parte (Mont. 350) 497, 499
V. Barnes (8 T. H. 188) 126
Ohio Salt Co. v. Guthrie (35 Oh. St.
666) 566
Olcott V. Wing (4 McLean 15) 35
Oldaker v. Lavender (6 Sim 239) 216,
277, 455, 511, 519
Oliphant v. Mathews (16 Barb 608) 114
Oliver V. Hamilton (2 Anst. 453) 293, 297,
298, 457
V. Burton (17 Q B. 989) 317
V. Forrester (96 111. 315) 435
V. Gray (4 Ark. 425) 48
V. Palmer (11 G. & J 426) 469
Olmstead r Hill (2 Ark. 346) 60
O'Mealey v Wilson (1 Camp. 482) 26,
309, 310
O'Neill V. Brown (61 Tex. 34) 248
TABLE OF CASES.
lix
Onondaga Bank v De Puy (17 Wend.
47) 143
Ontario Bank v. Hennessey (48 N. Y.
64o) 114
r Mumford (2 Barb. Ch. 596) 312
Oppenlieimer v. Clenimons (18 F. R.
880) 62, 69
Oram v. Rothermel (08 Pa. 300) 363
Ord V. Portal (3 Camp. 2!)3) 316
Ordinary v. Wherry (1 Bail. 28) 19
Oregon Steam Nav. Co. v. Winsor (20
Wall. 64) 566
Orplnm Board v. Van Keenen (I
KiKipp 100) 514
Orr V. Cliurcliill (1 H. Bl. 227) 223
Orvis V. Kimball (3 N H. 314) 18
Oiborn v. McBride ( 16 N. B. R. 22) 340,
344
V. U. S. Bank (9 Wheat. 788) 69
Osborne r. Barge (29 F. R. 725) 134, 135
V. Brennan (2 N & McC. 427) 54
V. Harper (5 East 225) 253
V. Stone (30 Minn. 25, 13 N. W.
922) 83
r. Thompson (35 Minn. 229, 28
N. W. -M)) 83
Osgood V. Glover (7 Daly 367) 146
V. Spenser (2 H. & G. 133) 444
Osmond y. Fitzroy (3 P. Wms. 130) 512
Ostrom V. Jacobs (9 Met. 454) 69, 89
Oteri r. Scalzo (145 U. S. 578) 305, 454,
457
Ottley V. Browne (1 Ball & B. 360) 9
Over V. Heatherington (66 Ind. 365) 136
Overall r. Taylor (11 So. 738) 118
Overholt's Appeal (12 Pa. 222) 345,349
Overton ?;. Tozer (7 Watts 333) 151, 155,
156
Owen, Ex parte (13 Q. B. D. 113) 293
V. Body (5 A. & E. 28) 56, 65, 452
V. Bowen (4 C. & P. 93) 482
V. Van Uster (10 C. B. 319) 183
Owens v. Collins (23 Ala. 837) 349, 353
V. Mackall (33 Md. 382) 65
Owings V. Low (5 G. & J. 134) 163
Owston V. Ogle (13 East 538) 207, 267
Oxley, Er parte ( 1 Ball & B. 257) 467
Ozeas i". Johnson (1 Binn. 191, 4 Dall.
434) 260, 262, 519
Paden v. Bellenger (87 Ala. 575,6 So.
351) 125
Page V. Brant (18 111. 37) 272, 413
V. Carpenter (10 N. II. 77) 338, 343
V. Cox (10 Hare 163) 127
V. Fry (2 B & P. 240) 319
V. McCrea (1 Wend. 167) 384
V. Morse (128 Mass. 99) 17
V. Thomas (43 Oh. St. 38, 1 N. E.
79) 352, 366
r. Thompson (33 Ind. 137) 249
c. Wolcott (15 Gray 536) 333
450)
Palmer v. Dodge (4 Oh. St. 21)
Pahlman v. Graves (26 111. 405) 477
Paige V. Paige (71 la. 318, 32 N. W.
360) 4, 352, 362, 366
Paine v. Thacher (25 Wend. 450) 200,
258, 384
Painter v. Painter (68 Cal. 395, 9 Pac.
138
168, 378,
381
75
&B.
151
132, 135
103
168
111,113
508
V. Elliott (1 Cliff. 63)
V. Justice Assur. Co. (6 E
1015)
o. Myers (43 Barb. 509)
V. Pinkbam (33 Me. 32)
V. Scott (68 Ala. 380)
V. Stephens (1 Den. 471)
V. Tyler (15 Minn. 106)
Paradise v. Gerson (32 La. Ann. 532) 427
Parchen v. Anderson (5 Mont. 438, 5
Pac. 588) 46, 104
Park V. Ballentine (6 Blackf. 223) 469
V. Wooten (35 Ala. 242) 402
Parkburst v. Kinsman (1 Blatch. 488) 67,
244, 391
V. Muir (3 Halst. Ch. .307) 295
Parker, Ex parte (Cooke B. L. 503) 497
, In )e (19 N. B. R. 340) 95
V. Barker (1 Br. & B. 9, 3 Moo.
226) 492
I'. (1 Clarke Ch. 1.36) 20
V. Brewer (3 J. B. Moore 226) 69
V. Broadbent (134 Pa. 322, 19
Atl. 631)
V. Canfield (37 Conn. 250)
i: Cousins (2 Gratt. 372)
439
55, 57,
61, 95
96, 378.
.381
V. Fergus (43 111. 437) 57, 62
V. Gossage (2 C. M. & R. 617) 219
V. Gregg (23 N. H. 416) 312
?'. Jonte' (15 La. Ann. 290) 515
V. Macomber (18 Pick. 505) 247, 308,
378, 379, 381
v. Merrill (6 Me. 41) 162
(;. Merritt (105 111. 293) 332
V. Moore (2 La. Ann. 1017) 160
V. Morrell (2 C. & K. 599) 162, 163
r. (2 Ph. 453) 163
V. Muggridge (2 Story 346) 471, 479,
500
V. Piiillips (2 Cush. 175) 380, 383
V. Pistor (3 B. & P. 288) 250, 290,
.324, 475
V. Ramsbottom (3 B. & C. 257) 62,
473, 489
V. Wright (66 Me. 392) 345
Parkin v. Carruthers (3 Esp. 248) 88, 403
406, 407
V. Fry (2 C. & P. 311) 553
Parmalee v. Wiggenhorn (6 Neb. 322) 427,
429
Parmelee v. Lawrence (44 III. 405) 144
Parnell v. Robinson (53 Ga. 26) 197, 524
Parr, Ex parte (18 Ves. 65, 1 Rose 76) 480,
485
Ix
TABLE OF CASES.
Parrish v. Parrish (88 Va. 529, 14
S. E. 325) 363
Parsons v. Crosby (5 Esp. 199) 30, 77, 109,
492
V. Haywood (31 Beav. 199)
• '•. Tillman (95 Ind. 452)
Partridge v. Kingman (130 Mass. 476)
213
497
60,
104
204
V. Wells (30 N. J. Eq. 176)
Paton V. Baker (62 la. 704, 15 N. W.
586) 368
Patten v. Garney (17 Mass. 182) 116, 320
I'. Whitehead (13 Rich. L. 150) 113
Patterson v. Blake (12 Ind. 436) 349
(;. Brewster (4 Edw. Ch. 352) 35, 91,
330, 331
r. Chalmers (7 B. Mon. 595) li6
V. Grace (10 Ala. 444) 349
r. Maughan (39 U. C. Q. B.371) 143
V. Silliman (28 Pa 304) 219
V. Ware (10 Ala. 444) 214
Patterson's Appeal (13 W. N. C. 154) 9
Pattison v. Blanchard (5 N. Y. 186) 45, 66
V. (6 Barb. 537) 262
Patton V. Leftwich (86 Va. 421, 10
S. E. 686) 136
Paul V. CuUura (132 U. S. 539) 222
Pawsey v. Armstrong (18 Ch. D. 698) 42,
237
Payne v. Freer (91 N. Y. 43)
V. Hornby (25 Beav. 280)
V. Ives (3 I). & R. 664)
V. Matthews (6 Paige 19)
527
378
185
330, 444,
500
V. O'Shea (84 Mo. 129) 347
V. State (39 Barb. 634) 160
V. Thompson (44 Oh. St. 192, 5
N. E. 654) 24
Peacock v. Cummings (46 Pa. 4.34) 188
V. Peacock (16 Ves. 49) 199, 291, 292.
295, 302, 371, 378, 388, 392, 396,
398
V. (2 Camp. 45) 109, 232, 233,
234
Peake, Ex parte (1 Madd. 358) 328, 338,
468, 474, 478, 489, 490
Pearce v. Chamberlin (2 Ves. 33) 10, 129,
432, 459
V. Cooke (13 R. I. 184) 445
V. Covert (39 Wis. 252) 354
V. Hennessy (10 R. I. 223) 203
0. Kearney (5 Hill 82) 92
V. Piper (17 Ves. 1.) 553
V. Wilkins (2 N. Y. 469) 80
Pearpoint v. Graham (4 Wash. C. C.
232) 131, 134, 371, 396
Pearsall v. McCartney (28 Ala. 110) 490
Pearson v. Keedy (6 B. Mon. 128) 327,
V. Lord (6 Mass. 81 ) 318
V. Parker (3 N. H. 366) 312, 316
V. Pearson (27 Ch. D. 145) 237
V. Skelton (1 M. & W. 504) 277
r. Williams (26 Wend. 630) 224
Pease v. Cole (53 Conn. 53) 83, 84
Pease v. Hewitt (31 Beav. 22) 530
V. Hirst (10 B. & C. 122) 158, 313,
316
Pechell V. Watson (8 M. & W. 691) 320
Peck V. Fisher (7 Cush. 386) 350, 352, 361
0. Schultze (1 Holmes 28) 344
V. Thomas (29 Eng L. & Eq. 276) 12
Pecker r. Hall (14 All. 532) 387
Peckham Iron Co. v. Harper (41 Oh.
St. 100) 119, 125
Pecks V. Ellis (2 Johns. Ch. 131) 269
Pecot V. Armelin (21 La. Ann. 667) 6
Peele, Ex parte (Buck 457) 146
, (6 Ves. 604) 175
Peirce v. Jackson (6 Mass. 242) 475
V. Tobey (5 Met. 168) 160
Pelletier v. Couture (148 Mass. 269, 19
N. E. 400) 17, 21
Pemberton v. Oakes (4 Russ. 154) 425,
448, 622
Pendleton v. Cline (85 Cal. 142, 24
Pac. 659) 228
Penn v. Harrison (3 T. R. 760) 186
V. Stone (10 Ala. 209) 308, 341
V. Whitehead (17 Gratt. 503) 22
Pennell v. Deffell (4 De G M. & G. 372) 425
Penniman v. Jones (58 N. H. 447) 247
;;. Munson (26 Vt. 164) 67, 244
Pennoyer v. David (8 Mich. 407) 162
Penn. Ins. Co. v. Murphy (5 Minn. 56) 552
Penn. Nat. Bank v. Furness (114 U. S.
376) 427
Penny v. Black (9 Bosw. 310) 235
V. Martin (4 Johns. Ch. 566) 76, 93
Pennybacker v. Leary (65 la. 220, 21
N. W. 575) 7, 350
Pennypacker v. Umberger (22 Pa. 492) 420
People V. Chicago Gas Trust (130 111.
268, 22 N. E. 798) 5.59, 567
V. North River S. R. Co. (121 N.
Y. 582, 24 N. E. 834) 559, 661, 564
V. Norton (1 Paige 17) 297
V. Wemple (117 N. Y. 136, 22 N.
E. 1046) 131, 551
Peoples' Bank v. Keech (26 Md. 521) 187
V. Shryock (48 Md. 427) 344, 345
Pepper v. Peck (20 Atl. 16) 98, 331
t;. Thomas (85 Ky. 539, 4 S. W.
297) 352
PercifuU v. Piatt (36 Ark. 456) 351, 363
Perens v. Johnson (3 Sm. & G. 419) 375,
383, 392
Perham v. Raynal (2 Bing. 309) 156, 157
Perkins v. Fisher (80 Ky. 11) 470
V. Hart (11 Wheat. 237) 515
Perminter v. Kelly (18 Ala. 716) 303
Perrin !'. Keene (19 Me. 355) 381
Perrine r. Hankinson (6 Halst. 181) 63
Perring v. Hone (4 Bing. 28) 111, 183, 248,
653
V. (2 C. & P. 401 ) 474, 549
Perrott i'. Bryant (2 Y. & C. 61) 60
Perry, Ex parte (5 Ves. 575) 490
V. Butt (14 Ga. 699) 46, 179
V. Jackson (4 T. R. 519) 162
TABLE OF CASES.
Ixi
Perry v. Randolph (6 Sm. & M 335) 77,
107
V. Taylor (1 Utah 63) 2U3
Persou V. Carter (3 Murph. 321) 160, 151,
152
]\'rsonette c Pryme (34 N J. Eq. 26) 7
Perth Amhoy Terra-Colta Co. v
Wood (124 Pa. 307, 17 Atl. 4 ) 155
Peter /;. Heverly (10 Pet. 5G7) 483
Peters p. Anderson (5 Taunt. 596) 420
V. Main (138 U. 8. 670) 475. 476, 480
V. Davis (7 Mass. 256) 434, 443
V. Sandfurd (1 Den. 224) 76, 92
Peterson v. Humphrey (4 Abb. Pr.
394) 242, 243
/'. lloach (32 Oh. St. 374) 89
Petrie p. IJury (3 B & C. 354) 316
y. Hannay (3 T. R. 418) 9
r. Lamont (1 C. & M. 93) 118
Petrikin ik Collier (1 Barr 247) 37, 373
Pettee o. Appleton (114 Mass. 114) 55, 58
Pettis V. Atkins (60 111. 454) 65
Pettit LK Shepherd (5 Paige 493) 89
Pettyjohn v. Woodroof (86 Va. 478, 10
S. 10. 715) 476
Pettyt o. Janeson (6 Madd. 146) 215, 282,
518
Peyser v. Myers (135 N. Y. 599, 32 N.
E. 699) 429
Pfeffer v. Steiner (27 Mich. 537) 444
Pfeuffer v. Maltby (54 Tex. 454) 8
Phelps V Brewer (9 Cush. 390) 145
V. McNeely (66 Mo. 654) 332
Philippi u. Philippi (61 Ala. 41) 306
Philips V. Belden (2 Kdw. Ch. 1) 515
(I Samuel (76 Mo. 657) 46, 58
u. Turner (2 Dev. & B. Eq 123) 200,
201, 384, 520
Phillips V. Ackerson (2 Bro. C. C 272) 309,
436
V. Blatchford (137 Mass. 510) 66, 248,
433, 550
r Clagett (11 M. & W. 84) 152, 307
V Cook (24 Wend. 398) 290, 340, 343
r. Pennywit (1 Ark. 69) 318
V. Phillips (1 M. & K. 649) 360, 354
V. (Biss. Part. 50) 364, 365
V. Purington (15 Me. 425) 69
i\ Trezevant (67 N. C. 370) 293
t>. Trowbridge Furniture Co. (86
Ga. 699, 13 S. E. 19) 69, 134
Philson i\ Bampfield (1 Brev. 202) 76
Phinsen v. Negley (25 Pa. 297) 171, 172
Phoeni.x c. Ingraham (5 Johns. 412) 490
Piatt V. Oliver (3 McLean 27) 214, 367
Pickard u. Sears (6 A. & E. 469) 492
Pickels V. McPherson (59 Miss 216) 84, 89
Pickens i\ McCoy (24 W. Va. 344) 203
Pickering r. Holt (6 Me. 160) 150
V. Pickering (11 N. H 141) 320
V. Rugbv (18 Ves. 484) 283
Pigott V. Bagley (McC & Y. 569) 449,
450, 610
Pierce v. Barnham (4 Met. 303) 23
r. Bryant (5 All. 91) 639, 545
Pierce v. Cameron (7 Rich. 114) 94
V. Covert (39 Wis 252) 361
V. Daniels (24 Vt. 624) 193, 194
V. Fuller (8 Mass 223) 401
V. Jackson (21 Cal. 636) 172
V, (6 Mass 242) 118, 137, 338,
339, 346, 446
V. Kearney (5 Hill 94) 76
V. McClellan (93 111. 245) 306
V. Nashua Ins Co. (60 N. H. 297) 235
I'. Pass (1 Port. 232) 97, 99, 100, 179
V. Pierce (89 Mich. 233, 50 N. W.
851) 194
V. Stockwell (11 Cush 236) 146
V. Tiernan (10 G. & J. 253) 137, 600
V. Tobey (5 Met. 168) 18
V. Trigg (10 Leigh 246) 349, 361, 362
363, 443
V. Whitley (39 Ala. 172) 10
Piersole v. Elliott (6 Pet. 95) 289
Pierson v. Hooker (3 Johns 68) 131, 144,
152 307
V. Steinmyer (4 Rich. 309) 46, 62
Pike V. Bacon (21 Me. 280) 151, 153
V. Warren (16 Me. 390) 159
Pilcher, Succession of (39 La. Ann 362,
1 So. 929) 2, 335
Pillans V. Harkness (CoUes P. C. 442) 11,
276
Pilling V. Pilling (3 De G. J. & S. 162) 202
Pim V. Harris (Ir. Rep. 10 Eq. 442) 202
Pinckney v. Keyler (4 E. D. Smith
469)
V. Wallace (1 Abb. Pr. 82)
Pine, Ex parte (Cooke B. L. 503)
Pinkerton, Ex parte (6 Ves. 814)
Pinkett v. Wright (2 Hare 120)
Pinkney v. Hall (1 Salk. 126, 1
Raym. 175)
Pio Pico V. Cuyas (47 Cal 174)
Pipe V. Bateman (1 la. 369)
Piper V. Smith (1 Head 93)
Pirtle V. Penn (3 Dana 240)
Pitcher v. Barrows (17 Pick. 361)
406, 411, 412
Pitkin V. Pitkin (7 Conn 307) 461
Pitt V. Cholmondeley (2 Ves. Sen. 566)
515 616
V. Petway (12 Ired 69) ' 304
V. Smith (3 Camp. 33) 27
Pitts V. Mower (18 Me. 361) 317
V. Spotts (86 Va 71, 9 S. E. 601)
360
V. Waugh (4 Mass. 424) 76, 348,
349, 356
Pittsburg Melting Co v. Reese (118
Pa. 355, 12 Atl. 362) 663
Place V. Sweetzer (16 Ohio 142) 291, 325,
344
Planter's & Miner's Bank v. Padgett
(69 Ga. 159)
Piatt V. Halen (23 Wend. 456)
Plowden, Ex parte (3 Mont. & A. 402,
2 Dcac. 456)
Plummer, In re (1 Phil. 56)
435
497
329
554, 656
Ld.
2,167
248
653
362
281
68, 308,
60
317
472
481
Ixii
TABLE OF CASES.
Poillon V Lawrence (77 N. Y 207) 470
i: becor (61 i\. Y. 456) 1U4
Pomdexter v. Waddy (0 Alunf. 418) 172,
427
Polk V Buchanan (5 Sneed 721) 46
V. Oliver (50 Miss 566) 405
Pollock V. Williiuns (42 Miss. 88) 81
Pomeroy u Ben tun (57 Mo. 531) 512
V. (77 Mo 64) 527
Porafret v. Wuidsor (2 Ves Sen. 482)
515
200
60
Pond
. Clark (24 Conn. 370)
r. Ounimins (50 Conn 372)
c. Kimball (101 Mass 105) 335, 491
Pontet V. Basingstoke Canal Co. (2
Scott 543) 655
Ponton V. Dunn (1 Russ & M. 402) 448
Pool V. Delaney (11 Mo. 570) 252, 254,
255
V. Pratt (1 D. Chip. 252) 16
Poole V. Hintrager (00 la 180, 14
N. W. 223) 429
V. Seney (66 la. 502, 24 N. W.
27) 332
Pooley V. Driver (5 Ch. D. 458) 1, 3, 43.
61
V. Whitmore (10 Heisk. 629) 84
Poor V. Carleton (3 Suinn 81) 292
Pope V. Cole (55 N Y. 124) 445
('. Randolph (13 Ala. 214) 263, 264
V. Rislev (23 Mo. 185) 163, 405, 413
r. Salsman (35 Mo. 362) 508
Popper (•. Scheider (7 Abb. Pr. n s
56) 456
Port Gibson, Bank of, v. Baugh (9 Sm.
& M. 290) 381
Porter v. Cumings (7 Wend. 172) 169, 183
V. Currv (50 111 310) 139
(,• Gorman (65 Ga. 11) 237
V. McClure (15 Wend. 187) 53, 54,
V. Taylor (6 Moo. & S. 156)
66
144,
307, 385
121
384
165
307
150
i: Vance (14 Lea 629)
V. Wheeler (37 Vt. 281)
Porthouse v. Parker (1 Camp 82)
Portland Bank i-. Hyde (11 Me. 196)
270, 271,
Po.eey V. Bullitt (1 Blackf. 99)
Post V Kimberly (9 Johns. 470) 37, 54,
81, 102, 229
Postmaster-General v. Furber (4 Mas.
332) 425
Potomac, The (2 Black 481) 198
Pott, Ex parte (2 Sim. 257) 495
V. Eyton (3 C. B. 32) 41, 104
Potter V. Commissioner (10 Ex. 147) 237
Gray (1 R. I. 1)
V. Greene (9 Gray 809)
V. McCoy (26 Pa. 458)
V. Moses (1 R. I 430)
Potts i\ Bell (8 T. R. 548)
V. Waugh (4 Mass 424)
Powell V Heisler (16 Ore.
Pac. 109)
412,
371, 373
103
96, 151
55,60
26
35
19
512
Powell i; Maguire (43 Cal 11) 259
V. Messer (18 Tex 401) 171, 172,
173
V. Moore (79 Ga. 524, 4 S. E
383)
V. North (3 Ind. 392)
V. Waters (8 Cow. 670)
Powers I'. Guardian Jns. Co.
Mass, 108)
V. Large (69 Wis. 621, 35 N.
53)
44, 62
452
164,413
(136
235
W.
340
V. Robinson (90 Ala. 225, 8 So.
10) 351, 360
Powles V. Page (3 C. B. 16) 119
Pratt V. Hutchinson (15 East 511) 554,
555, 556
V. Langdon (12 All 544) 45, 46, 74
V. (97 Mass. 97) 44, 45, 46
Prentice v. Elliott (72 Ga. 154) 527
Prentiss v. Savage (13 Mass. 20) 468
V. Sinclair (5 Vt. 149) 40.3, 406
Prescott, Ex parte (4Deac. & Ch. 23) 485
Preston v. Stratton (1 Anst. 50) 255, 260,
264, 265
Price V. Alexander (2 Greene 427) 151,
152,
V. Drew (18 Fla. 670)
V. Green (16 M. & W. 346)
V. Groom (2 Ex. 542)
V. Hicks (12 Fla. 365)
Priest V. Chouteau (85 Mo. 398)
153
248
224
67
354
46, 47,
51, 368
82, 84
Prince v. Crawford (50 Miss. 344
Princeton & K. Turnpike Co. v. Gulick
(16 N. J. 161) 403,406
Pringle v. Leverich (97 N. Y. 181
Printup V. Turner (65 Ga. 71) 351,
Prichard v. Draper (1 Russ. & M. 191 )
69, 144, 168, 162,
Pritt V. Clay (6 Beav. 503)
Proctor V. Moore (1 Mass. 198)
1-. Sargent (2 M. & G. 20)
Prosser r. Hartley (35 Minn. 340, 29
N W. 156)
Protheroe v. Forman (2 Swanst. 227)
163
;67
515
468
401
335
290
Providence v. Bullock (14 R I. 353)
352
Prnyn i'. Milwaukee (18 Wis. 367) 203
Publishing Co. v. Gage (11 Can. 306) 244
Pugh V Currie (5 Ala. 446) 349, 350, 353,
354, 362, 363, 366, 367
Pullen V. Ready (2 Atk. 592)
r. Whitfield (55 Ga. 174)
Purcell V. Cole (1 L. & T. 449)
Purdom v. Bovd (17 S. W. 606)
Purdy V. Powers (6 Barr 492)
179,
511
445
514
24
274,
276
Purple V. Farrington (119 Ind 164, 21
N. E. 543) 332
Parsley v. Ramsey (31 Ga. 403) 113, 403
Purviance v. McClintee (6 S. & R.
259) 46
V Sutherland (2 Oh. St. 478) 151,
153, 154
TABLE OF CASES.
Ixiii
Purvines v. Champion (67 111 459) 255
Purvis V. Butler (87 Mich. 248, 49
N. W. 5(J4) 65
Putnaui V. Wise (1 Hill 234) 53, 54, U3,
128, 555
Q.
Quayle i-. Guild (91 111. 378) 306
Queen v. Robsoii (16 Q. B. D. 137) 52
V. Whitmarsh (15 Q. B. 600) 52
Quine v. Quine (9 Sin. & M. 155) 34, 58
Qiiiner c. Marhleliead Social Ins. Co.
(10 Mass. 482) 131
Quinlan v. Kciser (66 Mo. 603) 512
Quinlivan o. KnsiHsh (42 Mo. 362) 401
;;. (44 Mo. 46) 293
Quinn v. Quinn (81 Cal. 14, 22 Pac.
264) 35
R.
Raba v. Ryland (Gow 132) 115, 133
Rabitte v. (Jrr (88 Ala. 185, 3 So. 420) 49
Rackstraw u. Iniber (Holt N. P. 368)
262, 519
Radcliffe v. Wightman (1 McC Ch.
408) 512
Radenhurst! v. Bates (3 Ring. 463) 258, 312
Railroad v. Bixby (55 Vt. 235) 345
r. Black (8 E.x. 181) 20
('. Cazenove (11 Q. B. 935) 20
r. Culver (75 Ala. 587) 65
('. Elliot (57 N. H. 397) 203
V. Fen rule V (4 Ex. 26) 20
V. Hudson" (16 Beav. 485) 384
V. Johnson (7 S. W. 838) 60
V. McCaughev (62 Tex. 271) 334
V. McMichael (5 Ex. 114) 20
v. Niles (3 Hill 162) 66
i: Roach (35 Kas. 740, 12 Pac. 93) 65
V. Spratt (2 Duv. 4) 65
V. Trippe (42 Ark. 465) 65
Railsback v Lovejoy (116 111. 442, 6
N. E. 504) 204, 350, 365
Rainey v. Nunse (54 111. 29) 477
Rains v. McNairv (4 Humph. 356) 303
Raleigh, Er parte (3 .Mont. & A. 670) 73
Ralston v. Moore (105 Ind 243) 445
Ramey v. McBride (4 Strobh. 12) 179
Rammelsberg v. Mitchell (29 Oh. St.
22) 237, 238
Ramsbottom v. Duck (1 Mont. Part.
135) 471
V. Parker (6 Madd. 5) 210
Randall v. Hunter (66 Cal. 512) 98
V. Johnson (13 R. I. 338) 343, 344
V. Meredith (11 S. W. 170) 35
f. (76 Tex. 669, 13 S. W.
576) 81, 84
V. Randall (7 Sim. 271) 357
Randel v. Chesapeake Canal Co. (1
Harr. 233) 219
212
222
123
6
492
492
60
499
237
347
222
^89, 459
Randleson, Ex parte (1 Mont & M'A.
36) 9
, (2 Deac & Ch. 534) 426
Randolph v Randolph (2 Call 537) 512
Ransom, In re (17 F. R. 331) 7, 362, 364
>:. Van Devcnter (41 Barb. 307) 471
Rapid, Tiie (8 Cranch 160) 26, 3l0
Rapier v. Gulf City Paper Co. (64 Ala.
330) 399
Rapp V Latham (2 B. & Aid. 795) 120, 163
Ratcliffe v. Mason (17 8. W. 438) 352
Rathbun V. McConnell (27 Neb. 239,
42 N. W. 1042)
Ratzer v. Ratzer (28 N. J. Eq. 136)
Rau V. Small (144 Pa. 304, 22 Atl
740)
Raub V. Smith (61 Mich. 543, 28 N. W
676)
Raw V. Pole (2 Vern. 239)
V. Potts (Prec. Ch. 35)
Rawlinson v Clarke (15 M. & W.292)
Rawson, Exparte (Jae. 277)
V. Pratt (91 Ind. 9)
Rawstorne v. Gandell (16 M. & W.
304) 307, 312
Ray ;;. Bogart (2 Johns. Cas 432) 512
Raymond v. Carne (45 N. H. 201) 283
V. Palmer (41 La. Ann 425, 6 So
692)
V. Putnam (44 N. H. 160)
V. Vaughn (128 111. 256, 21 N. E
566)
Raymond's Case (2 Rose 255) 127, 138
Rayner v. Pearsall (3 Johns. Ch. 578) 512
Reab r. Pool (30 S. C. 140, 8 S. E. 703) 74
Read v. Bowers (4 Bro. 441) 291
V. Smith (60 Tex. 379) 8, 9
V. White (5 Esp. 122) 482, 485
Reade v. Bentley (3 Kay & J. 271, 4
Kay & J. 65) 371, 373, 374
Reber v. Col. Machine Mfg. Co. (12
Oh. St. 175) 103
Reddington v. Lanahan (59 Md. 429) 60
Redlon v. Cimrcliill (73 Me. 146) 99, 187
Redman v. Green (3 Ired. Eq. 54)
Reece v. Hoyt (4 Ind. 169)
Reed v. Boardman (20 Pick 441)
V. Hussey (Bl. & H. 525)
v. Murphv (2 Greene 574)
V. Norris'(2 My. & C. 361)
(;. Upton ( 10 Pick 525)
V. Vidal (5 Rich. Eq. 289)
V. White (5 Esp. 122) 95, 387, 416
Reed Lumber Co. v. Lewis (94 Ala.
626, 10 So. 333) 146
Reese v. Bradford (13 Ala. 837) 327, 328,
338
Reeve, Ex parte (9 Ves. 588) 489, 497, 499
Reeves r. Ayres (38 111. 418) 474
Rehfuss V. Moore (134 Pa. 462, 19 Atl.
756) 537
Reid, Ex parte (2 Rose 84) 472, 498, 499
V. HoUinshead (4 B. & C. 867, 7
D. & R. 444) 55, 115, 133
V. McQuesten (61 N. H. 421) 252
515
391
421
60
45, 62
503
483
279
Ixiv
TABLE OF CASES.
Reilly v. Smith (16 La Ann. 31) 405
Reimsdyk v. Kane (1 Gall. 630) 162. 164,
169
Regden v. Pierce (6 Madd. 353) 502, 503,
504, 531
Regester v. Dodge {6 F. R. 6, 19
Blatcli. 79) 415
Regina v. Mallinson (16 Q. B. 367) 303
V. Registrar of J. S. Cos. (10 Q.
B. 839) 551
I'. Whitraarsh (19 L.J. Q. B. 185)
551
Remick v Emiz (41 111. 343) 434
Remington v. Allen (109 Mass. 47) 248
r. Cummings (2 Wis. 138) 155
Rencher v. Anderson (95 N. C. 208) 204,
306
Renfrow v. Pearce (68 111. 125) 204
Renton i-. Chaplain (1 Stock. 62) 292, 300
391 392
Reppert v. Colvin (48 Pa. 248)
Reubin v. Cohen (48 Cal. 545)
Rew V. Pettet (1 A. & E. 196)
Rex V. Almon (5 Burr. 2686)
V. Cole ( 1 Ld. Raym. 443)
V. Dodd (9 East 516)
V. Hard wick (11 East 578)
V. Marsh (2 B. & C. 723)
V. Pearce (Peake 75)
V. Sanderson (1 Wightw. 50) 344, 475
r. Topham (4 T. R. 126) 124
V. Webb (14 East 406) 554, 556
Reybold v. Dodd (1 Harr. 401) 200, 384
Reyburn v. Mitchell (106 Mo. 365, 16
S. W. 592)
Reynard v. Chase (2 Wils. 40)
Reynell v. Lewis (15 M. & W. 517)
Reynolds v. Austin (4 Del. Ch. 24)
V. Cleveland (4 Cow. 282) 37, 74, 81,
91
V. Hicks (19 Ind. 113) 127, 128
V. Johnson (54 Ark. 449, 16 S. W.
124) 332
V. Mardis (17 Ala. 32) 201, 527
V. Pool (84 N. C. 37) 53
V. Toppan (15 Mass. .370) 45, 63
V. Ward (5 Wend. 501)
Rhea v. Rhenner (1 Pet. 105)
Rliodes V. McKean (55 la. 547, 8 N
W. 359)
Rianhard r. Hovey (13 Ohio 300)
Riarl v. Wilhelm (3 Gill 3-56)
Rice, Appellant (7 All. 112)
V. Austin (17 Mass. 197)
160
170
157
124
21
549, 553
164
124
124
332
15
105
293
41
-23
98
50
248
445
45, 61, 63,
64, 325, 339
V. Barnard (20 Vt. 479) 361
V. Barrett (116 Mass. 312) 103
V. Pennypacker (5 Houst. 279) 306,
352 372
V. Rockefeller (134 N. Y. 174, 3l'
N. E. 907) 561, 562
V. Shuman (43 Pa. 37) 5
V. Shute (5 Burr. 2611) 469
Rich V. Davis (4 Cal. 22) 180
V. Flanders (39 N. H. 304) 162
Rich V. Pilkinton (Carth. 171)
Richards v. Baurman (65 N. C 162)
125
293,
466
V. Butler (65 Ga. 593) 405
V. Davies (2 R. & M. 347) 280, 281,
293, 456, 457, 510
V. Dutch (8 Mass. 506) 468
V. Grinnell (63 la 44, 18 N. W.
7,306
Heatlier (1 B. & Aid. 29)
V. Hunt (65 Ga. 342)
V. Manson (101 Mass. 482)
V. Todd (127 Mass. 167)
Richardson, Ex parte (Buck 209)
668)
444
404
332
305, 529
503
(3 Madd. 138) 451, 452
; In re (5 L. J. Ch. 129) 499
, (11 N. B. R. 114) 491
V. Adler (46 Ark. 43) 335
v. Bank of England (4 My. & C.
171) 214,249,517
V. Boright (9 Vt. 368) 18, 20
V. Buhl (77 Mich. 632, 43 N. W.
1102) 567
V. Davis (11 So. 790) 403
V. Farmer (36 Mo. 35) 73
V. French (4 Met 577) 123
V. Gregory (126 111. 166, 18 N. E.
777) 374
V. Hastings ( 7 Beav. 301) 457, 510
V. Hogg (38 Pa. 153) 538, 540
V. Hughitt (76 N. Y. 55) 61
u. Larpent (2 Y. & C. 507) 384
V. Moies (31 Mo. 430) 381
V. Pitts (71 Mo. 128) 50
V. Snider (72 Ind. 425) 405
V. Tobey (3 All. 81) 466
V. Wyatt (2 Desaus. 471)
V. Wyman (4 Gray 553)
Richmond v. Heapy (1 Stark 202)
485
145,
179
52
I'. Judy (6 Mo. App. 465)
Richmond Ry. & Electric Co. v. Dick
(52 F. R. 379) 119
Richter v. Poppenhausen (42 N. Y.
373) 65
Ricker i^. Amer. L. & T. Co. (140
Mass. 346, 5 N. E. 248) 131, 549, 559,
560
Ricketts v. Bennett (4 C. B. 686) 82
Riddle v. Whitehill (135 U. S. 621) 306,
352, 359, 393
Ridenour v. Mayo (40 Oh. St 9) 51
Ridgeley v. Crandall (4 Md. 4.35) 16
Ridgley v. Carey (4 H. & McH. 167) 137,
500
Ridgway v. Clare (19 Beav. Ill) 325, 330,
445
V. Grant (17 111 117)
V. Philip (1 C. M. & R. 415)
1,. (5Tyrw. 131)
Ridgway's Appeal (15 Pa. 177)
Riding w. Smith (1 Ex D. 91)
Ridlev V. Plymouth &c. G. & B.
(2 Ex. 711)
257, 258
69, 105,
164
107
354, 369
236
Co.
551
TABLE OF CASES.
Ixv
Ridley V. Tavlor (13 East 175) 96, 99, 108,
172, 173, 175, 170
Kiedeburg v. Sclimitt (71 Wis. 044, 38
N. W. 330) 128
Ricser, In re (19 Hun 202) 497
Rigden v. Fierce (0 Madd. 353) 443, 407,
609
Righter V. Farrel (134 Pa. 482, 19 Atl.
087) 65
Riley V. Carter (25 Atl. 667) 186, 364,
' 476
Rilling V. Thompson (12 Bush 310) 203
Rimel c Hayes (83 Mo. 200) 69, 104
Rui'^o V. Wing (49 Ar.c. 457, 5 S. W.
787) 118,231,427,429
Riper v. Poppenhausen (43 N. Y. 08) 540
Ripley v. Colby (23 N. H. 438) 37, 59, 110
V. Water worth (7 Ves. 425) 357
Rishton v. Grissell (L R. 5 Eq. 326) 524
Rittenhouse v. Leigli (57 Miss. 697) 24
Rizer v. James (20 Kas 221) 105
Roauh /'. IJrannou (57 Miss. 490) 136, 437
'). Perry (10 III. 37) 34, 200, 234
Roache c Pendergrast (3 H. & J. 33) 253
Robb V. Miidge (14 Gray 534) 402, 484
Robbins (.'. Butler (24 111. 387) 550
0. Cutler (26 N H. 173) 17
V Fuller (24 N. Y. 570) 370
V. Laswell (27 111. 3(55) 59
y. Willard (6 Pick. 464) 164
Robert c. Garnie (3 Cai. 14) 420
Roberts v. Anderson (2 Johns. Ch.
202)
V. Eldred (73 Cal. 394, 15 Pac.
16)
V. Everhardt (1 Kay 148) 34, 293,
294, 290, 298
r Filler (13 Pa. 265) 251, 208
V. Hardy (3 M. & S. 533) 20, 310
V. Johnson (58 N. Y. 613)
V. Kuffln (2 Atk. 112)
c. Law (4 Sandf. 642)
V. McCarty (9 Ind. 10)
V. Oldham (03 N C. 297)
r. Ripley (14 Conn. 513)
V. Spencer (123 Mass 397)
V. Strang (38 Ala. 560)
V. Totten (13 Ark. 009) 124, 194, 215
Robertson v. Corsett (39 Mich. 777) 3
V. Lockie (10 Jur. 533) 460
V. Mills (2 H. & G. 90) 172, 180
V. Quiddington (28 Beav. 529) 237,
243
V. Smith (18 Johns. 478) 22, 70
Robey v. Howard (2 Stark. 557) 37, 532
Robins v. Eaton (10 N. H. 561) 18, 19
Robinson, Ex parte (4 Deac. & Ch.
9) 499
, In re (1 Mont. & A. 18) 471
V. Allen (85 Va. 721, 8 S. E. 835) 46,
58, 333
r. Anderson (20 Beav. 98, 7 De G.
M. & G. 239) 221
V. Bullock (58 Ala. 618) 53
V. Crowder (4 McC. 519) 135, 153
292
521
124
515
517
354, 359
345
247
407
144
Robinson v. Goings (63 Miss. 500)
V. Gregory (30 N. Y. 350)
V. Hotinan (4 Bing. 502)
V. Hurlbut (34 Vt. 115)
w. McDonnell (5 M. & S. 228)
V. Mcintosh (3 E. D. Smith 221) 135,
209, 252, 540, 545
119,
125
135
140
95
493
V. Mansfield (13 Pick. 139)
V. Marciiant (7 Q. B. 918)
V. Reynolds (1 Aik. 174)
V. Rudkuis (38 Eng. L. & Eq.
372)
V. Simmons (146 Mass. 167, 15
N. E. 558)
V. Taylor (4 Barr 242)
V. Thompson (1 Vern. 465)
V. Wilkinson (3 Price 538)
320
321
23
90
V. Williams (8 Met. 454)
Robson V. Curtis (1 Stark. 78)
439
381
188
75, 95,
272, 387
264
248, 255,
205
V. Drumraond (2 B. & Ad. 303) 272,
315,317,318
Roby V. Colehour (135 111. 300, 25 N.
E. 777) 204
Rochester, Bank of, v. Bowen (7 Wend.
158) 185
V. Monteath (1 Den. 402) 110, 113,
114, 169,206
Rockafellow v. Miller (107 N. Y. 507,
14 N. E. 433) 128
Rockwell V. Wilder (4 Met. 556) 252, 253,
255, 201, 265
Rocky Mountain Nat. Bank v. Mc-
Caskill (16 Col. 408, 26 Pac. 821) 169,
171, 404, 405
Rodgers v. Maw (4 D. & L. 66) 385
V. Meranda (7 Oh. St. 179) 331, 476
('. Nowell (5 C. B. 109) 244
Rodney v. Hare (Mos. 296) 515
Rodriguez v. Heffernan (5 Johns. Ch.
417) 120,132,137,138,325,555
Rod well V. Redge (1 C.& P. 220) 272,317
Rogers v. Batchelor (12 Pet. 221) 96, 97,
98, 100, 110, 132, 137, 147, 172, 173
V. Coit (6 Hill 322) 111, 181
V. Hurd (4 Day 57) 16
V. Imbleton (5 B. & P. 117) 126
V. Murray (110 N. Y. 658, 18 N.
E. 261) 68
V. Nichols (20 Tex. 719) 328, 338,
391
V. Priest (74 Wis. 538, 43 N. W.
510) 84
V. Reed (18 Me. 257) 370
V. Rogers (1 Hall 391) 250
(,.. (5Ired. Eq. 31) 270,307
V. Taintor (97 Mass. 291) 243
Rolfe V. Flower (L. R. 1 P. C. 27) 481,
V. Peterson (2 Bro. P. C. 436)
V. Rolfe (15 Sim. 88)
Rollins V. Stevens (31 Me. 454)
Rolston V. Click (1 Stew. 526)
491
224
278
185
185
Ixvi
TABLE OP CASES.
Rooke V. Nisbet (50 L. J. n. s. Ch.
5bS) 52U, 530
Roope V. Herron (15 Neb. 73, 17 N.
W. 353) 4, 332
Roosevelt v. Mark (6 Johns. Ch. 26G) 159
Rootes V. Wellford (4 Muiif. 215) 1(33
Rooth V. Quin (7 Price 193) (JO, 79, 387,
402
Roots V. Mason City Salt Co. (27 W.
Va. 483) 201, 388
V. Welford (4 Munf. 215) ' 37fi
Rose V. Coffield (53 Md. 18) 404, 405
V. Daniel (3 Brev. 438) 20
V. Gunn (79 Ala. 411) 108
V. Murckie (2 Call 409) 273
V. Poulton (2 B. & Ad. 822) 271
Rosenbaiun v. Hayden (22 Neb. 744,
36 N. VV. 147) 115
Rosenfield v. Haight (53 Wis. 260, 10
N W. 378) 62
Rosenkrans v. Barker (115 111. 331,
3 N. E. 93) 125
Rosenstein v. Burns (41 F. R. 841) 45-5,
457, 402
Ross ■;;. Cornell (45 Cal. 133)
V. Decy (2 Esp. 469)
y. Drinker (2 Hall 415)
V. Henderson (77 N. C. 170)
248
75, 272
60
325,351,
366
156
92
437
293
538
465
V. Howell (84 Pa. 129)
V. Lawhorn (Dud. 360)
V. Pearson (21 Ala. 473)
V. Titsworth (37 N. J. Eq. 333)
Rothchild ,: Hoae (43 F. R. 97)
Rothwell V. Dewees (2 Black 613)
V. Humphreys (I Esp. 406) 89, 143
Roulston V. Washington (79 Ala. 519) 361
Ronquette v. Ryan (8 S. W. 702) 204
Rousillon V. Rousillon (14 Ch. D.
351 ) 566
Rovelsky v. Brown (92 Ala. 522, 9 So.
182) 367
Rowe V. Wood (2 Jac. & W. 556) 194,
199, 507
Rowland, In re (L. R. 1 Ch. 421) 108, 463,
475
r. Boozer (10 Ala. 690) 349
• V. Long (45 Md. 439) 55
Rowlandsnn, Ex parte (1 Rose 89) 40, 56
, (1 Rose 416) 468, 490, 493
, (2 Yes. & B. 173) 326, 327
. (3 P. Wms. 405) 487, 4»6
Rowlev V. Adams (8 Jur. 994) 230
V Stoddard (7 Johns. 207) 143
Rowth r Howell (3 Ves. 565) 453
Roxby, Ex parte (1 Mont, on Part.
198) 485
Rovs V. Vilas (18 Wis. 169) 434, 435
Ruckman v. Decker (23 N. J. Eq.
283) 118, 165, 361
Ruddock's Case (6 Co 2-5) 152
Ruff, Ex parte (6 Ves. 126) 475
Ruffin, Ex parte (6 Ves. 119) 136, 137,
326, 327, 328, 336, 338, 436, 463, 469,
490, 494, 500
Ruffner v. McConnell (17 111. 212) 153
Rufford, Ex parte (1 Glyn & J. 41) 485
Rumery v. McCuUoch (54 Wis. 565,
12 N. W. 65) 151, 367
Runnels v. Moffat (73 Mich. 188, 41
N. W. 224) 06
Rush V. Tliompson ( 112 Ind. 158, 13
N. E. 665) 163
Rushing v Peoples (42 Ark 390) 56
liussell V. Annable (109 Mass. 72) 154
o. Austwick (1 Sim. 52) 196
u. Byron (2 Cal. 86) 248
V. Grimes (46 Mo. 410) 266
V. Leland (12 All. 349) 71
V. Lennon (39 Wis. 570) 335
V. Loscomb (4 Sim. 8) 508
V. Miller (26 Mich. 1) 354
V. Pellegrini (6 E. & B. 1020) 148,
219
V. Perkins (1 Mass. 368) 315
V. Swan (16 Mass. 314) 311, 312
Russia Cement Co. i'. Lepage (147
Mass. 206, 17 N. E. 304) 242, 243
Rust V. Cliisolm (57 Md. 376) 435
Ruth V. Lowrey (10 Neb. 260, 4 N. W.
977) 334, 478
Rutherford v. Hill (22 Ore. 218, 29
Pac. 546) 50
Rutland Marble Co. v. Ripley (10
Wall. 339) 284
Rutledge v. Squires (23 la. 53) 97
Rutter V. Tailis (5 Sandf. 610) 295
Ryan v. Mackmath (3 Bro. C. C. 15) 209
S.
Sadler, Ex parte (15 Ves. 52)
V. Lee (6 Beav. 324) 123, 142,
V. Nixon (5 B. & Ad. 936)
Sage V. Ensign (2 Ail. 245)
V. Sherman (2 N. Y. 417)
Sager v. Tupper (38 Mich. 258)
St. Barbe, Ex parte (11 Ves. 413)
Sainter v. Ferguson (7 C. R. 727)
St. James's Club,/?/ re (2 De G. M. &
G. 383)
St. John V. Holmes (20 Wend. 609)
V. Standring (2 Johns. 468)
St. Johns, Ex parte (Cooke B. L.
510)
St. Marv's, Bank of, v. St. John (25
Ala. 566) 32,
Sale V. Dishman (3 Leigh 548)
Salem, Bank of, v. Thomas (47 N. Y.
15)
Salinas v. Bennett (33 S. C. 285, 11
S. E.968) 18,
Salisbury's Case (6 Ves. 747) 474,
Salland v. McRae (16 La. Ann. 193)
Salmon v. Davis (4 Binn. 375) 152,
Salomons v. Nissen (2 T. R. 674) 37
139, 304,
478
4.59
2-18
160
95
68
474,
499
224
52
155
304
474
273
94
89
367
496,
499
86
307
,58,
466
TABLE OF CASES.
Ixvii
Salsbury v. Ellison (7 Col, 167, 2 Pac.
y06, 3 Pac. 485) 136
Salter V. Ham (31 N. Y. 321) 60, 505
Saltmarsli v. Bower (22 Ala 221) 143
Saitoun V. Houston (1 Bing 433) 430
Sampson v. Shaw (101 Mass 145) 323
Sanborn v. Merrill (15 Vt. 700) 304
V. Royce (182 Mass. 5'J4) 343
V. Stark (31 F R 18) 168
Sander v. Sander (2 Coll. 270) 460
Sanders v. RuJdle (2 T. 13. Mon.
139) 118
I'. Young (31 Miss 111) 344
Sanderson v. Brooksbank (4 C. & P.
286) 180
V. Stockdale (11 Md 503) 476
Sandham, Ex parte (4 Deac. & Ch.
812) 428
Sandilands v. Marsh (2 B. & Aid.
673) 142, 103, 186, 206
Sandusky, In re (17 N. B R. 452) 336
Sanford v. Mickles (4 Jolins. 224) 381
Sangster v. Mazarredo (1 Stark. 161) 68
Sangston v. Hack (52 Md. 173) 47, 20],
213, 222, 525, 527
San Jose Indians, The (2 Gall. 208) 20, 234
Santa Clara Min. Ass. v. Quicksilver
Min. Co. (17 F. R. 657, 8 Sawy.
330) 34
Sargeant, Ex parte (1 Glyn & J. 183) 260
Sargent v. Henderson (79 Ga. 268, 5
S. E. 122) 85
Saunders v Johnson (Skin. 401) 216, 257
V. Reilly (105 N. Y. 12, 12 N. E
170)
331
491
463
350
468
433
400
Sauthoff, //( re (16 N. B. R. 181)
Savaoe. In re (16 N. B. R. -308)
v. Carter (9 Dana 408)
V. Marsii (10 Met. 594)
V. Putnam (32 Barb. 425)
V. Rockwell (32 X. Y. 501)
Saville v. Robertson (4 T. R. 725) 73. 88,
89, 101, 102, 184, 220, 430
Saving & Loan Soc. v. Gibb (21 Cal.
595) 438
Sawver r. Proctor (2 Vt. 580) 264, 265
Saver v. Bennet (1 Cox 107) 452, 458, 459
Savre v Herick (7 W. & S. 383) 38
Scaife v. Jackson (5 D. & R. 290, 3 B.
&C. 421)" 483
Scales u. Jacob (3 Bing. 652) 157
Scanlon (•. Union Ins. Co. (4 Biss.
511) 235
Scarf V. Jardine (7 App. Cas. 345) 403
Schack r. Autorg (1 M. & S 574) 316
Schatzill V. Bolton (2 McC. 478, 3
McC. 33) 345
Scheifflin v. Stevens (1 Wins. 106) 405
Schenierhorn v. Loines (7 Johns. 311) 95
Schenkl v. Dana (118 Mass. 236) 200
Schindel v. Gates (46 Md. 604) 160
Schlapback v. Long (90 Ala. 525, 8
So. 113) 24,103,335
Schleicher v. Walker (28 Fla. 680, 10
So. 33) 331, 333
Schmertz v. Shreeves (02 Pa 457)
Schmidlapp v. Currie (55 Miss. 597) 98,
Schneider t: Sansom (62 Tex 201)
Scholefield v. Eichelberger (7 Pet.
585) 2(), 127, 399, 432,
V. Heafield (7 Sim 667)
Scholey v. Walton (12 M. & W. 510)
Schollenberger v. Seldonridge (49 Pa.
83) 95, 181,
Schulten v. Lord (4 E. D. Smith 206)
Sehurtz v. Romer (82 Cal. 474, 23 Pac
118)
Schwabacker v. Riddle (84 111. 517)
Schwanck c. Davis (25 Neb. 196,41
N. W. 141) 134,
Scotland, Bank of, v. Christie (8 CI.
& F. 214)
Scott V. Avery (8 Ex. 487, 5 H. L. C.
811) 148,
V. Beale (6 Jur. n. ^. 559)
V. Berkeley (3 C. B. 925)
V. Buchanan (11 Humph. 468)
V. Campbell (30 Ala. 728) 45,
252,
V. Colraesnil (7 J J. Marsh. 416)
114,
V. Dansley (12 Ala 714)
V. Fisher (4 T. B. Mon. 387)
V. Godwin (IB & P. 74)
V. Mdne (5 Beav. 215, 7 Jur.
709) 443,
V. Raynient (L. R. 7 Eq. 112)
v. Rowland (26 L. T. Rep. 391)
Scott's Appeal (88 Pa. 173)
Scruegs V. Blair (44 Miss. 406)
"r. Burruss (25 W. Va. 670)
r. Russell (McCah. 39)
Scull's Appeal (7 Atl. 588)
Sea, F. & L Ass. Soc. In re (5 De G.
M. & G. 465)
Seabury v. Bolles (51 N. J 103, 16
Atl. 54) 103,
Searle v. Adams (3 Kas 315)
Sears v. Starbird (78 Cal. 225, 20 Pac
547) 159, 160,
Second Nat. Bank, Appeal of (83 Pa.
203)
V. Burt (93 N. Y 233) 113,
V. Hall (35 Oh. St. 158)
V. Hume (4 Mack, 90)
Secor i\ Keller (4 Duer 416)
Seddon, Ex parte (2 Cox 49) 483,
V. Connell (10 Sun. 79)
Sedgwick v. Daniell (2 H & N 319)
154
331
132
444
444
448
Seelev v. Mitchell (85 Kv. 508, 4 S. W.
190')
Seibert v. Bakewell (87 Pa. 506)
Seighortner v. Weissenborn (20 N. J.
Eq 172) 455,
Seldner v. Mount Jackson Nat Bank
(66 Md. 488, 8 Atl. 262)
Seldon v. Hickock (2 Cai. 167)
542,
545
231
118
170
425
220
427
554
17,
20
,48,
254
76,
409
112
420
316
515
210
242
254
354
135
7
478
552
104
203
268
359
488
50
186
273
485
269
255,
269
.368
540
456
146
303
Ixviii
TABLE OF CASES.
Seligman i'. Heller Bros. Clo. Co. (69
Wis 410, 34 N. W. 232) 347
Sellers v. Shore (89 Ga. 416, 15 S. E.
494) 335, 433, 435
V. Streator (5 Jones 261) 154, 155
Sells V. Hubhell (2 Johns. Ch. 397) 276
Servant v. Rusk (43 Cal. 235) 491
Servante v. James (10 B & C. 410) 207
Serviss v. McDonnell (107 N. Y. 260,
14 N. E. 314) 429
Sessions v. Jones (0 How. Miss. 123) 289
V. Kichinond (1 R. I. 298) 223
Settenibre v. Putnam (30 Cal 490) 556
Setzer r. Beale (19 W, Va. 274) 47, 128
Sewall V. Cailin (3 Wend. 291) 320
Sewel V. Bridge (1 Ves. Sen. 297) 615
Sexton r. Anderson (95 Mo 373, 8 S.
W. 564) 98, 331
Se.xton (9 Gratt. 204)
Shaaber v. Bushong (105 Pa. 514)
Shackelford v. Clark (78 Mo 491)
195
83
476,
478
r. Shackelford (32 Gratt. 481) 332
Shackle v. Baker (14 Ves. 468) 237, 239, 240
Shafer v. Randolph (99 Pa. 250)
Shafer's Appeal (106 Pa. 49)
Shaffer r. Snvder (7 S. & H. 503;
Shakeshaft's Case (G Ves. 123)
Trowbridge (28 N. J.
10:
350
411
474, 496,
499
Eq.
97
409
Shaler
595)
Shaniburg v. Abbott (112 Pa 6)
V Ruggles (83 Pa. 148) 409,429, 554
Shanks v. Klein (104 U. S. 18) 364
Shannon v. Wriglit (60 Md. 520) 284, 293
Sharon Canal Co. (; Fulton Bank (7
Wend. 412) 28
Sharp V. Hibbins (42 N J. Eq 543, 9
Atl. 113) 508
V. Hutchinson (100 N. Y 533, 3
N E. 500) 542
r. Taylor (2 Phil. 801) 8, 269
V. Warren (6 Price 131) 259
Sharpe v Cummins (2 D. & L 504) 232
Sbattuck V. Chandler (40 Kas. 516, 20
Pac 225) 134, 136
Shaw, Appellant (81 Me. 207, 16 Atl.
662) 432, 451
, Ex parte (1 Glvn & J. 129) 146
V. Holland (15 M & W. 136) 550
V. Picton (4 B & C. 715) 421
V. Rhodes (2 Russ 539) 299
V. Pratt (22 Pick. 305) 143
V. Robbins (12 Wheat. 369) 468
Shea V. Donahue (15 Lea 160) 223
Shearer v. Paine (12 All. 289) 367
V. Shearer (98 Mnss. 107) 354, 361
Sheble v. Strong (128 Pa. 315, 18 Atl.
397) 538
Shed V. Pierce (17 Mass 623) 144
Sheedy v. Bank (62 Mo. 17) 345
Sheehy v. Graves (58 Cal 449) 231
V. Mandeville (6 Cranch 253) 76.
416, 417, 483, 484
Shelby v. Mandeville (6 Cranch 264) 95
Shelton V. Cocke (3 Munf. 191) 159, 160
V Knight (68 Ala. 5U8) 201
V. Pollock (1 H. & M 422) 150
Shepard r Haw lev (1 Conn. 367) 38, 165
V. Pratt (16 Kas. 209) 46
Shepherd, Ex parte (2 Mont D & D
204) 485
V. Morris (4 Beav. 252) 514
V. Towgood (T. & H. 379) 503
Shepley v. Waterhouse (22 Me 497) 159
Sheppard v. Boggs (9 Neb. 257, 2 N. W.
370) 237
V. Oxenford (1 K. & J 491) 298
Sheridan v. Medara (2 Stockt. 469) 61
Sherman v. Kreul (42 Wis. 33) 445
Sherrod v. Langdon (21 la 518) 103
Sherry r. Gilmore (58 Wis. 324, 17
N. W. 252) 351
Sherwood ?•. Barton (36 Barb, 284) 179
V. Creditors (42 La. Ann. 103, 7
So. 79) 231, 542
V. Mar wick (5 Me. 295) 118
V. St. P. R. R. (21 Minn 127) 7, 350
V Snow (46 la. 481) 171, 187
Shieknesse v. Bromilow (2 Cr & J.
425) 82
Shields v. Oney (5 Munf. 550) 272
Shirley v Long (6 Rand. 735) 465
Shirreff y. Wilks (1 East 4b) 96, 174, 176,
• 427
Shoe & Leather Bank v. Herz (89 N.
Y. 629) 404
Shoemaker v. Benedict (UN Y. 176) 160
Shoemaker Piano Mfg. Co. v. Bernard
(2 Lea 358) 427, 429
Shorb V Benudrv (56 Cal. 446) 50
Short V. Magruder (22 F. R. 46) 350
Shotwell V. Miller (Coxe 181) 143
Shriver r. McCloud (20 Neb 474, 30
N. W 534) 9
Shriver's Appeal (12 Atl 553) 201
Shropshire v. Shepperd (3 Ala 733) 32, 45
Shuggart v. Lycoming Ins. Co. (55
Cal. 408) 2.35
Shumway v. Reed (34 Me 560) 483
Siiurlds v. Tilson (2 McLean 458) 406
Shute V. Taylor (5 Met. 67) 225
Sibley v. Lambert (30 Me. 2-53) 161
V. Parsons (53 N. W. 786) 404
V. Young (26 S. C. 415, 2 S. E.
314) 150, 151
Sickman v. Abernathy (14 Col. 174,
23 Pac 447) 332
Siddall, In re (29 Ch. D. 1) 557, 560, 561
Siegel V. Chidsey (28 Pa. 287) 88, 46.3, 464
Siegfried v. Ludwig (102 Pa. 547) 108, 378
Sieghortner v. Weissenborn (20 N.J
Eq. 172) 248
Siffkin V. Walker (2 Camp 307) 181, 316
Sigler V. Bank (8 Oh. St. 511) 332
V. Piatt (16 Mich. 206) 160
Sigourney v Drury (14 Pick. 387) 159
V. Munn (7 Conn 11) 350, 436, 443,
531
Sikes V. Work (6 Gray 433) 261, 265
TABLE OF CASES.
Ixix
Silk V. Osborn (1 Esp. 140)
V. Prime (2 L. Cas. Eq. 318)
Sillitoe, E.r parte (1 Glyn & J 374)
49(5, 407,
Silver v. St. Louis, I. M. & S. liy. (72
Mo. 194)
Silverman v. Chase (90 111. 37) 168,
Simiiions v. Curtis (41 Me. 373)
o. Leonard (3 Hare 581) 443,
V. Swaine (1 Taunt. 540)
Kimms v. Brutton (5 Ex. 802)
V. Kirtley (1 T. B. Mon. 80)
Simonds v. Strong (24 Vt. 042)
Simpson, Ex jiarte (2 Rose 338)
, (Mont. & Cii. (i()2)
, In re (L. II. 0 Cli. 572)
V. Bloss (1 Taunt. 240)
V. Feltz (1 McC. Ch. 21.3) 55, 439,
/•. (iediles (2 Bay 538)
,j. llowden (3 My. & C. 07)
V. Leach (80 111. 280)
V. Tenney (41 Kas. 501, 21 Pac.
634)
Sims V. Bond (5 B. & Ad 380) 273,
i\ Brittain (4 B & Ad. 375)
V. Brutton (1 E. & B. 446)
V. Smith (12 Rich. L 085)
V. Willing (8 S. & R. 103)
Simson v. Cook (l Bii'g. 452)
V. Ingiiam (2 B. & C. 05)
315,
420,
423,
Sindelare v. Walker (137 111. 43, 27
N. E. 59)
Singer v. Carpenter (125 111. 117, 17
N. E. 701) 230,
V. Kelly (44 Pa. 145) 540,
V. Townsend (53 Wis. 120)
Sitler V. Walker (1 Freem Ch. 77)
Skaife v. Jackson (3 B. & C. 421)
Skiffkiu V. Walker (2 Camp. 308)
Skillings v. Coolidge (14 Mass 43)
Skinner (;. Dayton (19 Johns. 513)
151. 154, 371, 390, 508, 552,
V. (5 Johns. Ch. 351) 151,
V. Shannon (44 Mich. 86, 6 N. W.
108)
V. Stocks (4 B. & Aid. 437) 272,
317, 318,
V. Tinker (34 Barb. 333)
Skip V. Harwood (1 Dick. 114)
V. (2 Swanst. 586) 137, 290,
Skipworth v. Lea (16 La. Ann. 247)
Skirving v. Williams (24 Beav. 275)
Slater, Ex parte (6 Ves. 140) 143,
V. Arnett (81 Va. 432)
V. Lawson (1 B. & Ad. 396) 157,
Slaughter v. Doe (07 Ala. 494)
Slee V. Bloom (20 Johns. 069, 5 Johns.
Ch. 360)
Sleech's Case (1 Mer. 530) 445, 470,
Sleraraer's Appeal (58 Pa. 168)
441
440
474,
499
512
429,
445
135
531
402
117
520
400
480
494
442
9
524
102
289
302
50
317
317
82
87
54
425
421,
425
308
231
542
345
291.
344
170
89
148
150,
553
154
335
310,
408
392
301
391,
392
434
453
144,
485
508
448
351
511
482
457
Slipper V. Stidstone (1 Esp. 47, 5 T.
R 493) 437
Sloan V. Machine Co (70 Mo. 206) 146
V. Moor? (37 Pa. 217) 294
Slocomb V. Lizard i (21 La. Ann. 355) 187
Slocum V Hooker (13 Barb. 530) 22
Sloo c. Bank of Illinois (2 111. 441) 150,
155, 156
Small V. Arwood (Younge 456) 322
V. Fitzwilliams (Prec. Ch. 102) 224
Smith, Ex parte (3 Madd. 63, Buck
149)
226, 403
463, 404
472
485
487
488
(5 Ves. 295)
, (Buck 492)
, (3 Bro. C. C. 46)
, (1 P. Wms. 237)
, (1 Deac 3«5)
, (lGlvn&J.74,6Madd.2) 489,
491, 498
, (2 Sim. 357) 495
, (16 Joims. 102) 200, 324, 325,
343, 475
V. Abbott (5 Abb. N. C 274) 243
V. Allen (18 Johns. 245) 248
V. Anderson (15 Ch. D. 247) 557,
558, 500, 561
V. Argall (6 Hill 479, 3 Den.
435) 638, 545, 547
V. Ayer (101 U. S. 320) 451
V. Ayrault (71 Mich 475, 39 N.
W. 724) , 126
V. Baily (11 Mod. 401) 142, 168, 183
V. Barker (10 .Me. 458) 325
V. Barrow (2 T, R. 476) 250, 256, 259
I'. Black (9 S. & R. 142) 76, 93
c. Burnham (3 Sumn. 435) 6, 35, 76
V. Chandos (Barn. Ch. 419) 211
V. Clay (3 Bro C. C. 639) 514
r. Coleman (7 Jur. 1053) 82, 175
V. Collins (115 xMass. 388) 34, 87, 95.
105
r. Craven (1 Cr. & J. 500) 89, 103
>-. Cummings (2 Pars. Cas. 92) 202
r. De Silva (Cowp. 409) 136, 403, 501
V. Danvers (5 Sandf. 669) 301
V. Edwards (2 H. & G. 411) 48
V. (7 Humph. 100) 328,338
V. Emerson (43 Pa. 466) 337
V. Everett (27 Beav. 446) 237, 238
V. (126 Mass. 304) 305
V. Fromont (2 Swanst. 330") 284
('. Goldsworthy (4 Q. B. 430) 551
V. Griffith (3 Hill 3-33) 08
V. Hall (5 Bosw. 319) 118
V. Harris (76 Ind. 104) 335
V. Hill (13 Ark 173) 35
V. Hull Glass Co. (19 L. J. C. P.
123) 551, 553
0. Jackson (2 Edw. Ch. 28) 325. 302
V. Jameson (6 T. R. 001) 123, 200,
385, 420
I'. Jarves (2 Ld. Ravm 1484) 168
V. Jeyes (4 Beav. 503) 208, 293, 295.
371, 456, 457
V. Johnson (2 Edw. 28) 327
Ixx
TABLE OF CASES.
Smith V. Jones (12 Mc. 332) 35, 76, 349
V. (18 Neb. 481, 25 N. W.
624) 352, 366
V. Kane (2 Paige 303) 47!)
V. Kerr (3 N. Y. 144) 151
i". Knight (71 III. 148) 46
V. Lowe (1 Etlw. Ch. 33) 296
V. Ludlow (6 Johns. 257) 159
V. Lusher (5 Cow. 688) 80, 168, 180,
206, 246
f. Mallory (24 Ala. 628) 446
V. Mayo (9 Mass. 62) 16, 19
V. Moynahan (44 Cal. 53) 57
V. Oriell (1 East 368) 304, 391, 464,
466, 471
V. Perry (5 Dutch. 74)
V. Rogers (17 Johns. 340)
V. Shelden (35 Mich. 42)
V. Sherwood (10 Jur. 214)
V. Sinnott (44 La. Aun. 51
So. 413)
V. Sloan (37 Wis 285)
(;. Smith (5 Ves. 189)
60
96, 418,
482
328, 381
108
10
851
82
226, 353
(80 Cal. 323, 21 Pac. 4, 22
368
248
74, 107, 483
468
332
304, 391, 463,
Pac. 186, 549)
I'. (33 Mo. 557)
r. (27 N. H. 244)
V. (2 Johns. 235)
V. (50 N. W. 64)
V. Stokes (1 East 363)
464, 465, 466, 475
V. Stone (4 Gill & J. 310) 152, 307
V. Snmmerhn (48 Ga. 425) 53
V. Tarlton (2 Barb. Ch. 336) 6, 7
V. Tupper (4 Sm. & M. 261) 150, 156
V. Tustin (5 Cow. 688) 308
V. Vanderburi: (46 111. 34) 57, 81
IK Walker (-57 Mich. 456, 24 N.
W. 830, 26 N. W. 783) 244
V. Warden (86 Mo. 382) 537
V. Watson (2 B. & C. 401) 60, 492
V. Wigley (3 Moo. & S. 174) 423, 425
V. Winter (4 M. & W. 454) 151, 376,
382
v. Wright (5 Sandf. 113) 56
v. (4 Abb App. 274) 57
Smitha r. Cnreton (31 Ala 652) 164
Smout V. Ilberv (10 M. & W. 1) 387
/•. Harrie (31 111. 62) 385
Smyth V. Hawthorn (3 Rawle 355) 443
V. Smyth (1 Swanst. 2-52) 292
V. Strader (4 How. 404) 180
V. Tankerslev (20 Ala 212) 303
Snaith >: Burridge (4 Taunt. 684) 96, 97,
120, 133
Snead t: Baringer (1 Stew. 134) 91
Sneed i-. Cogle^(4 Lift. 162) 181
V. Deaf (53 Ark. 152, 13 S. W.
703) 204
V. Wiester (2 A. K. Marsh. 277) 420,
423
Snell V. Crowe (3 Utah 26, 5 Pac. 522) 344
c. D wight (120 Mass. 9) 8, 9
Sniffer v. Sass (14 Rich. L. 20) 478
Snodgrass v. Broadwell (2 Litt. 353) 312
IV Reynolds (79 Ala 452) 12
Snodgrass's Appeal (13 Pa. 471) 331
Snow V. Howard (35 Barb. 55) 183
Snowball, Ex parte (L. R. 7 Ch. 5-34) 332
Snyder v. Burnhani (77 Mo. 52) 34
V. May (19 I'a. 235) 150
Sodiker /•. Applegate (24 W. Va. 411) 60
Solomon r. Kirkwood (55 Mich. 256,
21 N. W. 336) 393
V. Solomon (2 Ga. 18) 87, 194, 211
Solly r. Forbes (4 Moore 448, 2 Br. &
B. 38) 144, 316
Somerhy v. Buntin (118 Mass. 279) 7, 67,
280
SomerviUe r. Mackay (16 Ves. 382) 217,
279'
Soper V. Fry (37 Mich. 236) 155
Soule (-•. Havward (1 Cal. 345) 58
Soules V. Burton (36 Vt. 6-52) 198
Southard v. Steele (3 T. B. Mon. 435) 149
South Carolina Bank v. Case (8 B. &
C. 427) 113, 114, 168, 181, 206
V. Humphreys (1 McC. 388) 381,
413
Southern Cotton Oil Co. i\ Henshaw
(89 Ala. 448, 7 So. 760) 351, 363
Southern Fertilizer Co. r. Reams (105
N. C. 283, 11 S. E. 467) 61
Southmayd's Appeal (8 Atl. 72) 212
Southwick r. McGoyern (28 la. 533) 69
Spalding v. Hedges (2 Barr 240) 102
V. Wilson (80 Kv. 589) 851
Sparhawk v. Russell (10 Met. 305) 446
Sparman v. Keim (83 Ky. 245) 17
Sparrow v. Chisman (9 B & C. 241) 145,
179
Spaulding v. Ludlow Mills (36 Vt.
150) 95,161,402
Speake v. Prewitt (6 Tex. 252) 273, 312
Spear v Gillet (1 Dev. Eq. 466) 93
1-. Newell (13 Vt. 288) 250, 263, 264
Spears v. Toland (1 A. K Marsh. 203) 163
Speer r. Bishop (24 Oh St. 598) 103, 387
Speights V. Peters (9 Gill 472) 295, 297
Spencer v. Billing (3 Camp. 310) 105, 492
V. Durant (Comb 115) 216, 257
Spenceley c. Greenwood (1 F. & F.
297) 88T
Sperry, I» re (1 Ashm. 347) 327, 33(i
Spicer v. James (Coll. Part 164) 241
Spiers v. Houston (4 Bligh x. s. 515) 31fi
Spiro r. Paxton (3 Lea 75) 351
Sprague, Ex parte (4 De G. M. & G.
866) 494
V. Ainsworth (40 Vt. 47) 181
Springer r. Cabell (10 Mo. 640) 248
V. Foster (10 Met. 597) 468
Spurr V. Cass (L. R. 5 Q. B. 6-56) 109
Staats V. Bristow (73 N. Y. 264) 344
V. Howlett (4 Den. 559) 183, 240,
243
Stables v. Eley (1 C. & P. 614) 407
Stackpole v. Davoren (1 Bro. P. C.9) 514
Stacy V. Decey (2 Esp. 169) 317
TABLE OF CASES.
Ixxi
Stafford Nat Bank v. Palmer (47
(.'on II. 44.'-J)
Stair u. Uichanlsoii (108 Ind. 429,9
N. E. 300)
Stall <;. Catskill Hank (18 Wend.4G6)
Stanliope v. Swaffurd (80 la. 45, 45
N. VV. 40:i)
Staiinanl r. VVIiittlesey (9 Conn. 556)
StansfiL'ld (• Levy (o Stark. 8)
Stanton ". i5iic-kner (24 La. Ann. 301)
V. Westover (101 N. Y. 265, 4 N.
E. 52;)) 231, 331,
Stanton Iron Works Co., In re (21
13eav. 164)
Stanwood r. Owen (14 Gray 105)
Sta[)ilton r. Stapilton (1 Atk. 10)
Staples V. Sprague (75 Me. 458) 59,
Star Wajron Co. ;,'. Swezey (52 la.
;W1, 3 X. \V. 421)
Stark r. 'I'aylor (4 McC. 413)
Starnes /•• (^iiin (G Ga. 84)
State ('. Biernian (1 Strobli. 256)
r. Rowden (18 Fla 17) 231,
/'. (\atskill Bank (18 Wend. 480)
r. i)av (29 X. E. 430)
-■. Enunons (99 Ind. 452)
/•. Kenan (94 N C. 296)
/'. Liiiaweaver (3 Head 51)
r. Xeal (27 N. H. 131)
IV Xebraska Distilling Co. (29
Nel). 701), 46 N. W. 155) 559, 565,
r. Spencer (64 Mo. 355)
V. Standard Oil Co. (30 N.E. 279)
564, 565,
State Capital Bank v. Noyes (62 N H.
35)
Stead y. Salt (3 Ring, 101) 147, 148,
Stearns v. Barrett (1 Pick. 443)
V. Burnliani (4 Me. 84) 172,
V. Haven (14 Vt. 540) 77, 103,
r. (16 Vt. 87)
. Hongiiton (38 Vt. 583)
Siebbins, Ex parte (R. M. Charlt. 77)
Steel r. Jennings (Ciieves 183) 142,
r. Western (7 J B. Moo. 31)
Steele l\ Jennings (1 McMull. 297)
r. Stuart (L. K. 2 Eq. 84) 70,
Steers v. Lashlev (6 !'. R. 61)
Stegall r. Coney (49 .Miss 761)
Steiglitz r. Eg^niirton (Holt 141)
Stein V. La Dow (13 Minn. 412)
V. Robertson (30 Ala 286)
134,
214,
50
108
180,
184
125
507
272
248
335
65
387
511
192
168
23
303
117
335
174
335
344
335
118
117
566
335
559,
566
83
152
401
173
107
60
171
327
143
273
160
118
9
97
150
135
234.
Steinhart i>. Fyhrie (5 Mont. 463, 6
Pac. 367) 135
Stephens v. Orman (10 Fla 9) 195, 513
V. Revnolds (2 F & F. 147) 170
/•. Thompson (28 Vt. 77) 416, 417
Sterlinsi /•. Bock (40 Minn. 11, 41 N.
W. 236) 151, 153
r. Jandon (48 Barb. 459) 87
Sternburg v. Callanan (14 la. 251) 99,
427
Sterndale v. Hankinson (1 Sim. 393) 425
Sterry v. Clifton (9 C. B 110) 15, 36
Steuart v. Gladstone (10 Ch. D. 628) 569
Steuben Countv Bank v. Alberger
(101 N. Y. 202) 168
Stevens v. Hennnig (1 K. & J. 108, 6
De G. M. & G. 223) 315
V. Faucet (24 111, 483) 46, 60
V. Gainesville Nat. Bank (62 Tex.
499) 46
(,-. Lunt (19 Me. 70) 312,316
r. Morse (7 Me 36) 384
u. Perry (113 Mass. 380) 336
('. Yeatnian (19 Md 480) 384
Stevenson /; Mailiers (67 111. 123) 508
Steward r. Blakeway (L. R. 4 Ch.
60!) 352
/•. ( L. R. 6 Eq. 479) 358
Stewart, In re (62 la. 614, 17 N. W.
897)
V. Brown (37 N. Y. 350)
V. Forbes (1 McN. & G. 137)
98
491
233,
234
119
9
V. Levy (36 Cal. 159) 117
V. Mcintosh (4 H & J. 233)
V. Robinson (115 N. Y. 328,22
N. E. 160) 451
i: Rogers (19 Md. 98) 428
Stewart's Appeal (105 Pa. 307) 160
Stileman i\ Ashdown (2 Atk. 480) 514
Still V. Focke (66 Tex. 715, 2 S. W. 59) 231
Stillman c. Harvey (47 Conn. 20) 139
Stiinson /•. Lewis (.36 Vt. 91) 554
V. Whitney (130 Mass. 591) 169, 403
Stirling r. Heintzraan (42 Mich. 449,
4 N. W. 165) 1, 115
Stirrup's Case (6 Ves. 743) 474, 496, 499
Sioal lings v. Baker (15 Mo. 481) 53
Stockdale v. Ullery (37 Pa. 486) 171
Stocken r. Dawson (6 Beav. 371) 201, 439,
448
Stocker v. Brocklebank (3 McN. &
G. 250) 60
Stockton V. Frey (4 Gill 406) 124, 125
Stockwell v. Dillingham (50 Me. 442) 87
Stoddard Mfg. Co. v. Krause (27 Neb.
83, 42 N. W. 913) 404, 405
Stokes r. Brown (4 Chand. 39) 20
Stone, Ex parte (L. R. 8 Ch. 914) 282
V. Chamberlin (20 Ga. 259) 94, 381
V Dennis (3 Port. 231) 220
V. Fouse (3 Cal. 294) 454, 507
V. Marsh (6 B. & C 551) 121
V. (R. & .M. 304) 121
r. Mattinsily ( 19 S. W. 402) 248
V. Sevmour (15 Wend 19) 420
Storer v Flack (41 Barb. 161) 7
V. Hinkley (Kirby 147) KiO
V. Hunter (3 B. & C. 368) 493
Storrs V. Birker (6 Johns. Ch. 166) 492
Story V. Livingstone (13 Pet. 359) 469
('. Moon (8 Dana 331 ) 456
V Winsor (2 Atk. 6-30) 34
Stouffer V. Coleman (1 Yeates 390) 465
Stoughtou V. Lynch (1 Johns. Cii.
467) 194, 443
Ixxii
TABLE OF CASES.
Stougliton V. Lynch (2 Johns. Ch.
209) 215, 511, 515, 516, 52U, 522
Stout V. Baker (o2 Kas. llo, 4 Pac.
141) 334
V. Ennis Nat. Bank (09 Tex.
384, 8 S. \V. 808) 143, 152
V. P^ortnne (7 la. 183) 327, 328, 338
V. McNeill (98 N. C. 1, 3 S. E.
915) 335
V. Zulick (48 N. J. 599, 7 Atl.
362) 50
Stoveld, Er parte (1 Glvn & J. 303) 298
V. Eade (4 Bing. 154) 424
Strain ?'. Wright (7 Ga. 568) 17
Strang v. Bradner (114 U. S. 555) 124
Stranae r. Lee (3 East 484) 315
Strangford r. Green (2 Mod. 228) 149
Straus V. Kerngood (21 Gratt. 584) 335
Strauss v. Frederick (91 N. C. 121) 437
Strecker v. Conn (90 Lid. 469) 105, 404
Street v. Rigby (6 Ves. 815) 220, 462
Stretch v. Talmadge (65 Cal. 510, 4
Pac. 513) 512
Stroller v. Elting (97 N. Y. 102) 45
Stroman v Varn (19 S. C. 807) 151, 3fi7
Strong V. Fish (13 Vt. 277) 179
y. Foster (17 C. B. 201) 417
V. Lord (107 111. 25) 359, 363
V. Smith (62 Conn. 39, 25 Atl.
395) 69
V. Stapp (74 Cal. 280, 15 Pac.
835) 393
Stroud, Ex parte (2 Glyn & J. 127) 474, 499
Struthers v. Pearce (51 N. Y. 357) 196,
204
Stuart V. Adams (89 Cal. 367, 26 Pac.
970) 34
17. Coming (32 Conn. 105) 333
Studdy V. Sanders (2 D. & R 347) 69
Stuniph V. Bauer (76 Ind 1-57) 56, 343
Styles V. Cowper (3 Atk 692) 492
Suau V. Caffe (122 N, Y. 308, 25 N. E.
488) 24
Sullivan v. Greaves (Park Ins. 8) 9, 269
V. Smith (15 Neb. 476, 19 N. W.
620) 367, 368
V. Sullivan Mfg. Co. (20 S. C.
79) 51
Summerlot v Hamilton (121 Ind. 87,
22 N. E. 973) 139
Sumner v. Hampson (8 Ohio 358) 137,
361, 304, 366, 500
?•. Powell (2 Mer. 37) 330
Sutcliffe V. Dohrman (18 Ohio 181) 325
Sutro r. Wagner (23 N. J. Eq 388, 24
N. J. Eq, .5^9) 293
Sutton v. Clark (6 Taunt. 29) 125
V. Gregory (2 Peake 150) 168, 180
V. Irwine (12 S & R. 13) 185, 186
Suydam v. Barber (6 Duer 34) 92
V. Owen (14 Grav 195) 435
Swan V. Stedman (4 Met. 548) 151
V. Steele (7 East 210) 70, 73, 106,
131. 142. 1-52. 168, 171
Swasey v. Antram (24 Oh. St. 87) 24
Swascy v. Vanderheyden (10 Johns.
33) 16
Swearingen v. Bassett (65 Tex. 267) 351
Sweeney v. Neeley (53 Mich. 421, 19
N. W. 127) 526
Sweet V. Bradley (24 Barb 549) lb6
V. Jacocks (6 Paice 355) 503
V. Morrison ( 103 N. Y. 235, 8 N.
E. 396) 192
y. Read (12 R.I. 121) 345
Sweotser v. French (2 Cush. 309) 184, 185
Sweetzer v. Mead (5 Mich. 107) 133, 153
Swift V. Ward (80 la. 700, 45 N. W.
1044) 217, 392, 393, 529, 530
Syers v. Syers (1 App. Cas. 174) 56
Svkes v. Beadon (11 Ch. D. 170) 8, 9
Sylvester v. Smith (9 Mass. 121) 88, 272
Symonds v. Carter (32 N. H. 458) 322
Taber v. Cannon (8 Met. 456) 111
Tabler v. Brvant (62 Miss. 350) 333
Taft V. Buffum (14 Pick. 322) 392
V. Sergeant (18 Barb, 320) 17, 18
V. Ward (111 Mass. 518) 550
V. (106 Mass. 518) 550
Taggard v. Loring (16 Mass. 336) 63
Tait V. Murphv (80 Ala. 440. 2 So.
317) ' ■ 231, 344
Taitt, Et parte (16 Ves. 198) 479, 480
Tallmadffe v. Penover (35 Barb. 120) 177
Tanis V. Hetner (9Va.441) 111
Tanner v. Hall (1 Barr 417) 97, 184, 187
Tanner & Delaney Engine Co. ?'.
Hall (86 Ala. 305, 5 So. 584) 68, 104,
108
Tapley v. Butterfield (1 Met. 515) 131,
133, 134, 142, 153, 367
Tappan v. Bailev (4 Met. 535) 553
V. Blaisdeil (5 N. H. 190) 325, 338,
345, 446
159, 160
468
50
368
163
270
555
236
V. Kimball (30 N. H. 136)
V. Poor (15 Ma.'is. 419)
Tarbell r. Page (24 111.46)
V. West (86 N. Y 280)
Tassey v. Church (4 W. & S. 141)
V. (5 W. & S. 468)
Tatani v. Williams (3 Hare 347)
Tate V. Citizens' Ins. Co. (13 Gray
79)
V. Clements (16 Fla. 339) 159, 160
V. Mut. Ins. Co. (13 Gray 79) 311,
312
Tatlock V. Harris (3 T. R. 180) 386
Tattersall v. Groote (2 B. & P. 131) 11,
220, 276, 454
Tav V. Ladd (15 Gray 296) 333
Ta'yloe i\ Bush (75 Ala. 432) 46, 47, 60
V. Sandiford (7 Wheat. 14) 420
Taylor, Ex parte (8 De G. M. & G.
254) 17
, (2 Rose 175) 472, 409
, (18 Ves. 284) 480
TABLE OF CASES.
Ixxiii
Tavlor, Ex parte {'S\r,r\t. 240) 494
— '-, In re (5 Biss. UU) 544
0. Beniis (4 Biss. 40(3) 244, 531
0. Carpenter (2 W. & M. 1, 11
Paige 292, 2 Saridf. Cli. GO:}, 3 Story
458) 244
V. Castle (42 Cal. 367) 432, 556
V. Cliurcii (8 N. Y. 452, 1 E. D.
Smith 470) 820,321,322
V. Cornell (12 S. & R. 243) 145, 149
V. Davis (3 Beav. 388) 457
V. Field (15 Ves. 550) 290, 503
V. Fields (4 Ves. 300) 136, 290, 344,
430, 475, 503
V. Glassbrook (3 Stark. 76) 15
V. Hamlin (2 Bro. C. C. 310) 515
V. Hayling (1 (>)x 435) 515
V. Henderson (17 S. & K. 453) 69, 107
V. Herring ( 10 Bosw. 447) 65
V. Higgings (3 East 16'.)) 269
V. UiUyer (3 Blackf. 43.3) 162, 172, 173
V. Hutciiinson (25 Gratt. 536) 524
I'. Jones (2 Atk. 602) 514
V. (42 N. H. 25) 117
V. Kymer (3 B. & Ad. 320) 424, 425
V. Neate (39 Cli. I). 538) 237
V. Perkins (26 Wend. 124) 48
I'. Ragland (42 La. Ann. 120, 8
So. 467) 201, 202
>\ Tavlor (2 Murph. 70) 234
V. TeVme (3 H. & J. 505) 46
r. Wilson (58 N. H. 465) 116
V Young (3 Watts 339) 406
Taylor's Case (1 Browne 73) 150
Teague v. Hubbard (8 B. & C. 345) 246,
255, 553
r. (1 M. &R. 369) 553
Tebbetts v. Dearborn (74 Me. 392) 204
Teed v. Elwortliy (12 East 210) 22
V. (14 East 210) 109
Teller v. jNIuir (2 Penn. 548) 164
Temperton v. Russell (37 Sol. Jour.
423) 236
Temple v. Seaver (11 Cush. 314) 308, 380
Tenant v. Elliott (1 B. & P. 3) 269
Tench v. Roberts (6 Madd. 145) 55
Tennant, E.r parte (6 Cli. I). 303) 61
Tennessee, Bank of, v. Saffarans (3
Humph. 597) 174, 184
Tenney v. Johnson (43 N. H. 144) 476
V. N. E. Protect. Union (37 Vt. 64) 550
Terrell v. Goddard (18 Ga. 664) 297, 384
V. Hurst (76 Ala. 588) 146
V. Pichards (N. & McC. 20) 6, 257
V. RowIand(86Ky.67,4S.W.825) 201
Terry v. Butler (43 Barb. 395) 477
V. Carter (25 Miss. 168) 259
Tevis V. Tevis (24 Mo. 535) 186, 187
Te.xas & St. L. R. R. v. McCaughey
(62Te.x. 271) 334
Texiere v. Da Costa (Coll. Part. 354) 295
Thatcher v. Massey (20 S. C. 542) 203
Thayer v. Augustine (55 Mich. 187,
20 N. W. 898) 62
V. Buffum (11 Met. 398) 246, 308
Thayer r. Lane (Walk. Cli. 200) 362, 364
r. Smith (116 Mass. 363) 172
Theller v. Such (57 Cal. 447) 438, 439
Tliicknesse v. Bromilow (2 Cr. & J.
425) 142, 143, 169
Thimblethorp v. Hardesty (7 Mod.
116) 216,257
Thom V. Smith (21 Wend. 365) 89
Thomas, Ex jnirte (3 Mont. D. & D.
40, 2 id. 544) 494
, In re (17 N. B. R. 54, 8 Biss. 139) 182,
481
V. Atherton (10 Ch. D. 185) 148, 523
t: Elmaker (1 Pars. Cas. 108) 553
V. Fredericks (10 Q B. 775) 220
V. Harding (8 Me. 417) 147
V. Litchfield (Coll. Part. 287) 276
V. Pennrich (28 Oh. St. 55) 87
r. Pyke (4 Bibb 418) 257
V. Shillibeer (1 M. & W. 124) 95, 387,
415
V. Stetson (62 la. 537, 17 N. W.
751) 98
Thomason v. Frere (10 East 418) 149, 463,
467, 469
Thomasson v. Boyd (13 Ala. 419) 18
Thompson v. Andrews (1 M. & K.
116) 451
V. Bowman (6 Wall. 316) 162, 353,
367
V. Brown (M. & M. 40) 423
V. (4 Johns. Ch. 619) 452, 453, 503
V. Charnock (8 T. R. 139) 219, 220
y. First Nat. Bank (111 U. S.
529) 104
V. Frist (15 Md. 24) 344
V. Graham (1 Paige 384) 289
V. Howard (2 Ind. 245) 35, 82
V. J. D. Morton, The (2 Oh. St.
26) 271
V. Ketcham (8 Johns. 189) 310
V. Lay (4 Esp. 48) 19
V. Lewis (34 Me. 167) 344, 345
V. Lowe (HI Ind. 272, 12 N. E.
476) 136, 247
V. Percival (5 B. & Ad. 925) 94, 95,
387, 416, 419, 4«2, 484, 485
V. Ryan (2 Swanst. 555) 230, 501
V. Snow (4 Me. 264) 63
V. Thompson (7 Ves. 473) 269
V. Walker (40 La. Ann. 676, 4
So. 881) 512
V. Wesieyan Newspaper Associa-
tion 1 19 L.J. C. P. 114) 553
V. Williamson (7 Bligh N. s.
432, 5 W. & Sii. 16) 232, 234
Thomson v. Cook (2 South. 580) 303
Thorndike v. De Wolf (6 Pick. 120) 54,
64,66
Thornton v. Dixon (3 Bro. C. C. 200) 432
V. Illingworth (2 B. & C. 824) 16, 22
V. Kerr (6 Ala 823) 107
V. Lambeth (103 N. C. 86, 9 S.
E. 432) 90
V. Proctor (1 Anst. 94) 200, 384
Ixxiv
TABLE OF CASES,
Thorpe, Ex parte (3 Mont. & A. 716) 96,
99, 175
V. Jackson (2 Y. & C 553) 330, 444,
445
Thrall v. Seward (37 Vt. 573) 378, 427
Thropp V. Richardson (132 Pa. 399,
19 .\tl. 218) 254
Thrupp V. Wilder (2 Esp. 628) 19
Thurber v. Corbin (51 Barb. 215) 414
Thurlow r. Gilmore (40 Me. 378) 18
Thursby v. Lidsrerwood (09 N. ¥.198)378
Tliurston v. Lloyd (4 Md. 283) 171
Thwaites v. Kichardson (Peake 16) 164
Thweatt v. Jones (1 Rand. 328) 269
Tibbatts v. Tibbatts (6 McLean 80) 55,63
Tickel V. Short (2 Ves. Sen. 239) 518
Tidd V. Rines (26 Minn. 201, 2 N. W.
497) 351
Tiemann r. MoUiter (71 Mo. 512) 442
Tilford V. Ramsey (37 Mo. 563) 87, 113
Tilge V. Brooks (124 Pa. 178, 10 Atl.
746) 409, 544
Till's Case (3Neb. 261) 491
Tillar v. Cook (77 Va. 477) 280, 508
Tilley v. Phelps (18 Conn. 294) 325
Tillier v. Whitehead (1 Dall. 269) 146,
206
Tillinghast v. Champlin (4 R. I. 173) 302,
329, 349, 361, 369
V. Gilmore (22 Atl. 942) 148
V. Nourse (14 Ga. 641) 160
Tillotson V. Tillotson (34 Conn. 335) 201,
354, 524
Tilson V. Warwick Gas Light Co. (4
B. & C. 962) 553
Timrall r. O'Bannon (7 B. Mon. 603) 309
Tindal v. Bright (Minor 103) 246, 307
Tinkler v. Walpole (14 P:ast 226) 69
Tipton V. Nance (4 Ala. 194) 311
Tirrell v. Jones (30 Cal. 655) 202
Titus V. Todd (25 N. J. Eq. 458) 95
Tobey v. McFarlin (115 Mass. 98) 345
Tobias v. Blin (21 Vt. 544) 45
Todd V. Jackson (75 Ind. 272) 121
V. Pennington (21 Atl. 297) 9
V. Raffertv (30 N. J. Eq. 254) 9, 198,
512
Tolman r. Hanrahan (44 Wis. 133) 111
Tom r. Goodrich (2 Johns. 213) 91, 150
Tombeckbee Bank ik Dumell (5 Mass.
56) 381,403
Tomlin v. Lawrence (3 Moo. & P. 555) 144,
145
Tomlinson v. Nelson (49 Wis. 679) 251
Tompkins v. Tompkins (18 S. C. 1) 435,
522
r. Woodford (5 W. Va. 216) 170, 186,
187
Toof r. Brewer (3 So. 571) 24, 27
Tooker's Case (2 Co. 68) 152
Topliff V. Jackson (12 Gray 565) 415, 519
Torrell, £'.r /-ar/e (Buck 345) 499
Torrey r. Buck (1 Green 366) 289
c. Twombly (57 How. Pr. 149) 248
Towle V. Harrington (1 Cush. 146) 311
Towle V. Meserve (38 N. H. 9)
Towne r. Leach (32 Vt. 747)
Townsend v. Bogart (11 Abb. Pr. 355) 117
V. CJoewey (19 Wend. 424) 252, 262
V. Neall (2 Camp. 190)
V. Riddle (2 N. H. 448)
V. Townsend (1 Cox 28)
Townshend, Kx parte (2 Moll. 242)
t'. Devaynes (Mont. Part. 96)
Toulmin v. Copland (3 Y. & C. 625)
249
345
36
417
514
515
350
42.5,
517, 520, 51:
96
177
206
344
Tracy v. Pearl (20 Vt. 162)
Trader's Bank v. Bradner (43 Barb.
379)
Tradesmen's Bank v. Astor (11 Wend.
87)
Trafford v. Hubbard (15 R. I. 326, 4
Atl. 762)
Trafton v. United States (3 Storv 648) 92
Traphagen v. Burt (67 N. Y. 30") 351
Travis v. Milne (9 Hare 153) 233
Tread well r. Brown (43 N. H.290) 345, 346
I'.Williams (9 Bosw. 049) 139, 368
Tredwen v. Bourne (6 M. & W. 461) 82
Trentman v. Swartzell (85 Ind. 443) 332
Trickett v. Moore (34 Kas. 755, 10
Pac. 147) 345
Trimble v. Coons (2 A. K. Marsh.
375) 149,150,154
Troughton v. Hunter (18 Beav. 470) 410,
456
Troup I'. Haight (Hopk. 239) 515
Trowbridge v. Cross (117 111. 109,7
N. E. 347) 350
V. Cushman (24 Pick. 310) 182, 345
V. Scudder (11 Cush. 83) 50, 51
Troy I. «& N. Factory v. Corning (45
Barb. 231)
V. Winslow (11 Blatch. 513)
Trueman, Ex parte (1 Deac. & Ch.
464
V. Loder (11 A. & E. 589)
Truitt V. Baird (12 Kas. 420)
Trumbo i'. Hamel (29 S. C. 520,
S. E. 83)
Tubbs r. Richardson (6 Vt. 442) 303, 304
Tucker v. Adams (63 N. H. 361) 10
V. Cole (54 Wis. 639, 11 N. W.
703)
V. Moreland (10 Pet. 58)
V. Oxley (5 Cranch 35)
V Peaslee (36 N. H. 167)
Tuckerman r. Newhall (17 Mass. 581)
Tudor r. White (27 Tex, 584)
Tuff, In re (19 Q. B. D, 88)
Tumlin v. Goldsmith (40 Ga. 221)
Tupper V. Haythorne (Gow 135) 115, 133
Turbeville v. Ryan (1 Humph. 113) 151
Turner, Ex parte (4 Deac. & Ch. 169) 489
V. Bissell (14 Pick 192) 45
V. Burrows (5 Wend. 541) 318, 319
V. Duglass (77 Tex. 619, 14
S. W. 221) ' 135
V. Jaycox (40 N Y. 470) 182
V. Major (3 GifE. 442) 237
433
445
520
114
258
8
4, 480
118
16
446
89
143
407
497
69
TABLE OF CASES.
Ixxv
Turner v. Ross (1 R. T. 88) 159, 160
. Sm.irt (6 15. & C. 603) 157
r. Turner (5 S. W. 457) 2^3
Turnipseed v. Goodwin ('J Ala. 372) 214,
234, 458
Turton r. Tiirton (42 Cli. D. 128) 242
Tutt r. Adams (24 Mo. 18G) 171, 172
V. Laii.l (50 Ga. 338) 202
Tuttle y. Cooper (5 Pick. 414) 69, 107
V. ( 10 Pick. 281) 22, 469
r. Kskri(I^;e (2 Muiif. 230) 150, 152
Twiss r. iMassey (1 Atk. 07) 491
Twopenny r. Youn^ (3 H & C. 208) 310
Twyt'onl o. Trail (7 Sim. <J2) 123
Tyler v. Scott (45 Vt. 261) 58
Tylor I'. Taylor (8 Barb. 585) 303, 304
Tynherg v. Cohen (67 Tex. 220, 2
S. W. 734) 272
Tyng (,. Thayer (8 All. 3',)1) 507, 522
Tyree v. Lyon (07 Ala. 1) 99
Tyrrell v. \Vaslii)urn (6 All. 466) 553
Tyson v. Pollock ( 1 Barr 375) 143
u.
Uhl V. Bingaman (78 Ind. 365) 404
r. Harvey (78 Ind. 26) 405
Uliler V. Browning (4 Dutcli. 79) 172
r. Semi)le (20 N. J. Eq. 288) 362
Ulery r. Ginrick (57 111. 531) 82
Ullman v. Myrick (93 Ala. 532, 8 So.
410) 134
Uimer v. Cunningham (2 Me. 118) 317
Union Bank v. Bank of (Commerce
(94 III 271) 475,476,487
V. Day (12 Heisk, 413) 89
r. Eaton (5 Humpli. 499) 89, 170
V. Hall (1 Harp. 245) 376, 377
V. Knapp (3 Pick. 113) 514
r. Underhill (102 N. Y. 336, 7
N. E. 293) 98, 99
United Ins. Co. i'. Scott (1 Johns. 106)
54, 57, 65
U. S V. Astley (3 Wash. C. C. 508)
91, 150, 152
I'. Bainbridge (1 Mas. 71) 16
V. Bradbury^ (2 Ware 146) 425
i: Cuslniian (2 Sumn. 437) 76, 92
V. Hack (8 Pet. 275) 325
'•. Jellico Mt. Coal & Coke Co.
(46 F. R. 432)
V. Kirkpatrick (9 Wheat. 737)
568
421,
425
V. Lyman (1 Mas. 505) 91
V. Thoniasson (4 Biss. 99) 119, 124
V. Thompson (Gilp. 614) 143
V. Trans. Missouri Freight
Assoc. (53 F. K. 440) 560, 566, 568
V. iJnion Pacific R. R. (98 U. S.
569) 558
V. Ward well (5 Mas 82) 425
U. S. Bank r. Binney (5 Mas. 176) 29,
36. 114, 212,394,443, 520
V. Davis (2 Hill 264) 413
U. S. Express Co. v. Bedbury (34 111.
459) 333
Univ. of Cambridge v. Baldwin (5
M. & W. 580) 315
Universities of Oxford & Cambridge
V. Richardson (6 Ves. 706) 216
Updyke r. Doyle (7 R. I. 446) 427
Upham V. Hewett (42 Wis. 85) 58
V. Naylor (9 Mass. 490) 346
Usborne, A'x jjarte (1 Glyn. & J. 358)
494, 495
Usher v. Dauncey (4 Camp. 97) 180, 380
Vail V. Winterstein (53 N. W. 932) 23
Valentine r Ford (2 Browne 193) 23
V. Hickle (39 Oh. St. 19) 90
V. Wysor (123 Ind. 47, 23 N. E.
1076) 435, 438, 512
Vallett V. Parker (6 Wend. 615) 169,
171, 180
Van Aken v. Clark (82 la. 256, 48
N. W. 73) 364
Van Alstyne ;.'. Cook (25 N. Y. 489) 542
Van Amringe v. Ellmaker (4 Barr
281) 260, 262, 265, 508
Van Brunt v. Matlier (48 la. 503) 84
Vance v Blair (18 Oh. 532) 210, 259
r. Campbell (8 Humph. 524) 82
Vanderburgh v. Hull (20 Wend. 70)
45,60
Vanderhurst v. De Witt (95 Cal. 57,
30 Pac. 94) 69
Van Deusen v. Blum (18 Pick 229) 150,
155
Vandike v. Rosskane (67 Pa 330) 538
Vanduzer r. McMillan (37 Ga. 299) 523
Van Dyke v. Seelye (52 N. W. 215) 83
Van Eps v. Dillage (0 Barb. 244)
Van Epps v. Van Deusen (4 Paige
64)
Van heath v. Turner (Winch 24)
Van Horn v. Corcoran (127 Pa. 255,
18 Atl. 16)
Van Ingen v. Whitman (62 N. Y. 513) 538
Van Keuren v. Parmalee (2 N. Y.
525) 140, 160, 163
Vann v. Barnett (2 Bro. C. C. 158) 517
Van Ness v. Forrest (8 Cranch 30) 76,
256, 265
-^ V. Van Ness (32 N. J. Eq. 669) 199
Vannoy v. Klein (122 Ind. 416, 23
N. E. 526) 69
Van Ostrand v. Reed (1 Wend. 424) 483
Van Reimsdvk v. Kane (1 Gall. 630) 69
Van Sandau'y. Moore (1 Russ. 464) 209,
394, 396, 397, 510
Van Scoter v. Lefferts (11 Barb. 140) 136
Van Slvck v. Skinner (41 Mich. 186,
1 N. W. 971) 369
Van Staden v. Kline (64 la. 180, 20
N. W. 3) 350, 364
Van Valen v. Russell (13 Barb. 593) 76
95
479
2
537
Ixxvi
TABLE OF CASES.
Van Valkenburgh v. Bradley (2 la.
108)
Van Winkle v. Ketclium (3 Cai. 323)
Vanzaiit r Kay (2 Humph. 106)
Varner v. Nobleborough (2 Me 121)
Varner's Appeal (16 All. U8, 2Monag.
228)
Vassar v. Camp (14 Barb. 356)
Veal V. Keely Co. (86 Ga. 130, 12 S. E.
297)
Veale v. Hassan (3 McC 278)
Venning v. Leckie (13 East 7)
Vent )'. Osgood (19 Pick. 572)
Venus, The (8 Cranch 253) 309,
Vere, Ex jiarte (19 Ves. 93, 1 Rose
281)
c. Ashby (10 B. & C. 288)
12,
170,
Vergennes, Bank of, v. Cameron (7
Barb 143) 163, 180,
Vermillion v. Bailey (27 111. 230)
Vernon r. Brunson (25 Atl. 511)
f. Hallam (34 Ch. 1). 748) 237,
V. Jt-fferys (2 Stra. 114(1) 316,
V. Manhattan Co. (17 Wend. 524,
22 Wend. 183) 180, 405, 408,
V Vawdrv (2Atk. 1 19, 2 Kq. Cas.
Abr. 8, Barn. Cli. 280) 611,514,
Vesey v. Mantel! (9 M. & W. 323)
Vetterlin r. Barnes (0 F. R 693)
Vez V. Emerv (5 Ves 144)
Vibbard v Roderick (51 Barb C16)
Vicary's Case (Bac. Abr. Eachnce
623)
Vice V. Anson (7 B. & C 409) 6,
■ V. Fleming (1 Y. & J. 227) 79,
383, 387,
Vigers V. Sainet (13 La. 300)
Villa V. Jonte (17 La Ann. 9) 6,
Vinal Burrill (16 Tick. 401)
Vincent v. Martin (79 Ala 540) 432,
Viner v. Cadel (3 Esp. 90)
Voorhees v. Wait (3 Green 343)
Vose r. Grant (15 Mass. 521)
Vosper V. Kramer (31 N. J. Eq. 420)
VuUiamy v. Noble (3 Mer. 614) 399,
446, 447, 467,
381
16
69
483
512
13
98
160
257
16
310
467
75,
430
184
508
537
239
469
412
515
257
378
453
47
164
104
,80,
402
549
336
162
433,
451
503
20
269
332
432,
482
W.
Waddell i'. Cook (2 Hill 47) 343
Wade V. Jenkins (2 Giff. 509) 442
?;. Pratt (12 Heisk. 231) 203
Wadhams v. Page (1 Wash. St. 420,
25 Pac. 462) 418
Wadley v. Jones (55 Ga. 329) 266
Wadsworth v. Manning (4 Md. 69) 68
Wagner v. Freschl (56 N. H. 495) 168
V. Wagner (50 Cal. 76) 508
Wagnon v. Clay (1 A. K. Marsh. 257) 147,
185
Wainwriglit v. Waterman (1 Ves. 311) 449
Wait, In re (IJac. & W. 005) 468, 470, 471
Wait V. Brewster (31 Vt. 516)
Waite V Dodges (.34 Vt. 181)
V. Foster (33 Me. 424)
r. Tliayer (118 Mass. 473)
Waithman, Ex parte (2 Mont.
364)
V. Miles (1 Stark 181)
V. (4 Camp. 373)
Wakeham, In re (13 Q. B. D. 43)
103
82
382
87
A
164, 413
374, 388
377
474
Waland v. Elkins (1 Stark 272) 66
Waiburn v. Ingilby (1 My. & K 61) 281,
549, 652
Walcott V. Canfield (3 Conn. 198) 147
Waldeck v. Brande (61 Wis. 679, 21
N W. 633) 400
Walden v. Sherburne (15 Johns. 409) 132,
139, 140, 150, 163, 1G4, 169, 206
Waldo Bank r. Greely (16 Me. 419) 171
r. Lunibert (16Me. 416) 180,185, 186
Walford v De Pienne (2 Ksp. 554) 23
Walker, Ex pmtf (1 Bose 441) 488, 496
V. Bean (34 Minn. 427, 26 N W.
148
Brown (66 Tex. 556, 1 S. W.
103, 104
Grain (17 Barb. 119) 550
])ul)eiTy (1 A. K. Marsh. 189) 163
" • -- ■ 33Q
211
42, 60
293, 297,
300, 301
16 S. C.
76) ' ■ 131
260
143
614
V. Eyth (25 Pa. 216)
V. Harris (1 Anst. 245)
V. Hirscli (27 Ch. 1). 460)
V. House (4 Md. Ch. 39)
■V. Kee (14 S. C 142,
Long (2 Browne 125)
V. McCiilh)cli (4 Me 421)
V. Symonds (3 Swanst. 64)
V. Trott (4 Kdw. Ch. 38) 288, 295
V. Wait (50 Vt. 608) 4, 159, 247, 433
V. Whipple (58 Mich. 476, 25
N. W. 472) 392, 393
Wall V. File (37 Pa 394) 90, 488
Wallace v. Agry (4 Mas. 3.36) 483
V. Fairman (4 Watts 378) 92
V. Fitzsimmons (1 Dall. 248) 386,443
V. Kelsall (3 B & C. 273) 179
V. (7 M. & W. 264) 179,
274
V. Patterson (2 H. & McH. 463) 468,
476
Wallace's Appeal (104 Pa. 569)
Waller v. Davis (59 la. 103, 12 N. W.
798)
Walling V. Burgess (122 Ind. 299, 22
N. E 419)
Wallingford v. Burr (17 Neb 137)
Wallis V. Hirsch (1 C. B. n. s. 416)
V. Wallace (6 How. Miss. 254)
V. Wood (7 S. W. 852)
Wallworth v. Holt (4 My. & C. 619)
344
394
361
237
219
307
68,69
281.
4.57, 510
Walmsley v. Cooper (3 P. & D. 149) 145
V. Walmsley (3 J & Lat. 556) 520
Wain V. Hewes (5 S & R. 468) 437
Walrath v. Viley (2 Bush 478) 103
TABLE OF CASES.
Ixxvii
Walsh V. Adams (3 Denio 125)
321, 325,
343
471
525
146
160
150
22
V. Kelly (42 Barb. <J8)
V. McKeen (75 Cal. 519, 17 Pac
673)
Walton V. Dodson (3 C. & P. 1G2)
V. Kohinsoii (5 Ire. 341)
V. Tusten (40 Miss. 560)
Waiiisley v. Lindeiiberger (2 Rand
478)
Wann v. Kelly (5 F. R. 584) 8
Want i'. Roese ( I Bing 18) 257, 2G7
Warbrittoii i\ Cameron (10 Ind. 302) 253
Ward u. Bodenian (1 Mo. Ap]). 272)
u. Brampston (3 Lev. 302)
V. Brigiiam (127 Mas.s. 24)
V. Dalton (7 C. B. 643)
y. Gaunt (6 Dner 257)
V. Jolinson (13 Mass 148)
V. Leviston (7 Blaekf. 460)
Morris (4 II. & McH. 330)
66
320
50
485
54
76, 01
273, 317
468
Motter (2 Rob. Va. 536) 76, 91,
93, 94
V. Newell (42 Barb. 482) 539, 542
V. Society of Attorneys (1 Coll.
379) 551
V. Tiiompson (1 Newb. Adm. 95; 12,
55, 102
r. Tyler (52 Pa. 393) 376
Warden v. Hughes (3 Wend. 418) 172
Warder v. Newdigate (11 B. Mon. 174) 179
Wardwell r. Haight (2 Barb. 549) 408, 411
Ware v. Clowny (24 Ala. 707) 320
Warfield r. Booth (33 Md. 63) 236
Waring ,: Cram (1 Pars. Cas. 522) 438,443
V. Nat. Marine Bank (74 Md.
278, 22 Atl. 140) 44, 47
0. Robinson (1 Hoff. Ch. 524) 155,301
Warner v. Cunningham (3 Dow 76) 127,
432
V. Griswold (8 Wend. 665) 35, 317
V. Juif (38 Mich. 602) 203
V. Smith (9 Jur. N. s. 168) 33
Warren, hi re (Da v. 320) 7, 35, 74, 111,
183, 349
V. Ball (37 111. 76) 409
». Batchelder (15 N. H. 129) 482
V. Dickson (30 111. 363) 99
V. Farmer ( 100 Ind. 593) 332, 478
V. French (6 All. 317) 87
V. Smitli (9 Jur. n. 8. 168) 523
V. Taylor (8 Sim. 599) 278
V. Wheelock (21 Vt. 323) 264
V. Willis (38 Tex. 225) 337
Warriner v. Mitchell ( 128 Pa. 153, 18
Atl. 337) 182
Warring v. Hill (89 Ind. 497) 254
Warwick v Bruce (2 M. & S. 205) 20
Washburn r. Bank of Bellows Falls
(19 Vt. 278) 325, 327, 328, 330, 337, 338
V. Goodman (17 Pick. 519) 380, 383,
384, 399, 432, 436, 438, 443, 446
V. Pond (2 AH. 474) 95
Watchman, The (1 Ware 232) 468
Waterer v. Waterer (L. R. 15 Eq. 402) 354
Waters v. Taylor (15 Ves. 10) 280, 293,
295, 296, 297, 298, 508, 510
V. Taylor (2 Ves. & B. 299) 342, 371,
391, 455, 456, 457, 458, 459
V. Tompkins (2 C M. & R. 723) 158,
421
Watertown, Bank of, v. Landon (45
N. Y. 410) 49, 51
Watkins, Ex parte (1 Mont. & McA.
57) 490,491,498
V. Hill (8 Pick. 522) 483
Watkinson v. Bank of Penn. (4 Whart.
432) 403, 406, 413
Watney v. Wells (L. R. 2 Ch. 250) 202,
454, 527
Watson, Ex parte (16 Ves. 265) 21
, (19 Ves. 459) 30, 32, 40, 77, 109,
271, 498
, (2 Ves. & B. 414) 123
, (4 Madd. 477, Buck 449,
492) 472, 499
V. Bourne (10 Mass. 337) 468
V. Fletcher (7 Gratt. 1) 9, 10, 269
V. Hinchman (42 Mich. 27, 3
N. W. 236) 119
V. Miller (55 Tex. 289) 333
V. Murray (23 N. J. Eq. 257) 9
V. Owens (1 Rich. Ill) 76
V. Sheath (4 Madd. 477) 471
V. Taylor (2 Ves. & B. 299) 475
V. Wells (5 Conn. 468) 118. 165, 413
V. Woodman (L. R. 20 Eq. 721) 159
Watt V. Kirby (15 111. 200) 88
Watts 0. Adler (130 N. Y. 646, 29 N.
E. 131) 508
r. Brook (3 Ves. 612) 9
V. Patton (66 Miss. 54, 5 So. 628) 196
V. Rice (75 Ala. 289) 321, 333, 3-34
V. Say re (76 Ala. 397) 347
Waugh V. Austen (3 T. R. 437) 469
V. Carringer (1 Yerg. 31) 91
V. Carver (2 H. Bl. 235) 30, 35, .39,
40, 46, 64, 76, 77, 79, 2.59. 492
Way V. Bassett (5 Hare 55) 157, 448
V. Stebbins (47 Mich. 296, 11 N.
W. 166) 352
Waydell v. Luer (5 Hill 448) 94, 483
r. (3 Den. 410) 95
Wead V. Richardson (2 Dev. & B. 535) 97
Weald of Kent Canal Co. v. Robinson
(5 Taunt. 801) 555
Weaver v. Ashcroft (50 Tex. 427) 231, 335
V. Jones (24 Ala. 420) 17
V. Upton (7 Ired. 458) 201, 248, 258
V. Tapscott (9 Leigh 424) 94
V. Weaver (46 N. H. 188) 336, 470
Webb, In re {2 J. B. Moore -500) 194, 269
, (4 Sawy. 326) 470
V. Brooke (3 Taunt. 6) 9
V. Fordyce (55 la. 11, 7 N. W.
385) 199
Webster v. Bray (7 Hare 159) 221, 233,
234
V. Lawson (73 Wis. 661, 41 N.
W. 710) 254
Ixxviii
TABLE OF CASES.
Webster v. Stearns (U N. H. 498) 91, 161
0. Webster (3 iSwanst. 490) 242, 289,
387, 441, 440
Wedderburn v. VVedderburn (22 Beav.
84) 236, 237, 440, 442, 443, 447, 523
V. (2 Keen 722, 4 My. & C.
41) 501,513,514
Weed V. Kello-'',' (6 McLean 44) 165
r. Richardson (2 Uev. & B. 535) 172
V. Small (7 Paige 572) 515
Weeks v. McClintock (50 Ark. 193, 6
S. W. 734) 201,212
— V. Mascoma Rake Co. (58 N. H.
101) 150, 154
i: Weeks (5 Ired. Eq. Ill) 304
Weil V. Jones (70 Mo. 560) 347, 437
r. Simmons (66 Mo. 617) 24
Weisiger v. Wood (15 S. E. 597) 23, 24
Weisman v. Smith (6 Jones Eq. 124) 305
Weld V Oliver (21 Pick. 559) 303, 304
Weller v. Baker (2 Wils. 414) 320
Wells V. Brown (S3 Ala. 161, 3 So.
439)
I'. Carpenter (65 111. 447)
V. ElUs (68 Cal. 243, 9 Pac. 80)
30G
266
374,
480
152
132
180
260
82
200
222
68
492
V. Evans (20 Wend. 251, 22
Wend. 324)
V. March (30 N. Y. 344)
V. Masterman (2 Esp. 731)
V. Simonds (51 How. Pr. 48)
-— V. Turner (10 Ind. 133)
V. Wells ( Ventr. 40)
Welsh V. Canfield (60 Md 400)
/'. Speakman (8 W. & S. 257)
Wendell ;-. Van Rensselaer (1 Jolins
Ch. 344)
Wendling v. Jennisch (52 N. W. 341) 526
Werner v. Leisen (31 Wis. 169) 450
Wesson v. Washburn Iron Co. ( 13 All.
95) 361
West, Ex parte (2 De G. M. & G. 198) 21
, In re (39 F. R. 203) 478
V. Citizens' Ins. Co. (27 Oh. St. 1) 235
V. Randall (2 Mass. 181) 469
V. Skip (1 Ves. 237) 130, 137, 320,
436, 465, 468, 475, 500, 524
West Branch Bank v. Moorehead (5
W. & S. 542)
Westcott ('. Price (Wright 220)
r. Tyson (38 Pa. 389)
Westerls v. Evertson (1 Wend. 532) 35,
262, 265, 268
Western Assur. Co. v. Towle (05 Wis.
247)
Western Bank of Scotland v. Needell
(1 F. & F. 401)
Western Mass. Ins. Co. v. Riker (10
Mich. 279)
Western Stage Co. v. Walker (2 la.
512) 140, 189, 190
Weston, Ex parte (12 Met. 1) 182, 314,
315, 488
West Point Foundry Assoc, v. Brown
(3 Edw. Ch. 284) 5
420
240
471
105
410
236
West Virginia Transp. Co. i'. Oliio
River Pipe Line Co. (22 W. Va. 617) 507
Wetmore v. Baker (9 Jolins. 307) 05, 200
Wetter v. Schlieper (4 E. D. Smith
707) 135, 295, 297
Weyer v. Thornburgh (15 Ind. 124) 477
Wevlan v. Elkins (Holt 227, 1 Stark.
•2.T2) 124
Wiialey v. Moody (2 Humph. 495) 184
Wharton v. Fisiier (2 S. & R. 178) 479
V. Walker (4 B. & C. 103) 482
V. Woodburn (4 Dev. & B. 507) 93
Wiiately v. Manhim (2 Esp. 008) 69
Wheatley v. Calhoun (12 Leigh 204) ,353
Wheeler, Ex porle (Buck 25) 05, 494
V. Arnold (30 Mich. 304) 249
V. Sage (1 Wall. 518) 204
V. Rice (8 Cush. 205) 173
V. Van Wart (9 Sim. 193, 2 Jur.
252) 371, 373, 374, 394, 396
Wheelock v. Doolittle (18 Vt. 440) 159,
160
Whelen v. Watmough (15 S. & R. 153) 507
Whetham v. Davey (30 Ch. D. 574) 521
Whetstone v. Shaw (70 Mo. 575) 260, 268
WhiUdin v. Bullock (4 W. N. C. 234) 547
Whipple V. Parker (29 Mich. 370) 550
Whitaker v. Brown (16 Wend. 509) 88. 89,
90, 123, 143, 169, 172, 206
Whitcomb v. Converse (119 Mass. 38) 202,
222 5'''4 525
V. Whiting (3 Doug. 652) 'l50,'l57,
158, 159
White, In re (1 Ch. D. 514) 444
;;. Boone (12 S. W. 51) 400
V. Dougherty (Mart. & Y.309) 481
V. Eiseman (134 N. Y. 101, 31 N.
E. 276) 533, 538
V. Fitzgerald (19 Wis. 480) 302
V. Gibson (11 Ired. 283)
V. Hackett (24 Barb. 290)
V. (20 N. Y. 178)
V. Hale (3 Pick. 291)
V. Harlow (5 Gray 403)
V. Jones (38 111. 159)
V. (14 La. Ann. 681)
V. Murphy (3 Rioli. 369)
V. Osborne (21 Wend. 72)
v. Phelps (12 N. H. 386)
r. Reed (124 N, Y. 408, 26 N. E.
1037)
V. Toles (7 Ala. 569)
V. Tudor (24 Tex. 039)
V. Union Ins. Co. (1 N. & McC.
559) 399, 500
V. Woodward (8 B. Mon. 484) 291,
344
Whitehead r. Barron (2 M. & R. 248) 426
V. Cliadwell (2 Duv. 432) 477
Wiiiteman r. Smith (12 Rich. L. 595) 126
Whiteright r. Stimpson (2 Barb. 379) 436,
540
Whitesides v. Lafferty (3 Humph.
150) 299
Whiting V. Furanet (1 Conn. 60) 474
164
542
542
156, 160
268
340
312
413
303, 321
303
524
178
381
TABLE OF CASES.
Ixxix
VVliitinan v. B. & M. R. R. (3 All 133) 356
/•. Bowdeii (27 S. C 53, 2 S. E.
6;J0) 196
V. Keith (18 Oh. St. 134) 4
V. Leonard (3 Tick. 117) 414, 458,
404
/•. Porter ( 107 Mass. 522) 58, 561
Whitman v. liohinson (21 Md 30j 208,293
Wliitiiiore, J'Ji: j/(irtc (3 Deac 305j 42b
, (.3 Mont. & A. 627j 482, 484,
485
173
264
18
69, 107
53,60
316
y. Adams (17 la, 567)
Whitney v. Dean (5 N. II. 249)
ij. Dutcli (14 Mass. 457j
r. Ferris (10 Johns. 66j
ij. Ludington (17 Wis. 140)
f. McKechnie (1 Bosw. 427)
r. Reese (11 Minn. 138) 160
r. Sterling ( 14 Johns. 215) 69
Whiltaker v. Howe (3 Beav. 389) 241
Wliittenton Mills v. Upton (10 Gray
582) 27
Whittingham v. Hill (Cro. Jac. 494) 16
Wliittle V. McFarlane (1 Knai)p 312) 200
Wliitton V. Hulbert (Freem. Cli. 231) 131
V. Smith (Freem. Ch. 231) 371
Whitwell /'. Warner (20 Vt. 425) 375
Whitworth r. Hams (40 Miss. 483) 279
Wiivwall c. Champion (2 Stra. 1083) 16
Wic-kliam ». Davis (24 Minn. 167) 344
r. Wickham (2 Kay & J. 478) 424
Widdifield V. Widdifield (2 Binn. 245) 6
Wiegand v. Copeland [U F. R. 118) 352,
360, 366
Wiesenfeld v. Stevens (15 S. C. 554 1 351
Wigfield V. Potter (45 L T. Rep. 612) 557,
561
Wiggin V. Cummings (8 All. 153) 249, 256
y. Goodwin (63 Me. 389) 136, 509
0. Tudor (23 Pick. 444) 143, 144
Wiggins V. Hammond (1 Ma 121) 88
Wightman v. Tovvnroe (1 M. & S. 412) 65,
452, 503
Wilby V. Phinney(15 Mass. 116) 261, 263,
267, 384, 446
Wilcox V. Jackson (7 Col. 521) 132, 135
V. Kellogg (11 Oiiio 394) 332
f. Koatli (12 Conn. 550) 19
—:— V. Singletary ( Wright 420) 149
Wild V. Dean (3 All 579) 429, 484
V. Davenport (,48 N. J. L. 129, 7
295) 46,51,65,451,452
Atl.
W^iide V. Jenkins (4 Paige 481)
Wilder V. Keeler (3 Paige 167)
Wildes V. Fessenden (4 Met. 12)
512, 515,
518
330, 444
94,415,
484
485
337, 343
165
Wildman, Ex parte (1 Atk. 109)
Wiles V. Maddox (26 Mo. 77)
Wiley V. Griswold (41 La. 375)
Wilkins V. Davis (15 N. B. R. 460) 463,
466, 469
• V. Pearce (5 Den 541) 79
Wilkinson, Ex parte (13 Sim. 475) 495
c. Candlish (19 L. J. Ex, 166) 82
Wilkinson t'. Frasier (4 Esp. 182)
V. Henderson (1 M. & K. 582)
445,
V. Jett (7 Leigh 115)
V. Stafford (1 Ves. Jr. 41)
V. Tilden (9 F. K. 683) 284, 286,
V. Torkuigton (2 Y. & C. 726)
Wilks V. Back (2 East 142)
Willard V. Decatur (59 N. H. 137)
(.'. Stone (7 C(jw. 22)
Willett V. Blaudford (1 Hare 253)
440,
V. Brown (65 Mo. 138) 362,
V. Chambers (Cowp. 814) 37,
Williams, Ex parte ( 1 1 Ves. 3) 129,
326, 327, 328, 338, 378, 383, 391,
464, 465, 475, 490, 493, 494,
, (Buck 13) 316, 428, 481,
, (3 Mont. D. & D. 433)
V. Attenborough (T. & R. 70)
V. Bank of Michigan (7 Wend.
542)
V. Barrett (10 Kas 455)
» V. Beaumont (10 Bing. 270)
V. Bingley (2 Vern. 278)
>\ Bowers (15 Cal. 321)
V. Brimhall (13 Gray 462)
V. Butler (35 111. 544)
V. Farrand (88 Mich. 473, 50 N.
W. 446) 237, 238, 239, 243,
r. Fletcher (129 111. 356, 21 N.
E. 783)
V. Gage (49 Miss. 777) 327,
V. Gdchnst (11 N H. 535) 96,
V. Gillespie (30 W. Va 586, 5 S.
E. 210)
V. Gillies (75 N Y. 197)
V. Gridley (9 Met 482)
V. Henshaw (11 Pick 81) 252,
257, 261, 262, 263, 265,
V. (12 Pick 378)
r. Hitchings (10 Lea 326)
0. Hodgson (2 H & J. 474) 91
93, 154, 164,
V. Jones (oB.&C 108)
r. Keats (2 Stark. 290) 107,
V. Lewis (115 Ind. 45, 17 N. E.
262)
— V. Manning (41 How. Pr. 454)
— V. Moor (11 M. & W. 256)
V. Rawlinson (3 Bing. 7l)
— V. Roberts (6 Cold 493) 118,
— V. Savage Mfg Co. (1 Md. Cli.
306)
— V. Shelden (61 Mich. 311, 28 N.
W. 115)
— V. Soutter (7 la. 4-35)
— V. Thomas (6 Esp. 18) 82,
— V. Thorp (2 Sim. 263)
— V. Walbridge (3 Wend. 415) 172,
— V. Walshy (4 Esp. 220)
— ('. Whedon (109 N. Y. 333, 16 N.
E 365)
60
330
482
60
453
510
210
183
293
20
200,
523
363
116,
532
136,
434,
500
483
4r4
34
549
97
320
286
402
97
5
244
61
345
172
135
84
161
255
522
522
144
,92,
508
12
403,
407
165
163
16
425
135
515
350
46
169
495
184
150
136
Ixxx
TABLE OF CASES.
Williams v. Williams (2 Swanst. 253,
1 Wils. Vh 478)
V. Wilson (-1 Sandf. Ch. 379)
241, 290, •2!)7,
Williamson v. Barbour (9 Ch. D. 521))
u. Fox (38 Pa. 214)
V. Havcock (11 la. 40)
V. Johnson (1 li. & C 14G) 111,
182,
V. McGinnis(ll B. Mon 74) 12(5,
V. Naylor (3 Y. & C. 208)
V. Wilson (I Bland 418) 297,
300, bOl, 391, 432,456,
Willings V. Consoqua (1 Pet C C.
301) 76,93,
Willis I'. De Castro (4 C. B n s. 21G)
V. Dvson (1 Stark. 164) 80, 387,
V. Freeman (35 Vt. 44) 345, 350,
V. Green (5 Hill 232)
V. Hill (2 Dev. & B. 231) 88,
V. Jerncsran (2 Atk. 251 ) 512,
V. Hector (50 F. K. 684)
V. Sharp (113 N. Y. 686, 21 N
E. 705) 65, 451,
Willison V. Patteson (7 Taunt. 439)
Williston V. Camp (9 Mont. 88, 22 Pac
501)
WiUock, Ex parte (2 Rose 892)
Wills V. Cutler (P.l N. H 405)
V. Sinimonds(51 How. Pr 48)
Willson (• Gomparts (11 Johns 193)
V. Nicholson (61 Ind 241)
V. Owen (30 Mich. 474)
Wilniot V The Ouachita Belle (32 La.
Ann. 607)
Wilsford r. Wood (1 Esp. 182) 12,
Wilson, Ex parte (18 Ves 439)
I'. Bowden (8 Rich. 9)
V. Campbell (5 Gilm 383)
V. Comine (2 Johns. 280) 320,
V Curzon (15 M. & W. 532)
V. Cutting (4 Moo. & S 268)
V. Fitchter (3 Stock. 71)
V. Gibbs (2 Johns 282)
V. Greenwood (1 Swanst 471)
294, 295, 297. 298, 299, 378, 383,
443, 456, 463, 464, 466, 501,
V. Hirst ( 1 Nev. & M 742)
V. Hunter (14 Wis. 683) 152,
V. Johnstone (L. R 16 Eq. 606)
V. Lassen (15 Cal 116) 454
V. Lewis (2 M. & G. 197)
V. (2 So. N. R. 115)
V. Mower (5 Mass 411)
V. Reed (3 Johns. 175) 303, 304.
V. Richards (28 Minn. 337)
V. Robertson (21 N. Y. 587) 332,
V. Soper (13 B. Mon. 411) 136,
328
V. Stilwell (14 Ohio 464)
V. Torbert (3 Stew. 296)
V. Turnman (6 M. & G. 236)
287
239,
440
118
405
283
113,
•A2b
. 144
451
298,
,463
143
144
402
468,
476
38
160,
181
518
105
452
26
374
499
83
58
470
433
9
155
313
480
138
11
476
553
254
293
475
129,
391,
.509
426
355
529,
530
,507
97
176
145
321
168
490
327,
338
380
160
118
Wilson V. Wallace (8 S. & R. 53) 113, 272
273,312,498
V. Waugh (101 Pa. 233) 160, 161,
389
V. Whitehead (10 M. & W. 503) 57,
102
V. Williams (14 Wend. 146) 96, 99,
172, 174
Windham County Bank v. Kendall
(7 R. I. 77) 170
Winchester v. Glazier (152 Mass. 316,
25N. E. 728) 212
Winget V. Heathcote (4 Y. & C. 187) 298
Wing Ho ('. Baldwin (70 Cal. 194,
11 Pac. 565) 228
Winship v. Bank of U. S. (5 Mas.
176) 74, 142, 143, 168, 170
I, (5 Pet. 529) 32, 55, 73, 89,
114, 131, 140, 142, 143, 168, 170, 206
Winslow V. Newlan (45 111. 145) 103
V. Wallace (116 Ind. 317, 17 N.
E. 923) 477
Winsor i-. Cutts (7 Me 261) 63
Winsten v Ewing (1 Ala. 29) 325
Winter v. Innes (4 Mv. & C. 101) 96, 482
V. White (1 Br. & B 350) 260
r. (3 J B. Moo 674) 265
Wintermute v. Torrent (83 Mich. 555,
47 N. W 358) 81, 247
Wintle V. Crowther (1 C & G 316) 75,96,
97, 142, 170, 176
Wipperman v. Stacy (80 Wis 345, 50
N. W. 336) 223
Wise V. Copley (36 Ga. 508) 97, 99
I'. Frey (7 Neb. 134) 335
Wish V. Small (1 Camp. 331) 55, 63
Wisham v. Lippincott (1 Stock. 353) 336
Witter i: McNiel (4 111. 433) 151
V. Richards (10 Conn. 37) 291, 325,
327, 344, 498
Withers v. Withers (8 Pet. 359) 520
Wolbert v. Harris (3 Halst. Ch. 605) 295,
296, 301
Wolf V. Mills (56 111. 360) 119
Wood, Ex parte (1 De G. M. & G. 272) 130
, (1 De Gex 134) 488, 494
, (3 Mont. D. & D. 314) 494
V. Barber (90 N. C. 76) 159, 160
V. Beath (23 Wis. 254) 55
V. Bodwell ( 12 Pick. 268) 483
V. Braddick (1 Taunt. 104) 158, 161,
165, 376, 385
V. Brush (72 Cal. 224, 13 Pac.
627) 251
;;. Connell (2 Whart. 542) 142
V. Copper Miners' Co. (17 C. B.
561) 220
V. Dodgson (2 M. & S. 195) 472, 473.
499
V. Dummer (3 Mas. 312) 436
V. Erie Ry. (72 N. Y. 196) 228
V. O'Kelley (8 Cush. 406) 273, 817
V. Pennell (15 Me. 52) 77, 104
V. Rutland & A. Ins. Co (31 Vt.
552) 235, 312, 313
TABLE OF CASES.
Ixxxi
Wood 0. Scoles (L. R. 1 Ch. 3G9) 203, 519
u. Slieplierd (2 Pat. & II. 442) i;J2,
148, 149
V. Vallette (7 Oh. St. 122) 55
Woodbridge v. Swann (4 B. & Ad.
633) 471
V. Wilkins (3 How. Miss. 360) 349
Wooddrop v. Wards (3 Dcsaus. 203) 327,
500
Woodford v. Downer (13 Vt. 522) 376
Woodgate, Ex parte (2 Mont. D. & D.
391) 494
Woodling r. Knickerbocker (31 Minn.
208, 17 N. W. 387) 125
Wooiimansie ''. Holcomb (34 Kas. 35,
7 Puc 003) 331, 332
Woodruff V. King (47 Wis. 261, 2
N. W. 4.52) 1.34
V. Scaife (83 Ala. 152, 3 So. 311) 83
V. Webb (32 Ark. 612) 203
Woods *•. Wilder (43 N. Y. 164) 26
Woodward, Ex parte (3 Mont. & A.
232) 448
, In re (4 Johns. 289) 16
V. Cowing (41 Me. 1) 52
V. (ijles (2 Vern. 110) 224
u. Ntwhall (1 Pick. 500) 22
V. Schatzell (3 Johns. Ch. 412) 288
V. Winsidp (12 Pick. 430) 147
Woodworth r. Bennett (43 N. Y. 273) 9
V. Downer (13 Vt. 522) 162
V. Fuller (24 111. 109) 307
Wooley V. Batte (2 C. & P. 417) 2()7
V. Kelly (1 B. & C. 68) 336, 414
Worcester Corn Exchange Co., In re
(4 I)e G. M. & (;. 180) 52, 78, 82, 118, 552
Word r. Word (90 Ala. 81, 7 So. 412) 293
Worniley r. Wormley (8 Wheat. 421) 514
Worrall v. Munn (5 N. Y. 221) 151, 153
Worsley v. De Mattos (1 Burr. 467) 493
Worts V. Pern (3 Bro. P. C. 558j 282
Wray v. Hutchinson (2M. & K. 235) 284,
455, 458
V. Milestone (5 M. & W. 21) 260, 262,
265
Wren r. Kirton (8 Ves. 502) 34
Wrexham v. Hudleston (1 Swanst.
514) 127, 458, 459
Wright V. Cobleigh (21 N. H. 339) 249
V. Cumpsty (41 Pa. 102) 253, 260
i\ Davidson (13 Minn. 449) 55
r. Hooker ( 10 N. Y. 51) 111
V. Hunter (1 East 20) 2-53
V. (5 Ves. 792) 254,267,276
V. Michie (6 Gratt. 354) 252, 257
V. Pratt (31 Wis. 99) 491
V. Pulhani (2 Chit. 121) 403, 406, 412
V. Hussell (13 Wils. 6-32) 314
r. Ward (65 Cal. 525, 4 Pae. 534) 344
V. Williamson (2 Penn. 978) 312, 316
r. Wright (2 Desaus. 244) 23
Wrightson r. Pullam (1 Stark. 375) 381,
403, 406, 412
Wyatt V. Hodson (8 Bing. 309) 157, 158
Wycoff V. Purnell (10 la. 332) 253, 262
Y.
Yale V. Eames (1 Met. 486) 382, 443
V. Yale (13 Conn. 185) 179
Yallop, Ex parte (15 Ves. 60) 490, 493
Yandes v. Lefavour (2 Blackf. 371) 144,
160
Yarbrough v. Bush (69 Ala. 170) 24, 333
Yarneil v. Anderson (14 Mo. 619) 96, 417,
419, 482
Yates V. Finn (13 Ch. D. 839) 213, 439
V. Lyon (61 N. Y. 344) 17
Yeager v. Wallace (57 Pa. 365) 78, 188,
302
Yeatman ;•. Woods (6 Yerg. 20) 362
Yeoman v. Lasley (40 Oh. St. 190) 35, 59
Yetzer v. Applegate (50 N. W. 66) 195
Yonge, Ex parte (3 Ves. & B. 34) 199, 471,
489, 497, 498
I,. (2 Rose 40) 497, 498
York V. Clemens (41 la. 93) 7, 350
V. Eaton (2 Freem. 23) 436
York & N. M. Ry. v. Hudson (16
Beav. 485) 384
York Co. Bank, Appeal of (32 Pa.
446) 327
Y'orkshire Banking Co. v Beatson (5
C. P. D. 109) 114
Young, Ex parte (2 Ves. & B. 242) 66, 326
, (Buck 179. 3 Madd. 124) 467
, (2 Rose 40)
V. Axtell (2 H. Bl. 243)
V. Brick (3 N. J. L. 66.3)
V. Clapp (32 N. E. 187)
V. Goodson (2 Russ. 255)
v. Hoglan (.52 Cal. 466)
V. Hunter (4 Taunt. 582) 75,
471, 474
64, 76, 104,
107
249, 260
331
145
508
101,
102, 426
r. Keighly (15 Ves. 557) 134, 436,
475, 554, 556
V. Smith (25 Mo. 341) 163
r. Tibbetts (32 Wis. 79) 407
V. Timmins (1 Cr. & J. 331) 401
V. Wheeler (34 F. R. 98) 6
Y^ounglove v. Liebhardt (13 Neb. 557,
14 N. W. 526) 248
Zimmerman v. Chambers (79 Wis. 20,
47 N. W. 947) 393
V. Erhard (83 N. Y, 74) 228
Zell's Appeal (126 Pa. 329, 17 Atl.
647) 202
Zent V. Heart (8 Barr 337 ) 1 59
Zollar V. Janvrin (47 N. H. 324) 403, 407
Zuel V. Bowen (78 111. 234) 170
/
A TREATISE
ON THE
LAW OF PARTNERSHIP.
THE LAW OF PARTNERSHIP.
CHAPTER I.
DEFINITION AND NATURE OF A PARTNERSHIP.
§ 1. Definition of Partnership. — Partnership is a legal entity
formed by the association of two or more persons for the purpose
of carrying on business together and dividing its profits between
theiu.^
The word " firm " is often used synonymously with " partner-
ship," thougii it might better be restricted to its original meaning,
the partners or members of the partnership taken collectively.
As, however, the distinction is not made by the courts it is
perhaps useless to insist upon it ; and the two words will in the
following pages be used synonymously.^
§ 2. Origin of Law of Partnership. — The law of partnership, as
it exists in England and in this country, constitutes a system liy
itself. Its origin cannot be found, excepting in the law mer-
chant, which is itself only the custom of merchants, adopted,
systematized, and enforced by the courts, (a)
(a) Thus the peculiar doctrines of the of the business), that the act of one
law of partnership, which most distinguish partner, in reference to a partnership
it from the common law, as that there is matter, is the act of all, are declared hy
no survivorship of property or rights be- the eailiest authorities to be "per lectern
tween partners (except for the settlement mercatoriam," and "pro benejicio com-
1 This is the definition of the Civil Code of New York, with the addition of the
worls " a legal entity formed by." It was criticised by Jessel, M. R., in Pooley v.
Driver, 5 Ch. D. 458, on the ground that it allows the formation of a partnership for
an illegal purpose. But an association for an illegal business would evidently be a
partnership, though an illegal one. See post, § 8, note. A collection of the definitions
which have been proposed for a partnership may be found in 1 Lindl. Part. p. 1 .
2 There can be no firm without at least two partners. Therefore in a State where
an action is allowed to be brought against a partnershi]) in the firm name the action
altogether fails if the business, though carried on under the name of A. & Co., is
owned by A. alone, Stirling v. Heintzman, 42 Mich. 449, 4 N. W, 165.
1
2 THE LAW OF PARTNERSHIP. [CH. I.
Commercial partnerships were known to the Romans ; and
their hiw recognized and regulated tliem. So far as commerce
was then conducted in a similar manner and upon similar prin-
ciples as at present, the rules of the Roman law are applicable
now ; for that law, quite as much as our own, applied to tlie
transactions of merchants a law founded upon their usages ; and
to this extent we may regard the Roman civil law of partnership
as similar to our own. As a very large part of commercial busi-
ness consists in forming and executing contracts whicli must be
governed by the law of contracts generally, and this is a part of
the common law, many of the principles applicable to partnership
are the same as those which regulate the common transactions of
men ; and so far the law of partnership may be said to be founded
upon the common law. We doubt, however, whether anything
is gained by references of this kind. The supposed analogies
between the law of partnersliip and other branches of the law, if
they sometimes afford ample illustration, lead to confusion and
error when we attempt to carry them far; or, by their help,
deduce from other departments of the law a rule which may
control and determine a question of partnership.
§ 3. Mercantile Idea of Partnership. — That a partnership is an
entity, distinct from the partners, is the view of the business world
everywhere. Merchants and accountants alike look upon a firm
as a body which has independent rights, as well against its mem-
bers as against strangers. Accountants credit the partners with
advances on the books of the firm, and debit them with over-
drafts, the accounts being kept between each partner individually
and the firm, not between the partners.
Since the law of partnership is founded upon the law merchant,
that is, the custom of merchants, we should expect to find the
mercantile conception of a partnership recognized by the law.
And such is the state of the law in those European countries
where the civil law is in force, as for instance in Scotland,' and
in Louisiana, where the Code is founded on the civil law.^ We
mnrcii." Jenkins, 160 ; Co. Litt. 182 a ; are two joint trailers, and one accepts a
2 Brown, 99 ; Jeffreys v. Small, 1 Vernon, bill drawji on botli for him and partner,
217; Leaker. Craddock, 3 P. Wms. 158; it binds both if it concerns the trade;
Vanheath v. Tnrner, Winch. 24 ; Molloy, otherwise, if it concerns the acceptor only
b. 2, ch. 10, § 19. The case of Pinckney in a distinct interest and respect." v.
V. Hall is thus reported in 1 Salk. 126 : Laytield, 1 Salk. 292. See also 2 Rol.
"By the custom of England, where there Abr. 702, 370 ; Anon., Styles, 370 A.
J Bell, Principles, § 357.
2 Succession of Pilcher, 39 La Ann. 362, 1 So. 929 ; Liverpool, B. & R. P. Nav. Co.
V. Agar, 14 F. R. 615, 4 Woods, 20L
§ 4.] DEFINITION AND NATURE OP A PARTNERSHIP. 3
have seen that the civil law of partnership was founded, equally
with our own, upon the custom of merchants, and there should
therefore be no difference in this respect between the rules of the
civil law and those of our own.
§ 4. How far recognized by Law. — In our law, however, the
partnership has not been clearly recognized as an entity. In an
action at law, at least, the partners alone are recognized as parties
in interest, as owners of the firm property, and as principals in the
firm business. Yet even at law certain doctrines are held which
can be consistently explained only by recognizing the firm as
an entity. The courts of equity show more recognition of the
true character of a partnership ; but even in equity this has not
been made clear until recently. There is now, however, a strong
disposition on the part of the courts to recognize the mercantile
doctrine.
Perhaps the earliest statement of the doctrine was by Horn-
blower, C. J., in Curtis v. Hollingshead.^ "The firm is the
contracting party, not the individuals composing the firm ; the
credit is given to the firm; the partnership, the ideal person,
formed by the union of interest, is the legal debtor. A partner-
ship is considered in law as an artificial person^ or heing^ distinct
from the individuals composing it."
The doctrine was well stated by Jessel, M. R., in Pooley v.
Driver.2 " Everybody knows that partnership is a sort of agency,
but a very peculiar one. You cannot grasp the notion of agency,
properly speaking, unless you grasp the notion of the existence of
the firm as a separate entity from the existence of the partners ;
a notion which was well grasped by the old Roman lawyers, and
which was partly understood in the courts of equity before it was
part of the whole law of the land, as it is now. But when you
get that idea clearly, you will see at once what sort of agency it
is. It is the one person acting on behalf of the firm." ^
1 2 Green (N. J.) Law 403, 410 (1834). See Faulkner v. Whitaker, 3 Green Law
438, 439.
' 5 Ch. D. 458, 476.
8 Language as clear as this has been used to describe a firm by some of the ablest
judges in this country. " When one joins a partnership he makes himself a part of
an entity already existing, which has acquired certain property and business, and in
acquiring it has incun-ed certain indebtedness. The firm owns the property, holds the
business, and owes the debts." Brewer, J., in Cross v. Burlington Nat. Bank, 17 Kas.
336, 340.
' ' The partnership for most legal purposes is a distinct entity, — having its own
property, capable of contracting separate debts, having the right to sue in equity its
several members, and to be protected against their conduct to the same extent that it
might be against the conduct of strangers." Cooley, J., in Robertson v, Corsett, 39
Mich. 777, 784.
4 THE LAW OF PARTNERSHIP. [CH. I.
§ 5, Relation between Partners and Partnership. — The relation
between the partners and the firm is that of agent to principal;
and the firm property, the legal title to which is held by the part-
ners, is in trust for the firm. Each partner, in doing an act
which is within the scope of his agency, is acting therefore for the
firm. It is ordinarily said that the partners are agents for each
other ; each partner when carrying on business being principal as
to his own interest and agent as to the interests of his partners.
A more exact conception of the transaction is however that
already indicated : that each partner acts not as principal on his
own account and also, in the same transaction, as agent for his
copartners ; but that he acts in the single capacity of agent for
the partnership, and neither for himself nor for his copartners.
"A partnership, or joint stock company, is just as distinct and palpable an entity
in the idea of the law, as distinguished from the individuals composing it, as is a
corporation ; and can contract as an individualized and unified party, with an individ-
ual person who is a member thereof, as effectually as a corporation can contract with
one of its stockholders. The obligation and the liability, inter partes, are the same in
the one case as the other. The only practical difference is a technical one, having
reference to the forum and form of remedy." Barrett, J., in Walker v. Wait, 50 Vt.
668, 676. See also Forsyth v. Woods, 11 Wall. 484 ; Goldsmith v. Eichold, 94 Ala.
116, 10 So. 80 ; In re Dennery, 89 Cal. 101, 26 Pac. 639 ; Bracken v. Dillon, 64 Ga.
243, 251 ; Drucker v. Wellhouse, 82 Ga. 129, 8 S. E. 40 ; Henry v. Anderson, 77 Ind.
361 ; Paige v. Paige, 71 la. 318, 32 N. W. 360; Roop v. Herron, 15 Neb. 73, 80;
Whitman v. Keith, 18 Oh. St. 134, 144 ; Trumbo v. Hamel, 29 S. C. 520, 8 S. E. 83.
In some of these cases a statute provided that the partnership might sue and be sued
by its name. This statute, however, since it applied only to the remedy, could not
change the nature of a partnership. If, as is everywhere decided, it is an entity in
the eye of the law after such a statute, it must really have been so before the passage
of the statute.
§«■]
HOW PARTNERSHIP MAY BE MADE.
CHAPTER II.
HOW PARTNERSHIP MAY BE MADE.
§ 6. Partnership by Express Contract. — There must be a lawful
aud valid agreement to enter into partnership ; and this contract
must be executed. And therefore courts do not declare persons
to be partners under an agreement of partnership, without proof
that some joint transactions have been undertaken in accordance
with it, or some joint benefit received, (a) But a partnership may
be made by an agent ; and, if by one not then an agent, a sub-
sequent ratification mai<es the partnership effectual, {aa) Xot
unt'requently in England, and more rarely here, the contract is
sealed ; but this can seldom be useful, and is never necessary to
its validity. Usually the contract is in writing; and should
always be so, as a matter of reasonable precaution. But writing
{a) Metcalf v. Royal Exch. Ass. Co.,
Barnard. 343 ; Heylioe v. Barge, 9 C. B.
431 ; W'est Point Foundry Association v.
Brown, 3 Edw. Ch. 284 ; Atkins v. Hunt,
14 N. H. 205 ; Goddard v. Pratt, 16 Pick.
412. If two or more persons, who agree
to enter into partnership, stipulate each to
furnish a certain amount of capital, com-
pliance with this stipulation may be a
condition precedent, without the fulfilment
of whicdi no partnership will exist, unless
it be waived by the consent of both parties.
McGraw v. Pulling, 1 Freem. Ch. 357;
Bird V. Hamilton, Walker Ch. 361.
Where E. advanced money to W., to
enable him to perfect and realize a certain
invention, and W., besides expressly promis-
ing to repay the advance, agreed that, if the
invention should be one of public or pri-
vate use, W. should have one-third of the
profits thereof ; it was held that E. might
sue W. for the sum so advanced. Elgie v.
Webster, 5 M. & W. 518. So in Burnell
r. Hunt, 5 Jur. 650, where B. was to
receive from A., for superintending the
latter's manufactory, half the profits as
soon as any accrued, and, till that time,
21. per week. No profits having ever
arisen, the court held that there could be
no partnership before that time. If a man
make an agreement for a partnership, but
expressly reserve for himself for twelve
months the option of determining finally
whether or not he will be a partner, he is
not one until he exercises that option and
declares himself such. Gabriel v. Evill,
9 M. & W. 2H7. See Chapman v. AVilson,
1 Rob. (Va.) 267 ; President, Directors, &
Co. of the Adams Bank v. Rice, 2 Allen,
480 ; Andrews v. Garstin, 10 C. B. x. s.
444 ; Lascaridi v. Gurney, 11 C. B. x. s.
890 ; Moody v. Rathburn, 7 Minn. 89 ;
Cook V. Carpenter, 34 Yt. 121. W^here
one permits another to bu}' stock on their
joint account, in anticipation of forming a
I)artnership, and immediately afterwards
repudiates the agreement to become a
partner, he is not entitled to any of the
property bought, nor are his individual
creditors. Rice v. Shuman, 43 Pa. 37.
See, as to what connection in business
constitutes a partnership, and the admis-
sion of new members. Mealier v. Cox, 37
Ala. 201.
(aa) Williams v. Butler, 35 111. 544.
THE LAW OF PARTNERSHIP.
[CH. II.
is not essential to render the general agreement, or any of its
details, valid, (b) And though articles exist, the partnership may
be proved by parol, if the question is between those who form the
firm, and a stranger, [hh)
Whether a partnership exists is a question of fact ; what a
partnership is, is a question of law. (c) Sometimes the question
occurs, whether the provisions of a partnership come within the
requirement of the Statute of Frauds, and must therefore be in
writing. [According to the weight of authority, a partnership,
even if formed for the purpose of dealing in land, may be created
by a verbal agreement : though according to some authorities it
must be in writing.] (d)
(li) The true meaning and ajiplication
of this rule is clearly stated by Tiudal, C.
J., in Fox V. Clifton, 9 Bing. 117. See
also Smith v. Tarlton, 2 Barb. Ch. 336.
(bb) Anderson v. ClaJ', 1 Stark. 405 ;
Griffin v. Doe, 12 Ala. 783 ; Widdifield v.
Widdifield, 2 Binn. 245 ; Bounatfe v.
Fenner, 6 Sm. & M. 212 ; Allen v. Rostain,
11 S. & R. 362. Otherwise, perhaps,
where the question of partnership or no
partnership arises between the partners
themselves. Cutler v. Thomas, 25 Vt. 73.
See Buffurn v. Buffum, 49 Me. 108, and
Villa V. Jonte, 17 La. Ann. 9.
(c) Gabriel v. Evill, Car. & M. 358 ;
Drake v. Elwyn, 1 Caines, 184 ; Beechani
V. Dodd, 3 Harr. (Del.) 485; Doggett v.
Jordan, 2 Fla. 541 ; Everett v. Chapman,
6 Conn. 347 ; Terrell v. Richards, 1 N. &
McC. 20. See Dwinell v. Stone, 30 Me.
384.
{d) In Smith v. Burnham, 3 Sumn.
435, the plaintiff brought his bill in equity,
alleging an agreement of copartnership
between himself and the defendant for
general business purposes, and, among
others, for the purchase and sale of lands,
and praying for a general account of the
affairs of the partnership. The existence
of the partnership was attempted to be
proved only by parol. Story, J., held
that a verbal agreement to become inter-
ested as ])artners in the purchase and sale
of lands was a parol contract respecting
an interest in lands within the Statute of
Frauds, and therefore void. So in Vice v.
Anson, 7 B. & C. 409 ; Henderson i'. Hud-
son, 1 Mnnf. 510. Lefevre's Appeal, 69
Pa. 123 ; Ebbart's Appeal, 70 Pa. 79.
[Young V. Wheeler, 34 F. R. 98 ; Larkins
V. Rhodes, 5 Port. 195 ; Everhart's Appeal,
106 Pa. 349 ; Raub v. Smith, 61 Mich.
543, 28 N. W. 676. In Louisiana a writ-
ten contract of partnership is required by
the code : Pecot v. Annelin, 21 La. Ann.
667.] But in Dale v. Hamilton, 5 Hare,
369, a different view prevailed. In that
case, the bill of the jilaintiff, a land agent
and surveyor, alleged a jiarol agreement of
copartnership with the defendants, who
■were capitalists, for the sole purpose of
speculation in lands ; and that, by the
terms of their agreement, each of the
parties was to be interested one-third in
profits and losses. Real estate had confess-
edly been ac(|uired under some arrangement
of this sort, which had since greatly risen
in value. The prayer of the plaintiff was,
that the affairs of the joint concern might
be wound up, the lands sold for the mo.sc
they would fetch, and the proceeds distri-
buted by the court in accordance with the
terms of the said contract. The Vice-
Chancellor (after a statement of the
question raised) said : " When the prop-
osition was first advanced by the plaintiff,
I confess, it appeared to me, that to admit
the argument to the extent contended for
would be virtually to repeal the Statute
of Frauds, or nearly so." But, upon
examination of the authorities, he felt
himself bound to hold that the plaintiff
might first prove by parol the existence of
the partnership, as an independent fact,
and, that being established, might then
show by the same evidence his intej-est in
the lands, considered as the substratum or
stock of the partnership. An issue was
§7.]
HOW PARTNERSHIP MAY BE MADE.
It becomes more important, and indeed necessary, that the
contract should be reduced to writing, in proportion as it is com-
posed of many articles, and {)rovides in detail for the transaction
of the business of the firm, or for the rights and duties of the
partners. Of the effect and construction of written articles we
shall si)eak particulai'ly hereafter, (f)
§ 7. Partnership without Express Agreement. — Partnership may
be formed not only by express agreement, but may grow out of
transactions or relations in which the word " partnership " is not
uttered. If there is such a joinder of interests and action as the
law considers as the equivalent of partnership, or rather, such as
it regards as constituting partnership, it will give to the persons
accordingly directed to determine whether
such ail agreement of copartnersliii) as that
aUeged ill tlie bill had been made. See
Caddeck v. Simpson, 2 De G. & J. 52 ;
Fall River Whaling Co. v. Borden, 10
Cash. 458 ; Haiipf v. Howard, 3 Jones Eq.
440, 445. The result of the cases, as well
as of true reasoning upon the question,
would seem to be that of the Vice-Chancel-
lor in Dale v. Hamilton, supra. In re
Warren, Davies, 320 ; York v. Clemens, 41
la. 95 ; Scruggs v. Russell, McCah. (Kas.)
39 ; Julio V. Ingalls, 1 All. 41 ; Sherwood
V. R. R. Co., 21 Minn. 127 ; Chester v.
Dickeison, 54 N. Y. 1 ; Smith v. Tarlton,
2 Barb. Cli. 336 ; Storer v. Flack, 41 Barb.
1(51 ; Jones v. McMichael, 12 Rich. L.
176. [In re Ransom, 17 F. R. 331 ; Mc-
Elroy V. Swope, 47 F. R. 380 ; Coward v.
Clanton, 79 Cal. 23, 21 Pac. 359 ; Meagher
V. l{ee<l, 14 Col. 335, 24 Pac. 681 ; Bunnel
V. Taintor, 4 Conn. 568 ; Holmes v. Mc-
Ciay, 51 Ind. 358 ; Richards v. Grinnell,
63 la. 44, 18 N. W. 668 ; Peunybacker v.
Leary, 65 la. 220, 21 N. W. 575 ; Collins
V Decker, 70 Me. 23 ; Somerby v. Bun-
tin, 118 Mass. 279 ; Newell v. Cochran,
41 Minn. 374, 43 N. W. 84 ; Hirbour v.
Rtieding, 3 Mont. 13 ; Personette v. Piyme,
34 X. J. Eq. 26; Flowers. Barnekoff, 20 Ore.
132, 25 Pac. 370 ; Case v. Seger, 4 Wash.
St. 492, 30 Pac. 646. See also Allison v.
Perry, 130 111. 9, 22 N. E. 492 ; Marsh v.
Davis, 33 Kas. 326, 6 Pac. 612 ; Carr v.
Leavitt, 54 Mich. 540. In Wisconsin it
is held that where a partnership is formed
for another purpose, and the partners agree
verbally to buy land and take the title in
the name of one parttier, the other is pre-
vented by the Statute of Frauds from
claiming any interest in the land. Bird
V. Morrison, 12 Wis. 138 ; Clarke o. Mc-
Aulitle, 81 Wis. 104, 51 N. W. Rep. 83.
It has been held that a contract of part-
nership to continue 7iiore than a year is
within that provision of the Statute of
Frauds which requires contracts not to be
performed within a year to be in writing.
Morris r. Peckhara, 51 Conn. 128 ; Jones
V. McMichael, 12 Rich. 176. Such a con-
tract, though not in writing, has, however,
elsewhere been held valid. McKay v.
Rutherford, 6 Moo. P. C. 413, 13 Jur. 21 ;
Smith V. Tarlton, 2 Barb. Ch. 336 ; Jordan
V. Miller, 75 Va. 442.
There can be no doubt that the pre-
vailing view is the better one. The con-
tract is executed when the partnership
relation is entered into. All that is done
after that is done by and for the part-
nership. If land is purchased it is the
land of the partnership, and not of the
individual partners. In short, the only
action that could be brought for breach of
the contract would be an action for failure
to launch the partnership : any cause of
action arising after the partnership was
formed would arise out of the partnership
relation.
If, however, the contract calls for the
purchase of land by one party from the
other before the partnership comes into
existence it is within the statute. Clancy
V. Craiiie, 2 Dev. Eq. 363. And a contract
which called for the entrance into a part-
nership after the expiration of a year would
doubtless lie held to be within the statute.]
(e) Post, § 159 ct scq.
8 THE LAW OF PARTNERSHIP. [CH. II.
engaged in it all the rights, and lay upon them all the responsi-
bilities, and give to third parties dealing with them all the
remedies, which belong to partnership. Of this we shall treat
somewhat in the succeeding chapters.
§ 8. Illegal Partnerships. — That the Contract may be legal, it
must be formed for a legal purpose. (,y) It is obvious that the
law — through the courts — cannot protect or enforce what the
law forbids. Hence a partnership would be deemed illegal, not
only if it contemplated a business which the law expressly pro-
hibits, as smuggling, gambling, making counterfeit bills or false
coin to be used at home, or stealing, but also if it were formed for
a purpose distinctly opposed to the principles or policy of the law ;
as, to procure the election of persons to office, or the success of a
political party, or for marriage brokerage, {h) ^
(ij) The English law has at different regulating the jjawnbrokers' trade. See
periods laid various restrictions upon the Armstrong v. Lewis, 2 C. & JI. 274 ;
formation of partnerships, some designed Armstrong v. Armstrong, 2 Mylne & K.
to secure monopolies to one or several 45 ; Gardon r. Slowden, 12 Clark & F.
large incorporated companies, and which 237. There have also been certain re-
have since been repealed or greatly modi- strictive statutes, which have been passed
fied, while others liave aimed at the more rather to protect the revenue of tlie realm
laudable object of protecting the public than to afford security to the public,
from the combinations and the delusive Hence it is held, in several cases, that,
schemes of speculators. Thus the statute though a partnership be formed in disre-
of 6 Anne, ch. 22, § 9, made it unlawful gard of the provisions of these statutes,
for a partnership of more than six persons, yet such infringement will not deprive the
other than the Bank of England, to carry partnership of the right to recover upon
on banking business. By 6 Geo. 1, ch. 18, their contracts with third jiersons. Hodg-
§ 12, partnerships were forbidden to engage son v. Temple, 5 Taunt. 181. Johnson v.
in the business of marine insurance, or to Hudson, 11 East, 180 ; Brown v. Duncan,
make loans upon bottomry. In like man- 5 B. & C. 93. [See the statutes collected
ner, by 28 Geo. 3, ch. 53, § 2, partnerships and discussed, 1 Lindley, Part. *94 et seq.]
of more than five persons for trading in (h) A distinction was formerly made
lands are made illegal. See further 6 Geo. 1, between contracts of partnership for ob-
ch. 18, § 18 ; also, 39 & 40 Geo. 3, ch. 99, jects which are viala in se and those for
^ It is now everywhere acknowledged that the courts will not recognize an illegal
contract of partnership, either by enforcing performance of the whole contract, Ewing
V. Osbaldiston, 2 My. & Cr. 53; Durant v. Rhener, 26 Jlinn. 362, 4 N. W. 610; or
by enforcing the obligation to account. Sykes v. Beadon, 11 Ch. D. 170; Bartle v.
Coleman, 4 Pet. 184 ; Snell v. Dwight, 120 Mass. 9 ; Dunham v. Presby, 120 Mass.
285 ; Jackson v. McLean, 100 Mo. 130, 13 S. W. 393 ; Read v. Smith, 60 Tex. 379.
Some courts however allow a partner in an illegal partnership, after the business
has been entirely wound up, the right to a share of such proceeds of the business as remain
in his copartner's hands ; on the more or less clearly recognized principle that there is
a constructive trust. Sharp v. Taylor, 2 Phillip.s, 801 (criticised adversely in Sykes v.
Beadon, 11 Ch. D. 170) ; Brook.s v. Martin, 2 Wall. 70 ; Wann v Kelly, 5 F- R. 584 ;
Attaway v. Third Nat. Bank. 15 Mo. App. 577 ; Pfeuffer v. j\Ialtby, 54 Tex. 454
{wmble ; but see Kead v. Smith, 60 Tex. 379). See Snell v. Dwight, 120 Mass. 9, 18.
In Texas the court interferes only if there has been an account stated, and a note given
§M
HOW PARTNERSHIP MAY BE MADE.
§ 9. Partnership must be Voluntary. — The contract of partner-
ship must be voluntary ; that is, all the partners must consent
olijects which are only mala prohlbita. It v. Bignold, 5 B. & Aid. 335 ; Mitchell v.
was held that contracts arising out of the Cockburne, 2 H. Bl. 379 ; Aubert v. Maze,
transactions of a partnership, formed for 2 B. & P. 371 ; Ewing v. Osbaldistou,
purposes which werg inhibited by positive 2 My. & Cr. 53. See also Cannan v.
statute merely, might be recognized and Bryce, 3 B. & Aid. 179, Steers ?;. Lashley,
enforced by the courts, if they were one 6 T. R. 61 ; Brown v. Turner, 7 T. K. 630 ;
step removed from the illegal contract itself. Webb v. Brooke, 3 Taunt. 6; Simpson v.
jKc/jrtrte Balmer, 13 Ves. 313; Faikney y. Bloss, 1 Taunt. 246; Ottley v. Browne,
Reynous, 4 Burr. 2069 ; Petrie v. Haniiay, 1 Ball & B. 360 ; Ex farte Randleson,
3 T. R. 418 ; Watts v. Brook, 3 Ves. 612. 1 Mont. & M'A. 36, and cases cited. Nor
See also Berkshire v. Evans, 4 Leigh, 223. will the courts any more sustain an action
But these cases were in conflict with i>re- brought in revocation and disaffirmance of
vious adjudication, and cannot be regarded an illegal contract of partnership. Booth
as decided upon sound principles. Sulli- v. Hodgson, 6 T. R. 405; Ex parte Bell,
van V. Greaves, Park on Ins. 8 ; Bensley 1 M. k S. 751.
for the balance. Boggess v. Lilly, 18 Tex. 200; De Leon v. Trevino, 49 Tex. 88;
Kead v. Smith, 60 Tex. 379. See also McGunn v. Hanlin, 29 Mich. 476.
But by the weight of authority a bill for an account will not lie in case of an
illegal partnership, though the business is wound up and the assets are all in the hands
of the defendant partner. IJveret v. Williams, 1 Lind. Part. * 93 n. ; Sykes v. Beadon,
11 Ch. D. 170 (scmUc); Craft v. McConoughy, 79 111. 346 ; Hunter v. P'feitfer, 108 Ind.
197 ; Snell v. Dwight, 120 Mass. 9, 18 (semble) ; Jackson v. McLean, 100 Mo. 130, 13
S. yV. 393 ; Todd v. Rafferty, 30 N. J. £((. 254 ; Woodworth v. Bennett, 43 X. Y.
273 ; King v. Winants, 71 N. C. 469 ; Watson r. Fletcher, 7 Gratt. 1. Nor is the
action allowed though an account has been stated, and the defendant has expressly
agreed to pay the balance. Stewart v. Mcintosh, 4 H. & J. 233 ; Patterson's Appeal,
13 W. N. C. 154 ; Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. 173. And though
the business was legal where it was carried on, the courts of a State in which it is regarded
as against public policy will not entertain a bill for an account. Watson v. Murra\', 23
N. J. Eq. 257. But though erpiity will not sustain a bill for an account of illegal partner-
ship transactions, yet, if a part of the business of the partnershij) be legal and a part
illegal, an account of that which is legal may be directed ; as where the business of a firm
was that of brokers and underwriters, the court dismissed so much of the bill as sought
for an account of the profits of the underwriting business, but decreed an account of
the other business. Knowles v. Haughton, 11 Ves. 168; Anderson r. Powell, 44 la.
20 ; Willson v. Owen, 30 Mich. 474. And where the business was legal when the
partnership was formed, but was afterwards forbidden by statute, a partner may have
an accounting as to the business done before the statute came into effect. Bennett v.
Woolfolk, 15 Ga. 213.
Where it appears that the profits of the firm were swelled by cheating customers,
the fact is no defence to a bill for an account brought by the innocent partner. Todd
V. Pennington, 21 Atl. 297 (X. J.). And it has been held that even if both parties
were concerned in the fraud upon customers, a bill will lie whenever the partnership
was foi'med for a legal purpose. Shriver v, McCloud, 20 Neb. 474, 30 N. W. 534. In
Illinois, on the other hand, where one member of a legal partnership received bribes
in the course of the firm business the other partner was held not to be entitled to an
account of the money thus received. Northrup v. Phillips, 99 111. 449. Where the
business of pawnbrokers was carried on by two persons under a deed of partnership,
but under the apparent conduct and in the name of one, and he only was licensed,
semble, that although the parties might have made .themselves liable to the penalties
10 THE LAW OF PARTNERSHIP. [CH. II.
and ag-ree to it. This is so essential, that no person can be intro-
duced into a firm without the consent of all who are members of
it, (k) This consent may be implied ; (l) and even if one or more
members were reluctant, and made objections, and never expressly
gave their assent, still it might be inferred from their acts, if tlie
alleged partner or partners were treated by the other partners
and in their transactions as only a partner could be or should be
treated. (11) Still there must be this consent ; and we shall
presently see that if a partner sells out all his interest in a firm
(k) Ex parte Barrow, 2 Rose, 255 ; lations in the articles of association that
Kingman v. Spurr, 7 Pick. 235 ; Murray heirs or representatives sViould themselves
V. Bogert, 14 Johns. 318 ; Channel v. be partners. Otherwise in the English
Fassit, 16 Ohio, 166 ; Moddewell v. Keever, and American law. See post, § 106.
8 W. & S. 63 ; NicoU v. Munitbrd, 4 (l) Mason v. Connell, 1 Whart. 381.
Johns. Ch. 522. Partnershijis inter sesc The ijuestion in this case was, whether
can only be formed by the contract of the the firm of A. & B. was partner with C.
parties. ' Freeman v. Bloomfield, 43 Mo. The evidence oH'ered on this point was a
391 ; Metcalf v. Redmon, 43 111. 264. See written agreement of copartnership to
Brown v. De Tastet, Jacob, 284 ; Bray r. which was signed the name of C, and also
Froniont, 6 Madd. 5; Mathewson y. Clark, the name of the firm of A. & B., in the hand-
6 How. 122 ; Goddard v. Hodges, 1 Ci-. & writing of A. It was held that engaging
M. 33. Upon this principle of diledus the firm in such a partnershij) was out of
personcc, neither the representatives of a the ordinary commercial transactions, and
deceased partner, nor the assignees of one was therefore presumed to be without the
bankrupt, become partners with the sur- scope of one partner's authority. But,
viviiig or solvent partners, but are simply though the consent of each partner was
entitled to an account. Pearce v. Cham- absolutely necessary to constitute a part-
berlin, 2 Ves. 33 ; Marquand v. N. Y. nership, yet that such consent might be
Man. Co., 17 Johns. 525 ; Griswold v. testified in express terms, or the assent
Waddington, 15 Johns. 82. [Noonan v. might be tacit, or to be implied solely
Nunan, 76 Gal. 44, 18 Pac. 98.] In the from the acts and conduct of the parties,
civil law, the doctrine was even carried to {11) Pierce v. Whitley, 39 Ala. 172.
the length of making null and void stipu-
imposed by 39 & 40 Geo. 3, ch. 99, yet that, it being no part of the contract to carry
on the partnership in such a manner as to contravene the law, the contract was not
void ; but that, had a collateral agreement to carry on the partnership, in violation of
the act of parliament, been proved, no rights could have been acquired under it by
either party. Armstrong v. Lewis, 2 Cr. & M. 274.
It is clear that, at least as to third persons, the title to property is recognized as in
the partnership. Crescent Ins. Co. v. Bear, 23 Fla. 50, 1 So. 318 ; Tucker v. Adams,
63 N. H. 361. Real estate standing in the name of both partners belongs to them in
common. Watson v. Fletcher, 7 Gratt. 1.
It has been held that an association to build a railroad, by pr-ocuring a charter for a
corporation of which the partners should be the stockholders, and then making a
contract for construction between the corporation and the partnership liy which the
stock and bonds of the railroad should be given to the latter and sold by it, was formed
for a fraudulent purpose, and was therefore illegal. Jackson v. McLean, 100 Mo. 130,
13 S. W. 393. On the other hand a partnership to buy land at a tax sale is not illegal
without proof that it was formed or necessarily tended to stifle competition. Dawson
V. Ward, 71 Tex. 72, 9 S. W. 106.
§ 11.] HOW PARTNERSHIP MAY BE MADE. 11
to a third person, and expressly agrees with him that he shall
take the seller's place in the partnership, this will not make him
a partner, unless the other partners receive him as such, (w)
If the articles of the cojjartnership provided, somewhat in the
way those of joint-stock companies do, that a copartner might,
in a certain way, and upon certain terms, transfer all his interest
and rights in the company to a third person, who should, by force
of the transfer, become a copartner in the transferrer's stead, a
(;()urt of equity generally woidd, and a court of law migiit, so
fur recognize the force of this }>rovision as to hold such trans-
feree partner at once, (n) It is certain, however, that a mere
agreement to admit a new member into a partnershij), like an
agreement to form a partnership, (o) however expressed, and on
whatever consideration, would not of itself invest any person or
persons with the character of partners, although the breach of it
might give an action for damages, (p)
We shall hereafter see that, in reference to transfer and to
incoming partners, the courts pay great respect to that " dilectus
personarum^'' by which partners, who are so much in the power
of each other, may protect themselves from the danger of having
that power pass into hands to whom they would not willingly
intrust it. {q)
§ 10. Partnership Agreement vitiated by Fraud. — Every contract
that is vitiated by fraud, or by coercion, is thereby avoided and
annulled. This is certainly true of the contract of partnership ;
and, from the peculiar character of the relation of partners, and
of their almost unrestricted capacity to do each other an injury,
it may be thought that courts would be peculiarly watchful to
require that this contract was formed deliberately and freely, and
without deception or undue or wrongful influence, (r)
§ 11. Parties must be competent. — So, too, that the contract of
partnership may be lawful, it must be made by competent parties ;
that is, by those who have a legal right to enter into it. And we
shall hereafter see that competency to enter into partnership is
(m) See post, § 106. 89 ; Byrd v. Fox, 8 Mo. 574. See post,
(n) Fox V. Clifton, 9 Bing. 15. See § 191.
Kingman v. Spurr, 7 Pick. 236; Alvord (q) See 2)ost, § 106.
V. ^>mith, 5 Pick. 232 ; Cochran v. Perry, (r) Tattersall v. Groote, 2 B. & P.
8 W. & S. 262. See also ;oos<, § 107. 131; Ex parte Broome, 1 Rose, 69;
(o) Wilson V. Caniphf'll, 5 Oilman, Green v. Barrett, 1 Sim. 45 ; Pillans v.
383 ; Howell v. Brodie, 6 Bingham, N. C. Harkness, Colles P. C. 442 ; Hynes v.
44. Stewart, 10 B. Mon. 429 ; Howell i-. Har-
(;>) Figes v. Cutler, 3 Stark. 139; vey, 5 Ark. 270; Fogg r. Johnston, 27
M'Neil V. Reid, 9 Bing. 68, 2 Moo. & Sc. Ala. 432. See ;ws^ eh. 14.
12 THE LAW OF PARTNERSHIP. [CH. II.
almost or quite coextensive with a competency to transact business
generally, (s)
§ 12. Time of beginning. — It is sometimes important to deter-
mine when a partnership begins. Usually, this is determined by
the contract of partnei'ship. If not, it would ])robably be held as
presumption of law that it began when the written articles were
executed. (^) But even if in the contract of partnership it were
expi-essly stipulated that it should have a retrospective effect, and
that the partnership should begin a certain time before the date,
it might bind the parties to it, for some purposes at least ; but
could not make them partners at the time stipulated, in refer-
ence to third parties, except from the date, (u)
If the agreement of copartnership is executory and conditional,
no partnership is created by it until all the conditions are
fulfilled, (v)
In one case, in which the partnership was unlawful if entered
upon on the day of the date of the articles, and lawful if it began
three months afterward, the court held it to be an absolute pre-
sumption of law that it began on the day of the date, although
nothing in the articles specially indicated it. And the court re-
fused evidence that the bargain and intention of the parties was
not to enter upon the partnership until it should be legal. This
case seems not to be good law ; although it would be proper
to exclude evidence which contradicted an express provision, (w)
(s) See post, § 14. be not executed till tlie 18th of January.
(t) Howell V. Brodie, 6 Bing. N. G. Battley v. Bailey, 1 Scott N. R. 143.
108 ; Aspinwall v. Williams, 1 Ohio, 38 ; (v) Fox v. Clifton, 6 Bing. 776 ; Dick-
Austin V. Williams, 1 Ohio, 282 ; Grant v. inson v. Valpy, 10 B. & C. 128 ; Murray
Watts, 10 Paige, 82 ; Ingraliam v. Foster, v. Pilchards, 1 Wend. ^8. See further
31 Ala. 123 ; Beaman v. Whitney, 20 Me. Ward v. Thompson, 1 Newb. Adm. 95 ;
413. [Guice v. Thornton, 76 Ala. 466.] Bisset on Part., part 2d, ch. 6 ; Story on
{ii) Thus, where A. & B. who were al- Part., § 150 ; Avery v. Louve, 1 La. Ann.
ready in partnership, agreed on the 24th 457 ; post, ch. 18. See Peck v. Thomas,
of June to become partners with C, and 29 Eng. L. & Eq. 276. [So where the
it was farther agreed that the new pait- agreement contemplates the obtaining of
nership should be considered as commenc- land, fiom which the partnership is to
ing from the 18th of May preceding ; held, realize its profit, the partnershiji would
that C. was not liable as a partner upon a not generally begin till the land is ob-
bill of exchange indorsed by the firm of tained. Snodgrass v. Reynolds, 79 Ala.
A. & B. upon the 19th of May. Vere v. 452 ; Meagher v. Reed, 14 Col. 335, 24
Ashby, 10 B. & C. 288 ; Wilsford i'. Wood, Pac. 681.
1 Esp. 1-82. See Dyke v. Brewer, 2 Car. An agreement to enter into a partner-
& K. 828. On the other hand, if A., B., ship in the future does not make the par-
and C. agree to enter into partnership on ties partners : thej' do not become so until
the first of January, and from that time the agreement is performed and the part-
regard themselves as partners, the partner- nership launched. Goldsmith v. Sachs, 17
ship will be held to have commenced on F. R. 726, 8 Sawy. 110]
that day, though the deed of partnership {w} Williams v. Jones, 5 B. & C. 108.
§ 13.] HOW PARTNERSHIP MAY BE MADE. 13
Where the partiicrshij) was not formed by any express ajrree-
meut, written or oral, but implied by law from certain joint
transactions, it would be held to begin when these transactions
took i>lace, or perhaps when the agreement to enter into them
was formed, (x) Thus, if there were such a joint buying of
property with the intention of joint selling, as would make the
parties partners in law as to their property or business, they
would be partners, not only when the thing was bought, but they
might become partners as to this ])urchase by their agreement to
join and act, although no responsibilities as partners would rest
upon them until something was done to carry the agreement into
effect.i
§ 13. Jurisdiction of Partnership Suits. — It may be well to
remark, in this connection, that courts of common law cannot
take cognizance of a large proj5ortion of the cases which arise
under the law of partnership. Nearly all of those which relate to
the rights and obligations of partners inter se go into a court of
equity. AVe shall hereafter see that one partner can sue another
at law only in a few exceptional cases. And when the settlement
of the affairs of a partnership is required, or the taking of an
account, or the prevention or discontinuance of some wrongful
act, or the protection or enforcement of a right by other means
See Dix v. Otis, 5 Pick. 38 ; Yassar v. partnership between the defendants and
Camp, 14 Barb. .356 ; Bird v. Hamilton, A. and B. in certain publications for
"Walker Ch. 361. In this last case the which the paper was furnished and used,
contract of partnership was executed the put in evidence accounts between the two
16th of May. The language imputed a firms, determining their respective shares
partnership m jn-cesenti. But, inasmuch of the profits accruing from such publica-
as the business of the partnership could tions. These accounts bore dates from
not be entered upon until the 1st of July, Januarj', 1836, to February, 1837. The
the court, regarding the situation of the paper was supplied in Apiil and May,
parties, construed the partnership not to 1836. Upon this state of facts, Ld. Den-
commence until that time. man, C. J., left it to the jury to say
(x) Gardiner v. Childs, 8 C. & P. 345. whether, nt the time the goods in question
The firm, C. & D., defendants, were prin- were furnished, the defendants were part-
ters. The present action was brought to ners in the concern upon whose credit
recover of them the price of a certain they were supplied. The jury finding that
amount of paper delivered to them by the they were, judgment was rendered for the
plaintiffs, but at the order and upon the plaintiff's. See Avery v. Louve, 1 La.
credit of the firm of A. and B., publishers. Ann. 457.
The plaintiffs, to prove the existence of a
1 Where the agreement contemplates joint action at once, though not in the busi-
ness of the partnership, — as where the parties are to join in equipping a factoiy, —
the partnership begins at once. Kerrick v. Stevens, 55 Mich. 167, 20 N. W. 888.
And so if action is to begin at once the partnership begins, though the profit is not to
be divided till one of the partners is reimbursed for his outlay. Beauregard v. Case, 91
U. S. 134; Bybee r. Hawkett, 12 F. R. 649.
14 THE LAW OF PARTNERSHIP. [CH. II.
than damages for a breach of it, the parties necessarily resort to
equity. Hence there is certainly no branch of commercial law
(to which partnership emphatically belongs) that so often finds
the common-law jurisdiction inadequate to its wants, and is there-
fore obliged to resort to equity for relief. As we go on, we shall
endeavor to point out specifically, in reference to the various
questions and conflicting claims which are frequently springing
up under the law of partnership, the methods and measures of
relief which equity administers.
§ 14.] OF PARTNERS. 15
CHAPTER III.
OF PARTNERS.
§ 14. Who may be Partners. — There is nothing in this country
to prevent any number of persons from entering into partnership.
Notliing but their own convenience and pleasure determine
this, (a)
As to personal competency, it may be said that any persons
competent in law and in fact to transact ordinary business on
their own account may enter into partnership for that purpose.
For there is nothing in the status of partnership, which, on the
one hand, confers a power to transact business on one who
otherwise would have no power, or, on the other, restrains or
diminislies the power in him who possesses it before or without
partnership.
We have said competent in law and in fact, because there
are incompetencies created by the law, or absolutely presumed,
without any reference to the actual fact ; (5) as in the case of an
(a) But now, in England, by "The sons who have not been qualified in a
Companies Act " of 25 & 26 Viet. 1862, prescribed legal way incompetent to exer-
consolidating and amending former acts cise particular trades or professions. Thus,
upon the subject, no partnersliip consist- by 5 Eliz. ch. 4, persons were piohibited
ing of more than twenty persons, which from following any manual art or occupa-
has for its object the acquisition of gain, tion who had not previously served an
is allowed to carry on business without apprenticeship to the same. But one
forming a company by registration ; and who, though he had not been appren-
under the provisions of this act any seven ticed, was a partner with a brewer, was
or more persons may so associate, with or held not within the statute, since he had
without limited liability, as they may not acted in nor personally exercised the
elect and declare. trade. Reynard v. Chase, 2 Wils. 40. See
('j) In England, the statute 57 Geo. 3, 22 Geo. 2, ch. 46, § 11, an act to prevent
ch. 99, § 3, rendered all s[iiritual persons imqualified persons from acting as attorn-
iiicom[)eteat m law to carry on, by them- eys or solicitors. In re Jackson, 1 B. &
selves or their agents, " any trade or deal- C. 270 ; In re Clark, 3 D. & R. 260 ; Hop-
ing for gain or profit," and of course thereby kinson v. Smith, 1 Bing. 13; Candler »•.
interdicted such persons from being part- Candler, Jac. 225 ; Sterry v. Clifton, 9 C.
ners for that purpose. Hall v. Franklin, B. 110 ; Taylor v. Glassbrook, 3 Stark.
3 M. & W. 259. See 1 & 2 Vict. ch. 106. 76. In Gilfillan v. Henderson, 2 CI. & F. 1,
So also the law sometimes renders all per- two solicitors had entered into partner-
16 THE LAW OF PARTNERSHIP. [CH, III.
infant, who cannot lawfully do, the day before he is twenty-one,
what he may do on that day. 80 a married woman is disabled at
common law, althou<^h in fact she may have far greater business
capacity than her husband. An insane person is disabled by the
fact of his insanity ; and whether insanity exists, and in a
sufficient degree to have this "effect, must be a question of fact
only. And some difficulty, to say no more, attends the entering
into a copartnership of a corporation as a member of the firm.
We will, however, look at some of these questions more
specifically.
§ 15. Infants. — Infants are persons under twenty-one years of
age ; and, for their own benefit and safety, the law considers them
disqualified for the transaction of business. Their contracts or
promises for necessaries — such as shelter, food, raiment, and
sucli other means of support and education as are proper for them
— are valid and obligatory, because it is for their interest that
they should be able to bind themselves for the things they must
have, or suffer from the want of them. But the promise of an
infant in any business transaction is voidable by him ; because it
is not necessary that he should earn money by buying and
selling, (d)
The promise is voidable only (if made by an infant mentally
and physically able to make it), and not, in any case absolutely
void, as it used to be called, (e)
ship, one of whom could practise only in serted in a very great number of cases.
a superior court, the other only in an iufe- Keane v. Boycott, 2 H. Bl. 511; Bayley, J.,
rior court. By their agreement the profits in Thornton v. lUingworth, 2 B. & C. 826 ;
of their general business were to be divide<l; Fisher v. Mowbray, 8 East, 330 ; Baylis v.
each was to recommend clients to the Dineley, 3 M. & S. 477 ; Tucker v. More-
other, and the existence of the partner- land, 10 Pet. 58 ; Vent v. Osgood, 19 Pick,
ship was to be kept secret. It was held 572 ; Lawson v. Lovejoy, 8 Me. 405 ; Rog-
that the agreement was illegal and void, ers v. Hurd, 4 Day, 57 ; Pool v. Piatt,
See Li re Woodward, 4 Johns. 289. 1 D. Chip. 252 ; McGaw v. Marshall,
(d) 1 Rol. Abr. 729 ; Whittingham v. 7 Humph. 121 ; MMinn v. Richmonds,
Hill, Cro. Jac. 494 ; Whywall v. Cham- 6 Yerg. 9 ; M'Crillis v. How, 3 N. H.
pion, 2 Stra. 1083 ; Dilk v. Keighley, 348 ; Swasey v. Vanderheyden, 10 Johns.
2 Esp. 480 ; Goode v. Harrison, 5 B. & 33 ; United States v. Bainbridge, 1 Mason,
Aid. 147 ; Van Winkle v. Ketchum, 3 71 ; Fridge v. The State, 3 Gill & J.
Gaines, 323 ; Smith v. Mayo, 9 Mass. 62 ; 103 ; Ridgeley v. Crandall, 4 Md. 435 ;
Mason v. Wright, 13 Met. 306 ; Crabtree Cronise v. Clark, 4 Md. Ch. 403. But
V. May, 1 B. Mon. 289. the doctrine of the text seems more sound
(c) The supposed doctrine of the com- in principle and more practical of apjilica-
mon law, that there are some contracts of tion, and is supported by the later authori-
an infant, namely, those which the courts ties. Williams v. Moor, 11 M. k W. 256 ;
can pronounce to be to his prejudice, which Fonda i'. Van Home, 15 Wend. 631;
are absolutely void, is recognized and as- Breckenbridge v. Ormsby, 1 J. J. Marsh.
§15.J
OF PARTNERS.
17
The contract of partnership is like all other mercantile
contracts, and may be made by an infant for his own benefit,
subject to his right to avoid it. (ee) ^
236 ; Scott v. Buchanan, 11 Huniiih. 468 ;
Cummings v. Powell, 8 'i'exa.s, 80 ; Cole v.
Pennoyer, 14 111. 158 ; Robbins v. Cutler,
26 N. H. 173; Weaver v. Jones, 24 Ala.
420 ; Hardy v. Waters, 38 lie. 450 ; Fer-
guson V. Bell, 17 Mo. 347; Strain v,
Wright, 7 Ga, 568 ; 1 Am, Lead. Gas.
103 ; Taft v. Seri^eant, 18 Barb. 320.
{ce) Crabtree v. May, 1 B. Mon. 289 ;
GIossop v. Colnian, 1 Stark. 25. Hence,
an infant may be a partner in a mercan-
tile house, his father supplying the capi-
tal ; and if the transaction be a bona fide
one, and the son be the real party in in-
terest, and the father retain no power of
withdrawing from the firm either the
capital or the profits, an agreement that
the firm shall account to the father as
trustee for his son for one-third profit of
his son's capital, or any loss that may
accrue, and be governed by his advice iu
all business matters, will not make the
father a partner. Barklie v. Scott, 1 Hud.
& Bro. 83. But, though an infant coming
of age may avoid his contract, he cannot
recover of persons wlio have dealt with the
partnership money expended by him in its
affairs, for which he has received and en-
joyed a valuable consideration. Holmes
V. Blogg, 8 'i'aunt. 508. But where A.,
an infant, made an agreement of copart-
nersiii[) with B., and paid to him a hun-
dred pounds, to be forfeited if, when he
came of age, the partnershiit deed was not
duly executed by him, the jury finding
that A. had paid the money on a fraudu-
lent representation in B.'s balance sheet,
A., attaining his majority and disaffirm-
ing the contract, was allowed to recover
back the deposit, Corpe v. Overton, 10
Bing. 252. This last case differs from
Holmes v. Blogg iu many important fea-
^ The infivnt partner who has not disaffirmed has all the rights and is subject to the
duties of a partner. Thus his coi>aitner may maintain a bill for dissolution and
account, because of the infant's misconduct. Bush v. Linthicum, 59 Md. 344. But
he has a right to protection against liability, and therefore he may set up his infancy
in defence to a personal claim against him by a partnership creditor, Pelletier v.
Couture, 148 Mass. 269, 19 N. E. 400 : Folds v. Allardt, 35 Minn. 483, 29 N. W.
201 ; and where his partner is allowed to file a bill for a dissolution, the infant cannot
be charged with costs. Bush v. Linthicum, 59 Md. 344.
Where the infant puts capital into the partnership, the better view is that he can-
not u]>on disaffirming the contract withdraw his capital. Pelletier v. Couture, 148
Mass. 269, 19 N. F. 400 ; Dunton v. Brown, 31 Mich. 182; Foot v. Goldman, 68 Miss.
629, 10 So. 62 ; Hill v. Bell (Mo.), 19 S. W. 959. And if he gives his time to the
business he cannot recover the value of his services from his copartner. Page v. Morse,
128 Mass. 99. Even after dissolution, the assets are to be distiibuted according to tlie
articles ; if there has been a loss, the infant must bear his share. Moley v. Brine, 120
Mass. 324.
If the infant paid a premium to gain entrance to the firm, he cannot upon disaffirm-
ing the contract, recover the amount of the premium. Ex p'xrtc Taylor, 8 DeG. M.
& G. 254.
It has however been held in New York that an infant may rescind the contract of
partnership and recover the amount of his contributions, less what he has received
from the partnership. Sparman v. Keim, 83 N. Y. 245. Even in that State, however,
it would seem that this cannot be done if it would prejudice creditors of the partner-
ship. Yates V. Lyon, 61 N. Y. 344.
The infant's right to disaffirm extends to all transactions, it would seem, except as
llmiteil by rights acquired against the firm by third ))iuties. Thus he may avoid an
assignment of the firm property for the benefit of creditors made either by himself or
by his partner. Foot v. Goldman, 68 Miss. 529, 10 So. 62.
2
18 THE LAW OF PARTNERSHIP. [CH. III.
§ 16. Ratification after Coming of Age. — A promise of ail infant
may be ratilied by liini after he is of full age. And this ratifica-
tion may be direct and express, or it may be implied by his acts,
or even his silence, or inferred by law from circumstances. In
England, no ratification, after full age, binds an infant, unless
made in writing and signed by him. (/) A similar statute exists
in Maine, {y) It is not quite certain how this requirement would
affect a ratification by a continuance of the partnership and busi-
ness. If, for exami^le, a young man of the age of twenty entered
into a partnership, and at twenty-one took no notice of his having
been an infant, but continued in the partnership and in the same
business for a year or two more, and the firm was then called on
to settle an account running through all these years, it is doubtful
if, under this statute, the infant would be permitted to draw a line
between the items, and hold himself responsible only for those
which were subsequent to his majority. In this country generally,
one who was an infant may not only ratify after coming of age
any promise to which there is no other objection than the fact of
the previous infancy, but may ratify this by any conduct of an
unequivocal character, which must be understood either as a rati-
fication, or else as fraud or as gross negligence on his part, {h) ^
tures. The court, however, distinguish it satisfied the statute, and that the date,
from that case only upon the ground that address, and debt might be proved by
in the one the infant had, and in the other parol.
he had not, enjoyed a valuable consideia- ('/) Acts of Maine, 1845, ch. 166. See
tion for the money he sought to recover Thurlovv v. Gilmore, 40 Me. 378.
back. (h) Martin v. Mayo, 10 Mass. 137 ;
(/) 9 Geo. 4, ch. 14, § 5. In the Whitney v. Dutch, 14 Mass. 457 ; Pierce
construction of this statute, it has been v. Tobey, 5 Met. 168 ; Orvis v. Kimball,
held that "any written instrument signed 3 N. H. 314 ; Aldrich v. Grimes, 10 N. H.
by the party, which, in the case of adults, 194; Robins v. Eaton, 10 N. H. 561;
would have amounted to the adoption of Edgei-ly v. Shaw, 25 N. H. 514 ; Boydeu
the act of a party acting as agent, will, in v. Boyden, 29 N. H. 519; Delano v.
the case of an infant who has attained his Blake, 11 Wend. 85 ; Bigelow v. Grannis,
majority, amount to a ratification." Harris 2 Hill (N. Y. ), 120 ; Taft v. Sergeant, 18
V. Wall, 1 Exch. 122. See Mawson v. Barb. 320 ; Law&on v. Lovejoy, 8 Me. 405 ;
P.lane, 10 Exch. 206. In Hartley v. Richardson v. Bright, 9 Vt. 368 ; Best v.
Wharton, 11 A. & E. 934, the writing by Givens, 3 B. Mon. 72 ; Cheshire v. Barrett,
which the ratification was alleged to be 4 Me(.'ord, 241 ; Bobo v. Hansell, 2 Bailey,
made was a letter, without date or address, 114: Eubanks v. Peak, 2 Bailey, 497;
containing a promise to remit within a Alexander r. Heriot, Bailey Eq. 223 ;
short time, but mentioning no sum nor Thnmasson v. Boyd, 13 Ala. 419 ; Forsyth
any particular debt. It was held, never- v. Hastings. 27 Vt. 646.
theless, that this was a ratification which
^ An infant partner who continues his connection with the business after coming of
age ratifies all partnership transactions during his infancy. Salinas v. Bennett, 33 S.
C. 285, 11 S. E, 968.
§1^-]
OP PARTNERS.
19
But a mere acknowledgement that the debt exists is not of itself
a ratification of a promise to pay the debt. {()
If we suppose that an infant enters into a partnership, holding
himself out by his declarations, or by the plain indication of cir-
cumstances, as an adult, and, after he comes of age, does not
expressly withdraw or give any equivalent notice, persons dealing
with the firm in the belief that the former infant was still a part-
ner would hold him liable ; because, whether he was a partner or
not, he permitted the firm to use his credit, and he, and not an
innocent third party, must suffer the consequences, (j)
In general, an infant partner who comes of age should, with no
unnecessary delay, leave the firm, and declare himself not respon-
sible for its debts, if he intends to take that course ; for any
considerable delay would bind him like a ratification, because it
could be accounted for only by criminal neglect or fraud, (k)
(i) Thrupp V. Wilder, 2 Esp. 628 ;
Gooiisell I'. Myers, 3 Wend. 479 ; Millard
V. Hewlett, 19 Wend. 301 ; Smith v.
Mayo, 9 Mass. 62 ; Ford v. Phillips, 1
Pick. 202 ; Thompson v. Lay, 4 Esp. 48 ;
Benham v. Bishop, 9 Conn. 330 ; Wilcox
V. Roath, 12 Conn. 550 ; Hale v. Gerish,
8 N. H. 374 ; Robbins i'. Eaton, 10 N. H.
561 ; Ordinary v. Wherry, 1 Bailey, 28 ;
Alexander v. Hutcheson, 2 Hawks, 535 ;
Hindy v. Margarity, 3 Barr, 428.
{j) Goode V. Harrison, 5 B. & Aid.
147. Goode & Bennion, defendants below,
had held themselves out as general part-
ners in trade, especially by a joint pur-
chase of goods of the plaintiff in April,
1818. At that time Bennion was an in-
fant, though that fact was unknown to
the plaintiff. There was evidence showing
that Bennion did not intend to be a part-
ner with Goode, except for the single
transaction of April, 1818, and that he
did not afterwards interfere with Goode's
general business. In Maj- following he
became of age ; but no notice of his hav-
ing ceased to be a partner was ever given
by him. Subsei|nently to his coming of
age Goode bought more gootis of Harrison
in the name of the firm, and accepted a
bill for them in the name of himself and
Bennion. It was held that Bi^nnion was
liable on this bill ; for, having shortly be-
fore he came of age represented himself
as a partner, it was his duty to notify the
plaintiff that he was not so when he came
of age, as otherwise he facilitated the com-
mission of a fraud upon the plaintiff.
{k) See Holmes v. Blogg, 8 Taunt. 35 ;
1 J. B. Moore, 466. In March, 1816, the
firm of A. & B. leased certain premises for
the purposes of their trade. A., an in-
fant, in the presence of B., advanced one
half of the amount of the rent. For the
other half three bills were drawn upon the
fii'm, and accepted by A. in the names of
himself and [)artner, the first bill payable
in four months. In June, A. reached his
majority, and immediately dissolved the
partnership ; but, though his name was
taken from the door shortly afterwards, no
notice w-as given of his avoidance of the
lease till nearly four months afterwards.
Dallas, J., said : "I agree that in every
instance of a contract, voidable only by an
infant on coming of age, the infant is
bound to give notice of disaffirmance of
such contract in i-easonable time ; and,
if the case before the court were that sim-
ple case, I should be disposed to hold,
that, as the infant had not given express
notice of disaffirmance within four months,
he had not given notice of disaffirmance in
reasonable time." But it seems that no-
tice of disaffirmance of an infant's contract
may be dispensed with by the acts of the
party to whom it would otherwise be due.
The lessor, in this case, having, after the
dissolution of the partnership, made a new
arrangement with B., A.'s copartner, by
whicli a part of the rent was remitted,
20
THE LAW OF PARTNERSHIP.
[CH. III.
§ 17. Avoidance of Contract. — It may be well to remark that
the right of an infant to avoid his contract gives no right of avoid-
ance whatever to the other contracting party, who is bound if
the infant does not choose to avoid the contract. {I) The
and having, when the first bill became
due, sued B. alone upon it, and having
afterwards compromised tlie action, and
accepted from B. alone a surrender of the
lease, and cancelled the other bills, all
this without the privity of A., it was
held that there should be a new trial,
in order that the jury might determine
whether, upon these facts, notice of disaf-
firmance had not been waived. The case,
however, was ultimately decided upon
other grounds. 8 Taunt. 508. The dic-
tum of Dallas, J., above quoted, that an
infant must disaffirm his contract within
a reasonable time after coming of age, or
his silence will bind him like a ratifica- •
tion, is established law in the English
courts, and has been approved by emi-
nent judges in this country. Cork &
Bandon R. R. Co. v. Cazenove, 11 Q. B.
935 ; Leeds & Thirsk R. R. Co. v. Fearn-
ley, 4 Exch. 26 ; Northwestern R. R. Co.
V. M'Michael, 5 Exch. 114; Dublin &
Wieklow R. R. Co. v. Black, 8 Exch. 181 ;
Richardson v. Boright, 9 Vt. 368 ; Kline
V. Bebee, 6 Conn. 494 ; Scott v. Buchanan,
11 Humph. 468. But the weight of
American authority cannot be said to be
in favor of the proposition that mere neg-
lect to disaffirm will of itself amount to
a ratification. There must, beside, be
positive action on the part of him who
has come of age clearly indicating his
intention to abide by the contract which
he has made during his infancy. Thus,
in Dana v. Stearns, 3 Cush. 342, B., an
infant, and S. had been in partnership,
which was, however, dissolved by mutual
consent before B. came of age. B. sold
out his share to S.. took therefor the note
of S. with security, but never expressed
any purpose of repudiating the partner-
ship. In an action brought against B. &
S. as partners, upon notes given by them
while in business together, and in consid-
eration of merchandise sold and delivered
to them, it was contended that B. had
ratified the partnership after coming of
age, and therefore the notes iu suit, by
retaining and attempting to enforce the
note of S. above mentioned, which was
given by S. not only for the amount of
capital originally contributed by B., but
also in addition for B.'s share of the protits
realized by the firm during their continu-
ance in business. But the court held that
no sufficient ratification was proved from
these facts, and that B. was not liable for
the partnership debts. See, to the same
point, the note to the case of Dublin & Wick-
low R. R. Co. V. Black, 8 Exch. 181, where
the American authorities are reviewed.
See also Jones v. Phoenix Bank, 8 N. Y.
228 ; N. H. Mut. F. Ins. Co. v. Noyes,
32 N. H. 345 ; Stokes v. Brown, 4 Chand.
39. A plea of infancy to a note executed
by an infant partner in the name of the
firm is not avoided by a replication that
defendant had continued to be a partner
for a year and more after he became of
age, and had not during that time, nor
for some years after, disaffirmed any note
executed during his infancy in the name
of the firm. There should also be an
averment that he had knowledge of the
particular contract declared on, and that
he was looked to as a party to it. Crab-
tree V. May, 1 B. Mon. 289. In Miller v.
Sims, 2 Hill (S. C), 479, an action was
brought on a note signed by Sims in the
name of Sims & Ashford. Ashford was,
at the time of signing, a minor. After lie
came of age there was evidence that he
received moneys due the firm, and signed
the firm name, but refused to have any-
thing to do with the note in question,
and never ratified or confirmed it. The
court held that if Ashford, after coming
of age, did in any manner concur in carry-
ing on the partnership business, or receive
profits from it, it would amount to a rati-
fi. ation ; and that, by affirming the part-
nership, Ashford recognized and affirmed
the agency of Sims.
(0 Holt ?;. Ward, 2 Str. 937 ; Warwick
V. Bruce, 2 M. & S. 205 ; Willard v. Stone,
7 Cow. 22 ; Paikei- v. Barker, 1 Clarke Ch.
136 ; Rose v. Daniel, 3 Brev. 438 ; Voor-
. § 18.]
OF PARTNERS.
21
infant's privilege of avoiding his contracts extends to his legal
representatives, (m)
A fiat or decree of bankruptcy against an infant is not voidable
only, but wholly void at law. (n) Equity, however, will not declare
it void if he has induced persons to give him credit as an adult
member of the firm, but will leave him to his remedy at law. (o)
But the fact that his name is used in the firm is not of itself suffi-
cient to prevent equity from annulling the same, (p)
§ 18. Effect of Plea of Infancy. — If a contract be made with a
firm, one of the members being an infant, and repudiating his
own liability, it seems to be doubted whether the contract can
afterwards be treated as a contract made with the other part-
ners, (pp) It would seem, however, that it may. The technical
hees V. Wait, 3 Green, 343; M'Ginn v.
Shaeffer, 1 Watts, 412 ; Camion v. Als-
buiy, 1 A. K. Marsh. 76.
(wi) Hussey v. Jewett, 9 Mass. 100 ;
Martin c. Mayo, 10 Mass. 137 ; J;icksoii
V. Mayo, 11 ilass. 147.
(n) O'Brien v. Currie, 3 0. & P. 283 ;
Beltoi) P. Hodges, 9 Ring. 365. The fiat
is void, because a minors contracts of trade
being voidable, he cannot be a bankrupt for
debts which he is not obliged to pay. Ibid. ;
Rex r. Cole, 1 Ld. Kaym. 443 ; Lord
Eldon, in Ex parte Adam, 1 Ves. & B. 494 ;
Ex parte Moule, 14 Ves. 602. Hence also
a joint commission of bankruptcy against
a firm, one of the members of which is an
infant, will be superseded. Ex parte Hen-
derson, 4 Ves. 163 ; Ex jxirte Barwis, 6
Ves. 601. But where a statute provides
that an adjudicated bankrupt, to test the
validity of the commission, must show
cause before the commissioner within
seven days after the adjudication ; or, to
dispute or annul the fiat, must commence
proceedings within twenty-one days after
the advertisement of the bankruptcy, —
a partner adjudged a bankrupt while an
infant cannot after the lapse of the pre-
scribed period maintain a petition pray-
ing, on the ground of his infancy, to have
the adjudication and fiat annulled ; there
being in this respect no exception made
of infants in the statute. Ex parte West,
2 De Gex, M. & G. 198. [But under the
insolvency laws a firm may be declared
insolvent though one partner sets up his
infancy. The infant however cannot
himself be involved in the proceedings.
Pelletier v. Couture, 148 Mass. 269, 19 N.
E. 400.]
(o) Ex parte Watson, 16 Ves. 265.
The Lord Chancellor delivered his opinion
as follows: "As it appears in this case
that the petitioner held himself forth to
the world as an adult, and sici juris, and
traded in that character, and. contracted
debts to a considerable amount for two
years previous to the commission, and as
this i)etition is opposed on behalf of the
creditors, I will make no order ; but leave
the bankrupt to his action at law, if he shall
think proper so to do. I consider him no
more entitled to any favor or assistance
than a feme covert who lives apart from
her husband, and holds herself out as a
feme sole, and contracts debts, is entitled
to any summary relief from the judges at
common law ; who always leave a woman
of that description to make the best she
can of her plea of coverture in any action
brought against her, and constantly refuse
to interfere so as to aff"ord her any sum-
mary relief."
{p) As where A. takes B., his minor
son, sixteen years old, into partnership.
Though the names of A. & B. are put over
the door of their place of business, B. is
not by that circumstance so held out to
customers as an adult partner as to lose
the right of having annulled a joint fiat of
bankruptcy issued against the firm of A.
& B. Ex parte Lees, 1 Deacon, 705.
{pp) See Story Part. § 255.
22
THE LAW OF PARTNERSHIP.
[CH. III.
rules of pleading in England require that if an action be brought
against an infant (or one who was an infant at the time of the
promise) and others, and infancy is pleaded, the plaintiff cannot
proceed against the others, but he may bring a new action against
them alone, {q) And if he brings an action originall}' against
them alone, and the non-joinder of the infant is pleaded in
abatement, the infancy is a sufficient replication, (r) although a
ratification by him who has been an infant would be a good
rejoinder, (s) In Massachusetts, New York, New Hampshire,
Indiana, and Maine, it has been held that an action brought
against all may be continued against the other parties when
one of them pleads infancy ; {t) and it is to be expected that
this would be recognized as the American rule.
§ 19. Married Women. — A married woman is, by common law,
incapable of trade, and therefore of entering into partnership.
But, by the " custom of London," married women may some-
times be sole traders, (?^) and the courts of this country are quite
indulgent in permitting women whose husbands have deserted
them — voluntarily, or by compulsion of law — to enter into busi-
ness for their support. And it seems that any married woman who
is capable of being a sole trader may also enter into a commercial
partnership, {v)
{q) Chandler v. Parkes, 3 Esp. 76 ;
Jatfray v. Frebain, 5 Esp. 47.
(r) Burgess v. Merrill, 4 Taunt. 469 ;
2 Yin. Ab. 68.
(s) Gibbs 1-. Merrill, 3 Taunt. 307. But
such rejoinder must be supported by proof
of a ratification made before suit brought.
Thornton v. Illingworth, 2 B. & C. 824.
In an action for a partnership debt, an
infant partner must be made co-plaintiff.
Teed v. Elworthy, 12 East, 210 ; Kell v.
Nainby, 10 B. & C. 20.
(t) Woodward v. Newhall, 1 Pick. 500 ;
Tuttle V. Cooper, 10 Pick. 281 ; Hartness
V. Thompson, 5 Johns. 160 ; Robertson v.
Smith, 18 Johns. 478 ; Morton v. Croghan,
20 Johns. 123 ; Judson v. Gibbons, 5
Wend. 224 ; Ex parte Nelson, 1 Cow.
424 ; Cutts v. Gordon, 13 Me. 474. The
same is the rule in Indiana. Kirby v.
Cannon, 9 Ind. 371. So, too, in New
Hampshire. Gay v. Johnson, 32 N. H.
167. See also Wamsley v. Lindenberger,
2 Rand. 478 ; Cole v. Pennell, 2 Rand.
174 : Barlow v. Wiley, 3 A. K. Marsh.
457 ; Slocum v. Hooker, 13 Barb. 536.
(n) Langham v. Bewett, Cro. Car. 68.
In this case, the custom of London was
read, to wit : "That a feme sole merchant
is where the/cme trades by herself in one
trade, with which her husband doth not
meddle, and buys and sells in that trade."
But the city courts only, not the supei'ior
courts at Westminster, take notice of this
custom, so that a feme covert cannot, by
virtue of it, sue or be sued in the latter
without her husband. Caudell v. Shaw,
4 T. R. 361 ; Beard v. Webb, 2 B & P. 93 ;
Cosio V. De Bernales, 1 C. & P. 266, note.
(i') [Penn v. Whitehead, 17 Graft. 503.]
By the law of England a wife may act as
a feme sole, if her husband has been ban-
ished, or has abjured the realm, or been
transported, or if he has professed the
Catholic religion. Co. Litt. 132 b, 133 a ;
Lean v. Schutz, 2 W. Bl. 1195; Corbet t z;.
Poelnitz, 1 T. R. 5 ; Marshall v. Ruttoii,
8 T. R. 545 ; Carroll v. Blencow, 4 Esp.
27 ; Marsh v. Hutchinson, 2 V>. & P. 231 ;
Ex parte Franks, 1 Moo. & Sc. 1. So, &ho,
if her husband is an alien, who has never
resided in England. Deerly v. Mazarine,
20.J
OF PARTNERS.
23
§ 20. statutory Changes. — Legislation in this country has made
the most im|)(ji-t;uit and extensive additions to tlie powers of mar-
ried women. So early as 1718, in Pennsylvania, and 1744, in
South Carolina, the privileges oiferne aole traders by the custom
of London were extended to married women in those States,
which were then colonies, {w) Within the last few years, the
legislatures of very many States have made much greater innova-
tions upon the law of husband and wife. The various statutes
differ of course in their details, but, in general, their object and
scoi)e arc the same.^
1 Salk. 116 ; De rxallou v. L'Aigle, 1 B.
& 1'. 357 ; Miiiwli v. Hutchiiisoii, 2 B. &
?. 226 ; Farber v. Grauard, 4 B. & \\ 80 ;
Walfonl V. De Pieiine, 2 Esj). .o54 ; Fiaiiks
V. De Pitniiie, 2 Ksp. 587 ; Kay v. Pieiine,
3 Camp. 12:3. Tlie priuciiile upon which the
Eiii^li.sh courts have proceeded in these cases
is, that, in the view of the law, the husband
has no civil existence, and that the wife is
tiieiefoie m a state of civil widowhood. In
this country, the same exceptions to the
disability of married women to make and to
be bound by contracts have been recognized
by the courts. Gregory v. Paul, 15 Mass.
31 ; Robinson v. Reynolds, 1 Aik. 174 ;
Cornwall v. Hoyt, 7 Conn. 420 ; Wright
V. Wright, 2 Desau. 244 ; Boyce v. Owens,
1 Hill (S. C), 8; M'Arthur v. Bloom, 2
Duer, 151. And, if a man has never lived in
that State of the Union in wliich his wife
resides, be is, so far as that State is con-
cerned, an alien, and his wife is treated as
a feme sole. Abbot v. Baylc}', 6 Pick. 89.
But American courts have also gone far-
ther, and have held a separation from and
abandonment of the wife, coupled with an
intent to renounce dc facto the marital
relation, to operate like an abjuration of
the realm, and to invest the wife with the
rights of ^ feme sole. And in some cases
sliglit circumstances have been considered
sufficient to constitute such desertion aiwi
lenunciation. Bogget v. Frier, 11 East,
301 ; Gregory i-. Pierce, 4 Met. 478 ; Rhea
V. Rhenuer, 1 Pet. 105 ; Valentine v.
Ford, 2 P. A. Browne, 193 ; Bean v.
Morgan, 4 McCortl, 148 ; Love v. Moy-
nehan, 16 111. 277 ; Krebs v. O'Grady,
23 Ala. 726. In Massachusetts, a wife
divorced a nnensa et thoro may sue and be
sued as a feme sole. Dean v. Richmond,
5 Pick. 461 ; Pierce v. Barnhani, 4 Met.
303. Otherwise in England. Lewis v.
Lee, 3 B. & C. 291. Where a feme covert
entered into agreement of partnership,
providing for its duration beyond the death
of her husband, and this agreement was
executed, ^nd the partnership continued
beyond her husband's death until her own,
it was held, that the copartnership related
back to the execution of the articles, so as
to give all parties the same rights and
advantages as they would have been enti-
tled to if tlie/e?)!e covert had been a feme
sole at the date of their execution. Everit
V. AVatts, 10 Paige, 82.
(iv) Burke v. AVinkle, 2 S. & R. 189 ;
Jacobs V. Fatherstone, 6 W. & S. 346 ;
Newbiggin v. Pillans, 2 Bay, 462 ; Mc-
Dowall V. Wood, 2 N. &'McC., 242;
Stark V. Taylor, 4 McCord, 413.
1 It is still true that in the absence of express statutory authority a married woman
cannot (with the exceptions already noticed) be a partner. De Graum v. Jones. 23
Fla. 83, 6 So. 925 ; Bradstreet v. Baer, 41 Md. 19 ; Brown v. Jewett, 18 N. H. 230 ;
Gwynn v. Gwynn, 27 S. C. 525, 4 S. E. 229 ; Weisiger v. Wood, (S. C.) 15 S. E.
597 ; Frank v. Anderson, 13 Lea, 695 ; Brown v. Chancellor, 61 Tex. 437 ; Miller j;.
Marx, 65 Tex. 131 ; Carey v. Burruss, 20 W. Va. 571.
But under statutes which allow her to carry on business as if sole, she may form a
partnership. Abbott v. Jackson, 43 Ark. 212 ; Dupuy v. Sheak, 57 la. 361 ; Vail v.
24 THE LAW OF PARTNERSHIP. [CH. III.
rf a single woman was a member of a firm, — which she
certainly may be, — no doubt the established principle, by which
her marriage dissolved the partnership, would still prevail,
generally at least, in this country, {y)
§ 21. Ownership of Share in a Partnership. — There are kinds of
partnership, as joint-stock companies and the like, in which a
partner may only own stock or shares, and take no part whatever
in the active management of the concern. There is nothing to
prevent a wife from holding such stock or shares ; but her
ownership — or partnership, if it should be so called — would
seem to be that of her husband, and upon him would rest generally
all the liabilities and obligations of a partner, {z) So, if a man's
{y) Watson on Part. 384 ; Gow on the time of his marriage, his wife was a
Part. 225. See post, ch. 12. And see legally registered owner. After their mar-
Brown V. Jewett, 18 N. H. 230. ringe, the shares had continued to stand
{z) Gow on Part. 2. In Dodgson v. in the maiden name of defendant's wife,
Bell, 5 Exch. 57, the question was, wliether and she had received dividends and paid
the defendant was a partner in a joint-stock calls in respect of them, though without
banking compan}' in which, before and at the knowledge of her husband, who never
Winterstein (Mich. ), 53 N. W. 932 ; Newman v. Morris, 52 Miss. 402. Contra, Haas
V. Shaw, 91 Ind. 384 [scmbk). See Swasey v. Antram, 24 Oh. St. 87.
It is generally held that tliese statutes do not permit a wife to enter into partner-
ship with her husband. Haas v. Shaw, 91 Ind. 384 ; Bowker v. Bradford, 140 Mass.
521, 5 N. E. 480 ; Artman v. Ferguson, 73 Mich. 146, 40 N. W. 907 ; Payne v. Thomp-
son, 44 Oh. St. 192, 5 N. E. 654; Board of Trade v. Hayden, 4 Wash. St. 263, 30 Pac.
87; Fuller v. McHenry (Wis.), 53 N. W. 896. Contra, In re Kinkead, 3 Biss. 405
(scmble) ; Francis v. Dickel, 68 Ga. 255 (scmblc) ; Toof v. Brewer, (Miss.) 3 So. 571
(sevibfc); Suau v. Gaffe, 122 N. Y. 308, 25 N. E. 488 (Court of Appeals, Second Division :
three judges dissenting) ; but see Hendricks v. Isaacs, 117 N. Y. 411, 22 N. E. 1029.
Where a statute expressly empowers a husband and wife to contract witli one anothei
they may become partners. Schla]>back v. Long, 90 Ala. 525, 8 So. 113.
According to the Spanish-Mexican law, a wife may be a partner with her husband.
Gosio ;;. De Bernales, Ry. & Moo. 102 ; Fuller v. Ferguson, 26 Cal. 546.
A doubt was suggested in Rittenhouse v. Leigh, 57 Miss. 697, as to the right to
hold a married woman as partner by estoppel, wliere the statute gives her power to
do business and enter into partiiershiji. Although the statute permits her to engage in
business, it might well be held that she could render herself liable only by actually doing
so. Where she cannot form a partnership she certainly cannot be charged with the
liability of a partner by estoppel. Gvvynn v. Gwynn, 27 S. G. 525, 4 S. E. 229;
Weisiger v. Wood, (S. G.) 15 S. E. 597."^
If a married woman, not empowered bj' statute, engages in business as member of a
partnership, the capital that she puts into the enterprise is liable for the firm debts,
though she is under no individual liability. Weil v. Simmons, 66 Mo. 617 ; Frank
V. Anderson, 13 Lea, 695, (aemblc). And she has the corresponding right to call for an
account. Bitter v. Rathman, 61 N. Y. 512. Where a statute permits the partnership
to be sued in the firm name this may be done though a married woman is a member ;
since execution issues in such a suit against firm property only. Yarbrough v. Bush,
69 Ala. 170.
In Texas it is held that the husband is the partner. Miller v. Marx, 65 Tex. 131 ;
Purdom v. Boyd, (Tex.) 17 S. W. 606.
§ 22.] OF PARTNERS. 25
wife inherited an interest in a partnership, and ho, instead of
having the accounts settled, and the interest withdrawn, as he
might do, permitted it to continue in the husiness, this would
make him a partner, even without his actually withdrawing and
appropriating funds. It certainly would have this effect wherever
the common law so far prevailed that all her share of the profits
were at once his. If, however, the property or interest were given
to trustees for the sole benefit of the wife, free from any right or
control of the husband, then the mere fact of its continuance in
the business would not render him liable as partner, although it
would probably cast this responsibility on the trustees ; as otiier-
wise it would be a kind of limited partnership, without the
precautions and safeguards of the law on that subject. And if
the law of the State where the case occurred gave to the wife, so
far as her property was concerned, the status of a single woman,
she might then be a partner.
§ 22. Aliens. — An alien friend can be a partner in a com-
mercial house ; for there is nothing to prevent his holding any
personal property, or in bringing and maintaining or defending
any suits, (a) If the property of the firm were in part or in whole
real estate, a question might arise. If the estate was in a country
in which aliens could not hold land, the legal title certainly could
not be in him ; but we think that courts of equity would, in that
case, recognize the fact that the partners possess the legal title as
trustees for the partnership. They would certainly do this where
one of many partners alone holds the title, and there Avere no
aliens ; and we see no sufficient reason why they should not, if
one or more of the cestuis que trustent were aliens. (6)
in any way meddled with them. The and attended company meetings, at which
company's deed of settlement provided, only shareholders were entitled to he
that the husband of a female shareholder present. It is to be observed, that, in this
should not, merely in respect of his wife's last case, upon the authority of which
sliares, become a member of the company, Dodgson i'. IJell was decided, great stress
but that he nmst tirst comply with certain is laid by the judges upon the fact that
conditions. The defendant not having the remedy attempted to be enforced
fulfilled these conditions, it was held, that against the defendant, as a partner by
he was not a member against whom a sci. virtue of his wife's interest, was an extra-
/a. to levy exeaution under Stat. Geo. 4, ordinary statutable remedy. In both these
eh. 46, § 13, could issue. The same was cases the question was as to who were
held in Ness v. Angas, 3 Exch. 806, where partners inter se, and not as to who were
the defendant's wife had bought shares partners with respect to third persons. In
after her marriage, with the consent of her re Keene's Executors, 3 De G. M. & G.
husband, but out of the proceeds of her 272.
own estate ; and this although her hus- [See Miller v. Marx, 65 Tex. 131.]
band had received some of the dividends, (n) Co. Litt. 129 b.
signed receipts therefor as her agent, (b) See/)os<, oh. 11.
26
THE LAW OF PARTNERSHIP.
[CH. III.
The rule is quite otherwise as to alieu enemies. Here partner-
ship is impossible, (c) And if there be a partnership with an
alien friend, and war breaks out between the countries, it entirely
suspends the partnership. From the language sometimes used, it
might be inferred that a war would terminate and annul such
])artnership altogether ; (tf) and it might have this effect in many
cases. But where the terms and business and state of affairs of
the partnership were such that an entire suspension of all rights
and intercourse during the war would still leave the partnership
in a condition to go on as before when the war ended, we should
say that the partnership revived by peace, and did not need to be
created anew.
No alien enemy can bring any action in any court of the hostile
country, (e) And this rule has been applied to a citizen then
resident in a foreign country, on the ground tliat if he prevailed,
and funds in satisfaction of his judgment were remitted to the
foreign country, it would be a strengtheiiing of the enemy. (/)
There is nothing to prevent a firm consisting wholly of aliens
from having an agency in this country, and bringing any personal
actions. Even if husband and wife form a commercial partner-
(c) The reason is, that the existence of
a state of hostility between two countries
renders illegal all comnieicial intercourse
between their citizens. Bristow v. Tow-
ers, 6 T. R. 35 ; Potts v. Bell, 8 T. R. 548 ;
Willison ;;. Patteson, 7 Taunt. 439; The
Hoop, 1 C. Rob. Adni. 196 ; The Indian
Chief, 3 C. Rob. Adm. 22 ; The Jonge
Pieter, 4 C. Rob. Adm. 79 ; The Franklin,
6 C. Rob. Adm. 127 ; Ex parte Bouss-
raaker, 13 Ves. 71 ; Griswold v. Wadding-
ton, 15 Johns. 57, 16 Johns. 438 ; The
Rapid, 8 Craneh, 155 ; The Julia, 1 C.
Rob. Adm. 181 ; Scholefield v. Eichel-
berger, 7 Pet. 585 ; The San Jose Indiano,
2 Gall. 268. See upon this subject a
learned note to the case of Clemontson v.
Blessing, 11 Exch. 135.
{d) See Griswold v. Waddington, 15
Johns. 57 ; 16 Johns. 438. A commercial
partnership between citizens of the respec-
tive belligerents was dissolved by the late
rebellion. Woods r. Wilder, 43 N. Y. 164.
But the general doctrine of the text seems
to lie upheld by the weight of modern au-
thority. Kenshaw v. Kelsey, 100 Mass.
561 ; Cohen i-. N. Y. Life' Ins. Co., 50
xs. Y. 610. See also Mutual Benefit Life
Ins. Co. V. Hildyard, 37 N. J. L. 444,
where the cases upon the efl'ect of war
upon the abrogation of contracts are fully
collected. N. Y. Life Ins. Co. v. Statham,
93 U. S. 24.
(e) Co. Litt. 129 b ; Anthon v. Fisher,
Dougl. 649, note ; Brandon v. Nesbitt,
6 T. R. 23 ; Willison v. Patteson, 7 Taunt.
439 ; Griswold v. Waddington, 15 Johns.
57 ; 16 Johns. 438 ; Hoare v. Allen, 2
Dallas, 102. And the disability to sue
attaches to an alien carrying on trade in
an enemy's country, though he resides
there also as consul of a neutral country.
His individual character for purposes of
trade is not merged in his national char-
acter. Albretcht v. Sussman, 2 Ves. & B.
323. The wife of an alien enemy is also
disabled from suing in her own name on
a conti'act made either before or during
coverture. De Wahl v. Braune, 1 H. &
N. 178.
(/) M'Connell v. Hector, 3 B. & P.
113 ; O'Mealey v. Wilson, 1 Camp. 482 ;
Rolierts v. Hardy, 3 M. & S. 533 ; The
Julia, 8 Craneh, 181 ; Griswold v. Wad-
dington, 16 Johns. 438.
§ 24.] OF PARTNERS. 27
ship in a foreign country in wliicli such a partnership could leually
exist, it would be ditiicult to say that they could not maintain an
action together in this country, even as joint plaintiffs, however
unusual such a thing might be. (^)
§ 23. Insane Persons. — A fatuous or insane person could
neither transact business on his own account nor as a partner.
The degree of mental incapacity which should have this effect is
hardly capable of definition ; and the question whether it existed
might bo a difficult ([uestion of mixed law and fact. So, if one were
generally sane, with attacks of insanity, or generally insane, with,
lucid intervals, it might be difficult to apply the rule ; (A) but the
rule itself certainly must be that no one is incapacitated from
becommg a partner who is able to transact business of his own.
To those under guardianship as spendthrifts or otherwise, or
whom habitual intoxication has enfeebled and stultified, a similar
rule must apply, (i) They are incompetent to transact business
on their own account, and therefore incapable of entering into a
commercial partnership. Q")
§ 24 Corporations. — The question has arisen whether a cor-
poration, considered as a person, may become a partner, either
with another corporation or with individuals.^ Perhaps no other
general rule on this subject can be stated than that a corporation
may incur the liability of a partner as to third persons, although,
(g) See ch. 9. [If they have been sued clearly be avoided by proof that at the
and judgment obtained in the jurisdiction time it was made one of the parties "had
where they do business, the wife's separate not an agreeing mind " through temporary
property will be held on the judgment in intoxication. Pitt v. Smith, 3 Camj). 33 ;
a jurisdiction where husband and wife can- Fenton r. Holloway, 1 Stark. 126. See
not be partners. Toof v. Brewer (Miss.), Lightfoot v. Heron, 3 Younge Exch. 586.
3 So. 571.] (/) See further, on the subject of per-
(h) See the impressive remarks of Lord sons of insufficient mind to contract, 1
Chancellor Thurlow, in Attorney-General Fonbl. E(|. b. I, ch. 2, § 3 ; 1 Story Eq.
V. Pamther, 3 Bro. Ch. 441. ch. 6, § 229 et seq. ; 1 Pars. Cont. (5th ed. )
(i) Menkins v. Lightner, 18 111. 282; b. 1, ck 20 ; 2 Pothier on Obligations,
Mansfield v. Watson, 2 Clarke, 111. So App. Ko. 3, p. 23.
an agreement to forui a partnei"ship would
* It seems clear that a corporation may be empowered by its charter to form a part-
nership with an individual. See Butler v. American Toy Co., 46 Conn. 136. But
where no such power is given by the charter the entrance of a corporation into a ]iart-
nership is iil/ra vires. Gunn v. Central R. R., 74 Ga. 509 ; Whittenton Mills v.
Upton, 10 Gray, 582; Hackett v. Multnomah Ry., 12 Ore. 124 ; 6 Pac. 659; Mallory
V. Hanaur Oil Works, 86 Tenn. 598 ; 8 S. W. 396.
In Allen v. Woonsocket Co., 11 R. I. 288. it was held that a corporation might
become partner with an individual where the charter did not specify the business of the
corporation ; the individual was to have no voice in the partnership business, and all tlie
stock of the corporation was in the hands of a single owner. The case therefore turned
on special facts and is of no weight as an authority.
28
THE LAW OF PARTNERSHIP.
[CH. III.
on general principles, it would be inconvenient, if not impossible,
for a corporation, which is only a legal person, to enter into a full
copartnership, either with another legal person or with natural
persons. (Ar)
§ 25. Firms. — [An already existent firm may enter into a
partnership with an individual. In such a case the new partner-
ship will commonly be made up of the individual partners of the
old firm, together with the new partner. The old firm as such
will not generally become a member of the new partnership.^
But it is possible for two firms (or for a firm and an individual)
to enter into a partnership upon such terms that the old firms,
(A) As the whole power of a corpora-
tion is derived from its charter, it may
well be questioned whether it could enter
into a partnership for the transaction of a
business different from the object for which
it was chartered. And it seems that two
or more corporations cannot consolidate
theii funds, or form a partnership, unless
authorized by exjiress grant or necessary
implication. In Sharon Canal Co. v. Ful-
ton Bank, 7 Wend. 412, the court say :
" It cannot be necessary to decide whether
it is in the power of the two corporations,
who are the plaintiffs, to consolidate their
stock or to form a partnership. General
princi[»les are against the power of corpo-
rations to do such acts. They have no
powers but such as are granted, and such
as are necessarily incident to the grant
made to them. Corporations at conmion
law have certain power.s, but not such as
Vould authorize the forming of a partner-
ship, or the consolidation of two corpora-
tions into one." It is a different iiuestion,
whether a corporation may not render it-
self liable to third parties as a quasi part-
ner by its acts ; and we know of no rea.son
why this might not be the case. The sub-
ject was before the court in Holmes v.
Old Colony R. R. Co., 5 Gray, 58 ; but as
the acts of the corporation were held not
sufficient to constitute a {partnership lia-
bility as to third parties, there was no
direct decision upon the question whether
a corporation could be held as partner.
In Catskill Bank v. Gray, 14 Barb. 479,
one of the questions presented was whether
a corporation could be a partner with an
individual even as to liability. The lan-
guage of the court is : " Strictly, perhaps,
corporations should be and are restricted
from contracting partnerships with indi-
viduals or corporations, and as between
the parties to the contract, acting upon
equal knowledge, a question of validity
might be raised ; but a corporation may
contract with an individual in furtherance
of the object of its creation, the effect of
which contract may be to impose upon the
company, as respects the community, the
liabilities of a partner. I cannot think
that a corporation may so shape its con-
tracts, relating to the business for which
it was incorporated, as to share jointly
with an individual in the profits of such
business ; subtract its interest in the profits
from the fund on wliich the creditors of
the concern had a right to rely for the
payment of the debts due to them ; and,
when called upon by such creditors, be
permitted to escape liability altogethei, on
the ground that the profits were realized
as the partner of an individual, which re-
lation the corporation could not legally
occupy. I know of no sound reason why
a corporation, more than a natural person,
who participates in the profits as such of a
particular business in which it may law-
fully engage, should not be holden to the
public for losses." See Marine Bank v.
Ogden, 29 111. 248. [Cleveland Paper Co.
V. Courier Co., 67 Mich. 152; 34 N. W.
556]
1 Meyer v. Krohn, 114 111. 574, 2 N. E. 495.
§ 28.] OF PARTNERS. 29
and not their individual members, should be the partners in the
new firm.^]
§ 26. The Kinds of Partners. Different names are given to
partners, desci-ibing their respective relations to the partnership.
The principal names are : 1. Ostensible, or Public. 2. Secret,
or Unknown. 3. Nominal. 4. Silent. 5. Dormant. 6. Retiring.
7. Incoming. 8. General. 9. Si)ecial.
§ 27. Ostensible or Public Partners. — This name indicates that
the partner is " shown forth " to the world as one. If this is
done with his own consent, all the liability of a partner attaches
to him. There is no special way of holding such partner forth.
It may be done by having his name in the firm or style of the
partnership, or on the signs at the door, or by advertisement, or
by circular letters. (0 Indeed, if a partner generally unknown
is made known as such in any way to any one man, with his own
consent, he is, so far as that man is concerned, an ostensible
partner in every legal aspect and liability, as much as if adver-
tised to the world. In this sense, therefore, there would be a
difference between the words " ostensible " and " public," — the
latter meaning shown as a partner to all the world, — although
these two words are commonly used as synonymous.'''
§ 28. Secret or Unknown Partners. — He is a secret partner
who keeps Iiimself concealed from the public, and from all the
customers of the partnership. (?«) We shall hereafter see that
neither the word " Co.," nor any other public designation of a
copartnership is necessary to bind all the partners. But this
important distinction is to be taken : A partner is liable either
because he is one in fact, or because he holds himself out or
suffers himself to be held out as one. In the latter case, he is
liable whether actually a partner or not, as we shall presently see.
But, in the former case, he is not liable, unless it can be shown
that he is actually a partner. If he is, he has gained nothing by
being secret. Of course, so long as he is undiscovered he is safe :
but as soon as he is found to be a partner, even if this be not
until after an action has been brought against the other partners,
{I) Partners whose names are not ex- (»i) United States Bank v. Binney, 5
pressed in the firm, but who are simjily Mason, 185. [Harris v. Crary, 67 Tex.
indicated by the word "Co.," are not 383, 3 S. W. 316.]
dormant, but ostensible, partners. God-
dard V. Pratt, 16 Pick. 428.
1 III re Hamilton, 1 F. R. 800. See also Meador v. Hughes, 14 Bush, 652.
2 In Harris v. Crary, 67 Tex. 383, 3 S. W. 316, the term "ostensible partner" is
used in the sense of "nominal partner."
so
THE LAW OF PARTNERSHIP.
[CH. III.
he becomes liable ; because, although he added no credit to the
firm, and permitted no debt to be incurred on his credit, he is
equally liable as if he had done this, from the mere fact that he
shared the advantages of the partnership.
If a secret partner is announced as a partner to a customer,
without his own consent or connivance or ratification, his rights
are wholly unaffected by the customer's knowledge, and dc)>end
entirely upon the fact of his partnership. Not so, as we have
seen in the preceding section, if he permits himself to be made
known as a partner to a customer.^
§ 29. Nominal Partners. — Every ostensible partner is a nomi-
nal or known partner ; but by this designation is usually meant,
that the partner is only nominally one. (n) That is, he is so held
forth as a partner, with his own consent, by any of the means
usually employed for that purpose, as to make him liable as a
partner on the ground that he has given his credit to the firm,
and authorized engagements on his account, (o) It follows,
(/t) Ex parte Chuck, 8 Bing. 469. See
Cunier v. Silloway, 1 Allen, 19 ; Lindsey
V. Edniin.ston, 25 111. 359 ; Jacobsen v.
Hennekenius, 1 Bro. P. C. 432 ; Fox v.
Clifton, 6 Bing. 795 ; Hicks v. Cram, 17
Vt. 449. Hence one who is merely a
nominal partner with another man may
be called by him as witness. He is not
incompetent on the score of interest.
Parsons v. Crosby, 5 Esp. 199 ; Mawman
V. Gillett, 2 Taunt. 327.
(o) The ground of the liability of a
nominal partner is thus stated in a leading
case, Waugh v. Carver, 2 H. Bl. 235: "A
case may be stated, in which it is the clear
sense of the parties to the contract that
they shall not be partners ; that A. is to
contribute neither labor nor money, and,
to go still farther, not to receive any j)rofits.
But, if he will lend his name as a partner,
he becomes as against all the rest of the
world a partner, not upon the ground of
tlie real tran.saction between them, but
upon principles of general policy, to pre-
vent the frauds to which creditors would
be liable, if they were to suppose that
they lent their money upon the apparent
credit of three or four persons, when in
fact they lent it only to two of them, to
whom, without the others, they would
have lent nothing." So in Ex parte V/at-
son, 19 Ves. 461, Lord Eldon says : "There
is a wide difference between a dormant and
nominal partner. The former is liable in
respect of the j)rofits ; . . . but if one,
retiring or coming into the trade, suffers
his name to be used, it is of no con-
sequence whether he has a salary or sura
of money, to be paid by others, or to be
got out of the profits. It is the use of
the name that makes him liable, as one of
the persons by and to whom everything is
bought and sold." So, in Hicks v. Cram,
17 Vt. 449, the court say: " It is the rep-
resenting one's self, or suffering one's self
to be represented, as a partner, that creates
a liability to third persons ; and this is
sufficient to create a liability, notwith-
standing the truth should prove to be, that
the person so suff"ering himself to be held
out as partner, in fact was not so. This
is in order to preserve good faith and pre-
vent fraud, and is almost the only ground
of an estoppel m pais. If one man has
made a representation which he expects an-
other may or will act upon, and the otlier
does in fact act upon it, he is esto{i])ed
to deny the truth of the representation.
So, too, equally, when one remains silent,
and suffers another to make the representa-
tion."
1 Milmo Nat. Bank v. Carter (Tex.), 20 S. W. 836.
§ 31.] OF PARTNERS. 31
therefore, that if a person suffers himself to be regarded as a
partner by any customer of the firm, to him he is liable as if he
were one, although he is in fact no partner, and not generally
supposed to be one. The nominal partner is the converse of the
secret partner.
§30. Silent Partners. — This name is pro])crly and generally
ai)plied to those who take no active part whatever in the business
of the firm, and exercise none of the rights of a partner, except
that of receiving their share of the profits from time to time. He
is a silent partner, whether his name be made known in any way
as a partner or not. There is, however, a very common use of
the word " silent," which differs somewhat from that above stated.
It seems to be thought that he only is a silent partner who is
silent to the world in respect to his interest in the firm, as well
as silent within the firm in its transaction of business. In this
sense, a silent partner is one who is both inactive and unknown.
And there are those who go so far as to think the silence to the
world to be the main thing, understanding by the phrase " silent
partner" one who is not known as such, whether active or other-
wise ; thus making the word " silent " synonymous with the word
'•secret." But the definition first above given is the most reason-
able, and is best sustained.
§31. Dormant Partners. — This phrase also is used in some-
what different senses. Indeed, there is much confusion and
inaccuracy in the common use of the three words, — " secret,"
" silent," and " dormant." Many use this word as if it meant
only unknown and secret ; and apply the designation of dormant
or sleeping to partners whose names are concealed, however
awake and active they may be in the business of the firm.
Others consider the word as properly applied to those only who
are wholly inactive in the business, whether known to have an
interest or not. We think, however, the word implies both the
qualities of secrecy and inactivity. (^) It seems to be most
(p) These two qualities are attributed declarations of the acting, avowed part-
to the dormant partner in the following ners : it may enable them to reach the
expression of the difference between a dormant one, if the transaction is one in
dormant and an open partnership. " It which he had an interest, but does not
seems to me to be this : where the names alter its nature. The partnership remains
of the partners do or do not appear in dormant as to all whose names do not
their accounts, their advertisements, or appear on its transactions. The dormavf,
their paper, — where the business is carried the sleeping, inactire partner may be known
on in the name of all, it is open ; but, if by reputation, or the declaration of his
any are kept hack, it is dormant ; that the copaitner ; but these do not make him an
knowledge which the pulilic may have is avowed or active one, without the avowal
not the test, when it is acquired from the and pledge of his name or paper." Per
32 THE LAW OF PARTNERSHIP. [CH. III.
coraraoii and most convenient to use the word as indicating a
partner who both keeps himself concealed, and who also refrains
from any active interference with the business or management of
the firm. But the word is so often used as merely synonymous
with " unknown," that we shall frequently be obliged to employ
it or refer to it in this sense.
§ 32. Retiring Partner. — He is one who leaves an existing firm.
In law, as we shall see, the going out of a partner, by his own act,
or decree of court, or by death, terminates that partnership. But
in practice it is otherwise. Some old firms have continued to use
the same style, and to transact their business as one and the same
copartnership, with all the continuity of a corporation, although
not only all the original members, but all who immediately suc-
ceeded them, have passed away. In some of the commercial cities
of Europe, there are said to be active firms established under their
present names by the great grandfathers of those who are now
members. In this country it is, however, more common to an-
nounce these changes by a corresponding change in the style of
the firm.
§ 38. Incoming Partner. — This phrase designates a person who
enters into an existing copartnership, and becomes a member of
it. Here it may be said, as before, that any such change as the
addition of a new member terminates the former copartnership in
law and creates a new one. (/*jj) But in practice it is not so ; the
Baldwin, J., in Winship v. Bank of the or traders with whom they engage in a gen-
United States, 5 Pet. 573. In Mitchell v. eral partnership of all their stock and ef-
Dall, 2 H. & G. 159, however, and Bank fects, yet not suffering their names to appear
of St. Mary's v. St. John, 25 Ala. 566, in the copartnership firm, but at the same
persons seem to have been held dormant time receiving a proportionate share of the
partners, who, though tiieir names were i>rotits arising out of their joint trade,
concealed, took an active part in the busi- bearing equally their risk of loss ; and
ness of the firm. See Lloyd v. Archbowle, such are usually styled dormant partners."
2 Taunt. 324 ; Kelly v. Hurlburt, 5 Cowen, See North v. Bloss, 30 N. Y. 374 ; Waite
534 ; Hoare v. Dawes, 1 Dong. 371 ; Ex v. Dodges, 34 Vt. 181. [That a dormant
parte Watson, 19 Ves. 461 ; Shropshire v. pai-tner must be both concealed and inact-
Shepherd, 3 Ala. 733. The definition and ive, see Elmira Iron & Steel R. M. Co. v.
illustration of dormant partner.ship in Harris, 124 N. Y. 280, 26 N. E. 541;
Watson on Partnership, p. 46, seems compare Metcalf v. Officer, 2 F. R. 640.
accurate: " Sometimes all the partners in Where the firm name does not contain
tradedonotappearostensibly to the world, the name of partners, none of the
though they share in the profits and loss ; partners seem to be dormant : since credit
and it is not unusual for gentlemen of is given, not to known partners, but to all
large and independent fortunes to embark who in fact are interested. Clark v. Flet-
very considerable sums of money in trade, cher, 96 Pa. 416.]
they being oftentimes ignorant of the {pp) Mudd v. Bast, 34 Mo. 465.
science of commerce, and meaning to de- When two partners enter into another
pend entirely upon the skill of merchants partnership with a third person they are
§ 36.] OF PARTNERS. 33
old firm being " kept up," as the common phrase is, by former
members going out from time to time, and new members
coming in.
§ 34. General Partner. — This is a ncw phrase with us, and is,
at least in our sense of it, unknown in the English law. It means
one who is that member of a Limited Partnership, under our stat-
utes, who transacts the l)usiness, whose name is used in the firm,
and who is liable for all the debts and obligations of the firm, to
their full amount.
§ 85. Special Partner. — He is One who Supplies a certain
amount of capital, and who, if he complies with all the re(|uire-
ments of the statutes, is not liable for the debts of the firm beyond
the amount which he contributes to the capital.
§ 36. Sub-Partner. — [Sub-partner is the name often given to
one with whom a partner shares his profits by agreement.^ Since,
however, such a person is neithei- in fact a partner nor is he held
liable as a partner, the term sub-partner is misleading and not to
be commended.]
We have been somewhat precise in defining these different
classes or kinds of partners, because it will be seen in our subse-
quent chapters that especial rights, obligations, liabilities, and
remedies belong to them severally.
in the new partnership as individuals, amongst the three. 'Warner v. Smith,
and the profits are to be divided equally 9 Jur. N. s. 168.
1 Nirdlinger v. Bernheimer, 133 X. Y. 45 ; 30 N. E. 561,
34 THE LAW OF PARTNERSHIP. [CH. IV.
CHAPTER IV.
OF THE PURPOSES AND KINDS OF PARTNERSHIP,
§ 37. Purposes for •which Partnerships may be formed. — Although
partnerships are usually formed for commercial purposes, the}' are
not always so, and tliere is scarcely any occupation which an indi-
vidual can legally pursue that may not be the subject of partner-
ship. In this counti-y we have a far wider extent in the variety
of purposes for which partnerships are established, than anywhere
else. Thus, we have partnerships not only for every known
branch of commercial business, but for all kinds of farming, (a)
or manufacturing, mining, (hy stage-driving, fishing, hunting,
(a) See opinion of Gould, J., in Coope estates are quite different in the contempla-
V. Eyre, 1 H. Bl. 37 ; Allen v. Davis, 13 tion of this court ; a colliery being always
Ark. 28; Lansdale c. Biashear, 3 T. B. considered as a trade, the profits accruing
Mon. 330 ; Quine v. Quine, 9 Smedes & from day to day as in all trading con-
M. 155; Roach v. Perry, 16 111. 37. cerns." Story r. Ld. Winsor, 2 Atk. 630 ;
Jointly buying and selling cattle may con- Wien v. Kirton, 8 Yes. 502; Crawshay
stitute a tiading paitnersliip. Smith v. v. Maule, 1 Swanst. 495, 518 ; Fereday
Collins, 115 Mass. 388. v. Wightwick, Tamlyn, 250 ; Jeffreys v.
{/)) In England mines have never been Smith, 1 Jac. & W. 298. See Beatty v.
regarded in equity as real estate, but uni- Bates, 4 Y. & C. Exch. 182 ; Roberts
fornily as the regular subject and substra- v. Everhardt, 1 Kay, 148. The whole sub-
tum of a trade. In Williams v. Attenbor- ject of partnership in mines, as treated in
ough. Tarn. & Russ. 70, the language of the the English courls, is considered in a sepa-
Lord Chancellor is : "Collieries and landed rate chapter in Collyer on Part. b. 5, ch. 2.
1 A mining partnership is created when the owners of a mine operate it for their
joint benefit. Manville (-. Parks, 7 Col. 128; Meagher f. Reed, 14 Col. 335, 24 Pac.
681 ; Snyder v. Burnham, 77 Mo. 52.
Mining partners own the mine in common ; and therefore in case of an action against
the partnership only the shares of those partners who were served with jirocess can be
sold on execution. Santa Clara Mining Assoc, v. Quicksilver Mining Co., 17 F. R.
657, 8 Sawy. 330.
There is no delectus pcrsonarum ; therefore a partner may convey his share in the
mine without the consent of his copartners, and the a.ssignee becomes a i)artner. Nisbet
V. Nash, 52 Cal. 540 ; Meagher r. Reed, 14 Col. 335, 24 Pac. 681. And the partner-
ship is not dissolved by the death or bankruptcy of a partner, or by as.=ignment of a
partner's interest to a stranger. Kahn v. Central Smelting Co., 102 IT. S. 641 ; Lamar
V. Hale, 79 Va. 147. There is no fiduciary relation between the partners ; one jiartner
may therefore buy up the share of another, and hold it against his copartners. Bissell
V. Foss, 114 U. S. 252.
A mining partnership imposes on the partners the liabilities of a true partnership,
so that each is liable for the entire amount on all firm contracts. Stuart v. Adams, 89
§38.]
OF THE PURPOSES AND KINDS OP PARTNERSHIP.
35
lumbering, and the like, as well as the business of lawyers, (c)
physicians, ((i) mechanics, artists, laborers, and, indeed, for almost
all otlicr employments, (e)
§ 38. Partnerships to deal in Land. — After some question, it
seems to be settled, that there may be a partnersliip for the buy-
ing and selling of land. (/) It is to be remembered, however,
that the Statute of Frauds, and our Statutes of Conveyance, which
re([uire that all interests in land should be transferred by a writ-
ing signed and sealed by the grantor, and acknowledged and
recorded, thus determine the legal title by different evidence and
on different principles from those which ai>ply to personalty.
This has sometimes an important effect upon the rights and obli-
gations of partners in land speculations, and of those who deal
with them. We have already alluded to this subject, and shall
consider it hereafter, (/y)
(c) Marsh v. Gold, 2 Pick. 286 ; West-
eilo p. Evertson, 1 Wend. 532 ; Warner v.
Griswold, 8 Wend. 665 ; Living.stou v.
Cox, 6 Barr, 360 ; Smith v. Hill, 13 Ark.
173. See Jones ». Caperton, 15 La. Ann.
475.
(d) Allen v. Blanchard, 9 Cow. 631 ;
Tlionipsou p. Howard, 2 Ind. 245.
(f) Thus, there may be a partner.shii»
in a terry. Bowyer v. Anderson, 2 Leigh,
550. An association for carrying personal
property for hire in vessels is a commercial
partnership by the laws of Louisiana. Hef-
ferman o. Brenham, 1 La. Ann. 146. Ship
agents and ship brokers may be in partner-
shii* as to the profits of their resi)ective
commissions. Waugh c. Carver, 2 H. Bl.
235. See Bovill v. Hammond, 9 D. & K.
186 ; Cheap v. Cramond, 4 B. & A. 663.
Private associations and clubs for benevo-
lent and other purposes have been regarded
so far as partnerships that their members
are subject to liabilities similar to those of
partners. Beaumont r. Meredith, 3 Ves.
& B. 180. See Delauney v. Strickland,
2 Stark. 416. But their liability seems to
rest on the authority given to the agents
rather than on partner-ship. The points
of difference between such associations and
trading partnerships are stated and illus-
trated in Flemyng v. Hector, 2 M. & W.
172. See post, § 60.
(/) Lands being now so far subject to
commercial conditions, by the aid of equity,
as to be capable of being held as incident
to commercial partnerships, there would
seem to be no sufficient reason why they
may not, on the same principles, and by
the same equitable conversion, be the sub-
stratum itself of a copartnership. The
later cases, both in England and in this
country, leave little or rather no rooui for
doubt upon this point. Dale v. Hamilton,
5 Hare, 369 ; Potts v. Waugh, 4 Mass.
424 ; Fall River Wh. Co. v. Borden, 10
Cash. 458 ; Smith r. Burnham, 3 Sumn.
435 ; Kramer v. Arthurs, 7 Barr, 165 ;
Brady i-.' Calhoun, 1 P. & W. 140 ; Olcott
V. Wing, 4 McLean, 15 ; Smith v. Jones,
12 Me. 332 ; Dudley v. Littlefield, 21 Me.
418 ; 1)1 re. Warren, Davies, 320 ; Ludlow
V. Cooper, 4 Oh. St. 1 ; Chester i\ Dicken-
son, 54 N. Y. 1. See Patterson v. Brew-
ster, 4 Edw. Ch. 352; Claggett r. Kilbourne,
1 Black, 346. [Corey v. Cadwell, 86 Mich.
570 ; 49 N. W. 611 ; Yeoman v. Lasley,
40 Oh. St. 190 ; Hulett r. Fairbanks, 40
Oh. St. 233 ; Canada v. Barksdale, 76 Va.
899. See fost, § 67.]
((/) See ante, § 6, and -post, ch. 12.
Cal. 367, 26 Pac. 970. But since it is a non-trading partnership, one partner has no
authority to bind the firm by a firm note. See post, § 85.
The owners of a mine may of course, if they choose, form an ordinary partnership
for the purpose of carrying on the niine by entering into a partnership agreement.
Quinn v. Quinn, 81 Cal. 14, 22 Pac. 264 ; Randall i;. Meredith (Tex.), 11 S. W. 170.
36
THE LAW OF PARTNERSHIP.
[CH. IV.
§ 39. Exercise of an Office. — It is obvious that there can be no
partnership in a mere personal office, or in the discharge of its
duties; as in the office of guardian, trustee, executor, or the
like, (/i) These offices are often held by two or more persons
together; but their powers and duties, and relations generally,
are governed by rules entirely distinct from those of partnership.
Tliere are additional and decisive reasons against the exercise
of the powers or the discharge of the duties of any public office by
a partnership. It might seem as if there were some offices, as
that of postmasters, or of examiners of steamboats, or the like,
which might be given to a firm ; but the principle of personal
selection and personal responsibility make it difficult, if not
imj)ossible,that a firm should hold such an appointment, although
persons holding it sometimes become partners, and share in the
profits of the appointment, (i)
§ 40. Kinds of Partnership. — Partnerships may be general or
special. In theory, it is said they may be universal ; but an
instance can seldom occur in which tlie partners own everything
in common, without the reservation of any private and exclusive
property of either of them, (j) We have, however, in this country,
(/() Thus, the office of sheriff's bailiff is the articles of agreement it was stipulated
personal, and cannot be held by two in that B. should be a partner with A. in his
partnership. Jons v. Perchard, 2 Esp. business, and " that the emoluments aris-
507. See Canlield v. Hard, 6 Conn. 180. ing from the said offices, clei-k.ships, and
Upon the same principle a mercantile stewardships as sliould be held by eitlier
partnership, though it may act as execu- of them, the said- A. and B., during the
tor, cannot be appointed guanl,ian. De
Mazar v. Pybus, 4 Ves. 644. Where, by
the usage of the herald's office, a herald
and pursuivant were always in attendance,
who shared the profits of any business
which was begun while they were jointly
partnershij), should be considered as part-
nership property, and be distributable ac-
cordingly." It was held that the above
contract was not void as being an agree-
ment for the sale of an office, either within
the 5 & 6 Edw. 6, ch. 16, or within the 49
on duty, it was held that they were in the Geo. 3, cli. 126. Sterry v. Clifton, 9 C. B.
situation of copartners, and might main- 110.
tain a joint action (for making out a pedi-
gree) against the defendant, though he had
contracted only with the herald. Town-
send V. Neall, 2 Camp. 190. On the other
hand, the appointment of one of a firm to
the office of shcriH's replevin clerk will not
enable the finn to bring a joint action for
the expenses of preparing a replevin bond,
although it was executed, and the stamp
for it proviiJed, in their office. Brandon
V. Hubbard, 4 .T. B. Moore, 367. See
Clarke v. Eichards, 1 Y. & C. Exch. 3.51.
A., an attorney holding numerous lucrative
clerkship.s, stewardships, and other offices,
entered into copartnership with B. By
(i) See Caldwell v. Lieber, 7 Paige,
483.
(j) United States Bank v. Binney, 5
Mason, 183. Story, J., said: "There is
probably no such thing as a universal
partnership, if by the terms we are to
understand that everything done, bought,
or sold is to be deemed on partnership
account. Most men own some real or
personal estate which they manage exclus-
ively for themselves." [The so-called
" partnership " between husband and wife,
according to the Spanish-Mexican law, is
however a universal partnership. Fuller
V. Ferguson, 26 Cal. 546.]
§40.]
OF TUE PURPOSES AND KINDS OP PARTNERSHIP.
37
some associations whicli might perliai)S be regarded as universal
partnerships, (/c) Special partnershijjs relate only to an owner-
ship or use or employment by partners of one thing, or one cargo,
or one mercantile adventure, (l) It has been said that if a note
{k) Tlie case of Goe.s(;le v. Biiiieler, 14
How, 589, would seem to establish, not
only that such a partnership may exist,
but that, under able administration and
conduct, it is not inconsistent with a hifjh
degree of individual social prosperity.
The defendants in the case were members
of a society called Se|)aratists, which
emigrated from Germany to the United
States in 1817, and settled in Ohio, In
1819, articles of association were drawn
up and signed by the members of the
society, consisting of fifty-three males
and one hundred and four females. By
these articles, the signers surrendered all
their individual property, real or personal,
present or future, into the hands of three
directoi's, elected annually by themselves.
These officers were to conduct the business
of the society, to manage all its property,
and to account to the society for all their
tiansactions. In 1824, the original articles
were amended. An entire union of prop-
erty, and an absolute renunciation of
private ownership, were declared. Provi-
sions were made for the admission of new
members. The directors were to conduct
tlie allairs of the society ; to apply them-
selves for its benefit ; to provide for the
boarding, lodging, and clothing of its
members ; to provide for the children ; to
determine disputes, &c. Other of the new-
provisions related to the general welfare of
the society. In 1832, a charter of incor-
poration was granted them, in accordance
with which they adopted a constitution,
embodying, with others, substantially the
same provisions as those contained in the
articles of association above referred to.
Tlie extent of the prosperit}', which, under
this modified species of communism, the
association had attained in the space of
about thirty years, may be seen in the
following extracts from the opinion of Mr.
Justice McLean : " It appears, by great
industrj', economy, good management,
and energy, the settlement at Zoar has
prospered more than any part of the sur-
rounding county. It surpasses probably
all other neighborhoods in the State in
the neatness and jinjiiuctiveness of its
agriculture, in the mechanic arts, in manu-
facturing by machinery. The value of the
property is now estimated by complainants'
counsel to be more than a million of dollars."
Further : "Tlie people . . . are proved to
be moral and religious. It is said, that,
although the society has lived at Zoar for
more than thirty yeai's,no criminal jn-osecu-
tion has been instituted against any one of
its members." There is no legal objection,
it seems, to such an association. See an
example ^of a similar association called
"The Harmony Society." Baker?;. Nach-
trieb, 19 How. 126. See Lyman v. Lyman,
2 Paine C. C. 11. [Hamilton v. Halpin,
68 Miss. 99, 8 So. 739. In Colton v.
Stanford, 82 Cal. 351, 23 Pac. 16, several
capitalists a.ssociated for the purpose of
controlling the operations of various rail-
roads and entering into other enterprises.
This was regarded as a partnership.]
(I) The authority which is usually
referred to for the distinction between
general and special partnerships is a dictum
of Lord Mansfield in Willett v. Cliarnbers,
Cowp. 814. "Let us see, then," said he,
"what was the nature of the partnership
afterwards entered into between Dodley
and the present defendant : whether it
was a general partnership in all Dodley's
business, or confined to one particular
branch of it only ; for, to be sure, there
may be such a confined partnership."
Veiy many cases have since recognized and
illustrated the distinction. Salmons v.
Nissens, 2 T. R. 674 ; Robey v. Howard,
2 Stark. 557 ; Holmes v. Higgins, 1 B. &
C. 74 ; De Berkom v. Smith, 1 Esp. 29 ;
Livingston v. Roosevelt, 4 Johns. 265,
270 ; Post V. Kimberly, 9 Johns. 470 ;
Mumford v. Nicoll, 20 Johns. 611 ; Ensign
V. Wands, 1 Johns. Cas. 171 ; Reynolds
V. CHeveland, 4 Cow. 282 ; Cumpston v.
McNair, 1 Wend. 457 ; Mifflin v. Smith,
17 S. & R. 165 ; Bentley v. White, 3 B,
Mon. 263 ; Benson v. McBee, 2 McMull.
91 ; Solomon v. Solomon, 2 Kelly, 18 ;
Rijiley V. Colby, 23 N. H. 438 ; Petripin
V. Collier, 1 Burr, 247.
38 THE LAW OF PARTNERSHIP. [CH. IV.
or bill of exchange be signed or indorsed by two or more persons
jointly, this is a case of special partnership between those persons
as to that note or bill, (w) The name, however, or the distinc-
tion, is of little use, for all the laws of partnership apply as far,
and only as far, as the partnership extends ; and there is no dis-
tinct dividing line between general partnerships and those which
have been called special. And the designation, by statute, of the
partner in a limited partnership, who is liable only to the extent
of the capital he supplies, as " special partner," is an additional
reason for the disuse of the phrase " special partnership," in the
sense above stated.
Joint-stock companies will be treated by themselves. They are
much used in England, and are there regulated by statute. Here
they were quite common formerly. But incorporation may here
be obtained with great facility for any legitimate purpose ; and
wise and practical laws, in many of our States, give to corpor-
ations all the freedom and all the facilities they can desire, and
limit the responsibility of members as narrowly as a due regard
for public safety, and, indeed, the safety of the membei's, permits ;
and joint-stock companies are now comparatively rare.
Limited partnerships, to which we have already alluded, we shall
speak of more fully in a subsequent chapter, (w)
(m) Gow on Part. 6 ; 3 Kent (8th ed.), the bill was payable. This verdict does
p. 28. The only authority for considering not appear to have been disturbed. So
such joint promise or indorsement as con- that, the result of the case being consid-
stituting a partnership is the case of ered, it can hardly be said to be authority
Carvick v. Vickerj', 3 Doug. 653, note, for the position that joint promisors or
There the action was by the indorsee of a joint indorsers of a bill or note are quoad
bill of exchange drawn upon defendants, hoc partners ; since the second verdict
the Maydwells, by father and son, and could only have been upheld on the ground
pa j-able "<o MS or oi<r orf?er," but indorsed that the defendants were not i)artners.
only by the son. The father and son were The case does not seem to rest on sound
admitted not to be partners. At the first principles, and is unsupported by any
trial Ld. Mansfield nonsuited the plaintiff, other English authorities. In this coun-
because the bill had not been indorsed by try, it has been distinctly repudiated. lu
both the parties to whose order it was Willis v. Green, 5 Hill, 232, Nelson, C. J.,
payable. But a rule being obtained to says : " It was once supposed, in a like
show why there should not be a new trial, case, that the indorsers were partners
the court were unanimously of opinion quoad the particular transaction ; but tliat
that the Maydwells, by making the bill doctrine was repudiated when the case
payable "to our order," had made them- afterwards came on for trial before Lord
selves partners as to this transaction, and Mansfield." Sayre v. Herick, 7 W. & S.
the rule was made absolute. Upon the 383 ; Hopkins v. Smith, 11 Johns. 161 ;
second trial, before Ld. Mansfield, a verdict Shepard v. Hawley, 1 Cojin. 367. See
was again found for the defendants on the Mitflin v. Smith, 17 S. & R. 165.
same ground, that the indorsement should (n) ^ee post, ch. 17.
have been made by both parties to whom
§ 42.] WHO ARE PARTNERS. 39
CHAPTER Y.
WHO ARE PARTNERS.
§ 41. The Test of Partnership. — There is ordinarily no difficulty
in establishing the existence of a partnership. The relation of
the parties is usually fixed by a written agreement, known as
" articles of co-partnership," which in almost every case provides
at the outset for the formation of a partnership, and declares the
parties to be partners. But in some cases an agreement, either
oral or written, is entered into by the parties concerned, which
does not profess to create a partnersiiip, yet it is contended that
the effect of the agreement is to create one. A question of much
difficulty is then presented, namely ; whether the agreement, the
terms of which are known, does in fact create that sort of relation
between the parties which the law considers a partnership.
§ 42. Former doctrine in England. Sharing Profits. — Upon
this point the view held l)y the English courts has within a few
years undergone a remarkable change. Up to the year 1860, it
appeared to be the law of England that the mere fact of parti-
cipation in the profits of a business as such, made one a partner
as a matter of law. This was combined with the doctrine that
though such a partnersiiip existed as to third persons, a different
rule must be applied to determine whether persons were partners
inter se}
^ The general doctrine appears to have been founded upon the language of De Grey,
C. J., in Grace v. Smith, 2 W. Bl. 998. There Smitli & Robinson dissolved partnership.
Hut, Robinson continuing the business, Smith left behind in the trade 4,000/., for
which he was to receive five per cent, interest, and an annuity of 300/. a year. The
question being whether Smith & Robinson were general partners, De Grey, 0. J., said:
" 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 profits, he takes part of that fund on
which the creditor of the trader relies for his payment ... I think the true criterion
is to inquire whether Smith agreed to share the jirofits of the trade with Roliiuson, or
wlicther he only relied on those profits as a fund of payment." — In Waugh v. C;)rver,
2 H. Bl. 235, the distinction between [lartners inter se and partners as to thin! persons
was first put forward. The (|uestion was, whether the defendants, the two Carvers and
Giesler, were liable as ]iartners upon the true construction of certain articles of agree-
ment. The material portions of their contract were these : The two Carvers, merchants
and ship agents, residing in Gosport, agreed with Giesler, also a merchant and ship
agent, that, for their mutual benefit, he should establish himself at Cowes, and there
40 THE LAW OP PARTNERSHIP. [CH. V.
This rule was however, confined to the case of participation in
the net profits of a business ; one who had a share in the gross
carry on a house in the agency line. The two Carvers were to recommend ships to
Giesler, and were to receive a share in his commissions on such shijis, and in the dis-
count of the bills of the tradesmen employed on them. Giesler was to act by the
advice of the Carvers, to recommend ships to them, and to receive a share in their
commissions on them, and in their discounts on tradesmen's bills, and also certain pro-
portions of warehouse rent and agency. Eyre, C. J., said: "It is plain upon the
construction of the agreement, if it be construed only between the Carvers and
Giesler, that they were not, nor ever meant to be partners . . . But the question is,
whether they have not, by parts of their agreement, constituted themselves partners
in respect to other persons. The case, therefore, is reduced to the single ])oint,
whether the Carvers did not entitle themselves, and did not mean to take a moiety of
the profits of Giesler's house, generally and indefinitely as they should arise, at certain
times agreed upon for tiie settlement of their accounts. That tliey have so done is
clear upon the face of the agreement; and ujion the authority of Grace v. Smith, he
who takes a moiety of all the profits indefinitely shall, by operation of law, be made
liable to losses, if losses arise, upon the principle that, by taking a part of the profits,
lie takes from the creditors a part of that fund vvhicli is the proper security to them for
the payment of their debts." Waugh v. Carver was followed by later cases : Hesketh
V. Bianchard, 4 East, 144 (scmblc) ; Cheap v. Cramond, 4 B. & Aid. 663 ; Barry v.
Nesham, 3 C. B. 641 ; Heyhoe v. Burge, 9 C. B. 431.
The distinction between profits as such and a sum equal to profits appears to have
been introduced by Lord Eldon, who however professed to follow authority. In Ex
parte Hamper, 17 Ves. 404, the facts were that Thomas & Rogers had been partners in
a mercantile adventure to Cadiz, Rogers furnishing goods, and Tliomas going out with
and selling them. Before the goods were all sold, Rogers entered into a new arrange-
ment with Thomas, as follows : "I do agree to give Thomas one-half the profits he
makes on my goods instead of a commission, after shipping, freiglit, and every expense
paid ; I pay Thomas his passage out." This agreement was acted upon by the parties,
and letters were in evidence from Thomas to Rogers, in which Thomas styled himself
a ])artner, and other expressions indicating the existence of a partnership between
Rogers and himself.
Lord Eldon said : " The cases have gone to this nicety, upon a distinction so thin
that I cannot state it as established upon due consideration, that, if a trader agrees to
pay another person, for his labor in the concern, a sum of money, even in prf)portion
to the profits, equal to a certain share, that will not make him a ])artner ; but if he
has a specific interest in the profits themselves, as profits, he is a partner." Afterwards,
in the same case, as if in explanation, and certainly in confirmation, of this, he says : '* It
is clearly settled, though I regret it, that if a man stipulates that, as the reward of his
labor, he shall have, not a specific interest in the business, but a given sum of money,
even in proportion to a given quantum of the profits, tliat will not make him a part-
ner ; but if he agrees for a part of the profits as such, giving him a right to an account,
tliough having no ]iroperty in the capital, he is, as to third jiersons, a partner." In
Ex pa,rte Kowlandson, 1 Rose, 91, he says, more briefly, but evidently intending to
express the same rule • " The ground is settled, that, if a man, as a reward for his
labor, chooses to stipulate for an interest in the profits of a business, instead of a cer-
tain sum proportioned to those profits, he is, as to third persons, a partner." See to
the same ett'ect Ex parte Langdale, 18 Ves. 300 ; Ex parte Watson, 19 Ves. 459 ; Ex
parte Hodgkinson, 19 Ves. 291 ; In re Colbeck, Buck, 48.
This declaration has had great influence upon the courts and the profession. Collyer
says, "It must be admitted that his lordship's dicta upon this subject have received
the sanction of the most eminent practitioners at the bar." Collyer on Partnership
(Perkins's ed.) § 40. Nor is it difficult to account for this. For, to say nothing of
§ 43.] WHO ARE PARTNERS. 41
profits of a business, so called, that is, the gross earnings of the
business, was not held as a partner even as to third persons.^
§ 43. Cox V, Hickman. — The earlier authorities, while not
directly overruled, were rendered obsolete by the decision of the
House of Lords in the case of Cox v. Hickman.^ In that case
the creditors of an insolvent manufacturer agreed to carry on
the ])usincss of the debtor, and to apply the net profits to the
l^ayment of the deljts. This agreement was held by the House of
Lords not to constitute the creditors partners even as to third'
persons. Lord Cranworth said : " It is often said that the test,
or one of the tests, whether a person not ostensibly a partner is
nevertheless, in contemplation of law, a partner, is, whether he is
entitled to participate in the profits. This, no doubt, is, in gen-
eral, a sufficiently accurate test ; for a right to participate in
profits affords cogent, often conclusive, evidence that the trade in
which the profits have been made was carried on in part for or on
behalf of the person setting up such a claim. But the real ground
of the liability is that the trade has been carried on by persons
acting on his behalf." Lord Wensleydale said : " The law as to
partnership is undoubtedly a branch of the law of principal and
agent."
This case, decided in the highest court of England, was at once
the end of the old theory of partnership, and the starting-point of
a new doctrine. It put an end to two notions which had been
regarded as fundamental ; first, that third persons may hold to
the liability of partners those who in fact are not partners, merely
because some other relation exists between them ; second, that
participation in the profits of a business is conclusive of a part-
nership. The case did not however offer any alternative test of
a partnership ; for the suggestion of the necessity of an agency is
of no assistance in a doubtful case. The agency is the result of
the partnership, not vice versa.^
It was at first doubtful whether the case of Cox v. Hickman
■was an illustration of a general principle, or was decided simply
the immense authority of so eminent a judge, his words so understood supply a clear,
simple, and easily applicable rule for the avoidance of a great danger. They tell the
lawyer who would draw a contract of this kind, how, by a mere formula, he can guard
his clients from a great uncertainty ; the inconvenience of which might otherwise
suffice to prevent the proposed arrangement. As a convenient rule, much may be said
of it ; but, as an accurate one, it must be spoken of \qvy ditferenth'.
1 Dry V. Boswell, 1 Camp. 329. See Cheap v. Cramond, 4 B. & Aid. 663 ; Pott v.
Eyton, 3 C. B. 32 ; Lyon v. Knowles, 3 B. & S. 556.
2 8 H. L. C. 268 (i860).
3 Cleasby, B., in Holme v. Hammond, L. K. 7 Ex. 218, 233.
42 THE LAW OF PARTNERSHIP. [CH. V.
on the facts, and of no general application. It was finally deter-
mined that the former is true.^
§ 44. Sharing Profit and Loss. — The conclusiveness of a sharing
of profits as a test of partnership has therefore been definitively
denied. In its place, however, the theory was put forward by
high authority that a sharing of profit and loss was necessarily
conclusive of a partnership.^ But this theory is not now law in Eng-
land. It has been finally held that although profit and loss are
shared the parties are not partners if their intention was not to
form a partnership relation.^
§45. Boviii's Act. — Meanwhile the legislature had attempted
to remove the ditiiculties of this branch of the law of partnership
by statute, by the passage of " Boviii's Act," 28 and 29 Vict. ch.
86.* It would seem, however, that nothing was gained by the act:
1 Bullen V. Sharp, L. R. 1 C. P. 86 (Exch. Cliamb.) ; Moll wo v. Court of Wards,
L. R. 4 P. C. 419. In the former case Bramwell, B., said, as to the distinction some-
times made between partnership inter se and as to third persons : "The burden of
proof ... is on the plaintiffs. Now, what reason do they give ? They say that the
defendant is a partner with his son ; and that, if not partners inter se, they are so as
regards third parties. A most remarkable exj)ression ! Partnerslup means a relation
between two parties. How, then, can it be correct to say that A and Baie not in jiart-
nership a.s between themselves ; they have not held themselves out as being so, and yet
a tliird person has a right to say they are so as relates to him ? But that must mean
i7iter se ; for partnership is a relation inter se, and the word cannot be used except to
signify that relation. A is not the agent of B ; B has never held him out as such ;
yet C is entitled, as between himself and B, to say that A is the agent of B. Why is
he so entitled, if the fact is not so, and B has not so represented ? "
2 Lindley Part. * 10 ; Pawsey v. Armstrong, 18 Ch. D. 698.
8 Walker v. Hirsch, 27 Ch. D. 460 (C. A.) ; Badeley v. Consolidated Bank, 38 Ch.
D. 238 (C. A.).
* By this Act, after reciting that it is expedient to amend the law relating to part-
nership, it is therefore enacted as follows : 1. The advance of money by way of loan to
a person engaged or about to engage in any trade or undertaking, upon a contract in
writing with such person, that the lender shall receive a rate of interest varying with
the profits, or shall receive a share of the profits arising from carrying on such trade or
undertaking, shall not, of itself, constitute the lender a partner with the person or the
persons carrying on such trade or undertaking, or render him responsible as such.
2. No contract for the remuneration of a servant or agent of any person engaged in any
trade or undertaking, by a share of the profits of such trade or undertaking, shall, of
itself, render such servant or agent responsible as a partner therein, nor give him the
rights of a partner. 3. No person, being the widow or child of the deceased partner
of a trader, and receiving by way of annuity a portion of the profits made by such
trader in his business, shall, by reason only of such receipt, be deemed to be a jiiirtner
of or to be subject to any liabilities incurred by such trader. 4. No person receiving,
by way of annuity or otherwise, a portion of the profits of any business, in consideration
of the sale by him of the good-will of such business, shall, by reason only of such
receipt, be deemed to be a partnei' of or be subject to the liabilities of the i)erson carry-
ing on such business. 5. In the event of any such trader as aforesaid being adjudged
a bankrupt, or taking the benefit of any act for the relief of insolvent debtors, or entering
into an arrangement to pay his creditors less than 20s. in the pound, or dying in insol-
§ 46,] WHO ARE PARTNERS. 43
for the common law has since that time been declared to be in
accordance with the provisions of the act, and courts of the high-
est authority have said that it added nothing to the law.^
§ 46. Present English Doctrine. — The result of the English
cases seems to be the abandonment of any artificial test of part-
nership, and the adoption of what must be regarded as the true
principle : that parties become partners only by agreeing to enter
into an association wliich the law regards as a partnership.^ Tlie
agreement, cither express or implied, to form such an association,
is the only method by which one can become a true partner.
Whether such an association is intended to be formed is a question
of fact in each case ; and in deciding this question one obtains
much assistance from the opinion of Jessel, M. R., in Pooley v.
Driver : ^ " Partnership is a sort of agency, but a very peculiar
one. You cannot grasp the notion of agency, properly speaking,
unless you grasp the notion of the existence of the firm as
a separate entity from the existence of the partners ; a notion
which was well grasped by the old Roman lawyers, and which
was partly understood in the courts of equity before it was part
of the whole law of the land, as it is now. But when you get that
idea clearly, you will see at once what sort of agency it is. It is
the one person acting on behalf of the firm. He does not act as
agent, in the ordinary sense of the word, for the others so as to
bind the others; he acts on behalf of the firm of which they are
members ; and as he binds the firm and acts on tiie part of the
firm, he is properly treated as the agent of the firm. If you cannot
grasp the notion of a separate entity for the firm, then you are
reduced to this, that inasmuch as he acts partly for himself and
partly for the others, to the extent that he acts for the others he
must be an agent, and in that way you get him to be an agent for
the other partners, but only in that way, because you insist upon
ignoring the existence of the firm as a separate entity."
The formation of a partnership, then, is the creation of a body,
vent circumstances, — the lender of any such loan as aforesaid shall not be entitled to
recover anj' portion of his principal, or of the profits or interest payable in respect of
such loan, nor shall any such vendor of a good-will as aforesaid be entitled to recover
any such profits as aforesaid until the claims of the other creditors of the said trader
for valuable consideration in money or money's worth have been satisfied. 6. In the
construction of this Act the word "person" shall include a partnership firm, a joint-
stock company, and a corporation.
1 Sir Montague Smith in Mollwo v. Court of Wards, L. R. 4 P. C. 419 ; Jessel
M. R., in Pooley v. Driver, 5 Ch. D. 458.
2 Badeley v. Consolidated Bank, 38 Ch. D. 238,
3 5 Ch. D. 458, 476.
44 THE LAW OF PARTNERSHIP. [CH. V.
existent apart from the partners, for business purposes ; for which
the partners are to act, and not directly for each other.
§ 47. American Doctrine not Uniform. — The rules adopted upon ,
this subject by the American courts are, as we mig-ht expect, not
harmonious. In the older States the rule laid down in Waugli v.
Carver was followed before a more reasonable rule was made
possible by the decision of Cox v. Hickman. The courts of some
of these States felt themselves constrained by authority not to
follow the later I^nglish decision, even though the rules laid down
in it were more consonant with true principle. In other States,
however, the true principles were recognized even before they
were formulated in England. All that is now possible, therefore,
is to examine in detail the rules laid down in the different juris-
dictions in this country ; bearing in mind, throughout this ex-
amination, the fact that the rules finally adopted by the English
courts are the only ones consistent with principle.
§ 48. Partnership inter se and as to Third Persons. — It is said
in a number of recent cases that there may be a partnership as to
third jjcrsons, though the parties are not partners ifiter se.^ It
has however been held, in several important and well-reasoned
cases, that there can be no partnership except one founded upon
the intention of the parties.^ Indeed, it seems to be the view of
a respectable author that the distinction between partnership niter
se and partnership as to third parties has been abandoned in this
country ; ^ but unfortunately it appears, from the authorities
already cited, that the indefensible distinction still exists in
many if not in most jurisdictions. No stronger argument need
be made against it than that of Bramwell, B., previously quoted.*
§ 49. Sharing Profits as such. — The rule generally followed in
the earlier American cases was that suggested in some of the
English cases : that where the party in question received from a
business a sum equal to a certain proportion of the profits he was
not a partner ; but if he received a proportional part of the profits
themselves, he was a partner. In a less crude form, the rule
came to be stated thus : that when the party has a proprietary
1 Powell V. Moore, 79 Ga. .524, 4 S. E. 383 ; Howe v. Dupoyster (Ky.), 7 S. W.
627 ; Waring i--. Nat. Marine Bank, 74 Md. 278, 22 Atl. 140 ; Pratt v. Langdon, 97
Mass. 97 ; Hackett v. Stanley, 115 N. Y. 625, 22 N. E. 745 ; Caldwell v. Miller, 127
Pa. 442, 17 Atl. 983 ; Miller v. Marx, 65 Tex. 131.
2 Haycock v. Williams, 54 Ark. 384, 16 S. W. 3 (semhh) ; Eastman v. Clark, 53
N. H. 276 ; Harvey v. Childs, 28 Oh. St. 319 ; Boston & Col. Smelting Co. v. Smith,
13 R. I. 27.
3 1 Bates Part. § 15.
* Ante, % 43.
§50.]
WHO ARE PARTNERS. 45
interest in the profits qua profits before division he is a partner,
otlierwise not.^
§ 50, Distinction between Gross and Net Profits. — The distinc-
tion between gross ])rofits and net pi'ofits has been pointed out
by some American cases,^ following the English case of Dry v.
Boswell,^ already examined.
^ "The rule is ea.sily Liiil down ; the difficulty is in its application. Where a part
of the profits themselves is the property of the party lie is then a partner. Where their
amount merely ascertains the amount of a debt or duty, but they themselves do not
belong to the party, there it is not a partnership." Henderson, C. J., in Cox v. Delano,
3 Dev. 89. The leading and well-considered cases of Loomis v. Marshall, 12 Conn. 69,
and Denny i-. Cabot, 6 Met. 82, are to tlie same effect. This rule seems to have been
uniformly followed in Massachusetts. Reynolds v. Toppan, 15 Mass. 370 ; Kice v.
Austin, 17 Mass. 197; Turner v. Bissell, 14 I'ick. 192; Blanchard v. Coolidge, 22
Pick. 151 ; Bradley v. White, 10 Met. 303 ; Judson v. Adams, 8 Cu.sh. 556 ; Pratt v.
Langdon, 12 All. 544, 97 Mass. 97. The same distinction seems to be recognized in
all the earlier and a few later Ameiican authorities. Shropshire v, Shejjperd, 3 Ala.
733 ; Hodges v. Dawes, 6 Ala. 215 ; Scott v. Campbell, 30 Ala. 728 ; Bucknam v.
Barnum, 15 Conn. 67 ; Reed v. Murphy, 2 Greene (la.) 574; Clement v. Hadlock, 13
N. H. 185 ; Fitch v. Hall, 25 Barb. 13 ; Brockway v. Burnap, 16 Barb. 310 ; Stroher
V. Elting, 97 N. Y. 102 ; Johnson v. Miller, 16 Ohio, 431 ; Heckert v. Fegely, 6 W.
& S. 139 ; Dunham v. Rogers, 1 Barr, 255 ; Bartlett v. Jones, 2 Strobh. 471 ; Tobias
V. Blin, 21 Vt. 544 ; Bowyer v. Anderson, 2 Leigh, 550 ; Brown v. Higginbotham,
5 Leigh, 583.
2 Moore v. Smith, 19 Ala. 774 ; Turner v. Bissell, 14 Pick. 192 ; Beecham v. Dodd,
3 Harr. Del. 485 ; Heimstreet v. Howland, 5 Den. 68 ; Everett v. Coe, 5 Den. 180;
Pattison v. Bhmchard, 5 N. Y. 186 ; Gibson v. Stone, 43 Barb. 285 ; Ambler v. Brad-
ley, 6 Vt. 119; Bowman v. Bailey, 10 Vt. 170; Mason v. Potter, 26 Vt. 722. In
Loomis V. JLarsliall, 12 Conn. 67, the parties sought to be charged as partners were to
divide between them the proceeds of the sales of the gooils, diminished only by the cost
of selling. The difference between net profits and net sales was pressed upon the court.
But it was not thought necessary to express any opinion upon the point. In Denny v.
Cabot, 6 Met. 82, the fund to be divided was substantially the same : "For (to quote
the language of the court) although, in terms, the agreement was to pay Cooper one
third of the net earnings, yet that is explained by the words immediately following, by
which it appears that Cooper was entitled to one third of the gross profits after deduct-
ing certain specified charges ; and that in no event was he to be liable for any losses."
The court then cite Loomis v. Marshall, supra; Reynolds v. Topham, 15 Mass. 370;
Vanderburgh v. Hull, 20 Wend. 70 ; Turner v. Bissell, 14 Pick. 192 ; and proceed
thus : " These cases appear to us fully to support the defence in the present case.
Some of them may perhaps appear to clash with the distinction Haid down by Lord
Ellenborough in Dry v, Boswell, 1 Camp. 329, and recognized in other cases) between
sharing the gross earnings and sharing the net earnings of a business or adventure.
But, however this may be, we think there is no sound distinction between an agree-
ment to pay to a party a certain share of the gross profits and an agreement to pay a
certain share of the net profits, as explained in the present contract ; the clear meaning
of the terms of which is, that Cabot, Appleton & Co. were to pay Cooper one third part
of the profits, after making certain specified deductions therefrom, and Cooper clearly
was not to be liable for any losses. If he had stipulated for a share in the profits
{whetlicr gross or net profits), so as to entitle him to an account, and to give him a
specific lien, or a preference in payment over other creditors, and giving him the full
benefit of the profits of the business, without any corresponding risk in case of loss, —
3 1 Camp. 329.
46 THE LAW OF PARTNERSHIP. [CH. V.
§ 51. Sharing Profits generally. — It is still often laid down by
the courts that one who shares the profit of a business is partner,
no matter what was the intention of the parties ; following Waugh
V. Carver to the fullest extent.^ Other cases however hold that
in this case the relationship of the parties may be shown to be
other than that of partners.^ And it may perhaps safely be said
that every jurisdiction will eventually recognize the correctness of
this rule.
§ 52. Sharing Profit and Loss. — Even where the parties share
both i)rofit and loss, they are not partners if they have not in fact
created a partnership, but stand in some other relation to each
other.3
§ 53. Right to account as a Test. — An attempt has been made
in this country to set up another test of partnership. It has been
asserted, not only by text-writers, but by eminent judges, that a
person is liable as a partner, to third parties, when he has such
an interest in profits as will give him a right to an account, (a)
Undoubtedly, every partner has a right to an account of the
(a) 3 Kent Com. p. 25, note (b) ; Gary in Champion i;. Bostwick, 18 Wend. 184.
on Part. 11, note (i) ; Collyer on Part. § 44, See also Heimstreet v. Rowland, 5 Denio,
and note ; Lord Eldon in Ex parte Ham- 68 ; Denny i;. Cabot, 6 Met. 92.
per, 17 V'es. 412 ; Chancellor Walworth
justice to the other creditors would seem to require that he should be holden to be
liable to third persons as a partner."
1 Buckner v. Lee, 8 Ga. 285 ; Perry t). Butt, 14 Ga. 699; Howe v. Dupoyster (Ky.)
7 S. W. 627 ; Taylor v. Ternie, 3 H. & J. 505 ; Pratt v. Langdon, 12 All. 544, 97 Mass.
97 ; Champion v. Bostwick, 18 Wend. 184 ; Cushnian v. Bailey, 1 Hill, 526 ; Everett
V. Coe, 5 Den. 180 ; Manhattan Brass Co. v. Sears, 45 N. Y. 797 ; Cox v. Delano,
3 Dev. 89 ; Holt v. Keruodle, 1 Ire. 199 ; Mauney v. Coit, 86 N. C. 463 ; Purviance
V. McClintee, 6 S. & R. 259 ; Caldwell v. Miller, 127 Pa. 442, 17 Atl. 983; Pierson v.
Steinmyer, 4 Rich. 309 ; Cothran v. Marmaduke, 60 Tex. 370 ; Stevens v. Gainesville
Nat. Bank, 62 Tex. 499.
2 Meehan i;. Valentine, 145 U. S. 611 ; Le Fevre v. Castagnio, 5 Col. 564 ; Burton
V. Goodspeed, 69 111. 237; Smith v. Knight, 71 111. 148; Williams v. Soutter, 7 la.
435; Shepard v. Pratt, 16 Kas. 209; Beeclier t;. Bush, 45 Mich. 188, 7 N. W. 785;
Cohvell V. Britton, 59 Mich. 350, 26 N. W. 538 ; Corey v. Cadwell, 86 Mich. 570, 49 N.
"W. 611 ; Philips v. Samuel, 76 Mo. 657 ; Priest v. Chouteau, 85 Mo. 398 ; Parchen v.
Anderson, 5 Mont. 438, 5 Pac. 588 ; Gibson v. Smith, 31 Neb. 354, 47 N. W, 1052 ;
Horton v. New Pass Gold & Silver Mining Co., 27 Pac. 376 (Nev.) ; Eastman v. Clark,
53 N. H. 276 ; Wild v. Davenport, 48 N. J. L. 129, 7 Atl. 295 ; Harvey v. Chiids, 28
Oh. St. 319 ; Cogswell i;. Wilson, 11 Ore. 371, 4 Pac. 1130; Boston & Col. Smelting
Co. V. Smith, 13 R. I. 27 ; Polk v. Buchanan, 5 Sneed, 721 ; Robinson v. Allen, 85 Va.
721, 8 S. E. 835 {semb/c).
3 Tayloe v. Bush, 75 Ala. 432 ; Stevens v. Faucet, 24 111. 483 ; ChaflTraix v. Lafitte,
30 La. Ann. 631 (but see New Orleans v. Gauthreaux, 32 La. Ann. 1126) ; Dwinel v.
Stone, 30 Me. 384 ; McDonald v. Matney, 82 Mo. 358 ; Kellogg Newspaper Co. t'.
Farrell, 88 Mo. 594; Clifton v. Howard, 89 Mo. 192, 1 S. W. 26 ; Chapline v. Conant,
3 W. Va. 507. See the English authorities, ante, § 44.
5 54.1 WHO ARE PARTNERS. 47
profits ; but the converse is not true, that every one who has such
a right is a partner. There are many relations which a man
may bear to another, and in tliat right be entitled to an account
without being liable as a partner. And it has been well said by
an American writer, " In all cases where a person is to be paid
for his services by a sum proportional to the profits, he must be
entitled to an account of profits. If not, how is he to ascertain
that he has what he has stipulated for ? " (by
§ 54. Intention the true Test. — The true test of partnership,
then, is the intention of the parties. They have agreed together
for a certain purpose. If the purpose was the formation of an
associated body, different from the individual parties, for which
they were thereafter to act, they have formed a partnership. If
however the purpose was the entrance into a relationship in which
one of the parties, at least, was to act as an individual solely for
himself, without becoming a member of an associated body, there
is no partnership formed and the parties are therefore not part-
ners. The intention to form a partnership may be expressed in
the contract, or it may be gathered from the acts and from all the
circumstances which are available for the interpretation or con-
struction of the contract.^ This does not mean that parties
having formed their relationship are permitted to call it a part-
nership or otherwise at will ; but that whether the parties formed
the associated body which the law regards as a partnership depends
upon whether they intended to form such a body. If they did so
intend they are partners, though they were . ignorant of the legal
(b) Bissett on Partnership, p. 14.
* The right to go into equity for an account is not confined to a partner. Any
employee paid by a share of the profits may maintain a bill for an account, though he
is not a partner, since a court of law is unable to take such an account. Harrington
V. Churchward, 29 L. J. N. s. Ch. .'521 ; Katsch v. Schenok, 13 Jur. 668 ; Ferry v.
Henry, 4 Pick. 75 ; Hallett v. Cuniston, 110 Mass. 32 ; Bentley v. Harris, 10 R. I.
434 (distinguishing Hazard v. Hazard, 1 Story, 371).
2 Badeley v. Consolidated Bank, 38 Ch. Div. 238 ; Couch v. Woodruff, 63 Ala. 466
(sanble) ; Mayrant v. Marston, 67 Ala. 453 ; Tayloe v. Bush, 75 Ala. 432 ; Loomis v.
Marshall, 12 Conn. 69 ; Chaffraix v. Lafitte, 30 La. Ann. 631 ; Sangston v. Hack, 52
Md. 173 ; Waring v. Nat. Marine Bank, 74 Md. 278, 22 Atl. 140 ; Denny v. Cabot,
6 Met. 82 ; Beecher v. Bush, 45 Mich. 188, 7 N. W. 785 ; Corey v. Cadwefl, 86 Mirh.
570, 49 N. W. 611 ; Priest v. Chouteau, 85 Mo. 398 ; Kellogg Newspaper Co. v. Far-
rell, 88 Mo. 594; Vibbard v. Roderick, 51 Barb. 616; Setzer v. Beale, 19 W. Va.
274. Hence, if persons who unite in a joint undertaking expressly declare that they
do not mean to become partners, the law will not hold them partners as to each other,
unless the actual relations into whieh they enter neutralize and negative their declara-
tions. Gilpin V. Enderbey, 5 B. & Aid. 954 ; Kerr v. Potter, 6 Gill, 404 ; Freeman v.
Bloomfield, 43 Mo. 391 ; Gill v. Kuhn, 6 S. & R. 333.
48
THE LAW OP PARTNERSHIP.
[CH. V.
nature of their relation, and even though they may have expressly
provided in the articles that they should not become partners.^
And conversely, thou,<2;h they have declared themselves to be
partners, if the relationship established was not one of partner-
ship the parties will not be regarded by the law as partners.^
§ 55. Partnership inferred from Control of Business. — It is quite
certain that no mere interfei'encc with the affairs of the partner-
ship, no advice in respect to them, not even a control of them, not
even the right or the duty of interference, advice, or control, as
part of an express contract, can ahme make a party chargeable as
a partner ; (c) although they might be very influential, in connec-
tion with other circumstances, in determining the relation of a
person to the partnership. Neither would the fact of joining in
an order for the purchase or sale of goods, (cZ) or for any mercan-
tile transaction, {e) suffice to create a partnership or its liabilities
without other circumstances.
(c) In Barklie v. Scott, 1 Hudson &
B. 83, the court said : "As to the stipula-
tion that the house should be governed
and directed by the defendant's advice,
this does not constitute him a partner, nor
give him any legal interest in the firm ; it
does not hold him out to the world as a
partner, nor give him any share in the
profits, nor em]io\ver him to dissolve, alter,
or affect the partnership. Suppose that
the defendant Jiad not been the party ad-
vancing this money, but that the gift had
been made by a third person, who had
been desirous that the young man should
have the advice of some skilful person
engaged in trade, and had stipulated that
the house should be directed by that ad-
vice, — could such a person be considered
as a partner ? " See Bryden v. Taylor, 2
H. & G. 400 ; Taylor v. Perkins, 26 Wend.
124 ; Smith v. Edwards, 2 H. & G. 411.
(d) Gibson v. Lupton, 9 Bing. 297.
The defendants, who were never general
partners, ordered wheat of the plaintiffs,
by an order containing the following
words: "Payment for the same to be
drawn upon each of us, in the usual man-
ner." The i)laintiffs, in a letter addressed
to each of the defendants, answered :
"We have made a purchase for your joint
account." At the same time, they drew
upon the defendants for one-third of the
price, upon each by a separate bill for one
moiety of the third. They afterwards
despatched the wheat, and drew other
similar bills, in the same manner, for the
remainder of the price ; having, however,
previously written them : " We hold you
both harn)less for the advance up to the
period of lading and invoice." The bill
of lading, on its reaching tlie defendants,
was indorsed by each of them ; the freight
and charges were paid by the money of
each ; and the wheat was equally divided
between them when it was warehoused.
Upon these facts, it was held, that the
defendants were not jointly liable as part-
ners for the whole price of the goods.
See also Jackson v. Robinson, 3 Mason,
138 ; Harding v. Foxcroft, 6 Me. 76.
(e) Thus the fact that two persons sign
a note jointly is no evidence of copartner-
ship between them. Hopkins v. Smith,
11 Johns. 161. But it has been held
otherwise where two persons draw a bill
of exchange. Carvick v. Vickery, Doug.
653, note. See also Given v. Albert, 5
Watts & S. 339 ; M'lver v. Humble, 16
East, 169 ; Gibbons v. Wilcox, 2 Stark.
43; Chandler v. Brainard, 14 Pick. 285;
Clark V. Keid, 11 Pick. 446; Banchor v.
Cilley, 38 Me. 553; Chase v. Stevens, 19
N. H. 465.
1 Scott V. Campbell, 30 Ala. 728.
2 Oliver c. Gray, 4 Ark. 425.
§ 56.] WHO ARE PARTNERS. 49
In Ireland, a father advanced a large sum to a partnership for
his minor son, who l)ecame a partner, and the father was to have
the right of knowledge, advice, <fec., and the accounts of the part-
nership were rendered to him. But, the firm failing, he was
adjudged not a partner ; because the articles did not provide that
he might withdraw any part of the profits, and he did not with-
draw them in fact. (/)
But where one party really engages in the business, thougli he
acts nominally for another, he may be held as a [)artner. Thus
wdiere a business is carried on by a firm of which a married
woman is nominally a member, though the husband transacts all
the business, the intention is evidently that he shall engage in the
business, and he is a partner. ^
So where one signed partnership articles in the name of his
mother, but acted as partner in the business, he was held as such.^
So where a guardian entered into articles of copartnership in
the name of his ward, but contributed his own money as capital,
assisted in the business, and took the profits, he was held to be a
partner, and not his ward.^
§ 56. Intention to escape Liability not Enough. — Since the
intention of the parties to form an association which the law calls
a partnership is the test, it is immaterial whether they expect to
become individually liable. So wiiere certain persons subscribed
money for carrying on the grocery business, and called themselves
♦' stockholders," expecting to avoid individual liability, but took
no steps to form a corporation, they were held partners.* So
where a corporation is projected, but business is carried on by the
intending corporators before they have taken steps to obtain a
charter, they are lialjle as partners.^ They are also so liable when
they vote, after the expiration of the charter, to continue the
business.^ And where a corporation is in fact formed, but is a
merely nominal one, the parties really acting for a partnership,
they have been held partners.' Where three persons who had
combined to deal in land and water rights under a contract
(/) Barklie v. Scott, 1 Hudson & B. 83.
1 Rabitte v. Orr, 83 Ala. 185, 3 So. 420.
2 Bishop V Austin, 66 Mich. 515, 33 X. W. 525.
* Miles V. Wann, 27 Minn. 56.
* Farnum v. Patch, 60 X. H. 294.
* Citizens' Bank v. Hine, 49 Conn. 236 ; Martin v. Fewell, 79 Mo. 401 ; McVicker
V. Cone, 21 Ore. 353, 28 Pac. 76.
8 Nat. Bank of AVatertown v. Landon, 45 N. Y. 410.
7 Farmer's Bank v. Smith, 26 W. Va. 541.
4
50 THE LAW OF PARTNERSHIP. [CH. V.
secured a charter for a corporation and took property in the cor-
porate name, but never issued stock or engaged in business as a
corporation, it was held that their relation was that of a partner-
ship, the assets being the capital stock of the corporation.* And
where individuals bought the assets of a railroad company but
not the franchise, and carried on the road in the name of the
corporation, they were held to be partners.^ Where there is
shown to be an association for business purposes it is presumed
to be a partnership ; if the associates wish to escape liability
on the ground that the association is incorporated, they must
prove that fact.^
8 57. Intention to form Corporation. — But where persons unite
to form a corporation, and believe that they have done so, it is
clear that they should not be held liable as partners ; for they
never intended to form an association which the law calls a
^partnership. In accordance with this principle it is generally
held that where parties believe themselves to be stockholders in a
legal corporation they cannot be held liable to third persons as
partners, though there is no corporate liability ;* and it is imma-
terial whether the corporate liability fails by reason of defective
organization, expiration of charter powers, unconstitutionality of
the law under which organization was attempted,^ excess of
power, or for any other reason. It is however held in some
jurisdictions that an intended corporation not legally formed is a
partnership, and the stockholders are partners.^
Members of the supposed corporation who take part in creating
a liability to a third party are individually liable to him.' And
1 Shorb V. Beaudry, 56 Cal. 446.
2 Chatfe V. Ludeling, 27 La. Ann. 607.
8 Clark V. Jones, 87 Ala. 474, 6 So. 362.
4 Gartside Coal Co. v. Maxwell, 22 F. R. 197 ; Blanchard v. Kaull, 44 Cal. 440
{semble) ; Humphreys v. Mooney, 5 Col. 282 ; Stattoid Nat. Bank v. Palmer, 47 Conn.
443 ; Planter's & Miner's Banlc v. Padgett, 69 Ga. 159 ; Tarbell v. Page, 24 111. 46 ;
Fay V. Noble, 7 Cusli. 188 ; Trowbridge v. Scudder, 11 Cush. 83 ; First Nat. Bank v.
Almy, 117 Mass. 476 [semble); Ward v. Brigham, 127 Mass. 24; Merchants &
Manufacturers' Bank v. Stone, 38 Mich. 779 ; Stout v. Zulick, 48 N. J. L. 599, 7 Atl.
362 ; Central Bank v. Walker, 66 N. Y. 424 ; Jessup v. Carnegie, 80 N. Y. 441
(semble) ; Medill v. Collier, 16 Oh. St. 599 ; Newburg Petroleum Co. v. Weare, 27
Oh. St. 343 ; Second Nat. Bank v. Hall, 35 Oh. St. 158.
& Contra, Eaton v. Walker, 76 Mich. 579, 43 N. W. 638.
6 Conner v. Abbott, 35 Ark. 365 ; Coleman v. Coleman, 78 Ind. 344 ; Kaiser v.
LawTence Savings Bank, 56 la. 104; Hurt v. Salisbury, 55 Mo. 310; Richardson v.
Pitts, 71 Mo. 128 ; Abbott v. Omaha Smelting Co., 4 Neb. 416. Even in these juris-
dictions the stockholders could not be held as partners if the purpose of the corporation
was not to do business, as where it was formed to extend and grade a street. Johnson
V. Corser, 34 Minn. 355, 25 N. W. 799.
' Rianhard v. Hovey, 13 Ohio, 300 ; Rutherford v. Hill, 22 Ore. 218, 29 Pac. 546.
§ 59.] WHO ARE PARTNERS. 51
therefore if all the stockholders of a corporation knowingly
engage in a business not warranted by the charter,^ or continue
business after the expiration of the charter,^ they are liable
individually. It would seem, however, that even in this case the
liability is not that of partners, but is either an imi)lied warranty
of the corporate liability, analogous to the liability of one who
assumes without autliority to act as an agent ; ^ or else a liability
imposed by statute.*
§ 58. Requisites of a Partnership. — Different phrascs have been
employed by the courts to explaiu the requisites of a partnership.
Thus it has been said that there must be a community of interest
in property employed in business, and in the profits ; ^ a com-,
munity of interest for business purposes ;*^ a comnmuity of interest
in a business, as to wliich the partners are mutually principals
and agents, with general powers within the scope of the business ;'
a proprietary interest in the profits as such before division, as
principal trader ; ^ and that the relation of agency must be
created.^ These all approximate the true rule. They are so
many attempts to state the necessity for the formation of a
business association or entity, for which the parties are to act,
and with which their relations are established.
§ 59. Community of Loss not Essential. — Although it is
undoubtedly true, that in much the greater number of partner-
ships there is a comrauuity of loss as well as of profit, the weight
of authority as well as of reason seems to be decidedly in favor of
the rule that there may be a legal and valid partnership, although
one or more of the partners are guaranteed by the others against
loss.i** And even if one of the parties agrees to be liable for losses,
1 Ridenour v. Mayo, 40 Oh. St. 9.
2 Nat. Bank of Wateitown v. Landon, 45 N. Y. 410.
3 Trowbridge v. Seudder, 11 Cush. 83.
* Sullivan v. Sullivan Mfg. Co., 20 S. C. 79.
5 Dame v. Kenipster, 146 Mass. 454, 15 N. E. 927.
« Priest V. Chouteau, 85 Mo. 398.
7 Beecher v. Bush, 45 Mich. 188, 7 N. W. 785. See Corey u. Cadwell, 86 Mich.
570, 49 N. W. 611 ; Cogswell v. Wilson, 11 Ore. 371, 4 Pac. 1130.
8 Gibson v. Smith, 31 Neb. 354, 47 N. W. 1052.
9 Wild V. Davenport, 48 N. J. L. 129, 7 Atl. 295.
1* In spite of numerous dicfa to the contniry, both in England and in this country,
this appears to be the law. The true princiide seems to l)e laid down by Lord Eldon
in Ex parte Langdale. 18 Ves. 300 : " A man, who is to have no profit, may be a part-
ner, if holding himself out as such ; as by lending his name. He may also be a partner
when the contract is that he shall suffer no loss ; and, I agree, it is not the less a part-
nership becau.se part of the contract is, that they are not to suffer by bad debts, the
personal negligence of him who has the custody of the articles, by fire, &c." See
Brigham v. Dana, 29 Vt. 1. So in Giljtiii v. Enderbey, 5 B. & Aid. 954, where, though
52 THE LAW OF PARTNERSHIP. [CH. V.
although he is not to participate in the profits, it is possible that
there may be a partnershi}).^
§ 60. Voluntary Associations and Clubs. — It WOuld seem that
there must be a community of interest for business purposes ;
though it cannot be said that partnership exists only for buyiiig
and selling ; for, as we shall see, physicians and lawyers, who
neither buy nor sell professionally, may yet form a professional
partnership, which is entirely legal and to which all the rules and
privileges of the law of partnership ai)ply. Usually, however, the
purpose of the partnership is to buy goods and sell them again ;
and in all cases it must exist for the purpose of making a profit.
Hence, voluntary associations or clubs, for social and charitable
purposes, and the like, are not proper partnerships ; nor have their
members the powers and responsibilities of partners.^
§ 61. Purpose of realizing Profit essential. — If the intention of
acting in common is limited to buying and making, or if a valu-
able product arises from a contribution to common stock of one
one of the parties was guaranteed against all delits and losses, there being no usurj' in
the case, the court held that there was a partnership, though of a peculiar kind ; and
the circumstance that one of the parties was not to bear any losses was not adverted to.
See Fereday v. Hordern, Jacob, 144 ; Manville v. Parks, 7 Col. 128 ; Cochran . Bartle,
91 Mo. 636, 3 S. W. 8.'i4 ; Pierson v. Sleinniyer, 4 Rich. 309.
1 For such a case, see Mandeville v. Mandeville, 35 Ga. 243.
2 Fleniyng v. Hector, 2 M. & W. 172. So "clubs" ai-e neither " partnerships"
nor "associations" within the meaning of the Winding-up Acts. In re St. James's
Club, 2 De G., M. & G. 383. Nor is a company, the purpose of which is the purchase
of lands with funds raised by subscription, and the division of such lands amongst the
subscribers, a company entitled to registration under 7 & 8 Vict. ch. 110, wliich (§ 2)
applies only to associations formed " for any commercial or trading puriioses." Queen
V. Whitmavsh, 15 Q. B. 600. See Delauney v. Strickland, 2 Stark. 416 ; Caldicott v.
Griffiths, 8 Exch. 898 ; Cockerell v. Aucomjite, 2 C. B. N. s. 440 ; Briglit v. Hutton,
3 H. L. C. 341. In re Worcester Corn Exchange Company, 3 DeG., M. & G. 180 ;
Cheney v. Clark, 3 Vt. 431. Persons who subscribe in writing certain sums for the
purpose of building a meeting-house, which, when completed, is to be the property of
the subscribers in the proportion of their subscriptions, are not partners. Woodward
V. Cowing, 41 Me. 1.
So a voluntary association for charitable purposes is not a partnership. Burke v.
Roper, 79 Ala. 138 ; Lafond v. Deems, 81 N. Y. 507. Such as a Young Men's Chris-
tian Association, Queen v. Robson, 16 Q. B. D. 137 ; an unincorporated religious
society, Devoss v. Gray, 22 Oh. St. 159 ; or a Masonic Lodge, Ash v. Guie, 97 Pa.
493. An association formed to resist the claims of a certain patentee is not a partner-
ship. Burt V. Lathrop, 52 Mich. 106, 17 N. W. 716. A political committee is not a
piirtnership. Richmond v. Judy, 6 Mo. App. 465. An association formed to extend
ami grade a street is not a partnership. Johnson v. Corser, 34 Minn. 355, 25 N. W.
799.
When such an association undertakes a liability only those members are liable who
either voted to incur the liability or by taking some part in the business, or in some
other way, ratified the act of those who actually incurred the liability. Devoss v. Gray,
22 Ohio St. 159 ; Ash v. Guie, 97 Pa. 493. See ante, § 37.
§ 61.] WHO ARE PARTNERS. 53
thing by one and another thing by another, and a working on and
with those tilings by both, this may constitute a partnei-sliip as to
the ownership of that product, and in all the transactions which
led to it, if the product itself is to be sold on common account,
in order to realize a profit. This would be a numufacturing part-
nership. But if the parties thus combine stock and work for a
product to be divided between them, and not for sale, but for each
party to keep and use the share that falls to him, it is not a partner-
ship.^ So, where one party let another have all the timber on his
land, and the other was to saw it, and pay to the first one-fifth of
the gross proceeds, this did not constitute them partners.^
In short, the law of partnership requires a community of interest
in the profits resulting from the business or work done. {<j) Thus,
(g) Thus ill Hoaie v. Dawes, 1 Doug, wliere Lord Loughborough says : " If the
371, several persons liad employed a broker j)arties be jointly concerned in the pur-
to purchase a lot of tea, of which they were chase they must also lie jointly concerned
to have a separate share. The (question in the future sale ; otherwise the}- are not
being whether the employers of the broker partners.' On the same principle joint
were partners, so as to make any one of purchases of land, or even of merchandise,
them liable for the price of all the tea so by two or more cannot have the effect of
purchased, it was held, that they were not ; making them partners, nor of raising a
since there was no communion of prolit presumption that they are so. Porter v.
and loss, but merely an undertaking wich M'Clure, 15 Wend. 187; Ballon u. Spencer,
the broker by each for a particular ([uan- 4 Cow. 163 ; Brady c. Calhoun, 1 P. & W.
tity. So in Coope v. Eyre, 1 H. Bl. 37, 140 ; Gilmore v. Black, 11 Me. 485 ;
^ An agreement to cultivate a farm " on shares " is of this sort. The better view is
that where the object is to divide the crop in kind between the partners it is no part-
nership. Gardeniiire v Smith, 39 Ark. 280 ; Blue v. Leathers, 15 111. 31 ; Donnell v.
Harshe, 67 Mo. 170 ; Musser v. Brink, 68 Mo. '242, 80 Mo. 350 : Clifton v. Howard, 89
Mo. 192 ; Putnam v. Wise, 1 Hill, 234 ; Reynolds v. Pool, 84 N. C. 37 ; Day w. Stevens,
88 N. C. 83 (explaining Curtis v. Cash, 84 N. C. 41) ; Brown v. Jaquette, 94 Pa. 113 ;
Murray v. Stevens, 1 P»ich. Cas. 205. Contra, Holifield i*. White, 52 Ga. 567 (but see
Holloway v. Brinkley, 42 Ga. 226 ; Smith v. Summerlin, 48 Ga. 425).
In accordance with this princijile, it is almost universally held that a combination
to produce something and divide the product is not a partnership. Gibson v. Lupton,
9 Bing. 297. So of a combination to work a gold-mine and divide the gold, Gilnian v.
Cunningham, 42 Me. 98 ; to fish and divide the fish caught. Hurley r. Walton, 63 111.
260 ; to make and divide bricks, Haycock v. Williams, 54 Ark. 384, 16 S. W. 3 ; Lamont
V. FuUam, 133 Mass. 583 ; Chapman v. Lipscomb, 18 S. C. 222 ; to manufacture and
divide lumber, Robinson v. Bullock, 58 Ala. 618; Stoallings v. Baker, 15 Mo. 481.
Contni, Musier v. Truni])bour, 5 Wend. 274. See Everitt v. Cliapman, 6 Conn. 347 ;
Loomis V. Marshall, 12 Conn. 69 ; Bncknam c. Barnum, 15 Conn. 67, 73.
So where the owner of land agreed to allow a ditch to be built through the land, and
to pay a quarter of the expense, and he was to have a quarter interest in the ditch and
water, this was held not to be a partnership. Fitzell v. Leaky, 72 Cal. 477, 14 Pac. 198.
Where, however, the agreement is interpreted as securing a division of the proceeds
of the product, and not of the product itself, there is a jiartnership. Ensign v. Wands,
I Johns. Cas. 171 ; Farmers' Ins. Co. v. Ross, 29 Oh. St. 429 ; Whitney v. Ludington,
17 Wis. 140.
9 Fail V. McRee, 36 Ala. 61.
54 THE LAW OF PARTNERSHIP. [CH. V.
if persons purchase goods to be sent on a mercantile adventure,
the proceeds to be reinvested in a return cargo, though there be a
partnership in the buying of the goods, and in the sending of them
abroad and tliere selling them, there is still no partnership in the
purchase or the ownership of the return cargo, unless that cargo
was to be sold for the common benefit. For if it is to be divided
m specie, each of the company taking in severalty his share, it
may be doubted whether it could be said that there was any
partnership in the return cargo. (A)
So if three or four persons agree to buy jointly all of a certain
commodity in the market, and agree that one only shall buy for
all, and that what he buys shall be divided between them, they
are not partners, for the want of a community in the disposition
of the merchandise. (^)
§ 62. Professional Partnerships. — Professional men, like physi-
cians or lawyers, are partners, if the earnings of all come into a
common stock or fund, and not until then are divided and held in
severalty, (j^ They may call themselves partners ; but if each
charges in his own favor what he earns, and each has a right to
demand and sue for this in severalty, they are not partners
inter se, however liable they might be to others from calling
themselves so. (k}
§ 63. Contributions of Capital. — It is not necessary that each
partner should bring into the common stock both labor and prop-
erty. It is a familiar principle, quite frequently put in practice,
that one or more of the partners may contribute money alone,
Putnam v. Wise, 1 Hill, 234; Barton v. (j) Bond v. Pittard, 3 M. & W. 357.
Williams, 5 B. & Aid. 395 ; Noyes v. In Darracott v. Penington, 34 Ga., the
Cushman, 25 Vt. 390. court consider the nature and objects of a
(/t) Holmes v. United Insurance Co., law partnership. See Atkinson v. Mac-
2 Johns. Cas. 329 ; Post v. Kimberly, kreth, L. R. 2 Eq. 570.
9 Johns. 470. See Thorndike v. De Woff, (k) Finckle v. Stacy, Sel. Ca. Ch. 9,
6 Pick. 120 ; United Insurance Co. v. where joint articles were entered into by
Scott, 1 Johns. 106. The same principle two persons for the doing a particular
is frequently illustrated in cases where piece of work, on account of which several
goods, purchased either with joint or sep- sums of money were jointly received by
arate funds, are sent on a common adven- them, and immediately divided between
ture, but are to be sold by the consignee them ; though the court was of opinion
or agent on separate account. Harding v. that it was not to be considered a part-
Foxcroft, 6 Me. 76 ; Jackson v. Eobinson, nership, but only an agreement to do a
3 Mason, 138 ; Hall v. Leigh, 8 Cranch, particular act, between which there was
50. See also Felichy v. Hamilton, 1 Wash, great difference ; and that it was so was
C. C. 491 ; Osborne v. Brennan, 2 N. & plain, for the money which thej' received
McC. 427 ; Gibson v. Lupton, 9 Bing. 297; they immediately divided, and did not lay
Sims V. AVilling, 8 S. & R. 103. out on a common account. See also Por-
(?) Coope V. Eyre, 1 H. Bl. 37. See ter v. Jl'Clure, 15 Wend. 187.
Ward V. Gaunt, 6 Duer, 257.
§63.]
WHO ARE PARTNERS.
55
while one or two others may contribute labor and money, or
labor alone. (/) And indeed all may contribute labor, and none
money, (/n)
The doctrine is laid down in some cases, that there may be a
partnership in the i)rolits, where there is none in the property, (n)
This seems opposed to the nature of a partnershij), in which there
(/) Reid V. Hollinshead, 4 B. & C.
867 ; Ex parte Chuck, 8 Bing. 469 ; Can-
dler V. Candler, d Madd. 141 ; Bovill v.
Hammond, 6 B. & C. 149 ; Dob v. Halsey,
16 Johns. 34 ; Cregj^ Towtislii[i v. Halt-
Moon Tovvnshijt, 2 Watts, 342 ; Simpson
V. Fetz, 1 McCord Ch. 213 ; Potter v.
Moses, 1 R. I. 430 ; Winship v. Bank
of the United States, 5 Pet. 529 ; Tihhatts
i;. Tibhatts, 6 Mcjjean, 80 ; Biace v.
Washburn, 43 Me. 564; Wood v. Val-
lette, 7 Oh. St. 122. See Dwinel v.
Stone, 30 Me. 384 ; Wright v. Davidson,
13 Minn. 449 ; Parker v. Cantield, 37
Conn. 250 ; Pettee v. Appleton, 114 Mass.
114 ; Howland v. Long, 45 Md. 439. So
an agreement that A. shall fnriush a stock
of goods, shop fixtures, &c., and that B.
shall pay the rent of the shop, manage
the business, and pay A. interest on one-
half of the fixtures, the profits to be di-
vided equally, renders A. and B. partners
as to third jjarties, although it be orally
understood, at the time of executing the
agreement, that the share of profits to B.
shall be in lieu of salary. Brighani v.
Clark, 100 Mass. 430. Where one con-
tributes the use of real estate, and the
other furnishes eajjital and labor, where-
by the former is utilized, the profits to
be divided, a partnership is constituted.
Wood V. Beath, 23 Wis. 254 ; Dalton v.
Dalton, 33 Ga. 343. Anything of value
for the use of the partnership, as for
example a license to trade, is a sufficient
contribution to the joint funds. The
Herkimer, Stewart Adm. 23, 24. Nor
need the property itself be put into the
common stock. On the other hand, the
capital of a firm may consist of the mere
use of pioperty owned by the individual
partners separately. Chancellor Wal-
woi'th, in Champion v. Bostwick, 18
Wend. 183.
(hi) Not only may one partner con-
tribute labor alone to the joint under-
taking, Imt the contributions of all the
partners, and the whole capital of the
tirni, may consist substantially of per.sonal
services, as is generally tlie case in piofes-
sional partnershii)s between soiicitois,
{•hysicians, ic. See Tench v. Roberts,
6 Madd, 145, note (a). So where two
commission houses, one in London, the
other in Rio Janeiro, in accordance with
mutual stipulations, recommend customers
to each otlier, and divide equally the com-
missions on the sitle of all goods thus re-
commended by the one house to the other,
quoad hoc they are partners, the capital of
the partnership being the partners' mutual
exertion of influence in each other's favor.
Cheap V. Cramond, 4 B. «Ss Aid. 663. See
Dix V. Otis, 5 Pick. 38.
(a) Mever v. Sharpe, 5 Taunt. 74 ;
Ex parte Hodgkinson, 19 Ves. 291 ; Dry
V. Boswell, 1 Camp. 329 ; Wi.sh v. Small,
1 Camp. 331, note; Patterson, J., in Bur-
nell I'. Hunt, 5 Jur. 650 ; Mair v. Glennie,
4 M. & S. 240; Ward v. Thompson, 1 Newb.
Adm. 95 ; Bryant v. Wardell, 2 Exch.
479 ; Brigham v. Dana, 3 Williani.s, 1.
[Bullard V. Smith, 139 Mass. 492, 2 X.
E. 86.] In Chase v, Barrett, 4 Paige,
148, however, the doctrine is distinctly
asserted by AVahvorth, Chancellor, that,
to " constitute a partnership as between
the parties themselves, there must be a
joint ownership of the partnership funds,
according to the intention of the ]>arties."
See also Dwinel v. Stone, 30 Me. 384 ;
Lowry v. Brooks, 2 McCord, 421 ; Ogden
r. Astor, 4 San<lf. 322 ; Beecham v. Dodd,
3 Harr. (Del.) 485; McCauley y. Cleveland,
21 Mo. 438. So where three parties agree
"to enter upon an operation embracing the
purchasing and selling of shingles," — one
to purchase, and the other two to receive
and sell, the shingles to Vie the property
of these two, who were to furnish the
capital, — all to share equally the profits
and losses, the}' are partners. Getchell
V. Foster, 106 Mass. 42.
56
THE LAW OF PARTNERSHIP.
[CH. V.
is a contribution of something for the joint benefit. Whatever is
contributed becomes the i)roi)erty of the partnership, and die
partners have equal power over it. Tlie true explanation seems
to be that in such cases, though the property itself is not owned
by the partnership, yet the use of it forms part of the capital
stock, and is the contribution of that partner to whom the property
belongs, (o) ^
§ 64. Failure of essential Element of Partnership. — The ])rin-
ciples or rules above stated as defining or describing a partner-
ship, may be further illustrated by cases in which joint business
transactions have been conducted, but were held not to constitute a
partnership, for the want of some essential ingredient, as where the
contributions of all the parties were not mingled into common
stock. (/») So where the capital and labor employed were not
combined together for business purposes and a common profit, (q)
(o) Hence the creditors of one who is
partner only in the profits cannot take in
execution the property which is contribu-
ted as capital wliolly by the other partner.
Ej' pirtc Hamper, 17 Ves. 404 ; Ex jMrtc
lioulandson, 1 Rose, 89 ; Blanchard v.
Cor.lidge, 22 Pick. 151 ; Bartlett i;. Jones,
2 Strobh. 471.
(p) In Smith v. Wright, 5 Sandf. 113,
two mercantile houses had carried on a
joint business under the following ar-
rangement: Each firm agreed, in its own
name and with its own funds, to make
purcliases and sales of flour and other
produce. But all such contracts were to
be made for the joint account and benefit of
the two firms, who were to share equally
in the profits and losses resulting from
the separate dealings of each firm in this
particular line of business. Upon the
(question whether this agreement constit-
uted the parties to it partners, Sand ford,
J. , said : " There was no union of funds
contemplated by the agreement. Each
firm was to make and fulfil its own con-
tracts. There was no union of services,
because it might so happen that one ot
the firms would be unable, or deem it
unwise, to make any contracts at all ; and
yet, in the absence of bad faith, it would
participate in the profits, and would
certainly be liable to share the losses of
the contracts made by the other firm.
The whole effect of the agreement was to
bind two distinct mercantile houses, act-
ing in their own names, separately and
independently of each other, to share the
profits and losses, when they should be
ascertained, arising from one paiticular
department of their trade. We think that
this did not constitute the two firms copart-
ners in the contracts, which the respective
separate firms made in the transaction ot
that portion of their business." Benson
V. M'Bee, 2 McMullen, 91.
(q) Thus a deed of assignment by a
debtor of all his propeiiy to trustees for
the benefit of creditors, contaiidng a
clause by which the trustees are author-
ized to carry on the trade of the debtor,
will not make the creditors who sign the
deed partners, if the carrying on of the
business is merely auxiliary to winding
up the debtor's affairs, and has in view
merely the realization of his jnojierty.
Owen V. Body, 5 A. & E. 28 ; Janes v.
Wliitbread, 11 C. B. 4(/6 ; Coate v. Wil-
liams, 9 C. B. 481.
'■ See the .language of Lord Cairns in Syers v. Syers, 1 App. Ca.s. 174, 181. By
agreement between the partners, the title to [iroperty used in the business may remain
in one partner. In such a case the use of tiie proiieity is contributed, and belongs to
the partnership. Rushing v. Peoyiles, 42 Ark. 390 ; Stumph v. Bower, 76 Ind. 157 ;
Hankey v. Becht, 25 Minn. 212 ; Clements v. Jessup, 36 N. J. Eii- 569.
§ 05.]
WHO ARE PARTNERS.
57
And it seems that tlierc is a difference between an enterprise
undertaken by a number of persons jointly, with the intent
thereby to diminish a loss, and one for the sake of profit, properly
speaking, (r)
A mere contingent interest in proi)crty, without light in the
property of the iirm and without responsibility for losses,
constitutes no partnership, (s).
^ ^jH. Typical Form of Partnership. — The mOSt unmistakable,
and perhaps the most common, form of partnership, is where two
or more persons agree to contribute both capital and labor, and to
share in both prolit and loss, equally or in certain specified pro-
])ortions. (i) Such an agreement being executed, there can be no
question as to the existence of a complete partnership.^
(r) As where underwriters, having Talbot, 2 Gol. 639, contract to keep and
separately insured, and separately accep- sell cattle ; Anten v. Ellingwood, 51 How.
ted an abandonment of a vessel, then (Pr. ) 359, editing and conducting a
unite in prosecuting the original voyage, newspaper ; Marsh v. Is. W. Ins. Co., 3
"it is carrying the general principle too Biss. 351 ; Lewis v. Greider, 51 N. Y.
far to consider them in the light of com- 231, single mercantile adventure, — series
mon partners," since they take the vessel of adventures ; but see Smith v. Wright,
only for the purpose of diminishing a i Abb. A]ip. 274 ; cheese-factory associa-
loss, and with no other view than to sell tion, Hawley v. Keeler, 62 Barl). 231 ;
her at its termination. Livingston, J., in purchase of land and erecting buildings
United Lis. Co. v. Scott, 1 Johns. 112. thereon, Kelshaw v. Jukes, 8 L. T. N. s.
So, where a debtor, in consideiation of 387 ; joint contract to perform labor and
his indebtedness, transfers the control of furnish materials, each a sjiecific part,
his business to his creditors, the latter to Smitli v. jMoynahan, 44 Cal. 53 ; advance
receive a large share of the profits until of money for prosecution of business to
the indebtedness of the former shall be be reiihbursed out of sales, with share of
reduced to a specified amount, the debtor jirofits in lieu of interest, Lintner v. Mil-
and his creditors are not partners. Bran- likin, 47 111. 178. See also Edwards v.
dred v. Muzzy, 1 Dutch. 268. See Price Tracy, 62 Pa. 374 ; Dailey v. Hall, 5 Bush,
V. Groom, 2 Exch. 542 ; post, § 74. 549 ; Freese v. Ideson, 49 111. 191 ; Par-
(s) Com. V. Bennett, 118 Mass. 443; ker v. Canfield, 37 Conn. 317. A debt of
Haskins v. Warren, 115 Mass. 514;
Campbell v. Dent, 54 Mo. 325 ; Eastman
V. Clarke, 53 N. H. 276; Bendell v.
Hettrick. 45 How. (N. Y.) Pr. 198 ;
Crawford v. Austin, 34 JMd. 49 ; Morgan
V. Stearns, 41 Vt. 397 ; Chapline v. Con-
A. is transferred to and assumed by B.,
who is to pay it out of the profits of a
piartnership. This does not make A. a
member of the firm. Delaney i\ Timber-
lake, 23 Minn. 383. [So an agreement
that one party should furnish logs, the
ant, 3 W. Va. 507 ; Parker v. Fergus, 43 other saw them at his mill, and the pro-
Ill. 437 ; Smith v. Vanderberg, 46 111. 34 ; ceeds after jiayment of the expense of
Mason v. Hackett, 4 Nev. 420 ; Hargrave marketing and selling be divided, does
V. Conroy, 4 Green (N. J.), 281. As to not create a partnership. Nelms v. Mc-
special facts which do not constitute a Graw, 93 Ala. 245, 9 So. 719.]
]iartnership, see further Morrison v. Cole, (t) As to what particular facts consti-
30 Mich. 102, contract of one to deliver tute a partnership in special cases, see
to the other hay, which the latter is to innher Ej: parf.e Good, 5 Ch. D. 46 ; Duff
take to market and sell ; Beckwith v. v. McGuire, 99 Iklass. 300 ; Decker v.
1 Metcalf V. Royal Exchange Assur. Co., Barnard. Ch. 343; Green v. Beesley, 2 Bing.
N. C, 108 ; Brown v. Tapscott, 6 M. & W., 119 ; Wilson v. Whitehead, 10 M. & W.
58 THE LAW OF PARTNERSHIP. [CH. V.
Where parties agree to enter into an association for the pur-
pose of buying and selling, and carrying on a joint business
indefinitely, no stipulation for dividing profit and loss is necessary,
as that is an incident to the prosecution of their joint business.^
An agreement for a division of profits raises a presumption of
partnership.^
§ 66. Partnership in a single Transaction. — It not Ullfrequcntly
happens, that persons enter into partnership without knowing it;
that is, they make a bargain together, without knowing that it
creates or involves a partnership, and subjects them to the law of
partnership This occurs most frequently when the agreement
relates to a single transaction, or to one or two only. There is a
common impression that nothing is a partnership at law which
does not cover the whole ground of some kind of business ; but
this is not so. If, for example, one has goods in the hands of a
factor or commission merchant, and he and another person enter
into an agreement for a valid consideration to share the profit
and loss of those goods, this constitutes them partners ; and the
rule has been applied in such a case, where the owner of the goods
agreed to guarantee to the other party the solvency of the com-
mission house, (w) So persons associating, and contributing
Howell, 42 Cal. 636 ; mining enterprises, Hedge's Appeal, 63 Pn. 273 ; lumbering
Pettee «. Appleton, 114 Mass. 114 ; Adams enter])rise, U])ham v. Hewett, 42 Wis. '85.
V. Carter, 53 Ga. 160 ; brickmaking, {u) Salomons v. Nissen, 2 T. R. 674.
Farmer's Ins. Co. v. Ross, 29 Ohio St. So, it' two ineicantile houses recommend
429 ; farming, Beauregard v. Case, 91 consignments to eacli other, and divide the
U. S. 134 ; leasing a railroad. Wills v. gross commissions on all sales of goods so
Sinimonds, 51 How. (Pr. ) 48 ; agreement recommended, 7«oa(^/ioc they are partners,
between tinner and plumber to work to- Cheap v. Cramond, 4 B. & Aid. 663. So,
gether, Tyler r. Scott, 45 Vt. 261 ; job- also, where two jointly undertake to pro-
bing, Gillbank v. Stephenson, 31 Wis. 592; cure a caigo for a vessel, the commission
agreement to jiurchase and man a ferry- therefor to be divided between them,
boat. Whitman v. Porter, 107 Mass. 522 ; Bovill v. Hammond, 6 B. & C. 149.
joint-stock association, unincorporated, for And where D. & W. were owners of a quan-
purchase of land and boring for oil, tity of salt, taken to secure themselves
503 ; Emanuel v. Draughn, 14 Ala. 303 ; Soule v. Hayward, 1 Cal. 345 ; Fisher v.
Sweet, 67 Cal. 228, 7 Pac. 657 ; Doak v. Swann, 8 Me. 170 ; Wadsworth v. Manning,
4 Md. 59 ; Goddard v. Pratt, 16 Pick. 412 ; Quine v. Quine, 9 Sm. & M. 155 ; Halsted
V. Schmelzel, 17 Johns. 80 ; Cumpston v. McNair, 1 Wend. 457 ; Griffith v. Butfum, 22
Vt. 181.
1 Miller V. Hughes, 1 A. K. Marsh. 181 ; Barrett ;;. Swann, 17 Me. 180.
2 Badeley v. Consolidated Bank, 38 Ch. Div. 238 ; Meehan v. Valentine, 145 U. S.
611 ; In re Francis, 2 Sawy. 286, 7 N. B. R. 359 ; Duryea v. Burt, 28 Cal. 569 ; Dubos
V. Hoover, 25 Fla. 720, 6 So. 788 ; Niehott" r. Dudley, 40 111. 406 ; Lockwood v. Bonne,
107 111. 235 ; Corey v. Cadwell, 86 Mich. 570, 49 N. W. 611 ; Philips v. Samuel, To
Mo. 657 ; Fourth Nat. Bank v. Althcimer, 91 Mo. 190, 3 S. W. 858 ; Piobinson n.
Allen, 85 Va. 721, 8 S. E. 835 (scinhle).
§ 69.] WHO ARE PARTNERS. 59
money to obtain a Ijill for a railroad, in Parliament, were held to
be partners in this enterprise, (v) A known and acknowledged
partnership, doing a regular business, may enter into a bargain
for purchase, sale, and joint profit, with a third party, in regard
to some single transaction, which makes them all partners therein.
In such case, the third person is not admitted into the former
partnership ; nor is the partnership which is created by the bar-
gain one between the old partnershi[) and the new man; but the
members of the old partnership, and the third person, all as indi-
viduals, constitute a new partnership, {w)
§ 67. Partnership to deal in Land. — It is generally lield that
where two agree to buy land and re-sell it, sharing the profit, this
constitutes them partners.^ It makes no difference that one party
furnishes the money and takes title to the land, while the other
furnishes his own services.^ It has however been lield that such
an agreement did not constitute a partnership, but was a single
joint adventure.^
§ 68. Relationships other than Partnership. — In accordance with
the principles that have been laid down, if the parties have formed
a relation inter se which is not in fact the creation of a partner-
ship, their act cannot be relied upon to make them partners.
For instance, if one becomes the servant, creditor, or landlord
of the other he cannot, merely by coming into such a relation,
be declared a partner, though in fact he may receive compensa-
tion in the form of profits. This is now generally recognized in
the cases.
§ 69. Agent or Servant. — It is now quite settled that one acting
against their joint liability as iudorsers of White, 3 B. Mon. 268 ; Benson v. M'Bee,
a note, and by agreement between them D. 2 MeMull, 91.
took the salt to market to sell on joint (v) Holmes v. Higgins, 1 B. & C. 74
account, and did sell it, and the proceeds {w) Ex parte Gellar, 1 Rose, 297. [For
were applied for the joint benefit, it was other instances of partnerships in a single
held, that D. & W. were partners in this transaction, see Bobbins ii. Laswell, 27
transaction. Cnmpston v. MeNair, 1 III. 365 (buying and selling cattle) ;
"Wend. 457. In like manner, if the pro- Meador v. Hughes, 14 Bush 652 (buying
prietors of separate lines of stage-coaches and jiacking hogs) ; Staples v. Sprague,
hire and keep a stable in common for their 75 Me. 458 (cutting and packing ice) ;
coach horses, and em|>loy and pay a hostler Lynch v. Thompson, 61 Miss. 354 (raising
at their joint expense, a partnership exists and dismantling a sunken vessel) ; Henry
between them for these purposes. Ripley v. Bassett, 75 Mo. 89 (attorne3'S jointly
V. Colby, 23 N. H. 438. See Bentlcy v. employed in a law-suit).]
1 Moore v. Davis, 11 Cli. D. 261 ; Yeoman v. Laslej', 40 Oh. St. 190 ■• Hulett v.
Fairbanks, 40 Oh. St. 233 ; Canada ■;;. Barksdnle, 76 Ya. 899.
2 Simpson v. Tenney, 41 Kas. 561, 21 Pac. 634.
8 Clark V. Sidway, 142 U. S. 682.
GO THE LAW OP PARTNERSHIP. [CH. V,
for another as agent or servant does not become a partner with
liabilities as such, merely by receiving a certain proj)ortion of the
pi'ofits as his compensation.^ Ho where a broker or factor is paid
by a proportion of the profits of sale he is not a partner.^ So it
is generally held that sailors, who receive in lieu of wages a
certjrin share of the profits of a voyage, are not thereby made
partners with the other participators in the })rofits.3 But where
1 Wilkinson v. Frasier, 4 Esp. 182 ; Mair v. Glennic, 4 M. & S. 240 ; Gpddes v.
Wallace, 2 Bligh, 270 ; Stocker v. Brocklebaiik, 3 MuN. & G. 250 ; Walker v. Hirsrh,
27 Cli. D. 460 ; Berthold v. Goldsmith, 24 How. 536 ; Hazard v. Hazard, 1 Story, 371 ;
Moore v. Smith, 19 Ala, 774 ; Tayloe v. Bush, 75 Ala. 432 ; Olmstead v. Hill, 2 Ark.
346 ; Haycock v. VVillianis, 54 Ark. 334 ; Le Fevre v. (Jastagnio, 5 Col. 564 ; Pond v.
CuMimiiis, 50 Conn. 372 ; Stevens v. Faucet, 24 HI. 483 ; Fawcett v. Osborn, 32 III.
411 ; Macy «. Combs, 15 lad. 469 ; Holbrook o. O'B^^rne (la.), 9 N. W. 291 ; Chairraix
V. Price, 29 La. Ann. 176 ; Miller v. Chandler, 29 La. Ann. 88 ; Allen v. Dunn, 15
Me. 292; Braley v. (Joddard, 49 Me. 115 ; Bull v. Schuberth, 2 Md. 38 ; Keddington
V. Lanahan, 59 Md. 429 ; Baxter v. lljdnian, 3 Pick. 435 ; Blanchard v. Coolidge, 22
Pick. 151 ; Partridge v. Kingman, 130 Mass. 476 ; Hamper's Appeal, 51 Mich. 71,
16 N. W. 236 ; Gill v. Ferris, 82 Mo. 156 ; Newnian v. Bean, 21 N. H. 93 ; Atherton
V. Tilton, 44 N. H. 452 ; Nutting v. Colt, 7 N. J. E(i. (3 Halsted) 539 ; Smith v.
Perry, 29 N. J. L. (5 Dutcher) 74 ; Chase v. Barrett, 4 Paige, 148; Vanderbui'gh v.
Hull, 20 Wend. 70 ; Barckle v. Eckart, 1 Den. 337, 3 N. Y. 132 ; Lewis v. Greider,
51 N. Y. 231; Conklin v. Barton, 43 Barb. 435; Ross v. Drinker, 2 Hall, 415;
Ogden V. Astor, 4 Sandf. 311 ; Motley v. Jones, 3 Ired. E(i. 144 ; McArthur v. Ladd,
5 Ohio 514 ; Miller v. Bartlet, 15 S. & R.' 137 ; Potter v. Moses, 1 R. L 430 ;
Lowry v. Brooks, 2 McCord, 421 ; Norment v. Hull, 1 Hunii.h. 320 ; Goode v. McCart-
ney, 10 Tex. 193 ; Cothran v. Marmaduke, 60 Tex. 370 ; Buzard v. First Nat. Bank,
67 Tex. 83, 2 S. W. 54 ; Missouri Pac. Ry. v. Johnson (Tex.), 7 S. W. 838 ; Brown v.
Watson, 72 Tex. 216, 10 S. W. 395 ; Wilkinson v. Jett, 7 Leigh, 115 ; Kellogg v.
Griswold, 12 Vt. 291; Stearns v. Haven, 16 Vt. 87 ; Mason v. Potter, 26 Vt. 722;
Clark V. Smith, 52 Vt. 529 ; Sodiker v. Applegate, 24 W. Va. 411 ; Whitney v. Lud-
ington, 17 Wis. 140 ; Nicholaus v. Thielge.s, 50 Wis. 491, 7 N. W. 341 ; La Flex v.
Burss, 77 Wis. 538, 46 N. W. 801. Thus, in Muzzy v. Whitney, 10 Johns. 226, A.
6 B. had agreed with a turnpike cori)oration to build and complete a certain road.
They afterwards contracted with C. "to let him have a share of the profits, if any, in
making the second ten miles bf the road, in proportion to the help he afforded in com-
pleting the same, the one half of it to be taken from A.'s part, and the other from B.'s
jtart." It was held that this agreement constituted no partnership between the ]iai'ties,
Init only ap[)eared to be a mode of paying C. for his help and labor. In Rawlinson v.
Clarke, 15 M. & W. 292, A., a surgeon and apothecarj', sold out his business to B., and
further agreed to employ him.self for a year in transferring his business to B., — in con-
sideration whereof B. agreed to give A., during the year, a moiety of the clear profits of
the trade. It was held that by this agreement A. & B. were not made partners ; and
that, upon a view of the whole deed, it would bear no other construction than that A.
was to receive nothing more than a salary for the services he was Vo afford to B., in
helping him to continue the business. See Salter v. Ham, 31 N. Y. 321.
- Benjamin v. Porteus, 2 H. Bl. 590; Dixon v. Cooper, 3 Wils. 40 ; Gibbons v.
Wilcox, 2 Stark. 43 ; Hesketh v. Blanchard, 4 East 144 ; Smith v. Watson, 2 B. & C.
401.
2 Wilkinson v. Frasier, 4 Esp. 182 ; Perrott v. Bryant, 2 Y. & Coll. 61 (explaining
Coppard V. Page, Forrest, 1) ; Mair v. Glennie, 4 J\I. & S. 240. Duryee v. Elkins, 1
Abb. Adm. 529; Reed v. Hussey, Bl. & H. 525; Brown v. Hicks, 24 F. R. 811;
§ 70.] WHO ARE PARTNERS. 61
one agreed to enter into a business, advance a certain sum of
money, and take general charge of the business, and was to
receive as compensation a fixed sum weelvly and such proportion
of the net profits as the sum he advanced bore to the wliole capi-
tal, it was held that he became connected with the business, and
was a partner.!
§ 70. Creditor. — Where one lends money to be used in business,
receiving a part of the profits of the business in lieu of or in
addition to interest on the loan, taking however no part in the
conduct of the business, he is not a partner.^ But in order that it
should be a loan, and not capital of a partnership, it must be
clear that the money is to be repaid at all events whether the
business is successful or not.^ It must also be clear that the par-
tics do not contemplate the formation of an entity which is in
fact a partnership, of which the lender shall be a member. Thus
in Pooley v. Driver,* where the agreement provided that the money
lent should be emi)l()yed in the business, and should not be drawn
out during the continuance of the partnei'ship which carried it on,
and sliould be paid back six months after the end of the partner-
ship, and that the lender should receive an amount of profits
based on the proportion of the loan to the whole amount invested
in the business, the agreement was held to create a partnership.
In such a case the advance is really made to the firm, not to the
other partner personally.^ It would seem, however, that the part-
CofSn V. Jenkins, 3 Story, 108; The Crusadfr, 1 "Ware, 437 ; Eice v. Austin, 17 Mass.
197 ; Baxter v. Rodman, 3 Pick. 435 ; Grozier v. Atwood, 4 Pick. 234.
So, in Bishop v. Shepherd, '23 Pick. 492, 494, the court said: "It has often been
held that upon these wlialing voj'ages, carried on under a shipping-paper and
form of contract like that exhibited in the present case, although the officers and
seamen respectively are to receive a share of the proceeds of the oil and other acquisi-
tions of the ship as their only compensation, yet they are not partners or part-
owners of the oil with the owners of the ship ; but, on the contrary, the oil, heprre
division, is the property of the owners. The oil, in the first instance, being the
property of the owners, it remains theirs until some settlement or adjustment."
1 Fougner v. First Nat. Bank, (111.) 30 X. E. 442.
2 BuUen v. Sharp, L. R. 1 C. P. 86 ; Ex jmrtc Tennant, 6 Ch. D. 303 ; Meehan v.
Valentine, 145 U. S. 611 ; Williams v. Fletcher, 129 111. 356, 21 N. E. 783; Clark
V. Barnes, 72 la. 563, 34 N. W. 419 ; Sheridan v. Medara, 10 N. J. Eq. (2 Stoct.)
469 ; Richardson v. Hughitt, 76 N. Y. 55 ; Eager v. Crawford, 76 N. Y. 97 ; Curry
V. Fowler, 87 N. Y. 33 ; Cassidy v. Hall, 97 N". Y. 159 ; Harvey v. Childs, 28 Oh. St.
319 ; Hart v. Kelley, 83 Pa. 286 ; Boston & Colorado Smelting Co. v. Smith, 13 R. I.
27. In Drake v. Ramey, 3 Rich. 37, where the profits of a partner were by agree-
ment paid to his individual creditor, the latter was not a partner.
But see contra Parker v. Canfield, 37 Conn. 250 ; Conkling v. Washington Cniver-
sity, 2 Md. Ch. 497 ; Bailey v. Clark, 6 Pick. 372 [scmUe).
3 Eager v. Crawford, 76 N. Y. 97.
* 5 Ch. D. 458.
ij See Magovern v. Robertson, 116 N. Y. 61, 22 N. E. 398 ; Southern Fertilizer Co.
62
THE LAW OF PARTNERSHIP,
[CH. V.
nership relation is not established where there is a mere loan of
money, unless the lender gets a right to exercise some control
over the business.^
If money be lent to a firm for more than legal interest, this
would be a usurious loan, (a;) but would not make the lender a
partner.
§ 71. Lessor. — Where the owner of property leases it for busi-
ness purposes, agreeing to receive in return a proportion of the
profits of the business, he receives the amount merely as rent,
and is not a partner in the business.^
So where one party took cattle of the other party to fatten, and
(x) Gestons v. Brooke, Cowp. 793 ;
Parker v. Rauisbottoui, 3 B. & C. 257.
When the principal is at liazard, there can
be no usury. Accordingly, in Morse v.
Wilson, 4 T. R. 353, where the lender of
money was to receive a share of the profits
of a trade in addition to legal interest, and
to he liable to no losses, it was contended in
his behalf that the contract was not usuri-
ous, inasmuch as, by sharing in the profits,
he was liable to creditors for all the partner-
ship debts, and thus his princijial was in
hazard. But Lord Kenyon, C. J., said :
"Nothing can be clearer than this case.
The plaintiff, without having any part-
nership in contemplation, lent 2,000/. to
H. W^ilson, for which he was to receive,
not only 51. per cent interest, but also
such surplus profits as should arise from
these two shares in the business, he him-
self not being bound, on the other hand,
to make good to the partners any part of
the losses whicli the trade might sustain.
The sinij)le cpiestion is. Why, then, this
is not an agreement to receive more than
the 51. per cent allowed by law for the
forbearance of a loan ? Most unquestion-
ably it is ; and it is therefore void. It
has been argued, however, that this was
not an usurious contract, because the
principal was put in hazard, as it was
liable to the partnership creditors : but
it was no farther hazarded than in the
case of every other loan, namely, by the
risk of the borrower's insolvency ; for, as
between the plaintiff and the partners in
the business, he was not liable to contrib-
ute to the losses in the trade." Buller,
J. : " In this agreement provision is made
to receive the profits, but none to engage
for the losses, of the trade. And, there-
fore, it is not true that the plaintiff's piin-
cipal was at stake ; since, by the terms of
the contract, the trade is to be carried on
by the other partners, and the plaintiff is
only liable to make good the losses of the
trade in the event of the insolvency of
the other partners. But, as between tliese
parties, if there be any losses, they must
be borne by the defendant and the other
partner ; and, if there be any profit, the
])laintiff is to receive his proportion of it."
On the other hand, in Morisset v. King,
2 Burr. 891, a stipulation between the
parties, by which the person advancing
money to a trader was to be liable for a
moiety of the losses by the trade, seems
to have determined the court in holding
the transaction not to be usurious.
V. Reams, 105 N. C. 283, 11 S. E. 467 ; Rosenfield v. Haight, 53 Wis. 260, 10 N.
W. 378.
1 Clark V. Barnes, 72 la. 563, 34 N. W. 419.
2 Parker v. Fergus, 43 111. 437 ; Holmes v. Old Colony R. R., 5 Gray 58 ; Thayer
V. Augustine, 55 Mich. 187, 20 N. W. 898 ; Reed v. Murphy, 2 Greene (la.), 574 ; John-
son V. Miller, 16 Ohio, 431 ; England v. England, 1 Baxt. 108 ; Felton v. Deall, 22 Vt.
170 ; Bowyer v. Anderson, 2 Leigh, 550 ; Chapline v. Conant, 3 W. Va. 507.
Contra, Dalton City Co. v. Hawes, 37 Ga. 115 ; Powell v. Moore, 79 Ga. 524, 4 S. E.
383 ; and see Oppenheimer i;. Cleramons, 18 F. R. 886.
§71.]
WHO ARE PARTNERS.
63
his compensation was fixed at half the net proceeds over the
agreed value of the cattle, this did not create a partnership
between them.^
So where an owner of a farm lets it on half profits, the landlord
and tenant certainly are not partners ; (?/) for if we suppose tlie ten-
ant should go into great ex})ense for some new mode of cultivation,
and become insolvent, no one would thinly of calling on the land-
lord as liable on the tenant's contracts. So, in the very comliion
case of shipments on half profits, it is never supposed that such
a shipment makes a partnership between the shipper and ship-
owner ; (z) and the same principle has been applied where one
(y) Perrine y. Hankinson, 6 Halst. 181.
Here, the profits of a tavern, as well as of
a farm, were to V)e divided. Putnam v.
"Wise, 1 Hill, 234 ; Blue v. Leathers, 15
111. 31 ; Chase v. Barrett, 4 Paige, 148.
The lease of a ferry has been considered
analogous to a fanning lease, and a stipu-
lation by which tlie lessee thereof was to
divide with the lessor all the profits above
a certain amount was held not to make the
lessor and lessee liable as partners. Bow-
yer v. Anderson, 2 Leigh, 550. So, when
coal mines were leased. Heckert v. Fegely>
6 W. & S. 139, 143. In Tibbatts v.
Tibbatts, 6 McLean, 80, John W. Tibbatts,
and Ann Tibbatts, his wife, leased unto
Leo Tibbatts a stock farm under covenants
and conditions substantially as follows :
The said Leo to pay no rents during the
term of the lease, and to manage and con-
duct tlie business of the farm in accordance
with his own judgment ; the stock and
farming utensils on the farm at the time
of the lease to be fairly valued, and at the
end tlicreof to be accounted back in equal
value ; Leo to have one-third, and John
"W. Tibbatts and wife two-thirds, of the
net profits to accrue by the same, and cur-
rent expenses to be paid out of the general
stock funds of the concern. The real estate
ta.x was to be paid by John W. Tibbatts,
and six per cent, interest to be allowed on
all advances made by either of the parties.
Leo was to keep regular accounts of the
business of the farm, subject at all times
to the inspection of John W. Tibbatts
and wife ; and, in case of Leo Tibbatts's
death during the term of the lease, peace-
able possession was to be given to John W,
Tibbatts and wife. Tlie court held, that
" looking at the nature of the, above con-
tract, aud the language used by the parties,
there was less difficulty in considering it a
partnership agieement, than a mere lease
for the term specified, paying rent." See
also Rrownlee v. Allen, 21 Mo, 123 ; Allen
i;. Davis, 13 Ark. 28.
(z) Hice V. Austin, 17 Mass. 205, 206.
So a contract by which the owner of a
vessel lets her in consideration of a share
of her earnings, or of the proceeds of the
adventure, does not make the ship-owner
and the charterer partners. Reynolds v.
Toppan, 15 Mass. 370 ; Taggard v. Loring,
16 Mass. 336 ; Thompson v. Snow, 4 Me.
264 : Winsor v. Cutts, 7 Me. 261 ; Cutler
V. Winsor, 6 Pick. 335. See Cox v.
Delano, 3 Dev. 89. Li French v. Price,
24 Pick. 13, the defendants were sub-
scribers of a contiact by which they agreed
to become interested in a voyage and ad-
venture, in certain definite ])roportions.
They also, by the same instrument, ap-
pointed two of their number to manage
the business abroad, who were to receive a
commission and monthly wages as com-
pensation for their services, and two others
to manage the business in this country,
purchase a suitable cargo, &c., and to be
allowed to charge two and a half per cent,
on the amount of invoice and profits, and
the same on all returns, but no commission
for purchase or sale of vessel. They there-
by also ratified the purchase of a vessel,
which had been made by the home agents.
Upon the (juestion whether this agreement
1 Wish V. Small, 1 Camp. 331 ; Beckwith v. Talbot, 2 Col. 639, 95 U. S. 289.
64
THE LAW OF PARTNERSHIP.
[CH. V.
advanced money to buy troous, and consigned them, to be repaid
out of the goods, and to have a part of the net profits, (a)
§ 72. Annuitant. — A person may be in receipt of a sum from
the profits of a partnership, without being chargeable as a partner,
when one is entitled to an annuity from the firm. This happens
most frequently in the case of a retiring partner, who as a part of
his several jjroperty, or instead of some portion of his share in
the partnership property which he leaves behind, is to receive an
annuity for life, or for a certain number of years. This may
occur also by the bequest of a deceased partner, who leaves his
funds or a part of them in the firm, and gives an annuity to his
widow or some other person out of the profits. It is agreed that
if this annuity be certain, and in no way dependent on the amount
of the profits, although payable out of them, then the annuitant is
not a partner, {b) According to the case of Waugh v. Carver, an
annuity which took the form of a share of the profits would make
made the signers thereof partners, Morton,
J., said : " Similar transactions and enter-
prises are very common in our country ;
and I believe, among merchants, never are
considered or treated as partnerships.
Many cases occur in which it may be
extremely difficult to determine whether
the joint-owners of pioperty hold it as
partners or as tenants in common. The
case at bar may be one of them. But
although the connection between the
owners of the plant and cargo certainly
£ontams many of the ingredients and pro-
perties of a partnership, yet, si)eaking for
myself, I must say that in my o])inion it
does not come up to that relation. The
case of Thorndike v. De Wolf & Tr., 6
Pick. 121, bears some resemblance to this ;
and that of Jackson v. Eobinson, 3 Mason,
138, seems to me decisive."
(a) In Rice v. Austin, 17 Mass. 197,
Putnam, J., said : " So in the case of
shipments to India upon half- profits, so
generally practised in this country : it
would hardly be contended that the
numerous freighters, often unknown to
each other, have by such shipments be-
come answerable for each other, or in any
way interested as partners with the ship-
owner, in respect to the dollars, which
constitute the adventures, and which he
undertook to carry to India for half the
profits. . . . The resemblance between
the cases now mentioned and the case at
bar is veiy strong. The plaintiff advanced
his funds to be invested by Lindsay in live
oak in Florida, to be procured, cut, and
transported, at the expense of l^indsay, but
on the account and risk of the plaintiff, to
the navy-yards of the United States ; and
for the services and disbursements of
Lindsay, he was to have half the profits,
as the owners of the freighting ships to
India are compensated for their services
and disbursements ; and the plaintiff, for
his risks and advances, was to have his
principal sum repaid, and the residue of
the profits. But it has never been thought
that the return cargo was liable for the
debts of the ship-owner."
(b) See Young v. Axtell, 2 H. Bl. 243.
In Waugh v. Carver, 2 H. Bl. 235, Lord
C. J. Eyre says : " This case lias been
extremely well ai'gued, and the discussion
of it has enabled me to make up my mind,
and removed the only difficulty I felt,
which was. Whether by construing this to
be a ])artnership, we should not determine
that if there was an annuity granted out
of a banking-house to the widow, for
instance, of a deceased partner, it would
make her liable for the debts of the house,
and involve her in a bankrujitcy ? But
I think this case will not lead to that
conclusion,"
§ 75.] WHO ARE PARTNERS. 65
the annuitant a partner. ^ But according to the better doctrine, if
the proportional part of the profits is received by one who is simply
an annuitant, this does not make him a partner.^
§ 73. Assignee for Benefit of Creditors. — If two or more
creditors take an assignment of their debtor's stock in trade, and
agree together and with him to carry on the business under the
management of the debtor liimself or of a creditor and apply the
profits to the payment of their debts due them, this does not of
itself make them partners in the business.^
§ 74. Executor. — When an executor of a partner, by reason of
directions in tiie will or otherwise, takes part with the surviving
partners in carrying on the business, he becomes a partner.* But
if he merely leaves the interest of the testator in the business,
receiving a share of the profits but taking no part in the business,
he is not a partner.^
§ 75. Association of Carriers. — A traffic arrangement between
carriers, by which a through line is established and a through rate
agreed upon, to be divided m certain proportions, does not create
a partnership.^ This is clear, for there was no intention to create
a new body to operate the through line ; each carrier was to
operate his own line. But if the carriers intend to create a new
^ III re Colbeck, Buck, 48 ; Ex parte Wheeler, Buck, 25 ; Ex parte Chuck, 8 Bing.
469. See opinion of Master of Rolls, In re Stanton Iron Co., 21 Beav. 164.
2 Jones V. Walker, 103 U. S. 444.
8 Cox V. Hickman, 8 H. L. C. 268 ; Re English Society, 1 H. & M. 85 ; Holme v.
Hammond, L. R. 7 Ex. 218 ; Davis v. Patrick, 122 U. S. 138 ; Pettis t>. Atkin.s, 60111.
454 ; Purvis v. Butler, 87 Mich. 248, 49 N. W^ 564 , Brundred v. Muzzy, 1 Dutch. 268 ;
U. S. Ins. Co. i;. Scott, 1 Johns. 106 ; Righter v. Farrel, 134 Pa. 482, 19 Atl. 687.
But see Owen i'. Bod}', 5 A. & E. 28 ; Taylor v. Herring, 10 Bosw. 447. Compare
Cavanaugh v. Riley, (Ky.) 19 S. W'. 745.
* Mattison i-. Farnham, 44 Minn. 95, 46 N. W^. 347 ; Citizens' Mut. Ins. Co. v.
Ligon, 59 Miss. 305 ; Wihl v. Davenport, 48 X. J. 129, 7 Atl. 295 ; Willis v. Sharp,
113 N. Y. 586, 21 X. E. 705.
5 Holme V. Hammond, L. R. 7 Ex. 218 ; Owens v. Mackall, 33 Md. 382 ; Phillips
V. Blatchford, 137 Mass. 510 ; Avery v. Myers, 60 Miss. 367 ; Wild v. Davenport, 48
N. J. L. 129, 7 Atl. 295 ; Richter v. Poppenhausen, 42 N. Y. 373 ; Willis v. Sharp,
113 N. Y. 586, 21 N. E. 705.
Before the case of Cox v. Hickman the English decisions held the executor liable
as partner, since he received a share of the profits. Wightman v. Townroe, 1 M. k S.
412 ; Ex parte Garland, 10 Ves. 110 ; Ex parte Holdsworth, 1 Mont. D. & D. 475.
8 Insurance Co. v. Railroad, 104 U. S. 146; Citizens' Ins. Co. v. Kountz Line, 4
Woods, 268 ; Montgomery & E. Ry. v. Culver, 75 Ala. 587 ; Hot Springs R. R. v.
Trippe, 42 Ark. 465 ; Converse v. Norwich & X. Y. Tr. Co., 33 Conn. 166 ; Irvin v.
Nashville, C. & S. L. Ry., 92 111. 103 ; Atchison, T. & S. F. R. R. v. Roach, 35 Kas.
740, 12 Pac. 93 ; Darling v. Boston & C. R. R., 11 All. 295 ; Gass v. N. Y. P. k B. R.
R., 99 Mass. 220 ; Wetmore v. Baker, 9 Johns. 307 ; Merrick v. Gordon, 20 N. Y.
93. But see Cincinnati, H. & D. R. R. v. Spratt, 2 Duv. 4 ; Barter v. Wheeler, 49
N. H. 9.
5
66 THE LAW OP PARTNEKSHIP. [CH. V.
body to operate the line, they become partners. Thus where the
owners of several steamboats united to establish a line of steam-
boats and divide the profits, they were held partners, thouuli cacli
owner retained the title and control of his own boat.^ But if in
such cases the carriers do not own the profits resultinir fi-om the
whole road, as a common fund out of which each is entitled to
draw a certain share, but each one of them receives only those
profits and bears only those losses which accrue from his own
particular piece of road, there is now no such community of
interest between them as to make them partners,^ even though the
carrier making the most profit divides the excess.^ The carriers
in such cases may however be jointly liable, not by reason of a
partnership, but because the agent for whose act suit was brought
acted for them jointly.*
§ 76. Ownership in Common. — Partnership must be distin-
guished from the joint management of property owned in common.
Where two parties own a chattel and make a profit by the use of
it, they are not partners without some special agreement which
makes them so. Thus the joint owners of vessels are not part-
ners in the management of the vessels,^ unless they form a special
partnership association.^
So where two men agreed to share the expense of getting a
patent, and to be " equal partners " in all losses and expenses, and
in gains and profits it was held not to constitute a partnership.'^
1 Waland v. Elkiiis, 1 Staik. 272 ; Bowas v. Pioneer Tow Line, 2 Sawy. 21 ;
Meaher v. Cox, 37 Ala. 201 ; Connolly v. Davidson, 15 Minn. 519 ; Chanijiion v.
Bostwick, 18 Wend. 175.
2 Ellsworth V. Tartt, 26 Ala. 733 ; Mohawk & Hudson R. R. Co. v. Niles, 3 Hill,
162 ; Briggs v. Vanderbilt, 19 Barb. 222 ; Bousteel v. Vanderbilt, 21 Barb. 26 ;
Pattison v. Blanchard, 5 N. Y. 186.
3 Fay V. Davidson, 13 Minn. 523.
* Cobb V. Abbot, 14 Pick. 289.
* Watson on Part. 5, 6 ; Ersk. Inst. b. 3, tit. 3, § 18 ; 2 Bell Comm. 655 (5th
ed.); Ex parte Young, 2 V. & B. 242 (overruling Doddington v. Hallet, 1 Ves. Sr. 497);
Ex parte Harrison, 2 Rose, 76; Green v. Briggs, 6 Hare, 395 ; Jackson v. Robinson, 3
Mas. 138 ; The Daniel Kaine, 35 F. R. 785 ; Patterson v. Chalmers, 7 B. Mon. 595 ;
Harding v. Foxcroft, 6 Me. 76 ; Knowlton v. Reed, 38 Me. 246 : Lamb v. Durant,
12 Mass. 54 ; Thorndike v. De Wolf, 6 Pick. 120 ; French v. Price, 24 Pick. 13, 18,
19 ; Runnels v. Moffat, 73 Mich. 188, 41 N. W. 224 ; Ward v. Bodeman, 1 Mo.
App. 272; Porter v. McClure, 15 Wend. 187 ; Knox v. Campbell, 1 Barr, 366 ; Hop-
kins V. Forsyth, 14 Pa. 34 ; Adams v. Carroll, 85 Pa. 209.
6 Holderness v. Shackels, 8 B. & C. 612, 618 ; Macy v. De Wolf, 3 W. & M. 193 ;
Hendy v. March, 75 Cal. 566, 17 Pac. 702 ; Hewitt i;. Sturdevant, 4 B. Mon. 453 ;
Patterson v. Chalmers, 7 B. Mon. 595 ; Hardy v. Sproule, 29 Me. 258 ; Gardner
I'. Cleveland, 9 Pick. 334 ; Bulfinch v. Winchenbach, 3 All. 161 ; Hinton v. Law, 10
Mo. 701 ; Mumford v. Nicoll, 20 Johns. 611 (reversing Kicoll v. Mumford, 4 Johns.
Ch. 522) ; King v. Lowry, 20 Barb. 532. See Merritt v. Walsh, 32 N. Y. 685.
7 Fraser v. Gates, 118 III. 99, 1 N. E. 817.
§ 77.] WHO ARE PARTNERS. 67
But it is possible to form a partnership association, of wliich the
contemplated patent shall constitute the capital.^ In the same
way joint owners of a patent are not necessarily partners, though
they may by agreement become so.^ In French v. Styring ^ two
joint owners of a race-horse had entered into an arrangement
by whicli one of them had the entire management of the horse, and
paid in advance all the expenses of keeping, training, &c. Tlie other
co-owner was to pay a moiety of these expenses, and to share equally
in the earnings. One of tlie questions raised in the case was,
whether that agreement constituted a partnership. On this ques-
tion the court was divided ; but since they allowed the plaintiff to
recover, the necessary result of the case would seem to be that no
partnership existed. This is without doubt the true view.
§ 77. Joint Legatees. — Where property is left to two or more
persons by a will, in such a way that they would take it as joint
tenants, or as tenants in common, and they take it as partners,
and continue to hold and use it as partnership stock, their rights
to and in the property, and against each other in relation to the
property, are governed by the law of partnership, (c) To this it
may be said, by way of exception, that if the will contained
distinct expressions which would give to the property the quality
of joint-tenancy, even when it should be lield in partnership,
these words, in reference to the legatees, would take effect, (^d)
(c) Jackson v. Jackson, 7 Ves. 535. the purposes to which the testator had
Same case on appeal, 9 Ves. 591. In devoted his property, nor from any other
this case, personal property, including consideration, gone the length of provid-
leaseholds, property in trade, &c., was ing that the residuary legatees should not
left to A. & B., as residuary legatees. By have any power of destroying the original
both the Master of the Rolls, and the joint-tenancy by their acts and agreements.
Lord Chancellor on appeal, it was held, A. & B. then possessing the power of sev-
that they took it originally as joint- ering the joint-tenancy, he held, that they
tenants. But the Master thought the had exercised it, both as to the capital
bequest positive, and that there were no and the profits, by acting for twelve years
circumstances by which he could be guid- as partners in trade therein ; and that,
ed in giving to the words of the will any therefore, they were to be considered as
other than their literal import. Therefore tenants in common of the property em-
he decreed that, on the death of A., all barked in trade, from the time they were
the property thus bequeathed, excepting let into possession. See 2 Hov. Supp. 66.
a portion of the accrued profits, belonged {d) As where a testator, after making
to B., the survivor. The Lord Chancellor, considerable pecuniary and other legacies,
on the other hand, held, that the will without making any express disposition
had, neither from the obvious intention, of the residue of his personal estate, con-
1 Soraerby v. Buntin, 118 Mass. 279.
2 Parkhurst v. Kinsman, 1 Blatch. 488 ; Boeklen v. Hardenburgh, 37 N. Y. Super.
110; Penniman v. Munson, 26 Vt. 164.
8 2 C. B. X. s. 357. See also Hawes v. Tillinghast, 1 Gray, 289.
68 THE LAW OP PARTNERSHIP. [CH. V.
§ 78. Proof of Partnership. — When joint defendants are sued
as partners, the burden is on the plaintiff to prove them so.^
Partnership may be proved as well by circumstantial evidence as
by direct proof ;2 but general reputation is not evidence of part-
nership,^ or of its dissolution,* though if a partnership is proved,
general reputation is admissible to prove whether or not a par-
ticular partner is dormant or active,^ and it would seem that a
disinterested person may testify who compose a firm.^
A member of a firm may of course testify who his partners
are;' though if the agreement is proved, one party to it cannot
testify that the other party is his partner, since that is a question
of law rather than of fact.^ So the existence of a partnership
may be proved by the separate admissions of all who are sued ;
or by the acts, declarations, and conduct of the parties ; or by the
act of one, and the declarations or conduct of others ; ^ and one
who admits that he is partner in a business may be held liable
personally, on his admission.^^ But the declaration of one who
stituted his two eldest sons his executors, appeal, all agreed that actual dealing in
Though the executors had carried on trade partnership with effects left to two jointly,
together with a portion of the residue, it with intent that it should be a dealing
was, nevertheless, held, that, upon the in partnership, though they had taken
death of one of them, the whole of the under the will as joint-tenants, yet having
residuum survived to the other. Hall v. once begun to act with the property as
Digby, 4 Bro. P. C. 224. In 9 Ves. 596, merchants, would sever the joint-ten-
the Lord Chancellor thus states the prin- ancy, unless the will contains something
ciple upon which the case was decided : that would clothe the property, though
"In that case Mr. Fazakerley, Sir John engaged in trade, with the quality of
Strange, and the other considerable per- joint-tenancy."
sons who signed the reasons upon the
1 Eichel V. Sawyer, 44 F. R. 845 ; Lieb v. Craddock, 87 Ky. 525, 9 S. W. 838 ;
Hallstead v. Coleman, 143 Pa. 352, 22 Atl. 977.
' McEvoy V. Bock, 37 Minn. 402, 34 N. W. 740 ; Rogers v. MuiTay, 110 N. Y.
658, 18 N. E. 261.
3 Metcalf V. Officer, 2 F. R. 640 ; Marble v. Lypes, 82 Ala. 322, 2 So. 701 ; Tan-
ner & Delaney Engine Co. v. Hall, 86 Ala. 305, 5 So. 584 ; Campbell v. Hastings, 29
Ark. 512 ; Bowen v. Rutherford, 60 111. 41 ; Sager v. Tupper, 38 Mich. 258 ; Smith
V. Griffith, 3 Hill, 333 ; Adams v. Morrison, 113 N. Y. 152, 20 N. E. 829 ; Wallis v.
Wood, (Tex.) 7 S. W. 852; Emberson v. McKenna, (Tex.) 16 S. W. 419.
* Pitcher v. Barrows, 17 Pick. 361.
5 Metcalf V. Officer, 2 F. R. 640.
6 Hodges V. Tarrant, 31 S. C. 608, 9 S. E. 1038.
' First Nat. Bank of ^Yausau v. Conway, 67 Wis. 210, 30 N. W. 215.
8 Alexander i'. Handley, (Ala.) 11 So. 390.
9 Jennings v. Estes, 16 Me. 323; Welsh v. Speakman, 8 W. & S. 257 ; Hanghey i'.
Strickler, 2 W. & S. 411 ; Johnston v. Warden, 3 Watts, 101 ; Cornhauser v. Roberts,
75 Wis. 554, 44 N. W. 744.
1'^ In Sangster v. Mazarredo, 1 Stark. 161, where the action was assumpsit against
four as the acceptors of bills of exchange, three of whom resided abroad and had been
outlawed, it was held, that an admission of partnership by one was evidence as against
§ 78.] WHO ARE PARTNERS. 69
claims to be partner in a business is not admissible against
anotlier to prove bim a copartner.^ So the books of a firm
cannot be admitted to prove one a partner in the firm, (e)
(r) [Bryce v. Joynt, 63 Gal. 375.] So Barb. Ch. 105, 116 ; Cliapin v. Coleman,
it seems to be settled, as a general rule, 11 Pick. 331. See Studdy v. Sanders, 2
that a plaintiff cannot prove the part- D. & R. 347 ; Pritchard v. Draper, 1 Russ.
nership of those whom he had made de- & M. 191 ; Bevans v. Sullivan, 4 Gill,
fendants, by the admissions of one of 383.
them made in his answer tiled to a bill It was held in one case, Whately v.
in equity ngainst him. Rooth v. Quin, Manhim, 2 Esp. 608, that in an action
7 Price, 193 ; Field v. Holland, 6 Cranch, by A. against B. & C. as partners, A.
8, 24 : Van Reimsdyk v. Kane, 1 Gall, might establish the partnership by put-
630, 635 ; Clark v. Van Reimsdyk, 9 ting in evidence a verdict on an issue
Cranch, 1,53, 156 ; Osborn v. U. S. Bank, between B. & C. directed out of a court
9 Wheat. 788, 832 ; Christie v. Bishop, 1 of equity, to try whether they were part-
that one of a joint promise by the four ; since, in a future action by the present
defendant against his co-defendants for contribution, the record in the present case
would not' be sufficient evidence of the joint liability. See Ellis y. Watson, 2 Stark.
453, 478. But an admission by one that he is a partner with others is to be construed
with reference to the circumstances under which it is made, and, if fairly applicable
only to a single transaction, will not be sufficient to establish a general partnership.
De Berkom v. Smith, 1 Esp. 29. See Ridgway v. Philip, 1 Cr., M. & R. 415. Where
the issue of partnershijt was raised by a plea in abatement for the non-joinder of {parties
as defendants, the admission of liability as a partner by one not joined in the suit, being
gooil in an action against him, was held to be also receivable on this issue to prove him
a partner. 2 Greenl. Ev. § 484 ; Clay v. Lanslow, 1 Moody & M. 45.
1 Mont V. Mainwaring, 8 Taunt. 139 ; Burgue v. Firmin, 3 Stark. 53 ; Dit(^hburn
V. Spracklin, 5 Esp. 31 ; Tinkler v. Walpole, 14 East, 226 ; Gibbons v. Wilcox, 2
Stark. 43 ; Parker v. Brewer, 3 J. B. ]\[oore, 226 (see Evans v. Drummond, 4 Esp. 89,
91 ; Heath v. Sansom, 4 B. & Ad. 172, 175) ; Oppenheimer v. Clemmons, 18 F. R.
886 ; Cross v. Langley, 50 Ala. 8 ; Humes v. O' Bryan, 74 Ala. 64 ; Vanderhurst v.
De Witt, 95 Cal. 57, 30 Pac. 94 ; Butte Hardware Co. v. Wallace, 59 Conn. 336, 22 Atl.
330 ; Giliiin v. Temple, 4 Harr. 1, 90 ; McCutchin v. Bankston, 2 Ga. 244 ; Tumliu
V. Goldsmith, 40 Ga. 221 ; Flonrnoy v. Williams, 68 Ga. 707 ; Phillips v. Trowbridge
Furniture Co., 86 Ga. 699, 13 S. E. 19 ; Southwick v. McGovern, 28 la. 533 ; Degan
V. Singer, 41 111. 28 ; Gardner v. North-Western Co., 52 111. 367 ; Vannoy v. Klein,
122 Ind. 416, 23 N. E. 526 ; Evans v. Cornell, 1 Greene (la.) 25 ; Brown v. Rains, 53
la. 81, 4 N. W. 867 ; Phillips v. Purington, 15 Me. 425 ; Tuttle v. Cooper, 5 Pick.
414 ; Bridge ??. Gray, 14 Pick. 55 ; Ostrom i;. Jacobs, 9 Met. 454 ; AUcott v. Strong, 9
Cush. 323 ; McNamara v. Eustis, 46 Minn. 311, 48 N. W. 1123 ; Boyd v. Ricketts, 60
Miss. 62 ; Filley v. McHenry, 71 Mo. 417 ; Rimel v. Hayes, 83 Mo. 200 ; Converse v.
Shambaugh, 4 Neb. 376 ; Grafton Bank v. Moore, 13 N. H. 99 ; Flanagin v. Champion,
1 Green Ch. 51 ; Whitney v. Ferris. 10 Johns. 66 ; Whitney v. Sterling, 14 Johns.
215 ; McPherson v. Rnthbone, 7 Wend. 216 ; Mitchell v. Roulstone, 2 Hall, 351 ; Fenn
I'. Timpson, 4 E. D. Smith, 276 ; Kirby v. Hewitt, 26 Barb. 607 ; Henry v. Willard,
73 N. C. 35 ; Carson v. Gillitt (N. D.), 50 N. W. 710 ; Cowan v. Kinney, 33 Oh. St.
422 ; Taylor v. Henderson, 17 S. & R. 453 ; Nelson v. Lloyd, 9 Watts, 22 ; Ander-
son V. Levan, 1 W. & S. 334 ; Crossgrove v. Himmelrich, 54 Pa. 203 ; Edwards tJ.
Tracy, 62 Pa. 374 ; Vanzant v. Kay, 2 Humph. 106 ; Buzard v. Jolly (Tex.) 6 S. W.
422 ; Wallis v. Wood (Tex.) 7 S. iv. 852 ; Emberson v. McKenna, (Tex.) 16 S. W.
419 ; Bundy v. Bruce, 61 Vt. 619, 17 Atl. 796 ; First Nat. Bank of Wausau v. Conway,
67 Wis. 210, 30 N. W. 215 ; Strong v. Smith, 62 Conn. 39, 25 Atl. 395^
70
THE LAW OF PARTNERSHIP.
[CH. V.
Whatever be the evidence offered to prove a partnership, it is
said that parties denying it cannot give evidence of private
conversation or correspondence to rebut that evidence, (eg)
§ 79. Partnership in several distinct Firms. — There is nothing
to prevent the same person from being a partner in several dis-
tinct firms. (/) This may involve difficult questions of fact, or
perhaps of law, arising from the complication of interests,
especially in case of bankruptcy. (^) Some of these questions
we shall hereafter consider, when we treat of bankruptcy and the
settlement of a partnersliip estate. It seems, however, not only
that a member of one partnership may become a member of
another, but a member of one firm may enter into such a bargain
with a third party, in respect to the interest of the first in the
stock, business, or profits of his partnership, as shall constitute
this third person and himself partners as to the interest of the
first, although the partnerships are entirely distinct, the new from
the old, and the third person acquires no rights and incurs no
obligations in reference to the first partnership. (A) If the new
ners. But this case has been questioned,
by high authority, for reasons that seem
entirely conclusive. 2 Stark. Ev. (7th
Am. ed.) 808, n. And in Burgess v. Lane,
3 Me. 65, it was held, that a verdict
and judgment thereon can be admissible
evidence of a copartnership in another
action, only when both the parties to the
second suit are the same as the parties to
the first. See Fogg v. Greene, 16 Me. 282 ;
Ellis V. Jameson, 17 Me. 235 ; Cragin v.
Carleton, 21 Me. 492 ; Latham v. Ken-
niston, 13 N. H. 203. See Folk v. Wilson,
21 Md. 538.
{ee) Freeman v. Smith, 2 Wall. 160.
(J) Swan V. Steele, 7 East, 210 ; Bosan-
quet V. Wray, 1 B. & C. 597 ; Elderkin v.
W' inne, 1 Chand. 27.
(g) See post, § 200 ; and Steele v.
Stuart, L. E. 2 Eq. 84.
(A) To this effect is tlie language of
Eyre, C. J., in Bolton v. Puller, 1 B. & P.
546 : " There can be no doubt that, as
between themselves, a j)artnership may
have transactions with an individual part-
ner, or with two or more of the partners
having their separate estate engaged in
some joint concern in which the general
partnership is not interested ; and that
they may by their acts convert the joint
j)roperty of the general partnership into
the separate property of an individual part-
ner, or into the joint property of two or
more partners, or e converso. 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 partnership
were transacting business with strangers ;
for instance, suppose the general partner-
ship to liave 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. In some
respects, therefore, an individual partner,
or a particular partnership consisting of
two or more of those persons who are
partners in some larger partnership, may
be consiilered as third persons in transac-
tions in which the general partnership may
happen to be engaged with their corre-
spondent." The court proceeded upon the
same principle in Brown v. De Tastet, Jac,
284. There A., B., and C. being in part-
nership, A. agreed with D. to give him a
moiety of his share in the firm. It was
held that an account might be decreed be-
tween A. and D. without making B. and
C. parties. See Glassington v. Thwaites,
1 Sim. & S. 124. In Ex parte Barrow,
2 Rose, 255, the two Slyths, father and
§ 79.]
WHO ARE PARTNERS.
71
partnership becomes insolvent, it would affect the old partnership
only as the insolvency of any member tliereof would, (t) If a
person belongs to two firms, lie may transfer to the credit of one
of them his interest in the other, against the wishes of his part-
ners in the second lirm ; nor would this necessarily operate a
dissolution of the second firm, (j) i3ut it is so obvious that such
complicated arrangements may bring ujton the j)arties great incon-
venience and embarrassment, that they will continue to be very
rare, even if they take place at all.
son, were in partnership. They agreed
to dissolve ; that the allairs of the i)art-
nership should be settled by arbitration ;
and that Slyth the younger should have
one-third out of the prohts of the business,
until some situation should be found for
him. The affairs of the partnership were
never adjusted ; but, shortly after, Slyth
the elder, who remained in possession of
the effects of the firm, formed a new jiart-
nership with Gyles. A commission of bank-
ruptcy having issued against the two SI yths,
their assignees took possession of the effects
of Slyth and Gyles, to an amount more
than sufficient to pay the cre<Iitors of that
firm. The question in the present case
was to whom the sui-plus belonged, whether
to the joint creditors of Slyth the elder
and Slyth the younger, or to the separate
creditors of Slyth the elder. The court
lield that it was the separate ])ro[ierty of
Slyth the elder. Lord Chancellor Eld(ju,
in the course of his opinion, said: " Now
Slyth the son was no partner in this (the
new) partnership; for although Slyth the
father might be obliged to give one-third
of his profits to Slyth the son under this
.arrangement, yet I take it to have been
long since clearly established, that a man
may become a partner with A., where A.
and B. are partners, and yet not be a
member of that partnership which existed
between A. and B. In the case of Sir
Charles Raymond, a banker in the city, a
Mr. Fletclier agreed with Sir Charles
Raymond that he should be interested so
far as to receive a share of his profits of
the business, and which share he had a
right to draw out of the firm of Raymond
& Co. But it was held that he was no
partner in that partnership, had no de-
auand against it, liad no account in it,
and that he must be satisfied with a share
of the ]ii'ofits arising and given to Sir
Charles Raymond." See Freligh v. Miller,
16 La. Ann. 418.
(/) See preceding note.
( j) Ru.ssell V. Leiand, 12 All. 849.
72 THE LAW OF PARTNERSHIP. [CH. VI.
CHAPTER VI.
WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES.
§ 80. General Grounds of Liability. — As we have seen tliat it is
one of the essential qualities of partnership that upon each part-
ner rests an absolute liability for the whole amount of every debt
due from the partnership, it is of the utmost consequence, both to
the creditors of a partnership and to actual or alleged members of
it, to determine with certainty who they are upon whom this lia-
bility rests ; or, in other words, who are partners in respect to
third parties dealing with the firm. And this question is some-
times as difficult as it is important. It is certain that persons
may be held as partners as to third parties, who would not be
deemed partners as between- themselves, (aa)
The first thing to be remembered is, that persons may be
charged as partners of a firm on either one of two perfectly dis-
tinct grounds, to both of wliich we have already referred. One of
these is, that the person actually is a partner. The other is, that
he has, with his own knowledge and consent, been held forth as a
partner, to the person having a claim, or to the public generally.
In the great majority of cases these two causes unite ; that is, he
is held forth as a partner who actually is one. The secret partner,
on the one hand, or the merely nominal partner, on the other, are
exceptions to the prevailing custom ; but such exceptions do occur,
and not very unfrequently : and then the question is. What are the
rules of law in regard to them ?
The first which we state is, that the liability of a partner is
fastened upon any person just as absolutely, and to all intents and
purposes, by either one of these causes alone, as by both of them
together. And the reason is obvious. If a man is in fact a part-
ner in a mercantile or other partnership, the mere circumstance
{aa) Grieff y. Boudousquie, 18 La. An. thority, and maybe held as partner, even
631. A person may be so negligent as to though there be no community of interest
be estopped to deny that a person who is or participation in profits. I71 re Jewett,
managing his property is acting by his au- 15 N. B. R. 126.
§ 80.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 78
that he has been able to conceal this partnership from the world
affords no reason whatever why he should not share in the lia-
bilities of the known partners, (a)
(a) That one who is a partner in fiict,
though not known to be so, is liable upon
all the partnership engagements to the
same extent as though his name had never
been concealed, is one of the oldest and
best-established doctrines of partnership
law. In Hoare v. Dawes, 2 Doug. 371,
Lord Mansfield said : " I considered them
at first as a sort of dormant partners. The
law with respect to them is not disputed,
namely, that they are liable when discov-
ered, because they would otherwise receive
usurious interest without risk." And in
Saville v, Robertson, 4 T. R. 725, Lord
Kenyon, C. J., said: "It is clear that if
all these parties had been partners at the
time when these goods were furnished,
though that circumstance were not known
to the plaintiff, they would all have been
liable for the value of the goods. It is
ejually clear that such an action might be
maintained against the dormant partners
alone, unless they pleaded in abatement."
Coope V. Eyre, 1 H. Bl. 48 ; Gouthwaite
V. Duckworth, 12 East, 421 ; Swan v.
Steele, 7 East, 210; Ex parte Raleigh,
3 Mont. & Ayr. 670 ; Evans v. Drummond,
4 Esp. 89 ; Ex parte Cellar, 1 Rose, 297 ;
Dyke v. Brewer, 2 C. & K. 828. The
whole doctrine on the subject is thus stated
by JIarshall, C. J., in Winship v. Bank of
the United States, 5 Pet. 561 : " Partner-
shifis for commercial purposes, for trading
with the W'Orld, for buying and selling
from and to a great number of individuals,
are necessarily governed by many general
principles, which are known to the public,
which subserve the purpose of justice, and
which societj' is concerned in sustaining.
One of them is, that a man who shares in
the profits, although his name may not be
in the firm, is responsible for all its debts.
Another more applicable to the subject un-
der consideration is, that a partner, cer-
tainly the acting partner, has power to
transact the whole business of the firm,
whatever that may be, and, consequently,
to bind his partners in such transactions
as entirely as himself. This is a general
power, essential to the well conducting of
business, which is implied in the existence
of a partnership. When, then, a partner-
ship is formed for a particular purpose, it
is understood to be in itself a grant of
power to the acting members of the com-
pany to transact its business in the usual
way. If that business be to buy and sell,
then the individual buys and sells for the
company ; and every person with whom he
trades, in the way of its business, has a
right to consider him as the company,
whoever may compose it. It is usual to
buy and sell on credit ; and, if it do so,
the partner who purchases on credit in the
name of the firm nmst bind the firm. This
is a general authoiity held out to the world,
to which the world has a right to trust.
The articles of copartnei'ship are perhaps
never published. They are rarely if ever
seen, except by the partners themselves.
The stipulations they may cont;iin are to
regulate the conduct and rights of the par-
ties as between theniselves. The trading
world, with whom the company is in per-
petual intercourse, cannot individually ex-
amine these articles, but must trust to the
general power contained in all partner-
shij^s. The acting partners are identified
with the company, and have a right to
conduct its usual business in the usual
way. This power is conferred by entering
into the partnership, and is perhaps never
to be found in the articles. If it is to be
restrained, fair dealing requires that the
restriction .should be made known. These
stipulations may bind the partners, but
ought not to affect those to whom they are
unknown, and who trust to the ggneral
and well-established commercial law. See
Richardson v. Farmer, 86 JIo. 35.
"The counsel for the plaintiff in error
supposes that, though these principles may
be applicable to an open avowed partner-
ship, they are inapplicable to one that is
secret. Can this distinction be main-
tained ? If it could there would be a dif-
ference between the responsibility of a
dormant partner and one whose name was
to the articles. But their res])onsibility,
in all partnership transactions, is admitted
to be the same. Those who trade with a
firm on the credit of individuals whom
74
THE LAW OF PARTNERSHIP,
[CH. VI.
§ 81. Liability of Secret Partner, — A Secret partner is there-
fore liable upon all the acting partner's contracts made within the
usual scope of the partneishij) business,^ whether such contracts
are really on partnership account or not. It might perhaps be
said, that as no credit is given to the secret partner, and as his
liability is wholly founded upon his interest, if it were shown that
in fact he had no interest in a particular transaction, he ought
not to be bound with reference to it, even though it were appar-
ently within the regular course of the business carried on by the
partnership. And there are cases in which the court seems to
adopt this view. But the rule above stated rests upon the better
reason and the stronger authority, {h) It has been held that a
they believe to be lueiubcis of it take
upon themselves the hazard that their be-
lief is well founded. If they are mistaken,
they must submit to the consequences of
their mistake ; if their belief be verified by
the fact, their claims on the partners, who
were not ostensible, are as valid as on those
whose names are in the firm. This dis-
tinction seems to be founded on the idea
that, if partners are not openly named,
the resort to them must be connected with
some knowledge of the secret stipulations
between the partners, which may be in-
serted in the articles. But this certainly
is not correct. The responsibility of un-
avowed partners depends on the general
principles of commercial law, not on the
particular stipulation of the articles." s. c.
5 Mason, 176 ; Armstrong v. Hussy, 12 S.
&R. 315; Mifflin v. Smith, 17 S. &R. 165;
Graeff v. Hitchraan, 5 ^A'atts, 454 ; Given
V. Albert, 5 W. & S. 333; Bisel v. Hobbs, 6
Bla(;kf. 479 ; Braches v. Anderson, 14 Mo.
441; Church v. Sparrow, 5 Wend. 223; Bax-
ter i^. Clark, 4 Ired. 127; Everitt v. Chap-
man, 6 Conn. 347; Reynolds v. Cleveland, 4
Cow. 282; Kelley v. Hurlburt, 5 Cow. 534;
In re Warren, 2 Ware ( ), Davies,
324 ; Hadfield v. Jameson, 2 Munf. 66 ;
Grosvenor v. Lloyd, 1 Met. 19 ; McDonald
V. Millandon, 5 La. 406, 408; Lea v. Guice,
13 S. & M. 656 ; Smith v. Smith, 27 N. H.
244 ; Brooke v. Washington, 8 Gratt. 248 ;
Hill V. Voorhies, 22 Pa. 680 ; Griffith v.
Buffum, 22 Vt. 181 ; Pratt r. Langdon, 12
Allen, 544. [Callender v. Robinson, 96
Pa. 454; Gavin v. Walker, 14 Lea, 643.]
A secret partner cannot avoid his liability
to creditors by showing that, according to
the law of the place where it was made,
the contract of partnership as between the
parties was void. Oakley v. Aspinwall,
2 Sandf. 7. [Where a business is carried
on by an ostensible sole trader, and he
borrows money for the business, his secret
partner is liable, though the money was
misused. Gavin v. Walker, 14 Lea, 643.]
{b) In Etheridge v. Binney, 9 Pick.
272, where the two Binneys and John
Winship carried on the manufacture of
soap and candles in partnership, but in the
name of John Winship alone, the principal
question in the case being whether the
Binneys were liable for moneys borrowed
by Winship, the court instructed the jury
that " 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 import
only a promise of 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 ]iartner states that
he is one of a company, and that he bor-
rows 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, and he lends the money or sells
the goods on the faith of such representa-
tion, the company will be bound, unless
they prove that the contract was for his
private benefit, and known to be so by the
1 Reab v. Pool, 30 S. C. 140, 8 S. E. 703.
§ 81.J
WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES, 75
judgment obtained against an ostensible partner, upon a note given
by him in his own name in the course of the partnership business,
creditor." When two jiersons, under a
piivate agreement, become [lartners as to
third i)artie8, the contract specifying no
firm name, but allowing each partner to
purchase goods on his own individual
creiiit, — one to transact the business, and
tlie other to be unknown, — the dormant
partner is not liable on a note for goods
jiut into the concern by the other, and by
him signed in his own name ; the signa-
ture not being intended as the firm signa-
ture, and the payee not having reason to
su[)pose it to be such. Palmer v. Elliot, 1
cut. 63. See also Mercantile Bk. i'. Cox,
38 Me. 500. But see Hendrick v. Gunn,
35 Ga. 234. In Lloyd v. Ashby, 2 C. & P.
138, assumpsit was brought on a bill of
exchange, accepted by " Ashby & Piow-
land." The question was whether Shasv,
a dormant partner with Ashby k liowland,
was liable on the above acceptance. Shaw
was not known as a partner, nor did his
name appear in the partnership transac-
tions. The bill in question was accepted
in a matter having no relation to the part-
nership business. Abbott, C. J.: "If
Shaw had been known to be a partner, I
should have held that it was taken on his
credit ; and that, unless there was fraud in
the plaintitf, he would be entitled to re-
cover on it against Shaw ; but as the plain-
tiff did not know that Shaw was a partner,
and as he could not have taken the bill on
Shaw's credit, I am of the opinion that
the plaintitf cannot recover. I gi'ound
myself on these circumstances, that ilr.
Shaw was an unknown partner, and that
the bill was not accepted for a debt from
him, but for the raising of money from
which he had no benefit." See also Young
V. Hunter, 4 Taunt. 583, opinion of Gibbs,
J. : Ex parte Bolitho, Buck, 100. See
Miller v. Maince, 6 Hill, 114. But the
doctrine of these decisions is certainly con-
troverted by better considered and more
weighty adjudications. Lloyd v. Ashby,
supra, was afterwards reconsidered in the
King's Bench ; and the court were of
opinion that the plaintitf was entitled to
recover, and a new trial was granted. 2
B. & Aid. 23. The principle of the deci-
sion in Vere v. Ashby, 10 B. & C. 288, is
the same with that in 2 B. & Aid. 23 ;
and in Wintle v. Crowther, 1 C. & G. 316,
Bay ley, B., referring to the above cases,
said; "Notwithstanding these cases, we
are of opinion, that when a partnership
name is pledged, the partnership, of whom-
soever it may consist, and whether the
partners are named or not, and whether
they are known or secret partners, will be
bound, unless the title of the person who
seeks to charge them can be impeached."
See Nichols v. Cheairs, 4 Sueed, 229. In
Ross 17. Decy, 2 Esp. 469, the action was
for goods sold and delivered ; plea set off.
The plaintiffs entered into partnership as
grocers, Ross to keep the shop in his own
name only. He sold to the delendant the
goods for the price of which the present
action was brought. The defendant had
done business for Ross on his separate
account to a greater amount than the
demand now made against him by the part-
nership ; and this he offered to set off.
Lord Kenyon was of opinion that the set-
off was good. His lordship said, the j)lain-
titfs had subjected themselves to it, by
holding out false colors to the world, by
permitting Ross to appear as the sole
owner ; that it was possible the defendant
would not have trusted Ross only, if he
had not considered the debt due to himself
as a security against the counter demand.
Furtheimore, not only is a secret partner
bound by all transactions within the scope
of the partnership business, whether on
partnership account in fact or not, but in
Robinson r. W^ilkinson, 3 Price, 538, it is
said to be " clear law that a dormant part-
ner cannot discharge himself from liability
to pay the debts of a creditor through the
medium of his ostensible partner by any
acts of his during the concealment of the
unknown partner." There, Wilkinson
•was a secret partner with Cay in a vessel.
The plaintiff supplied the vessel with
stores on the credit of Cay ; took Cay's
sole bills for the amount of his debt ;
allowed him to renew them when due, and
afterwards, Cay proving insolvent, com-
pounded with him for the unpaid portion
of the debt, and received as security the
acceptance of a third person. But the fact
76
THE LAW OF PARTNERSHIP.
[CH. VI.
his copartner being unknown to the creditor was no bar to a joint
action upon the same note against both the ostensible and the
secret partner, (c) But this doctrine is opposed to the weight of
American authority , and upon the ground that a partnership debt
is, in this respect, joint only, and not joint and several, a judgment
against the ostensible partner or partners, though unsatisfied, may
be pleaded in bar to a subsequent suit upon the same cause of
action, where both the ostensible and the secret partners are
joined as defendants, {d) It has, however, been said, that the law
as to dormant partners is confined to commercial partnerships,
and does not extend to speculations in land, (g)
§ 82. Liability of a Nominal Partner. — If such be the law in
regard to one who is an actual but a secret partner, on the other
hand, if he be not a partner in fact, but has, for or without a reason,
suffered those who dealt with the firm, or any one of them, to
believe that the firm had the guaranty of his liability as partner,
and thus gave to the firm his credit, there are no grounds what-
ever for permitting him to refuse to satisfy that guaranty, merely
because the actual relation between him and the partnership
would not of itself have created it. (/) To give to such a circum-
of Wilkinson'.s interest in the ship being
unknown to the jilaintitf during the time
of these several transactions, it was hehi
that he was not discharged by anything
that had taken place. A similar decision
was made in Chamberlain v. Madden, 7
Rich. 395.
(c) Sheehy v. Mandeville, 6 Cranch,
253 (overruled in Mason v. Eldred, 6
Wall. 231). See Van Ness v. Forrest, 8
Cranch, 30 ; Watson v. Owens, 1 Rich.
Ill ; Brozel v. Poyntz, 3 B. Mon. 178;
Scott V. Cohncsnil, 7 J. J. Marsh. 416 ;
Dennett v. Chick, 2 Me. 191 ; Nichols v.
Cheairs, 4 Sneed, 229.
(d) Robertson v. Smith, 18 Johns. 459;
Ward V. Johnson, 13 Mass. 148 ; Smith v.
Black, 9 S. &. R. 142 ; Moale v. Hollins,
11 G. & J. 11 ; Willings v. Consequa, 1
Pet. C. C. 301 ; Anderson v. Levan, 1 W.
& S. 334. See further Pierce v. Kearney, 5
Hill, 94; Mossu. McCullough, 5 Hill, 135,
136 ; Ward v. Motter, 2 Eob. (Va.) 559,
560 ; Nichols v. Anguera, 2 Mills, 290 ;
Grafton v. The United States, 3 Story,
649 ; United States v. Cushman, 2 Sumn.
438 ; Gibbs v. Bryant, 1 Pick. 121 ;
Peters v. Sandford, 1 Denio, 224 ; Van
Valen v. Russell, 13 Barb. 593 ; Ledam
V. Hodges, 4 McLean, 51 ; How v. Kane,
2 Chand. 222 ; Philson v. Bampfield, 1
Brev. 202. Whether, if a creditor has
lost his right of action against all the
partners, by obtaining judgment against
the ostensible partner alone, equity will
relieve him as against the dormant part-
ners when discovered, see Penny i;.
Morton, 4 Johns. Ch. 566 ; Willings v.
Consequa, 1 Peters C. C. 301 ; Smith v.
Black, 9 S. & R. 142 ; Ledam v. Hodges,
4 McLean, 51 ; How v. Kane, 2 Chand.
222.
(e) Pitts V. Waugh, 4 Mass. 424 ; Smith
r. Jones, 12 Me. 332 ; Smith v. Burnliam
3 Sumn. 470. See post, § 269 [.scc^ (juery].
(/) Young V. Axtell, cited in Waugh
V. Carver, 2 H. Bl. 235. There the ques-
tion was, whether Mrs. Axtell was liable
as partner with the defendant, for coals
sold and delivered by the plaintiff. An
agreement was in evidence, from which a
partnership inter se was attempted to be
proved ; but, it being shown that bills
were made out for goods sold to her cus-
tomers in their joint names, Lord Mans-
field said : " However, as she suffered her
name to be used in the business and held
herself out as a partner, she was certainly
§ 84.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PERSONS. 77
stance this effect would be to sanction an obvious and easy fraud.
It is, however, evident that he is liable as a partner only to those
who have been led with his consent to believe him a partner, and
who have trusted the firm on his credit, {jf)
§ 83. General Authority of Partner, — The general principle
which lies at the foundation of the partner's liability is, that every
partner has full and absolute authority to bind all the partners by
liis acts or contracts, in relation to the business of the firm, in the
same manner and to the same extent as if he held full powers of
attorney from all the members. No principle is better established
than this : it rests not only on universal usage and universal author-
ity, but on obvious reason and necessity ; because, if the rule were
otherwise, a very large proportion of the advantages and facilities
for which partnerships are formed would be lost. It must, however,
be remembered that a partner binds the firm, necessarily only when
he uses the name of the firm.^ Hence it has been held that the
execution of a mortgage of personal property of a partnership, by
one partner in his individual name, passes no title, (uii)
§ 84. How far it may be limited. — This authority of each part-
ner is only an implied one. It is a fair inference from the fact of
partnership : it is an inference from the reason of the thing, as
well as from the rules of law. But it is an inference which can-
not be made when the partners disclaim it, honestly, in a reason-
able way, and by act as well as word. Hence, if the act of a
partner be forbidden by his copartners, and notice is given to the
person with whom he deals, he no longer acts as their agent, and
liable, though the plaintiti' did not, at the lentit only to two of them,to whom, without
time of dealing, know that she was a partner, the others, they would have lent nothing."
or that her name was used." The ground See further, in illustration of the general
upon which persons held out as partners principle, De Berkom v. Smith, 1 Esp. 29;
are made liable, as such, to third persons. Guidon v. Robson, 2 Camp. 302 ; Parsons
is thus stated by Lord Chief Justice Eyre in v. Crosby, 5 Esp. 199; ^z parte Watson,
AVaughv. Carver, supra: " Now, a case may 19 Ves. 461 ; Ex parte Matthews, 3 Ves,
be stated in which it is the clear sense of & B. 125 ; Dolman v. Orchard, 2 C. & P.
the parties to the contract that they shall 104 ; Stearns v. Haven, 14 Vt. 540 ;
not be partners ; that A. is to contribute Cottrill v. Vanduzen, 22 Vt. 511 ; Furber
neither labor nor money ; and, to go still v. Carter, 11 Humph. 271 ; Perry v. Pan-
further, not to receive any profits. But, dolph, 6 S. & M. 335. See also post, § 93 ;
if he will lend his name as a partner, he Fisher v. Bowles, 20 111. 396 ; Irwin v.
becomes, as against all the rest of the Conklin, 36 Barb. 64 ; Bams v. Rowlands,
world, a partner, not upon the ground of the 40 Barb. 368 ; Moss v. Jerome, 10 Bosw.
real transaction between them, but upon 220 ; Moffat v. Moffat, 19 Bosw. 468.
principles of general policy, to prevent (ff) Wood r. Pennell, 15 Me. 52.
the frauds to which creditors would be (uu) Clark v. Houghton, 12 Gray, 38 ;
liable, if they were to suppose that they and see Butterfield v. Hensley, 12 Gray,
lent their money upon the apparent credit 226 ; and Cummings v. Parish, 30 Miss.
of three or four persons, when in fact, they 41 2.
1 Norton v. Thatcher, 8 Neb. 186. See post, § 98.
78
THE LAW OF PARTNERSHIP.
[CH. VI.
his act is only his own. {iiuu') The great difiiculty is in drawing
the line between a rule which would give to any partner, at his
own pleasure, all the advantages and none of the liabilities of a
partner, and, on the other hand, permitting reasonable and honest
limitations or qualifications of liability which ought to operate on
all who have contracted with full knowledge of t-liem, and have
therefore assented to them, (v) It should be added, that the
(mill) Yeager v. Wallace, .57 Pa. 365 ;
[Ellis V. Allen, 80 Ala. 515, 2 So. 676 ;
Moffitt V. Roche, 92 Ind. 96.]
(y) Thus, in Aldeison v. Pope, 1 Camp.
404 ; note (ri). Lord Ellen borough held,
that when there was a stipulation between
A., B., & C, who appeared to the world
as copartners, that C. should not jiartici-
pate in the profit and loss, and should not
be liable as partner, C. was not liable as
partner to those who had notice of this
stipulation, and that notice to one mem-
ber of a firm was notice to the whole
])artnership. Compare with this case
Brown v Leonard, 2 Chitty, 120. In
Batty V. M'Cundie, 3 C. & ' P. 202, the
defendants had become shareholders in a
newspaper, the prospectus of which Col.
Jones, one of the plaintiffs, who were
partners, had been concerned in prepar-
ing, and which stated that the subscribers
were not to be partners, and were not to
be liable for more than their subscrip-
tions ; the present suit being brought for
the price of stationery furnished for the
newspaper. Parke, J. (in summing up),
said : " The question is, whether Col.
Jones, having a knowledge of all the
circumstances, can maintain the action ;
for it is clear that his knowledge is the
knowledge of all the plaintiffs. There is
no doubt that the defendants were pro-
prietors ; but that will not make them
partners. The question is, whether Col.
Jones did not know that these persons,
though called proprietors, were not to be
deemed partners, and whether he did not
give them an assurance that they would
not be liable for more than their subscrip-
tions ? The prospectus states that the
subscribers are not to be partners ; and it
is proved that he knew of that prospectus,
and acted as treasurer under it. How can
he, after this, say that the defendants are
liable ? The question for our considera-
tion is, whether Col. Jones does not accede
to the proposition, that the defendants are
not liable, and undertake that he will not
look to them as responsible ? If you be-
lieve the evidence in the sense that I have
taken of it, I tell you, that, in point of
law, the plaintiffs are not entitled to
recover." In re Worcester Corn Exchange
Co., 3 De G., M. & G. 180 ; Bailey v.
Clark, 6 Pick. 372. See also Boardman
V. Gore, 15 Mass. 339 ; Baxter v. Clark,
4 Ired. 127 ; Denny v. Cabot, 6 Met. 93 ;
Jordan v. Wilkins, 3 Wash. C. C. 115;
Dow V. Sayward, 12 N. H. 271 ; Cargill
V. Corby, 15 Mo. 425 ; Langan v. Hewett,
13 S. & M. 122 ; Brent v. Davis, 9 Md.
217. In Leavitt v. Peck, 3 Conn. 124,
Hosnier, C. J., says : " It is a well-estab-
lished principle, that the contract of a
partner is obligatory for his copartner, by
virtue of an implied authority, which
may be rebutted by a refusal to be bound
by his acts. By legal consequence, the
partners whose authority is thus declined
cannot bind the copartnership in favor of
those who have knowledge of the fact . . .
The principle under consideration is not
founded at all on any supposed waiver of
the creditor, but solely and exclusively on
the declaration of the person declining to
be bound. The implied authority of his
partner he has annihilated ; and the con-
tract in the name of the firm is of no
validity beyond the personal obligation it
imposes on the individual making it."
So if, upon the dissolution of a copartner-
ship, the outgoing partner assigns to the
continuing partner all his interest in the
outstanding partnership debts and ac-
counts, the subsequent release of a debt
by the outgoing partner to a debtor hav-
ing notice of the agreement is void.
Gram v. Cad will, 5 Cowen, 489. See Ex
parte Harris, 1 Madd. 583.
Partners sometimes give notice to
particular persons, or to the public gen-
erally, that they are not responsible for
§ 8^-]
WHO ARE LIABLE AS PARTNERS AS TO THIRD PERSONS. 79
question whether, in any particular case, an alleged partner has
disproved the evidence or rebutted the legal presumption of
the acts of one or more of the other
partners. Such repudiation of the ordin-
ary liabilities of a partner, especially if it
be with reference to a single transaction,
is not, perhaps, necessarily inconsistent
with the continuance of the [)artnership.
But it more commonly happens when one
or more of the partners wishes to dissolve
the partnership and retire, while the rest
choose to continue in the business. Such
warnings by partners of limitations they
mean to put to their own liability, and to
the authority of the other partners, have
the same effect, so far as third persons are
concerned, as the communication of stip-
ulations between partners restricting their
liability, and upon similar principles.
For, a partnership being once proved to
exist, and the implied power of each part-
ner to act for the others in everything
within the scope of the partnership busi-
ness being once given, the fair presump-
tion upon which third parties are justified
in acting is, that the partnership and the
consequent implied authority of each
partner still continue. But this pre-
sumption is of course wholly rebutted by
notice to the contrary, and can then no
longer be a reason for holding the party
giving the notice to liability as a partner.
In Galway v. Matthew & Sniithson, 10
East, 264, the defendants, partners in
trade, were sued upon a promissory note.
Matthew let judgment go by default ; but
Smithson defended the action on the
ground that the plaintiff, before he took
the note in question, had notice of an
advertisemrnt, then recently published in
a newspaper by Smithson, wherein he
warned all persons not to give credit to
the defendant Matthew on his (Smith-
son's) account, and that he would no
longer be liable for drafts drawn by the
other partners on the partnership account.
The defendants having a verdict on this
ground (Galway v. Matthew, 1 Camp.
403), upon motion to set aside the non-
suit. Lord EUenborough, C. J., said :
" The general authority of one partner to
draw bills or yjromissory notes to charge an-
other, is onlyan implied authority; and that
implication was rebutted in this instance by
the notice given by Smithson, who is now
sought to be charged, which reached the
plaintiff, warning him that Matthew had
no such authority. It is not essential to a
partnership that one partner should have
power to draw bills and notes in the part-
nership firm to chaige the others : they
may stij)ulate between themselves that it
shall not be done ; and if a third person,
having notice of this, will take such a se-
curity from one of the partners, he shall
not sue the others upon it, in breach of
such stijiulation, nor in defiance of a notice,
previously given to him by one of them,
that he will not be liable for any bill or
note signed by the others." Layfield's
Case, 1 Salk. 292 ; Minnit v. Whinnery,
2 Bro. P. C. 323, 16 Vin. Abr. 244 ; Ex
parte Harris, 1 Madd. 583 ; Vice v. Flem-
ing, 1 Y. & J. 227 ; Rooth v. Quinn,
7 Price, 193 ; Feigley v. Sponeberger,
5 Watts & S. 564 ; Johnston v. Button,
27 Ala. 245. It has, however, been ques-
tioned whether, if a firm consist of more
than two members, the expressed and
known dissent of one partner to a con-
tract about to be entered into in good
faith by a majority of the partners in the
name of the firm will operate to free the
dissenting partner from liability thereon.
Story on Part. § 123, and notes ; 3 Kent
Com. 45. This question will be consid-
ered when we come to treat of the power
of a majority of the partners to bind the
partnership, jjosf, § 147. In one case,
indeed, it was said : "By the act of enter-
ing into a copartnership, each of its mem-
bers becomes clothed with full power to
make any and every contract within the
scope and limits of the copartnership busi-
ness. All such contracts will therefore be
absolutely binding upon the several mem-
bers. Tins power is incident to the co-
partnership relation, and must exist, in
defiance of expostulations and oT)iections,
while the relation endures." Wilkins v,
Pearce, 5 Denio, 541, 544. But, though
the judgment in this case was affirmed in
the Court of Appeals, the dictum just
quoted does not appear to have been ap-
proved. On the other hand, the acts of
the protesting partner subsequent to his
80
THE LAW OF PARTNERSHIP.
[CH. VI.
authority on the part of his partner, to bind, seems to be a
question of fact, (tv)
On the whole, it may be said that the law-merchant, as it is
incorporated into the common law of England and of this country,
does not permit one to secure to himself all the advantages and
gains of partnership, and guard himself against all its liabilities
and losses ; and that his attempt to do so would be defeated by
casting upon him those liabilities. But stipulations are often
entered into which must be understood as giving up, on the part
of all the partners, or of a part, some of the powers and advan-
tages of partnership, and providing against a proportionate
measure of liability ; and any stipulations of this character would
undoubtedly take effect as far as they were known.
Thus, it is quite common, in continental Europe, for mercantile
firms, in their circulars or other advertisements, to designate one
or more of the partners as alone having authority to put the
expression of dissent were held to amount
to a waiver of it, and to a ratification of
the transactions to which he had originally
objected, s. c. 2 N. Y. 469, 472. See
opinion of Golden, Senator, in Smith ?'.
Lasher, 5 Cow. 689, 710. In Willis v.
Dyson, 1 Stark. 164, Lord EUenborough
held, "that after notice by one partner
not to supply any more goods on the part-
nership account, it would be necessary for
the party .sending goods after such notice
to prove some act of adoption by the part-
ner who gave the notice, or that he had
derived some benefit from the goods." This
qualification of the rule, that a partner
may limit his liability by giving notice to
that effect, though reiterated upon the
authoT'ity of this case by some of the writ-
ers on partnership (see 3 Kent Com. 8th
ed. 49 ; Gow on Part. 52), seems open to
considerable question, as matter of princi-
ple. Nor does it appear to have the sup-
port of any other judicial decision. On
the contrary, in Galway v. Smithson, su-
pra, Matthew, for whose acts Smithson,
his partner, had given the plaintiff' notice
he would not be responsible, had, after
the notice, borrowed money of the plaintiff,
and had applied it mostly to the payment
of partnership debts. Nevertheless. Smith-
son was held not liable on a note given in
the partnershij) name for the sum so bor-
rowed. So in Leavitt v. Peck, 3 Conn.
124. In Monroe v. Conner, 15 Me. 178,
Shepley, J., after an examination of the
point, comes to the conclusion that "it is
more in accordance with the general prin-
ciples of law, and with good faith and fair
dealing, to hold that a partner is not bound
by a contract after he has given notice, to
the party proposing to make it, that he
■would not be bound by it." When notice
is given to a party proposing to make a
certain contract, that one member of a firm
will not be bound by the action of the other
members, if the party thus notified still
persi.sts in his purpose, and completes the
contract, he must be presumed to have
made it solely on the credit of the non-
dissenting partners. But we shall see
later (§ 88), that where credit is given
to one or more of the individual partners,
the other partners are not liable on such
contracts, even though they inure to the
benefit of the partnership.
(w) Leavitt v. Peck, 3 Conn. 124;
Willis V. Dyson, 1 Stark. 164 ; Vice v.
Fleming, 1 Y. & J. 227. See authorities
cited above. And if a partner, in the
presence of a party dealing with another
partner who acts in the name of the firm,
refuses to be bound by the transaction, yet
his subsequent acts and declarations may
amount to a waiver of his dissent, and to a
ratification of the transaction from which
he thus at first dissented. Pearce v. Wil-
kins, 2 N. Y. 469.
§ 85.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PERSONS. 81
name of the firm to negotiable paper. If a firm should so adver-
tise in this country, it would undoubtedly prevent any person
who knew of it from holding the firm on the signature of any
other member. But it should not affect one who did not know
it; because he migiit fairly imply the authority of each partner
from the partnership. Formerly, the phrases special and limited
partnerships, which now have a statute meannig, were applied
quite loosely to those which were less general than usual ; (:r)
and it was always held that, where these limitations were known
to a customer, he was affected by them ; ^ and further, that this
specialty or limitation may be inferred from facts. Limitations
upon the authority of one partner to represent his copartners
may also be imposed by the nature and usages of particular
trades.
§ 85. Limitation by Trade Usage. Non-trading Partnership. —
The fact that a partnership is engaged in a particular trade being
known, is sufficient notice to third persons of the limitations
which the nature and customs of that trade place upon the power
of each partner ;2 and third parties dealing with a partner in
matters outside the scope of its usual business, to charge his firm
therein, must show him to have i)ossessed special authority so to
act. Thus, it has been held, that persons who are engaged in
w^orking a mine or a farm, in partnership, give no implied author-
ity to one another to borrow money or to draw bills of exchange
on joint account and credit, even in promotion of the joint busi-
ness. Hence, if money be borrowed, or a bill be drawn, by one
of several persons jointly interested in a farm or a mine, the
(x) See Lansing v. Ten Eyck, 2 Johns, who contracts with a partner in a matter
304 ; Miimford v. Nicoll, 20 Johns. (524, J'or wliich he alone is responsible, the other
629; Bentley v. White, 3 B. Mon. 2d3; Key- partners are not liable. Thus, A. and B.
nolds V. Cleaveland, 4 Cow. 282 ; Lnsign are partners, A. agreeing to furnish capital,
V. Wands, 1 Johns. Cas. 171. In these last and B. labor ; and C. knowing these facts
two cases the word "limited" is used only contracts with B. to perform in pail the
in the head-note. Ensign v. Wand.s, 1 labor which B. was to furnish. ('. nuist
Johns. Cas. 171 ; De Berkom v. Smith, look to B. for his conipen.sation. Pollock
1 Esp. 29 ; Post v. Kimberly, 9 Johns. 489. v. Williams, 42 Miss. 88 ; Newman v.
When, by the terms of a partnership, the Baker, 9 Johns. 207; Medberry v, Soper,
liability of each partner is limited, and 17 Kas. 369.
this limitation is known to a third person
1 The rights of third persons against a partnership will be limited by the special
provisions of the articles of copartnership known to such third persons. Smith v.
Vanderburg, 46 111. 34 ; Knox v. Buffington, 50 la. 320. So where a guardian was
member of a firm, but not authorized to contract firm debts, and he put into tlie busi-
ness money of his ward, making a firm note to himself as guardian, it was held that no
recovery could be had. Wintermute v. Torrent, 83 Mich. 555, 47 N. W. 358.
2 Randall v. Meridith, 76 Tex. 669, 13 S. W. 576.
6
THE LAW OF PARTNERSHIP.
[CH. VI.
lender or holder cannot hold the other partners upon it, without
showing that they had in some way authorized the acting partner
so to bind them, (y) ^
(//) Dickiusoa v. Valpy, 10 B. & C.
128 ; Kiuibro i-. Bullitt, 22 How. 256 ;
Ulery v. Giiirick, 57 Iil. 531 ; Gieeiislade
V. Dower, 7 111. 635 ; Kicketts v. Bennett,
4 C B. 686. See Shicknesse v. Broniilow,
2 Cr. & J. 425 ; Hawtayiie v. Bourne, 7
M. & W. 59o ; Tredwen v. Bourne, 6 M.
& W. 461 ; Howkeii v. Bourned, 8 M. &
\V. 703 ; Burniester v. Korris, 6 Exch.
796. But where it was shown that it was
the custom of planters generally to borrow
Ind. 133 ; Garland v. Jacomh, L. K. 8
Ex. 218. In Wisconsin, after a careful
review of the authorities, it was held that
one member of a uon-trading partnership
— law firm, for instance — cannot bind
his copartner by a bill or note, drawn,
accepted, or indorsed by him, even for a
debt of the firm, unless specially authorized
by his copartner, or it be necessary to
carry on the i)artnership, or it be shown to
be usual in similar partnerships ; and the
money when necessary for the j)urposes of burden of proof of authority, necessity, and
their business, it was held, that one of a
firm engaged in the business of planting
might bind his copartners by borrowing
money for their business, and giving a
note therefor. Lea v. Guice, 13 S. & M.
656. And in McGregor v. Cleaveland, 5
usage is upon the party claiming under the
note. Smith v. Sluan, 37 Wis. 285 ;
Hunt V. Chapin, 6 Lans. 139 ; McCord v.
Field, 27 U. C. C. P. 391 ; Prince v.
Crawford, 50 Miss. 344. In like manner,
a jiartner in the practice of physic is not
Wend. 475, a promissory note given for bound by a note drawn by his copartner in
the firm by one of two partners in the
business of farming and coopering was
held good, and binding upon both. " An
attorney, qua attorney, is not a scrivener :
it is part of his business to prepare convey-
ances and negotiate mortgages, and see
that the deeds are executed and the trans-
action completed. A scrivener is a person
who receives money to lay out upon secu-
the name of the firm, for the purpose of
raising money, Crosthwait v. Ross, 1
Humph. 23 ; nor by any other of his
copartner's contracts which are not con-
nected with their business as physicians,
Thompson v.. Howard, 2 Ind. 245. So if
four are interested as partners in two shares
of the stock of a company formed for dig-
ging tunnels, the peculiar and limited
rity, and to hold the money in his hands character of the partnership business pre-
until an opportunity ofl'ers for laying it eludes any legal implication that one of
out." Hence, where two are in partner- the partners can bind the others by issu-
ship merely as attorneys, one member of ing commercial paper in the partnership
the firm is not rendered liable as partner name. Gray v. Ward, 18 111. 32. See
by his copartner's receiving money indefi- Cocke v. Branch Bank, 3 Ala. 175, respect-
nitely for the purpose of being laid out on ing the linutations to the authority of one
mortgage security. Harman v. Johnson, of a firm of tavern-keepers. In re Wor-
2 E. & B. 61, 188. See Sims v. Brutton, cester Corn Exchange Company, 3 De G.,
1 E. & B. 446 ; Wilkinson v. Candlish, 19 M. & G. 180 ; and (.heeny v. Clark, 3 Vt.
L. J. Rep. Exch. 166. So, if persons are 431, as to the liability of members of a
in partnership as attorneys, there is no building association. See also Williams v.
imi)lied authority in one of them to bind Thomas, 6 Esp. 18 ; Bentley v. White, 3
the rest by pledging the name of the firm B. Mon. 263 ; Vance v. Campbell, 8
for a loan of money, Breckenridge v. Hum])h. 524 ; Lanier v. McCabe, 2 Fla.
32 ; Miller v. Hines, 15 Ga. 197 ; Benson
Shrieve, 4 Dana, 375 ; Hedley v. Bain-
bridge, 3 Q. B. 316 ; or by put-
ting the name of the firm in any
shape to negotiable paper, Levy v. Pyne,
1 C. & M. 453. See Smith v. Cole-
man, 7 Jur. 1053 ; Wells v. Turner, 16
1 Whether an act is outside the scope of a certain business in which a partnership
is engaged, is a question of fact, depending upon the known customs and usages of that
V. M'Bee, 2 McMullan, 91 ; Goodman v.
White, 25 Miss. 163 ; Cargill v. Corby, 15
Miss. 425 ; Lansing v. Gaine, 2 Johns.
300. In Andrews v. Lehott, 10 Barr, 47,
Andrews & Harris had agreed to fomi a
§ 86.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PERSONS. 83
§ 86. Limitation by Nature of Transaction. — A limitation or
exception niay grow out of the nature of the particular transac-
statutory limited partnership, Harris being creditor of the special partnership could
the special partner. With that view, they not discharge, the special partner from the
had placed upon record, and otherwise general liability fixed on him by statute,
published to the world, in accordance with The court said: "If the })laintifrs knew
the ])rovisions of the statute, the terms of they held themselves out as a limited
their connection. A subsequent breach of partncrshii), they also knew that, if the
the statute made Harris a general partner, defendants failed to coni{)ly with the requi-
in an action against both the partners uj)on sition of the act, they became general part-
contracts made in the name of the copart- ners, and were liable as such. Tlie
nersiiip. Harris alleged in defence that presumption is, that the contract was
the plaintilF, at the time the contracts made in reference to the legal rights of the
were made, knew he was a special partner, parties ; and this presumption can alone
and gave credit to the firm and the general be rebutted by clear proof of an express
partners, and did not rely on him. But it contract, waiving all the plaintiffs rights
was held, that this knowledge by the under the statute."
business. If these customs and usages authorize a partner to do such an act on behalf
of the firm, he may bind the firm by the act. Alabama Fertilizer Co. v. Reynolds, 79
Ala. 497 ; Pease v. Cole, 53 Conn. 53 ; Judge v. Braswell, 13 Bush, 67 ; Nat. State
Capital Bank v. Noyes, 62 N. H. 35 ; Biggs v. Hubert, 14 S. C. 620.
If the act is necessary for carrying on the business, it is, of course, within the scope
of the business. Nat. Exchange Bank v. White, 30 F. R. 412 ; Deardorf v. Thacher,
78 Mo. 128 ; Levi v. Latham, 15 Neb. 509, 19 N. W. 460. If the act is not within
the apparent scope of the business, the firm is not bound except upon evidence of
express or implied authority of all the partners, or ratification by them. Such
authority or ratification, however, makes the firm liable. Pease v. Cole, 53 t'onn. 53 ;
Judge V. Braswell, 13 Bush, 67 ; Holmes v. Kortlander, 64 iMich. 591, 31 N. W. 532 ;
Conely v. Wood, 73 Mich. 203, 41 N. W. 259 ; Deardorf v. Thacher, 78 Mo. 128 ;
Nat. State Capital Bank v. Noyes, 62 N. H. 35 ; Clarke v. \Vallace, 1 N. D. 404, 48
N. W. 339.
The burden is on the plaintitf to prove authority or ratification. Judge v. Braswell,
13 Bush, 67; Van Dyke v. Seelye (Minn.) 52 X, "W. 215.
The payment of a stranger's debt is not within the scope of a partnership business ;
consequently a firm note given by a partner for the accommodation of a stranger is not
valid in the hands of one with notice. Heffron v. Hanaford, 40 Mich. 305 ; Van Dyke
I'. Seelye (Alinn.), 52 N. W. 215.
So a promise by one partner in the name of the firm to pay the debt of a third party
is not valid against the firm. Shaaber v. Bushong, 105 Pa. 514.
So one partner cannot bind the firm by guaranteeing the note or other debt of a third
party. Osborne v. Stone, 30 Minn. 25, 13 N. 'W. 922 ; Osborne v. Thompson, 35 Minn.
229, 28 N. W. 260 ; Clarke v. Wallace, 1 N. D. 404, 48 N. W. 339 ; Fore v. Hittson,
70 Tex. 517, 8 S. W. 292. This is true even in case of guaranty of the rent of an
employee of the firm, Avery v. Rowell, 59 Wis. 82, 17 N. W. 875 ; or of a promise to
pay the medical expenses of an employee. Woodruff v. Scaife, 83 Ala. 152, 3 So, 311.
Where, however, a partnership bought out a manufacturing business, and one partner
agreed with the workmen that if they would continue at work the firm would pay their
arrears of wages, this was held to be within the scope of the firm's business, and to bind
the firm. "Wills v. Cutler, 61 N. H. 405.
As to acts within the scope of a partnership, a fundamental distinction exists between
commercial or trading partnerships and non-trading partnerships ; arising out of the
fact that in a non-trading partnership there is no general power in the partners to do
such acts as are customary in carrying on business.
Thus a partner in a non-trading partnership does not generally have power to bind
84 THE LAW OF PARTNERSHIP. [CH, VI.
tion. Thus, if a partner of a firm which deals only in merchandise
eives the note of the firm for a horse, it would be a fair presump-
tion that the party receiving it — if he knew the general busiiiess
the firm by signing the firm name to commercial paper given for borrowed money.
This rule has been held to apply in the following sorts of business : —
Farming, Greenslade v. Dower, 7 B. & C. 635 ; Kimbro v. Bullitt, 22 How. 256.
Practising law, Hedley v. Bainbridge, 3 Q. B. 316 ; Levy v. Pyne, Car. & M. 453 ;
Friend v. Duryee, 17 Fla. Ill ; Breckinridge v. Shrieve, 4 Dana, 375 ; Rogers v. Priest,
74 Wis. 538, 43 N. W. 510.
Carrying on saw-mill, Dowliug v. Exchange Bank, 145 U. S. 512 (but see Kimbro
V. Bullitt, 22 How. 256).
Keeping tavern, Cocke v. Bank, 3 Ala. 175.
INlanagiug a theatre. Pease v. Cole, 53 Conn. 53, 22 Atl. 681.
Carrying ou mill, Lanier v. McCabe, 2 Fla. 32.
Digging tunnels. Gray v. Ward, 18 111. 32.
Printing, Bays v. Conner, 105 Ind. 415, 5 N. E. 18.
"Working threshing-machine, Horn v. Newton City Bank, 32 Kas. 518, 4 Pac. 1022.
Real estate, Lee v. First Nat. Bank, 45 Kas. 8, 25 Pac. 196 ; Deardorf v. Thacher,
78 Mo. 128.
Mining, Judge v. Braswell, 13 Bush, 67 ; Randall v. Merideth, 76 Tex. 669, 13
S. W. 576. (Aliter of a commercial parnership for currying on a mine. Decker v.
Howell, 42 Cal. 636.)
Planting, Benton v. Roberts, 4 La. Ann. 216 ; Prince v. Crawford, 50 Miss. 344 ;
Morgan v. Pierce, 59 Miss. 210.
Keeping livery stable, Levi v. Latham, 15 Neb. 509, 19 N. W. 460.
Sugar refining, Livingston v. Roosevelt, 4 Johns. 251.
Practising medicine, Crosthwait v. Ross, 1 Humph. 23.
Publishing, Pooley v. Whitmore, 10 Heisk. 629.
On the other hand, the firm has been held liable on firm paper made by one partner,
where the business was collecting. Van Brunt v. ilather, 48 la. 503 ; and soap-making,
Deitz V. Regnier, 27 Kas. 94.
So a partner in a non-trading firm cannot ordinarily borrow money so as to make
the firm liable. Harris v. Baltimore, 73 Md. 22, 20 Atl. Ill (street improvement) ;
Williams v. Gillies, 75 N. Y. 197 (purchase of land on speculation).
Where the object of a non-trading partnership is not to sell, one partner cannot sell
firm property so as to pass all the interest of the firm. Lowman v. Sheets, 124 Ind.
416, 24 N. E. 351 (keeping mare for breeding purposes) ; Blaker v. Sands, 29 Kas. 551
(improving breed of sheep).
Where a partnership is formed for a certain purpose, one partner has no power to
bind the firm by engaging in Inisiness of another sort. So a partner in a commercial
firm cannot bind the firm by taking a promissory note for collection. Pickels v.
McPherson, 59 Miss. 216.
On the other hand, when a firm has become the owner of a chattel mortgage and has
foreclosed, one partner may bind the firm by creating an agency to sell the mortgaged
goods. Banner Tobacco Co. v. Jenison, 48 Mich. 459, 12 N. AV. 655. And where a
firm was formed to build a building according to certain plans, one partner in contract-
ing for extra work is actinic within the apparent scope of the firm business, and binds
the firm. Hoftinan v. Toll (Ind. ), 28 N. E. 557.
Where there are written articles, the question whether a certain line of business is
contemplated by the articles, and therefore within the scope of the partnership, is for
the court. Banner Tobacco Co. v. Jenison, 48 Mich. 459, 12 N. W. 655.
Where a partner does an unauthorized act in such a way that the firm is not bound
it is valid as against the acting partner, and (if a sale) passes his interest in the prop-
erty. Lowman v. Sheets, 124 Ind. 416, 24 N. E. 351 ; Blaker v. Sands, 29 Kas. 551 ;
Rogers v. Priest, 74 Wis. 538, 43 N. W. 510.
§ 87. J WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 85
of the firm — should have supposed that the partner had no
authority to give such a note, (z) The rule itself, which gives to
a partner his authority, limits it, in perhaps all the authorities
which assert the rule, to contracts or acts within or helonging to
the business of the firm. The reason of this is perfectly obvious;
and it would follow that as partners may certainly limit their
business as they please, by so doing they place an analogous lim-
itation to the authority of the partners, in reference to any one
knowing the limitation of their business.
§ 87. General Rule a Safeguard against Fraud. — One reason why
all the {jartncrs are bound by the acts of one, is, that great and
inevitable frauds would spring from the want of this rule. Thus,
it would always be easy for a firm doing the largest business to
have one partner (entitled to a very small share) without means,
and therefore without risk, who should sign all their paper and
execute all their contracts ; the other partners taking all the
profits and casting all the losses on him. But it would as cer-
tainly be a fraud, if a customer, who knew that a partner with
whom he dealt had no authority to act for his partners in a cer-
tain way or on certain terms, should nevertheless make that very
bargain with him, relying on the j-esponsibility of the other
(;) Holmes v. Burton, 9 Vt. 252 ;
Liviiig.ston v. Hoosevelt, 4 Johns. 251.
In this last case A. & B. formed a copart-
nership under the style of A. & Co., in
the business of sugar-refining, and so
advertised the public. B. afterwards,
without the knowledge of A., bought a
quantity of brandy, for which he gave his
note, payable to the firm, and indorsed by
him with the name of the firm. The
plaintiff, the indorsee of said note, took
both the newspapers in which the charac-
ter of the business of A. & Co. was ad-
vertised. The question in the case being
whether the copartnership was liable on
the above note, Kent, C. J., said; "All
partnerships are more or less limited.
There is no one that embraces, at the
same time, every branch of business ; and
when a person deals with one of the part-
ners in a matter not within the scope of
the partnership, the intendment of law-
will be, that he deals with him on his
private account, notwithstanding the part-
ner may give the partnership name, unless
there be some circumstances in the case
to destroy that presumption. * If,' said
Lord Eldon (8 Vesey, p. 544), ' under the
circumstances, the person taking the pa-
per can be considered as being ad%-ertised
that it was not intended to be a partner-
ship proceeding, the partnership is not
bound.' Public notice of the object of
a copartnership, the declared and habitual
business carried on, the store, the count-
ing-house, the sign, &o., are the usual
and regular indicia by which the nature
and extent of a partnership are to be
ascertained. When the business of a
jiartnership is thus defined and publicly
declaied, and the company do not depart
from that particular business, nor appear
to the world in any other light than the
one thus exhibited, one of the partners
cannot make a valid partnership engage-
ment on any other than a partnership
account. There must be some authority,
beyond the mere circumstance of partner-
ship, to make such a contract binding."
[A partnership for raising and selling
agricultural seeds is not bound by the
purchase by one partner of a number of
roses and other flowers, since such a pur-
chase is not within the apparent scope of
the business. Sargent v. Henderson, 79
Ga. 268, 5S. E. 122.]
86 THE LAW OF PARTNERSHIP. [CH. VI.
partners, (rt) A firm may undoubtedly permit one of the part-
ners to act in his own name, but for the interest and benefit of
the firm, and then any loss in such transaction is a loss of the
firm. As where one partner deposited the funds of the firm in a
bank in his own name, with the consent and for the convenience
of the firm, and the funds were charged to him in the books of
the firm, but only to indicate in whose hands they were, and the
bank became insolvent, — it was held to be the loss of the firm,
and not of the partner, (aa^
We have already seen that any stipulations between partners
bind them, and there is nothing to prevent them from agreeing
that one shall share all the profits, but that the others shall bear
all the losses. This, however, will not prevent a creditor of
the firm from suing all, nor from levying an execution on the
property of the partner thus exempted, unless the creditor had
knowledge of the agreement, and made his bargain with the firm
so far in acceptance of and accordance with that agreement, that
he must be taken not to have given any credit to the exempted
partner. If that partner is made to pay any share of loss, by the
general law of partnership, he can turn round upon his partners,
under their agreement, and recover it from them.
It is well established that if a partner, in direct violation of his
stipulations as partner, or in fraud of the partnership, enters into
any contract on their part with a third person, the partners are
not discharged by his breach of contract, or by his fraud, unless
the third person was participant or conusant of it. (^) ^
(a) To a similar effect is the language famil}', — it could not be supposed by any
of Kent, C. J., in Livingston v. Roosevelt, one that the company would be holden.
4 Johns. 278, 279. He says that where These would be plain cases of a fraud,
the particular business of a firm is made practised upon the firm, of which the
known in a usual and reasonable way to creditor would be chargeable with notice,
the public, "the creditor is advertised When the public have the usual means of
that he is not dealing on a partnership ac- knowledge given them, and no means
count ; and for him to take a partnership have been suffered by the partnership to
engagement, without the consent of the mislead them, every man is to be presumed
firm, is, in judgment of law, a fraud upon to know the extent of the partnership
the firm. Suppose, in the case of a gen- with whose member he deals." Dow v.
eral commercial ])artnership, a debt was Sayward, 12 N. H. 275. See Bignold v.
to be contracted by one partner upon the Waterhouse, 1 Moore & S. 259 ; Maltby
purchase of new lands; or suppose, in the v. N. W. & R. Co., 16 Md. 422.
case of a partnership between two attor- {aa) Campbell v. Stewart, 34 111. 151.
ueys, in law business, a partnership note (b) See pod, ch. 7, " Of the Rights
was to be given by one of them uyion the and Duties of Partners between Theni-
purchase of groceries or furniture for his selves." And see Salland v. McRae, 16
1 Where a partner, acting within the scope of his authority, borrows money in the
name of the firm, a misuse of the money by the partner does not excuse the firm
§ 87.] WHO ARK LIABLE AS PARTNERS AS TO THIRD PARTIES. 87
We add, that the person so dealhig with a fraudulent partner,
ill actual ignorance of the fraud, but in an ignorance which implies
gross negligence on his part, should not be permitted to hold the
lirm. This would be an inference from the principles of agency.
This rule has been applied to the holder of negotiable paper,
and should be applied to every one dealing with such partner, (c)
La. Ann. 193 ; Stockwell v. Dillingliam,
5U Me. 442 ; Mechaiii(!s' Bank v. Foster,
44 Bail). 87 ; Gale v. Miller, 44 Barb. 420 ;
Tillbrd v. Ramsey, 37 Mo. 563 ; Haywanl
V. French, 12 Gray, 453 ; Sterling v.
Jamlon, 48 Barb. 459 ; Blodgett v. Weed,
119 Mass. 215 ; [Andrews v. Conger, 2o U.
S. Supr. Ct. (L. Co. op. Ed.) 90 ; Nat.
Exchange Bank v. White, 30 F. R. 412 ;
Humes y. O'Bryan, 74 Ala. 64; Manville
V. Parks, 7 Col. 128 ; Lynch v. Thonii)-
son, 61 Miss. 354 ; Benninger v. Hess, 41
Oh. St. 64.] See also Guild v. Welch, 119
Mass. 257. A ])artner cannot, for a pri-
vate consideration, discharge a debtor of
the firm, by an agreement to pay the
debtor's note to the firm. Lewis v. West-
uer, 29 Mich. 14. If a partner pays his
[)rivate debts by receipting a bill due from
his creditor to the firm, the firm, or its
assignee, may nevertheless recover the
amount of their bill. Thomas v. Penn-
rich, 28 Ohio St. 55. If the appropriation
by one partner of partnership property to
pay his private debt, be made and received
in good faith and under such circumstances
that the other i)artners and the creditors
are not defrauded, the money so appropri-
ated cannot be recovered back. Corwiu
V. Suydam, 24 Ohio St. 210.
(c) Lloyd V. Freshlicld, 2 C. & P. 325 ;
New York Fire Insurance Co. v. Bennett,
5 Conn. 574. In this last case, Hosmer,
C. J., says : " It is now insisted, that the
payee of a promissory note, although he
has knowledge that the maker or indorser
in the name of the firm is making pay-
ment by this act of his own debt, or is
becoming the surety of another jierson,
without the concurrence ot his partner-,
and that neither the partnership covenant
nor the interest of the partnership sanc-
tions the act, yet that he has a right to
subject the partnership. The principle,
in direct hostility with justice and conve-
nience, is endeavored to be sustained by
tiie unwarranted supposition, that the
payee, not having knowledge that special
authority was not given the partner, may
fold his arms, and reap a benefit from his
supineness. Common sense and commou
integrity require that he .should make in-
(juiry, in such cases, and actually know
that authority was given. He is bound,
on legal and fair principles, to sustain the
affirmative. He knows that the partner-
ship is for mercantile operations. He
knows that the partner, signing or indors-
ing a note in the name of the firm, from
the partnership contract, had no implied
authority. He knows that the act can alone
be authorized by the delegation of express
power. And he knows that on the most
common and best-established principles, in
promotion of justice and prevention of
fraud, the person claiming the obligation of
contract against a partnership is bound to
prove it." See Warren i\ French, 6 Allen,
317; Kimball v. Walker, 30 111. 482;
Duncan v. Lewis, 1 Duvall, 183 ; Sims v.
Smith, 12 Rich. L. 685. Whether the
plaintiff suing on such a note had such
notice as ought to put him on inquiry, is
a question for the jury. Waite v. Thnyer,
from liability. National Bank of Commerce v. Meader, 40 Minn. 32.5, 41 N. W.
1043; Kleinhaus v. Generous, 25 Oh. St. 667; Gilchrist i;. Brande, 58 Wis. 184, 15
fN. W. 818.
The declaration of the partner at the time of making a contract that it is for the
firm is enough to charge the firm, if the contract is within the apparent i^cope nf the
business. Clark v. Taylor, 68 Ala. 453 ; Dodds v. Rogers, 68 Ind. 110 ; Smith v.
Collins, 115 Mass. 388 ; Benninger v. Hess, 41 Oh. St. 64 ; Gavin v. Walker, 14 Lea,
643.
THE LAW OF PARTNERSHIP.
[CH. VI.
§ 88. Credit Given to one Partner Only. — He who gives credit
to one partner alone, cannot call on the rest. This is true, how-
ever the credit be given. As, if the creditor sold him goods ; {d)
or sold to another goods on his guaranty ; or received him as
surety in any way, or loaned him money, {e) If there is no
evidence to show to whom credit was given, the fact that nionev
118 Mass. 473. The burden of proof tluit
a note given iii tiie tirm name by one of
tlie partners is not on partnership account,
is on the partnership. Currier v. lame-
rou, 31 Mich. 373.
{li) As where goods for the use of a
stage-coach are supplied to one of several
partneis in a stage-coach line by one
knowing that the agreement between them
is that each shall run and stock a particu-
lar portion of the road at his own expense.
Hiard v. Bigg, Mann. N. P. Index, Part-
ners, A. («). 5; Barton v. Hanson, 2 Camp.
97 ; 2 Taunt. 49. So where L. & C, by
articles, entered into partnership for the
manufacture of hemp ; L. to find the
stock, and C. to furnish the machinery
and operatives. The plaintiff's slave was
employed, by C. alone, in the business of
the firm, and the present action was as-
sumpsit against the partners for the value
of his services. The jilaintitf, as the only
evidence of the lialnlity of the firm, ex-
hibited tlie articles of copartnership, pro-
viding for the arrangement above stated.
It was held that, in the absence of evi-
dence to the contrary, the plaintiH must
be presumed cognizant of the duty of C.
to furnish hands, and to have contracted
solely npon the credit of C; to whom
alone, therefore, he could look for pay-
ment. Lafon V. Chinn, 6 B. Mon. 305.
See Pinckney v. Keyler, 4 E. D. Smith,
469. In Young v. Hunter, 4 Taunt. 583,
Gibbs, ,T., said : " I am b\' no means of
opinion that there may not be a case where
two houses shall be interested in goods
from the beginning of the purchase, yet
not be both liable to the vendor : as if the
parties agree amongst themselves that one
house shall purchase the goods and let the
other into an interest in them, that other
being unknown to the vendor ; in such a
case the vendor coitld not recover against
him, although such other person would
have the benefit of the goods." See fur-
ther Saville v. Robertson, 4 T. K. 725;
Gibson V. Lupton, 9 Bing. 297 ; Ex parte
Hairis, 1 Madd. 583 ; Hokroft v. Hog-
gins, 2 C. B. 488 ; Sylvester v. Smith,
9 Mass. 121 ; Holmes v. Burton, 9 Vt.
252; Ketchum v. Durkee, 1 Hoff. Ch.
528 ; Watt v. Kirby, 15 111. 200 ; Meyer
V. Larkin, 3 Cal. 403. In Joluistcm v.
Warden, 3 Watts, 101, the court instructed
the jury : "That if A. contract with B. to
deliver articles at a sjiecified period, and if
in the intermediate time B. and C. enter
into a partnership, as upon such a con-
tract, it is to be presumed that payment is
to accompany delivery ; if credit is given
at the time of delivery, it must be pre-
sumed to be done upon the credit of the
partners, and this whether the existence
of the partnership was known to the plain-
tiff who gave the credit or not. If the
existence of the partnership was known at
the tin)e no doubt could be raised ; but if
a credit be given whei'e there is a secret
|)artner, as the credit is supposed to be
given as well to him as to those associated
with him, npon the giound that he is en-
titled to the jirofits, so he in equity should
be responsible for the loss in the present
case."
(c) Fx park Hunter, 1 Atk. 223 ;
Parkin v. Carruthers, 3 Esp. 248, per
Le Blanc, J. ; Lloyd v. Freshfield, 2 C. &
P. 325 ; Bevan v. Lewis, 1 Sim. 376 ;
I\Iurray v. Somerville, 2 Gamp. 99 ; Le
Roy V. Johnson, 2 Peters, 186 ; Mifflin v.
Smith, 17 S. & R. 169; Willis v. Hill,
2 Dev. & Bat. 231 ; Foley v. Kobards,
3 Led. 177 ; Bird v. Lanius, 4 Wis. 615 ;
Clay V. Cottrell, 18 Pa. 408 ; Wiggins v.
Hammond, 1 Mo. 121 ; Siegel v. Chidsey,
28 Mo. 279 ; Miller v. Morrice, 6 Hill,
114 ; Holmes v. Burton. 9 Vt. 252 ; Evans
V. Biddleman, 3 Cal. 435 ; Logan v. Bond,
13 Ga. 192 ; Foster v. Hall, 4 Humj.h.
346 ; Jaques v. Marquand, 6 Cow. 497 ;
Whitaker v. Brown, 16 Wend. 505.
§88.]
WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES.
89
l)orro\ved by a partner comes to the use of a firm raises a pre-
sianptiou that the loan was made by liini as partner, and, if not
rebutted, will make the firm liable for the repayment. (/) If the
creditor sold goods or loaned money to every one of the partners
severally, on their several credit, he could not recover of them
jointly, nor hold them mutually responsible, although the money
or the goods were immediately used by the borrowers or buyers
to make up the stock of the firm, or provide for its debts or
business. (^) ^
(/) Jaques V. Maniuaiul, 6 Cow. 497;
Rothwell I'. Huinphreys, 1 Esp. 406 ;
Church V. Sparrow, 5 Wend. 223 ; Whit-
aker v. Brown, 16 Wend. 505. If for
money borrowed a partner gives his own
bill, or note, or other simple contract se-
curity, and suit is brouglit directly upon
such individual security, " it cannot be
allowed to supply by inten(hnent the names
of others, in order to chaige them" ([)er
Lord Ellenborough, C. J., in Emly v. Lye,
15 East, 7) ; Skitfkin v. Walker, 2 Camp.
308 ; Ex parte Brown, 1 Atk. 225, cited ;
Ex, parte Bolitho, Buck, 103 ; though upon
the connnon money counts the partnership
may be charged, if the obligation of the
borrowing partner was meant to be taken,
not in lieu of, but simply in connection
with the partnership liability. Ibid. ;
Denton v. Rodie, 3 Camp. 493 ; Tucker v.
Peaslee, 36 N. H. 167. If, however, the
obligation of one partner be thus taken,
not as a collateral, but as the sole security
for the money loaned, the credit must be
deemed to have been given solely to that
partner, and the lender cannot recover for
money had and received by the partner-
ship, notwithstanding the loan went to its
use. As where the transaction between a
banker and one partner is in fact a dis-
count by the former of the latter's paper ;
notwithstanding the application of the
funds so raised to the uses of the firm,
and the understanding by the banker that
they would be so applied, the discounter
does not become a creditor of the partner-
ship, but simply of the contracting part-
ner; for "the purchase or discount of a
note is a contract wholly unconnected with
the objects, uses, or application of the
money paid." Per Baldwin, J., in Win-
ship V. Bank of the United States, 5 Peters,
567 ; Emly v. Lye, 15 East, 7 ; Denton v.
Eodie, 3 Camp. 493 ; Graeff v. Hitchman,
5 Watts, 454 ; Bond v. Aitkin, 6 Watts
6 8. 165; Foster i-. Hall, 4 Humph. 346 ;
Union Bank v. Eaton, 5 Hiimjih. 499 ;
Green v. Tanner, 8 Met. 411 ; Ostrom v.
Jacobs, 9 Met. 454 ; Thorn v. Smith, 21
Wend. 365 ; Beebe v. Rogers, 3 Greene,
(la.) 319; Mead v. Tomlinson, 1 Day, 148.
See also Donnally v. Ryan, 41 Pa. 306 ;
Folk V. Wilson, 21 Md. 538.
{g) Saville v. Robertson, 4 T. R. 725.
See Hoare v. Dawes, Dougl. 371 ; Coope
V. Eyre, 1 H. Bl. 37 ; Smith v. Craven,
1 The partnership is not liable for money loaned to the partner indivi<lually, though
it was used for the purposes of the firm. Clark v. Taylor, 68 Ala. 453 ; Guice v. Thorn-
ton, 76 Ala. 466 ; Logan v. Bond, 13 Ga. 192 : Lill v. Egan, 89 111. 609 ; Nat. Bank of
Commerce v. Meader, 40 Minn. 325, 41 N. W. 1043 ; Farmers' Bank v. Bayliss, 41 Mo.
274 ; Nat. Bank of Salem v. Thomas, 47 N. Y. 15 ; Peterson v. Roach, 32 Oh. St. 374 ;
Ah Lep V. Gong Choy, 13 Ore. 205, 9 Pac. 483 ; Union Bank v. Day, 12 Heisk. 413.
Accordingly, where one member of a commercial partnership took a note to collect
(an act outside the scope of the partnershi]) business) the firm was not liable, though the
proceeds were ajiplied to the payment of firm debts. The transaction of the owner of
the note was with the individual partner. Pickels v. McPherson, 59 Miss. 216.
In the same way, when goods are sold to a partner individually the firm is not liable
for the price, although the goods are used by the firm. Adams v. Eatherly Hardware
90
THE LAW OF PARTNERSHIP.
[CH. VI.
It must, however, be remembered, that this credit, to exonerate
the other partners, must be given knowingly and vohintarily. For,
if one sold goods actually to a firm, but through the agency of a
partner wliom he did not know to be a partner, and accordingly
charged the same to that partner alone, the firm would still be
bound. This rule applies equally to all simple contracts, whether
oral or written. (A)
1 Cr. & J. 500 ; Bevan v. Louis, 1 Sim.
376 ; Wall's Adin. v. Fife, 37 Pa. 394. So
wliere two parties agree to buy separately
certain amounts of a specitied kind of ))ro]>-
erty, and then to form a partnership, each
contributing his purchase to tlie firm,
neither partner is liable for the purchase
of the other, as for a partnership debt.
McGar v. Drake, Sup. Ct. Tenn. 5 Rei)tr.,
387. [Valentine v. Hickle, 39 Oh. St. 19.]
(h) It was held, in one case, in the
Common Pleas in England, that there
was a difference between a written and
an oral contract, so far as regards the lia-
bility of a dormant partner to be sued
thereon, and that, in an action upon the
former, it was not allowable to add as par-
ties other persons than those whose names
were signed to the agreement. Beckham
V. Knight, 4 Bing. N. C. 243. The facts
of the case are sufficiently set forth in the
opinions of the judges. Tindal, C. J. :
"The action is brought on an express
contract between Kniglit & Surgey of the
one part, and the plaintiff of the other
part. It appears by the plea that three
persons were carrying on business under
the firm of Knight & Surgey, and that the
defendant Drake was a dornjant partner.
The agreement is in writing inter partes ;
and it contains no intimation that Knight
& Surgey were carrying on business as
members of a more extensive firm. I
know of no authority for introducing the
name of a dormant partner into such a
contract. In implied contracts, where the
benefit is equal, and the liability not lim-
ited, a dormant partner may be included ;
but there is no authority which extends
the principle to express contracts." Bosan-
quet, J.: "The plaintiff" is precluded, by
the form of the contract, from saying that
any other person entered into it besides
himself and Knight & Surgey." See also
Robinson v. Rudkins, Exch. 38 Eng. L. &
Eq. 372. But Beckham v. Knight, supra,
was afterwards overruled in the Exchequer.
In Beckham v. Drake, 9 M. & W. 79, upon
the same state of facts. Lord Abinger,
C. B., said : "I am of the same opinion
that I was then, that the doctrine stated
by the Court of Common Pleas that, when
a contract is in writing between jiarties
.signing their names to it, it cannot be used
against other parties than those who signed
their names to it, — cannot be supported
either on principle or authority. That
position, indeed, is contradicted by the
whole series of authorities bearing on the
subject. There is no question that a con-
tract in writing by an agent, signed by
himself, will bind his principal, when the
other contracting party discovers the prin-
cipal, although the contract was made
without his knowing who the principal
is ; as, for instance, in the case of a bill
of lading signed by the master, where the
action is brought against the owners. It
is also the case of every charter-paity,
which is signed by the owner, where the
owner is rendered liable by the act of the
master, because the master is his agent.
So it is in a vast variety of other cases
which frequently occur, all establishing
the principle, that the parties really con-
tracting are the parties to sue in a court
of justice, although the contract be in the
name of another. ... A contract under
Co., 78 Ga. 485, 3 S. E. 430 ; Gates v. Watson, 54 Mo. 585 ; Harvey v. Childs, 28 Oh.
St. 319 ; Holmes v. Burton, 9 Vt. 252.
In such cases the partner who thus becomes the debtor is of course entitled to a
credit to that amount on the books of the partnership. Thornton v. Lambeth, 103
N. C. 86, 9 S. E. 432.
§ 89.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 91
§ 89. Partner Accepted as Creditor, rirm whether Discharged. —
The firm would not be held, if the creditor of the firm had
acce[)ted the individual security of the partner instead of the debt
of the firm ; provided the new individual indebtedness be of a
hitrher nature than the firm debt, or payable sooner, or attended
with some other advantage, which might be regarded as a considera-
tion, (i) And a judgment obtained against one partner, whether
seal can bind none but those who sign and
seal it. A contract not under seal is ojjen
to all the cointnon-law requirements and
incidents of a contract, whether in writ-
ing or not. Suppose these two partners,
Knight & Surgey, had made a contract
verbally, not having said a word about
Drake ; no question could then have arisen
that Drake might nevertheless be liable
upon it. How, then, does the fact of
its being in writing, and of their having
put their names to it, alter the case ? The
])arties are just in the same situation, and
there can be no difference. There is noth-
ing affirmative on the face of the contract
to show an intention to exclude everybody
but themselves. It is open to the defend-
ant Drake to show such an intention, but,
unless it be shown, the objection does not
arise." See Cooke v. Seeley, 2 E.xch. 746.
See, to the same effect, Snead v. Baringer,
I Stew. 134 ; Reynolds v. Cleaveland, 4
Cow. 282 ; Mead v. Tomlinson, 1 Day,
148. The question as to whom the credit
was given is one for the jury. Webster v.
Stearns, 44 X. H. 498.
(i) As where the bond or other specialty
of one partner is taken for the simple con-
tract debt of the partnership, see Williams
1-. Hodgson, 2 H. & J. 474 ; Tom v. Good-
rich, 2 Johns. 214 ; Clement v. Brush, 3
Johns. Cas. 180 ; Waugh v. Carriger, 1
Yerg. 31 ; Ward v. Hotter, 2 Rob. (Va. )
536 ; Moule v. HoUins, 11 G. & J. 11 ;
Jacobs V. McBee, 2 McMuUan, 348 ; Bell
(;. Banks, 3 M. & G. 258 ; Ward v. John-
son, 13 Mass. 150 ; Patterson v. Brewster,
4 Edw. Ch. 352; McNaughten v. Partridge,
II Ohio, 223. In United States v. Astley,
3 Wash. C. C. 512, Washington, J., said :
" The reason upon which the doctrine is
founded is obvious. The bond is clearly
obligatory upon the parties who executed
it, and is therefore an extinguishment of
the simple contract debt as to him. A
joint action, therefore, to recover on the
original debt could not be .supported
against both partners. Neither could an
action be maintained against the partner
who did not execute the bond, because he
has a right to insist that his partner
should be joined with him in the action ;
of which right the creditor and the other
partner cannot, without his consent, de-
prive him. It is precisely like the case of
a release, which, if given to one joint
debtor, dischaiges both. A bond given
for a simple contract debt operates as a
release of that debt, and creates another
of a superior dignity, which can be enforced
only against the person who executed the
bond."
The above reasoning seems conclusive,
and appears to place the doctrine in ques-
tion upon a foundation entirely independ-
ent of the intentions of the parties. A
different principle, however, is intimated
in some of the authorities. Thus, in United
States V. Lyman, 1 JIason, 505, 506, Story,
J., says : "The doctrine, that in general
a higher security taken from the debtor
himself extinguishes the original contract,
proceeds upon a presumption of law that
it is taken in satisfaction of the original
debt ; for, if it appear otherwise upon the
face of the security, it will not operate as
an extinguishment. ... It is, therefore,
after all, a mere question of interest ; and
the law, in the absence of all other evi-
dence of the interest, construes the higher
security of the debtor himself as an extin-
guishment, because it gives a higher remedy.
I admit, also, that a higher security by a
third person, if taken at the time of mak-
ing the original contract or afterwards, in
satisfaction of the debt, operates as an
extinguishment. But theie is this dif-
ference between the case of a higher secu-
rity of the debtor himself and of a third
person, that, in the latter case, the law
92
THE LAW OF PARTNERSHIP.
[CH. VI.
the others be ostensible or secret, discharges tlie firm from liability
to be sued for the same debt. (?)
does not presume the security taken in
sutisfiiction, unless it is averred and proved
to be the agreement of the parties so to
consider it. Whether the receiving of a
higher security from one partner for a part-
nership debt be an extinguishment, unless
expressly taken in satisfaction of such
del it, may peihai)s admit of some doubt,
notwithstanding the language of some
highly respectable authorities." So in
Bond V. Aitkin, 6 W. & S. 165, the lan-
guage of the court is : " Where the bond
of one of the partners is taken for an
antecedent partnership debt, it may be
considered either as payment and extin-
guishment of such debt, or only a collateral
security, according to the nature of the
transaction and the circumstances attend-
ing it. Wallace v. Fairman (4 Watts,
378). But where there is no antecedent
debt, but the bond of one partner is taken
at the time money is loaned to the part-
nership, and as the consideration for loan-
ing the money, it can hardly be treated as
a collateral security. It must be con-
sidered as all one transaction, and the
boud as the only security contemplated ;
unless, perhaps, there were strong and
positive evidence to show an express agree-
ment to the contrary by all parties." See
Collier v. Leech, 29 Pa. 404. And where
two partners agieed to borrow money for
partnership purposes, and, upon its being
loaned to them, one of them gave his sole
bond for the amount, with the other as a
witness, it was held, upon the insolvency
of the firm, that the obligee might be
admitted as creditor under a joint commis-
sion. Ex parte Brown, 1 Atk. 225, cited.
See Horton v. Child, 4 Dev. 460 ; Ross v.
Lawhorn, Dudley, 360 ; Doniphan v. Gill,
1 B. Mon. 199. See Despatch Line of
Packets v. Bellamy Mfg. Co., 12 N. H.
234. But the ground upon which the
rule is placed in the passage above quoted
from Washington, J., certainly seems to
be more consonant with the weight of the
authorities. In Clement v. Brush, 3 Johns.
Cas. 180, the understanding of the parties
that the partnership was not to he released
was evinced ou the face of the si)ecialty,
which was taken by the creditor for the
firm debt, by its being signeil by the part-
ner with the name of the firm. But the
court said : " One partner cannot bind his
copartner by seal. The defendant Brush,
who executed it, is alone bound by the
specialty ; and, it being a debt of a higher
nature, it extinguishes the simple contract
or jiartnership debt." So in Williams v.
Hodgson, 2 H. & J. 474, and in McNaugh-
ten V. Partridge, U Ohio, 223.
(/) King V. Hoare, 13 j\I. & W. 494 ;
Maule, J., in Bell v. Banks, 3 M. & G.
267 ; Lechmere v. Fletcher, 1 Cr. & M.
635 ; Ti-afton v. United States, 3 Story,
648, 651 ; United States v. Cushman, 2
Sumn. 437, 440 ; Pearce v. Kearney, 5
Hill, 82 ; Suydam v. Barber, 6 Duer, 34,
38 ; McMaster v. Vernon, 3 Duer, 249 ;
Peters v. Sandford, 1 Denio, 224. See,
however. Collier r. Leech, 29 Pa. 404.
But this is not upon the ground that the
creditor who thus obtains judgment against
one partner alone thereliy agrees, or is on
that account presumed to agree, to release
the other partners. If that were so, the
presumption might be rebutted ; as, for
instance, in the case of a secret partner,
and the firm held, notwithstanding a prior
judgment against one partner upon the
same cause of action. But the real reason
in case of a judgment, as well as of a bond,
is, that the creditor, by taking the higher
form of a judgment security against one
partner for a debt due jointly from all the
l)artners, thereby changes the relations
and liabilities of the parties under the
original contract, and cannot, therefore,
afterwards hold them upon it, whatever
may be his intention. Perhaps these two
views of the effect of a creditor's taking
the separate higher security of one partner
for a partnership" debt arise from a partner-
ship's being regarded in two different
lights. If a partnership be treated as a
person, entirely distinct from the indivi-
dual partners, then a contract between a
creditor of the firm and one of the partners,
by which the former receives from the
latter, for a firm debt, his sole obligation
of a higher nature, is res inter alios acta.
§ 89.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 93
If a creditor of a firm has lost his remedy against the partner-
ship by taking from one partner a security of a higher nature, it
may not be quite determined whether equity will give relief ; or,
if it can, under what circumstances and in what manner this
relief will be afforded. Perhaps the question, in each case, would
be determined by the intention of the parties ; for, if they pur-
posed and desired to extinguish the joint debt and substitute an
individual debt, neither equity nor law would keep the joint debt
alive. It is held, in several cases, that it is no ground for the
interposition of equity, that a creditor of a partnership has, in
ignorance of a secret partner, extinguished his remedy at law
against him by taking, for the debt of the firm, either a judgment
against the ostensible partner, or his separate bond or specialty, (w)
If, however, a partner attempts to bind the partnership by a spe-
cialty, but, failing for want of authority, binds himself only,
and thereby discharges the partnership at law altogether, — equity
will give relief against the other partner, if it be shown that the
contract was really on the partnership account, and was intended
by all parties to bind the firm, (h)
and may be said not to discharge the firm,
unless clearlj' proved to have been intended
by all the parties to have that effect. If,
on the other hand, a partnership be con-
sidered simply as so many persons, who
contract and are bound jointly, but in no
other way, a person who has made a con-
tract with the partnership, but who after-
wards in some way absolves one of the
partners from liability to be sued upon it
together with the other partners, has
thereby precluded himself from suing on
the original contract, because by his own
act he has deprived himself of the proper
parties.
We have already seen that a judgment
against an ostensible partner, upon a joint
claim, though unsatisfied, and obtained
during the concealment of the secret part-
ner, is a bar to a subsequent suit upon the
same cause of action brouglit against both
the ostensible and the secret partners.
Upon the same principles, the bond of an
ostensible partner, taken for a partnership
debt, extinguishes the claim as against a
secret partner, who may be afterwards dis-
covered. See a full discussion of this
point in Ward v. Motter, 2 Rob. (Va.)
536 ; also, Anderson v. Levan, 1 W. & S.
334 ; Spear v. Gillet, 1 Dev. Eq. 466.
(m) Penny v. Martin, 4 Johns. Ch.
566 ; Willings v. Consequa, 1 Pet. C. C.
301 ; Williams v. Hodgson, 2 H. & J.
474; Smith v. Black, 9 S. & R. 142;
How V. Kane, 2 Chand. 222 ; Ledam v.
Williams, 4 McLean, 51. See Spear v.
Gillet, 1 Dev. Eq. 466.
(n) Wharton v. W^oodburn, 4 Dev. &
Bat. 507 ; Blanchard v. Parteur, 2 Hayw.
393 ; James v. Bostwick, Wright, 142 ;
Gunter v. Williams, 40 Ala. 561. See
McKee v. Bank of Mt. Pleasant, 7 Ohio,
175. In McNaughten v. Partridge, 11
Ohio, 223, one partner executed a bond for
a joint debt in the name of his firm, all
the parties to this instrument and all the
partners suppo.sing, at the time, that the
partnership was bound by such execution.
It was held, that, on the ground of the
mistake of the parties as to the legal
effect of the execution of the bond, equity
might relieve against the firm. But the
obligee, having, after the discovery of the
mistake, pursued his remedy against
the executing partner individually, on the
aforesaid bond, it was held, that this was
a ratification of the arrangement by which
the partnership had been discharged, and
that equity could not now relieve. The
doctrine in Virginia is thus set forth in
94
THE LAW ON PARTNERSHIP.
[CH. VI.
It has been argued that if there be no new consideration for
the new promise, as all the partners were equally liable in solido
for the firm debt, the new promise of any one of them to pay it,
should, by itself alone, be no consideration for releasing the
rest, (o) It is, however, the better doctrine, that it is for the jury to
decide whether the creditor intended to accept the sole liability of
a partner in discharge of the joint debt of the firm ; for if there
was such an intention, and no fraud, the new promise would be
supported on the ground that the sole promise must have been
more beneficial than the joint promise, or it would not have been
accepted instead of the joint promise. (^) ^
Nailnay v. Harvey, 9 Gratt. 466, by
Dauiel, J.: "It may, however, I think,
be stated as the well-settled doctrine of
this court, that whilst the mere acceptance
of such higher security by a creditor from
one member of a firm, for a partnership
debt due by simple contract, destroys the
right of the creditor to proceed at law
against the member who was not a party
in giviug such higher security, yet that a
court of equity will look at the original
character of the debt, and will not with-
hold relief against the member not unit-
ing in the higher security, merely because
of the merger and destruction of the legal
remedy against him ; but will treat that
simple contract as a debt still subsisting
iji foro coiiscientice, unless it is shown that
the creditor intended, by accepting such
higher security, to abandon all recourse
upon his original demand. In other
words, that in a court of law the higher
security operates per se a destruction of
the simple contract ; but that, in a court
of equity, whether such is to be the effect
of the transaction, is a question to be
decided by proof of the intention of the
parties. If by taking such higher secur-
ity it was not the design of the parties
that the social debt should be wholly ex-
tinguished, equity will still hold all the
partners bound. If, on the other hand,
the higher security is given and accepted
as a substitute for the original simple
contract of the firm, and with the inten-
tion to absolve the firm, all remedy upon
the latter is gone, in equity as well as at
law." See Sale v. Dishman, 3 Leigh, 548;
Gait V. Calland, 7 Leigh, 594 ; Weaver i;.
Tapscott, 9 Leigh, 424 ; Ward v. Motter,
2 Rob. (Va.) 552 ; Moser i-. Libenguth, 1
Rawle, 255 ; Hart v. \Yithers, 1 Barr,
285, 290.
(o) Attwood V. Banks, 2 Beav. 192 ;
Lodge V. Dicas, 3 B. & Aid. 611 ; Living-
ston V. Radeliff, 6 Barb. 201 ; David v.
EUice, 5 B. & C. 196 ; Cole i-. Sackett, 1
Hill, 516 ; Waydell v. Luer, 5 Hill, 448 ;
Wildes V. Fessenden, 4 Met. 12 , Frentress
V. Marble, 2 Greene (la.), 553. See Pierce
V. Cameron, 7 Rich. 114 ; Stone v. Cham-
berlin, 20 Ga. 259. If a creditor of the
firm, after dissolution, knowing that one
or more of the partners have agreed to
assume and pay the firm debts, accepts
the note of those agreeing to pay, in pa}'-
Dient of his debt, it is a discharge of the
other partners. Millerd i>. Thorn, 56 N.
Y. 402. So where each partner gives his
note for his share of a debt, it is a dis-
charge of the partnership debt. Maxwell
V. Day, 45 Ind. 509.
(/>) Tlius it was sai<l by Dennian, C.
J., in Thompson v. Percival, 5 B. & Ad.
925 : " Many cases may be conceived in
which the sole liability of one of two
debtors may be more beneficial than the
joint liability of two, either in respect of
the solvency of the parties or the con-
venience of the remedy, as in cases of
bankruptcy, or survivorship, or in various
other wa3's ; and whether it was actually
more beneficial in each particular case
cannot be made the subject of inquiry.
1 It is now everywhere admitted that where a partnership creditor accepts the note
of a partner in satisfaction of the claim against the firm, the firm debt is gone. The
§ 89. j WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 95
From the language used in some cases, it might be inferred that
the taking of a new security of the same class from one partner
for a partnership debt is of itself sufficient to extinguish the
partnership debt, and to discharge the firm. But the {principle
now ai)plied, both in England and generally in this country, is,
that the acceptance by a creditor of the firm of one partner's
separate security of the same class with the joint security (as of a
partner's promissory note for the firm debt) does not discharge
the other partners unless an express or implied agreement that
such shall be the effect of the transaction is clearly made out.(^)^
Kirwan v. Kirwan, 2 Cr. & M. 617, 623 ; said: "Is it to be endured, tluit, when
Hart V. Alexander, 2 M. & \V. 484 ; partners have given their acceptance, and
Waydell v. Ltier, 3 Denio, 410 ; Living- when perhaps one of two partners lias
ston V. Radclitf, 6 IJarb. 301 ; Van Eps v. made provision for the bill, the holder
Dillage, 6 Barb. 244 ; also, Hariis v. sliall take the sole bill of the other part-
Lindsay, 4 Wash. 0. C. 271 ; Marshall, ner, and yet hold both liable? I am of
C. J., in Shelby v. Mandeville, 6 ('ranch, opinion, that, when the holder chooses to
264 ; Ex parte Liddiard, 4 Deacon & do so, he discharges the other partner."
Ch. 603 ; Oakeley v. Pasheller, 10 Bligh, Acceptance by a firm creditor of a note
548; Anderson v. Henshaw, 2 Day, 272 ; made by the surviving partner, who had
Thomas v. Shillibeer, 1 M. & W. 124. The been authorized to take this in li(|uidatioii,
principle of these latter cases seems also does not discharge the estate of the de-
to have been asserted in Evans v. Drum- ceased partners. Titus v. Todd, 25 N. J.
mond, 4 Esp. 92, and in Reed v. White, 5 Eq. 458.
Esp. 122. In the former, Lord Kenyon (q) Ex parte Hodgkinson, 19 Ves. 295 ;
partner is really a third party, the true debtor being the firm ; and it is well settled
that a debt is discharged by accepting in payment of it the note of a third person.
In addition to the authorities collected in note (p) see the following cases. Thompson
V. Percival, 5 B. & Ad. 925 ; In re Parker, 19 N. B. R. 340 ; Myatts v. Bell, 41 Ala.
222 ; Bonnell v. Chamberlin, 26 Conn. 487 ; Maxwell v. Day, 45 Ind. 509 ; Drake v.
Hill, 53 la. 37 ; Crooker v. Crooker, 52 Me. 267 ; Washburn v. Pond, 2 All. 474 ;
Ludington v. Bell. 77 N. Y. 138 ; Bank v. Green, 40 Oh. St. 431 ; Robinson v. Hurl-
burt, 34 Vt. 115 ; Dages v. Lee, 20 W. Va. 584 ; Gates v. Hughes, 44 Wis. 332.
If, however, the note of a partner is taken in payment of an existing firm debt, it
will be presumed (in the absence of proof of an agreement to discharge) to be mere
conditional payment, and if the new note is not paid at maturity the liability of the
firm remains.
Ill re Clap, at 2 Low. 226 ; Leabo v. Goode, 67 Mo. 126 ; Titus v. Todd, 25 X. J. Eq.
458 ; Claflin v. Ostrom, 54 N. Y. 581 ; Leach v. Church, 15 Oh. St. 169 ; Spaulding
V. Ludlow Mills, 36 Vt. 150 ; Miller v. Miller, 8 W. Va. 542.
This is true even if the n^w note was given by an ostensible sole trader who in
fact had a dormant partner ; on discovering that fact, the creditor may sue on the
original claim, the new note remaining unpaid. Robinson v. Wilkinson, 3 Price,
508; Parker v. Canfield, 37 Conn. 250; Schemerhorn v. Loines, 7 Johns. 311; Hill v.
Vooi-hies, 22 Pa. 68 ; Nichols v. Cheairs, 4 Sneed, 229.
1 If at the time a debt arises against the firm the note of a partner is taken, not to
make him the debtor, but as collateral security or conditional payment, the firm is
bound. Bottomley v. Nuttall, 5 C. B. N. s. 122; Smith v. Collins, 115 Mass. 388 ;
Sage V. Sherman, 2 X. Y. 417 ; Bowers v. Still, 49 Pa. 65 ; Schollenberger v. Seldon-
96 THE LAW OF PARTNERSHIP. [CH. VI.
§ 90. Use of Firm Property for Private Purposes. — Instances of
partners using the name or credit of the firm for their personal
advantage, and without authority, are constantly occurring ; and,
as we have seen, when this is known to the person dealing with
them, the firm are not held. Some difficulty often arises as to
the proof of such knowledge on the part of the creditor. There is
a rule, however, which rests on strong authority, and is in itself
reasonable, just, and convenient, which would settle most of these
cases, or at least reduce them to mere questions of fact. It is,
that whenever a party receives from any partner, in payment for
a debt due from that partner only, whether the debt be created
at the time or before existing, or by way of settlement of or
security for a debt, the indebtedness or obligation of the firm in
any form, the presumption of the law is, that the partner gives
this and the creditor receives it in fraud of the partnership, and
has consequently no demand upon them, (r) And upon the
Harris v. Farwell, 15 Beav. 31 ; Winter itor where the partnership is dissolved by
V. Inues, 4 Myl. & Cr. 101 ; Davis v. De- the retirement of one or more of its mem-
sauque, 5 Whart. 530 ; Smith v. Rogers, bers. See § 324 et se.q. for a more detailed
17 Johns. 340 ; Parker f. Cousins, 2 Gratt. examination of the cases.
372 ; Mason v. Wickersham, 4 W. & S. (r) Hope r. Gust, cited in Shirreff v.
100; Yarnell v. Anderson, 14 Mo. 619; Wilks, 1 East, 48; Ridley i). Taylor, 13
Potter V. McCoy, 26 Pa. 458 ; Hill v. East, 175 ; Green v. Drakin, 2 Stark. 347;
Voorhies, 22 Pa. ^8 ; Nichols v. Cheairs, Ex parte Goulding, 2 Glyn & J. 118 ;
4 Sueed, 229. And even in those States, Heath v. Sansom, 2 B. & Ad. 291 ; Ex
where, as in Maine, Massachussetts, and parte Thorpe, 3 Mont. & Ayr. 716 ; Wintle
Vermont, the taking of a negotiable note v. Crovvther, 1 Cromp. & J. 316 ; Snaith
or bill is regarded as jwima facie evidence v. Bnrridge, 4 Taunt. 684 ; Ex parte
of payment of the debt, it may be believed Agace, 2 Cox, 312; Davenport ■u. Run-
that the acceptance by a partnership lett, 3 N. H. 386 ; Greeley v. Wyeth, 10
creditor of such separate security would N. H. 15 ; Williams v. Gilchrist, 11 N.
not discharge the firm, unless it were H. 535 ; Livingston v. Ha.stie, 2 Caines,
clearly shown that such was the intention 246 ; Lansing v. Ten Eyck, 2 Johns. 300 ;
of the parties. Barker v. Blake, 11 Mass. Livingstone. Roosevelt, 4 Johns. 251; Dob
20, 21. See also Melledge v. B. Iron Co., v. Halsey, 16 Johns. 34 ; Foot v. Sabin,
5 Cush. 170; Fowler v. Ludwig, 34 Me. 19 Johns. 154; Laverty ■?;. Burr, 1 Wend.
455 ; Tracy v. Pearl, 20 Vt. 162 ; Heald 529 ; Whitaker v. Brown, 11 Wend. 75 ;
V. Warren, 22 Vt. 410. The .security of Gansevoort v. Williams, 14 Wend. 133 ;
one or more of the partners for a firm Wilson v. Williams, 14 Wend. 146 ;
debt is more frequently taken by a cred- Chazournes ?;. Edwards, 3 Pick. 5; Rogers i-.
ridge, 49 Pa. 83 ; Maffet v. Leuckel, 93 Pa. 468 ; Barcroft v. Snodgrass, 1 Cold. 430 ;
Hoeflinger v. Wells, 47 Wis. 628, 3 N. W. 589.
According to the better view in these cases, the firm is not discharged even if the
creditor has pursued his remedy against the partner to judgment, or has proved
against the partner in bankruptcy ; the claim against the partner being merely
cumulative. Bottomley v. Nuttall, 5 C. B. N. s. 122 ; Claflin v. O^trom, 54 N. Y.
581 ; First Nat. Bank v. Morgan, 73 N. Y. 593. But see In re Herrick, 13 N.
B. R. 312.
§ 90.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 97
same principle, if one partner releases a debt due to his firm, in
consideration of a release to him of a debt due by him solely, the
presumption will be that the transaction was fraudulent, (s) ^
Bitchelor, 12 Pot. 221 ; Baud v. Cochran,
4 S. & It. 397 ; Cotton v. Evans, 1 Dev.
& B. Va[. 284 ; Wead i;. Richardson, 2
Dev. & B. 535 ; Pierce v. Pass, 1 Porter,
232; Mauldin v. Branch Bank, 2 Ala.
511 ; Hagar v. Mounts, 3 Blackf. 57, 261 ;
Hickman v. Reineking, 6 Blackf. 388 ;
Lanier v. M'Cabe, 2 Fla. 32 ; Clay v. Cot-
trell, 18 Pa. 408 ; King v. Faber, 22 Pa.
21 ; Darling v. March, 22 Me. 184 ; El-
liott V. Dudley, 19 Barb. 326 ; Miller v.
Hines, 15 Ga. 197. See Leveson v. Lane,
13 C. B. N. s. 278 ; Williams v. Brim-
hal!, 13 Gray, 462; Casey v. Carver, 41
111. 228 ; Rutledge v. S^iuires, 23 la. 53.
The purchaser of goods from a firm
cannot plead, in payment or set-otf, a debt
due him from one of the firm. Wise v.
Copley, 36 Ga. 508. Nor can a creditor
of a partner, by an attachment and sale
of firm jiroperty, on execution, for his
private debt, acijuire title as against the
creditors of the firm. Miner v. Pierce,
38 Vt. 610. A sale by a partner of ])art
of the firm property, the proceeds to be
aj)plied to the private account of the part-
ner, is fraudulent a.s against the other
partners, and gives the purchaser no title
as against them. Williams v. Barrett, 10
Kas. 455 ; Stegall v. Coney, 49 Miss. 761.
If a partner fraudulently approfiriate the
funds of a firm to the purchase of real
estate, or to the payment of life-insurance
premiums on a policy for the benefit of
his wife, a court of equity will follow the
funds and their proceeds, and appropriate
them to the use of the firm. Shaler r.
Trowbriilge, 28 N. J. Ec^. (Stewart) 595.
One who takes, in payment of the in-
dividual note of A., for his private debt,
notes payable to A., but belonging to
the firm of which he was a member, has
a good title, if he was ignorant of the
fact of partnership. Kellogg v. Faucher,
23 Wis. 21. The banker of a firm who
knowingly transfers funds of the firm to
the private account of one of the firm,
for the purpose of speculation, is liable
to the other partners for the funds so
transferred. Billings v. Meigs, 53 Barb.
272. And, generally, a partner cannot
use partnership funils or credits to pay
his private debt.s, or promote his private
interests. McXair v. Piatt, 46 111. 211;
Broailus v. Evans, 63 N. C. 633 ; Down-
ing V. Linville, 3 Bush, 472 ; Wise v.
Copley, 36 Ga. 508.
(s) Evernghim v. Ensworth, 7 Wend.
326; Gram v. Cadwell, 5 Cow. 459; Far-
rarv. Hutchinson, 9 A. & E. 641; Greeley
V. Wyeth, 10 N. H. 15. If a firm is sued
upon a note given in the partnership
name, partly for a partnership debt and
partly for the separate debt of one or more
of the partners, it seems that the firm is
liable so far as the note is founded upon
a partnership consideration. Wilson v.
Lewis, 2 Man. & G. 197 ; Barker v.
Burgess, 3 ilet. 273. See Barber v. Back-
house, 1 Peake, 61 ; AVintle v. Crowther,
1 Cromp. & J. 316; Ex parte Kirby,
Buck, 511.
1 A partner has no authority to dispose of partnership property in payment of an
individual debt ; and a creditor of the partner taking such property has no right to
hold it against the partnership, whether he claims absolute title, or holds the property
by way of mortgage or pledge. Snaith v. Burridge, 4 Taunt. 684 ; Rogers v. Batchelor,
12 Pet. 221 ; Kelley v. Greenleaf, 3 Story, 93 ; iloline AVagon Co. v. Rummell. 12
F. R. 658 ; Clafliu v. Bennett, 51 F. R. 693 ; Halstead v. Shepard, 23 Ala. 558 ; Xall
V. Mclntyre, 31 Ala. 532 ; Cannon v. Liudsey, 85 Ala. 198, 3 So. 676 ; Nichol v.
Stewart, 36 Ark. 612; Brewster v. Mott, 5 111. 378 ; Deeter v. Sellers, 102 Ind. 458,
1 N. E. 854 ; Johnson v. Crichton, 56 Md. 108 ; Kingsbury v. Tharp, 61 Mich. 216,
28 N. W. 74 ; Hinds v. Backus, 45 Minn. 170, 47 N. W. 655 ; Buck v. Mosley, 24
Miss. 170 ; Hoff v. Rogers, 67 Miss. 208, 7 So. 358 ; Hilliker v. Francisco, 65^ Mo.
598 ; Forney v. Adams, 74 Mo. 138 ; Dob v Halsey, 16 Johns. 34 ; Gcery v. Cockroft,
33 N. Y. Super. 146 ; Hartness v. Wallace, 106 X. C. 427, 11 S. E. 259 ; Tanner v.
98 THE LAW OP PARTNERSHIP. [CH. VI.
§ 91. Good if authorized. — The presumption of fraud in these
cases is never absolute. It may be rebutted by proof of the
Hall, 1 Barr, 417; Hartley v. White, 94 Pa. 31 ; McNair v. Wilcox, 121 Pa. 437, 15
Atl. 575 ; Goode v. McCartney, 10 Tex. 193. See Jones v. Yates, 9 B. & C. 532 ;
l-eucht V. Evans, 52 Ark. 217 ; Daniel v. Daniel, 9 B. Mon. 195 ; Bourne v. Woold-
riJge, 10 B. Mon. 492 ; t'adwallailcr v. Krocsen, 22 Md. 20U.
Tiiis is true, even if he was ignorant of the fact that it was partnership jiroperty.
Rogers v. Batchelor, 12 Pet. 221 ; Janney v. Springer, 78 la. 617, 43 N. \V. 461 ;
Minor V. Gaw, 11 Sni. & M. 322; Buck v. Mosley, 24 Miss. 170; Aukley v. Staehlin,
56 Mo. 558; Caldwell v. Scott, 54 N. H, 414; Binns v. Waddill, 32 Gratt. 588
(semble) ; Liberty Savings Bank v. Campbell, 75 Va. 534.
But see Locke 1). Lewis, 124 Mass. 1. If, however, the partner has been so intrusted
with the property by his copartners as to appear to be sole owner, a diHerent (question
is presented. See post, § 99.
If all tlie partners assent to the transfer, the individual creditor of the partner gets
a valid title. McGliees v. Mclutchen, 82 Ga. 788, 9 S. E. 785 ; Veal v. Keely Co.,
86 Ga. 130, 12 S. E. 297 ; Fargo «. Ames, 45 la. 491 ; Rhodes v. McKean, 55 la. 547,
8 N. W. 359 ; In re Stewart, 62 la. 614, 17 N. W. 897 ; Sc.hnndlaiip v. Currie, 55
Miss. 597 ; Sexton v. Anderson, 95 Mo. 373, 8 S. W. 564 ; Pepper v. Peck (R. I.), 20
Atl. 16 ; Carver Gin & Macli. Co. v. Bannon, 85 Tenn. 712, 4 S. W. 831; Hage v.
Campbell, 78 Wis. 572, 47 N. W. 179,
And it the firm has in this way assumed an individual debt, one jiartner may give a
tirni-note in payment of it. Randall v. Hunter, 66 Cal. 512.
The burden is on the individual creditor to show assent of all the partners. Johnson
V. McCIary, 131 Ind. 105, 30 N. E. 888 ; Mechanics' k Traders' Ins. Co. v. Richard-
son, 33 La. Ann. 1308 ; Mutual Nat. Bank v. Richardson, 33 La. Ann. 1312 ; Davis v.
Smith, 27 Minn. 390, 7 N. W. 731 ; Farwell v. St. Paul Trust Co., 45 Minn. 495, 48
N. W. 326.
And mere silence on the part of the other partners is not enough to prove assent.
Johnson v. McClary, 131 Ind. 105, 30 N. E. 888 ; nor dt.es assent without full knowl-
edge of the facts, amount to ratification, American Exchange Nat. Bank v. Georgia
Const. & Inv. Co., 87 Ga. 651, 13 S. E. 505. Nor will a representation by the partner
of the consent of his copartners cure the defect. Allen v. Cary, 33 La. Ann. 1455 ;
Union Nat. Bank v. Underbill, 102 N. Y. 336, 7 N. E. 293.
So where a partner releases a debt due to the firm on consideration of the transfer
of property or other advantage to the partner individually, the release does not bind
the firm. Lemiette v. Starr, 66 Mich. 539, 33 N. W. 832 ; Beatson v. Hariis, 60 N. H.
83 ; Clift V. Moses, 112 N. Y. 426, 20 N. E. 392.
And a partner cannot bind the firm by a consent to set off a debt due from him to a
stranger against a debt owed by the stranger to the firm. Cowen v. Eartheily Hard-
ware Co., (Ala.) 11 So. 195. Thomas v. Stetson, 62 la. 537, 17 N. W. 751 ; Chase
V. Buhl Iron Works, 55 Mich. 139, 20 N. W. 827 ; see Atkin v. Berry, 1 Lea, 91.
Therefore where both the firm and an individual partner owe the same creditor, a
firm check cannot with consent of the partner be applied to the debt of the latter.
Cornells v. Stanhope, 14 R. I. 97.
And where one partner used firm assets to pay off a mortgage on his wife's land, it
was held that the firm could charge the land with the amount of the mortgage.
Brecher v. Fox, 1 F. R. 273.
Upon the same principle, one partner cannot subject the partnership assets to the
individual debt of the other partner to him. Evans v. Bryan, 95 N. C. 174.
So where a partner, being an individual debtor, gives firm jiaper in payment of his
debt, the creditor, or one with notice, cannot enforce payment against the partnership.
Guice V. Thornton, 76 Ala. 466 ; American Exchange Nat. Bank v. Georgia Const. &
Inv. Co., 87 Ga. 651, 13 S. E. 505 ; Mechanics' & Traders' Ins. Co. v. Richardson, 33
91.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 99
authority given by the other partners, or of their knowledge and
consent, or their ratification ; and these, or either of them, may
be express, or be inferred from their acts, or usage, or any cir-
cumstances which reasonably imply them. (0 The presumption
seems to be held much more strongly in this country than in
England. There, indeed, the courts would seem to hold, that, if
the name of the partnership be used by a partner even for his
private debt, the partnei's will be held, unless they can show covin
or fraud on the part of the holder; and the mere fact that it was
the private debt of one partner to him will not amount to prirnd
facie proof of this, {u) In a recent English case, in a suit on a
(t) Franklaiid v. M'Gusty, 1 Knapp, 111. 374 ; Wise v. Copley, 36 Ga. 508. Rut
Pr. C. 274 ; Ex -parte Boiibonus, 8 Ves. proof of knowledge that the iiidel)tedness
540 ; Ex parte Thorpe, 3 Mont. & A. 716 ; or obligation of the partnership had been
Gnn.sevoort v. Williams, 14 Wend. 133 ; applied by one partner to pay his own
Wilson V. Williams, 14 Wend. 146 ; Cot- debt is not proof of consent to or satisfac-
ton V. Evans, 1 Dev. & B. Eq. 295 ; Noble tion of such misapplication by the other
V. jrClintock, 2 W. & S. 152 ; Pierce v. yiartners, so as to rebut the presumption
Pass, 1 Port. 232 ; Brewster y. Mott, 5 111. of fraud in the creditor. Ex parte Agace,
378; Jones v. Booth, 10 Vt. 268; Miller 2 Cox, 312; Elliott v. Dudley, 19 Barb.
V. Hines, 15 Ga. 197; Darling v. March, 326.
22 Me. 184. See Corbin v. McChesney, (u) Compare Ridley v. Taylor, 13 East,
26 111. 231; Warren v. Dickson, 30 IlL 175; Frankland w. M'Gusty, 1 Knapp. Pr.
363 ; Sternburgr. Callaman, 14 Iowa, 251, C. 274; Ex parte Agace, 2 Cox, 312;
adopted and confirmed in Cadwallader v. Ex parte Bonbonus, 8 Ves. 540; Ex parte
Blair, 18 Iowa, 420 ; Carver v. Dows, 40 Thorpe, 3 Mont. & A. 716 ; Musgrave v.
La. Ann. 1308 ; Blodgett v. Sleeper, 67 Me. 499 ; Daniels v. Hammond, 154 Mass.
165, 28 N. E. 12 ; Freeman v. Ellison, 37 Mich. 459 ; Howell v. Sewing Machine Co.,
12 Neb. 177, 10 X. W. 700 ; Union Nat. Bank v. Underbill, 102 N. Y. 336, 7 N. E.
293; Graham v. Taggart, (Pa.) 11 Atl. 652.
This is the case where the note of a new firm is given in renewal of a note of the old
firm it succeeded, by one who was partner in both firms. Tyree v. Lyon, 67 Ala. 1.
And where a partner indorsed his individual note with the firm name, and discounted
it for his individual purposes. Newman v. Richardson, 9 F. R. 865 ; Nat. Bank of
Connnerce v. Law, 127 Mass. 72. See Atlas Nat. Bank v. Savery, 127 Mass. 75.
But a holder of a firm note for value and without notice could of course recover.
Redlon v. Churchill, 73 Me. 146 ; Nichols v. Sober, 38 Mich. 678.
So where one partner borrowed money to put into the firm as his cajiital, and gave a
firm note for it, the lender cannot hold the firm on the note if he had notice of the facts
at the time of taking the note. Coller v. Porter, 88 Mich. 549, 50 N. W. 658 ;
McNanghton's Appeal, 101 Pa. 550. See Goodbar v. Gary, 16 F. R. 316.
As a partner cannot pay his own individual debt with the firm assets, so he cannot
thus pay the debt of his partner without the consent of all partners, including the
debtor. Brewster v. Reel, 74 la. 506, 38 N. W. 381.
A partner cannot give away the firm property to a volunteer, Daniel v. Daniel, 9
B. Mon. 195. And for this reason he cannot make a valid surrender of a firm lease,
unless in an exigency of the business, when the other partner is not accessible. Berg-
land V. Frawley, 72 Wis. 559, 40 N. W. 372. So one who receives a gift of a firm note
from a partner cannot sue the firm on it. Lobdell v. Slawson, 90 Mich. 201, 51
N. W. 349.
100
THE LAW OF PAETNERSHIP.
[CH. III.
bill of exchange accepted by a partner in the name of the firm,
which bill included with the debt of the firm a private debt of the
partner, the court directed a verdict for only the amount that
was due from the firm, {uv) We shall, in a future chapter, speak
of this question more fully in regard to negotiable paper.^
If a partner makes a fraudulent use of the name or property of
his firm, it should be clearly and immediately repudiated by them
as soon as it comes to their knowledge ; and any long delay may
work a ratification, (uuu)
§ 92. Beginning of Liability. — It is Sometimes important, in
reference to liability for debt, as in other respects, to determine
when a partnership begins. For example, if a man orders goods
sent to another, and they are so sent and charged to the first
party, and the seller discovers that the orderer and receiver were
partners in the transaction, both are liable. But if the goods were
to be supplied to the receiver by tlie orderer, and manufactured
on certain terms by the party receiving them, and the new prod-
Drake, 5 Q. B. 185 ; with Davenport v.
Runlett, 3 N. H. 386 ; Lansing v. Gaine,
2 Johns. 305; Dob v. Halsey, 16 Johns.
34 ; Gansevoort v. Williams, 14 Wend.
133 ; Cliazournes v. Edwards, 3 Pick. 5 ;
Rogers V. Batchelor, 12 Pet. 221 ; Cot-
ton V. Evans, 1 Dev. & B. Eq. 284 ;
Pierce v. Pass, 1 Port. 282. In Dob v.
Halsey, supra, Spencer, J., said: "The
only difference between the decision of this
court and that of the King's Bench con-
sists in this : We re(juire the separate cred-
itor, who has obtained the partnership
paper for the private debt of one of the
partners, to show the assent of the whole
firm to be bound. The rule of the King's
Bench throws the burden of avoiding such
security on the firm, by requiring them to
prove that the act was covinous on the
part of the partner for whose private debt
the paper of the firm was given, by show-
ing that it was done without the knowl-
edge, and against the consent, of the other
partners, and that the fact was known to
the separate creditor when he took the
paper of the firm." In Rogers v. Batch-
elor, 12 Pet. 221, the question was raised
whether it made any difference that at the
time of the transaction the separate cred-
itor had no knowledge that there was a
misappropriation of the partnership funds.
Judge Story said: "It is true that the
precise point now before us does not ap-
pear to have received any direct adjudica-
tion ; for in all the cases above mentioned
there was a known application of the
funds or securities of tlie partnership to
the payment of the separate debt. But
we think that the true principle 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 divested in favor of
such separate creditor, whether he knew
it to be partnership property or not. In
short, his right depends, not upon his
knowledge that it was partnership prop-
erty, but upon the fact whether the other
partners had assented to such disposition
of it or not." Brewster v. Mott, 5 111.
378. See the language of Spencer, J., in
Dob V. Halsey, 16 Johns. 39. It was dis-
tinctly adjudged in Achley v. Staclilin, 56
Mo. 558, that the fact that a creditor had
no knowledge was immaterial. [See ante,
§ 90, note.l
{uv) Ellston V. Deacon, L. R. 2 C. P. 20.
(liuu) Marine Co. of Chicago v. Carver,
41 111. 66 ; Casey v. Carver, 41 111. 225.
1 Post, § 133 c< seq.
§ 92.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 101
nets when manufactured (and not before) were to be the joint
property of the two as partners, then the receiver of the goods
would not be liable, {v)
The general principle which answers the question when a part-
nership begins, fur tlic purp(jse and with the effect of casting upon
the members of the firm the liability of partners, must of course
be that the liability of persons on contracts not made by them-
selves, and as partners, begins at the moment when they begin to
have a joint interest in the contracts as partners. For if a person
purchases goods or borrows money upon his own credit, and it is
aftei-wards discovered that the goods or the money have been
apj)lied to the use of a partnership of which he is a member, the
firm will be liable for the price of the goods or the amount of the
loan, if, from the nature and circumstances of the transaction, the
firm may be regarded as the real purchaser or borrower, which
has acted through its authorized agent ; otherwise, only the party
to whom credit was actually given can be held. Suppose there is
no partnership in contemplation at the time goods are sold or
money is loaned. In such case, though the money or the goods
subsequently go to the use of a copartnership, of which the visible
contracting party is a member, there can be no pretence for hold-
ing the firm liable, since, at the time of the formation of the
contract, it had no existence even in intention, (w)
(v) Gardiner v. ChiMs, 8 C. .fe P. 345 ; of a joint adventure, and one of them with
Broune v. (Ubbins, 5 Bro. P. C. 491 (Dub- the view pledges his credit for his allotted
lin ed.), 3 Bro. P. C. 127. contribution to the joint capital, he only
(w) Such was the case of Young v. can be made liaV)le upon the contract, un-
Huuter, 4 Taunt. 582. Hunter & Ray- less, at the time of making it, the partner-
ney had purchased goods of the plaintiffs ship was in existence and capable of being
and other persons, which they intended to a contracting party. And hence, if by the
ship for tlie Baltic ; and the defendants, parties' agreement the beginning of the
Hotf ham & Co., who were not otherwise partnership appear clearly dependent upon
jtartners of Hunter & Co., were afterwards some act or event subsequent to the making
allowed to join in the adventure, and to of the contract in (juestion, the possibility
have a fifth share upon the goods being of tlie firm's 'neing liable thereon is at once
put on board. The plaintiffs knew noth- excluded. This proposition is illustrated
ing of Hoff ham & Co., but sold the goods by the case of Saville i'. Robertson, 4 T. R.
to Hunter & Co. only. It was held that 720. In that case Loi-d Kenyon said :
Hoff ham & Co. were not liable to pay for " The facts of the case are shortl}' these :
the goods. Heath, J. : " The proposition several persons who had no general part-
of the plaintiffs, that, if it be shown that nei'ship, nor any connection with each
at any one period of the transaction there other in trade, formed an adventure to the
was a [lartnership subsisting, it was there- East Indies. The outfit of the vessel was
fore to be inferred that there had been a a joint concern of all the partners ; and
partnership in the original purchase is that delivers the case from one considera-
whoUy unfounded." tion, namely, the parcel of co]iper for
On the other hand, if parties have sheathing the ship, which is admitted to
agreed to be partners for the prosecutioji be a partnership concern. But beyond
102
THE LAW OF PARTNERSHIP.
[CH. VI.
§ 93. Partner by holding out. — We have already seen that one
may be liable as a partner who is not so in fact, if he suffers him-
that I see no partnership between the par-
ties till all the parcels of the cargo were
(ieiivered on board ; and that made it a
combined adventure between all the par-
ties. I cannot, therefore, see how it can
be said that these goods, which were sold
to Pearce only, and on his sole credit and
account, were sold and delivered on the
partnership account. Afterwards, indeed,
these defendants were to gain or lose by
the joint cargo : when the other goods
were brought in, the partnership arose ;
but each was to bring in his own particu-
lar stock. But in this case I think that
the question stops short of att'ecting the
defendants, and I cannot see how the plain-
tiff can have a right to call on the defend-
ants, as partners, for the value of these
goods, on a supposed contract, when the
real contract between the buyer and seller
was consummated before the joint risk
began." The case of Post v. Kimberh%
9 Johns. 470, is somewhat analogous in
its facts, and exemplifies the same piinci-
ple. See Ward v. Thompson, 1 Newb,
Adm. 95, where, however, the question
arose between the partners : Spalding v.
Hedges, 2 Barr, 240, 243 ; Dunham v.
Rogers, 1 Barr, 2.'55. On the other hand,
Gouthwaite v. Duckworth, 12 East, 421, is
a case in which, from the character of the
agreement between the parties, the part-
nership was tleemed to be in no way
dependent for its beginning upon any
commingling of the several partners' con-
tributions, nor upon any other appropria-
tion thereof to the joint fund ; but to have
been in existence at the time of and for the
purpose of the purchase of such contribu-
tions. Lord EUenborough, C. J., there
said : " It comes to the question, whether,
contemjiorary with the purchase of the
goods, there did not exist a joint interest
between these defendants. The goods were
to be purchased, as Duckworth states in
his examination, for tlie adventure; that
was the agreement. Then what was this
adventure ? Did it not commence with
the purchase of these goods for the pur-
pose agreed upon, in the loss and profits
of which the defendants were to share ?
The case of Saville v. Robertson does in-
deed approach very near to this ; but the
distinction between the cases is, that there
each party brought his separate parcel of
goods, which were afterwanls to be mixed
in the conmion adventure on board the
ship, and till that admixture the partner-
ship in the goods did not arise. But here
the goods in question were purchased, in
pursuance of the agreement for the adven-
ture, of which it had been before settled
that Duckwoith was to have a moiety.
. . . If all agree to share in goods to be
purchased, ami in consequence of that
agreement one of them go into the market
and make the puichase, it is the same, for
this jJUiT^'^'"' *^^ if ^^^ the names had been
announced to the seller, and therefore all
are liable for the value of them." So in
Everitt v. Chapman, 6 Conn. 347. There
A., B., & C. were in ])artnership in the
business of tanning hides, under an agree-
ment by which A. was to furnish hides for
one-half of the stock, and was to receive
and make market for one-half of the
leather, and B. k C. were to furnish the
other half of the stock, and to make mar-
ket for the other half of the leather ; each
of the partners to purchase on his own
separate credit. B. bought hides of the
plaintiff, wOnch were charged to him indi-
vidually. But, afterwards discovering the
partnei-ship, the ])laintiff brought his ac-
tion against A., B., & C. It was held,
that the firm were liable for the value of
the hides. The court cited Gouthwaite v.
Duckworth, supra, and, commenting on
Saville v. Robertson, referred to by the
defendants, said: "This authority, then,
is so far from justifying the defence, that
it vindicates the claim of the plaintiff;
for these defendants were in partnership
when the hides were purchased — they were
boiight for the concern — they were deliv-
ered into their tannery — they went to
their joint benefit, having been purchased
by H. P. Mott, without disclosing the
names of his copartners." See also, to the
same effect, a dicttim of Gibbs, J., iu
Young V. Hunter, 4 Taunt. 583 ; Brooke
V. Evans, 5 Watts, 196 ; Griffith v. Buffum,
22 Vt.' 181. In Wilson v. Whitehead,
Ackerman & Carleton, 10 -M. & W. 503,
§ 93] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 103
self to be held out to the world as a partner.^ The reason is
obvious. Any person may lend his credit to another, as he may
lend his money or property; and if he chooses to lend his credit
the action was assumpsit lor goods sold
and delivered to the defendant, White-
head, to be used in printing the ''Sporting
Review." To establish the joint liability
with liini of Aekerinan & Carleton, a ver-
bal agreement between the tliree was i)roved
that they should bring out and be jointly
interested in the " S[)orting Review ; "
Aokerrnan was to be the publisher, and to
make and receive general payments. Carle-
ton to be the editor, and Whitehead the
printer ; and, after payment of all ex-
penses, the three were to share the profits
of tile publication eijually. Whitehead
was to furnish the pa[)er for the work, and
to charge it to the account at cost price,
and was also to charge the printing at
"master's [)rices." On this evidence the
conrt directed a nonsuit, on the ground
tliat the other defendants were not jointly
liable with Whitehead in this action, giv-
ing the plaintiffs leave to move to enter a
verdict for tlie admitted value of the paper.
On the hearing of the motion, Parke, B.,
said : " The question is. Did the other de-
fendants authorize Whitehead to purchase
the paper on their account, or on his own ?
It appears to nie, on tlie true construction
of tlie contract, that the latter was the
case. Wlien tlie paper was in his posses-
sion, he was at liberty to have appropriated
It to any other purpose than to tlie ' Sport-
ing Review.' " That is, from the nature of
the agreement between the parties, it was
apparent that, contemporary with the pur-
chase of the goods in (question, there was
no joint interest in them on the part of the
defendants ; but their joint interest therein
arose subse(|uent to the contract of sale,
and only after some act had been per-
formed by Whitehead by which the paper
was appropriated to the use of the partner-
ship." See Barton v. Hansom, 2 Taunt.
49 ; Aspinwall i-. Williams, 1 Ohio, 38 ;
Austin V. Williams, 1 Ohio, 282. Of
course the same considerations are appli-
cable where, in pursuance of an agreement
to prosecute an adventure in companj',
one or more of the partners, on his own
credit, borrows money, and puts it into
the firm as his contribution to the joint
fund. Smith v. Craven, 1 Cr. & J. 500.
1 Ex parte Broome, 1 Rose, 69 ; De Berkom v. Smith, 1 Esp. 29; Goode t?. Harrison,
5 B. & Aid. 147 ; Baird v. Planque, 1 F. & F. 344 ; Edmundson v. Thompson, 2 F. &
F. 564 ; Kirkwood v. Cheethani, 2 F. & F. 798; Gurney v. Evans, 3 H. & N. 122 ;
Martyn v. Gray, 14 C. B. N. s. 824 : Donbleday v. Mnskett, 7 Bing. 110 ; Lake v.
Argyll, 6 Q. B. 477 ; Collingwood v. Berkeley, 15 C. B. N. s. 145 ; Maildiek v.
Marshall, 16 C. B. N. s. 387, 17 C. B. N. s. 829 ; Buckingham v. Burgess, 3 McLean,
364; In re Jewett, 15 N. B. R. 126 ; In re Krueger, 2 Low. 66 ; Schlapbaek v. Long,
90 Ala. 525, 8 So. 113 ; Bowie v. Maddox, 29 Ga. 285 ; Carmichael i>. Greer. 55 Ga.
116 ; Fisher v. Bowles, 20 111. 396 ; Sherrod v. Lnng.lon, 21 la. 518 ; Walrath v. Viley,
2 Bush, 478 ; Palmer v. Pinkham, 33 Me. 32 ; Potter v. Greene, 9 Gray, 309 ; Rice v.
Barrett, 116 Mass. 312 ; Mershon v. Hohensack, 2 Zab. 372 ; McStea v. Matthews, 50
N. Y. 166 ; Reber ■;;. Col. Machine M'f'g Co., 12 Oh. St. 175 ; Speer v. Bishop, 2 I Oh.
St. 598 ; Drennen v. House, 41 Pa. 30 ; Furber v. Carter, 11 Humph. 271 ; Gushing r.
Smith, 43 Tex. 261 ; Hnris v. Crary, 67 Tex. 383, 3 S. W. 316 ; Stearns v. Haven,
14 Vt. 540 ; Mathews v. Felch, 25 Vt. 536 ; Wait v. Brewster, 31 Vt. 516.
This princi]ile is a]iplicable where one represents himself to be partner in a business.
Brugman v. M.Guire, 32 Ark. 733 ; Dailey v. Coons, 64 Ind. 545 ; Dodd v. Bishop, 30
La. Ann. 1178 ; Baldey v. Brackenridse, 39 La. Ann. 660, 2 So. 410; Cirkel v Cros-
well, 36 Minn. 323, 31 N. W. 513 ; Shaferu. Randolph, 99 Pa. 2.i0 ; Walker v. Brown,
66 Tex. 556 ; Coi'nhauser v. Roberts, 75 Wis. 554, 44 N. W. 744.
It is equally applicable where one allows himself to be held out as partner by another ;
lint his eoiisent to tlie holding out must be proved. Humes v. O'Bryan, 74 Ala. 64 ;
Alabama Fertilizer Co. v. Reynolds, 79 Ala. 497 : Kritzer v. Sweet, 57 Mich. 617, 24
N. W. 764 ; Seabury r. P.olles, 51 X J. 103, 16 All. 54.
104 THE LAW OF PARTNERSHIP. [CH. VI.
or responsibility, he must of coui'se abide by the consequences of
any contracts made on the faith of it. Most cases of this kind
occur where a partner retires from a firm, and his retirement is
unknown, either through his wish or his negligence. These
we propose to consider together in reference to the duties and
liabilities of a retiring partner.
It has been said, holding out one's self as partner to the world
" is not a wise expression ; " and the question should be, " whether
he so held himself to the plaintiff, or under such circumstances of
publicity as to satisfy a jury that the plaintiff knew of it and
believed him to be a partner." {y) But to hold one's self out " to
the world " means, precisely, so to hold one's self out as to justify
anybody and everybody in believing him a partner ; and it seems
to be a very good expression for this purpose. It is a different
case, when the plaintiff relies upon tiie fact that the party sought
to be charged so held himself out specifically to the individual
charging him.
[One who is held liable as a partner because he has been so held
out is called a nominal or quasi partner.
This liability because of holding out rests upon the doctrine of
estoppel, because the defendant, having represented himself to be
a partner, cannot afterwards by showing the falsehood of the
representations defraud those who have acted upon them. It does
not make him an actual partner.^ Therefore he is held liable only
to one who knew of the holding out at the time he acted, and acted
in reliance upon it.^J
(y) So said, by Parke, J., in Dickinson v. A'alpy, 10 B. & C. 140.
1 Grabenheiraer v. P.indskotf, 64 Tex. 49.
2 A^ice V. Anson, 7 B. & C. 409 ; Dickinson v. Valpy, 10 B. & C. 128, 140 ; Carter
XK Whalley, 1 B. & Ad. 11 ; Pott v. Eyton, 3 C. B. 32 ; Edmundson v. Thompson, 31
L. J. Ex. 207; Thompson v. First Nat. Bank of Toledo, 111 U. S. 529 ; Benedict v.
Davis, 2 McLean, 347; In re Murray, 13 F. R. 550 ; Marble v. Lypes, 82 Ala. 322,
2 So. 701 ; Tanner & Delaney Engine Co. v. Hall, 86 Ala. 305, 5 So. 584 ; Levy v.
Alexander, (Ala.) 10 So. 394; Alexander t;. Haiidley, (Ala.) 11 So. 390; Bowie i;. Maddox,
29 Ga. 285; Hefner v. Palmer, 67 111. 161 ; Brown r. Rains, 53 la. 81, 4 N. W. 867; Mark-
ham V. Jones, 7 B. ilon. 456 ; Wood v. Pennell, 51 Jle. 52 ; Fitch v. Harrington, 13
Gray, 468 ; Partridge v. Kingman, 130 Mass. 476; Brown v. Grant, 39 Minn. 404, 40
N. W. 268 ; Rime] v. Hayes, 83 Mo. 200 ; Hahlo v. Mayer, 102 Mo. 93, 13 S. W. 804 ;
Parchen v. Anderson, 5 Mont. 438, 5 Pac. 588; Seabury v. Bolles, 51 N. J. 103, 16 Atl.
54; Burnett y. Snyder, 76 N. Y. 344, 81 N. Y. 550 ; Cook v. Penrhyn Slate Co., 36 Oh.
St. 135 ; Denithorne v. Hook, 112 Pa. 240, 3 Atl. 777 ; Walker v. Brown, 66 Tex. 556,
1 S. W. 797. See also Buckingham v. Burgess, 3 McLean, 364, 549 ; Hicks v. Cram,
17 Vt. 449.
One or two cases contra cannot be considered as law. Young v. Axtell, 2 H. Bl.
242 ; Poillon v. Secor, 61 N. Y. 456.
So where one, who had held himself out as a partner, informed the agent of the
§ 94.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 105
Much the greater number of cases relating to the liability of
one hold out as a ])artner turn upon the rights and duties of a
retiring partner, and will be considered when treating of that
subject.
§ 94. What constitutes holding out. — Persons may come under
a general liability by merely having the same firm name, provided
tiiey do business in such a way as to lead to the inference sug-
gested by the name, of an identity of interest, (a) So, too, if one
is a partner m a house for some business, and the other partners
carry on another business in which he has no interest, if nothing
is done or said and no circumstances exist to indicate his want of
community in this last l)usiness, so that those dealing with the
other partners are justified in believing that they are dealing
with him also, he is then liable as a partner, {b)
(«) James Spencer carried on business James, and became liable accordingly.
in Manchester under the firm of James Spencer v. Billing, 3 Camp. 310. And two
Spencer & Co.; and William Spencer, in firms will be held to be one, if they as-
London, under the style of Sjiencer & Co. sume to constitute one. Beall v. Lowndes,
It was held, that William Spencer, having 4 S. C. 258.
been in the habit, personally, or by his (b) Wood & Payne were in partnership
clerk, of accepting bills drawn upon James as wholesale grocers. Wood, Payne, &
Spencer & Co., and addressed to William Steele were partnei-s in buying and selling
Spencer's place of business in London, had cotton ; this last business being carried on
thereby held himself out as a partner of at Wood & Payne's counting-house, and in
plaintiff at the time of making the contract on which suit was brought that he was not
a partner, he could not be held as partner. Willis v. Rector, 50 F. K. 684. And so
where the plaintiff from any cause had notice. Alabama Fertilizer Co. v. Reynolds, 85
Ala. 19, 4 So. 639. See Alderson v. Pope, 1 Camp. 404 n.; Entwisle v. Mulligan,
(Pa.) 12 Atl. 766 (semb^e).
Where the representation was not that the party was, but that he was about to
become, a partner, he cannot be held as a nominal partner, since an estoppel cannot be
founiled upon a representation as to the future. Bourne v. Freeth, 9 B. & C 632 ;
Reynell v. Lewis, 15 M. & W. 517. And so a representation after the contract is made
will not make one a nominal partner. Ridgway v. Philip, 1 C. M. & R. 415.
If the plaintiff, at the time of dealing with a firm, had been led by the defendant to
believe the latter a partner, and therefore dealt with the firm believing defendant to be
bound, the defendant is liable, although no special reliance was placed on his credit.
Strecker v. Conn, 90 Ind. 469 ; Lieb (;. Craddock, 87 Ky. 525, 9 S. W. 838.
It has been held in North Dakota that if the holding out as partner continues for a
long time, the plaintiff need not show that he relied upon the representation ; for such
reliance will be presumed. Braithwaite v. Power, 1 N. D. 455, 48 N. W. 354. And
in Rizer v. James, 26 Kas. 221, it was held that even in the absence of evidence that
the plaintiff was misled by the holding out, the reputed partner would be liable as
nominal partner.
A plaintiff may prove that the defendant was held out as partner with his own con-
sent by showing such holdings out, though they did not come to the plaintiff's knowl-
edge ; and may then show that he relied upon the defendant's partnership hy showing
a holding out to him, though not by consent of the defendant. Fletcher v Pullen, 7.0
Md. 205, 16 Atl. 887.
106
THE LAW OP PARTNERSHIP.
[CH. VI.
The rule, then, is that every one who authorizes another to
believe him a partner, is, as to the person so authorized, a part-
ner ; but it must also be true that this authorization must be such
as would be so regarded by a reasonable and fair man ; and a
mere conjecture that a man is a partner, even from circumstances
tending that way, is not sufficient to hold him as such, (e)
Usually, the question whether one is liable as a partner because
so held out by himself, or with his consent, turns upon the force
and meaning of his acts. If his name is advertised, (q) or is on
the name of Wood & Paj'iie. Steele, how-
ever, had no concern in the grocery busi-
ness, nor did he take an active part in the
cotton business ; nor was lie known as a
2)artner therein, either to the plaintiffs or
to the woild. Wood & Payne bought
groceries of the plaintiffs ; for which they
gave a bill of exchange I'eceived by Wood
& Payne, as cotton dealers, for cotton sold
to the drawer, and in which Steele was
interested. This bill was payable to the
defendants or order, and was indorsed by
either Wood or Payne, by the name of the
firm of Wood & Payne. It was held that
Steele was liable as partner on such indorse-
ment. Swan V. Steele, 7 East, 210. See
Miner v. Downer, 19 Vt. 14. Assumpsit
on a bill of exchange by the indorsees
against the defendant as one of the
drawers, the other drawer having become
bankrupt. The bill was drawn in the
name of "James King & Co.," under
which firm the defendant and his partners
had traded. It also appeared that there
were other partnerships carried on under
the firm of "James King & Co.," in
which the other drawers were concerned,
but in which the defendant had no share.
The defendant offered to show that this
bill was not drawn on account of the part-
nership in which he was concerned, but on
account of one of the others, and that he
knew nothing of it. Lord Kenyon was of
opinion that the defendant was neverthe-
less liable ; he had traded with the other
partners under that firm, and persons tak-
ing bills under it, though without his
knowledge, had a right to look to him for
payment. Baker v. Charlton, Peake, 80.
See Fleming t\ McNair, cited in 1 Mon-
tagu on Part. 37, note (c); and in 3 Dow,
229. In Baker I'. Nappier, 19 Ga. 520, it
appeared that Kilgrow & Price were in
partneiship in the hotel business, and
Kilgi'ow & Patillo in the grocery business.
From the evidence, also, it was doubtful
whether each firm did not sometimes use
or recognize the name of E. W. Kilgrow &
Co. as its own. For goods bought of Kil-
grow, in the name E. W. Kilgrow & Co.,
the plaintiifs sought to hold the firm of
Kilgrow & Price. The court held, that the
jury should be instructed, " that, if Baker
& Hart (the plaintiffs), after taking reason-
able care to find out which firm Kilgrow
was dealing for, really thought he was
dealing for that in which Mrs. Price. was a
member, and so sold him the goods, in-
tending them for that firm, and if the
goods were adapted to the business of that
firm, — then that firm was liable to pay
for the goods, although Kilgrow, in truth,
intended them for the other firm, and
although they went into the other firm."
(e) This is well illustrated by the lan-
guage of the court in Baker v. Kappier, 19
Ga. 520, which has just been cited. In
the course of its opinion in that case the
court said : "A merchant, in dealing with
a i)erson known to him to be a member of
two different firms, and in resi)ect to goods
suitable to either firm, would in general
be in the exercise of no more than ordi-
nary care, if he called on that person to
know which was the firm he was dealing
for. And if, without making any such
inquiry, the merchant should sell the per-
son the goods, thinking him to be acting
for one firm when he was acting for the
other, the merchant could, in general, hold
only the firm for which the person was
really acting, liable."
[q) In Ex parte Matthews, 3 Yes. & B.
125, the petitioner prayed that the joint
commission against himself and John Mat-
thews as partners might be superseded :
§ 95.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 107
the painted signs over the door, (r) on the shop-bills or cards, (s)
and he knows this and makes no objection, he is bound.
§ 95. Consent must be Shown. — But a person cannot be made
liable as j)artner because so held out, unless the holding out is
})roved to have been with his concurrence. Hence the declaration
or acts of A., implicating B. as his partner, wliile they bind the
former, cannot affect the latter, without some confirmation by
him. (t) As to public acts of this kind, there is some presump-
and stated that he, the petitioner, never
was a partner, nor interested with John
Matthews nominally or really in the prop-
erty or profits of his trade, or any other
trade ; that he was merely the sliopman to
John j\[atthews, and not a trader ; and
that there was no pretence for supposing
him a partner with John Matthews, ex-
cept an advertisement in the "Gazette,"
declaiing the partnership between them
dissolved ; which advertisement was In-
serted for the purpose of counteracting a
report that they were partners. The Lord
Chancellor held, that upon the affidavits
he could not possil)ly decide that there was
no partnership ; and, accordingly, that an
issue must be directed to try that question.
{)) Williams v. Keats, 2 Stark. 290 ;
Dolman v. Prichard, 2 C. & P. 104.
(s) Young V. Axtell, 2 H. Bl. 242 ;
Gill V. Kuhn. 6 S. & R. 338 ; Benedict v.
Davis, 2 McLean, 348. See further, for
illustrations of the methods by which per-
sons may exhibit themselves as partners.
Ex parte Langdale, 18 Ves. 300 ; s. c.
2 Rose, 444 ; Bond v. Pittard, 3 M. & W.
357 ; Guidon v. Robson, 2 Camp. 302 ;
Geddes v. Wallace, 2 Bligh, 296 ; Stearns
V. Haven, 14 Vt. 540 ; Hicks v. Cram, 17
Vt. 449 ; Cottrill v. Vanduzen, 22 Vt.
511 ; Matthews v. Felch, 25 Vt. 536 ;
Perry v. Randolph, 6 Sm. & M. 335 ;
Chapman v. Wilson, 1 Rob. (Va.) 267;
Mershon v. Hobensack, 2 N. J. 372: Smith
V. Smith, 27 N. H. 244 ; Holmes v. Por-
ter, 39 Me. 157 ; Barnett v. Smith, 17 111.
565 ; Mi'Mnllan v. Mackenzie, 2 Greene
(la.), 368 ; Chidney r. Porter, 21 Pa. 390.
If A., wishing to get bills discounted, in-
troduces B., as his partner, to 0., but the
only connection between A. and B. is in
discounting bills, B. is not hereby so held
out as a general partner with A. as to be
liable for goods afterwards bought by A.
of a person who had been informed bj' C.
that A. and B. were partners. Berkom v.
Smith, 1 Esp. 29. See Ridgway v. Philip,
5 Tyrw. 131. A person is not liable as
partner because so held out, who has signed
his name to an instrument importing that
the subscribers intend, upon the fulfilment
of certain conditions, to cairy on business
ill ])artnership. He has not thereby held
himself out to the world as a partner in
a company already formed. Bourne v.
Freeth, 9 B. & C. 632. Nor is one who
has retired from a firm, and given due
notice thereof, liable as a partner to third
persons for goods supplied to a ship, be-
cause, having before retirement defectively
conveyed his interest as a partner therein,
his name appears on the ship's register
down to a i)eriod subsequent to the deliv-
ery of the goods, when he joins with the
assignees of the other partners in making
a good title thereto to their vendee. M'lver
V. Humble, 16 East, 169. See Hoare v.
Dawes, 1 Doug. 371.
(0 Whitney v. Ferris, 10 Johns. 66 ;
McPherson v. Rathbone, 7 Wend. 216 ;
Jennings v. Estes, 16 Me. 323 ; Thornton
V. Kerr, 6 Ala. 823; Tuttle v. Cooper,
5 Pick. 414 ; Anderson v. Levan, 1 W. &
S. 334 ; Taylor v. Henderson, 1 7 S. & R.
453. See Matthews v. Felch, 25 Vt. 536 ;
McBride v. Protection Ins. Co., 22 Conn.
248, 259. " The holding one's self out to
the world as a partner, as contradistin-
guished from the actual relation of part-
nership, imports at least the voluntary act
of the party so holding himself out. It
imydies the lending of his name to the
partnership ; and is altogether incompati-
ble with the want of knowledge that his
name has been so used. Thus, in the or-
dinary instances of its occurrence, when a
108
THE LAW OF PARTNERSHIP.
[CH. VI.
tion that he knows and permits them ; and he can escape the
liability only by proving his want of knowledge and consent, (u)
If he knew, and neither consented nor refused, nor took any
steps in relation to it, then he would be held as consenting ; for
he is in fault, and he should suffer rather than the wholly inno-
cent persons whom he permits to be deceived. And if he does
something in the way of objecting, the question then is, What
and how much ? (v) and we take the only rule to be, that if he is
held out as partner, and knows it, he is chargeable as one, unless
he docs all that a reasonable and honest man should do, under
similar circumstances, to assert and manifest his refusal, and
thereby prevent innocent parties from being misled. If he does
anything which might fairly produce the impression that he is a
partner, or, when another does this, fails to do what he should to
remove or prevent this impression, then he is as much liable as
if he calls himself a partner.
§ 96. Nominal Partner as Party in Suit. — If one is chargeable
as partner because so held out, he may be treated as one, not
only by being made responsible, but by being joined with the
partners in a suit against them, {w) Where there is a partner-
person allows Lis name to remain in a firm,
either exposed to the public over a shop
door, or to be used in printed invoices or
bills of parcels, or to be published in adver-
tisements, the knowledge of the j>arty that
his name is used, and his consent thereto,
is the very ground upon which he is es-
topped from disjinting his liability as part-
ner." Fox V. Clifton, 6 Bing. 776.
(k) See cases cited in preceding notes.
[Where general reputation of a partner-
ship was so widespread that it must have
come to the knowledge of the parties af-
fected, who did not deny it, this is a suf-
ficient holdding out. Tanner & Delaney
Engine Co. v. Hall, 86 Ala. 305, 5 So.
584.]
(v) As in the case of a retiring partner,
who, it seems to be settled, must notify
the dissolution to the public by proper
advertisements, and, perhaps, to custom-
ers by a particular notice. Newsonie v.
Coles, 2 Camp. 617. See Leavitt v. Peck,
3 Conn. 124. See also post, § 315 et seq.
(?/') That a nominal partner may be
joined in a suit against the other partners
is shown by almost every case in which
this liability of a nominal partner is tested.
See Goode v. Harrison, 5 B. & Aid. 156.
That one lield out as partner may be a
co-plaintiff in a suit with the other part-
ners, see Guidon v. Robson, 2 Camp.
302 ; Kell v. Nainby, 10 B. & C. 20. In
Smith V. Sherwood, 10 Jiir. 214, A. filed a
bill for an account against B. & C, alleg-
ing himself a partner with them. B. &
C, in their answer, denied the existence
of the partnership, and stated that the
plaintiff was their foreman, whom they
had contemplated taking into partner-
ship, and whom, therefore, they had al-
lowed to hold himself out as their partner
in many ways. They admitted that the
accounts had been made out in the name
of B., C, & A. ; that, in a certain specifi-
cation of buildings required by them, the
buildings had been described as the prop-
erty of B., C, & A. ; and also that they
had served A. with a notice to dissolve
partnership. The Vice-Chancellor held,
that there was sufficient proof of the exist-
ence of a partnership between B., C, & A.
Such a partner may also be made a bank-
rupt as a member of the firm. Jle Krueger,
2 Low. 66. [1)1 re Rowland, L. R. 1 Ch.
421.1
§ 97.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 109
ship as to third parties, the law presumes a partnership as
between themselves, (y)
[And indeed it is usually impossible for the plaintiff to know,
before bringing suit, that the nominal partner is not a true
partner.
But since the nominal partner is not a partner in fact, nor inter-
ested in the property of the partnership, he should not be joined
as plaintiff in an action on a simj^lc contract of the firm, (jjy) ^
But if the nominal partner is named as a party to a bill or note
he must of course be joined in any action brought upon it ; since
an action on mercantile paper must be brought by or against the
parlies to it.^]
§ 97. Firm Name. — Every partnership sliould have its proper
name or style. It may be whatever name the partnership chooses ;
(j^e') and this name need not be prescribed in the articles, or
determined upon by express agreement. It may grow out of the
custom of the firm, and the manner in which it carries on its
transactions. (/) If it have no name, and even if it avoid having
(y) Lord EUenborough in Peacock v. to have no interest whatever in the con-
Peacock, 2 Camp. 4.5. cern. Parsons v. Crosby, 5 Esp. 199 ;
{ijjj) A nominal partner need not join Davenport v. Rackstrow, 1 C & P. 89;
as a coplaintitf in an action on a con- Kell v, Nainby, 10 B. & C. 20 ; Glossop
ract made by the firm. Ex jjarte Alex- v. Colman, 1 Stark. 25 ; Teed v. Elworthy,
ander, 1 Glyn & J. 409 ; Atkinson v. 14 East, 210.
Laing, 1 Dow. & R. 16 ; Bernard v. Wil- {ce) Crawford v. Collins, 45 Barb. 269.
COY, 2 Johns. Cas. 374. See Allen v. (/) In Le Roy v. Johnson, 2 Pet. 186,
White, Minor, 365. On the other hand, Hoffman & Johnson had entered into arti-
the nominal partner may be a witness cles of copartnei'ship, and one of the ques-
for the plaintiff, if he be clearly shown tions in the case was, what the firm-name
1 Kell V. Nainby, 10 B. & C. 20 ; Cox v. Hubbard, 4 C. B. 317 ; Spnrr v. Cass,
L. R. 5 Q. B. 656 ; Bishop v. Hall, 9 Gray, 430. See also Teed v. Elworthy, 14 East,
210 ; Parsons v. Crosby, 5 Esp. 199 ; Davenport v. Rackstrow, 1 C. & P. 89 ; Harrison
V. Fitzhenry, 3 Esp. 238 ; Glossop v. Colman, 1 Stark. 25 ; Ex parte Watson, 19 Ves.
461 ; Kieran v. Sandars, 6 Ad. & El. 515 ; Allen v. White, Minor, 365.
2 Guidon v. Robson, 2 Camp. 302. In that case the action was brought by Guidon
alone against Robson, upon a bill of exchange, drawn in the name of Guidon & Hughes
upon Robson, and by him accepted. Hughes was simply a clerk of Guidon. Lord
EUenborough 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 partner as between himself and the rest of the world. Persons in trade had better be
very cautious how they add a fictitious 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 mat-
ters not what agreement there may be between him and those who share the profit and
loss. They are equally responsible, and the contract of one is the contract of all. In
this case, the declaration states that the defendant promised to ])ay 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."
110
THE LAW OF PARTNERSHIP,
[CH. VI.
one, the responsibilities of those who can be shown to be actually
partners will not be prevented or lessened. (</) [Any name may
be adoj)ted as the firm name, even though of a form appropriate
for a corporation.]*
But, when there is an adopted and recognized style, nothing
else, as such, binds the partnership.^ But though a partnership
style has been agreed on in the articles or otherwise, and has
been used accordingly, proof that another name is also custom-
was. Washington, J., said : " It is quite
clear that the name of this firm is novvliere
designated in tlie articles of copartnership
which have been referred to. The mode
in which a paiticular branch of their busi-
ness was to be conducted cannot reason a-
bl)'^ be construed to give a name to the
firm. It manifestly had no allusion to
that subject. The stipulation that the
funds necessary for the purposes of the
concern should be raised upon the paper
of Johnson, to be indorsed by Hoffman,
or in such other shape as might be found
most suitable to the object of the {larties,
no more designated Jacob Hoflfman than it
did George Johnson as the name of the
copartnership. It is unnecessary to decide
whether the omission to agree upon a part-
nership name in the body of the instru-
ment was or was not supplied by the
signatures of the contracting parties to
it ; because it was in full and uncontra-
dicted proof that, after the concern went
into operation under the articles, their
books were kept, and the bills and ac-
counts relating to their business were made
out at their warehouse, in the joint names
of Hoffman & Johnson, by which name
the firm was generally known in Alexan-
dria, and in which they acted in relation
to the business of the concern, and adver-
tised in the newspapers. Xow, it cannot
be questioned but that a name thus as-
sumed, recognized, and publicly used, be-
came the legitimate name and style of the
firm, not less so than if it had been adoi>ted
by the articles of copartnership." W. G.
& C. agreed to enter into partnership ; but
the articles were silent as to tlie name of
the firm. C. bought merchandise on joint
account, and executed a note therefor,
signed in the name of himself & Co. It
was held, that, in the silence of the arti-
cles on tlie subject, the fair presumption
was that the style adopted by C. was that
agreed upon by the parties as the name of
the firm. Aspinwall v. Williams, 1 Ohio,
38 ; Drake v. Elwyn, 1 Gaines, 184. In
Kipley v. Colby, 23 N. H. 443, the court
said: "Was the evidence competent to
show that the plaintiffs constituted the
firm of S. F. Ripley & Co. The evidence
was direct that the plaintiffs agreed to
hire a stable for their common use ; that
they afterwards occupied this stable ac-
cording to this agreement ; that they fur-
nished mone)' in the stipulated proportions
to pay their hostler, and to pay the rent.
They made these repairs on the building
while tliey so occupied it. Tiiey entered
and held under a lease made by the de-
fendants to S. F. Ripley & Co. This
must be hehl competent and (juite satis-
factory evidence that the plaintiflfs were
partners under the firm of S. F. Ripley &
Co., and, as such, made the repairs in
question."
(g) See Bank of Rochester v. Mou-
teath, 1 Den. 402.
1 Carico v. Moore (Ind.), 29 N. E. 928 ; Holbrook v. Insurance Co., 25 Minn. 229.
•■2 Kirk V. Blurton, 9 M. & W. 284 ; Faith v. Richmon<l, 11 A. & E. 339 ; Norton
V, Thatcher, 8 Neb. 186. See also Norton v. Seymour, 3 C. B. 792 ; Maclae i;. Suth-
erland, 3 E. & B. 1 ; Drake v. Elwyn, 1 Gaines, 184 ; Michael v. Workman, 5 W. Va.
391.
There is one exception to the general rule that a partner can bind his firm by the
issue of commercial paper only when he makes use of the firm name. At common
§ 97.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. Ill
aril}' employed in the dealings of the firm, with the concurrence
of all the partners, or even of the managing partner alone, will
sultice to make that name one by which the partnership will be
bound. (A) [And a change in the name of a firm without any
change in membership, does not change the partnership itself.]^
If the style be A., B.,& Co., the Co. being C, a note signed A.,
13., & C, in which they jointly and severally promise to pay, is
not a partnership note. («) Neither would a note signed " A. &
B." be the note of the firm. In either case, or almost any other,
upon proof that the partnership was really the party in interest
(/i) Williamson v. Johnson, 1 B. & C.
146. Abbott, C. J.: "It appears from
the evidence tliat Hopgootl, Uixon, and a
person named Lye, carrying on business
in partnership together, were known by
the description ot Hopgood & Co. All
their transactions of buying and selling
were carried on in that name ; but Dixon,
who was proved to be the manager of the
whole business, was also in the habit of
indorsing bills in the name of Hopgood &
Fowler, by procuration, for the purpose of
getting them discounted. The question
then is, whether that sufficiently proves
the existence of persons using, for the
purposes of business, the style and firm
of Ho[igood & Fowler ? At the trial I was
at first inclined to yield to the objections
but afterwards altered my 0[)inion. I still
think that, as between third persons, there
was sufficient evidence of an imlorsement,
by persons using the style and firm of
Hopgood & Fowler ; inasmuch as Dixon,
the managing partner in the firm of Hop-
good & Co., was in the habit of issuing
bills into the world, indorsed under the
former designation." [Wright u. Hooker,
10 X. Y. :,1 ; Moffat v. McKissick, SBaxt.
517.] See Faith v. Richmond, 11 A. &
E. 339 ; Rogers v. Coit, 6 Hill, 322 ;
Mifflin V. Smith, 17 S. & R 165 ; Pal-
iner v. Stephens, 1 Denio, 471 ; Tarns v.
Hetner, 9 Fa. 411 ; Le Roy v. Johnson, 2
Pet. 186.
(i) Perringf. Hone, 4 Bing. 32 ; Crouch
V. Bowman, 3 Humph. 209. See Marshall
V. Colman, 2 Jac. & W. 266 ; Kendrick v.
Tarbell, 27 Vt. 512 ; In re Warren, 1
Ware (Daveis), 320; Filley v. Phelps,
18 Conn. 294. In Lord Galway v. Mat-
thew & Smithson, 1 Camp. 403, where the
action was against the defendants as sur-
viving partners, Lord Ellenborough held,
that a note made in the following manner
was sufficient on the face of it to bind the
whole firm • " Sixty days after date, I
pay Lord V^iscount Galway, or order, 2001.
value received. For J. Matthew, T. Whit-
smith, and T. Smithson, J. Matthew."
But this must of course proceed on the
presumption that the names of all the
partners, as subscribed by the partner
acting for the firm, were to be considered
the style of the fimi until the contrary
•was proved. Caldwell v. Sithens, 5 Blackf.
99. In Norton v. Seymour, 3 C. B. 792,
the action was upon a note drawn in the
following form : " Two months after date,
law a parol acceptance of a bill of exchange is good ; therefore where a partner accepts
a firm bill by signing his own name, this charges the firm, the true reason being that
there is a valid parol acceptance. Mason v. Rumsey, 1 Camp. 384 ; Jenkins v. lAIorris,
16 M. & W. 877 ; Lindus v. Bradwell, 5 C. B. 583 ; Jlay v Hewitt, 33 Ala. 161 ;
Dougal i;. Cowles, 5 Day, 511 ; Beach v. State Bank, 2 Ind. 488 ; Tolman v. Hanrahan,
44 Wis. 133. Contra, Taber v. Cannon, 8 Met. 456.
But where an acceptance is required by statute (e. g. 19 & 20 Vict. c. 57, § 6) to be
signed by the party charged, the signature of one party does not bind the firm.
Heenan v. Na.sh, 8 ^linn. 407.
1 Gill V. Ferri.s, 82 Mo. 156.
112
THE LAW OF PARTNERSHIP.
[CH. VI.
and under obligation, and that another style than that of the
partnership was used through inadvertence or fraud, the partner-
ship would be held liable ', {j ) but no signature other than their
own would hold them as their signature, {k) ^
we promise to pay," &c., and signed,
" Thomas Seymour, Sai'ali Ayres," in the
liandwriting of Seymour. The defendant
Ayres had formerly carried on business at
tlie place at which the goods, in respect of
which the above note had been given, had
been su]iplied, and had admitted that she
was in partnership with Seymour. A
circular and invoice issued by Seymour
were also in evidence ; the circular stating
that the business would in future be car-
ried on in the names of Seymour & Ayres,
and the invoice being headed Sej'mour &
Ayres. It was objected, on the part of
the defendant Ayres, that, assuming the
existence of a partnership between herself
and Seymour, the latter had no authority
to bind her by a bill or note signed other-
wise than with the name of the firm. On
motion for a new trial of the case, Maule,
J., said. " As to the form of the note, it
is to be observed that it is signed by .Sey-
mour in the name of himself and the other
member of the firm. Suppose there was
no authority so to sign it, other than the
general authority conferred by the part-
nership, I should hesitate to say that one
of two partners could not bind the other
by signing the true names of both, instead
of the fictitious name. That, however, is
not the question here. The circular states
that the business will in future be carried
on in the names of Seymour & Ayres ;
that is, in the names of the two persons
mentioned, whatever those names may be.
Thomas Seymour is the name of the one,
and Sarah Ayres that of the other. There
is, therefore, sufficient evidence of a spe-
cial authority to sign the note in those
names, if such special authority were
necessary."
(j) kinsman v. Dallam, 5 Monr. 382 ;
Crozier v. Kirker, 4 Tex. 252. In Faith v.
Richmond, 11 Ad. & Ell. 339, Richmond,
Barbour, & Hannay were in ])artnership,
under the stvle of "The Newcastle &
Sunderland Wall's End Coal Company."
j\ promissory note was made by Rich-
mond, signed as follows : " For the New-
castle Coal Company, William Richmond,
manager. At the London and Westminster
Bank." It was objected that, admitting
Richmond to be entitled, as a partner, to
make promissory notes on behalf of The
Newcastle k Sunderland Wall's End
Coal Company, yet this was not a note
drawn in their behalf, and could not bind
them; "The Newcastle Coal Company"
not being their firm, nor the London &
Westminster Bank one with which they
dealt. The Lord Chief Justice, in sum-
ming up, observed, that the three defend-
ants were partners, and Richmond might
draw bills or notes as their agent ; and
that if he had done so in the name of The
Newcastle & Sunderland Wall's End Coal
Company, or if the plaintiff had been
used to deal with them as the Newcastle
Coal Company, the defendants would have
been bound ; but he left it to the jury
to say, whether, on the evidence, the note
in question was one which Richmond, as
a partner in the first-mentioned firm, had
authority to draw. A verdict being found
for the defendants, the Court of Queen's
Bench refused a rule for a new trial, on
the ground of misdirection.
(k) "If, in the body of a promissory
note, made by one partner, the language
be, 'I promise to pay,' &c., but the note
be signed with the copartnership name,
such note is binding on the firm, and not
alone on the partner who executed it."
Doty V. Bates, 11 Johns. 544. But if an
obligation on its face purports to be the
act of one partner, and to be made to se-
cure a debt due from him individually,
the mere fact that the partnership name
is signed to this instrument is not suffi-
cient to bind the firm thereby. Scott v.
Dansley, 12 Ala. 714. If a note be made
as follows : "I promise to pay," &c., and
1 The same partners sometimes carry on business in different ydaces at tlie same
time ; and it becomes a question whether there is more than one partnership. If the
§ 98] A^HO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 113
§ 98. Business done in Name of single Partner. — Questions of
this kind sunietiiues arise wliere partners in business do not
advertise or in any public way make known the fact of partner-
ship, but transact their business under the name of one of their
partners only. (I) When parties agree to transact business jointly,
or under an agreement to share in the profits, the name or firm
which they use is arbitrary and conventional. Tliey may use the
name of both, or of one of them alone, or any distinct designation,
by which all will be included and bouud, as if their names were
used. (7n) But though the business of a C(^partnership may be
transacted in the name of one partner, that partner alone cannot
bring an action for the price of goods sold by the house. The
otlujr acting and ostensible partners must Ije co-plaintitfs. {n)
And in assumpsit by a co-i)artnership, the plaintiffs must prove
who compose the firm, (nw) These questions are much compli-
cated when this partner docs lousiness on his own account also,
for then the signature may do nothing toward determining whether
be signed "For A., B., C, & D., A." or Crafts, 9 Met. 392. And where the name
" I3y A.," it seems that the whole firm is of one partner is the style of the firm,
liable thereon. Galway v. Smith, 1 Camp, that partner's 7iame, with the addition of
403 ; Hall v. Smith, 1 B. & C. 407 ; Ex "& Co." will not operate as the signature
parte Buckley, 14 M. & W. 469. Whe- of the partnership. As where J. B. & V.
tlier upon such a note there is a separate H., carrying on business as partners un-
right of action against the executing {)art- der the name of J. B. & C. H., made and
iier, see post. indorsed a bill of exchange in the name
(/) The style of a copartnership may of "J. B. & Co.," it was held, that J. B.
be the name of one of its members. Ex was not bound thereby. Kirk v. Blurton,
pnr/e, Bolitho, 1 Buck, 100 ; South Caro- 9 M. & W. 284. See Maclae v. Suther-
liiia Bank v. Case, 8 B. & C. 427 ; Palmer land, 3 E. & B. 34, 35 ; Forbes v. Marshall,
V Stephens, 1 Denio, 471 ; or of one who 11 Exch. 176, 180.
is not a partner. Bank of Rochester v. (n) Wilson r. Wallace, 8 S. & R. 53.
Monteath, 1 Denio, 402 ; Williamson v. (im) Patten v. Whitehead, 13 Rich. L.
Johnson, 1 B. k C. 146. 150. See Pursley v. Rimsey, 31 Ga. 403 ;
(?;i) Per Shaw, C. J., in Baring v. Tilford v. Ramsey, 37 Mo. 563.
same business is carried on simultaneouslj' in several places under the same name,
there is of course but one partnership. The fact that the name under which the busi-
ness is carried on is varied would not of itself make a difference. Where the same
business is carried on by the same parties there is ordinarily but one partnership,
though the business is conducted under different firm names in the difi'erent places.
Campbell v. Colorado Coal & Iron Co., 9 Col. 60, 10 Pac. 248. But where the same
partners carry on different lines of business under different names, there are distinct pai-t-
nersliips. Second Nat. Bank v. Burt, 93 N. Y. 233. And where a firm is dissolved
without assets, and the same partners afterwards unite to carry on again the satne
business, the firms are distinct. In re Nims, 16 Blatch. 439. In fact, it is a question
neither of name, time, nor place ; but of the intention of the parties to form or not to
form a new association. Where A. & B. do business as A. & Co., and A. does busi-
ness in another place under the same name, the creditors of A. in connection with the
latter business are his separate creditors. Loeb v. Morton, 63 Miss. 280.
114 THE LAW OF PARTNERSHIP. [CH. VI.
a i)iirchasc was made, or a bill accepted, or a note given by tliat
individual alone, or by a partnership of which he was a member.
All questions of this kind are questions of fact rather than of law.
Nothing better can be said, perhaps, than that they must be
answered accordingly as the evidence brings them under this or
that general principle of the law of partnership. If, for example,
the character of the goods imrchased, the circumstances of the
purchase, the use made of them, or the circumstances attending
the giving of the paper, or any or all of these, sufficiently indicate
that the transaction was in fact on account of the partnership, it
will be held as the transaction of the partnership.^
1 Where the name of one partner is used as the tirin name it will be presumed that
the name is used on behalf of the firm. " When a name is common to a firm and to an
individual member of that iirm, and the individual member carries on no business .se})a-
rate from that of the firm, there is a presumption that a bill of excdiange drawn, accepted,
or indorsed in the common name is a bill drawn, accepted, or indorsed for the partner-
ship, and for which the partnership is liable." Yorkshire Banking Co. v. Beatsoii,
5 C. P. D. 109, 116. See to the same effect South Carolina Bank c. Case, 8 B. & C.
427 ; Furze v. Sharwood, 2 Q. B. 388 ; Winship v. Bank of U. S., 5 Pet. 529 ; Scott
V. Colmesnil, 7 J. .1. Marsh. 416 ; Piank of Rochester v. Monteath, 1 Den. 402 ; Ontario
Bank r. Hennessey, 48 N. Y. 545 ; Oliphant v. Mathews. "16 Barb. 608 ; Graeff v.
Hitchman, 5 Watts, 454 : Mifflin v. Smith, 17 S. & R. 165 Where, however, the
ostensible partner does other busine.ss on his own account, there is no presumption that
the name is used as the firm name ; and one attempting to charge the firm must show
that it w.as so used as to bind the firm. U. S. Bank v. Binney, 5 Mason, 176 ; Buckner
V. Lee, 8 Ga. 285 ; Mercantile Bank v. Cox, 38 Me. 500 ; Manuf. & Mech. Bhuk ?'. Win-
shiji, 5 Pick. 11 ; Etheridge v. Binney, 9 Pick. 272; Hastings Nat. Bank v. Hibbard,
48 Mich. 452, 12 X. W. 651 ; Fosdick v. Van Horn, 40 Oh. St. 459. See Beakes v. Da
Cnnha, 126 N. Y. 293, 27 N. E. 251. In that case, however, it is enough to show that
the name was in fact used as the firm name, either by the circumstances at the time or
by the statement at the time of the ostensible partner. Ei: parte Bolitho, 1 Buck, 100;
Trueman v. Loder, 11 A. & E. 589 ; Etheridge r. Binney, 9 Pick. 272 ; Gernon v. Hoyt,
90 N. Y. 681. Thus in United States Bank v. Binney, 5 Mason. 189, where the two
Binneys and John Win.ship were in partnership, under the firm and style of "John
Winship," and the action was against all the ])artners, as indorsers upon promissoiy
notes imloised in the name of John Winship, Story, J., said : " The notes are all
indorsed 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 farther and show, either expressly or by implication, that these notes were ottered
by Winsliip as notes binding the firm, and not merely himself ])er.s()nally, as 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 discounting these notes, acted
upon the belief that they bound the fii-m, and were for the benefit and business of the
Iirm. They must go farther, and prove that that belief was known to and sanctioned
by Winship him.self in offering 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 indorse-
ment was the indorsement of the firm and to bind them ; and that the bank discounted
the notes upon the faith of such acts and representations of Win.ship. The jury will
judge, from the whole evidence, how the case stands in these respects. The mere fact
that the discounts so procured were applied to the use of the firm is not, of itself, suffi-
cient to prove that the discounts were ]irocured on account of the firm. It is a strong
circumstance, entitled to weight, but not decisive."
§ 99.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 115
In all such cases, it must be remembered that the individual
partner whose name is used, has, by law, full authority to repre-
sent and act for the rest, and use his own name as the name of
the firm ; and his representations in a matter of business which
mi<^ht be theirs bind them all, however fraudulent on his part.
If, therefore, when he purchases goods, or gives a note, or offers
a note for discount with his indorsement, he rei)resents that he
acts for the partnership, and the person with whom he deals
believes honestly and rationally that he does so act, the partner-
ship, and of course all the partners, are bound, although no name
but that of the individual was used in the transaction.
The use of such a name as usually indicates partnership, even
though it may be primd facie evidence of partnership, is slight and
easily rebuttable.^
§ 99. Ostensible Partners pass Property. — [Where there is a
secret partner, any dealing with the firm property by the osten-
sible partnere would seem to bind the secret partners. So where
one is an ostensible sole trader, a pledge of the property for his
private debt is binding upon the secret partner.'' So where the
firm appears to consist of A. & B., who transfer firm property
in payment of their joint debt, this gives the creditor a valid
title as agaiiiijt a secret partner.'^ On the other hand, where a
1 Charman v. Heiishaw, 15 Gray, 293. Thp use of sucli a name gives rise to no pre-
sumption of partnership. Brenuan v. Pardridge, 67 Mich. 449,35 X. W. 85. Where a
statute provides that action may be brought against a partnership where it does busi-
ui'ss, it has therefore been hekl that a sole trader who in doing business added " & Co."
to his name could not be sued where he did business. Stilling t'. Heintzman, 42 Mich.
449, 4 N. \V. 165. The opposite conclusion was reached iu Rosenbaum v. Hayden, 22
Neb. 744, 36 N. W. 147, on the ground of estoppel ; but th* defect being jurisdictional,
it would seem that it could not be so cured.
2 Raba v. Eyland, Gow, 132; Cammack v. Johnson, 1 Green Ch. 163; Motley?;.
Frank, 87 Va. 432, 13 S. E. 26. See Coidiran v. Anderson Co. Bank, 83 Ky. 36.
* Tupper V. Haythorne, Gow, 135, n. ; Reid v. HoUinshead, 4 B. & C. 867 ; Locke
V. Lewis, 124 Mass. 1. See Edmunds v. Bushell, L. R, 1 Q. B. 97 ; Dean v. Plankett,
136 Mass. 195. It has been said (e. g., 2 Bates Part. 1046) that Locke v. Lewis is
opposed to the doctrine stated above, that if an individual creditor of a partner takes
firm pro^ierty in payment of his private debt the creditor cannot hold it even if he was
ignorant that the pioperty was firm property. Ante, § 90, n. 1. That the case is not
opposed to that doctrine will appear from an examination of the opinion. It was an
action of re])levin for three carriages. The plaintiff had been in partnership with I. L.
and D. C. Robinson in the business of manufacturing carriages ; but the firm was dis-
solvetl, and plaintiff^ convej-ed his share of the business to the Robinsons, and received
in return a note signed by them. He afterwards accepted from them, in payment of
the note, the three carriages in question, for which they gave him a bill receipted in
the name of the firm. Meanwhile, however, they had formed a special jiartnership
with three others ; but this new partnership was unknown to the plaintiff", and the
business was continued as before. Tlie new firm attached the carriages, and this action
was brought against the attaching sheriff. In the course of the opinion, Gray, C. J.,
116 THE LAW OF PARTNERSHIP. [CH. VI.
partner so deals with his property as to make it apparently
partnership proi)erty, one who buys it from the other partner
gets a valid title. ^]
§ 100. Liability for Tort of a Partner. — Partners are liable in
solido for the tort of one, if that tort were committed by him as a
])artner, and in the course of the business of the partnership. This
principle is frequently illustrated by cases in which a partnership
is held liable for injury caused to third persons by their having
acted upon the false and deceitful representations made to them
by one partner. (J)
(b) Patten r. Garney, 17 Mass. 182 ; assumpsit to recover the value of the
DoieniusD. McCormick, 7 Gill, 49 ; Locke goods sold, or in an action on the case to
V. Stearns, 1 Met. 560 ; National Ex- recover damages for the deceit practised,
change Co. v. Drew, 2 Macq. 103; Blair Hawkins v. Ajipleby, 2 Sandf. 421. In
V. Bromlej', 5 Hare, 542, 2 Phillips, 354. one case (Willettu. Chambers, Cowp. 814),
See Brydges v. BranfiU, 12 Sim. 369; i)articiilar circumstances were held to make
Coomer v. Bromley, 5 De G. & S. 532 ; a partner liable for a fi-aud committed by
Chester v. Dickerson, 51 Barb. 349. As his copartner before the beginning of their
wiiere the plaintiffs were induced to take ])artnership. The facts were these : Prior
the note of a third party in payment for to any partnership between the defendant
goods sold upon the representation of one and Dudley, an attorney and conveyancer,
of the defendants, who were partners, that the latter, in the year 1771, received of a
it was good, when, in fact, the defendants Mr. Bindley the sum of 350^., to be laid
knew the makers were insolvent, and the out on real security. Dudley accordingly
note worthless ; it was held, that the defen- furnished him with a mortgage from a Mr.
dants were liable, either in an action of Hughes to that amount, which, as it after-
said : "If the private creditor has no knowledge that tlie property belongs to the part-
nership, and tlie partnership has entrusted its property to one partner in such a manner
as to enable him to deal with it as his own, and to induce the public to believe it to be
his, then the other partners fall within the rule that when one of two innocent pei'sons
nmst suffer, that one must suffer who bj' his acts or conduct has afforded tlie means of
committing the fraud. To hold a sale or a contract by the ostensible partners to be
absolutel)' void, for abuse of authority by them, so as to confer no title and no rights
upon a person dealing with them in good faith, within the apparent scope of their
authority and right, with no knowledge of any abuse thereof, would be to apply to
partners, having both title and authority amjde for the purpose, a stricter and narrower
rule than is applied to an ordinary agent exercising a bare authority without interest.
. . . The case upon which the defendant principally relies is Rogers v. Batchelor, 12
Pi't. 221. But nothing was adjudged in that case inconsistent with the views above
stated. . . . "We would not be understood to affirm that the mere belief of the
separate creditor that the property which he receives does not belong to the partner-
ship will of itself be sufficient to entitle him to hold it, if there has been nothing in
the acts or conduct of the other partners to induce the belief that the partners with
whom he dealt were the sole owners. Chazournes v. Edwanls, 3 Pick. 11 ; Gordon v.
Ellis, 2C. B. 825, 829. . . . If the plaintiff, by the manner in which the general partners
dealt, and had been allowed by the special ]>artners to deal, with the property sold to
him, was induced to believe that it was the property of the general partners only, and,
acting on such belief, bought it in good faith, and with no notice or knowledge that
the .s]>eri,al partners, or any other person than the general partners, had any interest
therein, he was entitled to maintain this action."
I- Birks V. French, 21 Kas. 238 ; Taylor v. Wilson, 58 X. H. 465 {semble).
§ 101 ] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 117
§ 101. Notice to one Partner. — [Upon a similar principle, notice
of a certain state of facts, if proved as to one partner in the course
ward appeared, Dudley had forged. In
1776, Dudley and Chambers entered into
partnership, shortly after which Bindley
wanted to call in his money. The pre-
tended mortgagor was represented at the
same time to want a further sum of 150/.,
which, added to the original mortgage-
money, made together the sum of 500Z.
The plaintiff, Willett, was read}' to advance
this sum. And, in consideration of his
doing so, an assignment was made to him
of the false mortgage, before made to
Bindley. As to 180/. imrt of this sum of
500/., Willett paid it into Dudley's office
to Chambers ; who gave for it his separate
receipt, Dudley not being at home. He
subsequently called at the office, and paid
the residue to Dudley, who gave therefor
his separate receipt. It was admitted that
Chambers was in no respect privy to the
forgery. Upon these facts, the jury hav-
ing found for the plaintiff, the Court of
King's Bench held, that the verdict should
stand ; Lord Jlansfield saying: "The
defendant suffers by the rascality of a man
who had a ver}' good character. I am very
sorry for the defendant ; but, upon this
evidence, I cannot say liut that it is a part-
nership transaction." See, in illustration
of the general principle of the text,
Brydges v. Branfill, 6 Jur. 310, s. c. 12
Sim. 369 ; M'Farland v. Crary, 8 Cow.
258 ; Lowell v. Hicks, 2 Younge & C.
481 ; Blight i;. Tobin, 7 Monroe, 617 ;
Hadfield V. Jameson, 2 Munf. 53 ; Simms
V. Brutton, 5 Exch. 802 ; State v. Neal,
27 N. H. 131. In this last case it was
held, that if one of two persons unlawfully
sell spirituous liquors in pursuance of an
agreement between them, and for their
joint account and benefit, the other party
may be liable in an indictment for the sale.
State V. Bierman, 1 Strobh. 256. See
Townsend v. Bogart, 11 Abb. Pr. 355
(doubted in Stewart v. Levy, 36 Cal. 159) ;
Gray v. Cropper, 1 Allen, 337 ; Taylor v.
Jones, 42 N. H. 25; McKnight v. Ratcliffe,
44 Pa. 156. " If one partner of a firm col-
ludes with one of another firm, in a trans-
action connected with the partnership, the
partners of the person so colluding are
liable for damages to the injured firm, by
reason of that partner's misconduct." Per
Lord Tenterden in Longman v. Pole, 1
Dawson & Lloyd, 126, 1 Mood. & Malk.
223. In that case, the facts were as
follows : The plaintiffs, Longman & Co.,
bankers, with the defendants, Pole & Co.,
and Hunt, a partner in the house of
Longman h Co., sent the cashier to the
defendants with cash to take up bills
accepted by him in the name of the firm
and coming due the next day. He accor-
dingly took uj) the bills, but by Hunt's
order did not enter them in the plaintiff's
books. About the same time, Downes, a
partner in Pole & Co., told one of the
defendants' clerks that a bill of Longman's
would come in on such a daj', which he
was to pay and give to him (Downes),
debiting Hunt with it in the note-book,
so that it might not go into the ledger.
Downes afterwards gave similar directions
resjiecting another bill. Both these bills,
which were acceptances b}^ Hunt in the
name of the firm, were paid and entered in
the note-book to the debit of Hunt indi-
vidually ; and the cash payments made by
Hunt to provide for these bills were also
entered in the same book to his credit, so
that no trace of these proceedings appeared
in the pass-book of the defendants or the
check-book of the jilaintiffs. The cashier
who gave the above statement also admitted
that there were bills on Hunt's private
account to a large amount, which appeared
in the pass-book (which the plaintiffs were
not in the habit of examining), but not in
their check-book. It also appeared, that,
at the time of these transactions, Hunt had
a large private acccmnt with the defend-
ant. Upon this state of facts. Lord Ten-
terden held the action as brought clearly
maintainable. But the jury found a ver-
dict for the defendants, the collusion of
Downes not being established with suffi-
cient certainty. The rule respecting the
liability of partners for each other's torts
is, as we have seen, confined to such torts
as a partner commits in that character,
and in the course of the jmrtnership busi-
ness. Hence, where three partners were
sued in an action of trespass, on account of
the wrongful ejectment by one partner of
118 THE LAW OF PARTNERSHIP. [CH. VT.
of the business, will charge all.^ Thus in an action upon a prom-
issory note, the firm in order to show bona fides must show it as to
each partner ; ^ and where a firm takes a conveyance or mortgage
of land, notice to one partner of a defect in the title is notice to
the firm.-"^ So notice of dishonor of commercial paper to one
partner is notice to the firm.^
Notice to a partner before he entered into the partnership is
clearly not chargeable to the firm, unless there is some connec-
tion between the notice and the final transaction.^ And it has even
been held that notice to one partner prior to the dealings by the
firm, where the business was done entirely by the other partner,
is not notice to the firm." It would seem clear, at any rate, tliat
the tenant of a house, it was ruled that tort, not done in the interests of the part-
one partner could not involve his copart- nership, will not render the partnership
ners in such a wrong ; though there might liable. Wilson v. Turnnian, 6 M. & G.
he exceptions to the rule, as where the 236 ; Grund v. Van Vlack, 69 111. 478.
tres])ass was in the nature of a taking In Pierce v. Jackson, 6 ]\Iass. 245, Parsons,
which was available to the partnership, C. J., saj's : " A fraud committed by one
and they afterwaids concurred in it and of the jjartners shall not charge, the part-
received the benefit of it ; or where, before nership." And in Sherwood i;. Marwick,
the trespass, they all joined in ordering it. 5 Rle. 295, it seems to have been held,
Petrie v. Lamont, 1 Car. & M. 9.3. So an that one partner cannot be made liable for
innocent j)artner is not liable for a deceit the fraud of another, without proof of
practised by one of the partners upon a actual participation. But in Locke v.
third person, by the sale to him of such Stearns, 1 Met. 564, where all tlie partners
partner's interest in the firm. Schwa- were held liable for the deceit of one,
backer v. Rid<lle, 84 111. 517. ['i'herefore Shaw, C. J., cites and explains both the
where tlie guilty partner took a note from above cases. He considers them to have
the jiurchaser for the purchase-money, and been decided on their special facts, and to
transferred it for value to an innocent be not inconsistent with the general prin-
partner, the latter can enforce j)ayment of ciple of law under discussion. See Atkin-
the note. Liddell r. Grain, 53 Tex. 549.] son v. Mackreth, L. R. 2 Eq. 570, and
Mere subsequent approval of a partner's Linton v. Hurley, 14 Gray, 191.
1 Steele v. Stuart, L. R. 2 Eq. 84 ; In re Worcester Corn Exchange Co., 3 De G.
M. & G. 180 ; Merchants' Bank v. Rudolf, 5 Neb. 527 ; State v. Linaweaver, 3 Head,
51. So where action is brought for injury caused by the falling of a gate belonging
to the partnership, knowledge of its dangerous condition brought home to one partner,
charges the firm. Newall v. Bartlett, 114 N. Y. 399, 21 IST. E. 990. So where a statute
allowed double damages in case timber was knoivingly cut on the land of a third person,
knowledge of one member of a firm responsible for the wrongful cutting of timber makes
all the firm liable to the statutory damages. Tucker v. Cole, 54 Wis. 539, 11 N. W. 703.
2 Frank v. Blake, 58 la. 750, 13 N. W. 50 ; Smith v. Hall, 5 Bosw. 319.
3 Overall v. Taylor, (Ala.) 11 So. 738 ; Watson i'. Wells, 5 Conn. 468 ; Sanders v.
Ruddle, 2 T. B. Mon. 139. So of a lack of authority to convey personal property.
Gray v. Church, 84 Ga. 125, 10 S. E. 539; Ruckman v. Decker, 23 N. J. Eq. 283;
Williams V. Roberts, 6 Gobi. 493. But see Ringo v. Wing, 49 Ark. 457, 5 S. W. 787,
where the point was not taken.
* See post § 1 46.
6 Williamson v. Barbour, 9 Ch. D. 529 (semble).
6 Baldwin v. Leonard, 39 Vt. 260.
§ 102.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 119
notice to a mere stockholder in a joint-stock bank would not be
notice to the bank so as to affect a transaction conducted for tlie
bank entirely by the directors. And such is the rule in England.^
It IS otherwise held in Pennsylvania.^]
§ 102, Malice or Fraud of one Partner. — [The same principle
applies when a specific state of mind is required for an action of tort.
Thus whore a writing published by a firm is privileged unless there
was malice, the malice of one partner renders all the partners
liable,^ and where a firm had obtained a discharge in bankruptcy,
the whole firm is liable for a debt fraudulently contracted l)efore
bankruptcy by t)ne j)artner.'* Ikit the innocent partner cannot be
declared guilty of actual fraud. ^ One partner may be sul)jected
to exemplary damages because of the fraud of his copartner.*']
It is not always easy to draw the line between such cases and
those in which the partners are not liable. The fact that money
})rocured by a fraud becomes j)artnership stock does not render
them liable without their participation in or consent to the fraud.
At the same time, if money be raised in the course of partnership
business, by the fraud of one of the partners, the other partners
will not be relieved from their liability for the fraud, merely by
the want of evidence that the money so raised was applied to the
use or benefit of the firm, (c)
(e) Compare iMamif. & iMech. Rank v. in an action to recover dainajifes for the
Gore & (jraftoii, 15 Mass 75, with Boai-ti- deceit, the injured part}', not knowing
man v. Gore, 1.5 Mass. 331. The firm is the other jiarties, need not join them,
liable for frauds or torts practised by one Leslie v. Wiley, 47 N. V^. 649. See also
of the partners in the partnership busi- Dart v. Walker, 3 Daly, 136. The firm
ness, though the act was unknown to the is not liable lor a tort by one partner,
other partners. Chester v. Diekeison, 52 when the act is known, by the party m-
Barb. 349 ; Stewart v Levy, 36 Cal. 159 ; jured, to be in violation of law. Leslie
Wolf V. Mills, 56 111. 360; Chambers v. v. Wiley, 47 N. Y. 649. See also Dart v.
Clearwater, 1 Abb. Ajip. 341 ; -lackson v. Walker, 3 Daly, 136.
Todd, 56 Ind. 406, 75 Lid. 472. But,
1 Sp- Richmond Ry. & Electric Co. v. Dick, 52 F. R. 879; Powles v. Page, 3
C. B. 16.
2 Mci'lurkan v. Byers, 74 Pa. 405.
3 Lothrop V. Adams, 133 Mass. 471.
* Cooper V. Prichard, 11 Q. B. D. 351 (C. A.) So each member of a firm is civilly
liable for a violation of the revenue laws by a copartner, whether with oi without
the knowledge of the others United States v Thomasson, 4 Biss. 99.
5 Stewart v. Levy, 36 Cal. 159. Therefore when one partner has obtained credit
for gooils sold the firm by false ivpresentations, the innocent partner cannot be arrested
on civil process, under a statute authorizing arrest in case of fraud only. McNeeiy v.
Hayne.s, 76 M. V. 122. And one partner cannot be punished undci a statute punish-
ing fraudulent delifors, because of fraudulent coiicealiiieut by his copartner. ■ Watson
V. Hincbuian, 42 Mich. 27, 3 N. W. 236.
'^ Robinson c Goings, 63 Miss. 500 ; Peckhain Iron Co. v. Harper, 41 Oh. St. 100.
120
THE LAW OF PARTNERSHIP.
[CH. VI.
§ 103. Wrongful dealing with Money. — If a partner steals moiie}',
and deposits it to partnersliip account, innocent partners would not
be liable for tlie tort, althougb assumpsit for money had and
received might lie. {d)
(d) Rapp V. Latham, 2 B. & Aid. 795.
Latham & Parry were in paituership as
wine merchants. Parry, being the man-
aging jmrtuer, in January, 1812, wrote to
the ]ilaintitl' tliat he had an opportunity
of [jurchasiiig si.\ty-one pipes of port, at
65/. per ]iipe, and he desired the plaintiff
to remit the monej' to pay the price of
such wine and the duties thereon. The
plaintiff accordingly remitted the money,
and Parry represented that he made the
pui'chase, and afterward, in the name of the
firm, transmitted an account to the i)lain-
tiff, stating that thirty of these sixty-one
pipes have been resold at the price of 8-t/.
per pipe, and i)aid the [)roceeds of such
pretended sale to the plaintiff". Other
similar tiansactions took place, running
througli a period of about one year. Each
transaction formed the subject of a separ-
ate account, and all the purchases were
described as being made at a certain speci-
fied rate per pipe. The plaintiff conceived
that Parry was in fact laying out his
money in bona fide jnirchases of wine,
and that he actually resold part of such
wine as he represented. But, the defend-
ants failirig, ii appeared that the transac-
tions were wholly fictitious, though the
defendant, Latham, did not know that
they were so. Upon the whole account,
the plaintiff had received from the sup-
posed resales more Ujoney than he had
advanced ; but he contended that he had a
right, to take each transaction separately,
and to charge the defendants with the
amount of the money advanced to them for
the purchase of every ])ipe of wine not
accounted for. It was held, that the
plaintiff Iiaii such right ; that Latham
could not say that those transactions were
fictitious wliich Parry had represented to
be real ; ami that, beside retaining all the
money tliat had been paid to him on ac-
count of those fictitious transactions, the
plaintiff was also entitled to recover back
the sums advanced for the other supposed
purchases, as money advanced by him
upon a consideration not performed, and
as, therefore, had and received by the
defendant to his use. In Kilby v. Wil-
son, Ryan & M. 178, it was held, that no
l)roperty could be vested in a i)artnership
by the fiaud of one i)artner to which the
rest were not privy. Tliere the action
was trover for divers bales of cotton,
under the following circumstances : The
plaintiffs, who were brokers, being em-
jiloyed by T. & Co to purchase cotton,
bought it of R,, for the use of T. & Co.
The plaintiffs paid R. for the goods, de-
livered East India Company warrants for
them to T. & Co., and received, in return,
their check for the cost of the cotton and
the charges. T. immediately jdedged the
warrants to the defendant, to cover his
acceptances for two bills given to T. & Co.
But the check taken by the plaintiffs for the
cotton was dishonored ; it afterwards appear-
ing thatthe only object of T.,in the transac-
tion, was to raise money, and abscond
which he accordingly did on the same day
that he received and pledged the wariants.
Payne, T.'s partner, who drew the check,
was altogetlier unconcerned in the frauds
of the latter. The defendant's acceptan-
ces were subsequently recovered from T.,
and were deliveied to the defendant by
the as.signees of T. & Co., which firm had
been declared bankrupt. Abbott, Ld. C.
J., left it to the jury to say whether or
not T. obtained the goods from the plain-
tiffs with a preconceived design to raise
money upon them and then abscond,
without ever paying the plaintiffs ; if he
did, they should find for the plaintiffs ;
otherwise, if T. conceived the jdan of
defrauding the plaintiffs after he had ob-
tained jiossession of the cotton. See
Snaith v, Burridge, 4 Taunt. 684. See
cases cited in last note. Where one mem-
ber of a firm uses trust funds in speculation
in stocks, contrary to the copartneiship
article, and without the knowledge of the
other, the latter is not liable. Guilliou v.
Peterson, 9 Phila. 225. If a partner,
who has knowingly received stolen goods,
after discovery pays for them out of the
§ 103.]
WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 121
But if it was the business of a firm to receive property on
deposit and for safe-keeping, and one of the partners stole and
sold something so deposited, and spent the money, the partnership
would be liable. This rule, or rather the principle on which it
' asts, has been applied to trustees, one of whom forged the names
of his cotrustees, to a power authorizing his copartners to sell. (<i)^
funds of the firm, to avoid iiroai-cution,
the money so paid cannot be recovered
back in a suit in the name of the firm,
even if the otlier partner is innocent, and
tlie goods did not go to the use of the
firm. Johnson v. Byerly, 3 Head, 194.
(e) Stone v. Marsh, 6 B. & C. 551.
The plaintiffs, Fauntleroy and others, lield
stock as trustees ; and the defendants, of
whom Fauntleroy was also one, were in
partnership as bankers. Fauntleroy exe-
cuted a letter of attorney, authorizing his
copartners to sell the .said stock, and forged
thereto the names of his cotrustees. The
stock was accordingly sold and transferred
by the partners of Fauntleroy to the credit
of the purchasers in the books of the Bank
of England. The consideration-money
thereof was ]>aid into the bank of the
defendants' agents, to the credit of the
defendants, according to the usual prac-
tice on the sale of stock for the defend-
ants. Fauntleroy was permitted by his
partners to conduct the greater part of the
business of the house without their inter-
ference, and drew upon the account at
]\Iartin, Stone, & Co.'s, in the partner-
ship name (as he thought fit), without
the knowledge, and in fraud of his part-
ners, more than the amount of the said
sums so paid in. The defendants became
bankrupt. Fauntleroy was tried for for-
ging a similar instrument, convicted, and
executed. The plaintiffs then presented a
petition in bankruptcy, to be allowed to
prove the amount of stock sold, against
the joint estate of the bankrupts. There-
upon the Lord Chancellor directed an issue
to try whether the defendants and Fa~iint-
leroy were, at the date, &c., indebted to
the plaintiffs and Fauntleroy in any and
what sum of money, it being also ordered
that no objection should be taken on the
ground that Fauntleroy was interested as
a trustee jointly with the plaintiffs, and
also as a partner with the defendants. Hx
parte Bolland, Mont. & i\L 315 ; Stone v.
Marsh, Ryan & M. 364. The Court of
King's Bench held, that the money re-
ceived by the banking-house of the defend-
ants constituted a debt due from them to
the trustees. Lord Tenterden : ""Upon
this state of facts, it cannot be doubted
that it was the duty of the house to place
the money to the credit of the trustees,
and retain it for their u.se, and subject
to their order; and that no ignorance on
the part of any of them, even sujjposing
all but one to have been ignorant of the
facts (which, however, cannot have been),
nor any neglect on the part of the hou.se,
arising from a misplaced confidence re-
posed by them in one of themselves, or
otherwise, to which the plaintiffs were no
1 If it is i)art of the business of the firm to receive deposits, or if all the partners
have knowledge of a deposit, the firm is liable where one partner receives a deposit on
the firm account, and afterwards converts it or ap])lies it to the general purposes of the
firm. Cleather v. Twi.sden, 28 Ch. D. 340 (C. A.) ; Moore v. Knight, [1891] 1 Ch. 547 ;
Til re Ketchum, 1 F. R. 815. So where a firm of solicitors took money to inve.st, and
on- partner without the knowledge of the others invested it in an inadequate mortgacre,
all tiie ])artners were liable for the misapplication. Blyth v. Fladgate [1891], 1 Ch,
337. Where one of a firm of attorneys collected money for a client and misused it the
other partners were held liable. Porter v. Vance, 14 Lea, 629. And where goods werd
intrusted to one partner to sell on commission, such being the business of the partner-
ship, and the partner misapplied the pioceeds, all the partners were liable. Todd
V. Jackson, 75 Ind. 272. Where one of a firm of attorneys who had negotiated a mort-
gage took money to use in insuring the property, but failed to do so, the firm was liable
by reason of the failure. CcUier v. McCall, 84 Ala. 190, 4 So. 367.
122
THE LAW OF PARTNERSHIP.
[CH. VI.
§ 104. Breach of Trust of Partner. — If one of a firm, being
also a trustee, applies tlu; trust funds to the use of the partner-
parties, can deprive the plaiiitills of their
right to their money." The piaintilfs were
accordingly admitted to j)rove. For the
defendants, it was argued at the trial at
)iisi prias (Ivvan & M. 368) . First, that no
debt could be founded on and arise out of
a felony ; and that it was against the jjolicy
of the criminal law that the party whose
name had been forged should be allowed
to adopt the felony, or in any way to sanc-
tion it, or turn it to his advantage. Sec-
ond, that, inasmuch as the transfer under
a forged power worked no alteration of
property, the plaintiti's had not lost their
property, but still remained owners of the
stock, and might call upon the Bank of
England to account for both the principal
and dividends. Third, that even if the
defendants were fixed by the payment of
the money to their agents, Martin & Co.,
still they were discharged by the repayment
of it to Fauntleroy, one of the parties whose
property it was, and into whose hands and
use it appeared by the evidence to have
come. In answer to the first objection, it
was held, in the Court of King's Bench
(6 B. & C. 564), and by Lord Lyndhurst
(Mont. & Mac. 397), that it was undoubt-
edly a [trinciple of law that a man should
not be allowed to make a felony the foun-
dation of a civil action. But that this
rule of law was one founded on public pol-
icy, which requires that offenders against
the law shall be brought to justice, and
ceases to operate when the reason for it
fails ; and that no such ]iolicy or rule was
applicable to the present case, the offender
having already suffered the extreine pen-
alty of the law for a similar offence.
Further, that the assertion that the plain-
tiffs were seeking to ratify a felonious act,
and were making that act the ground of
their demand, was incorrect. That the
ground of their demand was the actual
receipt of the money [)roduced by the sale
and transfer of their annuities. That the
sale was not a felonious act, nor the trans-
fer, nor the receipt of the money. That
the felonious act was antecedent to all
these, and complete without them (.see a
similar opinion of the court in Boardman
V. Gore, 15 Mass. 331), In reply to the
second objection, it was held, in the .same
courts, that whether or not the plaintifi's
had a remedy against the Bank of Eng-
land, it was unnecessary to decide, since
their remedy against the defendants was
clear, and, generally speaking, when an in-
jured party has different remedies against
different persons, he may elect wliich he
will pursue. Upon the third objection,
Lord Tenterden .said, in Kyan & M. 369:
" But they say, also, that Fauntleroy was
one of the persons entitled, and that he
has drawn the money out, and, therefore,
they are not answerable. Now, if two
persons give a power of attorney to bank-
ers to sell out their joint stock, tlie bankers
ought to place the proceeds to their joint
account, and both ought to draw. If it is
meant that the money should be paid to
one, an authority to that effect ought to
be given to the bankers ; that, in my ex-
perience, has been the ordinaiy juactice.
If you are of o{)inion that this is the usual
mode of dealing, then, as against the other
two, it is no defence that the payment has
been made to one only of several who are
jointly entitled to receive it." See, to the
.same point, Ex parte Bolland, 1 jMont.&
A. 570 ; Keating v. Marsh, 1 Mont. & A .
582 ; Marsh v. Keating, 1 Mont. & A. 592 ;
s. c. 2 CI. & Fin. 250. In Hume ?■. Bol-
land, 1 C. & M. 130, s. c. 2 Tyr. 575, a
case arising out of the same bankruptcy,
Marsh & Co., the banking firm of which
Fauntleroy was a member, had been em-
ployed by the trustees of stock, standing
in their names on the books of the Bank
of England, to receive the dividends
thereon. In the books of Marsh & Co.,
accordingly, the amount of the dividends
was regularly carried to the credit of their
employers, and was by them drawn for and
received. But it afterwards appeared that
none of the above dividends had in jioint
of fact been received by Mai.sh & Co. ;
Fauntleroy having transferred and sold
the stock by means of forged powers of
attorney, and having caused the above
entries to be made in the books of the
firm in fraud of his copartners, the money
never having been received by them.
Upon the issuing of commissions against
§ 104.] WHO ARK LIABLE AS PARTNERS AS TO THIRD PARTIES. 123
sliip, with the knowledge of the other partners, the firm will be
chargeable with the amount, and held as debtors to the trust
therefor, (y) It is said in some cases that the firm will not be
liable in such case, unless the other partners have knowledge of
the trust and of this application of the trust funds, {z) But it has
also been held, that if a member of a firm, holding funds as an
agent of a third party, puts that money into the business of the
firm, the firm is liable whether the other partners knew that the
money was so held or not. {zz) How far the knowledge and con-
sent of the other partners is necessary to make them liable is not
distinctly settled on the authorities.
[The true principle seems to be recognized in the case of
Guillou V. Peterson.^ There a partner lent to his firm securities
which he held in trust, and the firm used them. It was held that
Marsh & Co., a case being sent to the
Exchequer to try the ([uestion whether
the bankru])ts were indebted to the trus-
tees, and if so in how much, it was held,
that, at the date of the commissions, the
bankrupts were not indebted to the trus-
tees for the balance of the dividends ap-
pearing by the books to have been received.
But see Hume v. Bolland, Ryan & ^L 371;
also Keating v. Marsh, supra, subseijuently
decided in the House of Lords, in Sadler
V. Lee, 6 Beav. 324.
(y) Ex parte Watson, 2 Ves. & B. 414;
Smith V. .Jameson, 6 T. R. 601 ; Board-
man V. Mosman, 1 Bro. C. C. 68 ; Jarjues
V. Marquand, 6 Cow. 497 ; Hutchinson v.
Smith, 7 Paige, 26 ; Richardson v. French,
4 Met. 577. [In re Jordan, 2 F. R. 319 ;
Rau V. Small, 144 Pa. 304, 22 Atl. 740.]
(?) E.v parte Heaton, Buck, 386 ; Ex
2mrte Apsey, 3 Bro. C. C. 265 ; Guillou v.
Peterson, 9 Phila. 225 ; Douncei'. Parsons,
45 N. Y. 180. But see Richardson v.
French, 4 Met. 577 ; Whitaker v. Brown,
16 Wend. 509 ; Freeman v. Fairlie, 3
]\Ieri. 44. In tliis last case, it seems to be
held, that, if the other partners merely
jiermit one partner to mix his accounts as
executor with those of the firm, the part-
ners may, without proof of further knowl-
eilge on their part, be compelled to produce
those accounts to the cestui que trust.
And, in the following case, the fact, that,
during the continuation in a firm of trust
funds by a breach of trust on the part of
some of the partners, other partners en-
tered and retired from the fiim, seems to
have ex(!mpted the latter from liability for
the bleach of trust of their copartners to
which they were privy. A., a partner in
a house of agency in India, died, having by
his will directed his estate to be called in,
and invested on certain trusts, and ap-
pointed two of his copartners his executors.
Tiiey, however, suffered his share in the
partnership to lemain in the liouse. After
A.'s death, B. and C. were admitted as
partners, and they knew that A.'s share
was remaining in the house, and that it
was subject to the trusts of his will. They
afterwards retired, and other partners
were admitted. The house ultimately
failed. It was held, that B. and C. were
not responsible for the breach of trust com-
mitted by their copartners, the executors.
Twyford r. Trail, 7 Sim. 92. Where trust
money is put into trade without authority,
the cestui que trust may generally elect to
take from the trustees either a share of the
profits, for the period of the breach, or
interest for that time. There may, how-
ever, be circumstances in which the cestiii
que trust will have a right to divide the
period, and to claim interest for one part
and a share of the profits for another.
Heathcote v. Hulme, 1 Jac. & W. 722 ;
Docker v. Somes, 2 Mylne & K. 656. See
Clayton's Case, 1 ]\Ieri. 572 : Hankej' v.
Garrett, 1 Ves. 236.
(") Floyd V. Wallace, 31 Ga. 688 ;
[Cunningham v. Woodbridge, 76 Ga. 302.]
And see Harper v. Lamping, 33 Cal. 641.
1 89 Pa. 163.
124
THE LAW OF PARTNERSHIP.
[CH. VI.
all the partners were liable for the value of the securities, even if
they had no knowledge of the trust. It was admitted that where
a partner lent money to the firm, the iimocent partners were not
liable to the true owner, if the partner had misappropriated it ;
but in this case the securities had been used by the firm after it
had received them, and this use gave cestui que trust a claim
against the firm.]
§ 105. Instances of Tort of Partner. — A partnership to whom
goods were consigned for sale was held liable for the pledge
thereof by a fraudulent partner ; (a) so was a firm of common
carriers, one of whom lost property intrusted to them; (h) and
partners in a publishing house, one of whom published a libel ; (e)
and partners in the stage-coach business, one of whom caused an
injury by negligent driving, (c?)
So all the partners are liable for the tort of an agent, although
that agent were appointed by one partner only, jjrovided he had
autiiority to make the appointment, (e) So it would be in case of
a breach of the revenue laws. (/) And a demand upon and a
refusal by one partner is a conversion by the firm, which will
sustain trover, (g) ^
(n) NinoU u. Glcnnie, 1 M. & S. 588. Cotton v. Bettner, 1 Rosw. 430. And
(/)) Mitchell V. Tarbutt, 5 T. K. 649. the action may be brought against one or
(c) Rex V. Almon, 5 Burr. 2686 ; Rex more or all the partners. Roberts v.
V. Pearoe, Peake, 75 ; Rex v. Toi)ham, 4 Johnson, 58 N. Y. 613.
T. R. 126 ; Rex v. Marsh, 2 B. & C. 723 ; (/) Attorney-General v. Strongforth,
[Atlantic Glass Co. v. Paulk, 83 Ala. 404, 3 Bunb. 97 ; Attorney-General v. Burges,
So. 800.] Bunb. 223 ; Attorney-General v. Siddon,
(d) Moreton v. Hardern, 4 B. & C. 223. 1 Cr. & J. 220; United States v. Thomasou,
(c) As where several persons are pro- 4 Biss. 99.
priritors of, and partners in, a line of stage (g) Nishet i'. Patton, 4 Rawle, 120;
coaches, but each stocks, and employs Hoi brook v. Wight, 24 Wend. 169 ;
drivers for his own particular portion of Mitchell v. Williams, 4 Hill, 13. The
the roatl ; all the partners are liable for managing jiartner, who conducted the
injuries caused by the misconduct and business of a mine, refused to deliver up
negligence of a person employed on any ore belonging to the former tenants of the
portion of the line, thongli such wrong- mine, on the ground that it was partner-
doer is hired and paid by only one partner, ship property, and there was subsequently
Weylan v. Elkins, Holt, N. P. 227; 1 a notice, by the attorney for the defen-
Stark. 272 ; Bostwick v. Champion, 11
Wend, 571, 18 Wend. 175; Bayley, J.,
in Lnugher v. Pointer, 5 B. & C. 570.
See also Dwight r. Brewster, 1 Pick. 50 ;
dants, offering to deliver up tools that were
in the same building with the ore ; but
the notice was silent as to the ore. Held,
evidence of conversion by all the partneis.
Cobb V. Abbott, 14 Pick. 289 ; Stockton Lloyd v. Bellis, 37 Eng. L. & Eq. 545.
See Com. Dig. tit. Trespass, eh. 1 ; NicoU
V. Glennie, 1 M. & S. 588 ; Dore v. Wil-
Frey, 4 Gill, 406 ; Hadfield v. Jameson,
2 Munf. 53 ; Locke v. Stearns, 1 Met.
560 ; Roberts v. Totten, 8 Ark. 609 ; kinson, 2 Stark. 287.
National Exch. Co. i*. Drew, 2 Macq. 103 ;
1 Where one partner makes false representations or commits fraud in the course of
the firm business, all the partners are liable in tort. Strang v. Bradner, 114 U. S,
§ 105.] WHO ARE LIABLE AS PARTNERS AS TO THIRD PARTIES. 125
But even if the tort were cominitted by a partner in the per-
formance of the partnership business, it might, from its nature or
attendant circumstances, be shown to be only a several act. As
if two physicians were in partnership, and one intentionally mal-
treated a patient.^ So if two were partners as bankers and bill-
brokers, and one of them discounted a note usuriously, this would
be his own act only, or the act of the partnership, according to
his authority, or the usage of the firm, or other circumstances. (A)
It is to be observed that, although all the partners may be liable
for a tort, and all may be sued jointly, they may also be sued
severally , for, in law, all torts, however joint, and whether con-
structive or actual, are several. It is, therefore, no answer for a
defendant sued in tort to say that others were guilty with him. {i)
(h) When one partner, without the put on their papers in causes in their office,
knowledge of the other, borrows money at either of them is liable to the penalties of
usurious interest, and executes a note in the act 37 Geo. 3 for practising as an attor-
the name of the firm ; and afterwards pays ney without entering his certificate, though
the.usurious interest, and the other part- it does not appear that one of them had
ner, ignorant of the payment of the usury, any profit or advantage from the suit for
executes his own note in lien of the other, suing in which the action in qid tarn is
he cannot, when sued upon it, set up as a brought. 1 Wms. Saund. 291, d ; Rich v
defence the payment of usury by his part- Pilkinton, Carth. 171 ; Sutton v. Clark, 6
ner. Jones y. Jackson, 14 Ala. 186. See Taunt. 29; Edmondson v. Davis, 4 Esp.
Hutchins v. Turner, 8 Humph. 415. 14 ; Attorney-General v. Burges, Bunb.
(0 If an attorney is in partnership 223 ; Mitchell v. Tarbutt, 5 T. R. 649 ;
with another, and they carry on their busi- Stockton v. Frey, 4 Gill, 406. As all the
ness together, and their joint names are partners may be affected by the tort of
555 ; Stanhope v. Swafford, 80 la. 45, 45 N. W. 403 ; Bradner v. Strang, 89 N. Y.
299 ; Peckham Iron Co. v. Harper, 41 Oh. St. 100. And operates by way of estoppel on
all the partners. In re Many, 17 X. B. R. 514; French v. Rowe, 15 la. 563 ; Cole-
man V. Pearce, 26 Minn. 123 ; Henslee v. Cannefax, 49 Mo. 295 ; Griswold v. Haven,
25 N. Y. 595. So all the partners are liable in tort where one partner makes illegal
charges. Lockwood v. Bartlett, 130 N. Y. 340, 29 N. E. 257. Or in the course of
business commits a trespass on chattels of another. McClure «. Hill, 36 Ark. 268 ;
Robinson v. Goings, 63 Miss. 500. Or converts the property of another. In ?'eKetch-
um, 1 F. R. 815. Or negligently injures property. Bucki v. Cone, 25 Fla. 1, 6 So. 160.
Or injures another negligently. Haley v. Case, 142 Mass. 316, 7 N. E. 8/7 ; Hyrne
V. Erwin, 23 S. C. 226. Or libels a customer. Woodling v. Knickerbocker, 31 Minn.
268, 17 N. W. 387. Or a rival firm. Hauey MTg Co. v. Perkins, 78 Mich. 1, 43 N.
AV. 1073. Or procures a wrongful attachment of property on a firm claim. Kuhn v.
"Weil, 73 Mo. 213. Or institutes a malicious prosecution. Mcllroy v. Adams, 32 Ark.
315. It is however held in Rosenkrans i-. Barker, 115 111. 331, 3 X. E. 93, that such a
wilful lort as the malicious prosecution of a firm debtor is an individual act of the part-
ner who institutes it, and the other members of the firm are not lial>le for it. In
order to charge the firm the tort must be shown affirmatively to have been committed
in the course of the business. So in an action of trover for buying goods from a thief,
the true owner in order to charge a firm must prove that they were bought for the firm,
not for the individual partner. Paden v. Belleiiger, 87 Ala. 575, 6 So, 351.
^ But the negligent act of one of a firm of physicians, in the course of the business, has
been held to render the other members of the firm liable. Hyrne v. Erwin, 23 S. C. 226.
126
THE LAW OF PARTNERSHIP.
[CH.
VI.
[Where an innocent partner is compelled after dissolution, to
satisfy a judgment obtained for the tort of his co-partner, he may
maintain an action for compensation against the actual wrong-
doer,^ since the parties are not really joint wrong-doers between
whom no contribution can be claimed.]
one, so a release to one of all liability in
respect of the tort will operate as a release
ami discharge of all. Co. Litt. 232, a ;
Bac. Abridg. Release (G) ; Com. Dig.
Release, B. 4; id. Pleader, 3 M. 12;
Kiffiu I'. "Willis, 4 Mod. 379 ; Williamson
V. AlcGiuiiis, 11 B. Moil. 74. Case is the
j)roiier action against partners for injuries
caused by the negligence of their servant ;
and, if the damage be effected by laches
simply, it will lie against them, even
though one partner were present, per-
sonally, and acted in that which occa-
sioned the daniiige. So, where one partner
is a wilful wrong-doer, if under the circum-
stances any action is sustainable against
his copartners, case is still the proper rem-
edy. But, as against the malicious part-
ners solely, trespass is the proper form of
action. Mitchell v. Tarhutt, 5 T. R. 649 ;
Morley v. Gaisford, 2 H. Bl. 442 ; Huggett
V. Montgomery, 5 B. «& P. 446 ; I.eame v.
Bray, 3 East, 593 ; Ogle v. Barnes, 8 T.
R. 188 ; Rogers v. Inibleton, 5 B. & P.
117 ; Moreton v. Hardern, 4 B. & C. 223 ;
Whiteman v. Smith, 12 Rich. L. 595.
[Since the partners are severally liable,
the innocent partner may be sued without
joining the other. Mode t;. Peuland, 93
N. C. 292.]
1 Smith V. Ayrault, 71 Mich. 475, 39 N. W. 724.
§ 106.] RIGHTS AND DUTIES Oi lARrXERS. 127
CHAPTER VII.
OF THE RIGHTS AND DUTIES OF PARTNERS BETWEEN THEMSELVES.
SECTION I.
RIGHTS AND POWERS OF A PARTNER.
§ 10(3. Right of Choice as to a Partner. — No One among the
rights of [)artuer.s is more certain, or leads to more important
consequences, tiian that to which we have already referred as
implied by the phrase dilectus personaruni. Every partnership
must be, in its beginning, voluntary, and the result of the choice
and wish of those who become partners.^ Precisely so, as to
admission of new partliers, it must continue to be. (a) Hence,
whatever rights a partner may have of assigning or otlierwise
disposing of his share of the stock or profits ( a subject to be
presently considered), his character or relation of partner cannot
be assigned. (6) And if he does assign it, and the other partners
{a) The civilians pushed the priueiple (h) R;i}-inou(rs Case, 2 Rose, 255 ;
of dilectus pcrsunarum to a great, and, as Kingman v. Spurr, 7 Pick. 235 ; Gilmore
Pothier thinks, to an unreasonable extent ; v. Black, 11 Me. 488; Moddewell v.
for with them, even a sti[>ulation between Keever, 8 W. & S. 63 ; Cowles v. Garrett,
partners, that heirs or executors should 30 Ala. 341 ; Ketcham v. ( 'lark, 6 Johns,
succeed to the relation of partner, was 144 ; Murray v. Bogert, 14 Johns. 318.
deemed to be void. Domat, lib. i. tit. 8, In Marquand v. Xew Yoik Manuf. Co., 17
§ 2 ; Pothier, Traite du contrat de societe, Johns. 525, Fitch assigiieil his interest in
ch. 8, § 3 ; Crawshay v, Maule, 1 Swanst. a paitnership, by the articles of which it
509, note. The doctrine of the English was provided that it should continue until
and American Law is otherwise, and stipu- two of the partners should demand a dis-
lations for the admission of such persons solution. The other partners desired the
into a firm upon the decease of a partner partnership to go on notwithstanding the
are frequent, and are always, as far as assignment. But, per Woodworth, J. :
possilile, enforced by the courts. See " It is well settled in England, that an act
Wrexham v. Hudleston, 1 Swanst. 514; of bankru[itcy is a dissolution of ])artner-
Balmain v. Shore, 9 Ves. 500 ; War- ship ; this is by reason of the assignment,
ner v. Cunningham, 3 Dow. 76 ; Gratz which severs the interest of the bankrupt,
V. Bayard, 11 S. & R. 41; Scholefield by o])eration of law. An assignment made
V. Eichelberger, 7 Pet. 586 ; Downs v. by the party himself, under circumstances
Collins, 6 Hare, 418; Page v. Cox, 10 like the present, produces the same result :
Hare, 163. See Reynolds v. Hicks, 19 Ind. in both cases, they give rise to a state of
113 ; Buckingham v. Hanna, 20 Ind. 110. things altogether incompatible with the
^ Where a partner grants a part or the whole of his profits to a third person, the
latter does not tliereby become a partner. He cannot be made a partner without the
128
THE LAW OF PARTNERSHIP.
[CH. VII.
receive the assignee among them and into the partnershi}), the new
partner becomes one, altogether by their reception and his agree-
ment with them, and in no degree by the assignment or transfer
by him who has ceased to be a partner, (c) In an English case, a
prosecution of a {)ai'tnership concern, com-
jiienced and [ireviously conducted by the
bankrupt and his former copartners. It is
l)eifectly clear that a new partner cannot
be admitted without consent. This, ex vi
termini, implies that even consent would
be nugatory, unless the assignee elected to
become a partner ; when he does not so
elect, but (as in the present case) insists
on a div'ision of the property, the demand,
according to acknowledged general prin-
ciples, cannot be denied." Mathewson v.
Clark, (J How. 122 ; Putnam v. Wise, 1
Hill, 238 ; Channel v. Fassitt, 16 Ohio,
166 ; Mason v. Connell, 1 Whart. 381 ;
Morton's Appeal, 13 Pa. 67 ; Bray v.
Fromont, 6 ]\ladd. 5. In Goddard i'.
Hodges, 1 C. & M. 33, the plaintiff was
the solicitor of a bridge company, and on
that account, not desiring to appear as the
owner of shares in a company, had ino-
cured one Fall to be the nominal stock-
holder of a certain number of shares, the
])laintiff, however, being the real owner,
making the deposits, and paying all other
expense on the shares. In an action to
recover compensation for professional ser-
vices, the i)laiutiff cited Bray v. Fromont,
supra; and contended that, as between
himself and the bridge company, he was
not a partner, since there was no consent
nor agreement of the company to receive
him as such. But the court held other-
wise, and a non-suit was entered. See
Bradley v. Harkness, 26 Cal. 76.
(c) The effect of an assignment by a
partner of his interest in a cojiartnership
is to give the assignee a right to insist
upon an account of the joint concern, and
to claim whatever his assignor would be
entitled to upon a settlement of accounts,
upon satisfaction of the claims of the
otlier partners. NicoU v. Mumford, 4
Jolins. Ch. 522 ; Rodriguez v. Heffernan,
5 Johns. Ch. 417 ; Marquand v. New
York Manuf. Co., 17 Johns. 525 ; King-
man 17. Spurr, 7 Pick. 235 ; Bray v. Fro-
mont, 6 Madd. 5 ; Mathewson v. Clark, 6
How. 122 ; Moddewell v. Keever, 8 AV. &
S. 63. In this last case it was held, that
an acquittance of a partnership debt,
given by the assignee of one partner's
share, could not have the effect of reliev-
ing the debtor from liabilit}' to the firm
consent of the other partners. Ex parte Barrow, 2 Rose, 252 ; Brown v. De Tastet, Jac.
284 ; Frost v. Moulton, 21 Beav. 596 ; London Assurance Corp. v. Drennen, 116 U. S.
46] ; Bybee v. Hawkett, 12 F. R. 649 ; Meyer v. Krohn, 114 111. 574, 2 N. E. 495 ;
Revnolds v. Hicks, 19 Ind. 113 ; Burnett v. Snyder, 76 N. Y. 344, 81 N. Y. 550 ;
Rockafellow r. Miller, 107 N. Y. 507, 14 N. E. 433 ; Setzer v. Beale, 19 W. Va. 274 ;
Riedeburg v. St^hmitt, 71 Wis. 644, 38 N. W. 336. But it is otherwise held in Mas-
sachusetts, Baring v. Crafts, 9 Met. 380 ; Fitch v. Harrington, 13 Gray, 468.
For the same reason the purchaser of the interest of a deceased partner does not
become a partner. Noonan r. Nuuan, 76 Cal. 44, 18 Pac. 98. And where the interest
of a partner is sold on execution, the purchaser cannot insist upon being accepted as a
partner. Carter v. Roland, 53 Tex. 540.
The name "sub-partner " is sometimes apjdied to the assignee of an interest in a
partner's profits. Nirdlinger v. Bernheimer, 133 N. Y. 45, 30 N. E. 561. The
term is however misleading, for he is a partner neither with the firm nor with his
assignor.
Since one partner cannot admit a new member to a firm, his representations in the
course of an attempt so to do cannot bind the firm. Thus where a partner agreed with
a stranger that if the latter should buy out another partner he would get a third interest
in the business free from all liens, this did not bind the firm. Love v. Payne, 73
Ind. 80.
§ 107.] RIGHTS AND DUTIES OF PARTNERS. 129
person entering into business was guaranteed to the firm np to a
certain amount by liis father, and in consideration thereof con-
tracted to pay to his father a certain sum out of the profits.
Afterwards marrying, he made a marriage settlement, by which
he transferred all the jH'ofits and earnings of the business to his
father and another, in trust, first to secure the father's annuity,
and then on other trusts. It was held by the Court of Common
Pleas that the father became a partner in the business and liable
for the debts. But the judgment was reversed in the Exchequer
Chamber, (cc)
So if a partner bequeaths his interest in a firm to some one,
this will not make the legatee a partner ; ((7) nor will the bequest
have this effect although the legacy is expressly for the purpose
of making him a partner, and is said to be a legacy of all the
rights, etc., of a partner; for this character of partner is not trans-
ferable. But one who represents the interest of a former partner,
if received by the other partners and treated as a partner, becomes
a partner under the origmal articles, {dd} Nor is the dileetus
personarum a right of the old partners only. It belongs just as
much to the new partner. No act of any others can, of itself,
make him a partner. He must himself give his consent, and
enter into the firm by his own act. If a transfer of a partner's
interests and rights were made with an intent on the part of the
transferrer that the transferee should thereby be made a partner,
he would not become one as to the others, without their and his
acquiescence. (^)
§ 107. Provisions in Articles for Transfer of Share. — It is per-
haps possil)le that the consent of the former partners may be
given beforehand, and the consent of the transferee implied, by
for the same debt. Ex parte Barrow, 2 (d) Nor are the executors of a deceased
Rose, 2.52 ; Brown v. De Tastet, Jac. 284 ; partner, nor the assignees of a bankrupt
2 Bell Coinm. 636. See Newland v. Tale, one, partners with the other member of
3 Ired. Eq. 226 ; Cowles v. Garrett, 30 the original firm. They are simply en-
Ala. 341. The transferee of a portion of titled to an account. Pearce v. Chaniber-
a copartner's interest has a debt which he lin, 2 Ves. 33 ; Wilson v. Greenwood, 1
may prove against the transferrer's estate. Swanst. 482 ; Fox v. Hanbury, Cowp.
Ex parte Dodgson, Mont. & M'A. 445. 445; Hague v. Rolleston, 4 Burr. 2177;
But the assignee of a partner's interest Ex parte Williams, 11 Ves. 5 ; Griswold
cannot withdraw his share of the joint v. Waddington, 15 Johns. 82 ; Manjuand
effects. They must remain in the posses- v. New York Manuf. Co., 17 Johns. 535 ;
sion of the continuing i>artner, for the Kingman r. Spurr, 7 Pick. 238.
purpose of winding up the affairs of the (dd) Mealier v. Cox, 37 Ala. 201.
partnership, which has been dissolved by (e) See Mar^uand r. New York Manuf.
the assignment. Horton's Ajipeal, 13 Pa. Co., 17 Johns. 529, 535, and other cases
67 ; Meaher v. Cox, 37 Ala. 201. cited in preceding notes.
{r.c) Bullen v. Sharp, 18 C. B. N. .s.
614; L. R. 1 C. P. 86.
9
130
THE LAW OF PARTNERSHIP.
[CH. VII.
the reception of the things transferred. If, for example, a joint
stock company, which is a kind of partnership, provided by its
rules that the shares should be regarded and treated as transfer-
able, and as a kind of scrip ; that each share was such an aliquot
part of the whole, or represented a certain amount of money, and
one man might hold a number of them ; and if it was farther
provided that a sale of a share, acknowledged before the clerk,
and recorded, with a delivery of the former certificate and the
issue of a new one, would make the holder of the new certificate
one of the company ; in such case the transferee becomes at once
a stockholder, which in this case would mean a partner, by the
completion of the transfer according to the rules of the com-
pany. (/) And it is possible, also, that the articles of a private
(/) This would seem to be a legitimate
conclusion from the opinion of the court
in Fox V. Clifton, 9 Biiig. 115, 6 Bing.
776. There several persons were sued a.s
partners in a distillery company. It was
in evidence that, such a company being in
process of formation, upon payment of a
deposit, scrip receipts were issued to the
subscribers, which were to be surrendered
for certificates of shares, when the part-
nership deed was prepared and signed ;
that the scrip of the company was openly
sold in the market ; the persons produc-
ing that scrip, and paying the instalments
due, were, without further inquiry, per-
mitted to sign the company's deed as
partners ; and that Levi, one of the de-
fendants, had, before the contract was
made upon which the present suit was
brought, sold his scrip. C. J. Tindal :
" The present case appears not to be gov-
erned by reference to the rules which
restrain partners from parting with their
shares in ordinary cases, without each
other's consent ; for, in this case, the
power of transferring the scrip to any one
cannot but have formed a part of the
known original design." Aft-er adding that
at the time the contract was entered into
with the jilaintiff, Levi was not and could
not be a partner; "On the other hand,
the man who had purchased his scrip, if
he was willing to pay up the second in-
stalment, would have been entitled and
allowed to receive a certificate of his
share, and to execute the deed without
difficulty." But where, as supposed in
the text, the articles of an association
prescribe a particular method of transfer-
ring shares, that mode must be strictly
followed ; for the formalities of transfer
are the terms or conditions upon which
the members of the company give their
consent to the admission of a new partner.
Ness V. Angas, 3 Exch. 805, 814 ; Dodg-
son V. Bell, 5 Exch. 967 ; Kingman v.
Spun-, 7 Pick. 235 ■ Cochran v. Perry, 8
W. & S. 262. In Ex parte Wood, Keene's
Executors' Case, De G. JI. & G. 272, a
joint-stock company may, by long acquies-
cence in the neglect of its directors to
carry out one or more of its regulations
respecting the transfer of shares, and the
admission of new shareholders, be pre-
cluded from taking advantage of such in-
formality in the transfer of shares ; and,
further, that a shareholder, thus irregu-
larly introduced into a coin])any, if he has
become de facto a shareholder, is debarred
from raising an objection of form against
the company, so as to relieve himself from
the obligations of a shareholder. Bargate
V. Shortridge, 5 H. L. C. 297. And
though, by articles of copartnership, it is
provided that any partner may assign his
share of the .stock by a certificate in writ-
ing, which, when lodged with the clerk
of the company, shall entitle the assignee
to all the ]irivileges, and subject him to
all the liabilities, of an original partner,
an assignment without such certificate
will, nevertheless, transfer the property.
Alvord V. Smith, 5 Pick. 232.
108.]
RIGHTS AND DUTIES OP PARTNERS.
131
partnership might contain similar provisions, with a system of
transfer to carry them into effect. But it remains true, that the
consent and acquiescence of all the members of a partnership are
necessary to its becoming a partnership, however or whenever
this consent and acquiescence take place, or may be proved,
implied, or inferred.^
§ 108. Right of assigning or transferring Property. — The right of
every partner to sell, assign, or transfer, any part or the whole of
the partnership property, in the way of the regular business of the
partnership, is absolute and unquestioned, (ff) There is au
exception to this rule in reference to the real estate of a partner-
ship, (/^) but none as to the personal property. Suppose a part-
nership dealt in buying and selling cotton, and all their stock
consisted in five hundred bales stored in New York ; there is no
more doubt that either one of the partners might sell, and give
good title to the whole, than that he could do so with a single
bale. (^) This, however, must be done in the regular course of
(ff) For an interesting case on the
question, If one acting as a partner sells,
without the consent of his copartner,
what amounts to a ratification of the sale?
see Cheeseman v. Sturges, 9 Bosw. 246.
(/(/) See post, § 277.
{(/) The absolute jus disponendi of
each partner over the effects of the part-
nership is very early asserted in Lambert's
Case, Go<lb. 244. See Barton v. Williams,
5 B. & Aid. 405, per Best, J.; Lyies v.
Styles, 2 Wash. C. C. 224 ; Pearpoint v.
Graham, 4 Wash. C. C. 2-34 ; Law v. Ford,
2 Paige, 310; Winship v. Bank of the Unit-
ed States, 5 Pet. 561 ; Lamb v. Durant,
12 JIass. 54 ; Pierson v. Hooker, 3 Johns.
70, per Kent, C. J. ; M'Cullough v. Som-
merville, 8 Leigh, 430 ; Tapley v. Butter-
field, 1 Met. 518 ; Whitton v. Hulbert,
Freeman, Ch. 231 ; Forkner v. Stuart, 6
Gratt. 197 ; Fronime v. Jones, 13 Iowa,
474. In Anderson v. Tompkins, 1 Brock.
456, Chief Justice Marshall affirms this
jiower in the most positive terms. Bos-
well V. Green, 1 Dutch. 390; [Ellis v.
Allen, 80 Ala. 515] ; McGregor v. Ellis, 2
Dis. (Supr. Ct. Ciii.) 286. A partner's
jus disjwnendi extends to choses in action
as well as those in possession. See Swan
V. Steele, 7 East, 210 ; Harrison v. Sterry,
5 Cranch, 289, 300 ; Quiner v. Mar-
blehead Social Ins. Co., 10 Mass. 482 ;
Mills V. Barber, 4 Day, 428 ; Halstead v.
Shepard, 23 Ala. 558, 573. [Fulton v.
Loughlin, 118 Ind. 286, 20 N. E. 796;
Clarke v. Hogeman, 13 W. Va. 718 ; see
KuU V. Thompson, 38 Mich. 685. So a
partner may assign a patent right belong-
ing to the firm. Christ v. Firestone, (Pa.)
11 Atl. 395. So he may indorse commer-
cial paper. Fulton i'. Loughlin, 118 Ind.
286, 20 N. E. 796 ; Walker r. Kee, 14 S. C.
142, 16 8. C. 76. Or assign a chattel mort-
gage Most-s V. Hatfield, 27 S. C 324, 3 S. E.
538.] One ]>artner may bind his firm by
assenting to the transfer of a debt on ac-
count, due from the firm, from one banker
to another. Beale v. Caddick, 2 H. & X.
326. This right is in no way affected by
a secret act of bankruptcy previously com-
mitted by another partner. Fox v. Hau-
burj^ Cowp. 445. Nor by the fact that
^ A voluntary association with transferable and heritable shares is valid at common
law. Ricker v. American Loan & Trust Co., 140 Mass. 346, 5 N. E. 284 ; McFadden
V. Leeka, 48 Oh. St. 513, 28 N. E. 874 ; McN.dsh v. Hulless Oat Co., 57 Vt. 316.
Some of its aflfairs are frequently regulated by statute. Davison v. Holden, 55 Conn-
103, 10 Atl. 575 ; People v. Wemple, 117 X. Y. 136, 22 N. E. 1046. See post, ch. 18.
132
THE LAW OF PARTNERSHIP.
[CH. VII.
the business of the firm; for outside of this he has no such
power. (7i) If he docs this in fraud of tlic other partners, — that
is, if he sells tlie wliole, or any part, intending to run off with the
proceeds, and does run off with them, — this has no effect on the
title of the purchaser, unless he has some knowledge of the fraud,
or would have had some knowledge of it but for a negligence so
gross as would tend to imply fraud, (i) ^
§109. Eight to pledge or mortgage. — If, however, a })artncr
undertakes not to sell the goods or property of the partnership,
but to assign them, by way of pledge or mortgage to secure the
debts of the firm, or in any unusual way, he has not necessarily
any power to do this. Neither do we consider it certain that he
has no power to do it. On the one hand, such a transaction
seldom or never belongs to the regular business of a firm, (j) If
the proceeds ai'ising from a transfer of
partnership eflects have not come to the
use nor to the advantage of the firm. Ar-
nold I'. Brown, 24 Pick. 89. Xor, in point
of principle, is there any ditference be-
tween so-called general partnerships and
those for a special adventure as to the
power possessed by each partner of dis-
posing of the joint proy)erty. Livingston
V. Roosevelt, 4 Johns. 251, 205, 277. See
the lang mge of Best, J-, in Barton v.
■Williams, .T B. & Aid. 405. [See on this
subject Ames, Cas. on Part., 572 n.].
\h) 2 Chan. Cases, temp. Car. 2, 32,
38. Anon., 16 Vin. Abr. 242. See Liv-
ingston V. Roosevelt, 4 Johns. 266, 267,
278 ; Walden v. Sherburne, 15 Johns.
422; [AVilcox v. Jackson, 7 Coh 521.] See
the remarks of Marshall, C. J., in Ander-
son V. Tompkins, 1 Brock. 460 ; Kogers v.
Batchelor, 12 Pet. 221. See farther, as
to this point, section 3d, subsection 2d, of
this chapter, on the general extent of the
power of a partner ; and see Wells v.
March, 30 jST. Y. 344 ; Coope v. Bowles,
42 Barb. 87; Palmer v. Myers, 43 Barb.
509.
{)) So it was said by Marshall, C. J.,
in Auderson v. Tompkins, 1 Brock. 460.
An assignment by one partner of jiartner-
ship assets to another, to be applied to the
individual purposes of the latter, is a
breach of trust in both assignor and as-
signee, and void as to the firm. Wood v.
Shepherd, 2 Patt. & Heath, 442 ; Rod-
riguez V. Hefl"ernan, 5 Johns. Ch. 417 ;
Halstead v. Shepard, 23 Ala. 558 ; Clay-
ton V. Hardy, 27 Mo. 536 ; Croughton v.
Forrest, 17 Mo. 131. In this last case,
where one partner fraudulently disposed
of all the partnership stock and effects,
the vendees, who had received the prop-
erty with knowledge of the fraud or with-
out consideration, were held to be trustees
thereof for the benefit of the firm. See
Kirkpatrick v. Turnbull, Addison, 259 ;
Rogers v. Batchelor, 12 Pet. 221. [Ellis
V. Allen, 80 Ala. 515 {scmhk) ]
(j) In Metcalf v. Royal Exch. Ass. Co.,
Barnard. 343, it seems to be implied that
a pledge of partnership effects, in the ex-
ercise of a power which belongs to the
general course of business of a trading
partnership, is valid. See the remarks of
^ It would seem that a partner who has power to sell part of the firm chattels, —
that is, the chattels kept for sale, has power to sell them all for cash. Ellis v. Allen,
80 Ala. 515, 2 So. 676 ; Crites v. Wilkinson, 65 Cal. 559, 4 Pac. 567 ; Coakley v.
Weil, 47 Md. 277 ; Schneider v. Sansom, 62 Tex. 201. But it seems that a sale not
merely of the goods kept for sale but of all the assets of the business is not within the
partnership powers, and may be avoided by the other partner. Drake v. Thyng, 37
Ark. 228 ; Wilcox v. Jackson, 7 Col. 521. Such a sale would of course transfer all the
interest of the partner who made the sale. Carrie v. Cloverdale Banking & Commer-
cial Co., 90 Cal. 84, 27 Pac. 58.
§ 110.]
RIGHTS AND DUTIES OF PARTNERS,
133
it does, of course he has this power. If it does not, it may still be
so far connected with, or so naturally arise out of or promote, their
regular business, that if the transaction be an honest one, without
bad faith on the part of any party, we should say it was a valid
transaction, which the law would enforce. Perhaps a consider-
ation of the authorities and of the reason of the case would lead
to this difference between the selling and the assigning in pledge
of partnership property by one partner. If the sale take place in
the course of business, it would bind the other partners, as we
have seen, though fraudulent as to them ; but an assignment in
pledge or mortgage, not being in the way of business, would bind
the other partners, if it were done in good faith for the advantage
of the firm, and was reasonable in itself, but not otherwise. (^)
§ 110. Right to assign for Benefit of Creditors. — One partner
may, in good faith, assign a part of the propei'ty to pay or secure
Shaw, C. J., in Tapley v. Butterfidd, 1
Met. 515, where a mortgage by one j)art-
ner of the whole stock iu trade of a part-
nership, to secure a creditor, was held
valid. Anderson v. Tompkins, 1 Brock.
456 ; Deckard v. Case, 5 Watts, 22. See
also ililton v. Mosher, 7 Met. 244; Brown-
rigg V. Rae, 5 Exch. 489 ; Sweetzer v.
Mead, 5 Mich. 107. In Ex parte Lloyd,
1 Mont. & A. 494, it seems to have been
considered that the peculiar circumstances
of that case authorized one partner to bind
his firm by an etpiitable mortgage. There,
W., being the sole owner of certain free-
hold premises, entered into partnership
with 0., and W. & 0. thenceforth occupied
the premises as cotton spinners, and erected
a steam-engine, kc, for the purposes of their
joint trade. The firm being indebted to
their bankers, 0., in June, 1822, deposited
with them the leases of certain leasehold
premises, with a memorandum setting out
a list of the title-deeds deposited, and con-
cluding thus: "These papers are placed
in the hands of Messrs. Jones, Lloyd, &
Co., as security for what they may think fit
to advance to 0. & W." In August, 1822,
"W. also deposited with them a lease of a
freehold piece of land, on which was situ-
ated a mill and other buildings, with the
following memorandum: " These deeds of,
&c., are placed in the hands of Messrs.
Lloyd & Co., as security for what they may
think proper to advance to 0. & W., by
W. The buildings alone are insured for
upwards of 2, OOOZ. ; machinery, &c., 2,000Z.
more." 0. k W. liaving become bankrupt,
and the bankers petitioning to be declared
equitable mortgagees of the premises, the
court thought that, under the circum-
stances, there was no difficulty in finding
that the one partner had authority to
pledge the property, in order to obtain an
advance of money for partnership pur-
poses ; and that W. might fairly be taken
as mortgaging, for himself, his own free-
hold interest in the land and buildings,
and as agent for the firm, mortgaging the
leasehold interest and the property of the
firm in the machinery.
(^•) In the three following cases, where
partnership property was pledged without
any fraud or collusion, or any knowledge
on the part of the pledgee of the interest
of the firm in the pledge, the contract was
held to bind the copartnership. Raba v.
Ryland, Gow, 132 ; Tupper v. Haythorne,
Gow, 135, n.; Reid i;. Hollinshead, 4 B. &
C. 867, s. c. 7 D. & R. 444. On the other
hand, in Ex parte Copeland, 2 Mont. & A.
177, s. c. 3 Dea. & Ch. 199, two of the
judges strongly intimate their opinion that,
if at the time of a pledge by one partner
the pledgee is conusant of the joint inter-
est of the other partners, such pledge will
not be valid as against the other partners.
See Ex parte Gellar, 1 Rose, 297 ; Snaith
V. Burridge, 4 Taunt. 684.
134 THE LAW OF PARTNERSHIP. [CH. VII.
an existing debt, or a debt to be contracted. (Z) ^ [There is some
doubt, however, whether he has power to assign the whole prop-
erty in trust for all the creditors. His power to transfer firm
property generally is within the scope of the firm business, since
the object of the business is to dispose of such property. But the
assignment of all the property in trust for creditors is necessarily
outside the scope of the business, since it puts an end to the busi-
ness. The better opinion therefore seems to be that in the
ordinary case one partner has no power to assign all the assets in
trust for creditors without the consent of the other partners.^ But
It a])pears, from the above cases, that deliver specific portions of partnership
there is no distinction between general property to a creditor of the firm in pay-
partnerships and those for a particular ment of a debt ; that, inasmuch as it is in
adventure, as to the power in each partner the power of one member of a firm to pay
to pledge, mortgage, &i;., the partnership off a debt, he may pay it in a si)ecific cluit-
effects. tel actually delivered to the creditor, as
(/) See McClelland v. Renisen, 14 Abb. well as in money." Anderson v. Tomp-
Prac. 332 ; Young v. Keighly, 15 Ves. kins, 1 Brock. 461 ; Hodges v. Harris,
557 ; Mills v. Barber, 4 Day, 428 ; Fox v. 6 Pick. 360 ; Tapley v. Butterfield, 1 Met.
Hanbury, Cowp. 445; Harrison v. Sterry, 518; Havens i". Hussey, 5 l'ai>;e, 31, 32;
5 Cranch, 289 ; Dana v. Lull, 17 Vt. 390. Everet v. Strong, 5 Hill, 163, 7 Hill,
In Deming v. Colt, 3 Sandf. 290, Oakley, 585 ; Kirby v. IngersoU, 1 Hare (Mich.),
C. J., speaking of the law of New York, 172, s. c. 1 Doug. (Mich.) 477 ; CuUum v.
says that it is settled in that State, "that Bloodgood, 15 Ala. 34 ; Boswell v. Green,
one partner may, from time to time, witli- 1 Dutch. 390. See McNutt v. Strayhorn,
out the as.sent of his copartner, assign and 39 Pa. 269.
1 It is almost universally held that a partner has authority to pledge or mortgage
part of the property to secure a firm debt. Gates i\ Bennett, 33 Ark. 475 ; Phillips v.
Trowbridge Furniture Co., 86 Ga. 699, 13 S. K. 19; McCarthy;;. Seisler, 130 Ind. 63, 29
N. E. 407 ; Citizens' Nat. Bank v. Johnson, 79 la. 290, 44 N. W. 551 ; Schwanck v.
Davis, 25 Neb. 196, 41 N. W. 141 ; Hembree v. Blackburn, 16 Ore. 153, 19 Pac. 73 ;
Woodniir V. King, 47 Wis. 261, 2 N. W. 452 ; Hage v. Campbell, 78 Wis. 572, 47
N. W. 179. Contra, Osborne v. Barge, 29 F. R. 725. Since he may give such a mortgage,
he may consent to its cancellation. Phillips v. Trowbridge Furniture Co., 86 Ga. 699,
13 S. E. 19. It would seem tliat such a mortgage is good if it covers all the chattels of
the firm. Letts-Fletcher Co. v. McMaster (la.), 49 N. W. 1035 ; and .see the cases cited
suprn. But see Burbank v. Wiley, 79 N. C. 501. A partner has also authority to
pass absolute title to partnership chattels in payment of a firm debt. Hanchett v.
Gardner, 138 111. 571, 28 N. E. 788 ; Johnson v. Robinson, 68 Tex. 399, 4 S. W. 625.
" We can conceive of no partnership, whether commercial or non-trading, which may
not, in the line of the partnership business, incur debts. . . . We regard it as thor-
oughly well-settled law that a partnership, or any one of its members, without express
authority from his co-partners, may transfer a part of the partnership property in pay-
ment of a debt of the firm, and this wholly regardless of the non-trading character of
the concern." McClellan, J., in Ullman v. Myrick, 93 Ala. 532, 536, 8 So. 410.
2 Pearpoint v. Graham, 4 Wash. C. C. 232 ; Adams v. Thornton, 82 Ala. 260, 3 So.
20 ; Loeb V. Pierjyoint, 58 la. 469, 12 N. W. 544 ; Hunter v. Wayiiick, 67 la. 555, 25
N. W. 776 ; Shattuck v. Chandler, 40 Ka.s. 516, 20 Pac. 2-25, Maughlin v. Tyler, 47 Md.
545 ; Kirby v. IngersoU, 1 Doug. Mich. 477 ; Stein v. La Dow, 13 Minn. 412 ; Hughes
V. Ellison, 5 Mo. 463 ; Einer v. Beste, 32 Mo. 240, 39 Mo. 69 ; Hook v. Stone, 34
§ 111.] RIGHTS AND DUTIES OF PARTNERS. 135
if the other partners are absent and cannot be come at to be con-
sulted, one partner who is thus left in charge of the business may
in an emergency make a general assignment.^]
§ 111. Assignment by surviving Partner. — If a partner die, the
Mo. 329 ; Steinhart v. Fyhiie, 5 Mont. 463, 6 Pac. 367 ; Hitchcock v. St. John, Hoff.
Ch. 511; Haven.s v. Hu.ssey, 5 Paige, 30; Fisher v. Murray, 1 E. D. Smith, 341;
Deniing v. Colt, 3 Sandf. 284 ; Hayes v Heyer, 3 Sandf. 293 ; Holland i'. Drake, 29
Oh. St. 441; Daniels, Petitioner, 14 R. I. 500; Williams v. Roberts, 6 Cold. 493;
Turner o. Dugla.ss, 77 Te.\. 619, 14 S. W. 221; Dana v. Lull, 17 Vt. 390 ; Coleman v.
Darling, 66 Wis. 155, 28 N. W. 367. See Wilco.x v. Jackson, 7 Col. 521 ; Simmons
V. Curtis, 41 Me. 373 ; Mabbett v. White, 12 N. Y. 442 ; Wetter v. Schlieper, 4 E. D.
Smith, 707 ; McCuUough v. Somnierville, 8 Leigh, 415. There are a few decisions
which uphold the power of a single partner to make a general assignment. Anderson
V. Tompkins, 1 Brock. 461 (scmbk) ; Hennessy v. Western Bank, 6 W. & S. 300 ;
Robinson v. Crowder, 4 McC. 519 ; Graves v. Hall, 32 Tex. 665 ; Gordon v. Cannon,
18 Gratt. 387 ; Scruggs v. Burruss, 25 W. Va. 670. If one partner expressly objects
the other certainly has no power to make a general assignment. Adams v. Thornton,
82 Ala 260, 3 So. 20 ; Williams v. Roberts, 6 Cold. 493. If the other partners assent
to an assignment or ratify it the assignment is valid, though made by a single partner.
Osborne v. Barge, 29 F. R. 725 ; Adee v. Cornell, 93 N. Y. 572 ; Klumpp v. Gardner,
114 N. Y. 153, 21 N. E. 99 ; Hooper v. Baillie, 118 N. Y. 413, 23 N. E. 569. Such
assent must be made to appear affirmatively. Steinhart v. Fyhrie, 5 Mont. 463. If
the assignment is without authority it of course conveys no property of the firm ; and
though a ratification by the other partners generally makes it good from its date,
those who acquire a lien on the property meanwhile, as, for instance, attaching firm
creditors, may hold in spite of the ratification. Loeb v. Pierpoint, 58 la. 469, 12
N. W. 544; Stein v. La Dow, 13 Minn. 412 ; Kittrell v. Blum, 77 Tex. 336, 14 S. W.
69 ; Coleman v. Darling, 66 Wis. 155, 28 N. W. 367. But see Adee i;. Cornell, 93
N. Y. 572.
1 Harrison v. Sterry, 5 Cranch, 289 ; Andenson v. Tompkins, 1 Brock. 456 ; Loeb
V. Pierpoint, 58 la. 469, 12 N. W. 544 ; Hunter v. Waynick, 67 la. 555, 25 X. W.
776 ; Kirby v. IngersoU, 1 Doug. Mich. 477 ; Stein v. La Dow, 13 Minn. 412 ; Hol-
land V. Drake, 29 Oh. St. 441 ; Deckard v. Case, 5 W'atts, 22 ; Daniels, Petitioner,
14 R. I. 500 ; Robinson v. Ciowder, 4 McCord, 519 : Johnson i'. Robinson, 68 Tex.
399, 4 S. W. 625 (scinhic) ; McCullough v. Somnierville, 8 Leigh, 415; Williams v.
Gillespie, 30 W. Va. 586, 5 S. E. 210 ; First Nat. Bank r. Hackett, 61 Wis. 335, 21
N. W. 280 ; Coleman v. Darling, 66 Wis. 155, 28 N. W. 367. In Dickinson v. Legare,
1 De-saus. 537, the earliest case upon the subject, a contrary decision was made. But, in
that in.stance, " the assignment, being made by a citizen of one of the United States
during the existence of a war, to an alien enemy and in an enemy's country, was {)rob-
ably void by the laws of war, so far at least as to prevent its being carried into eff'ect
by any of the courts of this country." Per Chancellor Walworth, in Egberts v. Wood,
3 Paige, 517, 524. And in effect the case is overruled by the subsequent case of Robin-
sou V. Crowder, 4 McC. 519. See Kimball v. Hamilton Fire Ins. Co., 8 Bosw. 495.
In New York, however, absence of one partner will not give power to the others to
make a general assignment in trust for creditors. Robinson r. Gregory, 30 N. Y. 350
(cited) ; Coope v. Bowles, 42 Barb. 87; Palmer v. Myer.s, 43 Barb. 509 (see earlier
decisions, however, — Deming v. Colt, 3 Sandf. 291 ; Fisher v. Murray, 1 E. D. Smith,
341 ; Robinson v. Mcintosh, 3 E. D. Smith, 221 ; Kemp v. Carnley, 3 Duer, 1). But
if a partner absconds, the others may make such assignment. Palmer v. Myers, 43
Barb. 509.
It was held in Stein v. La Dow, 13 Minn. 412, that the mere temporary absence of
one partner will not give the other power to assign in trust for creditors.
136
THE LAW OF PARTNERSHIP.
[CH. VII.
surviving partners may undoubtedly a[)ply the effects of the part-
nership to the payment of its debts, without consulting- at all the
representatives of the deceased, (p) ^
§112. Assigumeiit of individual Share. — The power of each
partner over his own share or intciest in the partnership pruji-
erty stands upon an entirely different footing from his power over
the partnershij) property generally. It is certain that no partner
has any exclusive right to any one or more things of the jiartner-
ship. {q) If, in the case supposed before, the partnership owning
ip) Egberts v. Wood, 3 Paige, 517 ;
Wilson t;. Soper, 13 11 Mou. 411 ; thougli,
where there is more than one survivor, one
of them cannot assign the whole interest in
the partnership effects to trustees, for the
benefit of preferred creditors, without the
concurrence of the other. Egberts v.
Wood, supra. The remaining partners
have the same rights as against an assignee
of all one partner's interest. Clark v.
Wilson, 19 Pa. 414. As to whether, when
one of the partners is dormant, a deed of as-
signment of all the partnershij) pro]ierty, by
the other partner or partners, for the benefit
of creditors, is valid without being e.xecuted
by liim, see Egberts n. Wood, supra ; Drake
V, Rogers, 6 Mo. 317. Whether the gene-
ral partners in a limited partnership may
make a general assignment of the joint
funds, witliout the consent of the special
partner, was doubted in Mills v. Argall, 6
Paige, 577. See)>os/,ch. 17-
(q) Hence no general principle of the
law of partnership is better settled than
that nothing is to be considered the share
of any one partner but his projiortion of
the residue on the balancing of the |>artner-
ship accounts. Accordingly, where a
member of a copartnership sold and as-
signed to another " all his interest iu
and to the property, goods, wares, and
merchandise, and debts belonging to the
hrm,' it was held that a debt owing by
himself to the firm did not pass by the
assignment ; the interest of the assignor
being only what remained over and above
the amount of his indebtedness to the firm.
Van Scoter v. Letl'erts, 11 Barb. 140.
[Painter v. Painter, 68 Cal. 395, 9 Pac.
450; Norman v. Hudleston, 64 111. 11;
Over V Hetherington, 66 Ind. 365 ;
Thompson v. Lowe, 111 Ind. 272, 12
N. E. 476; Houk v. Walker, (Ind.) 30
N. E. 1080 ; Wiggin v. Goodwin, 63 Me.
389 ; Lambert v. Griffith, 50 Mich. 286,
15 N. W. 458; Finley v. Fay, 17 Hun, 67.]
See further Fox v. Hanbury, Covvp. 445 ;
Smith V. I)e Silva, Cowp. 469 ; West v.
Skip, 1 Ves. 239 ; Ex parte Ruffin, 6 Ves.
119 ; Ex parte Williams, 11 Ves. 5 ; Taylor
1 A surviving partner may pledge or mortgage the firm assets to secure firm
debts. Bradford Commercial Banking Co. v. Cure, 31 Ch. D. 324 ; Bohler u. Tappan,
1 F. R. 469; First Nat. Bank v. Parsons, 128 Ind. 147, 27 N. E. 486. Cuntra,
Anderson v. Norton, 15 Lea, 14, on the ground that a surviving partner cannot
give preference to a creditor. So a surviving partner may make a valid assignment
for the benefit of firm creditors. Enier.son v. Senter, 118 U. S. 3; Shattuck v. Chand-
ler, 40 Kas. 516, 20 Pac. 225 (scmble) ; Atchison v. Jones, (Ky.) 1 S. W. 406 ; Gable
V. Williams, 59 Md. 46 (scmble) ; Riley v. Carter (Md.), 25 Atl. 667 ; Hanson ;;. Met-
calf, 46 Minn. 25, 48 N. W. 441 ; Haynes v. Brooks, 116 N. Y. 487, 22 N. E. 1083 ;
Farmers' Bank v. Ritter, (Pa.) 12 Atl. 659. According to the better view, such an
assignment is good even if one creditor is preferred. Williams v. Whedon, 109 N. Y.
333, 16 N. E. 365 ; Be.ste v. Burger, HON. Y. 644, 17 N. E. 734 (overruling Nelson
t;. Tenney, 36 Hun, 327); Patton v. Leftwich, 86 Va. 421, 10 S. E. 686. And see Roach
V. Brannon, 57 Miss. 490 ; Krueger v. Speith, 8 Mont. 482, 20 Pac. 664. Contra, Sals-
bury V. Ellison, 7 Col. 167, 2 Pac. 906, 3 Pac. 485, on the ground that a surviving part-
ner is a trustee for creditors. See^os^, § 345.
§ 112.]
RIGHTS AND DUTIES OF PARTNERS.
137
the cotton agreed not to sell it, no one partner could separate ten
bales, and say to a customer, The firm will sell nothing; but I
will take these as my own, and will sell them to you. Such a sale
would pass no title whatever, (r) The proj)erty sold would be
available for the debts of the partnership ; and so, perhaps, would
any property into which it was converted, so long as that could
be distinctly traced and identified, (s)
Any partnership would probably consent that a partner might
take a part of their goods on his own account, and would charge
the same to him. But without such consent, express or implied,
it is quite clear that he can appropriate nothing to himself.
Every partner owns the whole partncrshij) property, subject to
the equal ownership of every other partner ; and no one partner
can make his own ownership of any part absolute, and relieve it
from the encumbrance of the ownership of the others without
their consent. Because each partner owns the property of the
V. Fields, 4 Ves. 396, .559 ; Holdenien v.
Sliackles, 8 B. & C. 612 ; Eddie v. David-
son, 3 Doug. 650 ; Pierce v. Jackson, 6
Mass. 243 ; Fisk v. Herrick, 6 Mass.
271 ; Doner v. Stautfer, 1 Pen. & VV.
198 ; Church v. Knox, 2 Conn. 514, 518 ;
Con well V. Sandidge, 8 Dana, 278 ; Hodges
V. Holenian, 1 Dana, 53; Pierce v. Tiernan,
16 Ci. & J. 253 ; Commercial Bank v.
Wilkins, 9 Me. 28 ; Murray v. Murra\',
5 Johns. Ch. 70 ; Nicoll v. Mum-
ford, 4 Johns. Ch. 522 ; Rodriguez v.
Heffernan, 5 Johns. Ch. 428 ; Greene v.
Greene, 1 Ohio, 251; Sumner y. Hampson,
8 Ohio, 330 ; Dyer v. Clark, 5 Met. 575 ;
Lingen v. Simpson. 1 Sim. k St. 603. We
shall he obliged to consider this question
of the interest of one partner in partner-
ship property more in detail, when we
treat of the remedies of third persons
against partners, and of partners intc?- se.
See post; §§ 179, 255. In Lovejoy v.
Bowers, 11 N. H. 404, it was held that
one partner cannot sell or mortgage an un-
divided interest in a specific part ; the
profierty belonging to the partnership.
The property constitutes a fund or capital
to carry on the business of the partnership,
and to pay partnership creditors ; and the
separate interest of each partner is an
interest in the surplus. Morrison v. Blod-
gett, S N. H. 231.
(r) See Rogers v. Batchelor, 12 Pet.
221.
(s) Croft V. Pyke, 3 P. Wms. 180. lu
West V. Skip, 1 Ves. 239, Lord Chancellor
Hardwicke asserted the general principle,
that the "partner's lien" (which is
nothing but the right of the partnership
to its own property) is not appropriated to
the original stock alone, but attaches to
whatever is substituted in its place. He
said that a partnership lien " is not con-
sidered as appropriated to the stock
brought in, but to every thing coming
in lieu duiing the continuance or after the
determination of the partnership. As in
Bucknal v. Roiston, Pre. Cli. 285, where a
lien was held to be on those goods which
were the produce of the original goods.
So in Brown v. Heathcote, Michael. T.
1749, it was held that it continued on what
was the produce by way of barter and sale ;
and that holds much more strongly in the
case of a partnership trade which cannot
otherwise be continued." The cases ot
Skii> V. Harwood, 2 Swanst. 586, and of
Ridgley v. Carey, 4 Har. & M'H. 167,
come yet nearer to the proposition of the
te.xt. Of course, however, this doctrine is
not pushed to the extent of saying, that
what at any time during the partnership
has been part of the partnership eil'ects
sliall in all future time remain part of the
partnership effects, notwithstanding a bond
fide transmutation. Ex parte Ruffin, 6
Ves. 119.
138 THE LAW OF PARTNERSHIP. [CH. VII.
firm, it has been held that one of two partners cannot be guilty of
burglary or larceny as to a house or propert}- owned by the
firm, (ss)
But although no partner owns absolutely any part of the prop-
erty, he has his own interest in the whole ; which interest we
have defined as an ownership of the whole, subject to the owner-
siiip of the other partners. And the question has repeatedly
arisen, whether he can sell and transfer this interest. The
answer, in general, is in the affirmative. (0 But a court of equity
will not foreclose a mortgage made by a partner of his interest in
the partnership property to secure his individual debt, if the prop-
erty of the partnership will not more than pay the debts of the
partnership, {tt)
It may be added, that while partners may own the partnership
property in whatever proportions they choose, they arc presumed,
in the absence of evidence, to have equal interests. (^tW)
This power of sale must, however, be subject to many qualifica-
tions. It is plain, from what was said in the preceding section,
that he cannot make his transferee a partner in his place, without
the consent of the others. But, if he can transfer his interest at
all, he must be able to give to the transferee some of his powers
as partner, in order to make the transfer available. Thus, he
must give to him the i)Ower of requiring an account and settle-
ment of the concern, or, at least, some just and adequate
ascertainment and setting off in severalty of his share, (w)
For this purpose, the transferee must go into equity ; for it is
not easy to see how he could, by means of trover or replevin or
case or assumpsit, find a full and sufficient remedy. But, if he
goes into equity, he must be prepared to do equity, and to submit
to the application of the principles of equity to his case. If, there-
fore, tiie articles expressly forbid such transfer ; or if they provide
for a continuance for a time certain, or by any other provisions
indirectly negative the right of transfer, or affix to it, as in the
case of joint-stock companies, certain conditions and requirements,
which have been disregarded ; or if the nature of the business,
(ss) AlMe V. Wright, 17 Ohio, 238. Bowden, 8 Rich. 9 ; Armstrong v. Fahne-
{t) See Raymond's Ca.se, 2 Rose, 255 ; stock, 19 Md. 59 ; Norris v. Vernon, 19
Kingman v. Spurr, 7 Pick. 255 ; Gilmore Md. 13.
V. Black, 11 Me. 488; Modilewell v. («) Jones v. Parsons, 25 Cal. 100.
Keever, 8 W. & S. 63 ; Ketcham v. Clark, {ttf) Moore v. Bare, 11 Iowa, 198.
6 Johns. 144 ; Manjuand v. N. Y. Manut'. («) See preceding notes, and Nicoli v.
Co., 17 Johns. 525 ; Mathewson v. Clark, Mnmford, 4 Johns. Ch. 522 ; Rodriguez
6 How. 122 ; Horton's Appeal, 13 Pa. 67 ; v. Hetfernan, 5 Johns. Ch. 417 ; Ex parte
Bray o. Fromont, 6 Mod. 5 ; Wilson v. Barrow, 2 Rose, 252.
§ 113.] RIGHTS AND DUTIES OF PARTNERS. 139
the especial purpose of the partnership, the method of transfer, or
any of the circumstances attending it, make it impossible for the
transfer to be enforced, — a court of equity would probably either
refuse to sanction the transfer at all, or would attach to their
enforcement of it conditions and provisions which would prevent
it from working a mischief. Subject to these qualifications, every
partner has, at common law, an unquestionable right of divesting
liimself, in good faith, of his interest in the partnership, in favor
of a third party. But, taking them into consideration, we think
it an accurate expression of the rule to say that no partner has a
right to transfer the whole of his interest in the partnership stock
to a stranger, unless he has a right to dissolve the partnership.
Indeed, as we shall sec in a subsequent chapter, such a transfer
works a dissolution.
§113. Right to Purchase. — As with sales so with purchases:
a purchase by one partner, in the course and within the scope of
the regular business of the firm, binds the partnership, (a) ^
(ct) The principle is laid down in a 430; Dougal v. Cowles, 5 Day, 515 ; per
ease as early as 1696, Hyat i?. Hare, Comb. Spencer, J., in "Walden v. Sherburne, 15
383. See Bond v. Gibson, 1 Camp. 185 ; Johns. 422 ; Braches v. Anderson, 14 Mo.
Dyke v. Brewer, 2 C. & K. 828 ; per 441 ; Dubois's Appeal, 38 Pa. 231.
Brainerd, J., in Mills v. Barber, 4 Day,
1 So the purchase of the lease of a brewerj' by one of a firm of brewers is within
the scope of tlie business, and one partner may bind the firm by making it. Stillmau
V. Harvey, 47 Conn. 26.
But the purchase of the interest of a partner is not within the scope of the part-
nership busine>s ; and one partner in making it is not acting for the firm. Cassels
V. Stewart, 6 App. Cas. 64 ; Summerlot v. Hamilton, 121 Ind. 87, 22 N. E. 973.
Where one of a firm of brokers, being the managing partner, agreed with a pur-
chaser of bonds on behalf of the firm to repurchase the bonds at any time for the
price paid, this was held apparently within the scope of the partnership business.
Johnston v. Trask, 116 N. Y. 136, 22 X. E. 377.
But one partner cannot without consent of the others accept in pa}'ment of a firm
debt shares in a company the owner of which becomes liable as a contributoi7.
Niemann v. Niemann, 43 Ch. D. 198 (C. A.).
A purchase by one partner, though in fraud of the partnership, binds the copart-
nership, if made bond fide and without gross negligence on the part of the vendor.
Bond V. Gibson, 1 Camp. 185 ; Dixon v. Alexander, 7 Ired. 4. See "Walden v. Sher-
burne, 15 Johns. 422, 423 ; also, ante, § 84, as to the effect of stipulations between
partners which are known to those who deal with them. And see Salomons v. Xissen,
2 T. R. 674 ; Treadwell v. Williams, 9 Bosw. 649 ; Morrison v. Atwell, 9 Bosw. 503.
So tlie partner may buy land for the firm if it is needed for the firm business.
Davis V. Cook, 14 Nev. 265.
But the goods bought must be in the line of the firm business, unless the purchase
is ratified. Porter v. Curry, 50 111. 319 ; Biggs v. Huberts, 14 S. C. 620 ; Bankhead v.
Alloway, 6 Coldw. 56.
The firm is liable, though the partner who bought goods on account of the firm
140
THE LAW OF PARTNERSHIP.
[CH. VIL
SECTION II.
EXTENT OF THE POWER OF A SINGLE PARTNER.
§ 114. Foundation of the Power of a Partner. — It is not
iiiifrcqueutly said tliat each pai'tner is the agent of all the rest,
and acts for them by possessing their authority, (v) It is however
(y) Such is almost universally the
doctrine of the authorities upon the sub-
ject. Watson, the earliest writer upon
the Law of Partnership, in stating the
principle upon which one partner's acts
bind the rest, made use of language which
has been quoted with approbation by all
subsequent text-writers upon the same
branch of law: "It may be laid down
that partners are bound by what is done
by one another in the course of the part-
nership business. Their liability under
contracts is commensurate and coextensive
with their rights. Although the general
rule of law is, that no one is liable upon
an}^ contract except such as are privy to it,
yet this is not contiavened by the liability
of ]>artners, as they may be imagined vir-
tually present at and sanctioning the pro-
ceedings they singly enter into in the course
of trade ; or as each vested with a power
enabling them to act at once as principals
and as the authorized agents of their co-
partners." Watson on Part. p. 167. So
in Hawken v. Bourne, 8 M. & W. 703,
Parke, B., says : "One partner, by virtue
of that relation, is constituted a general
agent for another, as to all matters within
the scope of the partnership dealings, and
has conmiunicated to him by virtue of
that relation, all authorities necessary for
carrying on the partnership, and all such
as are usually exercised by partners in
that business in which they are engaged."
Fox v. Clifton, 6 Bing. 792, per Tindal,
C. J.; Walden v. Sherburne, 15 Johns.
422 ; Van Keuren v. Parmelee, 2 N. Y.
525 ; Western Stage Company v. W^alker,
2 la. 512. In W^inship v. Bank of the
United States, 5 Pet. 561, Chief Justice
Marshall thus declares his opinion of the
basis upon which the power of one partner
rests: "A partner, certainly the acting
partner, has power to transact the whole
business of the tirm, whatever that may
be, and consequently to bind his partners
in such transactions as entirely as himself.
This is a general power, essential to the
well-conducting of business, which is im-
plied in the existence of a partnership.
When, then, a partnership is formed for a
particular purpose, it is understood to be
in itself a grant of poiver to the acting
members of the company to transact its
business in the usual way. If that busi-
ness be to buy and sell, then the individ-
ual buys and sells for the company, and
every person with whom he trades in the
way of its business has a right to consider
him as the company, whoever may com-
pose it. It is usual to buy and sell on
credit ; and, if it be so, the partner who
purchases on credit, in the name of the
firm, must bind the firm. This is a gen-
eral authority held out to the world, to
which the world has a right to trust." In
Greeley v. Wyeth, 10 N. H. 16, Parker,
C. J., says : "The authority of a partner
is much more extensive than that of a
mere agent."
afterwards misapplied them. Johnson i'. Barry, 95 111. 483 : Kenney v. Altwater, 77
Pa. 34 ; Clark v. Johnson, 90 Pa. 442.
Where it is a well-established custom for one firm to charge to the account of
another goods furnished to a customer sent to the former by the latter, the managing
partner of a firm has authority to charge it with the price of goods thus furnished to
a customer sent by the managing partner to another firm to buy the goods. Cameron
V. Blackman, 39 Mich. 108.
§ 115.] RIGHTS AND DUTIES OF PARTNERS. 141
more exact to say that the authority of each partner rests on prop-
erty quite as much as on agency, and arises from the nature and
purpose of the rehition of partners, and must be found and ilhis-
trated only in and by the law of partnership. This distinction is
material ; for some confusion and error have arisen from deriving
the definition and extent of the power too exclusively from the
law of agency. We take the true theory to be, that as the com-
mon law recognizes corporations, as peculiar persons, governed
by a peculiar but very complete system of law, so the law-mer-
chant, which is now a part of the common law, recognizes part-
nerships as quasi corporations. They are something between
individuals and corporations, and are not governed altogether by
the laws applicable to either, but by their own law. They are
like individuals, in that the names of the persons composing them
are to be used in court, whether they be plaintiffs or defendants.
But even the usual addition," copartners under the firm and style
of," (fee, indicates the point wherein a partnership resembles a
corporation, in being an aggregated body with an appellation
which is proper to it, which is indeed its mercantile name, under
which it does all mercantile business and signs all mercantile
papers. We do not say that a partnership is a person in the
sense in which the common law says that a corporation is one.
But we say it has a peculiar kind of personality, which must be
understood and recognized if we would understand and apply
aright the law of partnership. And we consider the individual
partner, when conducting the affairs of the partnership, not so
much as acting for himself because of his own interest, and then
for the rest by their authority, but as acting for and representing
this commercial personality. For it is one of the principal rules
of the law whicli creates, defines, and governs this personality,
that every one of those members who together constitute it has
full power to represent it and act for it in all mercantile transac-
tions within the scope of its business. And this power in each
member is coequal with the power of every other member, except-
ing only such modification as may be derived from the articles of
agreement which gave existence and form to this personality, or
some subsequent modification of them.
§ 115. General Extent of the Power of a Partner. — While the
power of one partner is the same with the power of every other,
unless qualified by the articles, the power of every partner — all
being alike — may be qualified not only by the articles, but by the
nature and limitations of their transactions, or the general usage
of merchants, or the especial usage of persons engaged in that
142
THE LAW OF PARTNERSHIP.
[CH. VII.
business, or even of that very firm. For out of all these sources
may arise what might be called implied stipulations with each
other.
Hence, this power of each partner to bind the firm is not con-
fined to mere selling and buying, but extends over all contracts
or obligations or acts fairly within the business of the firm, (w)
Numerous and various are the questions which have arisen as to
the application of this principle, as well as the cases which
answer these questions.
§ 116. Power to Borrow and Pay. — The general principle being,
then, that one partner may act for his copartnership in all trans-
(w) Anon., 12 Mod. 446; Smithy.
Baily, 11 Mod. 401 ; v. Layfield, 1
Salk. 292, Holt, 434 ; De Tastet v. Carroll,
1 Stark. 88 ; Swan v. Steele, 7 East, 210;
Sadler v. Lee, 6 Beav. 324 ; Blair v.
Bromley, 2 Phillips, 354; Lacy t?. M'Neile,
4 Dow. & R. 7 ; Winship v. Bank of the
United States, 5 Pet. 529, 661, 5 Mason,
176 ; Tapley v. Butterfield, 1 Met. 515 ;
Brown v. Lawrence, 5 Conn. 397 ; Beck
V. iMartin, 2 McMullaii, 260 ; Hawken v.
Bourne, 8 M. & W. 703; Hill v. Voorhies,
22 Pa. 68. And, if a partnership engages
in any transaction outside of its regular
business, the acts and declarations of one
partner, with respect to that transaction,
bind the firm, as much as though they
were nia<le with respect to some matter ih
the course of its ordinary and customary
business. Sandilands v. Marsh, 2 B. &
Aid. 673. See Ex parte Gardom, 15 Ves.
286. So where the proprietors of several
mail-coaches advertised that they would
not be accountable for any parcels above
the value of 5^., except upon certain con-
ditions, and A., one of the co-proprietors,
who kept the coach-office, made a special
agreement with the plaintiff, with respect
to one coach, by which those conditions
were dispensed with, it was held, that all
the owners of the coaches in which A.
was a partner, and by which the plaintiff's
goods were .sent, were bound by this spe-
cial contract. Helsby v. Mears, 5 B. & C.
504, 8 Dow. & R. 289. See Dwight v.
Biewster, 1 Pick. 50.
These powers of a partner exist, though
some of the partners be secret or dormant.
Winship v. Bank of the United States, 5
Pet. 529 ; Swan v. Steele, 7 East, 210 ;
Wiutle V. Crowther, 1 Cr. i J. 316.
Though it has been held, that, if there be
actual fraud in the original formation of
the partnership, a dormant partner who
has received none of the funds will not be
liable to creditors upon contracts made by
the ostensible partners. Mason v. Connell,
1 Whart. 381 ; Wood v. Connell, 2 Whart.
542. Nor does it affect the power of each
partner, that the partners are trustees, and
that the joint business is carried on for the
benefit of their ccstuis que trustent. Thick-
nesse v. Bromilow, 2 Cr, & J. 425. As to
the effect of fraud, see Dickson v. Alexan-
der, 7 Ired. 4 ; Emerson v. Harmon, 14 Me.
271; Bascom v. Young, 7 Mo. 1,4; Steel v.
Jennings, Cheves, 183 ; M'Kee v. Stroup,
Rice, 291. See Halls r. Coe, 4 McCord,
136; Henderson v. Wild, 2 Camp. 561 ;
Jones V. Herbert, 7 Taunt. 421 ; Arton
V. Booth, 4 J. B. Moore, 192 ; Furnival v.
Weston, 7 J. B. Moore, 356 ; Bignold v.
Waterhouse, 1 M. & S. 255 ; Farrar
V. Hutchinson, 9 A. & E. 641 ; Lloyd v.
Freshfield, 2 C. & P. 325 ; Barker v. Rich-
ardson, 1 Y. & J. 362 ; Mountstephen v.
Biooke, 1 Chitty, 391. In Eastman v.
Wright, 6 Pick. 323, Morton, J., said :
"In England, when a nominal plaintiff,
or one of several plaintiffs, releases an
action in fraud of the party in interest,
the court directly interfere, and set aside
the release. But in this State the courts
have never exercised that power. The re-
lease may be avoided, if fraudulent ; but
the question of fraud can only be tried liy
jury." The effect of stipulations between
partners upon the power of any one or
more of them, when those stipulations are
known to third parties, we have already
considered See ante, § 84. For their effect
when unknown, see post, § 160.
S 116.]
RIGHTS AND DUTIES OF PARTNERS.
143
actions fairly within tlie business of the firm, we will cite the
authorities which appear to determine what acts one partner in a
mercantile house may ordinarily do. We have already shown
that one partner may buy and sell, and may assign and transfer,
by way of either pledge or mortgage, and in trust or otherwise, in
the name of the partnership, (a) He may also bind the firm by
borrowing money, (aa) though he misapplies the money after bor-
rowing it ; or by lending money, (b) He may also make payment
for the firm of the joint debts, (^i) and may compound them ; (c?),
or he may take a release of them, which, though made to himself
personally, and even though providing that those bound with him
shall not be released, (cc) will yet be a complete discharge of the
whole firm, (c?) But a release to one partner, made with refer-
ence to a joint debt, to have the effect of discharging the firm
must be a technical one under seal, (e) Hence a covenant with
one partner not to sue him will not discharge his copartners,
(rt) See ante, § 108.
(aa) Rothwell v. Humphreys, 1 Esp.
406; Thicknesse v. Bromilow, 2 Cr. & J.
425, 430, 431 ; Etheridge v. Binney, 9
Pick. 272 ; Wbitaker v. Brown, 16 Weml.
505 ; Church v. Sparrow, 5 Wend. 223 ;
Onondatja Co. Bank v. De Puy, 17 Wend.
47 ; Winship v. Bank of the United
States, 5 Pet. 529, 5 Mason, 176 ; Lloyd
V. Freshfield, 2 C. & P. 325; Miller v.
Manice, 6 Hill, 119 ; Steel v. Jennings,
Cheves, 183 ; Emeison v. Harmon, 14
Me. 271 ; Bascom v. Young, 7 ilo. 4 ;
Hunt V. Hall, 8 Ind. 215; Hutchins v.
Hudson, 8 Humph. 426 ; Hogan v. Rey-
nolds, 8 Ala. 59 ; Saltinai.sh v. Bower, 22
Ala. 221 ; [Gilchrist v. Brande, 58 Wis.
184, 15 N. W. 818. And he may agree
upon security for the loan. Hopkins v.
Thomas, 61 "Mich. 389, 28 N. W. 147.]
If one partner authorizes another to pro-
cure an indorser on a note to be offered
for discount, he authorizes him to mort-
gage all the stock in trade to secure the
indorser, Patterson i>. Maughan, 39 U. C.
Q. B. 371 ; and, generally, such acts as
may be reasonably necessary to accomplish
the authorized act. Halpenny v. Pennock,
33 U. C. Q. B. 229.
(b) Alexander v. Barker, 2 Cr. & J.
133.
(bb) Innes v. Stephenson, 1 Moody &
R. 145; Tyson v. Pollock, 1 Barr, 375;
Cheap V. Cramond, 4 B. & Aid. 663;
Averell v. Lyman, 18 Pick. 351. See
Campbell v. Mathews, 6 Wend. 551;
[Hardy v. Norfolk .Mfg. Co., 80 Va. 403.
In Stout V. Ennis Nat. Bank, 69 Tex.
384, 8 S. W. 808, the court suggested
that payment of a firm debt by a single
partner might be valid, even if the other
objected to the payment, to the creditor's
knowledge.]
(c) Doremus i-. McCormick, 7 Gill, 49
65. See Ex parte Slater, 6 Ves. 146.
(cc) See Everard ?;. Heme, Litt. 191 ;
Cocks I'. Nash, 9 Bing. 341.
(d) Hammon v. Roll, March, 202 ;
Nt'dliam's Case, 8 Co. 136 ; Bower v.
Twadlin, 1 Atk. 294 ; Co. Litt. 232, a ;
Collins V. Prosser, 1 B. & C. 682 ; Tuck-
erman v. Xewhall, 17 Mass. 581 ; Amer-
ican Bank r. Doolittle, 14 Pick. 126;
Wiggin V. Tudor, 23 Pick. 444; United
States V. Thompson, Gilpin, 614 ; Bursou
V. Kincaid, 3- Pen. & W. 57 ; Willings v.
Consequa, Pet. C. C. 301, 307 ; Brown v.
Marsh, 7 Vt. 327 ; Gray v. Brown, 22
Ala. 262.
(fl) Shotwell I'. Miller, Coxe, 181 ;
Shaw V. Pratt, 22 Pick. 305 ; Walker v.
McCulloch, 4 Me. 421 ; Harrison r. Clare,
2 .Tohns. 449 ; Rowley v. Stoddard, 7
Johns. 207 ; De Zeug v. Bailey, 9 Wend.
336 ; Catskill Bank v. Messenger, 9 Cow.
37 ; Lunt v. Stevens, 24 Me. 534.
144
THE LAW OF PARTNERSHIP.
[CH. VII.
since such an agreement of itself evinces an intention on the part
of the partnership creditor to avoid the effects of a technical
release to one of the firm. (/) ^
§ 117. Power to receive Payment. — One partner may also
receive payment of the debts due the partnership ; (^) he may
compromise them ; (h) or he may release them, and this even by
deed.'-^ But though a partner may release a joint debt in his own
name only, a covenant by him personally, not to sue a deljtor of
the partnership, does not amount to a release of the debt, nor
prevent the firm from bringing an action for it in the names of
all the partners. In such case, the remedy of the partnership
(/) Hutton V. Eyre, 6 Taunt. 289 ;
Bank of Chenango v. Osgood, 4 Wend.
607 ; Dran v. Newhall, 8 T. R. 168 ;
Couch V. Mills, 21 Wend. 424 ; Chandler
V. Herrick, 19 Johns. 129 ; Goodnow v.
Smith, 18 Pick. 416 ; Shed v. Pierce, 17
Mass. 623 ; McLellaii v. Cumberland
Bank, 24 Me. 566 ; Mason v. Jouett, 2
Dana, 107 ; Hosack v. Rogers, 8 Paige,
229. And even a release under seal to
one partner, may, it seems, be accom-
panied with such provisos and conditions
as to confine its operation to that one
partner alone, and prevent it from dis-
charging the firm. Solly v. Forbes, 4
Moore, 448 ; 2 Br. & B. .38. See the lan-
guage of Shaw, C. J., in Wiggin v. Tudor,
23 Pick. 444, 445.
Upon the same principle, if two are
arrested on a joint ca. sa. for the amount
of the damages obtained against them in
an action of trespass, and the i)laintiff
discharges one of them upon his giv-
ing him his promissory note, this dis-
charge of one operates as a release of both
the defendants. Ballam v. Price, 2 J. B.
Moore, 235. See Foster v. Jackson, Hob.
59. In like manner, if one of two joint
debtors, who is in execution, obtains his
discharge from the creditor, the del)t is
thereby satisfied as to the other debtor
also. Clark v. Clement, 6 T.R. 625; Gould
V. Gould, 4 N. H. 173 ; Abel v. Forgue,
1 Root, 502.
((/) Anon., 12 Mod. 447 ; Duff v. The
East India Company, 15 Ves. 198 ; Tom-
lin V. Lawrence, 3 Moore & P. 555; M'Kee
V. Stroup, Rose, 291 ; Gregg v. James, 1
III. (Breese) 107 ; Yandes v. Lefavour, 2
Blackf. 371 ; Allen v. Farrington, 2
Sneed, 526 ; Porter v. Taylor, 6 Moore &
S. 156 ; King v. Smith, 4 C. & P. 108 ;
Brasier v. Hudson, 9 Sim. 1. See Hen-
derson V. Wild, 2 Camp. 561 ; Pritchard
V. Draper, 1 Rus. & JVi 191 ; Jacaud v.
French, 12 East, 317.
(/() Pierson v Hooker, 3 Johns. 70;
Cunningham v. Littlefield, 1 Edw. Ch.
104; Doremus v. McCormick, 7 Gill, 49,
65. [See Levick's Appeal, (Pa.) 2 Atl.
532. But he cannot accept on satisfaction
shares in a company the owner of which
is liable as a contributory. Niemann v.
Niemann, 43 Ch. D. 198 (C. A.).]
^ A release of one partner is valid and releases the firm. Ex parte Slater, 6 Ves.
146; Elliott v. Holbrook, 33 Ala. 659; Williamson v. McGinnis, 11 B. Mon. 74; Chase
V. Bean, 58 N. H. 183. But a mere covenant not to sue one partner will not be effectual
as a release of all. Roberts v. Strang, 38 Ala. 566 ; Hosack v. Rogers, 8 Paige, 229, 237.
And if the intention was not to release the firm, even a sealed release of one partner
will be construed as a covenant not to sue. Willis v. De Castro, 4C. B. N. s. 216 (of a
joint debt); Northern Co. v. Potter, 63 Cal. 157 ; Parmelee v. Lawrence, 44 111. 405 ;
Gardner ?7. Baker, 25 la. 343 ; Greenwald v. Raster, 86 Pa. 45 ; Williams v. Hitchings,
10 Lea, 326. Supra, note (/). This will be the case a fortiori where the release was
not sealed. Ex parte Good, 5 Ch. D. 46 ; McAllester v. Sprague, 34 Me. 296 : Burke
V. Noble, 48 Pa. 168. Supra, note [e). See Ames, Cas. on Part., 606 n.
2 See post, § 123.
§ 118.]
RIGHTS AND DUTIES OF PARTNERS.
145
debtor is against the covenanting partner, for the breach of
covenant. (/ )
§ 118. Power to conduct Legal Proceedings. — One partner has
power to represent and to act for the firm in legal proceedings.
Thus, one partner may, for himself and his copartner, sign a note
for the weekly payment under the Lords' Act. (^k) So, if two
partners commence an action, one may release the subject-matter
of it, which release will be binding upon his copartner, and ope-
rate as a bar to the action. (Z) Upon the same principle, one
partner may suspend proceedings in an action by the firm (w).
[So in an action against the firm, one partner may enter an
appearance for the rest. (?i) It seems however, that service of
process should be made on each partner personally, (o)]
As in legal proceedings generally, so in those under the
Bankrupt Laws, the act of one partner is the act of his partner-
ship. Thus, to sustain a fiat, one partner may make affidavit
(j) Walinsley v. Cooper, 3 Ter. & D.
149.
{k} Meux V. Hiunphrey, 8 T. R. 25;
Burton v. Issitt, 5 B. & Aid. 267.
{I) Barker v. Richardson, 1 Yoiinge &
J. 362 ; Arton v. Bootli, 4 J. B. Moore,
192 ; Furnival v. Weston, 7 J. B. Moore,
356 ; Jones v. H(!rbert, 7 Taunt. 421 ;
Wilson V. Mower, 5 Mass. 411. So, if a
bill is drawn by a firm, and one of the
]iartners agrees with the acceptor to pro-
250. See, however, contra. Haslet v.
Street, 2 McCord, 310; Loomis v. Pierson,
Harp. 470 ; Hills v. Ross, 3 Dallas, 331,
note ; Bright v. Sampson, 20 Tex. 21. A
different question arises after dissolution.
Hall v. banning, 91 U. S. 160, holds that
one partner after dissolution has no
authority to enter an appearance for
the firm, in a suit against it ; and a judg-
ment founded on such an appearance
is void, in case the other members re-
vide for it when due, this operates as a sided out of the State. A fortiori such a
release to the acceptor of any action that judgment would be void, if the other
might have been brought upon the bill, partners could be reached by process,
notwithstanding any fraud on the part of See ace. Atchison Savings Bank v. Tem-
the single partner as against his copart- plar, 26 F. R. 580.]
ners. Riclnnoiul v. Heapy, 1 Stark. 202 ;
Johnson v. Peck, 3 Staik. 66 ; Siiarrow v.
Chisman, 9 B. & C. 241.
(m) Harwood v. Edwards, cited in Gow
on Part. 65. See Loring v. Brackett, 3
(o) Moredou V. Wyer, 6 M. & G. 278,
and note ; Demoss v. Brewster, 4 S. & il.
661. See Bennett v. Stickney, 17 Vt.
531 ; Phelps v. Brewer, 9 Gush. 390. In
equity, however, where one of two part-
Pick. 403. Hence, if for a previous debt ners was abroad, service of sub]ioena upon
one partner draw a bill upon a debtor of the other partner has been held good
the firm, which is accepted by him, and service upon both. Carrington v. Cantil-
is taken by the partner in payment, this Ion, Bunb. 107; Coles f. Gurney, 1 Madd.
is giving time to the debtor, though the 187. And in Lansing v. M'Killup, 7 Cow.
bill was drawn in that one partner's name 416, service of declaration upon one of a
alone ; and the debtor cannot be sued for firm of attorneys, whose name did not
the amount of the debt till the bill has appear on the record as attorney for the
arrived at maturity and been dishonored.
Tomlin v. Lawrence, 3 Moore & P. 585.
(h) D. arguendo, Harrison v. Jackson,
7 T. P. 208 ; Bennett v. Stickney, 17 Vt.
531 ; Taylor v. Coryell, 12 S. & R. 243,
defendant, the business of the firm being
done in the name of the other partner,
was yet held good and regular service.
Alexander v. Stern, 41 Tex. 193. See
contra, Young v. Goodson, 2 Russ. 255.
10
146 THE LAW OF PARTNERSHIP. [CH. VII.
of debt, and execute the usual bond, (p) Pie may " prove a
debt, vote in the choice of assignees, and sign the certificate,"
in behalf of the firm, (q^ He may, by power of attorney,
authorize some third person to vote in the choice of assignees,
and to sign the certificate, etc., for the partnership, (r) He may
sign a petition presented for a hearing, (.s-) And he may bind
the firm in all other proceedings in bankruptcy, except in the
case of a i)etition for a fiat, in which all the partners must
join. (0
§ 119. Miscellaneous Powers of a Partner. — One partner may
also bind the firm by effecting insurances upon the joint prop-
erty, though a part-owner has no such implied authority, (m)
One partner may also, in the course of the joint business, take a
guaranty, which, if so intended, shall iimre to the benefit of the
firm.(y)
[ One partner may acknowledge a deed for the firm ; ^ may
waive demand and notice on a firm note ;^ may represent the
firm at a meeting of a corporation in which the firm is a stock-
holder, may vote at the meeting, and may waive notice of the
meeting ; '^ and may sign in the name and on behalf of the firm
a petition for a statutory lien. ^ ]
One partner has also power to appoint an agent to transact
the joint business, and to bind the partnership by his acts rela-
tive thereto, {w) So also, where a partnersliip is by name
(p) Ex parte Hodgkinson, 19 Ves. 291 ; B. L. vol. 2, p. 5. See Pierce v. Stockwell,
2 Rose, 174 ; Ex parte Peele, Buck, 457. 11 Ciish. 236.
iq) Fer Lovd E\don in Ex parte Hodg- {u) Hooper v. Lusby, 4 Camp. 6*5,
kinson, 19 Ves. 293 ; Ex parte Mitchell, [Hillock v. Traders' Ins. Co., 54 Mich.
14 Ves. 597 ; Ex parte Shaw, 1 Olyn & J. 531 ; Osgood v. Glover, 7 Daly, 3t57.]
129 ; Ex parte Bank, 2 Glyn & J. 3fi3 ; Ex See Irving v. Excelsior Fire Ins. Co., 1
parte Hall, 1 Rose, 2 ; Ex parte Bignold, 2 Bosw. 507 ; Graves v. Boston Marine In?;.
Mont. & A. 655. Co., 2 Cranch, 419 ; Foster v. United
(r) Ex parte Mitchell, 14 Ves. 597; States Ins. Co., 11 Pick. 85.
Ex parte Shaw, 1 Glyn & J. 129. {v) Garrett v. Handley, 4 B. & C. 664 ;
(.f) See Ex parte' Morgan, Buck, 109 ; Walton v. Dodson, 3 C. & P. 162.
Ex parte Cox, 1 Glyn & J. 355, note ; Ex (tv) Tillier v. Whitehead, 1 Dallas,
parte Fife, 2 Mont. & A. 577. 269 ; Lucas v. Bank of Dari^n, 2 Stewart,
(t) Buckland v. Newsame, 1 Taunt. 280, 297; Coons c. Reniek, 11 Tex. 134.
477 ;• Ex parte Peele, Buck, 457 ; Arch. See Eobinson v. Hotnian, 4 Bing. 562.
1 Citizens' Nat. Bank v. Johnson, 79 la. 290, 44 N. W. 551 ; Sloan v. Machine Co.,
70 Mo. 206.
2 Seldner v. Mount Jackson Nat. Bank, 66 Md. 488, 8 Atl. 262. But he may not
waive the benefit of the exemption laws so as to bind his partner. Terrell v. Hurst, 76
Ala. 588 ; Reed Lumber Co. v. Lewis, 94 Ala. 626, 10 So. 333.
3 Kenton Furnace R. R. & MTg Co. v. McAlpin, 5 F. R. 737.
* Garland v. Hickey, 75 Wis. 178, 43 N. W. 832.
§ l^lj
RIGHTS AND DUTIES OF PARTNERS.
147
empowered to act for a third party, one partner may execute
the agency so as to bind the principal, (x) But from a general
power of attorney granted to one of two partners the other can
derive no authority, (xx)
§ 120. Limitation of Power by Usage. — This principle is gen
erally subject to the further limitations of usage, although the
general usage of merchants would impose very little other restric-
tion than that already implied by the requirement that these
acts should always be within the regular business of the firm, (/y)
And if a contract be made by one partner in the name of the
firm with a stranger, if the transaction is foreign to the usual
course of dealing with the firm, this circumstance lays on the
stranger the duty and responsibility of inquiring and ascertain-
ing whether the partner has the authority of the firm. (^?/)
§ 121. Power to Submit to Arbitration. — A seeming exception
exists in relation to arbitration ; lor, while a copartner may
create a debt, or pay a debt, or compromise a debt, or, in good
faith, deal with it in any other way, the one thing which it is
said he cannot so do as to bind his copartners is to submit the
debt to arbitration. (2) Of the reasons given for this, one, that
{x) Gordon v. Buchanan, 5 Yerger, 71,
82 ; Beck v. Martin, 2 McMuUan, 260 ;
Kennebec Co. v. Augusta Ins. & Bank Co.,
6 Gray, 204.
(xx) Edmiston v. Wright, 1 Camp .88.
(y) Anon., 2 Ca. Ch. 38, 16 Vin. Ab.
242 ; Ex parte Agace, 2 Cox, 312 ; Living-
ston V. Roosevelt, 4 Johns. 251 ; Lawrence
V. Dale, 3 Johns. Ch. 23, 17 Johns. 427 ;
Rogers v. Batchelor, 12 Pet. 221 ; East-
man V. Cooper, 15 Pick. 276 ; Marsh v.
Gold, 2 Pick. 285 ; Nichols v. Huglies, 2
Bailey, 109 ; Thomas v. Harding, 8 Me.
417 ; Walcolt v. Canfield, 3 Conn. 198 ;
Wagnon v. Clay, 1 A. K. Marsh. 257 ;
Goode V. Linecurn, 1 How. (Miss.) 281 ;
Goodman v. Wliite, 25 Miss. 163. The
giving of guarantees for the debts of third
parties is not a part of the regular course
of business of an ordinary mercantile
house, and is not, therefore, within the
power of one partner. See po.if, § 144.
Nor is the receiving of notes for other
persons, and undertaking to collect them.
Hogan I'. Reynolds, 8 Ala. 59. And,
though every partner has an implied
authority to borrow money generally, he
is not thereby necessarily empowered to
bind the firm by a loan of money for the
purpose of increasing the fixed capital of
the concern. Fisher v. Tayler, 2 Hare,
218. See Greenslade v. Dower, 7 B. k C.
635. A partner cannot bind his copart-
ners, by a banking account opened by him
in his own name in behalf of the firm.
Alliance Bank v. Keaseley, L. R. 6 C. P.
433. So, notwithstanding the power of
disposal which each partner possesses with
respect to the joint property, he cannot
give it away. Ante, § 90. Finally, the
manner in which a particular firm has been
in the habit of managing its business may
greatly var}' and enlarge the power which,
under ordinary circumstances, that par-
ticular trade would confer upon one [lart-
ner. See "Woodward v. Winship, 12 Pick.
430.
(yy) Cadwallader v. Kroesen, 22 Md.
204.
(z) And this continues true, whether
the submission be under seal or not. Stead
V. Salt, 3 Bing. 101. But see Hallack r.
i\rarch, 25 111. 48, and ca-ses there cited.
A firm of five members declared against
the defendant for work, labor, materials,
&c. The defendant pleaded the general
148
THE LAW OF PARTNERSHIP.
[CH. VII.
submission to arbitration is no mercantile transaction, and could
not have entered into the minds of the partners when entering
into partnership, seems to us to beg the question, and to be a very
feeble reason ; (22) and another, that it may compel the part-
ners, by force of the award, to do things never contemplated by
them, and in no sense mercantile, seems to have little more
force, (a) The true reason may be, that the law, while it
favoi-s arbitration in many respects and ways, on the other hand
is jealous of it. The courts are, or until a very recent period (6)
issue, and put in an award upon the matter
touching which the action had been
biought. The articles containing the sub-
niis.sion, however, were signed bj' only
three of the partners. It was held that
the submission was insufficient, and could
not bind the firm. Hambidge i\ De La
Crouee, 3 C. B. 744, 745. In Adams v.
Bankart, 1 Cr., U. & R. 685, Lord Abinger,
C. B., said : "I think we have sufficient
authority for saying, that one partner
cannot bind another by a submission to
arbitration, without the assent of the
latter." Karthaus v. Ferrer, 1 Pet. 228;
Hall V. Lanning, 91 U. S. 160 ; Martin v.
Thrasher, 40 Vt 460 ; Gibson, C. J., in
Harper v. Fox, 7 W. & S. 143 ; Buchanan
V. Curry, 19 Johns. 137 ; Harrington v.
Higham, 13 Barb. 660 ; Buchoz v. Grand-
jean, 1 Mich. 367 : Wood v. Shep-
herd, 2 Pat. & H. 442 ; Jones v.
Bailey, 5 Cal. 345. See Boyd v. Emer-
son, 2 A. & E. 184 ; Skillings v. Coolidgc,
14 Mass. 43, 45 ; Martin r. Thrasher, 20
Vt. 460. [Thomas v. Atherton, 10 Ch. D.
185 (C. A.) ; Fancher v. Bibb Furnace
Co., 80 Ala. 481, 2 So. 268; Walker v.
Bean, 34 Minn. 427, 26 K W. 232;
Tillinghast v. Gilmore, (R. I.) 22 Atl.
942. If authorized by the other partners,
one partner may make a binding contract
to submit to arbitration. Davis v. Berger,
54 Mich. 652, 20 X. W. 629.] Respect-
ing the mode of showing the authority of
one partner to bind his firm by a submis-
sion, Lord Abinger, C. B., said, in Adams
V. Bankart, supra : " I do not mean to
say tliat such assent must be given in any
particular form of words, or that it re-
quires to be under the hand of the copart-
ner: all that is necessary is, that there
should be some evidence of an actual
authority conferred." And Parke, B., in
the same case: "I am entirely of the
same opinion. The authority to bind a
partner to submit to arbitration does not
flow from the relation of partnership ; and,
where it is relied upon, it must, like
every authority, be proved either by
express evidence, or by such circumstances
as lead to the jiresumption of such an
authority having been conferred."
When a submission is made of all
matters of difference between an indivi-
dual and a partnership, it includes only
such matters as are in dispute between
that individual and the partnership
jointly, and not those in dispute between
that individual and one or more of the
partners severally. Garland v. Noble, 1
J. B. Moore, 187.
(zz) Stead v. Salt, 3 Bing. 103 ; Adams
V. Bankart, 1 Cr., M. & R 681.
(ii) In Boyd v. Emerson, 2 A. & E. 184,
one question raised was, whether one part-
ner could bind his copartners by a parol
submission to arbitration. The court did
not tliink it necessary to decide the point.
The argument of counsel, however, in
favor of this power in one partner is
worthy of attention.
{b) See for cases questioning, and to
some extent overruling, the ancient prin-
ciple, that the courts will not enforce an
agreement to refer, Scott v. Avery, 8 Exch.
487, 497, 5 H. L. C. 811 ; Livingstone u.
Ralli, 5 E. & B. 132 ; Horton v. Soyer, 4
H. & X. 643 ; Russell v. Pellegrini, 6
E. & B. 1020. See also Cobb i-. New
England Mut. M. Ins. Co., 6 Gray, 192,
204. An English statute, 17 & 18 Vict.
c. 125, § 11, provides, that when there is
such an agreement, and an action is
brought in violation of it, the court may
grant a rule to stay proceedings, at the
request of the defendants. See j^ost, § 170.
§ 122.] RIGHTS AND DUTIES OP PARTNERS. 149
have been, unwilling to enforce or sanction an agreement by
which parties are compellable to renounce the perfectly impartial
and well-constituted tribunal which is open to all the public, for
one which the parties construct themselves, and which is open
to very many possibilities of error, (c)
Hence both law and equity have refused to permit a partner so
to bind himself and his copartners by an agreement to submit a
question as to oust them of their jurisdiction. But if a partner
made such a submission, and it was followed by an award, and
the award and submission were honest and reasonable, and the
partner thereon agreed that his firm should do the thing awarded,
this might now be held, in equity at least, as obligatory on the
partnership. (fZ)
Indeed, if all the partners agreed to submit a question to
referees, and then refused to perform their promise, this promise,
made by the whole, might not only be enforced by decree for
specific performance, but it would be a good contract at law, as all
such agreements to refer are, and the party refusing might be sued
for his breach of promise, (g) And in some of our States, the
power of a partner to bind the partnership, by his unsealed agree-
ment to refer a question in which the partnership was interested,
has been held as matter of law. (/)
§ 122. Power to Affix a Seal. — The contracts of a firm should
be unsealed ; for, on this point, the common law certainly con-
trols the law of partnership. No partnership has a seal, and no
partner can affix the seals of his copartners, or of any of them,
without their express authority. While this seems to be a
settled rule, there has been a great extent and some variety of
adjudication in regard to it, as we show in the note. (^) Per-
((•) Harrington v. Higham, 13 Barb, ford v. Green, 2 Mod. 228 ; JIcBride v.
660. Hagan, 1 Wend. 326, 336 ; Buchanan v.
{d) Buchanan y. Curry, 19 Johns, 137. Currj-, 19 Johns. 137, 143; Armstrong
(g) So, if one member of a firm enter v. Robinson, 5 G. & J. 412, 422; "Wood
into a submission in behalf of himself and v. Shepherd, 2 Pat. & H. 442 ; Jones v.
his partners, and undertake that the copart- Bailey, 5 Cal. 345.
nership shall perform the award, the acting (/") Southard v. Steele, 3 B. Jlon. 435 ;
]iartner is bound, though the firm is not; Taylor v. Coryell, 12 S. & R. 243 ; Wilcox
and a refusal by his copartners to be bound v. Singletary, Wiight, 420 ; [Gay v. Wait-
by the arbitration will be a breach of that man, 89 Pa. 453.]
partner's promise, for which he may be {q) For authorities against the power of
held liable in damages. Thus, in Com. a partner to bind his firm by a seal, see
Dig. " Arbitrament" (D. 2), it is said: Thomason y. Frere, 10 East, 418; Metcalfe
"If there be a controversy between A. of v. Rycroft, 6 M. & S. 75 ; Hall v. Bain-
the one part, and B. and C. of the other, bridge, 1 M. & G. 42 ; McKee v. Bank of
and B. submits for himself and C, and Mt. Pleasant, 7 Ohio, 175 ; McNaughten
there be an award that B. shall pay; this v. Partridge, 11 Ohio, 223; Trimble v.
is good, though C. be a stranger." Strang- Coons, 2 A. K. Marsh. 375 ; Southard v.
150
THE LAW OF PARTNERSHIP.
[CH. VII,
haps the old technical rule, that the authority to seal must be by
seal, (70 would not be strictly applied ; but, generally, at least
authority there must be. (/)
Steele, 3 T. B. Mon. 435; Gerard v. Basse,
1 Dall. 119 ; Hart v. Withers, 1 Barr,
285 ; Green v. Beals, 2 Gaines, 254 ; Clem-
ent V. Brush, 3 Johns. Gas. 180 ; Skinner
V. Dayton, 19 Johns. 513 ; Mills v. Barber,
4 Day, 428 ; Garland v. Davidson, 3
Jklunf. 189 ; Tuttle v. Eskridge, 2 Munf.
330 ; Shelton v. Pollock, 1 Hen. & M.
422 ; Posey v. Bullitt, 1 Blackf. 99 ;
Fisher v. Tucker, 1 McCord Ch. 169 ;
Nunuely v. Doherty, 1 Yerg. 26 ; Black-
burn V. McCallister, Peck, 371 ; Anon.,
Taylor, 113 ; Anon., 2 Hayw. 99 ; Person
V. Carter, 3 ]\Iuri:)hy, 321 ; Case of James
Taylor, 1 Browne, Ixxiii ; Cady v. Shep-
herd, 11 Pick. 400 ; Van Deusen v. Blum,
18 Pick. 229 ; United States v. Astley, 3
Wash. C. G. 508 ; Fleming v. Dunbar, 2
Hill (S. C), 532; Sloo v. State Bank of
Illinois, 2 ill. 441 ; Cummins v. Cassily,
5 B. Mon. 75 ; Montgomery v. Boone, 2
B. Mon. 244; Button v. Hampson,
Wright, 93; Ford v. Haft, Wright,
118; Lay ton v. Hastings, 2 Harr. 147;
Morris v. Jones, 4 Harr. 428 ; Albers v.
Wilkinson, 6 G. & J. 358 ; Lucas v.
Sanders, 1 McMuUan, 311 ; Napier v.
Catron, 2 Humph. 534 ; Smith v. Tapper,
4 Sm. & M. 261 ; Snyder v. May, 19 Pa.
235 ; County v. Gates, 26 Mo. 315 ;
Gibson v. AVarden, 14 Wall. 244 ; Walton
V. Tusten, 49 Miss. 569 ; [Herzog v.
Sawyer, 61 Md. 344 ; Moore v. Stevens,
60 Miss. 809 ; Weeks v. Mascoma Rake
Co., 58 N. H. 101; Sibley v. Young, 26
S. C. 415, 2 S. E. 314 ; Hull v. Young,
30 S. C. 121, 8 S. E. 695. The contrary
seems to have been held in one nisi prius
case, Mears v. Seronold, cited by Dampier,
orquendo, in Harrison v. Jackson, 7 T. R.
208.] Hence custom-house bonds, signed
and sealed by one partner, tliough in the
name of and for duties on goods imported
by and belonging to the partnership, are
yet, at common law, not binding on the
firm, but only on the executing member.
Tom V. Goodrich, 2 Johns. 213 ; Walden
V. Sherburne, 15 Johns. 409, 423 ; United
States V. Astley, 3 Wash. C. C. 508. But
so much practical inconvenience has been
found to result from this application of the
doctrine that, by act of Congress of March
1, 1S23, Stat. 2, chap. 21, § 25, it was pro-
vided that any bond to the United States
entered into for the payment of duties by
a merchant belonging to a firm, in the
name of such firm, shall equally bind tlie
partner or partners in trade of the ])erson
or persons by whom such bond shall have
been executed. 3 U. S. Statutes at Large
(ed. 1846), 737. [On the other hand, it
seems to be held in Texas that a partner
has authority in the name of the firm to
sign and seal a bond to dissolve an attach-
ment against the firm. Munzesheimer v.
Heinze, 74 Tex. 254, 11 S. ^N. 1094.]
Qi) See Steiglitz v. Egginton, Holt, 141;
Berkeley v. Hardy, 5 B. & C. 355'; Trimble
V. Coons, 2 A. K. Marsh. 375; Cummins v.
Cassily, 5 B. Mon. 74 ; Hart v. Withers,
1 Barr, 285; Pickering v. Holt, 6 Me.
160; Blood v. Goodrich, 9 Wend. 75, 76,
12 Wend. 525.
(i) It seems to be established in Eng-
land fand this is also the doctrine of some
early American cases), that, to bind his co-
partners by specialty, a partner must have
a special authority under seal. The requi-
site authority is not conferred by a general
partnership agreement under seal. Harri-
son V. Jackson, 7 T. R. 207 ; Steiglitz v.
Egginton, Holt, 141 ; Horsley v. Rush,
cited, arguendo, 7 T. R. 209. See Wil-
liams V. Walsby, 4 Esp. 220 ; Napier v.
Catron, 2 Humph. 534. Nor does the
doctrine, which is universally received as
well in this country as in England, that
one partner may execute a valid deed on
behalf of his firm, if his 'lopartners are
present and consent thereto, constitute any
exception to the general rule ; for, in this
case, tlie act of the executing partner is
considered the act of all. Lovelace's Case,
W. Jones, 268 ; Shep. Touch. 55 ; Fitz
Abr. tit. "Feoffment," ph 105 ; Com.' Dig.
" Fait" (A. 2) ; Burn v. Burn, 3 Ves. 578 ;
Ludlow i). Simond, 2 Caines Cas. 1, 42, 55;
MacKay v. Bloodgood, 9 Johns. 285 ; Mc-
Whorter v. McMahan, 1 Clarke Ch. 400 ;
Halsey v. Whitney, 4 Mason, 232 ; Darst
V. Roth, 4 Wash. C. C. 471 ; Anthony v-
Butler, 13 Pet. 423, 433 ; Hart v. Withers,
123.]
RIGHTS AND DUTIES OF PARTNERS,
151
§ 123. Limitations of the Rule as to Seals — An important
limitation to thu operation of the rule occurs in proceeding's in
1 BiiiT, SS.o, 291 ; Fichtliorii v. Boyer, 5
Watts, 159 ; Overton v. Tozer, 7 Watts,
333 ; Potter v. McCoy, 26 Pa. 458 ; Flood
V. Yaiides, 1 Blank t'. 102 ; Modisett v.
Lindley, 2 Bhokf. 120 ; Henderson v. Bar-
bee, 6 Blackf. 28; M'Artlmr v. Ladd, 5
Oiiio, 514, 517: Pike v. Bason, 21 Me.
287; Fleming v. Dunbar, 2 Hill (8. ('.),
533 ; Freeman v. Carliart, 17 Ga. 348 ; Lee
V. Onstott, 1 Ark. 206, 218 ; Day v. Laf-
ferty, 4 Ark. 450. The doctrine is the
same in equity as at law. Burn v. Burn,
supra; 1 Hov. Supp. 410. See Smith v.
Winter, 4 M. & W. 454 ; Palmer v. Justice
Assurance Co., 6 E. & B. 1015. While,
then, in England, the common-law doc-
trines in reference to the execution of
sealed -instruments have, as far as part-
ners are concerned, undergone but little,
if any, modification, the American cases
have made great and decided innovations.
Thus, in most of the States, it is well
established that a partnership will be
bound by a deed executed by one partner
on its behalf, provided the act of such
partner have from his copartners either a
previous parol authority or a subsequent
parol ratification. The grounds of this
qualification of the old rule of the common
law are clearly and forcilily stated in the
opinion of Mr. Chief Justice Jones, in
Gram v. Seton, 1 Hall, 262. This opinion
includes a very elaborate review of all the
leading authorities upon the subject. For
cases supporting the doctrine laid down in
Gram v. Seton, see Skinner v. Dayton, 19
Johns. 513, 5 Johns. Ch. 351 ; Smith v.
Kerr, 3 N. Y. 144 ; Cady v. Shepherd, 11
Pick. 400; Swan v. Stedinan, 4 Met. 548 ;
McXaughten v. Partridge, 11 Ohio, 223,
235 ; Purviance v. Sutherland, 2 Ohio St.
478, 486 ; Person v. Carter, 3 Murph. 321 ;
Fleming v. Dunbar, 2 Hill (S. C), 532;
Lucas V. Sanders, 1 McMullan, 311 ; Mc-
Cart V. Lewis, 2 B. Mon. 267 ; Darst v.
Koth, 4 Wash. C. C. 471 ; Bond v. Aitkin,
6 W. & S. 165, overruling some eaiiier
cases in Pennsylvania ; Jackson v. Porter,
2 Mart. (La.) 200 ; Drumright v. Philpot,
16 Ga. 424 ; Price v. Alexander, 2 Greene
(la. ), 427 ; McDonald v. Eggleston, 26 Vt.
154 ; Gwinn v. Rooker, 24 Mo. 290 ; Johns
V. Battin, 30 Pa. 84 ; Lowery v. Drew, 18
Tex. 786 ; [Herzog v. Sawyer, 61 Md.
344 (scinble) ; Sterling v. Bouk, 40 Minn.
11, 41 X. W. 236 ; Moore v. Stevens, 60
Miss. 809 (semblc) ; Stroman v. Varn, 19
S. C. 307 ; Sibley v. Young, 26 S. C. 415,
2 S. E. 314 ; Hull v. Young, 30 S. C. 121,
8 S. E. 695 ; Kasson v. Brocker, 47 Wis.
79, 1 N. W. 418; liumery y. McCulloch,
54 Wis. 565, 12 N. W. 65.] See also
Brulton c. Burton, 1 Chitty, 707. In
Worrall v. Munn, 5 N. Y. 221, 240, Paige,
J., regards the true rule, as ilerived from
the cases, to be, that a pi-ior jjarol author-
ity, or a subsequent ])arol ratification, will
make a specialty, executed by one partner
in behalf of his firm, binding upon his co-
partners, when the act in question would
have been valid if no seal had been used.
In Illinois and Alabama it is held to be a
presumption "warranted by common sense,
by justice, and sound reason, as well as by
the principles of law, that all the signers
of an instrument, indicating, upon its face,
an intention to seal it, adopt an}' seal or
scrawl that may be annexed to the name
of one." Davis v. Burton, 4 111. 41 ; Wit-
ter V. McNiel, 4 111. 433 ; Hatch v. Craw-
ford, 2 Porter, 54 ; Herbert v. Hanrick, 16
Ala. 581. In this last case the doctrine of
Gram v. Seton is asserted. In Tennessee,
the technical rule of the common law is
strictly adhered to, and no partner can
bind his copartnership by affixing a seal,
unless he be specially empowered, under
seal, so to do. Turbeville v. Pivan, 1
Humph. 113; Napier i'. Catron, 2 Humph.
534. See Lambden v. Sharp, 9 Humjih.
224. As for the evidence of prior author-
ity, or subsequent ratification from which
a jury may infer the power of one partner
to bind his copartners by deed, it has been
held, that where, in a deed of dissolution
executed by both partners, a debt, for
which one partner had given a sealed note
in the name of his firm, was put down as
a delit " owing by said firm," this was an
acknowledgment of the legal obligation
upon the firm of the specialty from which
an authority to execute it might be inferred.
Fleming v. Dunbar, 2 Hill (S. C), 532.
So where one of two partners gave a bond
152
THE LAW OF PARTNERSHIP.
[CH. vir.
bankruptcy ; (/) and in the case of a release to a joint debtor of
a partnership claim ; in both of which instances one partner
may bind his firm, and without special authority, (k) The
reason for the general rule is obvious. The seal belongs to
common law and not to the law-merchant, and partnership
belongs to the law-merchant and not to common law. (?) But
for a firm debt, in the name of the firm,
and the other partner afterwards gave di-
rec'tioiis for its payment, by an order in
wliich the bond was described as the bond
of tlie purtnersliip, it was held that this
order was evidence of a recognition of, and
an assent to, the act of the partner who
executed the bond, from which his author-
ity so to act might fairly be found by the
jury. Person v. Carter, 3 Murph. 321.
See Price v. Alexander, 2 Greene (la.),
427 ; Drumright i-. Philpot, 16 Ga. 424 ;
Bond V. Aitkin, 6 W. & S. 165 ; Tuttle v.
Eskridge, 2 Munf. 330 ; Wilson v. Hunter,
14 Wis. 683.
(./) See ante, § 118.
(k) The rule applicable to a release by
one partner of a joint claim has been gen-
erally stated thus: "Though one partner
cannot by deed bring any fresh burden
upon his copartner, he maj' bar him of a
right which they possess jointly." One
reason soTuetimes given for this apparent
exception to the general doctrine of the
common law is, that, inasmuch as a debtor
may lawfully' pay his debt to one partner,
he ought, also, to be able to obtain a dis-
charge upon due payment. Another rea-
son, of a similar nature, is suggested by the
above rule itself, which is, that though a
release be UTider seal, yet its operation is
not, like that of a bond or of a deed, to
expose the sejiarate persons and estates
(real as well as personal) of the partners
to special and dangerous liabilities. But
]irobahlj' the true, though technical, foun-
dation of the rule that one partner may
bind his firm by a release, under seal, of a
joint claim, is, that inasmuch as such a
release is certainly binding on the partner
who executes it, and inasmuch as he is a
necessary coplaintiff in any action by the
firm for the debt released, his release neces-
sarily operates as a bar to any joint action
by the partners for the same debt. The
rule is the same both in law and in equity.
2 Rol. Abr. 410 (D) ; Tooker's Case, 2 Co.
68 ; Ruddock's C:ise, 6 Co. 25 ; Periy v.
Jackson, 4 T. R. 519; Stead ?;. Salt, 10
J. B. Moore, 393, 3 Bing. 103 ; D. anju-
endo, Swan v. Steele, 7 East, 211 ; per
Parke, B., in Adams v. Bankart, 1 Or. M.
& R. 684, and in Phillips v. Clagett, 11
M. & W. 84, 94; Pierson v. Hooker, 3
Johns. 68 ; Bulkley v. Dayton, 14 Johns.
387 ; Morse v. Bellows, 7 N. H. 567 ;
United States v. Astle}', 3 Wash. C. C.
511 ; McBride v. Hagan, 1 Wend. 326,
337; Napier v. McLeod, 9 Wend. 120;
Salmon v. Davis, 4 Binney, 375 ; Curtwel,
V. Brown, 5 Jones, 263 ; [Allen v. Cheever,
61 N. H. 32 ; Stout v. Ennis Nat. Bank,
69 Tex. 384, 8 S. W. 808.] Respecting
deeds of composition, see Watson on Part,
p. 225 ; Ellison v. Dezell, 1 Selw. N. P.
(Am. ed.) 385. See Hawksliaw v. Par-
kins, 2 Swanst. 539, 544 ; Bruen v. Mar-
quand, 17 Johns. 58 ; Halsey v. Whitney,
4 Mason, 206, 232 ; Smith v. Stone, 4 Gill
& J. 310. As one partner may himself re-
lease a partnership claim, so he may, un-
der seal, authorize an agent to bind the
firm by the discharge of a debt due to it.
Wells V. Evans, 20 Wend. 251, 22 Wend.
324. Where one partner dul}"^ signed and
sealed a release of all actions, claims, de-
mands, &c., but the release did not pur-
port on its face to ajiply particularly either
to the separate demands of that partner or
to those of his firm, it not appearing that
the releasee was separately indebted to the
executing paitner, the release was held to
be a discharge of the debts due the part-
nership. Emerson r. Knower, 8 Pick. 63.
And if one partner execute a deed purport-
ing to release all the joint demands, parol
evidence that a particular claim was not
intended to be included is inadmissible.
Pierson v. Hooker, 3 Johns. 68.
(/) Lord Kenyon says, in Harrison v.
Jackson, 7 T. R. 210, that it would be a
most alarming doctrine to hold out to the
mercantile world that one partner could
bind the others by deed ; since it would
§ 123.]
RIGHTS AND DUTIES OF PARTNERS.
153
as there are very few mercantile transactions in which seals are
needed or used : and as, if a seal was used when the instrument
was equally effective without it, the courts regard the seal as
surplusage only ; (m) and as a subsequent ratification would
extend to the case of mortgages, and would
enable a jjartner to give to a favorite credi-
tor a real lien on the estates of the other
partners. But tlie reasoning of Jones,
C. J., on tliis point, in Giam v. Seton, 1
Hall, 269, seems conclusive : "Negotiable
papei', 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 cojiartner, ecjually
with tlie signature of the copartnership,
would, if permitted, be restricted to copart-
nership puri)Oses and copartnership opera-
tions solely ; and the joint deed of the
copartners executed by the present for the
absent members, be held competent to con-
vey or to encumber the copartnership prop-
erty alone, and to have no operation upon
the private funds or separate estate of the
coi)artners. With these restrictions upon
the use and operation of the seal, is not
the power of a partner to bind his copart-
ner, and to charge and encumber his
estate, as great and as mischievous, with-
out the authority to use the seal of the
absent partner, as it would be with that
authority ? " It is to be remembered, also,
that the distinction formerly taken between
debts by specialty and those by simple con-
tract— by which the former were held to
be a charge upon the real estate of the
debtor, wliile the latter were not — is now
for the most part done away, at least in
this country.
(vi) This doctrine has been oftenest
applied where one partner has transferrnd
an interest, absolute or qualified, in the
partnership property. Thus, a general or
partial assignment for the benefit of credi-
tors, Anderson v. Tompkins, 1 Brock. 462 ;
Harrison v. Sterry, 5 Cranch, 289 ; M'Cul-
lough V. Sommerville, 8 Leigh, 415 ;
Robinson v. Crowder, 4 McCord, 519 ;
Deckard v. Case, 5 Watts, 22 ; Hennessy
V. Western Bank, 6 W. & S. 300, 310 ;
a mortgage of personal property belonging
to the firm, Tapley r. Butterfield, 1 ]Met.
515 ; Milton v. Mosher, 7 Met. 244 ;
Sweetzer v. Mead, 5 Mich. 10" ; an as.sign-
ment of a chose in action due to the firm,
Everit v. Strong, 5 Hill, 163 : these trans-
actions have all been held valid, notwith-
standing that the partner, purporting to
act for his firm, has used a seal therein.
It has also been held, that a delegation of
power under seal by one partner to do acts
which the agent would have been equally
competent to do, if authorized by parol,
was not invalid on account of the unneces-
sary solemnity of the instrument making
the delegation. Lucas v. Bank of Darien,
2 Stewart, 280 ; [Boyd r. Thompson, (Pa.)
25 Atl. 769.] See also Price v. Alexander,
2 Greene (la.), 427, 433; Purviance i*.
Sutherland, 2 Ohio St. 478 ; and contra,
Cummins v. Cassily, 5 B. Mon. 74, 75.
LTpon the same principle, the case of
Brutton v. Burton, 1 Chitty, 707, seems
to have been decided. The doctrine has
been extended to executory contracts.
Lawrence v. Taylor, 5 Hill, 107 ; Worrall
V. Munn, 5 X. Y. 229. See Pike v. Bacon,
21 Me. 280 ; McWhorter v. McMahon, 1
Clarke Ch. 400 ; Ruffner v. McConnel, 17
111. 212, 216; [Sterling v. Bock, 40 Minn.
11, 41 X. W. 236.] See remarks of Rogers,
J., in Hennessy a. Western Bank, 6 W.
& S. 310. The limitation to the doctrine,
that a transaction by one partner which
would be binding on the firm without seal
is not vitiated because a seal is used, is
thus stated in Lucas v. Bank of Darien, 2
Stew. 297 : "It is said that even an act
which would be valid against the firm with-
out a seal, if done by the partner or by
agent under a parol appointment, would be
void if executed by specialty. On this
point I think a wise discrimination is
required. I take the distinction to be
this : that, if the bond or deed constitutes
the contract, it must be made the evidence
of it, and determines the remedy. Then
the principle applies ; because the legal
effect of the contract, the form of the
remedy, and the rules of evidence, are
essentially difTerent, the security being of
higher dignity." And this is in accord-
ance with the language of Marshall, C. J.,
154
THE LAW OF PARTNERSHIP.
[CH. VII.
liavc the effect of previous authority ; and as courts of equity,
and, to some extent, courts of law, place land, when it is part
of the partnership property (and it is in relation to conveyances
of land that the seal is most necessary, and most frequently inter-
feres with the law of ])artnership), on the same footing with
personal property, — the rule that a partner can athx no seal but
his own and that of one who has given him authority to do so,
may perhaps be considered as having now less practical import-
ance than formerly.
§ 124. Liability of Partner afBxing Seal for Firm. — Though one
partner, by the executiun for his copartners and himself of a
sealed instrument, cannot bind them, yet he always binds him-
self. This rule is one derived from the law of agency, and
regards each partner, not as standing for and representing the
partnership, but as the agent of all his copartners, and conse-
quently as always making himself liable, when, from want of
sufficient authority, he fails to bind those for whom he attempts
to act. (w)
in Audersoii v. Tompkins, 1 Brock. 462 :
" No action can be sustained against the
partner who has not executed the instru-
ment on the deed of his copartner. Ko
action can be sustained against the partnei',
which lests on tlie validity of such a deed
as to the persou who has not executed it."
Bewley v. Tams, 17 Pa. 48.5. The doc-
trire of the court in Purviance v. Suther-
land, 2 Ohio St. 478, is, that the technical
rule of the common law is satisfied by
holding that an agreement under seal in
the name of tlie firm, which is executed by
one partner only, is not the deed of the
partnership. But such an agreement,
though the deed only of the partner seal-
ing it, may yet be evidence of a partner-
ship liability (Fagely v. Bellas, 17 Pa. 67);
and perhaps the form of the agi'eement
may raise a presumption that a seal was
affixed to the contract by mistake. In
Kentuck)', by statute, promissory notes
the same effect in every other respect."
Per Robertson, C. J., in Montgomery v.
Boone, 2 B. Mon. 244. See Human v.
Cunitfe, 32 Mo. 316 ; Dubois's Ai)peal, 38
Pa. 231. But see Schmertz v. Shreeves,
62 Pa. 457, and Russell v. Annable, 109
Mass. 72.
(n) Elliot V. Davis, 2 Bos. & P. 338 ;
Hawkshaw v. Parkins, 2 Swanst. 543 ;
Trimble v. Coons, 2 A. K. Marsh. 375 ;
Williams v. Hodgson, 2 H. & J. 474 ;
La)-ton V. Hastings, 2 Harr. (Del.) 147;
Skinner v. Dayton, 5 Johns. Ch. 351, 19
Johns. 513 ; Clement v. Brush, 3 Johns.
Cas. 180 ; Gates v. Graham, 12 Wend. 53 ;
Jackson v. Stanford, 19 Ga. 14. [Weeks
V. Masconia Rake Co., 58 N. H. 101.]
See, however, Sellers v. Streator, 5 Jones,
261 ; also, supra, § 121, note (e). Thus,
if one onh^ of three partners execute a deeil
of assignment, purporting to convey all the
personal propert\- of the three to trusti^es,
have all the legal effect and dignity of for the benefit of creditors, such a deed
bonds under seal. Nevertheless, " if a
y)artner, in executing several notes for a
debt, in instalments, should happen to
affix a superfluous scrawl to one of them,
and omit it as to the others, the first
might be binding on himself alone, whilst
the others would bind all the partners ; and
this would be the only legal effect of the
scrawl, without which the note would have
will pass the share of the executing ])art-
ner. Bowker v. Burdekin, 11 M. & W.
128. See Dutton v. Morrison, 17 Ves. 193 ;
Hughes V. Ellison, 5 Mo. 463. But if one
partner executes a sealed instrument for
himself and his partners, and suit is
brought against all, there can be no re-
covery in that suit against the executing
partner. Hart v. Withers, 1 Barr. 285.
§ 125.]
RIGHTS AND DUTIES OF PARTNERS.
155
§125. Power to Confess Judgment. — The Same principles of
the common law which operate to disable a partner from binding
his copartners by specialty, must, it should seem, still more com-
pletely incapacitate him to bind them, without their distinct
assent, by a voluntary confession of judgment. A fortiori, he
cannot, by virtue of his implied power, authorize another to do
it, [as by giving a warrant of attorney for that purpose,] even
though the authority be not under seal, (a) But if a volun-
tary judgment be confessed by one partner against his firm, the
judgment is binding upon that partner, and will not be set aside
uj)on his aj)plication. Nor will it be altogether set aside upon
the application of the other partners ; but the court will amend
the judgment by ordering their names to l)e struck out, and
otherwise correcting it so that they shall not be bound, or will
order execution to be served on the ])erson and estate of the
acting partner only, or that only his several interest in the part-
nership property shall be sold, (h')
So, if a partner signs and seals a deed of
composition in the name and firm of him-
self and partner, he alone is entitled to
bring covenant thereon. • Metcalf v. Ry-
croft, 6 M. & S. 75. See Gates r. Graham,
12 Wend. 53. By contract under seal,
purporting to be made between the plain-
tiffs and the firm of B. & T., the former
agreed to erect a certain dam for the uses
of the partnership. The contract was
signed with the name of the partner-
ship by B., and a seal affi.ved thereto. It
was held that B., not having aiithority
thus to bind his copartners, the firm were
not liable on the specialty, but were liable
on an implied promise for the work done,
and the materials furni.shed by the jilain-
titfs to their benefit. Van Deusen v. Blum,
18 Pick. 229. See Sellers v. Streator, 5
Jones, 261 ; Fox v. Norton, 9 Mich. 207.
[See on the effect of a deed sealed by one
partner, Ames, Cas. on Part. 488.]
(a) Green v. Beals, 2 Caines, 254 ;
Crane v. French, 1 Wend. 311 ; JIcBride
V. Hagan, 1 Wend. 335 ; Grazebrook v.
M'Creedie, 9 Wend. 437 ; Waring v.
Robinson, 1 Hoflf. Ch. 524 ; Gerard v.
Basse, 1 Ball. 119 ; McKee v. Bank of Mt.
Pleasant, 7 Ohio, 175 ; Remington v.
Cummings, 5 Wis. 138; Hull v. Garner,
31 Miss. 145; Lagow v. Patterson, 1
Blackf. 252; Barlow i-. Keno, 1 Blackf.
252 ; Sloo V. The State Bank of Illinois,
2 111. 428 ; Waring v. Eobinson, 1 Hoff.
Ch. 525 ; Harper v. Fox, 7 W. & S. 142 ;
Bitzer v. Shunk, 1 W. & S. 340 ; Cash v.
Tozer, 1 W. & S. 519 ; Overton v. Tozer,
7 Watts, 331 ; Bennett v. JIarshall, 2
Mills, 436 ; Grier v. Hood, 25 Pa. 430 ;
]Morgan v. Richardson, 16 Mo. 409; Biiiney
V. Le Gal, 19 Barb. 592 ; per Wilde, C. J.,
Hainbidge v. De La Crouee, 3 C. B. 744.
See Brutton v. Burton, 1 Chitty, 707 ;
Kinnersley v. Mnssen, 5 Taunt. 264 ;
[Soper V. Fry, 37 Mich. 236 ; Ellis v.
Ellis, 47 N. J. 69 ; Perth Amboy Terra-
Cotta Co. V. Wood, 124 Pa. 367, 17 Atl.
4 ; McCleery v. Thompson, 130 Pa. 443,
18 Atl. 735. Contra, Wilmot v. The
Ouachita Belle, 32 La. Ann. 607. Where
a power to confess judgment need not be
sealed, a partner binds his firm by giving
such power. Alexander v. Alexander, 85
Va. 353, 7 S. E. 335, even though the
])0\ver is in fact sealed, since the seal may
be rejected. Boyd v. Thompson (Pa.), 25
Atl. 769.]
(h) Motteux V. St. Aubin, 2 W. Bl.
1133 ; Green v. Beals, 2 Caines, 254 ;
Crane v. French, 1 Wend. 311; St. John
V. Holmes, 20 Wend. 609 ; Gerard v.
Basse, 1 Dall. 119 ; Bitzer r. Shnnk, 1 W.
& S. 340 ; Harper v. Fox, 7 W. & S. 142 ;
Morgan v. Richardson, 16 Mo. 409. See
156
THE LAW OF PARTNERSHIP.
[CH. VII.
§ 126. Representations or Admissions of a Partner. — As a part-
ner may act for his firm by his general authority, so, as we have
ah-eady seen, his representations, acknowledgments,, admissions,
part payments, notice given or received, and all other doings on
which rights or obligations may be founded, are binding upon the
partnership : always, however, with the qualification that these
things belong fairly and actually to the bnsincss of the firm; for
this is a condition which universally limits his power. Thus, it
was once quite uncertain what was the effect of an acknowledg-
ment, by a partner, of a debt barred by the statute of limitations.
It was held to bind the firm as long as this statute was regarded
as founded on presumption of payment. Whether there had been
such payment was perfectly well known to every partner, and
known to each one after a dissolution as well as before. Conse-
quently, if a partnership owed a debt, and was dissolved, and the
debt ran on more than six years, and then one of the former
partners acknowledged the debt, this removed the presumption of
payment, and all the partners became bound, (n)
Gi-ier v. Hood, 25 Pa. 430 ; Smith v.
Tupiier, 4 Sm. & M. 261 ; Overton v.
Tozer, 7 Watts, 331 ; ('ash v. Tozer, 1 W.
& S. 519. See Sloo v. State Bank of
Illinois, 2 111. 428. A, a member of a
firm, confessed judgment against himself
for a firm debt. It was held that the
partnership property might be levied on
to satisfy this judgment. Ross v. Howell,
84 Pa. 129.
(k) The different views taken at differ-
ent periods by the courts of the statute of
limitations are stated in all the element-
ary treatises upon the subject. See 3
Parsons on Contracts, 61, 67 ; Angell on
Limitations, ch. 20 and 23. The earliest
decisions of all seem to indicate that the
statute was at first regarded as a statute of
repose. But this view soon gave way to
another, which construed the statute as one
of presumption entirely ; rendering it prob-
able that the barred debt had been paid,
but leaving this presumption liable to
rebuttal by anything amounting to proof
that the debt was in fact unsatisfied. It
is true, that, to recover upon a claim
against which the statute had run, there
was required not only satisfactory evi-
dence of the existence of the debt, but
also a new promise. But if the continued
existence of the debt was proved by the
acknowledgment or admission of the
debtor, or by any thing amounting thereto,
then the plaintiff was not required to go
furthei-, but might rest his case upon pmof
of the acknowledgment or admission, and
the law would imply therefrom the neces-
sary promise. While the statute of lim-
itations was regarded in this light, the
effect of an acknowledgment by one of
several joint debtors, that a joint debt
barred by the statute was still unsatisfied,
came before Lord Mansfield, in the case
of Whitcomb v. Whiting, 3 Doug. 652 ;
and it was there decided that the acknowl-
edgment of one must be taken as the
acknowledgment of all ; then, all having
admitted their joint indebtedness, the law
raises the new promise.
As to the support which the case de-
rives from other adjudications, it has some-
times been supjiosed to be inconsistent
with the earlier case of Bland v. Haselrig,
2 Vent. 1.52. See Atkins r. Tredgold,"2
B. & C. 28, opinion of Abbott, C. J.
But, besides the facts that the latter case
cannot be regarded as of nuich authority,
and can best be explained in a manner
which leaves it in no way contradictory
(see note in 3 Doug. 653 ; remarks of
Best, C. J., in Perham v. Raynal, 2 Bing.
309 ; of Parker, C. J., in White v. Hall,
3 Pick. 293 ; of Story, J., in Bell r. Mor-
rison, ] Pet. 367), AVhitcomb v. Whiting
§ 127.]
RIGHTS AND DUTIES OP PARTNERS.
157
§ 127. Acknowledgment removing Bar of Statute of Limitations.
— But when the statute of limitations came to be looked upon, us
has been constantly actcil upon as sound
law in the Englisli courts ; Jiut always,
however, we think, upon precisely the
same ^'rounds. So long as the statute of
limitations was regarded as one of pre-
sumption merely, Whitcomb v. Whiting
might be, as it was, literally followed.
Its doctrine was pushed to its utmost lim-
its in Jackson v. Fairbank, 2 H. Bl. 340.
There, one of two makers of a joint and
several promissory note having become
bankru^Jt, the payee received a dividend
under the comnussion, on account of
the note, within six years before action
brought. It was held, that the payment
of such dividend was such an acknowledg-
ment of the del)t as took the case out of
the statute of limitations as to the other
maker. This last case, and the whole
doctrine of Whitcomb v. Whiting, were,
it is true, strongly questioned in Brnn-
drum V. Wharton, 1 B. & Aid. 463. So
also in Atkins v. Tredgold, 2 B. & C. 23,
where, one of two makers of a joint and
several promissory note having died, it
was held, that the payment of interest
within six years by the other maker would
not take the case out of the statute, as
against the executors of the deceased prom-
isor. But in Perham v. Kaynal, 2 Bing.
306, where the two cases just mentioned
are considered, Whitcomb v. Whiting was
explicitly denied to be in any way im-
pugned by them, and was expressly af-
firmed as good law. See Halliday v.
Ward, 3 Camp. 32.
The cases we have just been consider-
ing were all adjudged while the statute of
limitations was still regarded as a statute
of presumption, Perham v. Raynal being
decided in 1824. In little more than a
year after, Court v. Cross, 3 Bing. 329,
was adjudged in the Common Pleas, and
■was the first case in which a decided stej)
was taken towards construing the statute
of limitations as a statute of repose. C. J.
Best, who then delivered the opinion of
the court, reasserted this view of the stat-
ute in Scales v. Jacob, 3 Bing. 652. The
position he assumed was adopted and
confiimed by Lord Chief Justice Tenter-
den, in Turner v. Smart, 6 B. & C. 603 ;
and thenceforward the statute of limita-
tions has been invariably regarded and
construed as a statute of repose. The
earlier doctrine was also applied to pay-
ments of interest, made by one of the
makers of a joint and several promissory
note, though more than six years after it
became due. They were held to take the
case out of the statute, as against the
other maker. Manderston v. Robertson,
4 Man. & Ry. 440 ; Channell v. Ditch-
burn, 5 M. & W. 494. But, in such case,
the payment or payments must be dis-
tinctly shown to be made on account of
the particular debt. Holme v. Green, 1
Stark, 488. So, where A. & B. made a
joint and several promissory note, B.
being merely a surety, a part payment by
A., within six years and during the life-
time of B., was held to take the case out
of the statute so as to make B.'s admin-
istrator liable on the note. Burleigh v.
Stott, 8 B. & C. 36. See Perham v. Ray-
ual, 2 Bing. 306; Wyatt v. Hodson, 8
Bing. 309. And where one of three joint
contractors, more than six years after the
contracting of the oiiginal debt, but within
six years of the action brought, made a
payment on account of a joint debt, but
in fraud of his co-contractors, it was
nevertheless held to bar the operation of
the statute as against the other two.
Goddard v. Ingram, 3 Q. B. 839. See
Martin v. Brydges, 3 C. & P. 83. But, as
we have already seen, payment of interest
by one or two makers of a joint and sev
eral promissory note, after the death o?
the other, will not take the case out o'.
the statute, as against the executor of W\f
deceased maker, Atkins v. Tredgold, J
B. & C. 23. See Ault v. Goodiich, 4
Russ. 430 ; Way v. Bassett, 5 Hare, 55 ;
the principle being that the joint contract
is determined by the death of one of the
joint contractors ; nor after the death of
one of two joint contractors will a pay-
ment on joint account by the executor of
the deceased take a debt out of the statute,
as against the survivor. Slaters. Lawson,
1 B. & Ad. 396. See Gittin v. Ashby, 2
C. & K. 139. See further, in confirmation
of the general principle, Rew v. Pettet. 1
158
THE LAW OF PARTNERSHIP.
[CH. YII.
it now is universally, as a statute of repose and not of presump-
tion, and as resting on the principle that the courts should not
A. & E. 196; Pease V. Hirst, 10 B. &C.122;
Clark V. Hoojier, 10 Biijc?. 460 ; rhtchuid
V. Draper, 1 Russ. & Myl. 191.
Respecting ackiiowledgineuts or prom-
ises by words only, the question is ]nit at
rest in England by Lord Teuterden's act
(9 Geo. 4, ch. 14), which, after reciting
21 Jac. 1, ch. 16, and the Irish act of 10
Car. 1, sess. 2, ch. 6, declares: "that
where there shall be two or more joint
contractors, or executors, or administra-
tors of any contractor, no such joint con-
tractor, executor, or administrator, shall
lose the benefits of the said enactments,
or either of them, so as to be chargeable
in respect or by reason only of any written
acknowledgment or promise made and
signed by any other or others of them."
But, with respect to admissions by pay-
ments, the same statute provides " that
nothing therein contained shall alter, take
away, or lessen the effect of any payment
of any principal or interest, by any per-
sons whatsoever," The effect of this
proviso is, to leave the effect of past pay-
ment of principal or interest, by one of
several joint debtors, the same as before
the passage of the statute ; and the reason
for it is said by Chief Justice Tindal in
Wyatt V. Hodson, 8 Bing. 312, to be,
"Because the payment of principal or
interest stands on a different footing from
the making of promises, which are often
rash or ill interpreted ; while money is
not usually paid without deliberation,
and payment is an unequivocal act, so
little liable to misconstruction as not to
be open to the objection of an ordinary
acknowledgment." Chippendale v. Thur-
ston, 4 C. & P. 98 ; 1 Moo. & M. 411 ;
Waters v. Tompkins, 2 C, M. & R. 723.
The principle, then, being established
in the English law, that an acknowledg-
ment by one of several joint debtors of
the existence of a joint debt will operate
as a new promise by all to pay, which
principle is. however, by statute limited
in its application to acknowledgments by
past payments, we may next inquire
what is the effect in the English law of a
payment by one of several partners of
principal or interest on account of a part-
nership debt, after the firm has been dis-
solved. It seems to be settled in England
that one partner may, after dissolution,
impose a fresh charge upon his copartners,
by a payment of princi[ial or of interest,
on account of an unliquidated partnership
debt barred by the statute of limitations.
Two reasons seem to be given for this
doctrine. In the first place, jiartners
after dissolution, being still jointly liable
for the partnership debts, are still regarded
as joint debtors, and therefore within the
rule of Whitcomb v. Whiting. Further-
more, it was decided in Wood ?\ Braddick,
1 Taunt. 104, that an admission by one
of two pai'tners, after the dissolution
of the ]iartnership, concerning joint con-
tracts made during the partnership, is
competent evidence to charge the other
partner. In Pritchard v. Draper, 1
Russ. & Myl. 191, 199, Lord Chancel-
lor Brougham asserted the same doc-
trine ; and it being objected that the
declarations of one partner after dissolu- ,
tion as to a fact relating to partneiship
transactions, but which fact also took
place after dissolution, were not admis-
sible evidence against the other paitner,
he said: "The partnership, it is true, had
ceased ; but so, in Whitcomb v. Whiting,
had the connection between the two mak-
ers of the promissory note. And in God-
dard v. Ingram, 3 Q. B. 839, where one
of several jiartners, after the dissolution
of his firm and more than six years after
the incurring of the original debt, but
within six years of the bringing of the
action, had made a part payment on ac-
count of it, which the jury found to be
fraudulent upon his copartners, it was
held, nevertheless, that the payment
barred the operation of the statute."
Such seems to be the state of the
English law upon this subject. With
respect to the law of this countrj', as we
have before said, it seems to be settled,
generally, and perhaps universally, that
the statute of limitations is one of repose,
and not one of presumption. Whitcomb
V. Whiting, as above explained in connec-
tion with the statute of limitations, has
also been followed in many authoritative
§ 127]
RIGHTS AND DUTIES OF PARTNERS.
159
enforce an unpaid debt, if it were old and stale, then the bar of
the statute could only be removed by a new promise ; that is, the
old debt could not itself be demanded, but it was a good consid-
eration for a new promise ; and, if this were made, it could be
enforced. But the question then is. Who makes it ? And this
will depend upon whether the partnership is still in existence, or
has been dissolved. If it still exists, the partner making the
promise has a right to make it for his copartners and himself,
and it is then the promise of the whole partnership.^ But, if the
])artnership be dissolved, his authority has wholly gone, and the
new promise which he makes is his own only.^ The cases are
cases, and its principle applied to all
kinds of acknowledgments and admissions,
except where in England its operation
has been restricted by express enactment.
Thus in the New England States, with
the exception of New Hampshire, the
doctrine of that case has been uniformly
approved. Getchell v. Heald, 7 Me. 26 ;
Pike V. Warren, 15 Me. 390 ; Dinsmore
V. Dinsmore, 21 Me. 433 ; Shepley v.
Waterhouse, 22 Me. 497 ; Martin v. Root,
17 Mass. 227 ; Cambridge v. Hobart, 10
Pick. 232 ; Ilsley v. Jewctt, 2 Met. 168 ;
Wheelock v. Doolittle, 18 Vt. 440; Joslyn
V. Smith, 13 Vt. 3.53 ; Turner v. Ross, 1
R. I. 83 ; Bound v. Lathrop, 4 Conn. 336;
Coit V. Tracy, 9 Conn. 1. So also in
Virginia, Shelton v. Cocke, 3 Munf. 191
(see Farmers' Bank v. Clarke, 4 Leigh,
603); in South Carolina, in the early cases,
Beitz V. Fuller, 1 McCord, 541 ; Fisher v.
Tucker, 1 McCord, Ch. 169 ; which are,
however, now overruled ; in North Caro-
lina, Davis V. Coleman, 7 Ired. 424 ; in
Pennsylvania, Zent v. Heart, 8 Barr, 337,
overruling prior case ; in New York, in
some of the early decisions, which, how-
ever, have since been overruled, see Smith
V. Ludlow, 6 Johns. 257 ; Johnson v.
Beardslee, 15 Johns. 3. The rule of Whit-
comb V. Whiting, as in England, has also
been fre<[uently apjdied in this country to
the case of a joint and several promissory
note, made by two or more parties, but
by some of them only in the character of
surety. Hunt v. Bridgham, 2 Pick. 581 ;
Sigourney v. Drury, 14 Pick. 387 ; Shepley
V. Waterhouse, 22 Me. 497 ; Joslyn v.
Smith, Vt. 356 ; Clark v. Sigourney, 17
Conn. 511 ; Caldwell v. Sigourney, 19 Conn.
37 ; Zent v. Heart, 8 Barr. 337. And in
Fisher v. Tucker, 1 McCord Ch. 169, and
Hathaway v. Haskell, 9 Pick. 42, it is
held, in accoidance with Atkins v. Tred-
gold, and Brandrum i-. Wharton, supra,
that, one of two joint debtors dying,
neither the survivor nor the representa-
tives of the deceased can, as against each
other, by their acknowledgments, part
payment, &c., take the debt out of the
statute. See also Roosevelt v. Mark, 6
Johns. Ch. 266, 291, 292. [For the pres-
ent state of the law ou this point, see
post, § 128, n. 2.]
1 Acknowledgment before dissolution. — Before dissolution, an acknowledgment by
one partner will bind the firm. Watson v. Woodman, L. R. 20 Eij. 721, 730 (semhJe
but see Goodwin v. Parton, 41 L. T. Rep. 91, 42 L. T. Ref>. 568) ; Sears i;. Starbird,
78 Cal. 225, 20 Pac. 547 ; Tate v. Clements, 16 Fla. 339 ; Abrahams v. Myers, 40 Md.
499 ; Faulkner v. Bailey, 123 Mass. 588 (semblc) ; Harding v. Butler, 156 Mass. 34,
30 N. E. 168 ; Kenniston v. Avery, 16 N. H. 117 ; Tappan v. Kimball, 30 N. H. 136 ;
Wood V. Barber, 90 N. C. 76 (semble) ; Carlton v. Coffin, 28 Vt. 504 ; Walker i;. Wait,
50 Vt. 668.
2 Acknowledgment after dissolution. — In America there is much confusion in the
authorities on this point. The better view would seem to be, that after dissolution the
power of a partner to bind his copartner has ceased, and an acknowledgment of a pre-
160 THE LAW OF PARTNERSHIP. [CH. VII.
very numerous in which these questions are raised ; and we
endeavor to exhibit in our notes the principal authorities. It
existing firm delit, by a ])artiiil jiayiiK^iit or a new promise, will not, raise the bar of
the statute against the jiartners who take no part in it. Bell v. Morrison, 1 I'et. 351 :
Bispham v. Patterson, 2 McLean, 87 ; Cronkhite v. Herrin, 15 F. R. 888 ; Wilson v.
Torbert, 3 Stew. 296 ; Myatts v. Bell, 41 Ala. 222 ; Espy v. Comer, 76 Ala. 501 ; Curry
V. White, 51 Cal. 530 ; Sears v. Starbird, 78 Cal. 225, 20 Pac. 547 ; Tate v. Clements,
16 Fla. 339 ; Kallenbach v. Dickinson, 100 111. 427 ; Yandes v. Lefavour, 2 Blackf.
371 ; Kirk v. Hiatt, 2 Ind. 322 ; Peirce v. Tobey, 5 Met. 168 ; Sigler v. Piatt, 16 Mich.
206 ; Gates v. Fisk, 45 ilich. 522, 8 N. W. 558 (semble) ; Mayberry v. Willonghby, 5
Neb. 368 ; Mann «. Locke, 11 N. H. 246 ; Tappan v. Kimball, 30 N. H. 136 ; Van
Keuren v. Parmelee, 2 N. Y. 523 ; Shoemaker v. Benedict, 11 N. Y. 176 ; Payne v.
Slate, 39 Barb. 634 ; Graham v. Selover, 59 Barb. 313 ; Kerper v. Wood, 48 Oh. St.
613, 29 N. E. 501 ; Belote v. Wynne, 7 Yerg. 534 ; Muse v. Donelson, 2 Humph. 166 ;
Folk V. Russell, 7 Baxt. 591 ; Haddock v. Crocheron, 32 Tex. 276 ; Conrad v. Buck,
21 W. Va. 396.
In some authorities however a distinction is made between acknowledgments made
before and those made after the statutory period has run. After the statutory ])eriod
has run, these authorities hold that the firm is not bound, because to hold it bound
would give to a partner after dissolution the power to charge his copartner with a new
debt. Merrit v. Pollys, 16 B. Mon. 355 ; EUicott v. Nichols, 7 Gill, 85 ; Newman v.
McComas, 43 Md. 70 ; Whitney v. Reese, 11 Minn. 138 ; Steele f. Jennings, 1 McMull.
297. But if the acknowledgment is made by a partner before the statute has run, though
after dissolution it binds all the partners. Burr t'. Williams, 20 Ark. 171 ; Austin y.
Bostwick, 9 Conn. 496 ; Bissell v. Adams, 35 Conn. 299 ; Beardsley v. Hall, 36 Conn.
270 ; Brewster v. Hardeman, Dudley (Ga.), 138 ; Tillinghast v. Nourse, 14 Ga. 641 ;
Parker v. Moore, 2 La. Ann. 1017 ; Carroll v. Gayarre, 15 La. Ann. 671 ; Greenleaf v.
Quincy, 12 Me. 11 ; Schindel v. Gates, 46 Md. 604; White v. Hale, 3 Pick. 291 ;
McClurg V. Howard, 45 Mo. 365 ; Merritt v. Day, 38 N. J. 32 ; Casebolt v. Ackerman,
46 N. J. 169.
In a few jurisdictions it has been held that even if made after the statute has run,
an acknowledgment by one partner after dissolution binds all the partners. Mclntire v.
Oliver, 2 Hawks, 209 ; Willis v. Hill, 2 Dev. &B. 231 ; Walton v. Robinson, 5 Ire.
341 (nullified by statute ; Wood v. Barber, 90 N. C. 76) ; Turner v. Ross, 1 R. I. 88
(semble) ; Beitz v. Fuller, 1 McC. 541 ; Veale v. Hassan, 3 McC. 273 ; Wheelock v.
Doolittle, 18 Vt. 440 ; Carlton v. Ludlow Woolen Mill, 28 Vt. 504 ; Mix v. Shattuck,
50 Vt. 421 ; Shelton v. Cocke, 3 Munf. 191 ; Brockenbrough v. Hackley, 6 Call, 51.
In Pennsylvania, it is held that an acknowledgment by the liquidatinci jmrtner will
remove the bar of the statute. Houser v. Irvine, 3 W. & S. 345 ; Campbell v. Floyd,
(Pa.), 25 Atl. 1033. But when the acknowledgment is by any other than the liqui-
dating partner, it does not affect copartners. Levy v. Cadet, 17 S. & R. 126 ; Cole-
man V. Fobes, 22 Pa. 156 ; Reppert v. Colvin, 48 Pa. 248 ; Wilson v. Waugh, 101 Pa.
233 ; Kauffman v. Fisher, 3 Grant, 302.
If however the creditor had no notice of the dissolution the acknowledgment by one
partner binds all. Sage v. Ensign, 2 All. 245; Buxton v. Edwards, 134 Mass. 567;
Kenniston v. Aveiy, 16 N. H. 117 ; Tappan v. Kimball, 30 N. H. 136 ; Clement v.
Clement, 69 Wis. 599, 35 N. W. 17.
An individual promise by one partner to pay the debt does not remove the bar of
tlie statute against the firm. Ford v. Clark, 72 Ga. 760 ; Stewart's Appeal, 105 Pa.
307.
It is to be added that, in a number of the States (and the number is increasing),
statutes similar to 9 Geo. 4, ch. 14, have rendered the acknowledgment of one joint
contractor insufficient to take any case out of the statute of limitations as to his
co-contractors. Generally, as in the English statute, though not uniformly, an excep-
§ 128.] RIGHTS AND DUTIES OF PARTNERS. IGl
will be seen that in these cases, not only the general question of
the authority of the partner Is considered, but the particular
questions which occur when the new promise is made, if at all,
not only by an acknowledgment, but, m the absence of this, by
part payment of the j)rincii)al or of the interest.
§ 128. Admissions after Dissolution. — A similar principle deter-
mines all the questions raised by the acts of one partner. If the
partnership has ceased, his authority has gone, unless he derives
it from his power to settle the estate as surviving partner, or in
some other especial manner. That is, he can no longer make a
new promise, which shall be their promise as well as his. But it
does not follow that his admissions and acknowledgments, as
those of one well acquainted with the facts, especially if they are
against his interest, should not be received as determining a
question, not of future promise, but of a past fact. We cannot
but think, however, that the true principle which should decide
this much-vexed question, must be this : After a dissolution,
however caused, the new words and acts of those who were part-
ners shall have no effect upon the rights or obligations of their
former copartners, excepting so far as these words and acts
fairly belong to the settlement of the concern, and the power
which each partner has in winding it up.^
tion is niadft of an acknowledgment by part payment. See Mass Pub. Stat. ch. 197,
§ 17 ; Williams v Gridley, 9 Met. 482 ; Maine Rev. Stat ch. 146, § 27 ; Sibley v.
Lambert, 30 Me. 253 ; Vt. Gen. St. ch. 63, §§ 23, 28 ; Carlton v. Ludlow Woolen
Mill, 27 Vt. 496 ; Caldwell v. Lawrence, 20 Ga. 94 ; Fonte v. Bacon, 24 Mi.ss. 156 ;
Briscoe v. Anketell, 28 Miss. 361 ; Webster v. Stearns, 44 N. H. 498 ; Griswold v.
Haven, 25 N. Y. 595. Such a statute has been passed in Michigan. Gates v. Fisk,
45 Mich. 522, 8 N. W. 558. A debj; may become barred, by the statute of limitations,
as to one member ot a partnership in the State, and not as to those out of the State.
Spaulding v. Ludlow Woolen Mill, 36 Vt. 150.
Of course, any partner who authorizes or ratifies the acknowledgment is bound by
it. Wilson V. Waugh, 101 Pa. 233.
This (question has been held to be governed by lex fori ; consequently an acknowL
edgment made by a partner in a juri.sdiction where it is held to bind the firm will not
aft'ect the limitation in another jurisdiction where it is held not to bind the firm.
Kerper v. Wood, 48 Oh. St. 613, 29 N. E. 501.
See a very valuable note upon this subject, Ames, Cas. Part. 618.
^ Admissions after dissolution, — The authorities upon this ]5oint are in hopeless
conflict. One line of decisions follows the case of Wood v. Braddick, 1 Taunt. 104.
This was an action brought to recover from the defendant the [)roceeds of certain lin-
ens, which the bankrupts, in the year 1796, had consigned for sale in America, as the
jplaintiffs alleged, to the defendant, jointly with one Cox, who was then his partner,
but, as the defendant contended, to Cox only. The defendant pleaded the general
issue, and the .statute of limitations. At the trial at Guildhall, before Jlansfield, C.
J., the plaintiffs i>roduced in evidence a letter from Cox, dated the 24th of June, 1804,
stating a balance of 919/. to be then due to the bankiupts u]>on this consignment. It
was in proof that on the 30th of July, 1S02. Braddick & Cox dissolved their partner-
11
162 THE LAW OF PARTNERSHIP. [CH VII,
§ 129. Admissions before Dissolution. — If the partnership exists,
the question then is, Do the act or the words refer to the business
ship, as from the 17th of November, 1800. Cockell & Lens, Sergeants, objected, that
this letter, being written after the dissolution of the partnership, was not aihnissible
evidence to charge Braddick. The Chief Justice overruled the objection, but
reserved the point ; and the jury, being of opinion that the agency was undertaken by
Cox on the iiartuersliip account, found a verdict for the plaintiff. Mansfield, C. J. :
*' Clearly the admission of one partner, made after the partnership has ceased, is not
evidence to charge the other, in any transaction which has occurred since their separa-
tion ; but the power of partners, with respect to rights created pending the partner-
ship, remains after the dissolution. Since it is clear that one partner can bind the
other during all the partnership, upon what principle is it, that, from the moment
when it is dissolved, his account of their joint contracts should cease to be evidence ;
and that those who are to-day as one person in interest should to-morrow become
entirely distinct in interest with regard to past transactions which occurred while they
were so united ?"
Heath, J.: " Is it not a very clear pro))osition, that when a partnership is dissolved,
it is not dissolved with regard to things i)ast, but only with regard to things future ?
With regard to things past, the partnership continues, and always must continue."
The i)rincii)le of Wood v. Biaddick is affirmed in Pritcliard v. Draper, 1 Russ. &
M. 191, where it was held, that the declaration of one of two partners, that, subse-
quently to dissolution, a debt due to the jiartnership had been paid, was admissible as
evidence against the other partner. See Goddard v. Ingram, 3 Q. B. 839; Lacy r.
M'Xeile, 4 Dow. & R. 7, 9. See also Parker v. Morrell, 2 C. & K. 599, where it was
held, that the answer in chancery of one who had been a partner in a firm, but who
had retired from the lirm and ceased to have any interest in it ])efore the commence-
ment of the suit, is not admissible in evidence against the continuing partners of the
firm, although it relates to transactions which occurred with the hrm at the time
when the retired partner was a member of it. The doctrine of Wood v. Braddick is
maintained in many American cases. Reimsdyk v. Kane, 1 Gall. 630, 636 {scmbU);
Austin V. Bostwick, 9 Conn. 496 : Taylor v. Hillyer, 3 Blackf. 433 (scmblc); Kirk v.
Hiatt, 2 Ind. 322 ; Parker i\ Merrill. 6 Me. 41; Cady v. Shepherd, 11 Pick. 400 ; Bridge
V. Gray, 14 Pick. 5.5 ; Vinal v. Burrill, 16 Pick. 401; Gay v. Bowen, 8 Met. 100 ; Ide
V. Ingraliam, 5 Gray, 106 ; Buxton v Edwards, 134 Mass. 567 ; Pennoyer r. David, 8
Mich. 407 ; Mann v. Locke, 11 N. H. 246 ; Rich v. Flanders, 39 N. H. 304 ; Merritt
V. Day, 38 N. J. 32 ; McElroy v. Ludlum, 32 N. J. Eip 828 (but see Flanagin r.
Champion, 1 Green Ch. 51); Myers v. Standart, 11 Oh. St. 29 ; Feigley v. Whitaker,
22 Oh. St. 606; Fripp i). Williams, 14 S. C. 502 (see the earlier cases, Simpson v.
Geddes, 2 Bay, 533 ; Kendrick v. Campbell, 1 Bail. 522 ; Meggett v. Finney, 4
Strobh. 220); Woodworth r. Downer, 13 Vt. 522; Loomis v. Looniis, 26 Vt. 198;
Garland v. Agee, 7 Leigh, 362.
In oi)position to this view of the power of one partner after dissolution, it is held
by weighty authorities in this country, that, when a partnership ceases to exist, the
power of each partner wholly ceases also ; so that, unless he have special authority,
his acts, declarations, &c., even when they relate to past partnership transactions, are
utterly inadmissible as against his firm. Judge Story, who takes this view, says it
seems difficult upon principle to perceive how the acts, declarations, &c., of one jmrt-
ner after dissolution can be binding upon his partnership "any more than the decla-
ra'ions, or acts, or acknowledgments of any other agent of the partnership would be,
after his agency had ceased. In the latter case, they are constantly held inadmissible
by the courts of common law, upon grounds which seem absolutely iriesistible."
Story on Part. § 323. Bell v. Morrison, 1 Pet. 351. 373 (semhle): Thompson v.
Bowman, 6 Wall. 316 ; Bis]>ham v. Patterson, 2 McLean, 87 : Barringer v. Sneed, 3
Stew. 201; Demott v. Swaim, 5 Stew. & P. 293; Burns v. McKenzie, 23 Cal. 101; Miller ».
129.]
RIGHTS AND DUTIES OP PARTNERS.
163
an
of the partnership ? If so, it binds the firm, {q) Thus,
ahnission, by one partner (the partnership or joint liability hav
ing been proved or admitted), of a fact bearing on the issne of a
case at bar, is admissible evidence, (r) The partnership being
(7) Thus Abbott, G. J., in Saiidilands
V. Marsh, 2 U. & Aid. 678 : " But the
true coiistructiou of the rule is this, that
the act and assurance of one partnei', made
with reCerence to business transacted by
the firm, will bind all the partners." Rapp
V. Latham, 2 15. & Aid. 795, 801 ; Lacy v.
M'Neile, 4 Dow. & K. 7. See also v.
Layfiuld, 1 Salk. 292, and French f. Rowe,
15 Iowa, 563.
(r) The declarations of one partner are
of course, as a general rule, admissible in
evidence, only when they are admissions,
and are supposed to have been made
acrainst the interests of the party and of
his firm. Independently of statutes, they
are comjietent to charge, but not to exon-
eratfs the partnershii). Hence, in a suit
against A. & B. as partners, the declara-
tions of A. are inadmissible in behalf of
B. to disprove the partnership alleged.
Young V. Smith, 25 Mo. 341 ; Clark v.
Huffaker, 26 Mo. 264. See Danforth v.
Corter, 4 la. 230.
[So where the defendant had a claim
against two members of a firm, and they
repiesented themselves as the only part-
ners ; the defendant, having dealt with
the firm, could not on account of ' the
representation set off against his debt to
the firm the debt owed to him by the two
j)artners. Rush v. Thompson, 112 Ind. 158,
13 N. E. 665.]
But before one partner's acknowledg-
ments can thus be admitted to attect others
as copartners, a joint liability must be
shown. A priina facie case of partner-
ship, at least, must be made out. Nicliolls
V. Dovvding, 1 Stark. 81 ; Gray v. Hodson,
I Esp. 135 ; Grant v. Jackson, Peake, 203 ;
Neimerick, 19 111. 172 : Winslow v. Newlan, 45 111. 145 ; Walker v. Duberry, 1 A.
K. Marsh. 189 ; Craig v. Alverson, 6 J. J. Marsh. 609 ; Bentley v. White, 3 B, Mon.
263; Daniel 0. Nelson, 10 B. Mon. 316; Hamilton v. Summers, 12 B. Mon. 11; Lambeth
v. Vawter, 6 Kob. (La.) 127 ; Conery v. Hays, 19 La. Ann. 325 ; Owings v. Low, 5
Gill & J. 134 ; National Bank of Commerce v. Meader, 40 Minn. 325, 41 N. W.
1043 ; Maxey v. Strong, 53 Miss. 280 (but see Curry v. Kurtz, 33 Miss. 24); Brady v.
Hill, 1 Mo. 315 ; Pope v. Risley, 23 Mo. 185 ; Dowzelot r. Rawlings, 58 J\Io. 75 ;
Hackley v. Patrick, 3 Johns. 536 ; Walden v. Sherburne, 15 Johns. 409 ; Hopkins v.
Banks, 7 Cow. 650 ; Gleason v. Clark, 9 Cow. 57 ; Baker v. Stack^wole, 9 Cow. 420 ;
Mercer v. Sayer, Anth. N. P. 162 ; Van Keuren v. Parmelee, 2 N. Y. 523, 530 ;
Nichols i\ White, 85 N. Y. 531 ; Bank of Vergennes v. Cameron, 7 Barb. 143 ; Tas-
.sey r. Church, 4 W. & S. 141 ; Hogg v. Orgill, 34 Pa. 344; Crumless v. Sturgess, 6
Heisk. 190; Hawkins u. Lee, 8 Lea, 42; Kootes v. Wellford, 4 Munf. 215. After a
partner has ceased to have any interest in the firm, his declarations charging the firm
cannot be received against his copartner ; being realh' in his own interest, not against
it. So the admission of a partner after a discharge in bankruptcy cannot be used
against a firm. Parker v. Morrell, 2 Ph. 453, 2 C. & K. 599 ; Grant v. Jackson, Peako
N. P. 203. P>ut, if a partner has not received his certificate of discharge, his admission
will bind his co[>artners, though made after his bankrujitcy. Grant v. Jackson, Peaki^,
203. See Boyce v. Watson, 3 J. J. Marsh. 498 ; Howard v. Cobb, 3 Daj', 309 ;
3Iartin v. Root, 17 Mass. 227. Nor can the admission of a partner after he has as-
signed all his interest in the firm be received to charge the firm. Jeffries v. Castleman,
75 Ala. 262 ; Gillighan v. Tebbetts, 33 Me. 360; Hatheway's A])pea'i, 52 Mich. 112.
Whether the fact that the declarations were made to one who had no notice of dis-
solution would affect the question is not clear. It is held in New York that it would
not. Brisban v. Boyd, 4 Paige, 17; Williams v. Manning, 41 How. Pr. 454; Piingle
V. Leverich, 97 N. Y. 181. But the opposite opinion has been held. Spears v Toland,
1 A. K. Marsh. 203 ; Myers v. Standart, 11 Oh. St. 29.
164
THE LAW OP PARTNERSHIP.
[CH. VII.
proved aliunde^ entries of account made by one partner during
the existence of the firm are admissible evidence to cliarge
all. {f) So notice or knowledge of any one partner is notice or
knowledge affecting all the rest, or rather the partnership as a
whole ; (m) and such notice, even if coupled with a demand, as
Reimsa.vk v. Kane, 1 Gall. 635 ; Teller v.
Muir, 2 Peimiiigtoii, 548 ; Robbiiis v.
■Willaid, 6 Pick. 464 ; Corps v. Robinson,
2 Wash. L'. C. 3S8 ; Harris v. Wilson, 7
Wend. 57 ; Buekiiani v. Barnain, 15 Conn.
67 ; Bispham v. Patterson, 2 McLean, 88 ;
Flanagin v. Champion, 1 Green, Ch. 51 ;
Grafton Bank v. Moore, 13 N. H. 99 ;
Dutton u. Woodman, 9 Cush. 255 ; Alcott
V. Strong, 9 Cush. 323. And admissions
by a party that he is a partner with others
bind himself only. They are not competent
evidence of partnership to all. Ante, § 78.
(/) Walden v. Slierbnrne, 15 Johns.
409. See Chami)lin v. Tilley, 3 Day, 307 ;
Noyes v. Bruniau.x, 3 Yeates, 30. [F-5ryee
V. Joynt, 63 Cal. 375.] So, if two part-
ners are garnishees, and one answers for
both and acknowledges a joint indebted-
ness, judgment may be entered against the
tiiiii. Anderson i;. Wanzer, 5 How. (Miss.)
587. See, fuither, in illustration of the
general rule, Vicary's Case, Bac. Abr. tit.
" Evidence," 623 ; Hodenpyl v. Vinger-
hold, Chitty on Bills, 489, note ; Cheap v.
Cramond, 4 B. & Aid. 663 ; Lucas v. De
la Cour, 1 M. & S. 249 ; Lacy v. M'Neile,
4 Dow. & R. 7 ; Rex v. Inhabitants of
Hardwick, 11 East, 578, 589 ; NichoUs v.
Dowding, 1 Stark. 81 ; Odiorne v. Maxcy,
13 Mass. 182, 15 Mass. 44; Bridge v.
Gray, 14 Pick. 61 ; Bound v. Lathrop, 4
Conn. 336 ; Fisk v. Copeland, 1 Over.
383 ; Reimsdyk v. Kane, 1 Gall. 635 ;
Williams v. Hodgson, 2 H.& J. 474 ; Hart v.
Palmer, 12 Wend. 523 ; Cook v. Castner,
9 Cush. 266 ; Fickett v. Swift, 41 Me. 65 ;
Foil V. McArthur, 31 Ala. 26 ; Sniitha v.
Cureton, 31 Ala. 652 ; Kahn v. Boltz, 39
.Ala. 66. It makes no diH'erence, as to the
binding force of the declarations of any
one partner, that some of the firm are
dormant, Ka.skaskia Bridge Co. i\ Shan-
non, 6 111. 15, 25 ; see Lea v. Guice, 13
Sm. & M. 656 ; Corps v. Robinson, 2
Wash. C. C. 388 ; Allen v. Owens, 2
S|>eers, 170 ; nor that the partner making
admissions or acknowledgments respecting
joint affairs is not a party to the suit in
which they are offered as evidence, see
McCutchin v. Bankston, 2 Ga. 244, 247 ;
Thvvaites v. Richardson, Peake, 16. But
if a partnership is established between
co-defendants, and the admissions of one
are offered in evidence to charge all, the
copartners may show that such admissions
relate to other than the partnership con-
cerns, Jaggers v. Binnings, 1 Stark. 64 ;
or to transactions antecedent to the
partnership, Cutt v. Howard, 3 Stark. 3 ;
or that they were made by mistake, Ridg-
way V. Philip, 1 Cr. M. & R. 415. And if
a partner make a purchase, appareiitlj'
for himself, not mentioning his firm, and
afterwards declare that he made the pur-
chase for the use of the partnership, such
declaration, by itself, is not admissible to
charge the fiim for the price of the thing
purchased, on the ground of interest in
the party making it. White v. Gibson, 11
Ired. 283.
(u) As in the case of notice by or to
one partner in legal proceedings. If one
of several, jointly interested in a cargo,
effects an insurance for the benefit of all,
he may give notice of abandonment for
all. Hunt ?'. Royal E.xchange Ass. Co., 5
M. & S. 47. As one partner may bind his
firm by giving notice, so he may by receiv-
ing it, always supposing the transaction to
be bona fide. Lord EUenborough, C. J.,
in Bignold r. Waterhouse, 1 M. & S. 259 ;
Alderson v. Pope; 1 Camf>. 404, n. ; Ex
parte Waithman, 2 Mont. & A. 364. Thus
if several joint defendants, makers of a
promissory note, suffer judgment by
default, service of a rule nisi, to compute
the principal and interest due on the note,
made upon one, is service on all ; for quoad
hoc they are partners. Figgins v. Ward,
2 Cr. & M. 424 ; Carter v. Southall, 3 iM.
& W. 128. See further Mayhew v. Fames,
1 C. & P. 550 ; Lansing v. M'Killup, 7
Cow. 416 ; Powell v. Waters, 8 Cow. 670 ;
Gilly V. Singleton, 3 Litt. 249 ; Fitch v.
Stamps, 6 How. (Miss.) 487; Hay ward
§ 130.] RIGHTS AND DUTIES OF PARTNERS. 165
a notice to quit certain premises, (v) or a demand on \<'hich
trover is to be founded, {w) may be given or made by one partner
on his general authority. Almost the whole law on this subject
resolves itself into tlie rule, that the representations or misrepre-
sentations of a partner are binding on the firm, provided they are
made in the course of, and relate to, and arc material to, the trans-
action of the business of the firm.^
§ 130. Povrex to vary Business of Partnership. — From the same
principle, that the power of each partner grows out of the business
of the firm, and is measured by it, another rule is drawn, namely,
that the business of a partnership is not to be materially varied,
except by consent of the other partners. It cannot be changed
as to its object and character, nor materially enlarged beyond its
originally intended scope ; nor can a new branch of business be
taken up and added to the old. For the very first thing for a
V. Harmon, 17 111. 477 ; Miser v Tro- v. March, 22 Me. 189. 190 And notice
vinger, 7 Ohio St. 281. In like manner, to the surviving partner ot the dishonor of
notice to one ot two or nioie j)artners a note indorsed b}' the firm is sufficient to
of a prior unrecoided deed is notice to all bind the estate of the deceased jiartner,
the paitners, and will render void a subse- though the holder knew ot the death of
quent deed of the same land to all the the deceased partner before the note became
partners. Barney v. Cuiiitr, 1 U. Chip. due. Dabuey ". Stidger, 4 Sm. & Jl. 749.
315. See Watson v. Wells, 5 Conn. 468. See Cocke v. Hank of Tennessee, 6 Humpli.
If a bill accepted by a firm is dishonored 51. But persons wiio are joint indoisers
by one partner, notice of the dishonor of a note or bill, but are not partners,
need not be given to the other partners , must be severally notified of its dishonor ;
and, if the drawer of a bill be a part- and, without notice to both, it seems that
ner in the house upon which it is neither can be holden. Shepard v. Haw-
diawn, proof of notice to the drawer of ley, 1 Conn. 368 ; Bank of Chenango v.
the dishonor is not necessary. Porthouse Root, 4 Cow. 126 ; Dubney i;. Stidger,
V. Parker, 1 Camp. 82 ; Gowan v. Jack- su])ra. See 1 Pars. Notes and Bills, 502 ;
son, 20 Johns. 176 ; Bouldin v. Page, 24 post,, § 146, anf.e, § 101.
Mo. 595. Farther, if a note indorsed by (v) Doe d Eliot v. Halme, 2 ilan. & E.
a firm becomes due after its drssolution, 433. Otherwise, if the joint lesees are
notice of dishonor given to one of the late not partners. Goodtitle v. Woodward,
partners will be sufficient, if the holder 3 B & Aid. 689,
has not been notified of tlie dissolution. (ic) Ste ante ; § 105 and note.
Kott V. Downing, 6 La. 684. See Darling
1 Upon this proposition see, in addition to the authorities quoted, W^ood r. Brad-
dick, 1 Taunt. 104 ; AVeed y. Kellogg, 6 McLean, 44 ; Mnnson v. Wickwire, 21 Conn.
513 ; Wiley v. Griswold, 41 la. 375 ; Dujnerris v. HallLsay. 27 La. Ann. 132 ; Hariy-
.man v. R.)berts, 52 Md. 64 ; Smith v. Collin.s, 115 Mass. 388 ; Coleman v. Pearce, 26
Minn. 123, 1 N. W. 846 ; Cady r. Kyle, 47 Mo. 346 ; Rucktnan v. Decker, 23 N. J.
Ecp 233 ; McKee v. Hamilton, 33 Oh. St. 7 ; Irby v. Brigham, 9 Humph. 750 ; West-
ern Assur. Co. V. Towle, 65 Wis. 247. The representations must be in the usual course
of business. Boor v. Lowrey, 103 Iiid. 468. And where one partner declared that cer-
tain property belonged to his copartner individually this did not deprive the firm of the
property ; and one who in reliance on the declaration bought it at a sheriffs sale as
l>roperty of the partner could not hold it as against the firm. Williams c. Lewis, 115
Ind. 45, 17 N E, 262.
166
THE LAW OF PARTNERSHIP.
[CH. VII.
partnership to do is to determine what business it shall transact ;
that must be the determination of all, and remains in force until
changed by all. (x) At the same time there may be an apparent
exception to this rule in relation to third parties. If a partner
enter into a new branch of business in the name of the firm, but
without the authority of the firm, and this is unprofitable, the
firm — if they have in no way adopted or ratified the transactions
— may refuse to participate in the loss, and cast the whole on
that partner, treating it as his several business. And any third
party dealing with that partner, and knowing, or having sufficient
means of knowing, that he goes beyond the business of the firm
and transcends his rights, can look only to him ; for the firm
may then re{)udiate this new business as well to this third person
as to the partner, (y) But it may happen that this new business
(x) Tlie lea<liiig, and perhaps the only
case directly bearing upon the proposition
ol' the text is tliat of Natustdi v. Irving,
cited in the Appendix to Govv on Part.
p. 398. There a large number ot persons
had united in forming a joint-stock com-
pany, for the purpose of effecting iire and
life assurances. The plaintiff, a share-
holdei- in the company, on behalf of him-
self and the other sharelioldeis, filed a bill
in equity against the piesident and direc-
tors of said com})any ; praying, amongst
other things, that they might be restrained
from employing the capital, credit, &c.,
of the said company in the business of
marine insurances. Lord Chancellor Eldon,
in giving his opinion upon the facts, put
the following case ; " If six persons join m
a partnership of lile assurance, 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 part-
nership expres.sly or impliedly gave that
power ; because if this was otherwise, an
individual oi- individuals, by engaging in
one specified concern, might be implicated
in any other concern whatever, however
ditTerent in its nature, against his consent.
But if a pait of the six openly and pub-
licly professed their intention to engage
the partnership in another concern, and
clearly and distinctly biought this to the
knowledge of one or more of the other
partners ; and such one or more of the
other partners could be clearlv shown to
have acquiesced in such intention, and to
have permitted the other partners to have
entered ui)on and to have engaged them-
selves and the body in such new projects,
and thereby to have placed their jjartners,
so engaged, m difficulties and embarrass-
ments, unless they weie permitted to jno-
ceed in the farther execution of such
projects, — if a court of equity would not
go the length of holding that such con-
duct was consent, it would scarcely think
parties so conducting themselves entitled
to the /estiniu) I. remcdiuni of injunction."
These })rinciples being applicable as well
to a jiartnership of six hundred as to one
of six, his lordship said that '' the court
would restrain particular members of those
bodies from engaging other members in
projects in which they have not consented
to be engaged, or the engaging in which
they have not encouraged, assented to,
em])owered, or acquiesced in, expressly or
tacitly, so as to make it not equitable
that they should seek to restrain tiiem."
It wiis further considered that an offer to
return to the plaintifl' in this suit his cap.
ital with interest; or to indemnify \\\n\
against losses from transactions outsidi*
the specified purposes of the institution,
or the fact that the plaintiff could sell his
shares for more than he gave for them, —
that any or all these circumstances, did
not affect his right to hold his associates
to the original business of the partnership
and to prevent them by injunction from
transgressing its reasonable limits. See
Kean v. Johnson, 1 Stock. 401.
(//) See cmlc, § 85, to the point that
§ 131.] RIGHTS AND DUTIES OF PARTNERS. 167
has nothing in itself to distinguish it from the general business of
tlie (irni, and that the third person had no notice that it was so
distinguished ; then he will hold the firm, and on the same
ground on which he would be unaffected by any private stipula-
tion or limitations of the firm not made known to him. (z) ^
SECTION III.
POWER OF ONE PARTNER TO ISSUE NEGOTIABLE PAPER.
§ 131. Power to issue Negotiable Paper. — The whole doctrine
of negotiable paper, so far as it differs from the common law of
contracts, is derived from the law-merchant. The law of partner-
ship, as we have seen, has no other source. And when they meet,
as in the powers of partners to make, indorse, receive, or other-
wise deal with negotiable paper, for the partnership, we have a
twofold reason for solving the question which this topic presents,
by the law-merchant, as that has been established by adjudica-
tion, or by tiiat usage of merchants which is the foundation of the
law-merchant. It was established, as long ago as the reign of
William III., that, "■ by the custom of England, when there are
two joint traders, and one accepts a bill drawn on both, for him
and i)artner, it binds both, if it concerns the trade.' ' (a) The
same doctrine has also been always applied both to the making
and to the indorsement of bills of exchange and promissory notes,
as well in law as in equity .^ " In drawing and accepting bills
of excliange, it never was doubted but that one partner might
bnid the i-est." (6)
the nature of the particular business of a 225. A partnership is not bound by the
firm is generally notice to the world of acts of another partnership having a com-
the limitations thereby put upon the power nion member, unless it authorizes or rat-
of each partner ; and, cousequently, that ifies such acts. Cobb v. Illinois Central
persons dealing with a partner in matters R. R. Co., 38 Iowa, 601.
beyond the scoi)e of that particular busi- (z) See Barnley v. Rice, IS Tex. 481.
ness cannot charge the partnership there- (n) Pinkney v. Hall, 1 Salk. 126, 1
on, without proof of that partner's special Ld. Raym. 175.
authority. Guillou v. Peterson, 9 Phila. (/<) Lord Kenyon, in Harrison v. Jack-
1 Defendant sold the good-will of a certain business to plaintiff, and agreed not to
engage directly or indirectly in the same business for twenty years. Defendant then
formed a copartnership with a third Jtarty for carrying on a business within the geneial
scope of which the forliidden business lay. Defendant's partner, without the knowl-
edge of defendant, entered upon the forbidden business on behalf of the firm. It was
held that defendant's contract was broken. Congdon v. Morgan, 13 S. C. 190.
2 One partner who makes a note in the course of business binds the firm. Wagner
1G8 THE LAW OF PARTNERSHIP. [CH. VII.
§ 132. Authority to use Firm Name presumed. — The power of
each partner to put the name of the firm to negotiable paper is so
universally implied from the very existence of the partnership,
that stipulations among' the partners that one or more of them
shall not have this right will not affect third parties, unless made
known to them ; and this is true whether all the partners be
known or whether some be unknown and dormant, (c) Nor is it
son, 7 T. R. 207. See Auou., Styles, 370 ; Lewis, 13 Siu. & M. 226 ; Crozier v.
Smith V. Jarves, 2 Ld. Kayni. 1484 ; Lane Kirker, 4 Tex. 252. On the other hand,
V. Williams, 2 Vein. 277 ; Smith v. Baily, if there are several drawees or |)ayees of a
11 Mod. 401 ; Buller N. P. 270; Sutton bill or note, who are not partners, an ac-
V. Gregory, 2 Peake, 150 ; Arden v. ceptance or indorsement by one of them
Sharfje, 2 Esp. 525 ; Swan v. Steele, 7 will not be the act of all, nor bind
East, 210 ; Ridley v. Taylor, 13 East, all. See Carvick v. Viekery, Doug.,
175 ; Livingston v. IJoosevelt, 4 Johns. 653, n., Holt. 297, March, 64, 1 Beawes,
265 ; Smith v. Lusher, 5 Cow. 689 ; Man- 445.
liattan Company v. Ledyard, 1 Caines, (c) Hubert v. Nelson, Davies' B. L.
191; Kane v. Scofield, 2 Caines, 368; 8; Winship v. Bank of the United States,
McGowan v. Bank of Kentuck}', 5 Litt. 5 Pet. 529, 5 Mason, 176; South Carolina
271 ; Commercial Bank of Manchester v. Bank v. Case, 8 B. & C. 427 ; Grant v.
V. Simmons, 61 Ala. 143 ; Palmer y. Scott, 68 Ala. 380; Silverman v. Chase, 90 111. 37;
Motfitt V. Roche, 92 Ind. 96 ; Martin v. Muncy, 40 La. Ann. 190, 3 So. 640 ; Fuller v.
Percival, 126 Mass. 381 ; Wilson v. Richards, 28 Minn. 337 ; Mace i-. Heath, 30 Neb.
620, 46 N. W. 918 ; Wagner v. Frescid, 56 N. H. 495 ; Steuben County P.auk v. Alber-
ger, 101 N. Y. 202 ; Moorehead v. Gilmore, 77 Pa. 118 ; Morse v. Hageuah, 68 Wis.
603, 32 N. W. 634. It is therefore no defence to a firm note to sliow that the holder
knew that one partner signed it without consent of the other, provided it was really or
ostensibly given for firm purposes. Moffitt v. Roche, 92 Ind. 96. A jiartner who has
authoiity to make a note of course has authority to alter it. Mace ■;;. Heath, 30 Neb.
620, 46 N. W. 918.
Power after dissolution. — After dissolution, whether brought about by death or
otherwise, a partner has no power to bind the firm by giving a firm note, even for a
pre-existing firm debt, or in renewal of an old firm note. Rose v. Gunn, 79 Ala. 411 ;
Bank of Montreal v. Page, 98 111. 109 ; Hayden v. Cretcher, 75 Ind. 108; Dunlap v.
Limes, 49 la. 177 ; Mej'er v. Atkins, 29 La. Ann. 586 ; Matteson v. Nathanson, 38
Mich. 377 ; Jenness v. Carleton, 40 Mich. 343; Citizens' Mutual Ins. Co. v. Ligou, 59
Miss. 305 ; Mauney v. Coit, 80 N. C. 300 ; Palmer v. Dodge, 4 Oh. St. 21 ; Gardner v.
Conn, 34 Oh. St.'l87; McCleery v. Thompson, 130 Pa. 443, 18 Atl. 735; Brown v.
Chancellor, 61 Tex. 437; Conrad v. Buck, 21 W. Va. 396.
Nor can a partner after dissolution bind the firm by indorsing negotiable paper in
the name of the firm. Stair v. Richardson, 108 Ind. 429, 9 N. E. 300 ; Carleton v.
Jenness, 42 Mich. 110, 3 N. W. 284.
But the use of the firm name is l)inding if the other partners authorize or ratify the
act. Sanborn v. Stark, 31 F. P. 18 ; Murray v. Ayer, 16 R. I. 665, 19 Atl. 241. Or
if the use of the firm name was required by a Hiin contract made before dissolution.
Star Wagon Co. v. Swezey, 52 la. 391, 3 N. W. 421.
The peculiar rule prevails in Pennsylvania that a licpiidating partner may bind the
firm by giving a note for money borrowed to pay firm debts. Fulton v. Central Bank,
92 Pa. 112 ; Siegfried v. Ludwig, 102 Pa. 547.
A settling partner after dissolution may sign the firm name to a check upon the bank
account of the firm, for the purpose of paying the firm debts. Bradford v. Taylor, 61
Tex. 508. So of a surviving partner. Backhouse v. Charlton, 8 Ch. D. 444 (C. A.).
§ 132.]
RIGHTS AND DUTIES OF PARTNERS.
169
incumbent upon persons dealing with a partner to inquire whether
he is authorized to sign the partnership name to commercial
paper. In the absence of facts to the contrary, they have a right
to presume that he has this power, (d) It is always open to the
])artners to show that negotiable paper bearing their name was
never their paper, or not signed with their name in and for their
business, or. if their paper, that it was not transferred on their
account ; and if this be so, and the third party claiming of them
had no belief, grounded on sufficient circumstances, that it was
their paper, tlien they are not held. It has already been remarked
that an individual is held liable as a partner because he was so in
fact, or because he was held out as one. An exactly analogous
rule applies to negotiable paper bearing the name of a firm; it
binds the firm either if it was their paper negotiated in their
business, or if it was " held out " as such ; that is, so treated and
dealt with by the firm, or with their knowledge and without their
objection, as to justify others in believing it to l)e their paper, and
the making or transfer of it their transaction, {h)
Hawkes, Chitty on Bills,42 ; Bank of Ken-
tucky 0. Brooking, 2 Litt. 41 ; WalJen
o. Sherburne, 15 Johns. 409, 413 ; Whit-
aker v. Brown, 16 Wend. 505 ; Bank of
Rochester v. Monteath, 1 Denio, 402 ;
[Rocky Mountain Nat. Bank v. McCaskill,
16 Cul. 408, 26 Tac. 821 ; Stinison v.
Whitney, 130 Mass. 591.]
(d) Coursey v. Baker, 7 Harris & J. 28 ;
Storer v. Hinkley, Kirby, 147; Champion
V. Musford, Kirby, 172 ; Hawes v. Dun-
ton, 1 Bailey, 146 ; Drake v. Elwyn, 1
Caines, 184 ;" Vallett v. Parker, 6 Wend.
615; Porter v. Cnnungs, 7 Wend. 172;
Foster v. Andrews, 2 Pen. & W. 160 ;
LeRoy v. Johnson, 2 Pet. 186, 197. Nor,
with respect to this implied power of each
partner, is there any ditference between
general and special partnerships. Living-
ston V. Roosevelt, 4 Johns. 251. See
Davidson v. Robertson, 3 Dow, 229 ;
Williams v. Thomas, 6 Esp. 18. There
are partnerships, however, which are not
strictly fraduiff partnerships, and in the
course ol whose business the use of ne-
gotiable paper is generally neither custom-
ary nor necessary. Partners in such firms
have not prima facie or implied authoritv
to bind them by putting the firm name
upon bills or notes. Of this sort are
professional partnerships, and those for
mining and farming pnrpo.ses. See ante^
§ 85. But the mere circumstance that the
business of a firm consists in making
profits out of real estate, as in working a
stone quarry, will not take the case out of
the general rule. Thicknesse v. Bromi-
low, 2 Cr. k J. 425, 430.
The act of drawing a bill of e.Kchange
by one partner, in his own name, upon
the firm of which he is a member, for the
use of the partnership concern, has been
held to be an acceptance of the bill by
the drawer in behalf of the firm, and to
bind the firm as on an accepted bill.
Dougal V. Cowles, 5 Day, 511. See also
Beach v. State Bank. 2 Ind. 488 ; Miller
V. Thompson, 3 M. & G. 576. And it
seems that in such case, if the partnership
were not held to be bound at law, yet, if
the bill were actually drawn on partner-
ship account, equity would enforce pay-
ment of it. Reimsdyk v. Kane, 1 Gall.
630. See, as to the subject of this note
generally, 1 Pars. Notes and Bills, 123-
148. A partner may indorse a note, of
which his firm is payee, in the name of
his firm, to himself; and may then, in
his own name, sue and recover from the
maker. Kirby v. T'ogswell, 1 Caines, 505 ;
Burnham v. Whittier, 5 N. H. 334.
(6) We have just seen that it is within
170
THE LAW OF PARTNERSHIP.
[CH. VII.
§ 133, Issue of Negotiable Paper in Fraud of Firm. — The making
or indorsement of a promissory note, in the name of the firm, by
one of the firm, does not bind the lii-m, if the payee or indorsee
knows, or ouglit from the circumstances to know, that it is on
j)rivate account, or unless specially authorized or ratified by the
other partners ; (ba) but the firm will be held if the thing is done
apparently In the course of business, and the other party has no
])rivity with the fraud and no notice or knowledge of it. But a
party cannot, as to his copartners, waive notice upon a note
indorsed by him for his own benefit, {bb)
the general implied power of each partner
to bind liis firm by all contracts concern-
ing negotiable pajier. As against hi.i
copartners, the making, accejiting, or
indorsing of such pa[)er by one partner is
valid only when the act is within the
scope of the joint business and is actually
on the joint account. But, as far as third
parties are concerned, such act of a single
partner charges the partnership, if only it
fairly appear to be within the joint busi-
ness and on the joint account. Hence,
wherever the partnership name is signed
by a partner to negotiable paper the firm
is bound, unless in some way the title of
the holder can be impeached. Wintle v.
Crowther, 1 Cr. & J. 316, 318 , Lane v.
Williams, 2 Vern. 277 ; Baker v. Charl-
ton, 1 Peake, 80 ; Arden v. Sharpe, 2
Esp. 523 ; M'Nair v. Fleming, 1 Montagu
on Part. 37; 3 Dow, 229 ; 2 P>ell Comm.
672 ; Lloyd v. Ashby, 2 B. & Ad. 23 ;
Vere v. Ashby, 10 B. & C. 288; Livingston
V. Roosevelt, 4 Johns. 251 ; Winship v.
Bank of the United States, 5 Pet. 529 ;
Etheridge v. Binney, 9 Pick. 272, 274 ;
Miller w. Manice, 6 Hill, 114. (Schwanck
V. Davis, 25 Neb. 196, 41 N. W. 141.]
And it has been held that the fact that
the payee of a note, made V)y one partner
in the name of the firm, believed that tlie
money for which the note was given was
to be applied to the individual purposes
of the acting partner, wotdd not inval-
idate the note as to the firm, unless such
misappropriation renlly took place. Ham-
ilton V. Summers, 12 B. Mon. 11. Nor,
if a partner lias borrowed money on his
own credit, and given his separate note
therefor, is it a fraud afterwards to sub-
stitute the note of the firm, provided the
money borrowed actually came to the use
of the firm. Neither, if the original loan
was made on the credit of the firm,
though the separate note of the borrowing
partner was executed for it, would it be a
fraud to substitute for the separate secur-
ity the note of the firm, notwithstanding
it did not appear that the money went
into the business of the partnership.
Union Bank v. Eaton, 5 Humph. 499.
See Ala. Coal Mining Co. v. Brainard, 35
Ala. 476 ; Connecticut River Bank v.
French, 6 Allen, 313 ; Fielden v. Lahens,
9 Bosw. 436; Stephens v. Reynolds, 2
Fost. & Fin. 147 -, Dow v. Phillip.s, 24
111. 249 , Maynard v. Fellows, 43 N. H.
255.
(ba) Ditts V. Lon.sdale, 49 Ind. 529 ;
Reubin v. Cohen, 48 Cal. 545 ; First Nat.
Bank v. Bieese, 39 Icwa, 640 ; Hotchkiss
?• English, 4 Hun, 369, 6 Th. & C. 658 ;
Tompkins v. Woodford, 5 W. Va. 216;
Graves v. Kellenberger, 51 Ind. 66 ; Lime
Rock Ins. Co. v. Treat, 58 Me. 415 ; Zuel
V. Bowen, 78 111. 234 ; Bankhead r. Allo-
wa}', 6 Cold. (Tenn.) 56 ; Blodgettu.Weed,
119 Mass. 217; Crocker i;. Colwell, 46 N.
Y. 212 ; [Campbell v. Pence, 118 Ind. 313,
20 N. E. 840 ; Central Nat. Bank c. Frye,
148 xMass. 498, 20 N. E. 325.] A firm is not
bound for capital contributed by any part-
ner, even if a firm note be given therefor,
if the note be given without the authority
of the other partners. Wiltram v. Van
Wormer, 44 III. 97 ; Heap v. Dobson, 15
C. B. N. s. 460 . Ba.xter v. Plunkett, 4
Houst. (Del.) 450.
{bb) Windham County Bank i'. Kendall,
7 R. I. 77. See Bush v. Crawford (U. S.
C. Ct.), 9 Phila. 392, where it is held that
nothing short of bad faith of the plaintiff
§ 134.]
RIGHTS AND DUTIES OF PARTNERS.
171
§ 134. The Burden of Proof. — Rule in America. — The question
has been very much discussed, on whom lies the burden of proof ;
and we have already alluded to it, in connection with the question
to whom credit is given. There is some fluctuation in the adjudi-
cation both of England and of this country ; but we think there is
no material difference in the principles adopted by the two coun-
tries. It must be regarded as the general presumption of law,
that all pai)er upon which the signature of the firm has been put
by a partner, is the paper and bears the signature of the partner-
ship ; and that all transfers of such paper by him were lawful, (c)
can be available as a defence to such a
note. See also, to same point, Canadian
Bank v. Wilson, 36 U. C. Q. B. 9 And
if the person receiving such a note indorses
the same before maturity to a bona fide
holder, for value, he is liable in damages
to the defrauded partners. Calkins v.
Smith, 48 N. Y. 614. Nor is it a defence
to a note given to a partnership, that one
of the partners agreed that it might be
jiaid by off-setting a debt due from the
partner so agreeing. Harper v. Wrigley,
48 Ga. 493. See also Stearns i;. Houghton,
38 Vt. 583.
Where one jtartner, holding notes for
the benefit of the firm, attem]>ts to pawn
or pledge them for his own private debts,
tlie court will interfere to restrain it as
an act of fraud <ni his copartners. Stock-
dale V. Ullery, 37 Pa. 486. Moreover, the
title of the holder is not affected by any
knowledge acquired by him subsequently
to his reception of the paper. In Swan v.
Steele, 7 East, 210, see the very instruc-
tive opinion of Lord Ellenborough, C. J.
We shall find this same principle occur-
ring and being applied to neaily all the
questions which we are about to consider
res])Hcting the liability of a firm upon
negotiable paper issued or transferred by
one partner. See post, § 137, respecting
cases where paper bearing the firm name,
but originally made or afterwards trans-
ferred in fraud of the firm, has come into
the hands of a bona fide holder for value.
(c) Manuf. & Mech. Bank v. Win ship,
5 Pick. 11 ; Etheridge v. Binney, 9 Pick.
274 ; Waldo Bank v. Greely, 16 Me. 419 ;
Barrett v. Swann, 17 Me. ISO ; Vallett v.
Parker, 6 Wend. 615 ; Doty v. Bates, 11
Johns. 544 ; Knappy. McBride, 7 Ala. 19 ;
Ensminger v. Marvin, 5 Blackf. 210 ;
Miller v. Hines, 15 Ga. 197 ; Thurston v.
Lloyd, 4 Md. 283 ; Manning v. Hays, 6
Md. 5 ; Powell v. Messer, 18 Tex. 401 ;
Hickman v. Kunkle, 27 Mo. 401 ; Carrier
V. Cameron, 31 Mich. 373 ; [Rocky
Mountain Nat. Bank v. McCaskill, 16 Col.
408, 26 Pac. 821 ; Sherwood v. Snow, 46
la. 481 ; Deitz v. Kegnier, 27 Kas. 94 ;
Lindh v. Crowley, 29 Kas. 756 ; First Nat.
Bank v. Morgan, 73 N. Y. 593 ; Hogg v.
Orgill, 34 Pa. 344.] If a creditor of a part-
nership take a bill from his debtors, drawn
by them upon another firm, and this bill
is afterwards, in the usual course of busi-
ness, accepted in the name of the firm
drawn upon, though by a partner who is
also a member of the drawing firm, it can-
not, in such a case, be inferred as matter
of law from this latter fact, standing alone,
that the purpose of the parties, or even that
the effect of the transaction, is to subject the
funds of the acceptors to the payment of
the debt. These facts alone appearing, the
acceptance is, prima facie, an acceptance
on the joint account of the accepting firm,
and binds a partner therein who is not a
member of the drawing firm, and did not
expressly assent to it. Tutt v. Addanis,
24 Mo. 186. See Phinsen v. Negley, 25
Pa. 297. Nor is the fact that a draft or bill,
made in the name of the firm, is made pay-
able to the order of one of the partners,
any indication that the paper was not
drawn on partnership account, and in the
usual course of the business of the firm.
Nor is the presumption that a draft or bill,
so signed, is regular partneiship paper,
changed by showing that such paper was
discounted at the request of the partner
who drew the draft in the name of the
172
THE LAW OF PARTNERSHIP.
[CH.
VII.
This, therefore, would call on the partnership to discharge itself,
and therefore would lay the burden of proof on them.
Thus far the law seems to be clear. Then the American adjudi-
cation very decidedly assumes that the third party taking this i)aper,
with the knowledge that it was given for the private and personal
debt only of one partner, knows enough to put him on his guard,
and that he is now bound to inquire whether the firm authorized
this use of their name, and can only hold them on the ground that
they did so authorize it in fact ; and this he must show as the
foundation of his claim. In other words, the American courts
liuld the doctrine that a third party taking from a partner the
signature of his firm for his own debt, cannot hold that firm,
without proof of authority, adoption, or ratification by the firm, (d)
firm whose name was inserted as payee,
who indorsed it, and drew out the proceeds.
Haldeman v. Bank of Middlet(nvn, 28 Pa.
440 ; Phinsen v. Net^ley, 25 Pa. 297. See
Pierce v. Jackson, 21 Cal. 636 ; Uhler i\
Browning, 4 Dutch. 79; Hurdi'. Haggerty,
24 111. 171 ; Littell v. Fitch, 11 Mich. 525.
A., the indorser of a promissory note
made by B., one member of a firm consist-
ing of B. & C, payable to the order of A.,
who indorsed it to C, A.'s indorsement
being for the accommodation of the firm,
may maintain an action against B. & C.
jointly, to recover the amount which he,
A., may have been compelled to pay.
Thayer v. Smith, 116 Mass. 363.
{fl) Chazournes v. Edwards, 3 Pick. 5 ;
Homer v. Wood, 11 Cush. 62 ; Davenport
t'. Runlett, 3 N. H. 386 ; Williams v.
Gilchrist, 11 N. H. 535 ; Livingston v.
Hastie, 2 Gaines, 246 ; Lansing v. Gaine,
2 Johns. 300 ; Livingston v. Roosevelt, 4
Johns. 251 ; Laverty v. Burr, 1 Wend.
529 ; Warden v. Hughes, 3 Wend. 418 ;
Whitaker v. Brown, 11 Wend. 75 ; Ganse-
voort V. Williams, 14 Wend. 133 ; Joyce
V. Williams, 14 Wend. 141 ; Wilson v.
Williams, 14 Wend. 146 : Baird v. Coch-
ran, 4 S. & R. 397 ; Cotton v. Evans, 1
Dev. & B. Eq. 284 ; Abpt v. Miller, 5
Jones, 32 ; Weed v. Richardson, 2 Dev. &
B. 535 ; Hagar v. Mounts, 3 Blackf. 261 ;
Taylor r. Hillyer, 3 Blackf. 433 : Hick-
man V. Rieneking, 6 Blackf. 387 ; Rogers
V. Batchelor, 12 Pet. 221 ; Mauldin v.
Branch Bank at Mobile, 2 Ala. 502 ;
Darling v. March, 22 Me. 184 ; Brown v.
Duncanson, 4 H. & McH, 350 ; Poindexter
V. Waddy, 6 Munf. 418 ; Robertson v.
Mills, 2 H. & G. 98 ; Stearns v. Bnrnham,
4 Me. 84; Elliott v. Dudley, 19 Barb. 326 ;
Lanier v. McCabe, 2 Fla. 32 ; Tutt v.
Addams, 24 Mo. 186 ; Powell v. Messer, 18
Tex. 401 ; Clay v. Cottrell, 18 Pa. 408
The fact that a note given by one part-
ner, in the name of his firm, but mainly
for his own debt, includes within it a small
debt of the firm, will not make the firm
liable on the note. King v. Faber, 22 Pa.
21. And wherever the firm name is put
by one partner upon negotiable paper under
circumstances which make the transaction
actually or constructively fraudulent, and
therefore void as to the firm, the bill or
note, also, is void in the hands of the
fraudulent holder as to any of the other
jiarties to it ; for, otherwise, the ])artner-
ship would eventually be made liable
upon it. Ridley v. Taylor, 13 East, 175 ;
Livingston v. Hastie, 2 Gaines, 246 ; Cha-
zournes V. Edwards, 3 Pick. 5 ; Williams
V. Walbridge, 3 Wend. 415 ; Hagar v.
Mounts, 3 Blackf. 261. But see Bo wen
V. Mead, 1 Mich. 432. As to the ques-
tion of the consent of the firm to the
act of one partner, by which he pledgi'S
the partnership name for his private debt,
it is not a matter of legal presumption, but
a matter of fact, of which the jury must
be satisfactorily convinced. Hence, where
the jury were instructed that, if one of two
partners was ])resent and heaid the other
partner make an arrangement by which
the partnership name was pledged in a
§ 135.]
IlIGHTS AND DUTIES OF PARTNERS.
173
§ 135. Rule in England.
The weiglit of authority in tlie
English courts seems to be in favor of rules substantially simi-
lar. («) That is, they also hold, that, if a creditor of one partner
matter outside of the partnershij) concerns,
the law would presume that the Ibnner
assented to it, it was held, that such in-
struction was ground for a new trial.
Mercein t). Andrus, 10 Wend. 261; Foster
V. Andrews, 2 Pen. &, W. I(j0 ; Jones v.
Kootli, 10 Vt. 268 ; McKinney v. Brights,
16 Pa. 399. But where a partner gives
the ])artnership name for his individual
debt, tlie assent of his copartners to the
act, or their ratification of it, may be
implied from circumstances, and need not
be proved by express agreement. Ganse-
voort V. Williams, 14 Wend. 133; Noble
V. M"Clintock, 2 W. & S. 152 ; Cha-
zournes v. Edwards, 3 Pick. 11 ; Cotton v.
Evans, 1 Dcv. & B. Eip 284 ; Abpt i'.
Miller, 5 Jones, 32 ; Brewster v. Mott, 5
111. 378 ; Powell v. Messer, 18 Tex. 401 ;
Kemegs v. Richards, 11 Barb. 312 ;
Wheeler v. Kice, 8 Cush. 205. See
Elliott V. Dudley, 19 Barb. 326. Nor
need there be any new and independent
consideration for the act of the partners,
ratifying and promising to be bound by
the act of a copartner who has wrongfully
used the ])artnership name for his own
benefit. Commercial Bank v. Warren, 15
N. Y. 577. In Flagg v. Upham, 10 Pick.
147, it appeared that Valentine, one of
two partners, had given the firm note for
his several debt ; and that afterwards his
copartner, acting under a mistake of law,
acknowledged himself liable upon the note,
and gave his written guaranty for its pay-
ment. The payee bringing his action
upon the guaranty, the court said : " The
note was made in the partnership name,
purported to bind both partners, and was
binding upon the partners, if made with
their consent. Supposing it to be made
by Valentine for his several debt, without
the consent of the defendant, it would not,
indeed, be binding upon hin) ; but no one
else could make the objection, and it
depended on himself to in-sist on, or to
waive, the objection. Under these circum-
stances, knowing the terms of the partnei-
ship between Valentine and himself, and
knowing the consideration for which the
note was given, we are of opinion that his
acknowledgment of his own liability, and
his express obligation to guarantee the
l)ayment, were a waiver of any objection
which he ndght have made to the note,
and therefore that this guarantee was
given upon a good consideration, and that
he is bound by it.'' See Stearns v. Burn-
ham, 4 Me. 84 ; Leversou v. Lane, 13
C, B. N. s. 278. In Taylor v. Hillyer, 3
Blackf. 433, where one of two partners
had given a note, in the name of his firm,
for his private debt, and this was known
to the payee, a sub.secjuent oral promise by
the other partner to pay the note was
deemed to be within the statute of frauds,
and therefore not binding on him. See
Mercein v. Andrus, 10 Wend. 461 ;
Fielden v. Lahens, 9 Bosw. 436 ; Whit-
more V. Adams, 17 Iowa, 567 ; Burleigh
V. Parton, 21 Tex. 585.
(c) The English and American rules on
this point have frequently been contrasted
in the courts of this country. The views
taken of the points of <litlerenee between
the two, though variously stated, are in
the main in unison with those of the text.
Thus in Chazournes v. Edwards, 3 Pick.
5, Parker, C. J., after stating the Ameri-
can rule, says : "The only case which
has a contrary tendency is that of Ridley
V. Taylor, 13 East, 175, in which case,
however, the i)rinciple above stated is
admitted ; but it was thought that the
facts did not show that knowledge on the
part of the creditor which would consti-
tute the transaction fraudulent on his part.
There were circumstances in the case from
which it was thought the plaintiffs might
reasonably infer that the bill given to them
by their debtor was one which he had a
right within his general authority as a
partner to transfer. Though the decision
does not seem to be in exact conformity
with the rule as before settled in several
cases, yet the principle is clearly ad-
mitted." In Dob V. Halsey, 16 Johns.
38, Spencer J., thus expresses the distinc-
tion : "The only difference between the
decision of this court and that of the
174
THE LAW OF PARTNERSHIP.
[CH. VII.
take partnership paper in payment of his debt from that part-
ner, and there are no further facts in the case, the partnership
would not be held, and the act of the liolder of that paper
would be deemed fraudulent in law. (/) But, if further facts
King's Bench consists in tiiis : We require is re([uired negativini^ a presumed concur-
tlie separate creditor, wlio lias obtained the rtuce of the copartner." See opinion of
partnership paper for the private debt of Bronson, J., in Wilson v. Williams, 14
one of the partners, to show the assent of Wend. 146, 158 ; of Tracy, Senator, in
the wliole firm to be bound. The rule State v. Catskill Bank, 18 Wend. 480 ;
of the King's Bench throws the burden Rogers v. Batchelor, 12 Pet. 221; Bank of
of avoiding such security on the firm, by Tennessee v. Salfarans, 3 Humph. 597-
requiring them to prove, that the act was (/) This is the principle of Hope v.
covinous on the part of the partner for Oust, cited by Lawrence, J., in 1 East, 52.
whose private debt the paper of the firm The same principle was applied in Shirretf
was given, by showing that it was done v. Wilks, 1 f^ast, 48, the case in which
without the knowledge, and against the Hope v. Cust, supra, was cited. Lord
consent, of the other partners, and that Kenyon, C. J., said : " This is an action
the fact was known to the separate creditor brought against three persons, Wilks,
when he took the paper of the firm." Bishop, and Robson, as acceptors of a bill
See Laverty r. Burr, 1 Wend. .^)29, 531, of exchange. It appears that the accept-
opinion of Sutherland, J. The ojunion of ance was in fact made by Bishop alone, in
Kelson, J., in Gansevoort v. Williams. 14 the name of the firm. The consideration
Wend. 133, upon the same jjoint, is very for this bill was some porter, which had
full and elaborate. He says : " The Eng- been sold by the plaintiffs to Wilks &
lish cases upon this subject are not always Bishop only, at a time when Kobson had
consistent with themselves ; and even the no concern with the house. Then the
same court, while they profess to adhere plaintiffs, knowing this, draw the bill upon
to this general position, namely, that the all the three partners, and knowingly take
partner denying the authority of his asso- an acceptance from one of them to bind
ciate must prove affirmatively that the the other two, one of whom, Robson, had
holder knew the paper was given in a trans- no concern with the matter, and was no
action unconnected with the ])artnership, debtor of theirs, — no assent of his being
and also that he did not assent, sometimes found, and nothing stated to show that he
substantially disregard the latter qualifi- had any knowledge of the transaction. It
cation of the rule in the application of it is hard enongh for one partner in any case
to facts." He illustrates the above remarks to be able to bind another without his
by a citation of some of the leading Eng- knowledge or consent; but it would be
lish authorities, from the examination of carrying the liability of partners for each
which he concludes " that while the Eng- other's acts to a most unjust extent, if we
lish courts hold to the position that the suffered a new partner to be bound in this
firm is liable on a bill or note made by one manner for an old debt incurred by other
out of the partnership business, unless the persons. The plaintiffs, therefore, ought
holder knows that it was so made, and not in justice to have taken this security,
that the other partners did not concur, the by which they were to bind one who was
frequent ])ractical operation and effect of it not their debtor: the transaction is fraudu-
under their direction does not essentially lent upon the face of it." So in Green r.
ditler from the rules as settled in this Drakin, 2 Stark. 347. There H. and B.
court. They undoubtedly put the defence being partners, the plaintiff lent H. 500/,
of the copartner upon the ground of fraud, to enable liini to enter into partnership
committed upon him by his associate and with D., the defendant, and shortly after
the holder ; but this is sometimes inferred D. H. and B. became partners. To pay
from the fact that the bill or note is given part of the sum borrowed, H. drew a bill
for a private debt, and that known to the of exchange in the partnership name, to
holder ; and at other times further proof his own order, and endorsed the same to
§ 135.]
RIGHTS AND DUTIES OF PARTNERS.
175
come in, these do not seem to be construed with the same sever-
ity, in reference to the holder, as they would be in this country.
Thus, if the paper be larger than the debt, and not agreeing with
it in point of time, and is indorsed before the holder sees it, such
facts have been considered as warranting the conclusion that the
holder honestly believed, and might rationally have believed, that
the firm authorized the transfer. (^) But, while it is true that
the phiintifr. Being called as a witness,
he testified that he had drawn the bill
in question without the knowledge of his
cojiartners, but that the plaintiff did not
know this. The defendant had given no
notice of his intention to dispute the con-
sideiation of the bill. But Lord Ellen-
borough was of opinion that the nature of
the transaction was intiinsically notice,
and he directed, that the plaintiff should
be nonsuited, on the ground that one part-
ner had no right to bind another without
his knowledge, bj* drawing a bill for his
own private debt. Ex parte Goulding, 2
Glyn & J. 118. See Jones r. Yates, 9 B.
& C. 532 ; Ex parte Thorpe, 3 ]Mont. &
A. 716 ; JUx parte Bon bonus, 8 Ves.
540 ; Ex parte Peele, 6 Ves. 604 ; May v.
Chapman, 16 M. & W. 355 ; Smith v. Cole-
man, 7 Jur. 1053. In Franklin y. M'Gusty,
1 Knapp, 301, the Master of the Rolls
said : " I take it to be clear, from all the
cases upon the subject, that it lies upon
a separate creditor who takes a partnership
security t'orthejiayment of his separatedebt,
if it be taken si'/np^/ci'/'tfr, and there is nothing
more in the case, to prove that it was given
with the consent of the other partners."
And see Blinn v. Evans, 24 111. 317.
((/) The principal case is Kiilley v. Tay-
lor, 13 East, 175. The plaintiffs in
November, 1806, sold to Ewbank, of
the firm of Ord & Ewbank, linen-
drapers, on his separate account, a cargo
of coals, to the amount of 34^. lis. In
ilay following, Ewbank paid 5^. on account,
and gave his note for the balance. This
note was dishonored, and taken up by the
plaintiffs, who shortly after received from
Ewbank, for the same balance, the bill in
suit. This bill, for 40/., was drawn and
indorsed by Ewbank in the style and firm
of Ord & Ewbank, and was before that
time accepted by the defendant Taylor.
After delivering this accejitance to the
plaintiffs, Ewbank applied to the plaintiffs
for the balance of 9^. 19s. 9d.; but the
plaintiffs refused to pay it until the bill
upon the defendant should have been paid.
The jilaintiffs negotiated the bill for 40/.,
but were subsei[uently obliged to jiay it,
and thereupon deliited Ewbank alone' for
the amount. Ord & Ewbank having become
bankrupt, the defendant was sued as ac-
ceptor, and a verdict found for the plain-
tiff's to the amount of the bill, subject to
the opinion of the court on the above
fact.s. It was held, in the King's Bench,
that the verdict should stand to the amount
of Ewbank's debt.
The same circumstances, of the partner-
ship paper being for an amount larger than
the private debt, and of its being drawn,
accepted, and indorsed before the creditor
saw it, and of its differing in point of
time, seem to have determined the opinion
of the court in Ex parte Kirby, 1 Buck, 511.
There T., M., and F. were in partnership,
under the firm of M., F.,&Co. T. also
carried on business on his own account,
and being separately indebted to K. to the
amount of 100/., he sent to K. a bill of
exchange for 300/. already drawn and
accepted, and also indorsed by M., F., &
Co., the payees, but which wanted nearly
three months of being due. At the same
time, T. re(piested K. to place 100/. to his
credit, and to send him a bill for the bal-
ance, 200/. K. accordingly sent a draft
for 200/., which was duly paid. The bill
for 300/. being dishonored, and M.,F., &
Co. having become bankrupt, K. was held
to have made a bona fide exchange of
security, and to be entitled to prove against
the joint estate, though not against the
separate estate of T.
Upon the same principle, apparentl_v,
it was held, in Ex parte Bonbonus, 8 Ves.
540, that the mere fact that money
advanced to one partner upon the security
of the firm was earned to his separate
account, even with the knowledge of the
176
THE LAW OF PARTNERSHIP.
[CH. VII.
paper agreeing in amount and time with the debt, and therefore
<nore obviously made for the debt, would be more suspicious, we
k'lidcr, was not sufficient to make the trans-
action fraudulent as to the other copartners,
md thereb}- to discharge the firm from lia-
bility. Lord Eldon said : " This petition is
presented upon a principle which it is very
difficult to maintain, that if a partner, for
his own accommodation, pledges the jiart-
nership, as the money comes to the account
of the single partner only, the partnership is
uot bound. I cannot accede to that. I agree,
if it is manifest to the persons advancing
money that it is upon the separate account,
and so, that it is against good faith that
he should pledge the partnership, then
they should show that he had authority
to bind the partnership. But if it is in
the ordinary course of commercial transac-
tions, as upon discount, it would be mon-
strous to hold, tjiat a man borrowing
money upon a bill of exchange, jiledging
the partnership, without any knowledge in
the banker that it is a separate transaction,
merely because that money is all cariied
into the books of the individual, therefore
the partnership should not be bound. No
ease has gone that length. It was doubted
whether Hope i'. Cust was not carried too
far, yet that does not reach this trans-
action ; nor Shirreff v. Wilks, as to which
1 agree with Lord Kenyon, that, as part-
ners, whether they expressly provide
against it in their articles (as they gen-
erally do, though unnecessaiily) or not, do
not act with good faith when pledging the
partnershi)) property for the debt of the
individual, so it is a fraud in the person
taking that pledge for his separate debt."
Further, it has been held both here and in
England, that if one partner, to pay his
separate debt, give the partnershi]) accep-
tance to an anioiint greater than the debt,
the creditor may, in an action against the
firm, recover the diflerence between the
amount of the bill and his separate demand;
the whole transaction, it seems, not being
vitiateil by the fraud as to ])art. Thus, in
Wintle V. Crowther, 1 Cr. & J. 316, the
defendants, Crowther & Combes, were
Sued as the accejitors of two bills of ex-
change, — one for 130/. lOs. M., the
other for 45/. 10s. Respecting the former
bill, these facts were in evidence : Crow-
ther & Combes carried on business in ]inrt-
nership as coal merchants. Combes being
a dormant partner. Crowther was also
engaged in another kind of business on his
separate account, and therein became sepa-
rately indebted to the plaintiffs for 8U/.
The plaiiititfs drew on him two bills of
exchange ; the one for 40/., the other for
38/. 8s. 6c/., the first of which was dis-
honored. When the second became due,
Crowther took to the plaintilf the bill for
130/. 10s. 6c/., which was accepted in the
name of Crowther & Co., in the handwrit-
ing of Crowther. The two separate bills
of Crowther were given up, and, as the
evidence indicated very strongly, in ex-
change for the partnership bill for 130/.
10s. 6c^. The cause was twice tried. Upon
the first trial, a verdict was found for the
defendants ; but it was set aside as being
against evidence. Upon the second trial,
the jury found for the plaintiffs upon both
bills ; and the plaintiffs having consented
to reduce this verdict by the amount of
Crowther's two separate bills for 40/. and
38/. 8s. 6c/. (a clear admission of fraud, as
to that part of the transaction at least), it
was held in the Exchequer that they might
retain their verdict for the residue. Wilson
V. Lewis, 2 Scott's N. K. 115 ; Gamble v.
Grimes, 2 Ind. 392. See also Barber v.
Backhouse, 1 Peake, 61.
The English rule seems to be very
clearly stated by the Master of the Rolls,
in Frankland v. M'Gusty, 1 Knapp, 301 :
" I take it to be clear, from all the casrs
upon the subject, that it lies upon a se])-
arate creditor who takes a partnership
security for the payment of his separate
debt, if it be taken simpliciter, ami there
is nothing more in the case, to prove that
it was given with the consent of the other
])artners. But there may be other circum-
stances attending the transaction, which
may afford the separate creditor a reason-
able ground of belief that the security so
given in the partnership name is given
with the consent of the other ]iartners ;
and these circumstances occurred in the
case which was cited, and which seemed to
be inconsistent with the other authorities.
I refer now to the case of Ridley v. Taylor.
§ 135.]
RIGHTS AND DUTIES OF PARTNERS.
177
have some doubt whether this coincidence between the private
debt to be paid, and the paper of the firm which pays it, with no
evidence of authority or adoption by the firm, would always be
suificient, in England, to discharge the firm. But, on the other
hand, we are quite confident that American courts would require
better reason for believing in the good faith of the holder, than
any coincidence between the date and amount of the firm's paper
and those of the private debt which it pays or secures. In other
words, the fact that the private creditor of a partner takes from
him the paper of the firm to pay his debt, raises a stronger pre-
sumption of fraud in this country than in England.
Lord Eldon says, very truly, that it may be of great moment to
a partnership that the mercantile credit of one of the partners
should be preserved, and that the courts sliould not embarrass
the lawful use of the paper of a firm, by a partner, for his own
accommodation, seeing that this is often connected with the
advantage of the firm. (/<) But to all considerations of this kind
thei'e is one answer., The power of a partner is limited by the
business of the firm ; he who knows that a partner's act is not
within the business of the firm, knows that it is not authorized ;
In that case the bill was dated eighteen
days before its deliveiy by the partner, to
his separate creditor, and it was not known
by the creditor that it was drawn and
indorsed by the debtor alone ; and the bill
was to a greater amount than the separate
debt. The court, therefore, wei-e of opin-
ion, that there was reasonable ground for
the separate creditor believing it not to
have been given to him in fraud of the
partnership, and that the general presump-
tion, that a partnership security, when
applied in payment of a separate debt, is
in fraud of the partnership, was repelled
by the special circumstances which be-
longed to that particular occasion. Upon
a consideration, therefore, of all the au-
thorities, I am of opinion that the law is,
that taken simpliciter the separate creditor
must show the knowledge of the partner-
ship ; but, if there are circumstances to
show a reasonable belief that it was given
with the consent of the partnership, it lies
upon the partners to j)rove the fraud. I
think that will reconcile all the cases." We
have already seen (§ 135, note (d)), that,
in this country, if one partner use the part-
nership paper under such circumstances of
separate advantage to himself, and of col-
lusion or of negligence on the part of the
one dealing with him, as to make the trans-
action prima facie fraudulent and void as
to the firm, the firm may still be held
upon jiroof of its previous consent to, or
subsequent adoption of, the single part-
ner's act. The same is also the doctrine
of the English courts. Thus, in Ex parte
Bonbonus, stated above, Lord Eldon said :
" There is no doubt now, tlie law has taken
this course ; that if, under the cinami-
stances, the party taking the paper can be
considered as being advertised in the
nature of the transaction, that it was not
intemled to be a partnership proceeding, as
if it was for an antecedent debt, prima facie
it will not bind them : but it will, if you
can show previous authority or subsecjuent
approbation ; a strong case of subseijuent
ap|)robntion raising an inference of previous
jiositive authority." See Tallmadge v.
Penoyer, 35 Barl'.. 120.
(Ji) Ex parte Bonbonus, 8 Ves. 544.
See The Trader's Bank of Rochester v.
Bradner, 43 Barb. 379 ; Freeman v. Car-
penter, 17 Wis. 126.
12
178 THE LAW OF PARTNERSHIP. [CH. VII.
and, if all he knows is that the act of the partner is for his own
immediate and direct and several henelit, he has no right to pre-
sume that the firm are benefited also, and therefore authorized it ;
because it is generally very easy for him to ascertain how this is,
if he wishes not to be a party to a fraud.
§ 136. Other Acts of Partner in Fraud of Firm. — Similar doctrines
must be applied if a partner disposes of any other securities ; or
of the goods or property of any kind, of the firm, in payment of
his personal debt, or for his personal relief, (i) And, generally,
the true rule should be, and we are confident that it is so in the
United States, that any act whatever of a partner, certainly for
his own individual and several benefit, and not obviously for that
of the firm also, does not bind the firm, until the holder proves
their authority or ratification. When a note signed in the firm
name was given not for partnership purposes, and a partner said
he would settle it, " if he could get the books, notes, and accounts
from the partner who signed the note," and he did not get them,
it was held that he was not liable. (iV) And a release, by one
partner, of a debt due to the partnership, or a receipt of payment,
which he has unquestionably authority to give if in good faith,
will be inoperative if given for a consideration which is known,
or ought to be known, to inure only to his own benefit. And
many decisions illustrating this principle may be found in the
note, (j)
(0 See ante, § 90. The adjudications seem to be somewhat in
(//) Burleigh v. Parton, 21 Tex. f>85. conflict. But the doctrine of quite a num-
(j) Evernghim v. Ensworth, 7 Wend, ber of cases seems to be, that as one part-
326 ; Gram v. Cailwell, 5 Cow. 489 ; ner has an undoubted right to sell the
Farrar v. Hutchinson, 9 A. & E. 641 ; goods of the partnership, or to contract for
Greeley v. Wyeth, 10 N. H. 16 ; Minor v. its services ; and as he may take pay
Gaw, 11 Sm. & M, 322. See, however, therefor in behalf of the partnership in
Halls V. Coe, 4 McCord, 136; Beckham v. either specific articles or money; and as
Peag, 2 Bailey, 133. An arrangement is an appropriation by him of such articles or
sometimes made between one partner and money, once received for the partnershi{>,
a customer of the firm, by which it is to his private use, would not subject the
agreed that goods sold or services rendered party from whom he received them to an
to such customer by the partnership shall action by the firm, — the nature of the
he paid for by a debt due from that partner case is not changed, if the party, thus
alone, or by articles furnished for his sepa- dealing «ith one partner, knows at the
rate use. Thus, one of a firm of grocers time that what he pays for labor, materials,
may agree with a tavern-keeper that the &c., furnished him by the partnership, is
debt of the latter for provisions bought of intended to come to the use of that partner
the partnership shall be set off against the alone. The disposition of the articles, or
debt of the former for entertainment fur- money, received by one partner, for benefits
nished at tlie inn. Is such an engagement, conferred by the partnership, is a matter
enteredintoby one partner, valid as against entirely between the different partners
his copartners, who are not privy to it ? Greeley v. Wyeth, 10 N. H. 15 ; White v.
§ 137.]
RIGHTS AND DUTIES OF PARTNERS.
179
§ 137. yKThen Fraudulent Paper binds Firm. — A bill of exchange
thus drawn fraudulently or so accepted, or a promissory note so
made or indorsed, does not bind the firm to an indorsee of the
original wrongful holder or indorsee, even if this second indorsee
be wholly innocent, unless he can show that he paid a considera-
tion for it. (k) Nor would it be good in his hands, whatever the
Toles, 7 Ala. 569 ; Strong v. Fish, 13 Vt.
277 ; Halls v. Coe, 4 McCord, 136 ; Hen-
derson V. Wild, 2 Camp. 561 ; Perry v.
Butt, 14 Ga. 699. See also M'Kee v.
Stroup, Rice, 291 ; Arnold v. Brown, 24
Pick. 89, 93 ; Yale v. Yale, 13 Conn. 185 ;
contra. Pierce v. Pass, 1 Porter, 232 ;
Goode I'. M'Cartney, 10 Tex. 193 ; Nor-
nient v. Johnson, 10 Ired. 89 ; Kamey v.
JMcBride, 4 Strobh. 12. The practical
rule applicable to the point is, we think,
well stated in Warder v. Newdigate, 11 B.
Mon. 174, 177. Where the plaintitfs,
partners, had hoarded with the defendant,
and each had told him "that what one
might call for would be the same as if both
sliould order it," the defendant's account
for linuors, &c., furnished to each, was
held to create a joint indebtedness, and to
constitute a valid counter-claim to the
deniiuid of the two plaintirts for goods sold
and delivered. Hartung v. Siccanli, 3 E.
D. Smith, 560. It has been held, that a
suit at law cannot be maintained in the
names of all the partners, for a debt from
which one of the joint plaiutilfs has
already discharged the defendant, although
such discharge may have been a fraud
upon the firm, in which the released
debtor was participant ; as where it has
been given in consideration of one part-
ner's receiving a discharge from his private
and separate debt. Jones v. Yates, 9 B.
& C. 532, 539 ; Wallace v. Kelsall, 7 M.
& W. 264 ; Gordon v. Ellis, 7 M. & G.
607, 621 ; Greeley v. Wyeth, 10 N. H. 15 ;
Homer v. Wood, 11 Gush. 62. Upon simi-
lar grounds, it is said, if a partnership
draw a bill of exchange, and one partner
agrees with the drawee, though in fraud of
the firm, that he will provide for it when
due, tlie firm cannot maintain an action on
the bill against the acceptor. Piichmond
i). Heapy, 1 Stark. 202 ; Johnson v. Peck,
3 Stark. 66 ; Si>arrow v. Chisman, 9 B. &
C. 241. See further Longman v. Pole, 1
Moody & M. 223 ; and compare w ith Jones
V. Yates, supra ; Henderson v. Wild, 2
Camp. 561. See also Minor v. Gaw, 11
Sm. & M. 322 ; Brewster v. Mott, 5 111.
378 ; Purdy v. Powers, 6 Barr, 492.
Though a discharge or a release from a
debt by one of several plaintitfs who are
partners, is, even when fraudulently given,
a good defence to the joint action, yet a
receipt of payment, given by one of several
plaintitfs, copartners, is nothing more, as
evidence, than a primajhcie acknowledg-
ment that the debt sued has been paid ;
and the plaintitfs may, notwithstanding,
show the contrary. Skaife v. Jackson, 3
B. & C. 421 ; Farrar v. Hutchinson, 9 A.
& E. 641 ; Oi)inion of Parke, B., in Wal-
lace V. Ktdsall, 3 B. & C. 273. See Sher-
wood V. Barton, 36 Barb. 284.
(k) Grant v. Hawkes, Chitty on Bills,
42 ; Heath v. Sansom, 2 B. & Ad. 291.
In this last case, Sansom & Evans were
partners under the firm of Sansom k Co.
Sansonr was also a partner in the Droit-
witch Patent Salt Company ; and being
indebted to them, drew a bill in the name
of Sansom & Co., payable to the Salt
Company. The latter indorsed the bill to
the plaintiff, though not, as it ayipeared,
for any valuable consideration. The plain-
tiff brought his action against Sansom &
Evans. It was held, that the Droitwich
Company could not have sued Evans on
the note, it being given to them in fraud
of Evans ; and that, as it did not ajipear
why the plaintiH sued the makers of the
note, whom he did not know, rather than
the indorsers, who were a solvent and
well-known partnership, it was incumbent
upon the plaintiff, under the circum-
stances, to show that he gave a valuable
consideration for the indorsement to him.
It was held, also, Parke, J., dissenticnte,
that in all cases where, from defect of
consideration, the original payees cannot
recover on the note or bill, the indorsee,
180
THE LAW OF PARTNERSHIP.
[CH, VII,
consideration he gave, if he also was aware of the fraud by which
his indorser obtained it. (Z)
to maintain an action against the maker or
acceptor, must prove consideration given
by himself or a prior indorsee, though lie
may have had no notice that such proof
will be called for. But where, in an ac-
tion by indorsee against acceptors of a l>ill
of exchange, some of the defendants
l)leaded that they did not accei)t, and it
was ])ioved that all the defendants were
partners, and that one of them, who had
suttVred judgment by default, had accepted
the bill in the name of the firm, in fraud
of the partnershij), and not for partner-
ship puri)oses, it was held, that such proof,
without evidence of knowledge on the part
of the plaintiti', did not, under the issue,
oblige the plaintiff to prove the circum-
stances under which the bill was indorsed
to him. JMusgrave v. Drake, 5 Q. B. 185.
See Heywood r. Watson, 4 Bing. 496 ;
and see the Mechanics' Bank v. Foster,
44 Barb. 87.
(I) If the partnership prove the note
or bill upon which it is sued to have been
issued or transferred in fraud of their
rights, the burden is now upon the claim-
ant, through the original wrongful holder,
to show that he took it fairly, and not
under circumstances which could reason-
ably operate as notice of the fraud. Mun-
roe v. Cooper, 5 Pick. 412 ; Arden v.
Sharpe, 2 Esp. 524. See Blair Miller v.
Douglass, Fac. Coll. No. 41. p. 154 ;
cited in Collyer on Part. § 495. And
in an action against one paitner by
the payee of a partnership note, the other
partner is a competent witness for the
defendant, to prove that the consideration
of said note was for the witness's exclusive
benefit, given to secure a debt due by him
on his own account ; and that when he
signed the note he informed the plaintiff
that he was not authorized to sign the de-
fendant's name to it. Robertson v. Mills,
2 H & G. 98. .But it is not necessary
that actual bad faith .should be fastened
upon the second indorsee of a fraudu-
lently circulated bill or note, to defeat his
claim aaninst the firm. It is sufficient if
the ciriMimstances under which he became
such iudnrsee show that, but for his gross
negligence, he would have learned the
fraud in which the pajter originated, or by
which it had been transferred. N. Y. F.
Ins. Co. r. Bennett, 5 Conn. 574; Smyth v.
Strader, 4 How. 404. And, it seems, that
if a note is offered at a bank, by one \\ho
became a party to it as intermediate in-
dorser, to be discounted for the benefit of
the offerer, the transaction on its face
would import, that the last indorsement
was intended merely to aid the negoti-
ability of the paper, and would throw
upon the bank discounting the paj)er un-
der such circumstances, the onus of show-
ing the tiansaction to have been regular.
Mauldin v. Branch Bank at Mobile, 2 Ala.
502. See Bank of Vergennes v. Cameron,
7 Barb. 143, 150; Cooper r. McClarkan,
22 Pa. 80. But if the holder of a part-
nership negotiable security, issued or
negotiated through the fraud of one of
the paitners, show himself to be a bona
Jidc indorsee for value, without notice of
the fraud, the undoubted general lule is,
that, in such hands, the jiaper is binding
on the firm ; and, as we have already
seen, knowledge acquired by the holder
subsequently to his taking the pa])er will
not affect the bona Jides o\' the tiansaction.
Arden v. Sharpe, 2 Esp. 524 ; Wells v.
Masterman, 2 Esp. 731 ; Lacy v. Wolcott,
2 Dow. & R. 458 ; Sanderson v. Brooks-
bank, 4 C. & P. 286 ; Usher v. Dauncey,
4 Camp. 97 ; Sutton v. Gregory, 2 Peake,
150 ; Ex parte Bushell, 8 Jur. 937 ; Bank
of Kentucky v. Brooking, 2 Litt. 45 ;
Livingston v. Roosevelt, 4 Johns. 279 ;
Smith V. Lusher, 5 Cow. 689 ; Vallett v.
Parker, 6 Wend. 619 ; Catskill Bank v.
Stall, 15 Wend. 364, 18 Wend. 466 ;
Vernon v. Manhattan Co., 17 Wend. 524,
22 Wend. 183 ; Evans v. Wells, 22 Wend.
325, 333, 20 Wend. 251 ; North River
Bank v. Aymar, 3 Hill, 262 ; Gildersleeve
V. Mahony, 5 Duer, 383 ; Rich i'. Davis,
4 Cal. 22 ; I.e Roy v. John.son, 2 Pet. 186;
Emerson v. Harmon, 14 Me. 271 ; Waldo
Bank v. Lumbert, 16 Me. 416 ; Dudley v.
Litt.lefield, 21 Me. 418 ; Duncan v. Clark,
2 Rich. 587 ; Babcock v. Stone, 3 Mc-
Lean, 172 ; Commercial Bank v. Lewis,
13 Sm. & M. 226; Freeman r. Ross, 15
Ga. 252 ; Calkins v. Smith, 48 N. Y. 614.
§ 139.]
RIGHTS AND DUTIES OP PARTNERS.
181
§ 138. Firm when Liable on Individual Note. — Taking the indi-
vidual note of a member of a firm for goods sold to the firm will
not discharge the other members from liability for the goods,
unless there be an agreement with the firm to that eifect. And
this is so although the note be negotiable, if it remains in the
hands of the payee. 0}')
On the other hand, if paper be drawn or discounted or received,
bearing only the signature of one partner, and the proceeds are
directly carried to the partnei'ship funds, the partnership cannot
be charged ; because it is considered that the credit is given on
negotiable paper only to those whose name it bears, (m) But as
between the partners it is a partnersliij^ note ; and, if one partner
pays it, he may charge it to the account of the firm, (nim)
§ 139. Usual Signature binds Firm. — The strictness of the rule
has been relaxed so far as to hold the firm liable, when, by proof
of usage or otherwise, it was found that this was the way in
which they signed their paper ; for this, in fact, makes the part-
ner's name the name of the firm, as to these transactions, (z^)
Hence, equity will restrniu by injunction
the negotiation of a bill of exchange,
tluiugh in the hands of a holder for value,
if he took it knowing that it had been
improperly accepted, by one of the i>art-
iiers, in the name of the partnership.
Hood V. Aston, 1 Riiss. 412. In general,
however, the fact that one partner has
given the partnership name on his own
separate account is a matter of legal de-
fence only, and equity cannot relieve
unless defence at law be impracticable.
Sneed v. Cogle, 4 Litt. 162.
To an action by indorsee against A. &
B., as drawers of a bill of exchange, in-
dorsed to C, and by him to the plaintiff,
A. pleaded that lie and B. were in copart-
nership as brewers ; that B. made and
indorsed the bill, using the name of the
firm, in fraud of A., and not for the pur-
poses of the copartnership, but for his
own private purposes, namely, for a pri-
vate debt due fiom him to C, and without
tlie knowledge or consent of A.; that there
was no consideration or vahie to him, A.,
for the drawing or indorsement of the bill :
of all which premises, C, at the time of
the indorsement to him, had knowledge
and notice ; and that at the time when
the bill was indorsed and delivered to the
plaintitT, he had full knowlt^dge and notice
of all the premises in the plea aforesaid.
Replication, that, at the time when the
bill was indorsed and delivered to the
plaintiff, he had not any such knowledge
or notice as in the plea mentioned ; and
issue thereon. At the trial, the jury
found that C. had no knowledge of the
original fraud in the drawing of the bill ;
but that the plaintiff, at the time of the
indorsement to him, had knowledge of that
fraud. It was held, that the plea was not
proved. May v. Chapman, 16 M. & W. 3.^5.
(jj) Folk V. Wilson, 21 Md. 538. [See
ante, § 89.]
(hi) Farmers' Bank of Mo. v. Bayless,
35 Mo. 428, 41 Mo. 274 ; Emly v. Lye, 15
East, 7 ; Siffkin v. Walker, 2 Camp." 308 ;
Ex parte Hunter, 1 Atk. 223 ; Ex parte
Bolitho, Buck, 100 ; Denton v. Rodie, 3
Camp. 493 ; Bevan v. Lewis, 1 Sim. 376.
See Loyd v. Freshfield, 2 C. & P. 325;
Grneff y. Hitchni^n, 5 Watts, 454 ; Ja(|ues
I'. Mar(|uand, 6 Cow. 497; Willis u. Hill,
2 Dev. & B. 231 ; Allen v. Coit, 6 Hill,
318 ; Rogers v. Coit, 6 Hill, 322 ; Green
V. Tanner, 8 Met. 411. [See ante, § 88.]
(jnm) Sprague y. Ainsworth, 40 Vt. 47.
ill) South Carolina Rank v. Case. 8 B.
& C. 427. And see Hubbell v. M'oolf, 15
Ind. 204 ; Schollenberger v. Seldouridge,
49 Fa. 83.
182 THE LAW OF PARTNERSHIP. [CH. VII.
So, too, if a partner uses neither his own name nor that of the
firm, but a fictitious one, and does this in partnership business
and on partnership account, if his partnership can be shown to
have authorized or to have adopted the act, they will be held as if
this name were theirs, (o)
§ 140. Two Firms with Common Member. — If there be two
houses of the same name, entirely independent and disconnected
in their business, no other difficulty can arise than what may
occur when one man is charged as liable on paper which
another man of the same name has made. It is a question of
fact, and not of law. But if there be one person who is a part-
ner in both of these houses, a new question arises. And it seems
to be held, that a partner in one may be made liable on the paper
of the other, unless he could show that the holder knew that the
paper was that of the other exclusively : (5-) as a general rule,
it may be said that if two or more firms are connected in busi-
ness, and use the same name, a holder of the paper having that
name may charge upon it either of the partnerships, at his own
election ; unless he knew, or ought to have known, definitively,
that it belonged to one of them, and not to the other. But though
he may thus elect to consider it as the paper of one or the other,
he cannot treat it as the paper of both, unless their connection be
such as to make them in fact but one firm, (r)
§ 141. Joint and Several Notes. — A joint and several note by all
the members of a firm is not strictly a partnership note, nor has
it the same effect ; ^ nor could the holder, in case of insolvency,
(0) Williamson v. Johnson, 1 B. & C. (?•) M'Nair v. Fleming, cited in Jlont.
146. on Part. 37, 3 Dow. 229 ; Miller v. Con-
(q) Baker v. Charlton, 1 Peake, 80. solidation Bank, 48 Pa. 514.
^ A note signed by the partners individually is not upon its face a partnership note ;
and the presumption is that on such a note the partners individually are bound, but
not the firm. Freeman v. Cami)bell, 55 Cal. 19" ; Ex parte Weston, 12 Met. 1. But
if the note was given for partnership purposes, it binds the firm. In re Thomas,
17 N. B. R. 54, 8 Hiss. 139; De Jarnette r. McQueen, 31 Ala. 230; Iddings v.
Pierson, 100 Ind. 418 ; Carson v. Byers, 67 la. 606, 25 N. W. 826 ; Ex parte Nason,
70 Me. 363 ; Trowbridge v. Cushman, 24 Pick. 310 ; Agawam Bank v. Morris, 4 Gush.
99 ; Maynard v. Fellows, 43 N. H. 255 : McKee v. Hamilton, 33 Oh. St. 7 ; Wairiner
V. Mitchell, 128 Pa. 153, 18 Atl. 337 : Kendrick v. Tarbell, 27 Vt. 512. So of a bond:
Ex parte Stone, L. R. 8 Ch. 914 ; Howell v. Moores, 127 111. 67 ; Berkshire AVoolen
Co. V. Juillard, 75 N. Y. 535. But see In re Holbrook, 2 Low. 259 ; In re Herrick,
13 N. B. R. 312 ; Turner v. Jaycox, 40 N. Y. 470 ; Crouch v. Emmerson, 3 Humph.
209. So where one partner draws and the other indorses a note for partnership pur-
poses, it has been held a firm note. Colwell v. Weybosset Nat. Bank, 16 R. I. 2S8,
15 Atl. 80, 17 Atl 913.
§ l^lj
RIGHTS AND DUTIES OF PARTNERS.
183
claim from the partnership funds ; and, if it be signed by some
of the jjartners only, it will have no operation against those not
signing it. (s)
That one partner may sign a note so as to hold all jointly and
himself severally, there can be no doubt. If A. makes a joint
and several note, and signs it "A., B., & Co.," and also "A.,"
he may perhaps be so held. If there be no words making it joint
and several, it is only the joint note of all, which it is by the sig-
nature A., B.,& Co. ; and therefore the signature A. is surplusage
and inoperative.^ But if the signature is "A., B., & Co., by A.,"
then it is certainly the signature of the company by an agent,
who might be held severally, if want of authority or othei* cir-
cumstances made him so liable, but who is no more held in
severalty because he is a partner than he would be if he were
not. If the words were, " I i)romise," etc., it might tend to hold
the signer severally, but would not, we think, be suthcient for
this.(p)
(s) Peri'ingy. Hono, 4 Bing. 28 ; Crouch
V. Bowman, 3 Huiiiiih. 209. See Norton v.
Seymour, 3 C B. 792 ; Kendrick v. Tarbell,
27 Vt. 512 ; In re Warren, Daveis, 320 ;
Filley v. Plielps, 18 Conn. 294 ; De Jarnette
V. McQueen, 31 Ala. 230 ; ((7ile, § 97.
(^>) See Galway v. Matthew, ] Camp.
403. This case expressly decides that on
a note of tlie above description the whole
firm are liable. But it is an inference only
that in such a case the partner signing his
own and the firm's name, could be separa-
tely sued. This, however, is expressly
decided in Hall v. Smith, IB. & C. 407".
But Hall V. Smith h;is been overruled in
the Exchequer, and cannot now be regarded
as an authoritative decision. See Ex
parte Buckley, 14 M. & W. 469. Parke,
B. : "I really must say that I think Hall
V. Smith cannot be supported." Alder-
son, B., concurred. Piatt.: "I have no
doubt that Hall v. Smith cannot be sup-
ported." Maclae v. Sutherland, 3 E. & B.
34, 35 ; Staats v. Howlett, 4 Denio, 559.
Compare Owen v. Van Uster, 10 C. B.
319. See also Fx parte Christie, 8 Jur.
919. See also Wilks v. Back, 2 East, 142 ;
Doty V. Bates, 11 Johns. 544. In this
last case, a note made by one partner,
and beginning, " I promise to pay, " but
signed with the name of the firm, was held
binding on the partnership, as meaning,
"7, 07ie of the partners, promise on
behalf of the firm," &c. A note signed by
one partner only, " for himself and part-
ners," will satisfy the terms of an Act of
Parliament, which requires a writing to be
signed " with his or their name or names,"
and will, therefore, be a valid note, and
binding on the firm. Meux i\ Humphrev,
8 T. R. 2*57. See Smith v. Bailey, 11 Mod.
401. And if in an action against the
drawers of a bill, or the makers of a
promissory note, the declaration states the
defendants to have made the bill or note,
" their own proper hands being thereunto
subscribed," a bill or note subscribed with
the partnership name of the defendants by
one of them is suflHeient to support such
averment. Jones v. Mars, 2 Camp. 305 ;
Porter v. Cumings, 7 Wend. 172. See
Snow V. Howard, 35 Barb. 55. Whether
it is within the general implied powers of
one partner to hind his copartner in an
obligation which shall make him severally
liable to a creditor, so as to deprive such
^ Where a partner signs commercial paper with the firm name and adds his own
name under it, the partner seems not to be held liable separatelv. In re Barnard,
32 Ch. D. 447 (C. A.) ; Makomsou v. Malcomson, L. R. 1 Ire. 228.
184 THE LAW OF PARTNERSHIP. [CH. VII.
S 142. Debt incurred before Formation of Partnership. — If a
partnership be contemi)latcd and agreed upon, and a purchase is
made or a debt otherwise incurred by one of the partners for the
partnership, but before the actual formation of the partnership, it
is only the debt of that partner : but this indebtedness is a suth-
cient consideration to sustain tlie subsequent promise of the
partnership when formed, given in lieu of it or to secure it. Q)
§ 143. Accommodation Paper, — There are some acts in rela-
tion to negotiable paper which carry with them the presumption
that the partner doing them was not authorized. One of these is
the indorsing of paper which does not belong to the firm. This
is, in fact, lending or giving the credit of the firm. There can be
no doubt that this is frequently done by mercantile firms. Some-
times they lend their credit, and are paid for it by a compensation
for the guaranty. Sometimes they reciprocate accommodation
paper with another firm, each indorsing for the benefit of the
other ; and the notes are of the same amount, or equalized in some
way, and perhaps made for some Ijroken amount, to give them
the appearance of business paper. Of course, a partnership is
liable where it authorizes any such use of its name. But this is
no part of general and regular mercantile business, and therefore
the presumption of the law is rather against the authority of the
partner who so signs the name, (m) But this presumption may
be overcome not only by direct evidence of authority, but from
usnge or frequent recognition of such signature, or such other
similar facts as would satisfy a jury that the signature was for the
partnership and by its authority. (y)
copartner of a defence in abatement for is in reality for the benefit of the partner-
the nonjoinder of his codebtor as defend- ship, rather than for that of him to whom
ant, when prosecuted at law upon the it is given. As where a bill, drawn by
obligation, is doubted by Wells, J., in oue ]iartner upon the firm, and accepted
Ganson v. Lathrop, 25 Barb. 455. by liim in the firm's name, for the acconi-
(/) Saville ?'. Robertson, 4 T. R. 720. niodation of the payee, is given in ex-
(«) The principle is clearly stated by change for the paper of the latter, to be
Walwortii, Chancellor, in Stall v. Catskill used in raising money for the purposes of
Bank, 18 Wend. 466, 477. See also Bank the partnership. Gano v. Samuel, 14 Ohio,
of Tennessee v. Saffarrans, 3 Humph. 597. 592.
New York F. Ins. Co. v. Bennett, 5 Conn. (v) Bank of Tennessee v. SaflTarrans, 3
574 ; Mauldin v. Branch Bank at Mobile, Humph. 597; Whaleyv. Moody, 2 Humph.
2 Ala. 502 ; Lang v. Waring, 17 Ala. 145 ; 495 ; Oansevoort v. Williams, 14 Wend.
Gansevoort v. Williams, 14 Wend. 133, 133, 139 ; Chenowith v. Chamberlin, 6
139 ; Williams v. Walbridge, 3 Wend. B. Mon. 60 ; Sweetser v. French, 2 Cush.
415; Austin r. Vandermark, 4 Hill, 261 ; 309; Bank of Kentucky v. Brooking, 2
Bank of Vergennes v. Cameron, 7 Barb. Lift. 41, 45 ; Darling v. March, 22 Me.
143, 150. But this presumption does not 184, 188 ; Tanner v. Hall, 1 Barr, 417 ;
arise where accommodation paper, executed Dundass r. Gallagher, 4 Barr, 205. But,
by one partner in the name of the firm, though it ajipear that each of two part-
§ 1^-i]
RIGHTS AND DUTIES OF PARTNERS.
185
§ 144. Guaranty iii Name of Firm. — It is also a general rule,
that no pailner has any authority implied from the mere fact of
partnership to become surety for any debt in any way, and bind
the partnership thereto, (iw) The reason from which this rule
originated, is, that the proper business of a partnership is most
usually buying and selling ; and therefore there is seldom a pre-
sumption that anything but this is within their business. And
the same rule applies, for the same reason, to guaranties given by
one partner in the name of the firm. But the question is always
0])en to evidence ; and the holder of the guaranty may show not
only the peculiar usage of that firm, or their frequent recognition
of such guaranties, (a;) but also that the nature of their business
is such as to make this giving of guaranties a part of it. So
Lord Mansfield said in relation to bankers ; (y) and it has been
ners has repeatedly, with the knowledge
and assent of the other, indorsed accom-
modation notes in the firm name, this is
not sufficient evidence that either of them
is authorized to sign the firm name to such
paper as maker and surety. Early v. Reed,
6 Hill, 12. Paper, however, to 'which the
partnership name has been affixed by one
partner by way of accommodation, is
always binding upon the firm, in the
hands of a bona fide holder of value,
taking it without notice of the circum-
stances, express or implied. Id. ; C'atskill
Bank v. Stall, 15 Wend. 364 : Austin v.
Yandermark, 4 Hill, 2f)9 ; Gano v. Samuel,
14 Ohio, 592 ; Waldo Bank v Lumbert,
16 Me. 416 ; Mauldin i'. Branch Bank at
Mobile, 2 Ala. 503, 513 ; Beach v. State
Bank, 2 Ind. 488.
(«•) Foot V. Sabin, 19 Johns. 154;
Laverty v. Burr, 1 Wend. 531 ; N. Y. F.
Ins. Co. V. Bennett, 5 Conn. 574, 580 ;
Andrews v. Planters' Bank, 7 Sm. & M.
192 ; Langan v. Hewt-tt. 13 Sm. & M.
122 ; Wagnon v. Clay, 1 A. K. Marsh. 257 ;
Rollins I'. Stevens, 31 Me. 454 ; New
York F. Ins. Co. v. Bennett, 5 Conn. 583 ;
Butler V. Stocking, 8 X. Y. 408. See
farther for the general principle, Sweetser
V. French, 2 Cush. 309, 314 ; Rolston v.
Click, 1 Stewart, 526 ; Kibbler v. De
Forest, 6 Ala. 92 ; Bank of Rochester v.
Bowen, 7 Wend. 158 ; Long v. Carter, 3
Ired. 238. The ratification by a firm of
the unauthorized act of one partner, in
signing the firm name to a contract of
suretyship, is ineffectual as against existing
partnership creditors, being in substance
an adoption by the firm of a private debt
of one i)artner. Kidder v. Page, 48 N.
H. 3S0.
(./ ) And a recognition and adoption,
express or implied, subsequent to the
giving of the guaranty, may be given in
evidence as well as a prior authority ; and
either the one or the other may be shown
by parol as well as by a written document.
Duncan v. Lowndes, 3 Cami). 478 ; Ex
2}arte Nolte, 2 Glyn k J. 305, 306 ; Craw-
ford V. Sterling, 4 Esp. 207 ; Halseham i'.
Young, 5 Q. B. 833 ; Long v. Carter, 3
Ired. 241 ; Mayberry v. Bainton, 2 Harr.
Del. 24. See Coursey v. Baker, 7 H. &
J. 28. In Sweetser v. French, 2 Cush.
309, 314, Metcalf, J., states very clearly
the law respecting guaranties as established
both in England and this country. See
also Hamill v. Purvis, 2 Barr, 177 ; Sutton
V. Irwine, 12 S. & R. 13. Partners may
give in evidence a disclaimer of a guaranty,
and a refusal to be concerned in it.
V. Layfield, 1 Salk. 292. And whether a
guaranty has been given by one partner
with the privity and consent of all, is
a question for the jury. Payne v. Ives, 3
Dow. & R. 664.
(v) Hope V. Gust, 1 East, 53. If a
guaranty given by one partner can be
considered as an assurance or represen-
tation made in the usual course of, and
186 THE LAW OF PARTNERSHIP. [CH. VII.
held, that in horse-dealing it is so customary to sell with war-
ranty, or rather so rare to sell without it, that a buyer may
presume that a partner (or any agent) having authority to sell
has thereby authority to warrant, (z) The power or authority
to sell generally does not carry with it the power to warrant ; but
we should be disposed to hold that a warranty by any partner, of
the ])roperty of the firm lawfully sold by him, Avould hold the
firm, if made and received in good faith, (a)
§ 145. Power to indorse Negotiable Paper. — [The indorsement
of commercial paper has a double effect : it passes property and
it binds the indorser to a subsequent holder. We have seen that
one partner has power to transfer firm property, and therefore to
indorse a firm note for the purpose of transferring it : ^ he has the
power by his indorsement in the firm name also to bind the firm
to subsequent holders.^
If he indorses firm paper for his private purpose, the indorsee
cannot of course hold the paper against the firm ; nor could any
subsequent holder with notice.^ It becomes important therefore to
determine what transactions, apparent on the face of the note,
are notice of fraud on the firm. Where the private note of a
partner is indorsed by the firm name, the firm not being a party
with reference to, the business of the firm, Sandilands v. Marsh, 2 B. & Aid. 679.
it will be binding on the partnership, See Penn v. Harrison, 3 T. R. 760.
as being an act entirely within the scope (a) In Sweet v. Bradlej', 24 Barb. 549,
of one partner's authorit.y. . See Crawford the defendant, a member of the firm of
V. Sterling, 4 Ksp. 209; Sutton i'. Irwine, B. Bradley & Co., sold some promissory
12 S. & r! 13. Bat one partner will not notes belonging to the firm, received the
be deemed to have the power of giving a proceeds, and applied them to the use of
guaranty in the name of the firm, merely the firm. At the sale, he assured the
in consequence of its being a rcaxonahU purchaser of the pajier that he would
mode of carrying into etiect an acknowl- warrant that the notes were given in the
edged partnership contract. Brettel v. regular course r)f business, and would be
"VvTlliams 4 Exch. 623. paid ; that the makers and indorsers were
(;:) " A case may be put, where two responsible and men of abundant means,
persons in partnership, for the .sale of Tlie notes having been bought upon the
horses, should agree between themselves strength of these and other similar repre-
never to warrant any horse ; yet, though sentations, which proved to be false, it was
tliis be their course of business, there is no held that the firm was bound by the
doubt that if upon the sale of a horse, the representations of the partner who sold the
].io].erty of the partnership, one of them notes ; and that an action would lie against
.sho\ild give a warranty, the other would all the members of the firm, ujion the
be thereby bound." Per Abbott, C. J., in warranty.
1 Ante, § 108.
2 Waldo Bank v. Lumbert, 16 Iile. 416 ; Tevis v. Tevis, 24 Mo. 535 , Tompkins v.
Woodvard, 5 W. Va. 216.
■ 8 Second Nat. Bank v. Hume, 4 Mack. 90; Allen v. Cary, 33 La. Ann. 1455;
Livingstone v. Roosevelt, 4 Johns. 251.
§ 147.] RIGHTS AND DUTIES OF PARTNERS. 187
to the note, the indorsement is clearly for the accommodation of
the partner, and any holder lias notice that it was not made in
the course of business, and is put upon his inquiry.^ But where
the note of an individual partner is made payable to a firm, and
is indorsed by the partner in fraud of the firm, an innocent holder
for value may enforce it against the firm,^ although the individual
creditor to whom it was given could not, in the ordinary case.^
So where a j)artner draws a firm draft to his own order, this is
not of itself notice of irregularity.* Where a partner in two firms
makes a note in the name of one firm payable to tlie other, and
indorses the name of the other firm, a subsequent holder for value
is not affected witli notice.^]
§ 146. Notice of Dishonor. — [Notice of the dishonor of negoti-
able paper is good if sent to a single partner, whether before or
after dissolution. '^j
SECTION IV.
OF THE POWER OF A MAJORITY OF THE PARTNERS.
§ 147. Power of a Majority. — Whether a majority in numbers of
the partners can lawfully control the rest, and conduct the affairs
1 National Bank of the Commonwealth v. Law, 127 Mass. 72 ; Tanner v. Hall, 1
Ban-, 417; Cooper v. McClurkan, 22 Pa. 80 ; (but see Ihmsen v. Negley, 25 Pa. 297;)
Tompkins r. Woodyard, 5 W. Va. 216. Contra, Bank of Commonwealth v. Mudgett,
44 N. Y. 514.
2 Redlon v. Churchill, 73 Me. 146 ; Manning v. Hays, 6 Md. 5 ; Atlas Nat. Bank
V. Savery, 127 Mass. 75.
3 Mechanics' Bank v. Barnes, 86 Mich. 632, 49 N W. 475 ; Tevis v. Tevis, 24 Mo.
535 ; Commercial Bank v. Warren, 15 N. Y. 577.
4 Haldeman v. Bank of Middletown, 28 Pa. 440.
5 Atlantic State Bank v. Savery, 82 N. Y. 291. But if the note were made to the
order of the partner, so that the second firm was a party only as indorser, this would
seem to be notice that the note was not given in the course of business of the second
firm. Contra, however, Ihmsen v. Negley, 25 Pa. 297. Where a partner drew and
signed a note, and under his own signature added that of the firm, it was held to be a
question for the jury whether the form of the note was notice of any iiTegularity.
Sherwood v. Snow, 46 la. 481. See Ames, Cases on Part. 527 n., 533 n.
6 Coster V. Thomason, 19 Ala. 717 ; Slocomb v. Lizardi, 21 La. Ann. 355 ; People's
Bank v. Keech, 26 JId. 521 ; BouMin v. Page, 24 Mo. 594 ; Fourth Nat. Bank r.
Altheimer, 91 Mo. 190, 3 S. W. 858 ; Hubbard v. Matthews, 54 N. Y. 43. See Bank
of America v. Shaw, 142 Mass. 290, 7 N. E. 779. If one partner resides at a distance
from the firm business and tlie place of payment, notice to him alone has been held not
sufficient. Hume v. Watt, 5 Kas. 34. After the death of a partner, notice to the sur-
viving partner has been held sufficient to bind the estate of the deceased jiartiier.
Dabney v. Stidger, 4 Sm. & M. 749. But see Cocke v. Bank of Tennessee, 6 Humph.
51, contra.
188 THE LAW OF PARTNERSHIP. [CH. Til.
of the partnership at their own pleasure, has been much discussed.
At one time there was certainly a strong tendency to sustain this
power, and to extend it over all the affairs of the partnership,
provided only that it was exercised honestly and deliberately, and
with every reasonable opportunity to the minority to make their
wishes and the reasons for their wishes known and duly con-
sidered. It has, as certainly, been the tendency of the courts in
later years to limit this power narrowly, and almost confine it
within what may be called the domestic acts of the firm ; as, for
example, the appointment or salary of a clerk, the arrangements
of the counting-room, method of conducting sales, or keeping
accounts, and the like. And, even as to these, it is put upon the
apparent necessity of deciding as to how that shall be done which
must be done in some way. Whereas, if the partnership cannot
agree about a purchase, or a sale, it may be omitted, and the
business nevertheless go on. Recent American decisions appear
to enlarge this power somewhat. Thus, it has been held that a
majority of a firm established to publish a newspaper has author-
ity to appoint or remove a publisher, (^oa') It will be apparent,
however, from the authorities presented in our note, that the law
as to the power and authority of a majority of copartners cannot
be considered as definitively established. (6)
(rtffl) Peacock v. Cummings, 46 Pa. major part of the part-owners should
434. But see Yeager v. Wallace, 57 Pa. conclude the rest. And in Falkland v.
365. Cheney, 5 Bro. P. C. 476, 1 Bro. P. C.
ib) Chitty says (3 Laws of Commerce, (Dublin ed.) 90, it seems to have been
236) that, in the absence of express stip- laid down as a general principle that, in
Illations between the partners, " a majoi-- all sea adventures, the act of a majority
ity must decide as to the disposal of the binds the whole. But in that case such
partnership property ; or, if no majority power was given to the majority by the
can be obtained to decide as to such dis- articles of association. See Lloyd v. Loa-
posal, or there are but two partners in the ring, 6 Ves. 777. Perhaps the weightiest
firm, one or more partners may manage authority to be found in the English
the concern as they think fit ; provided it books is the dictum of Lord Eldon in
be within the rules of good faith, and Const v. Harris, Turner & R. 516, 525.
warranted by the circumstances of the After declaring that the act of the major-
case." To this CoUyer adds (Collyer on ity of the partners is to be considered the
Part. § 197): "It will be observed that act of all, he adds: "I call that the act
this opinion is given with considerable of all, which is the act of the majority,
caution, and jierhaps it may be laid down provided all are consulted and the nuijor-
that, in a partnership without articles, the ity are actiug bond fide ; meeting, not for
power of the majorit}' to bind the minor- the purpose of negativing what any one
ity is confined to the ordinary transactions may have to offer, but for the purpose of
of the fiartnership." The English author- negativing what, when they are met to-
ities on the point are few, and by no means gether, they ma)', after due consideration,
conclusive. In Robinson v. Thompson, 1 think proper to negative. For a majority
Vern. 465, it was held, that an account of of partners to say, ' We do not care what
the profits of a voyage settled by the one partner may say : we, being the ma-
U8.j
RIGHTS AND DUTIES OF PARTNERS.
189
§ 148. As to Third Persons. — We may consider this question
in reference to third persons, and also in reference to the partners
themselves. If the majority propose to deal with a customer,
either in the way of purchase or sale, in a manner to which the
minority do not assent, it is certain that the minority, whether
they withhold authority or not, will be bound, if they do not com-
municate tlieir dissent to the customer, provided the transaction
be within the scope of the partnership business ; for so would the
majority be bound if the minority so did it, and so would all the
|)artners be bound if any one of them so did it. On the other
hand, if it be not within the business of the firm, neither a
majority nor a minority would be bound to third persons, unless
these persons could show themselves to have believed and to have
been authorized to believe that it was within the business of the
firm, or that the firm had made it theirs by adoption or
ratification.
All that we have said results necessarily from principles which
have been fully considered in former chapters. Let us here sup-
jority, will do what we please,' is, I ap-
prehend, what this couvt will not allow.
In all partnerships, whether it is expressed
in the deed or not, the partners are bound
to be true and faithful to each other : they
are to act upon the joint opinion of
all, and the discretion and judgment of
any one cannot be excluded ; what weight
is to be given to it is another question."
The American authorities are not much
more numerous nor satisfactory. The opin-
ion of the court in Kirk f. Hodgson, 3 Johns.
Ch. 400, contains expressions which, con-
sidered by tliemselves, would appear to
give unqualified support to the above dida
of Lord Eldon. But Chancellor Kent,
who rendered the decision in that case,
says of it, in his Commentaries, that it
"related onlj' to the case of the manage-
ment of the interior concerns of the
partners among themselves ; and to that
it is to be confined." 3 Kent Comm. [45].
"We have, however, two cases in which
the doctrine is asserted, that where a firm,
without articles, consists of more than
two members, any contract within the
sphere of the joint business, made in good
faith by the majority, will be binding on
the whole, notwithstanding at the time
of, or previous to, the making of the
agreement, the minority expressly dissent.
and communicate their dissent to the
third party with whom it is made. See
Johnston v. Button, 27 Ala. 245 ; Camp-
bidl V. Bowen, 49 Ga. 417. See also
Western Stage Co. v. Walker, 2 Iowa, 504 ;
Irvine v. Forbe.s, 11 Barb. 587. In Kirk
V. Hodgsdon, 3 Johns. Ch. 400, E., K.,
& D., in trade, employed H. as their
clerk, at a fixed annual salary, but with
the understanding that the salary should
be increased with the increase of the firm,
business and of H.'s duties. In the third
year, it was discovered that H. had over-
drawn money of the firm and applied it
to his own use ; and this breach of trust
was confessed by him. Nevertheless, a
majority of the firm, E. & D., continued
H. afterwards in his employment. It was
held, that this fact was decisive in favor
of the continuance of the rights of H.
and of his claim to the stijiulated increase
of salary ; that it was evidence that he
had not forfeited the confidence of the
firm, and that the overdiawings, charged
and confessed, were not understood by
them to be acts of intentional fraud ; and
that they could not, therefore, be set up
by the firm against his claim, founded on
their promises and acknowledgments, and
his services.
190 THE LAW OF PARTNERSHIP. [CH. VII.
pose that the question refers to some single act. The majority of
a house dealing in cotton wish to sell one hundred bales at a
certain price, and the minority refuse to consent ; the majority
make the sale, deliver the cotton, and take notes or money for it ;
can the buyer hold this cotton by good title ? Certainly, if the
minority express no dissent ; but, if they do express dissent and
positive prohibition, is the transaction then valid ? It might not
be easy to reach the question at law. The minority alone, that
is, without the majority, would find it difficult to maintain reple-
vin or trover, or any other action, for the cotton or its value.
And it would not seem, commonly at least, to be a case in which
a court would permit a minority to use the names of the majority
as coplaintiffs against their will. If the minority sold the same
cotton to another customer, and let the two purchasers contest
the title of each other, the purchaser from the minority alone
would certainly have no better title than the purchaser from the
majority alone. If the question were considered in equity, all
the circumstances of the case would be duly regarded, and, among
others, the right or absence of right of the minority to dissolve
the partnership at will, (c) For, if they have this right, it would
seem that they could exercise it, in case of irreconcilable and
material difference of view or purpose. And, if they did not
exercise it, they might be considered as yielding to the majority,
for the sake of preserving the partnership, and so adopting the
transaction. If they could not dissolve it, because it was estab-
lislied for a time certain, and if the conduct of the majority was
unreasonable and oppressive, this would be a good ground for the
other partners asking of the court a dissolution of the partner-
ship; and generally, if they did not, it would, we think, be taken
(c) In both the cases, Johnston v. Dut- term, as having any bearing on the
ton, 27 Ala. 245, and Western Stage Co. case under consideration. Conceding
r. Walker, 2 Iowa, 50i, cited in preceding they are law, which is doubtful, the
note, the partnership was, by articles, to decisions rest solely upon the ground,
continue for a time certain, and in both that the limitation of the right of disso-
the actions were at law. In Johnston v. lution is incompatible with the nature of
Button, the attention of the court seems the partnership contract ; and this prin-
to have been called to views similar to ci])le does not militate against the posi-
those represented in the text. See argu- tions we have asserted. The dissent, in
nient of counsel, pp. 2.50, 251. The court, the present case, cannot be regarded as a
however, said, p. 253 : "We do not dissolution ; for, if effectual, it would
consider the cases to which we have not, necessarily, produce that result, al-
been referred, holding that one partner though it might operate to change the
has the riijht, at pleasure, to dissolve a mode of conducting the business. In
partnei\ship, although the articles provide other words, it might be carried on with-
that it is to continue for a specified out contracting debts."
§ 149.] RIGHTS AND DUTIES OF PARTNERS. 191
as before, that by not dissolving the partnership they acceded to
the wishes of the majoi-ity. But there certainly might be cases
in which the act of the majority would be injurious to the minor-
ity, and an immediate dissolution even more so, and the majority
would be deemed to have no right to inflict upon a minority either
of these mischiefs. Then the court would decree such annulling
of the act, or compensation, or other remedy, as justice between
all the parties and the power of the court should authorize and
require. But tiiese considerations touch rather the rights and
interests of the partners. So far as the customer, the third party,
is concerned, — always supposing the transaction honest as to him,
— we should say that the question of the power of a majority
would be put aside both in law and in equity by the general rule,
that, if the transaction were within the business of the firm, it
bound all the partners who gave no notice to the third party ; and,
on the other hand, that it did not bind recusant and jjrotesting
partners who gave sufficient notice of their dissent ; (c?) and that,
if it was without the business of the partnership, it bound nobody
but those who authorized the act or ratified it.
§ 149. Between the Partners themselves. — If the question of a
majority related only to those things to which no person out of
the partnership was privy, it would assume a somewhat different
aspect. Suppose, for example, a majority chose to enlarge or
vary the business importantly, or enter upon a new business,
which things no partner can do by his implied authority, can the
majority compel the minority to acquiesce in this ? We should
say that they certainly could not. (e) And yet it must generally
be the case, that if the majority persisted, and the minority did
not dissolve the partnership or seek relief from a court of equity,
but did go on with the business in the manner proposed by the
majority, this would be deemed evidence of their consent. Still,
(d) See ante, § 147, note (b). were afterwards altered by the company
(t) Natnseh v. Irving, Gow on Part, so as to allow a trade in ardent spirits
App. p. 398 ; ante, § 131, note (x). See to be carried on. The court said :
Conist y. Harris, Turn. & R. 524; Living- " We can have no hesitation in holding,
ston I'. Lynch, 4 Johns. Ch. 573. In that this was such a substantial alteration
Abbott V. Johnson, 32 N. H. 9, it ap- as discliarged the plaintiffs from their
peared tiiat a number of ])ersons, among obligation to proceed with the partner-
them the plaintiffs, formed a written agree- ship, unless they agreed to the change,
ment of copartnership, for the purpose and that it gave them the right to retire
of carrying on a retail trade in domestic from the firm, ... if they did it under
and foreign goods. By one of the articles circumstances which were such as to do
it was provided that there should be no injury to the partners who chose to go
"neither purchase nor .sale of anient on under the new arrangement."
spirits by the concern." The articles
192 THE LAW OF PARTNERSHIP. [CH. VIL
tlie universal principle would apply, that waiver or consent is
implied by acquiescence only when that acquiescence is free and
voluntary ; and therefore this evidence, or presumption, might be
rebutted by showing that circumstances had placed the minority
so far in the power of the majority that they must go on and sub-
mit for a time, reserving all their rights of dissent, or suffer
important injury, and then their so going on would not be held as
necessarily implying a waiver or loss of any right. These views
are, to some extent, only theoretic ; and it is perhaps a little
remarkable that cases of conflict of interest or wishes between
partners have not been before the courts of England or this
country often enough to settle the question by adjudication as to
the power of a majority. ^
SECTION V.
OF THE DUTY OF PARTNERS TOWARD EACH OTHER.
§ 150. Good Faith between Partners. — The first and highest
duty which partners owe to each other, is that of perfect good
^ Power of majority. — The tendency of the modern cases seems to be in the direc-
tion of giving to a majority of the partners entire power to act in all matters within
the scope of the firm business. See Clarke v. Slate Valley R. R., 136 Pa. 408, 20 Atl.
562, where it was held that two partners out of three have power to sign a warrant of
attornej', in order to authorize a suit in the firm name. So it has been held that in
the absence of fraud a majority of the partners in a firm formed to sell ice may give a
good title to ice of the firm, though the dissent of the minority is made known to the
purchaser. Staples v. Sprague, 75 Me. 458.
On the other hand, no mere majority of the partners has a right to change the
location of the business without consent of all. Jennings's Appeal, (Pa.) 16 Atl. 19, 2
Monaghan, 184. And where the lease of business premises ex[)ired duiing the contin-
uance of the partnership, and the partners could not agree to continue business there,
it was held that part of the partners could not fix the location of the business, but all
must agree. Clements v. Norris, 8 Ch. D. 129 (C. A.) This was, to be sure, a case
of disagreement between two partners ; and the decision might perhaps have been
different if a majority had desired to continue the business in the old location.
Where a partner leaves the place where the business is carried on, tlie remaining
partners must of course exercise entire control over the business, though no doubt
they have no power to vary the nature of it. So where one partner who alone had
control of the finances of the firm went away, having named another partner to take
his place, it was held that the remaining paitners, and not the single one named, had
control over the finances, and miglit arram/e a settlement of the affairs of the firm.
Sweet V. Morrison, 103 N. Y. 235, 8 X. F.. 396.
§ 150.] RIGHTS AND DUTIES OF PARTNERS. 193
faith, (ee) ^ In the Roman civil law, tlic " societas " of mer-
chants for trade, and of husband and wife, were considered
closely analogous, and in many respects governed by the same
principles. (/) Indeed, what we have already said indicates
suHiciently how much partners are in the power or at the mercy
of each other, and there certainly seems to be no relation in life,
calling, either by its own exigencies or by the rules of law, for a
more absolute good faith than the relation of partnership. (^)
After this comes the duty of having and using the skill and
knowledge which the partnership requires ; of applying to all
its affairs due care ; of devoting to them a reasonable measure
of time and labor ; and of conducting all its concerns, private
or public, with due economy. For the breach of any one of
these duties, the party is held responsible. (A) A court of
equity, in particular, will always decree such com|)eiisation, in
form or kind and amount, as shall be needed to make good any
losses arising from any violation or disregard of these duties. (?)
The rule would extend, by the reason of it, to the manner of
doing anything. Hence, as no partner should do that which
he has no lawful power to do, so he should do everything he
has power to do either by the general law of partnership or by
special stipulation in the articles, — as, for example, the assign-
ing of his .share, ^ or the giving of partnership security, — in
such a way as a due regard for the interests, of the partnership
would require. ( j)
(ee) See Nicholson v. Janeway, 1 Green of Iledfield, C. J., in Pierce v. Daniels, 24
(N. J.), 285. [Ellis V. Allen, 80 Ala. 515, Vt. 624.
2 So. 676.] (i) See post, ch. 8, § 204 et scq., respect-
(/) Vin. Comm. lib. 3, tit. 26, § 2 ; ing the remedies between partners which
Pothier, Contr. de Soc. ch. 3. courts of equity administer. See Lefever
(g) Baker v. Charlton, 1 Peake, 80. v. Underwood, 41 Pa. 505. If a partner
See England v. Carling, 8 Beav. 129, for neglects to render the personal services
an example of bad faith between partners, which he ought to render, he will be
and of the displeasure with which it is charged with their value in settlement of
viewed by the court. See also Blissett v. the partnership account. Jlarsh's Appeal,
Daniel, 11 Hare, 493, Ault i'. Goodrich, 69 Pa. 30.
4 Russ. 434. (/) The rule that each partner must do
(h) See post, § 154, as to how far a all he can for the benefit of his firm has,
partner may engage in other business, of course, its limitation in the reason of
besides that of the firm. See the remarks the thing and the circumstances of each
1 The duty of good faith toward his partners is especially incumbent upon a man-
aging partner. Brooks v. Martin, 2 Wall. 70 ; Kimberly v. Arms, 129 U. S. 512 ;
Fulmer's Appeal, 90 Pa. 143.
2 The sale of one partner's interest to another is not a breach of duty. Cassels v.
Stewart, 6 App. Cas. 64.
13
194
THE LAW OF PARTNERSHIP.
[CH. VII.
In every bargain which he makes, he must remember a prin-
ciple laid down emphatically by Lord Eldon, — that it is his duty
to use the property for their benefit whose property it is ; (^)
that is, for the benefit of the whole as one concern, or one body,
for so it is owned. ISo if a partner by any means gets possession
of a fund properly belonging to the firm, he must share any profit
or advantage arising from it, with his copartners. (M)
§151. Partner charged with Loss caused by His Fault. — If
losses occur by reason of a breach of duty by a partner, in any
way whatever, whether through fraud, negligence, ignorance, or
extravagance, and, whether by design or not, they must rest on
the partner whose faulty conduct has caused them ; and he can-
not require the partnership to contribute in any way towards
them. {I) But a partner is not liable to his copartners for a loss
particular case. See Rowe v. Wood, 2 Jac.
& W. 556.
(k) Crawshay v. Collins, 15 Ves. 226 ;
Honore v. Colmesnil, 1 J. J. Marsh. 507,
541. Hence, when all the proprietors of a
morning payier, save one, were also the
owners of an evening paper, published in
the same place, an injunction was granted
to restrain the proprietors of the evening
paper from publishing therein any informa-
tion obtained at the expense of the morn-
ing paper, until it should first have been
published in the morning paper. Glass-
ington V. Thwaites, 1 Sim. & S. 124, 133.
And if a copartnership own a dwelling-
house which is occupied exclusively by the
family of one of the partners, this partner
i.° liable for rent to the firm, though
there be no special agreement to that
effect. Holden v. Peace, 4 Ired. Eq. 223,
[So where a partnership owned a mine,
together with houses and machinery, and
the managing partner owned an adjoining
mine and used the plant in working his
own mine, it was held that he must
account to the firm foi the rental value of
the property he used. Pierce v. Pierce,
89 Mich. 233, 50 N. W. 851.] The
case of Beecher v. Guilbane, Mosley, 3,
is thus reported : "If one copartner
borrows money of the other on his note,
he shall pay interest for it, though he had
more money in the stock than what he
borrowed ; for the stock is only to be
employed in augmentation of the trade,
for their mutual benefit ; but neither of
them can make use of it for their own
private advantage." See Kelley r. Green-
leaf, 3 Story, 93 ; Roberts v. Totten, 13
Ark. 609 ; Pierce v. Daniels, 25 Vt. 624. ^
If one jiartner employ partnership funds
in a private trade or adventure, he must
account not only for the interest on the
funds thus withdrawn from the partner-
shi[), but also for the profits of such
separate trade. Brown v. Litton, 1 P.
Wms. 140 ; Crawshay v. Collins, 15 Ves.
218 ; Stoughtou v. Lynch, 1 Johns. Ch.
467 ; Solomon v. Solomon, 2 Ga. 18.
And if such acts of one partner threaten
the destruction of the joint property, or
render it probable that the solvency of
the firm and the rights of the creditors
depend upon the interference of chancery,
equity may interpose by injunction, even
though a dissolution of the firm be not
prayed for. Miles v. Thomas, 9 Sim. 607 ;
Gratz V. Bayard, 11 S. & R. 41, 48. The
same ]irinciples as to the use of the joint
property apply to partners who wind up
the affairs of the partnership after dissolu-
tion. See post, ch. 12, 13, upon the dis-
solution of a partnership and its effects.
(kk) Easonv. Cherry, 6 Jones, Eq. 261.
(/) Devall V. Burbridge, 6 W. & S.
529 ; Jessup v. Cook, 1 Halst. 434. See
M'llreath v. Margetson, 4 Doug. 278 ; In
re Webb, 2 J. B. Moore, 500 : Lyles v.
Styles, 2 Wash. C. C. 224. See Beste v.
His Creditors, 15 La. Ann. 55. [So where
a partner improperly pays an unjust bill,
he and not the firm must be charged with
§ 151.] RIGHTS AND DUTIES OF PARTNERS, 195
caused by an honest mistake of judgment, unless it amounts to
gross negligence or ignorance. (^11)
The question may occur whether a negligence and consequent
loss, in one respect, would be made up, or excused, by great suc-
cesses and pi'olit in anotiier. It would perhaps be impossible
to frame a definite rule which w^ould govern all cases of this
kind. The general principle w^ould be something like this: If
it were one transaction, quite indivisible, and tlie partner con-
ducted it in some respects with a want of attention, which caused
some loss, and in others with unusual care and skill and energy,
which increased the profits, it could not be deemed on the whole
a case of wrong demanding compensation. If, however, he had
conducted throughout as be should have done, excepting in one
or two particulars, and his default in these caused material
injury, he should not be beld excused for thus lessening the
profits of the firm l)y the fact that they were still, on the whole
transaction, very considerai)le. For the partnership is entitled
to all its profits, and may ask compensation of any one whose
wrongful act takes them or a part of them away, whether he be
a partner or not, and whether much or little be left. And if
there be many transactions, or one business divisible into many
transactions, that he did his duty for the most part would cer-
tainly be neither excuse nor compensation for not doing it at all
times. And ^ve should doubt whether equity would find it easy
to regard him as protected against all claims for default or vio-
lation of duty, because in certain things he did more than his
duty. (??!)
From the requirement of perfectly good faith, it follows that
no partner must deceive his copartners, for his benefit and their
injury, either by false representations or by concealments. Thus,
if he persuades them into any course of business, or to any single
transaction, by these means, and losses occur, he must sustain
them or compensate for them. So, if he proposes to buy of them
the wdiole or any part of their share of their business, and by any
false statement or intimation on his part, or any concealment
or prevarication, influences them to enter into an arrangement
to effect his wishes, it will not be obligatory on them, (w)
the amount. Yetzer v. Applegate, (la.) 50 (m) See Pothier, Contr. de Soc. n. 12.5.
N. W. 66 ; Moore's Appeal, (Pa.) 19 Atl. (?i) Maddeforcl v. Austwick, 1 Sim. 89,
753.] is a leading case. Tlie same principles are
(II) Morris v. Allen, 1 McCarter, 44 ; asserted and maintained in the cases of
and see Stephens v. Orman, 10 Fla. 9. Sexton v. Sexton, 9 Oratt. 204, and Hop-
[Charlton v. Sloan, 76 la. 288, 41 N. W. kins v. Watt, 13 111. 298 ; Knij,dit v.
303.] Marjoribanks, 11 Reav. 322, 2 ^laen. &
G. io. [Brooks v. Martin, 2 Wall. 70.
196 THE LAW OP PARTNERSHIP. [CH. VII.
§ 152. Partner Making Secret Advantage. — If lie makes any
private bargain with third parties for his own benefit, which
either infiicts a loss upon the partnership, or turns to himself
advantages which belong to all in common, he will be held to
make compensation for this, or to restore these advantages to
the partnership in some way. (o) ^ Thus, if the partnership have
a valuable leasehold property, and, when it is about to expire, a
partner privately gets a renewal of it to himself, he cannot take
advantage of this to impose hard terms on his partncj's, but will
be held to have obtained it for them as well as for himself, (p )
So, if he obtains goods for the partnership by barter of his own
goods, he cannot charge an extra price for his goods. If he is
properly carrying on a separate business, he may charge a fair
living price ; so perhaps he may if he has them on hand in any
way. But if he purchased them for this bargain with the part-
nership funds or credit, or if he for the partnership might have
bought in the same way, he will be allowed to put upon them
only the price he paid, (q') So if he acts in buying for his firm
(o) Fawcett v. Whitehouse, 1 Russ. & ship ; and this renewal mnst be held to
M. 132, 135, 141, 148 ; Hichens v. Con- have been so obtained." The renewal,
greve, 1 Russ. & M. 132, 150, note (6), during a copartnership, of a lease held by
4 Russ. 562 ; also Carter v. Home, 1 Eq. a firm, and rendered more valuable bj- the
Ca. Abr. "Account," A., pi. 13 ; Russell business of the firm, though made by one
V. Austwick, 1 Sim. 52 ; [Kimberly v. partner to himself, and though it would
Arms, 129 U. S. 512.] not have been made to the firm, inures to
(p) Featherstonaugh v. Fenwick, 17 the benefit of the firm. Mitchell v. Reed,
Yes. 298, 310 ; Dougherty v. Van Nos- 61 N. Y. 123 ; Struthers v. Pearce, 51 N.
trand, 1 Hoff. Ch. 68, 69 ; Leach v. Leach, Y. 357.
18 Pick. 68, 76 ; Anderson v. Lemon, 8 (q) Burton v. Wookej', 6 Madd. 367.
N. Y. 236, 4 Sandf. 552. In Feather- The plaintiff and defendant entered into
stonaughr. Fenwick, .szi^jra, the Master of partnership together to deal in lapis ca I-
the Rolls said : " It is clear that one aminaris. The defendant, who was a
partner cannot treat privatel}% and behind shopkeeper, was to take the active part in
the backs of his copartners, for a lease of the concern, and to purchase the article
the premises, where the joint trade is from the miners in whose neighborhood he
carried on, for his own individual benefit, lived. After some tune, the defendant
If he does so treat, and obtains a lease in adopted a course of dealing, by which, in
his own name, it is a trust for the partner- place of paying the miners for the article
1 So where a partner on whose recommendation the firm bought land received mye
land from the seller by way of commission, he took it in trust for the firm. Hodge v.
Twitchell, 33 Minn. 389, 23 N. W. 547. So where in the course of selling firm
property or of other partnership transactions one partner gets a secret commission
from the purchaser, he will be required to hold it for the firm. Newell v. Cochran, 41
Minn. 374, 43 N. W. 84 ; Watts v. Patton, 66 Miss. 54, 5 So. 628 ; Whitman v.
Bowden, 27 S. C. 53, 2 S. E. 630. The arrangement being fraudulent^ one partner will
not be allowed to maintain an action on a contract to pay such a secret commission.
Gleason v. Chicago,. M. & S. P. R. R. (la.) 43 N. W. 517-
§ 153.]
RIGHTS AND DUTIES OF PARTNERS.
197
a particular kind of goods which he also buys and sells on his
own account, the firm are entitled to any profit he may make on
his own goods sold to the firm, (r) And if, on the other hand,
a partner gives the goods of the partnership in barter for some-
thing he buys, or otherwise uses them for his own benefit, he
must allow the partnership the full market-price for them, or
what any customer would have i)aid, unless the usage of the firm
or their stipulations permit him to make his personal profit out
of them.
§ 153. Hovr far Partner may transact Independent Business. — It
is quite well settled that a partner has no right to carry away his
knowledge, his skill, his capital or credit, his care or labor, iiito
another business, whether only his own or that of another firm,
to the injury of his first copartners. That is, he may not do this
such a way as to deprive them of business, of profits or advan-
tages, which they had a right to expect from their connection
with him. (6-) As there is in practice no such thing as a uni-
with money, he paid them with shop-
goods ; and in his account with the
plaintiir he charged him as for cash paid,
to the amount of the price of the goods.
Tlie ([uestion was, whether he couhl
justify this charge, or whether he must not
divide the prolit made by him ou the sale
of the goods with the phxiutitf.
Tiie Vice-Chaucellor said: "I must
decree an account of the profit made by
the defendant in his barter of goods, and
must dechare that the pUiintitf is entitled
to an e(iual division of that profit with the
defendant."
(r) Bentley v. Craven, 18 Beav. 7.5. In
this case the firm carried on the business
of sugar-refiners. One of the members
was a wholesale grocer, who had great
knowledge of the proper time for buying
sugai's, and who, therefore, was selected as
the buying agent of the firm. He bought
sugars on his own account, in anticipation
that the firm would need them ; and, when
the}' were required, sold them to the firm
at the then market-ju-ice. It was held that
the firm was entitled to any profit he
might have made. But when a partner-
ship is entered into for the purpose of
transacting a commission business, — one
to furnish buildings and fixtures, and the
other to keep the books and give his
personal attention to the management of
the business, — the latter may, after the
houses furnished by the former are full,
and the former refuses to furnish further
warehouseroom, put up other warehouses,
and extend the business, to his own exclu-
sive profit, provided he does not neglect
the business of the firm. Parnell v. Rob-
inson, 53 Ga. 26.
{s'l See Boulay Paty, Cours de Droit,
Com. torn. ii. 94. Sir, John Leach said,
in Glassington v. Thwaites, 1 Sim. & S. 131,
133, " The piinciples of courts of equit}'
would not permit that ]iarties bound to
each other by express or implied contract,
to promote an undertaking for the com-
mon benefit, should any of them engage
in another concern, which necessarily gave
them a direct interest adverse to that
undertaking." In Long v. Majestre, 1
Johns. Ch. 305, A. & B. carried on trade
as partners, the capital being supplied by
A. B. without the consent of A., and
without rendering any account or dissolv-
ing the partnership, formed a new part-
nership with C, and carried into that
house all the funds of the original firm,
and used them therein till his death. The
plaintiff filed his bill against the adminis-
tratrix of B., and against C, his surviving
partner, claiming to be entitled to the
whole share of the de(;eased in the last
partnership, alleging that a great part of
198 THE LAW OP PARTNERSHIP. [CH. VII.
vei'sal partnership, so no partner is obliged, by the mere fact of
partnership, to do nothing else than the business of the par;:ner-
ship. It IS probably not true in fact that the majority of part-
ners confine themselves absolutely and exclusively to partnership
business, or that it is expected or necessary that they should, {t)
And it may be very difficult for a court to distinguish between
the case of an honest several business, taking only its due share
of time, capital, care, Arc, and an instance of unlawful with-
drawing from a partnership of what belongs to the firm.^ But
the line must be drawn somewhere ; and courts have sometimes
applied the rule with so much severity as to avoid transactions
or compel compensation where the partner could not be charged
with anything more than exposing himself to a bias in his own
favor, and prejudicial to the partnership, (m)
tlie personal estate of the deceased had equity that a person who stands in a
Come into the hands of C. ; and praying relation of trust or confidence to another,
tliatC. might be compelled to set forth a shall not he jiermitted, in pursuit of his
full and true account of the joint trans- private advantage, to place himself in a
tactions between him and the deceased, and situation which gives him a bias against
of the personal estate of the latter in his the due discharge of that trust or confi-
hands. C. demurring to so much of the deuce." But the mere fact that ]iartners
bill as called for the discovery and account are so situated as to be under a temptation
above stated, the demurrer was overruled, to improperly use the partnership property
And see Law v- Cross, 1 Black, 533 ; is not sufficient to induce eijuity to inter-
Soules f. Burton, 36 Vt. 652. fere by injunction. See Glassington v.
{/) See remarks of Willard, Vice-Chan- Thwaites, 1 Sim. & S. 124.
cellor, in Caldwell v. Lieber, 7 Paige, 483, The considerations ajjplicable to the
494, 495; Ship "Potomac," 2 Black, 48L case of surviving partners, who are ap-
{u) Burton u. Wookey, 6 Madd. 367; pointed executors of deceased copartners,
ante, § 153, note ((j). Sir John Leach will be suggested hereafter. Pusl, ch. lb.
there said : "It is a maxim of courts of
^ It is clear that if one partner carries on clandestinely the same business as that
of the firm, the partnership is entitled to the benefit of any profit he may make.
Todd V. Raflferty, 30 N. J Eq. 254. But if the business carried on by the partner is
of a difFcient sort from that of the firm, and not connected with it, the firm has no
claim to the profit. So where a partner in a warehouse owned a whaiflioat, for the
use of which he received fees from steamboats, it was held that his partners had no
claim to the fees. Northrup v. Phillips, 99 111. 449. So where a partner in a firm of
salt brokers engaged in the manufacture of salt, the firm cannot claim the profits of
the manufacture, since there is no competition. Dean v. Macdowell, 8 Ch. D. 345
(C. A.). Even tliough the partner makes use in the new business of information
acquired in the firm business, that does not give the firm a right to participate in the
profits of the new business, where the information is not used for the purpose of com-
peting with the firm business, and the new business is not in the same line as the old.
Therefore a firm of shipbrokers was held not to be entitled to the profits of one part-
ner who had joined a shipbuilding firm. Aas v. Benham, [1891] 2 Ch. 244 (C. A.).
In the absence of agreement, one partner has no interest in an invention of his co-
partner, though made in the course of the partnership business and in business hours
Burr v.Be La Vergne, 102 N. Y. 415, 7 IS". E. 366. *
§ 154.]
RIGHTS AND DUTIES OF PARTiNERS,
199
§ 154. Sovr Accounts of the Firm should be kept. — As all
partners have these rights as against each other, so they have the
right which these rights imply, — that of enforcing and protect-
ing these rights ; and especially of knowing whether they are
invaded or not. Therefore, each partner has a perfect right to
know all that is done, and examine all the accounts at his own
pleasure, (v) So every partner is bound to enter upon the proper
books and in the proper way, or enable the clerk or other person
employed to make due entry of, every charge and every credit,
all money paid or money received, and all notes payable or
receivable, and every other transaction which is usually put upon
the books of account ; and all this he must do without unneces-
sary delay, (w) So, if any partner contemplates any important
transaction, we should regard it as his duty to communicate what
he does, and what he intends to do, before he takes any prelim-
inary steps which might embarrass the firm if the transaction
should not be carried into effect, in order that the firm may do
what they think proper. If, by articles or arrangements, any one
partner is intrusted with the accounts, it would be a peculiar
breach of duty on his part to keep them in such way as to mis-
lead his partners, whether by misentry or by nonentry. (a;)
iv) Rowe V. Wood, 2 Jac. & W. 558 ;
[Webb V. Fonlyce, 55 la. 11, 7 N. W.
385 ; Katz v. Brewiugtou, 71 Md. 79, 20
Atl. 139. This is especially true where
the business is under the control of a
managing partner. Fulmer's Appeal, 90
Pa. 143.] It is the duty of each partner
to keep precise accounts, and to have
them always ready for inspection. The
good faith of the partners is pledged
mutually to each other, that the business
shall be conducted under their actual,
personal inspection, enabling each to see
that the other is carrying it on for their
mutual advantage, and not destroying it.
Peacock v. Peacock, 16 Ves. 49, 51 ;
Donaldson v. AVillianis, 1 Cr. & M. 345 ;
Kowe V. Wood, 2 Jac. & W. 553, 556.
See Boynton v. Page, 13 Wend. 425.
(w) Ex parte Yonge, 3 Ves. & B. 36 ;
Goodman v. Whitcomb, 1 Jac. & W. 589,
593 ; [Webb v. Fordyce, 55 la. 11, 7 X.
W. 385.] Every reasonable presumption
will be made against ]iartners whose fault
it is that the partnershi]) books are im-
perfect ; and if they claim to be entitled
to other credits than those to which the
books, at the close of the partnership, en-
title them, it is usual to require of them
very strict proof. Bevans v. Sullivan, 4
Gill, 383, 391 ; [Kirwan v. Henry, (K3^)
16 S. W. 828 ; Van Xess v. Van Ness, 32
N. J. Eq. 669 ; Dimond v. Henderson, 47
Wis. 172, 2 N. W. 73. But there is no
presumption against a partner whose fail-
ure to keep proper accounts is shown to
have been due to incapacity. Kuapp v.
Edwards, 57 Wis. 191, 15 N. W. 140.] In
Beacham v. Eckford, 2 Sandf. Ch. 116, it
was held, that, on the dissolution of a
partnership between persons residing at
different places, it is the duty of each
partner to furnish to the other all their
accounts, and to endeavor to adjust them
to ascertain the balance; that this is espe-
cially the duty of the partner at the jilace
where the principal business has been
transacted ; and that, upon the death of
a copartner, this duty becomes imperative
upon the survivor ; and, if he neglect it,
he will lose interest on the balance which
may subsequently appear to have been
due to him.
(x) See Maddeford v. Austwick, 1 Sim.
200
THE LAW OF PARTNERSHIP.
[CH. VII.
§ 155. Partner's Right to Extra Compensation. — Another point
seems to be well settled, both at law and in equity. It is that no
partner shall receive any special compensation for what he does,
unless by agreement of the partnership. (?/) If the articles, or an
arrangement subsequent to them, provide that one or another shall
receive any special compensation for special service, this arrange-
ment will be respected, (z) But if there be no such provision.
89 ; Kelley v. Greenleaf, 3 Story, 93, 103.
It is, of course, improper to bleud the
accounts of the partners with the firm
with the individual accounts of the part-
ners between themselves. Honore v. Col-
mesnil, 1 J. J. Marsh. .'506, 517.
(//) Thornton v. Proctor, 1 Anst. 94 ;
Wliittleu. M'Farlane, 1 Knapp, 312, 315;
Holmes v. Higgins, 1 B. & C. 74 ; Frank-
lin V. Robinson, 1 Johns. Ch. 156, 165 ;
Bradford v. Kimberly, 3 Johns. Ch. 431 ;
Caldwell v. Lieber, 7 Paige, 483 ; Philips
V. Turner, 2 Dev. & B. Eq. 123 ; Ander-
son V. Taylor, 2 Ired. Eq. 420 ; Reybold
V. Dodd, 1 Harr. 401, 415 ; Dougherty v.
Nostrand, 1 Hoflf. Ch. 68 ; Bevans v. Sul-
livan, 4 Gill, 383 ; Coursen v. Hamlin, 2
Duer, 513 ; Roach v. Perrj', 16 111. 37 ;
King V. Hamilton, 16 111. 190 ; Bennett
V. Russell, 34 Mo. 524 ; Drew v. Ferson,
22 Wis. 651. But, if a partner be ajv
pointed by the firm agent for a sjxciul
I)ur]iose, he is entitled as against the firm
to the usual compensation in relation to
the subject of such agency. Bradford v.
Kimberly, 3 Johns. Ch. 431 ; Fhilijis v.
Turner, 2 Dev. & B. Eq. 123. If, in
winding up their affairs, the surviving
partner renders services, not strictly in
settlement, but in the prosecution and
execution, of contracts already existing,
or new ones entered into with the consent
of the administrators of the deceased
partner, for the general benefit of the
partneiship fund, he is entitled to com-
pensation for such service as is not in
strict settlement. Schenkl v. Dana, 118
Mass. 236 ; Willett v. Blandford, 1 Hare,
253. And if a partner sell half his share
to another person, who becomes the gen-
eral manager of the partnership business,
such third party, not being a partner as
respects tlie partner retaining his original
interest in the firm, is responsible to the
latter only as agent, and as against him
may claim a reasonable compensation for
his services. Nevvland v. Tate, 3 Ired.
Eq. 226. A partner is, of course, entitled
to be indemnified for outlays made by
him, and obligations incurred, in the ser-
vice of tlie partnership, and for the suc-
cessful conduct of its business, though he
cannot claim any thing for his manage-
ment, time, and labor. Burden v. Bur-
den, 1 Ves. & B. 170 ; Brigham v. Dana,
29 Vt. 1. And, it seems, tliere may be
actual expenditures of money for the firm,
by one partner, which partake so much of
the nature of personal service that the
court will not allow the firm to be cliai'ged
with them, especially if the partner him-
self do not apjiear to have regarded them
as items of expense incurred on jiartner-
ship account. Thornton v. Proctor, 1
Anst. 94 i In re The German Mining
Comyiany, 27 Eng. L. & Eq. 158. And
if shareholders, or partners in such a
company, at the request of the directors,
the managing partners, make advances of
money for partnership purposes, which
are so applied, and are the means of sav-
ing the concern from ruin, and of pre-
venting the total loss of the joint property,
such shareholders are creditors of the
company to the amount of their advances
and interest thereon. In re The German
Mining Company, 4 De G., M. & G. 19.
See also finst, § 157, note {cc),
(z) Paine v. Thacher, 25 Wend. 450;
Deslia V. Sheppard, 20 Ala. 747 ; Pond v.
Clark, 24 Conn. 370. See Baltyde v.
Trump, 1 Md. Ch. 517. And where by
the articles of copartnership one partner
is exempted from the duty of rendering
his personal services to the joint business,
if he afterwards does render such services,
at the instance and request of his cojiart-
ners, he will be entitled to a reasonable
compensation therefor. The general rule,
that one partner cannot charge the firm
§ 155.] RIGHTS AND DUTIES OF PARTNERS. 201
tlie law will not make any, nor infer one from the 2:reater indus-
try or greater ability of any one partner, (a) The principle
seems to be, that partners are considered as meeting on a com-
mon ground, each engaging to do all he can do for the common
good, {b) And, whatever any one does, he has no claim for any
thing beyond his equal share of the common benefit, without the
consent of his copartners, (c) ^
for his services, is founded on the princi- Lieber, 7 Paige, 483 ; aytte, § 153, and
pie that eacli partner is bound to devote Cunlitie v. Dyerville, 7 R. I. 325.
his skill and labor to the promotion of (6) The principle was very fully con-
the coinmon benefit of the concern, and is sidered by Willard, V. C., in Caldwell v.
inapplicable when the reason for it fails. Lieber, 7 Paige, 483, 495. He said :
Lewis V. Motfett, 11 111. 392. Upon the " Where there is no special agreement to
same ground, if partners agree to invest that effect, partners are not entitled to
ecpial amounts of capital in the joint en- charge each other for their services in the
terprise, and one partner advance more management of the concern ; and the law
than his share, the partnership must allow never undertakes to settle between them
him interest on the excess. Keynolds v. their various and unequal services in the
Mardis, 17 Ala. 32. If A. & B. enter transacti(m of their private affairs." But
into partnership under articles by which if a partner refuses to discharge the duties
"A. bargains and agiees to give B. four he is bound to by the articles, he may be
hundred and fifty dollars to manage the charged with their value in the account,
business," B.'s salary is to be paid not by ^Marsh's Appeal, 69 Pa. 30.
A. alone, but by the partnership, and out (c) Beatty v. Wray, 19 Pa. 516, 519.
of the partnership funds. Weaver i;. The rule is the same after the dissolution
Upton, 7 Ired. 458. See Reynolds v. of the firm, by death or otherwise. Part-
Mardis, supra. ners who wind up the concern are not
(a) Philips V. Turner, 2 Dev. & P,. E<[. entitled to any extra compensation for
123. In this case the partnership busi- their time and labor. Burden v. Burden,
ness was under the almost exclusive super- 1 Ves. & B. 170 ; Stocken v. Dawson, 6
intendence of the partner making a claim Beav. 371, 376 ; Beatty v. Wray, 19 Pa.
lor extra compensation. See Caldwell t". 516; Lyman r.Lyman, 2 Paine, C. C. 11,52.
^ Compensation of a iwrlner. — In the absence of special agreement, one partner
can claim no comjiensatiou for his services. Ligare v. Peacock, 109 111. 94 ; Lee v.
Davis, 70 Ind. 464 ; .McBride v. Stradley, 103 Ind. 465, 2 N. E. 358 ; Taylor v. Rag-
land, 42 La. Ann. 1020, 8 So. 467 ; Godfrey v. White, 43 Mich. 171, 5 N. W. 243;
Frank v Webb, 67 Miss. 462, 6 So. 620 : Gaston v. Kellogg, 91 Mo. 104, 3 S. W.
589; Coddington v. Idell, 29 N.J. Eq. 504 ; Lindsey v. Stranahan, 129 Pa. 635, 18
Atl. 524 ; Frazier v. Frazier, 77 Va. 775 ; Eoots v. Mason City Salt Co., 27 W. Va.
483. And this is equally true, though the services of one partner are greater than
those of the others. Burgess v. Badger, 124 111. 288, 14 N. E. 850. As where a part-
ner winds up the business of the firm. Denver v. Roane, 99 U. S. 355 ; Shelton v.
Knight, 68 Ala. 598 ; Tillotson v. Tillotson, 34 Conn. 335 ; Terrell v. Rowland, 86 Ky.
67, \ S. W. 825 ; Sangston v. Hack, 52 Md. 173 ; Gregory o. Menefee, 83 Mo. 413 ;
Brown's Appeal, 89 Pa. 139; Shriver's Appeal, (Pa.) 12 Atl. 553; Cothran v.
Knox, 13 S. C. 496.
Where it is so agreed, one partner may have compensation for his services ; and
this agreement may be implied as well as express. Adams v. Warren, (Ala.) 11 So.
754 ; Weeks v. McClintock, 50 Ark. 193, 6 S. W. 734 ; Askew v. Springer, 111 HI.
662; Lassiter v. Jackman, 88 Ind. 118 ; Sangston v. Hack, 52 Md. 173 ; Ciamer v.
Bachmann, 68 jMo. 310 ; Mann i;. Flanagan, 9 Ore. 425. As by entries in the partner-
ship books. Godfrey v. Templeton, 86 Tenn. 161, 6 S. W. 47.
Even if one partner is absent by reason of sickness, the other has no claim foi
202 THE LAW OF PARTNERSHIP. [CH. VII.
§ loo. Interest on Advances. — Upon the same principle, no
partner is entitled to interest on moneys advanced to, or deposited
with the firm, for its use, unless there be a special agreement to
that effect, (ca) There is no established rule as to the allowance of
[ar) Lne (-■. Lashbrooke, 8 Dana, 214; Eradford, L. R. 5 Ch. 519. Nor is a
Day V Lockwood, 24 Conn. 185 ; Desha paitner chargeable with interest on over-
v. Shepard, 20 Ala. 747 ; Tiriell v. Jones, drawn profits. Mayiuott v. Mayinott, 9
30 Cal. 655 ; Wiiitcomb v. Converse, 119 Jur. x. s. 496. Where by the contract
Mass. 38. If there is an agreement, partners agreed to keep one another in
interest is allowed with annual rests be- funds to a specified extent, and, on dis-
foi-e dissolution, but without rests after, solution, one was found not to have con-
Barfield v. Loughborough, L. 11. 8 Ch. 1, tributed to the extent agreed, interest was
disai)proving Pilling v. Pilling, 3 De G. J. allowed on the difference, to the partner
& S. 162. But it is elsewhere held that, whose advances were in excess of the
in taking account after dissolution, the others. Pini v. Harris, Ir. Rep, 10 Eq.
articles allowing interest on capital, in- 442. But In re German Mining Com-
ti-rest from that time and during the pany, 4 De G. M. & G. 19, Knight Bruce,
process of settlement is not to be allowed L. J., said : " I think that mercantile usage
on each i)artner's capital contributed, and the general course of trade dealings
Watney v. W' ells, L. R. 2 Ch. 250 ; but do, where a partner in trade has duly and
otherwise, if there is no agreement for in- properly advanced money of his own for
terest. Tntt v. Land, 50 Ga. 338. When the purposes of the partnership business,
]irofits are left in business, the partner so as to become justly a creditor in ac-
leaving them does not draw interest, count with the partnership for the amount,
unless by express agreement. Dinham v. raise an implied contract for interest, so
compensation. It is one of the risks of the partnership, to whicli each partner is
subject. Heath v. AVaters, 40 Mich. 457. The same is true if one partner refuses to
do iiis share of the work. Henry v. Bassett, 75 Mo. 89. But where one partner was
employed elsewhere so that he could not give his time to the firm during nine months in
everv year, it was held that an agreement might be implied to I'ay the other partner
compensation for his services during that time. Moriis v. Griffin, (la.) 49 N. W. 846.
And so where one partner left the country, leaving the other to wind up the business,
the latter is entitled to compensation. Clement v. Ditterline, (Ky. ) 11 S. W. 658.
It might be reasonable, however, to require some evidence in addition to the mere fact
of absence of one partner. The fact that before his admission to the firm one partner
was em^iloyed in the business at a salary gives him no claim for compensation.
Dunlap r. Watson, 124 Mass. 305.
It has been suggested that where the profits of a business are the result solely of
the skill and labor of the partners, as in a professional partnership, a surviving part-
ner might be entitled to compensation for his services in winding up the business.
Denver v. Roane, 99 U. S. 355. If there is anything in this suggestion, it must of
course be confined to the case of a surviving partner.
Where after dissolution of partnership, settlement in full of its affairs, and the
death of one partner, the survivor, thinking the firm had a certain cause of action,
prosecuted it successfully without the assistance of his copartner's representatives, and
recovered a large amount of money, he was held entitled to compensation for his ser-
vices. Zell's Appeal, 126 Pa. 329, 17 Atl. 647.
W^here the managing partner employs his minor children in the work of the part-
nershi]), he is entitled to compensation for their services. Taylor v. Ragland, 42 La.
Ann. 1020, 8 So. 467. WHiere a partner was by tlie articles to receive a salary for
his services, it was held that he had no claim to it while he was sick and unable to
render the services. Kinney v. Maher, 156 Mass. 252, 30 K. E. 818.
§ 158.] RIGHTS AND DUTIES OF PARTNERS. 203
interest between partners. The circumstances of each particular
case must determine, (cb) A partner is entitled to interest on
advances although there was no express agreement to that effect,
if it may be inferred from circumstances or their usage, that an
allowance of interest was intended, (cc)
§ 157. Rate of Interest. — Interest payable by the terms of the
contract at a greater rate than the law permits, except by special
contract, is to be reckoned, after the maturity of the contract, at
the rate fixed by the law, in the absence of express agreement.
Thus, where the rate is six per cent, unless otherwise agreed, a
note payable in one year at ten per cent interest draws but six per
cent after the expiration of the year, {cd} ^
§ 158. How far Partners are Trustees. — As a general principle,
which will sometimes be of much use in determining the rights
and obligations of copartners, it may be said that all partners are
regarded somewhat as trustees for the firm.^ We have already
as to entitle the partner advancing to Ludwick v. Huntsenger, 5 W. & S.
have his account with the firm credited .51 ; Cook v. Fowler, L. R. 7 H. L. 27 ;
with interest accordingly, although his Pearce v. Hennessy, 10 R. I. 223 ;
partners may not have authorized, and Kitchen v. Bank, 14 Ala. 233 ; Lash v.
may not have known of the transaction ; Lambert, 15 Minn. 416 ; Hubbard v.
at least, in the absence of any express Callahan, 42 Conn. 524 ; Searle v. Adams,
contract to the contrary." See In re Ger- 3 Kas. 315. See Cromwell v. County of
man Mining Company, 27 Eng. L. & Sac, 96 U. S. 51. See also contra, Bran-
Eip 158. [See pos^ § 417, n.] non v. Hursell, 112 Mass. 63 ; Hand v.
(ch) Gyger's Appeal, 62 Pa. 73 ; Moss Armstrong, 18 la. 324 ; Marietta Iron
V. McCall, 75 111. 190. Works v. Lattimer, 25 Ohio St. 621 ;
(cc) Morris 17. Allen, 1 McCarter, (14 X. Hopkins v. Chittenden, 10 Te.x. 189;
J, Eq.)44 -.Woodv. Scoles, L. R. iCh. 369. Pruyu v. Milwaukee, 18 Wis. 367;
(cd) Brewster v. Wakefield, 22 How. Etnyre v. McDaniel, 23 111. 201 ; Kil-
118 ; Eaton v. Boissoncault, 67 Me. 540 ; gore v. Powers, 5 Blackf. 22. But see
Burnhisel v. Firman, 22 Wall. 170 ; Ayer v. Tilden, 15 Gray, 178.
1 The rule stated in the text is supported by the weight both of authority and of
argument. 1 Sedg. Dam. (8th ed.) § 325 et seq. ; Goodchap v. Roberts, 14 Ch. D.
(C. A.) 49 ; Holden v. Trust Co., 100 U. S. 72 ; Woodruff v. Webb, 32 Ark. 612 ;
Cummings v. Howard, 63 Cal. 503 ; Jefferson County v. Lewis, 20 Fla. 980 ; Rilling
V. Thompson, 12 Bush, 310 ; Brown v. Hardcastle, 63' Md. 484 ; McLane v. Abrams,
2 Nev 199 ; Ashuelot R. R. v. Elliot, 57 N. H. 397 ; Hamilton v. Van Ren.sselaer,
43 N. Y. 244 ; Thatcher v. Massey, 20 S. C 542 ; Perry v. Taylor, 1 Utah, 63 ; and
authorities cited in note (cd).
See, however, contra, Kerr v. Haverstick, 94 Ind. 178 ; Downer r. Wliittier 144
Mass. 448; Warner v. Juif, 38 Mi.^h. 662; Meaders v. Gray, 60 Miss. 400; Macon
Co V. Rodgers, 84 Mo. 66 ; Kellogg v. Lavender, 15 Neb. 256 ; Wade v. Pratt, 12
Heisk. 231 ; Cecil v. Hicks, 29 Gratt. 1 ; Pickens v. McCoy, 24 W. Va. 344 ; and
authorities cited in note {cd).
2 " If fiduciary relation means anything, I cannot conceive a stronger case of fiduciary
relation than that which exists between partners. Their mutual confidence is the lite
blood of the concern. It is because they trust one another that they are partners in
the first instance ; it is because they continue to trust one another that the business
204 THE LAW OF PARTNERSHIP. [CH. VII.
remarked that the law of partnership is a thing by itself ; but,
like every other branch of the law-merchant, and indeed of the
goes on." Bacon, V. C, in Helmore v. Smith, 35 Ch. D. 436, 444. See to the same
etfect, Koby v. Colehonr, 135 111. 300, 25 N. E. 777 ; Keneher v. Anderson, 95 N. C.
208. "These properties of partnership render it eminently a relation of trust. All its
effects are held in trust, and each partner is, in one sense, a trustee ; a trustee for the
newly created entity, the partnershi}), and for each member of the firm, who thus
becomes a beneficiary under the trust." Stone, C. J., in Goldsmith v. Eichold, 94 Ala.
116, 10 So. 80.
Therefore where one partner buys in property belonging to the firm, as njion a sale
on execution, he takes it for the beneht of the whole firm, not for himself individually.
Railsback v. Lovejoy, 116 111. 442, 6 N. E. 504 ; Roby v. Colehour, 135 111. 300, 25
N. E. 777 ; Jones v. Dexter, 130 Mass. 380 ; Devore v. Woodruff, 1 N. Dak. 143, 45
N. W. 701 ; Lamar v. Hale, 79 Va. 147- But see Helmore v. Smith, 35 Ch. D. 436
(C. A.) ; RoU(iuette y. Ryan (Ky.), 8 S. W. 702.
A partner foi' the same reason cannot buy up a claim against the firm. If he takes
an assignment of such a claim he holds for the firm, and is entitled only to charge
against the firm the amount he actually paid out. Easton v. Strothei', 57 la. 506, 10
N. W. 877 (note); Catron v. Shepherd, 8 Neb. 308 (cliosc in action). This is true
even if the firm has been dissolved. Filbrun v. Ivers, 92 Mo. 388, 4 S. W. 674. It is
payment even as to third parties in the absence of some equity to keep it alive. Booth
V. Farmers' & Mechanics' Nat. Bank, 74 N. Y. 228 (judgment).
For the same reason a partner cannot take a renewal of a firm lease for his own
benefit ; though he takes it in his own name he holds for the firm, even if there was no
renewal clause in the original lease. Featherstonhaugh v. Fenwick, 17 Ves. 298 ; Clegg
V. Fishwick, 1 MacN. & G. 294 ; Clements t;. Hill, 2 De G. & J. 173 ; Bell v. Barnett,
21 W. R. 119; Leach v. Leach, 18 Pick. 68 ; Struthers v. Pearce, 51 N. Y. 357 ;
Mitchell V. Read, 61 N. Y. 123, 84 N. Y. 556. This seems to be true even after dis-
solution ; for the chance of renewal may be a valuable asset of the partnership, in which
the whole firm has a right to participate. Johnson's Appeal, 115 Pa. 129, 8 Atl. 36.
And so where the renewal was taken during the continuance of the partnership though
pending arrangements for dissolution. Sneed v. Deal, 53 Ark. 152, 13 S. W. 703.
But where one partner died, and the survivor, without fraud, took a renewal, this was
held not to benefit the estate of the deceased partner ; the fiduciary relation, like the
partnership, ceased with the partner's death. Chittenden v. Witbeck, 50 Mich. 401,
15 N. W. 526.
The same rule applies where one partner obtains any benefit through the partner-
ship which in equity the firm should have. Thus where a partner insured firm prop-
erty in his own name he was requiied to account to the firm for the insurance money.
Tehbetts v. Dearborn, 74 Me. 392. And where a partner contributed an invention as
his capital, and then took out a patent on it in his own name, he held the patent in
trust for the firm. Hill v. Miller, 78 Cal. 149, 20 Pac. 304.
Where a partner buys property with the funds of the firm, and takes title in his own
name (or in that of his wife), he will be held a trustee for the firm. Helmore v. Smith,
35 Ch. D. 436 (C. A.) ; Kayser v. Maugham, 8 Col. 339, 7 Pac. 286 (semble) ; Ren-
frow V. Pearce, 68 111. 125 ; Holdredge ■;;. Gwynne, 18 N. J. Eq. 26 ; Partridge v.
Wells, 30 N. J. i:q. 176.
A partner in acting beyond the scope of the business is not acting in a fiduciary
capacity. Wheeler v. Sage, 1 Wall. 518. As for instance in buying the share of
another partner in the firm. Cassels v. Stewart, 6 App. Cas. 64. Or in buj'ing in on
foreclosure the mortgaged individual share of another partner in the firm real estate.
Rouquette v. Ryan (Ky. ), 8 S. W. 702. And so ordinarily the fiduciary relation ceases
upon dissolution. Consequently one has no claim to participate in a purchase made
§ 159 ] RIGHTS AND DUTIES OF PARTNERS. 205
law in general, it is connected, by many relations and analogies,
and many common principles, with collateral branches ; and these
it is often useful to consider. Thus the law is well settled in
regard to trustees. A wisely adjusted system of right and obli-
gation guides the trustee, preserves the property or interests in
liis hands, and protects both him and the cestui que trust; him
from all undue interference and molestation while faithfully dis-
charging his duty, and the cestui que trust from all injurious
breach of duty. Now, a copartner has powers, opportunities,
and duties, in relation to the partnership, very similar to those
which a trustee has in relation to his cestui que trust. And, so
far as they are similar, it has been repeatedly held that the same
rules and principles are applicable to them, both in law and in
equity. ((?)
SECTION vr.
INTERPRETATION OF PARTNERSHIP AGREEMENT,
§ 159. Articles of Copartnership. — It would be very possible
for persons to enter into partnership with no articles, and no
agreements whatever, excepting the bare agreement to become
partners. Then the law would provide for them a set of rules
and arrangements which would cover nearly the whole ground,
and would probably be much the same with those agreed upon
by parties in most cases. But generally, if not always, the par-
ties themselves enter into some definite and special bargains or
terms, which are to be taken as the foundation of their part-
nership. Sometimes these are agreed upon only orally, and
sometimes they are expressed in writing. It does not seem that
there is any difference in their effect and operation, whether
spoken or written, if only they are ascertained ; (g) but there is
(d) See the remarks of Story, J., in action of covenant can be maintained for
Kelley v. Greenleaf, 3 Story, 93, 101. a breach of tlie stipulations in it, which
Surviving partners are trustees for certain would be binding on the representatives
purposes. See mife, § 154, note (n). of the contracting parties in the same
(e) It might be one advantage of manner and to the same extent as other
having a deed of partnership, that an specialty obligations.
after dissolution by his former copartner, though it was connected with the firm busi-
ness. Kennedy v. Porter, 109 N. Y. 526, 17 N. E. 426.
There is no fiduciary relation between mining paitners. Harris v. Lloyd, 11 Mont
390, 28 Pac. 736 ; Lamar v. Hale, 79 Va. 147.
206 THE LAW OF PARTNERSHIP. [CH, VII
much difference in respect to the evidence of the agreement ; for
the only way to be reasonably certain of the terms of a bargain
is to reduce it to writing at the time, and, as a matter of precau-
tion, have it verified bv the signatures of all who arc interested
in it. (/)
§ 160. Special terms bind Partnsrs only — Tn regard to the
articles of copartnership, the two most general principles have
already been stated. They are, first, that the law permits part-
ners to enter into any arrangements or engagements between
themselves which are not void as against statutory provisions or
the general principles of law. These may conflict with any or
all of the especial rules of the law of partnership, but will be none
the less binding upon the parties themselves. Thus, if A., B., &
C. choose to enter into partnership, and agree that A. shall keep
all the accounts, and that neither B. nor C. shall ever see them
without his permission ; or that A. alone shall sign the name of
the firm ; or that he shall share the profits, but not sliare any
loss;(,^) any or all of these agreements woidd be binding on the
parties.
The second general rule is, as already stated, that these special
arrangements or bargains are not binding or operative upon any
third parties who are not especially informed of them, and sub-
sequently enter into transactions in acknowledgment of them. (A)
The general rules of law, and the special rules of the law of part-
nership, every person is presumed to know, and cannot ground a
(/) The importance of written articles, has been stipulated that some one or
by which the courts may be guided in more of the partners shall not liave the
determining all questions in which the power of putting the firm name to
partnership or the several partners are negotiable paper. If notwithstaning such
interested, and especially as to the method stipulation, the prohibited partners do
of winding up the affairs of the joint con- exercise this power, the partnership is
cern upon a dissolution, is strongly bound, unless knowledge of such proliihi-
enforced liy Lord Eldon in Crawshay v. tion, actual or constructive, can be fixed
Collins, 2 Russ. 341, 343. upon the party taking the paper ; audit
(r/) See North British Bank v. Collins, makes no difference that the stipulation be
28 Eng. L. & E(i. 7. made in favor of a dormant partner.
(h) Sandilands v. Marsh, 2 B. & Aid. Winship v. Bank of United States, 5
697 : Smith v. Jameson, 5 T. R. 601, 603 ; Mason, 176, 5 Pet. 529 ; Grant v. Hawkes,
Craven v. "Widdows, 2 Ch. Ca. 139; Chitty on Rills, 42 ; South Carolina Bank
Hawken v. Bourne, 8 M. & W. 703, v. Case, 8 B. & C. 427 ; Smith v. Lusher,
710 ; Tradesmen's Bank v. Astor, 11 5 Cow. 689, 710 ; Walden v. Sherburne,
Wend. 87, 90 ; Tillier v. Whitehead, 1 15 Johns. 409 ; Whitaker v. Brown, 16
Dallas, 269 ; Devin v. Harris, 3 Greene, Wend. 505, 508 ; Bank of Rochester v.
(la.) 186; Nichols v. Cheairs, 4 Sneed, Monteath, 1 Denio, 402, 406; Gano v.
229 ; [Irwin v. AVilliar, 110 U. S. 499 ; Samuel, 14 Ohio, 592; Bank of Kentucky
Gruner v. Stucken, 39 La. Ann. 1076, 3 v. Brooking, 2 Litt. 41 ; [Bates u. Forcht,
So. 338.] The proposition of the text is 89 Mo. 121, 1 S. W. 120 ;] ante, § 83.
frequently illustrated by cases in which it
§ IGl.]
RIGHTS AND DUTIES OF PARTNERS.
207
right or a defence upon his ignorance of them. But no one is
])resuraed to know those private arrangements, and no one is
therefore affected Vy them until they are brought home to his
knowledge.
I 161. General Principles of Construction. — There remain to be
considered the rules and princij)les which courts apply to the
construction of partnership articles. In the first place, so far
as the articles contain provisions which the law would create
between the partners if the articles did not, they might be
regarded as surplusage. But if any question arose as to the
bearing, application, or exact effect of these rules, great regard
M'Oukl be i)aid to the intention of the parties as it was expressed
in their articles. («')
{%) Gainsborough v. Stork, Barnard.
Ch. 312. General language used in one
place will .sometimes be construed to run
thront;h and ])ervade the whole body of
the articles. Thus, the words of covenant
generally occurring at the commence-
ment of a partnership deed, usually
declare the covenant to be joint and
several ; and words of covenant sub-
sequently occurring in the instrument
are on that account usually construed to
be intended to be also joint and several.
But it is to be borne in mind that, what-
ever may be the Form of a covenant, if
the interest and cause of action be joint,
the action must be by all the covenantees,
and, on the other -hand, if the intei'est and
cause of action be several, the action
may be by one. Hence, notwithstanding
the rule of construction we have just
stated, where the covenant, introductory
to a partnership deed, is declared to be
joint and several, some of the covenants in
the instrument may be such that the
partner committing a breach can be sued
only by all the rest jointly, while for the
breach of others a several action by one
of the partners may be maintainable,
Eccleston v. Clipsham, 1 Saun. 153. See
Owston V. Ogle, 13 East, 538 ; Servante v.
James, 10 B. & C. 410.
There may be single and ])articular
provisions in partnership articles, which,
from change of circumstances, lapse of
time, or in other ways, have come to be
entirely inconsistent with and contra-
dictory to the whole .schpme and tenor of
the agreement. In such case, a court of
equity regarding the general object and
purpose of the parties as superior to and
controlling any lesser and subordinate
intent, will refuse to carry into effect the
minor and inconsistent stipulation. See
this illustrated with respect to the clause
giving to two-thirds of the partners the
power to expel a member of the firm.
Bli-sset V. Daniel, 11 Hare, 493. See also
Ex parte Croxton, 1 De G. U. & G. 600,
as to the construction of apparenth'
inconsistent stipulations respecting the
liabilities of a retiring partner.
When a partnership consi.sts of very
many partners, as in a joint-stock company,
the ]iartners are to be held, as strictly as
may be, to the terms of association. Lawes's
Case, 1 De G. M. & G. 421.
In the construction of partnership
articles. Lord Eldon said, in Greddes v.
Wallace, 2 Bligh, 295: '"You are to
take the whole instrument together, and
you are not only to look at the whole
of the instrument together, but you
are to look at the transactions of the
parties ; for, whatever may be the lan-
guage of a partnership deed, the dealings
and transactions among the partners may
be such as to amount to distinct evidence
that some of the articles in that partner-
ship deed were waived by all parties, and
that some of the articles in that deed were
not to be considered as rules which should
regulate the rights and duties of the
partners." And partnership articles are
read in a court of equity as not contain-
ing the clauses on whicn the parties have
not acted. Lord Eldon in Jackson v.
208 THE LAW OF PARTNERSHIP. [CH. VII.
If any of the rules of partnership law are not interfered with
by the articles, — that is, if the articles are silent on any points
established by the law, — it will be presumed that the parties
intended that the right given and the duties imposed by the law
in these respects suited them perfectly, and all such rules of law
will be enforced in the same manner as if they entered into the
articles, (j)
§ 162. Bill for Specific Performance of Articles. — Most of the
questions litigated under articles of j^artnership come before
courts of equity ; nor is there any doubt as to the full juris-
diction of equity over these articles, or any general difference
between the principles which equity applies to questions of part-
nership and those applicable to other questions of an analogous
character, (kk)
A very frequent prayer of a complainant in equity is for a
decree for a specific performance. This prayer the court will
hear in some form, whether the act required is demanded by the
articles, or is a legal obligation created by the law ; and will
grant, as in ordinary cases, provided the contract or duty be
clearly made out, and there is no waiver on the complainant's
side, or no breach on his part justifying that of which he com-
plains ; and provided the performance prayed for is practicable,
remedial, and just, as between the parties, and not injurious to
third parties. But one principle, which often prevents this
decree in ordinary cases, is frequently applicable in partnerships.
It is this: A partner may bind himself by articles, to be honest,
diligent, skilful, &c., and is bound by law to be the first perfectly,
and the others as far as the exigencies of the partnership require
and his capacity permits. And any breach of these obligations,
actual or intended, equity will prevent by injunction, if that suits the
case, or apply any other proper remedy. But no specific perform-
ance can be decreed ; for it is difficult, not to say impossible, to
draw an exact defining line, and say how industrious or skilful a
partner shall be, or how he shall prove his honesty. But if
his fraud, his negligence, or his ignorance threaten an actual
mischief which the court can prevent, or have caused one for
Sedgwick, 1 Swanst. 469. But the topic of relation are regulated, as far as tliey are
the waiver of partnership articles will be touched by the express contract ; if it
separately considered hereafter. Post, § 164. does not reach all those duties and obliga-
(j ) In Crawshay v. Collins, 15 Ves. tions, they are implied and enforced by
218, 226; Lord Eldon said : "Partner- the law." Smithi». Jeges, 4 Beav. 503, 505.
ships are regulated either by the express See Jackson v. Sedgwick, 1 Swanst. 469.
contract, or by the contract implied by (kk) Whitman v. Robinson, 21 Md.
law from the relation of the parties. Tlie SO ; Horn fray v. Fothergill, L. R. 1 Eq.
duties and obligations arising from that 567 ; Ibbotson v. Elam, L. R. 1 Eq 188.
§ 163.] RIGHTS AND DUTIES OF PARTNERS. 209
which he can make compensation, the aid of the court will
then be given. We have mentioned this subject here, as it
seemed necessary to notice it in connection with the articles
of copartnership ; but shall treat of it more fully hereafter, when
considering the general subject of the equitable processes and
remedies between partners, {k)
§ 163. Specific Performance of Agreement to form Partnership. —
Equity is sometimes called upon to decree a performance of an
agreement to enter into partnership. There can be no doubt
whatever of the perfect competence of the court to make such a
decree, if they see fit. (/) But there are so many possible
objections to it, that, in point of fact, it very seldom is made -or
asked for. If the agreement is for a term of time, a court would
hesitate before it compelled parties to enter a relation of long
endurance, in which it is, above all things, necessary that there
exist entire mutual confidence and the most unembarrassed
co-operation; although there are undoubtedly, instances of this,
enough perhaps to constitute a general rule, (m) If, on the
other hand, no term of time is fixed by the agreement, it would
be merely nugatory for equity to decree a partnership which the
reluctant partner might terminate the moment after, (w) It is
easy, however, to suppose cases wliere a person had made arrange-
ments with a view to a partnership distinctly agreed upon, which
would now bring upon him great loss and mischief, if that part-
(k) Post, § 205. Thougli the court decree the specific
(/) Buxton V. Lister, 3 Atk. 383 ; perforuiance of an agreement to let the
Anoiij'iiiou.s, 2 Ves. Sen. 630 ; Birchett v. plaintitf into a trade, it seems, it will not
Boiling, 5 Munf. 442 ; 2 Story Eij. § 718; direct an account of the profits from the
Adderly v. Dixon, 1 Sim. & S. 610, time the plaintiff ought to have been
611. See further the ojiinion of Wiiile, admitted ; his remedy, in that resi)ect,
J., Clark V. Flint, 22 Pick. 231, 239. The being complete at law. Anou., 2 Ves. Sen.
specific performance of an agreement for a 630. Sed qu.
I)artnership may be enforced by compelling (h) In Hercy r. Birch, 9 Yes. 357 ; 2
the parties to execute the proper partner- Hov. Supp. 174, Lord Eldon refused to
ship deed. Hibbert v. Hibbert, Collyer enforce specifically an agreement for a
on Part. § 203 ; England v. Curling, 8 iiaitnership without limitation of time,
Beav. 129. So a court of equity may observing: "No one ever heard of this
compel a partner to contribute the sum court executing an agreement for a part-
stipulated as capital, or to restore it to nership, when the parties might dissolve
the common fund, if he have withdrawn it immediately afterwards." It has been
it before the debts are paid. P>obinson said, that Lord Eidon was not quite sat-
V. Mcintosh, 3 E. D. Smith, 221. isfied with this decision. 1 Madd. Ch.
(m) See cases cited in last note ; (3d ed.) 525, n. 1. In Buxton v. Lister,
Anonymous, 1 Madd. Ch. (3d ed.) 525. See 3 Atk. 383, and Anon., 2 Ve.s. Sen.
Van Sandnn v. Moore, 1 Russ. 441, 463 ; ^29, no difference, in this particular,
Birchett v. Boiling, 5 Munf. 442 ; Eng- between partnerships for a term and those
land V. Curling, 8 Beav. 129 ; Manning v. without limitation of time, seems to have
"Wadsworth, 4 Md. 59. been adverted to,
14
210 THE LAW OF PARTNERSHIP. [CH. VII.
iicrship did not at least begin to be. There may have been an
actual partncrsiiip for a time, and then one of the partners refuse
to consider himself partner under the articles, or to allow them
any force, to the great detriment of the other. In any such case,
there can be no reason why a court of equity should not decree a
partnership. And we ap[)rehend that a partnershij) might tiius
be formed by order of court, to be dissolved at once at the
pleasure of one party, but yet substantial justice be done by
clothing the parties with the obligations and the rights which
result from a partnership, however brief it may be. (o) If it
were necessary, we know not why equity may not decree a
jiartnership as of a past day, if justice required this, by the
api)lication of that familiar principle, that equity will consider
that as actually done which certainly ought to have been done.
Another general objection to a decree that certain persons
should become partners is, that it can seldom be necessary.
Damages may be recovered at law for a breach of the contract, in
an action of assumpsit, which is itself a kind of equitable action ;
and, generally, these may be estimated on principles which would
make them fully compensative. Indeed, they may be recovered
at law in some cases in which equity would refuse a specific per-
formance, on the ground that it would be ineffective and use-
less. (/?) It must be remembered, however, that this action is not
maintainable at law, unless the particulars of the agreement on
the one hand, and of the breach on the otiier, can be distinctly
proved, (q) If the agreement is under seal, then covenant will
(o) Mr. Swanston, in his note to Craw- peiformance, though genei'allj' not. Scott
shay I'. Maule, 1 Swanst. 513, alhiding to v. Eayment, L. R. 7 Eq. 112.
the distinction taken between executory A court of equity, in some cases, may
contracts of partnerships to last for a term, inhibit a partner from dissolving the firm,
and those without such limitation of time, Cliavany v. Van Somnier, cited in 3
with reference to their being specifically Wood. Lee. 416, n. ; also, in Crawshay v.
enforced, remarks: "This distinction, Maule, 1 Swanst. 511, note ; Ranisbottom
however, must be received, it is presumed, v. Parker, 6 Madd. 5.
not without qualification. In many such (/>) M'Neil v. Reid, 9 Bing. 68, 2
cases, though the partnership could be Moore & S. 89. See Manning v. Wads-
immediately dissolved, the performance of worth, 4 Md. 59.
the agreement (like the execution of a (q) Figes v. Cutler, 3 Stark. 139.
lea.se after the expiration of the term, see Compare this with M'Neil v. Reid, 9
Wilkinson v. Torkiugton, 2 Y. & Col. Bing. 68. See Gale v. Leckie, 2 Stark. 107,
726) might be important, as investing the 108 ; Vance v. Blair, 18 Ohio, 532. It is
party with the legal rights for which he a sufficient consideration for a promise to
had contracted." See Downham v. Mat- admit a stranger into a firm, that the
thews, cited in 1 Ves. Sen. 497, 499. If latter will become a partner. Byrtl v.
justice require it, under special circum- Fox, 8 Mo. 574,
stances, the court will decree a specific
§ 164.] RIGHTS AND DUTIES OF PARTNERS. 211
lie. Here, however, as appears by the only case of the kind that
we are aware of, the question of priority of covenants and priority
of breach may be very material. P^or if the plaintiff has failed
to do something; obli^'atory on his i)art and tending towards
the partnership, this may furnish an adecjuate excuse to the
defendant, (r)
§ 104. Waiver of Provisions in the Articles. — The |)rovisions
agreed upon by the pai-ties, whether orally or in writing, may be
waived by them, or modified in any way they please. And courts
of equity will sometimes imj^ly such waiver or modification from
facts. Thus, it is an established rule that provisions in the
articles which the partners have never acted upon, but for a
sufficiently long time have wholly disregarded, will be considered
as expunged, (s) If there is only silence and neglect from which
to infer this, tliey must be long continued, and such as not to be
fairly open to any other explanation than that the parties under-
stood the provision thus disregarded to have no force. If the
silence or non-observance be brief, but these are strengthened l)y
acts of the |)artners opposite in their nature and effect to those
provisions, and not to be reconciled with any regard to them, the
same inference will be made. (0 It is equally true that no one
partner has a right to violate the provisions, and that all the
partners together have a right to annul or amend them. And
if one {lartner violate them and the rest follow his example, or
without doing the same thing, approve by word or act of what he
docs, or, perhaps, if they do not oj)pose it, here would be evidence
of a new agreement.^
(r) Walker v. Harris, 1 Anst. 245. dos, Barnard. Cli. 419; ante, ^ 161, note
See 1 Wnis. Saiind. 320, u. 4 ; Glover v- (/).
Tuck, 24 Wend. 153 ; Morrow v. Saun- (/) In Const v. Harris, Turner & R.
ders, 1 Br. & B. 318. 523, Lord Eldon said; "In ordinary
(.s) Partners, if they please, may, in partnerships, nothing is more clear than
the course of the partnership, come to this, that although partners enter into a
any new arrangement, for the purpose of written agreement, stating the terms upon
having some addition or alteration in the which the joint concern is to be carried
terms on which they carry on business, on, yet, if there be a long course of deal-
ju'ovided those additions or alterations be ing, or a course of dealing not long, but
made with the unanimous concurrence of still so long as to demonstrate that they
all the jiartners. England v. Curling, 8 have all agreed to change the terms of the
Beav. 129, 132. See Solomon v. Solomon, original written agreement, they may be
2 Ga. 18 ; Lord Eldon in Jackson v. held to have changed those teruis by con-
Sedgwick, 1 Swanst. 460, 469; Boyd i'. duet." Jackson v. Sedgwick, 1 Swanst.
Mynatt, 4 Ala. 79. See Smith v. Chan- 460, 469. See McGraw v. Pulling, 1
Freeman Ch. 357, 371.
1 Where the language of the articles is ambiguous, the construction jilaced upon it
by the partners themselves as shown by their course of dealing is of great, if not of
212 THE LAW OP PARTNERSHIP. [CH. VII.
On one point the courts seem to construe articles quite strictly ;
and that is in relation to any material change or enlargement of
the business ; for this they require an unanimous consent. We
apprehend that no courts would now give this power to a mere
majority. (?/)
§ 165. Renewal of Partnership. — It happens quite often that a
partnershij), limited by the articles to a certain time, continues
after that time, and is carried on by the same parties in much the
same way, with no new articles, and no formal notice or renewal
of the old ones. The. question may then arise, as to the effect of
the articles upon the new firm under these circumstances. The
answer must depend mainly on the conduct of the parties. If
they go on precisely as before, or in such a way as to indicate no
intentional departure from such a course, the provisions of the
former articles would be held to be those of the present partner-
ship, excepting such, if any there were, as were plainly inapplicable
to the present state of things, (v) On the other hand, if the firm
varied or departed from these provisions, or appeared to adopt
new ones, they would be considered as making, so far, a different
bargain from the old ones. It siiould be noticed, however, that a
partnership, silently continued upon old articles, is dissolvable
at the will of either partner, although those articles contain a dis-
tinct limitation of time, (w) The renewal of this limitation of
(u) Natusch V. Irving, Gow on Part, doctrine on this point, said: "The articles
App. 398 ; caite, § 131. Respecting the expired by their own limitation, in two
rights of a majority, see ante, § 148. years; and had force no longer, unless the
(v) " We know, that after the expira- parties elected to continue the partnership
tion of the time at first agreed upon, on the same terms. That is matter of
partnerships frequentlj'' continue witliout evidence upon the whole facts. The nat-
a new agreement ; and the effect of that ural presumption is, that, as the partner-
is, that the partners, after the expiration ship was continued in fact, it was
of the partnership term, continuing to continued on the same terms as before,
carry on the trade without a new deed, unless that presumption is rebutted by
all the old covenants are infused into the the other circumstances in the case,
new series of transactions." Per Sir An- There is no written agreement re.specting
thony Hart, in Booth v. Parks, 1 MoUoy, the extension of the coi)artnershij), and
466 ; Crawshay v. Collins, 15 Ves. 218, therefore it is open for incpiiry upon all
228 ; Bradley v. Chamberiin, 16 Vt. 613 ; the evidence."
Mifflin r. Smith, 17 S. & R. 165. In (w) Booth v. Park.s, 1 Molloy, 466;
United States Bank v. Binney, 5 Mason, Featherstonaugh v. Fenwick, 17 Ves. 298.
176, 185, Sir. Justice Story, stating the
controlling, weight. Meguiar v. Helm, (Ky.) 14 S. W. 949; "Winchester r. Glazier,
152 Mass. 316, 25 N. E. 728 ; Rathbun v. McConnell, 27 Neb 239, 42 N. W. 1042.
A modification of the articles may be shown by a long course of dealing indicat-
ing mutual consent to the change, even if there is no other evidence. Weeks v.
McCliutock, 50 Ark 193, 6 S. \Y. 734 ; McCall v. Moss, 112 111. 493. As by entries
in the books of the firm, to which all partners had access. Gregg v. Hord, 129 111.
^13, 22 N. E. 528 ; Southmayd's Appeal, (Pa.) 8 Atl. 72.
§ 106.] RIGHTS AND DUTIES OF PARTNERS. 213
time would seldom be presumed from acts, or sustained by the
law as a part of a new bargain, on any thing less than proof that
the parties had expressly so agreed, (x) ^
The articles sometimes provide for a continuance of the part-
nership after the death of one or more partners. This is much
more common in England than here ; but is not unknown here,
and such provisions may give rise to difficult questions. These,
liowever, we shall consider when we treat of dissolution by the
death of a partner.
§ 166. Provisions for Advances by a Partner. — The articles of
partnership not unrre([uently contain agreements that one or all
{x) Tlie original articles of a copart- coini>lainaiit's resumption of his duties as
nership provided that it should last seven a partner on the original terms was a
years. At the end of that time, the de- substantial renewal of the articles on his
fendants, wlio resided in this country, part, and was such an assent to the writ-
transmitted to the complainant in London ten renewal of them b}' the defendants as
(where he resided) the partnership arti- would be binding on him, if the defend-
cles, with an indoi-senient of a renewal of ants had insisted upon it. Dickinson v.
them for another term of seven years, to Bold, 3 Desaus. 501. The written articles
commence from the expiration of the last, of partnership, including the arbitration
The complainant, in his answer to the clause, continue in force, so far as applic-
defendants' letter, enclosing the renewal, able, when the partnership is continued
said that he would agree to it if he were beyond the term limited by the articles,
relieved from his difficulties on the arrival Gillett y. Thomton, L. R. 19 Eq. 599;
of the ship "Carolina." The "Carolina" Parsons v. Haywood, 31 Beav. 199. But
did arrive, and both complainant and de- special and unusual provisions of a penal
fendants went on with tlie business in the nature will not be considered as in force
same manner as had been done while the after the expiration of the term. Clark v.
original articles were in force. But Leach, 8 L. T. N. s. 40. A stipulation,
the complainant never made any formal in partnership articles, that neither shall
renewal of the articles. The defendants sell his interest without the consent of the
therefore contended that the partnership others, has no application after a dissoln-
which continued was not for seven years, tion, and the appointment of a receiver,
but was determinable at will. The court Xoouan . McXab, 30 Wis. 277.
held otherwise, and considered that the
1 Where a business is continued after the time for which the partnership was formed
has elapsed, it is presumed, in the absence of circumstances showing a different ar-
rangement, to be upon the old terms. Xeilson v. Mossend Iron Co., 11 App. Cas.
298 ; Cox v. Willoughby, 13 Ch. D. 863 ; Haynes v. Short, 88 Ala. 562, 7 So. 157 ;
Sangston v. Hack, 52 Md. 173. But the continuing partnership is at will, and such
provisions of the articles as are inconsistent with a partnership at will cease to be in
force. Neilson v. Mossend Iron Co., 11 App. Cas. 298 ; Cox v. Willoughby, 13 Ch.
D. 863. So where one of the articles provided for dissolution and disposition of the
assets after three months' notice by a partner, it was held that this aiticle
was not in force after the original term of partnership, and the partnership
might be dissolved at will. jS^eilson v. Jlossend Iron Co., 11 App. Cas. 298.
Where the articles provide that upon the death of a partner the survivor may take
the business on payment of a certain sum to the representatives of the deceased, the
better view would seem to be that the provision, not being inconsistent with a part-
nership at will, continues in force after the expiration of the limited term of partner-
ship. Cox V. Willoughby, 13 Ch. D. 863 ; but see Yates v. Finn, 13 Ch, D. 839.
214 THE LAW OF PARTNERSHIP. [CH. VII
of the partners should pay into the capital stock of the firm cer-
tain moneys, at certain times and on certain terms. Any partner
is considered, as to any such obligation, merely as a debtor to the
lirm ; and his rights and his responsibilities are the same with
those of any other debtor, {ij) Tiiis is carried so far, that, where
two had agreed to pay large sums, through a considerable period,
to one, in consideration that he would take them into partnership,
and this one became bankrupt soon and before most of the sums
were paid, it was held that his assignees were entitled to those
instalments. (2)^ If, however, a partner owes money to the firm,
on any ground, he may refuse to pay it if the other partners, also
owing money to tlie firm, refuse to pay. The reason of this is sim])ly,
that the first partner claims in substance that a balance is due to
him, or would be due if all the partners paid the charges against
them, or that his debt would be diminished ; and, where such a
claim is made in good faith, he cannot be compelled to pay, unless
they pay. {a)
In general, where a sum of money is advanced to a partner, or
a partner is permitted to take it as a loan, and there are no
(2/) A partner, by failing to contribute 89. Per the Master of the Rolls : " In al-
liis share of the ]5artnership fund, does most all partnerships, a loss follows the
not in ordinary cases forfeit the interest bankruptcy of any of the partners ; a
whicli he already has in the firm, espe- thousand instances must have occurred of
cially if no extraordinary emergency re- lossby bankruptcy in circumstances similar
quire the payment. Piatt v. Oliver, 3 to the jiresent, yet no precedent is ]iro-
IVIcLean, 27. See Patterson v. Ware, 10 duced of the interposition of a court of
Ala. 444 ; Turnijiseed v. Goodwin, 9 Ala. equity. The reason is evident. The loss
372. And one partner, after accepting is not a breach of the contract, but a con-
the money and services of another, shall tingency subject to which the parties
not, when called upon to carry out the purchased. The defendants bought the
partnership, be permitted to deny that right of becoming i)artners ; they became
any joint interest ever existed, because the partners ; the partnership ended by an
other partner has failed to furnish as event by which it was, in its nature, liable
much money for partnership purposes as to be determined. . . . Upon a division,
he agreed to. Stein ii. Eobertson, 30 Ala. the whole price became, according to tlni
286. The means which partners may em- terms of the agreement, dehitum in prccy
ploy to enforce their rights, when any one senti, although solvendum in futuro. \\\
partner neglects to contribute his proper equity, as well as at law, the contract has
quota to the joint fund and the launching been performed, and the consideration
of the partnership, will be more appro- must be paid."
priately considered when we treat of the (a) Foster v. Donald, 1 Jac. & W.
remedies of partners between themselves. 252; Eichardson v. Bank of England, 4
Post, § 191. Myl. & C. 171.
(z) Akhurst v. Jackson, 1 Swanst. 85,
1 Where it is agreed that one shall pay a premium to another upon being admitted
into partnership, he must pay the ))remium though he decides not to enter iuto the
partnership. Bluck v. Capstick, 12 Ch. D. 863.
§ 1*^']
IIIGHTS AND DUTIES OF PARTNEllS.
215
express terms a<]jreed on, his profits are in the first place answer-
able ; and, if they are insullicieni, his share of the stock goes to
discliarge tliis balance ; and, if that be insufficient, he becomes a
personal debtor for the balance, (b)
§ 167. Provisions as to Accounts. — The articles sometimes
contain provisions as to the accounts, how they shall be kept, or
how settled ; and these provisions also are protected by law, but
only so far as justice will j^ermit. (c) Thus, it may be provided
that accounts once settled shall not be reopened but for fraud
discovered ; and yet a material error, through gross negligence,
would undoubtedly be corrected in equity. It is prudent to guard
settled accounts from too easy or too hasty reconsideration ; and
not(jnly will the courts enforce reasonable provisions made for this
])ur|)osc, but equity would not permit settled accounts to be
reopened without good and certain cause, even where there was
no such provision, (d) On the other hand, if it be agreed that no
accounts between the partners which have once been closed shall
be reopened after the death of any party to them, it is clear that
equity would reopen them on proof of fraud, either by the de-
ceased partner or against him. (c ) The articles may also provide a
(b) Crawshay v. Collins, 2 Russ. 3'J5,
347, per Lord Eldon.
(c) 111 the absence of special stipula-
tions, the rule is that the accounts must be
taken in the usual way. Jackson v. Sedg-
wick, 1 Swanst. 469. The duty of each and
all of the partners to keep proper books of
account, always ready for inspection, we
have already considered. We have also
seen that partners may waive any of the pro-
visions of the partnei'ship det^d, and that
they may do this not only by express agree-
ment, but by conduct in opposition, or
without regard to, the articles. The doc-
trine is as applicable to stipulations re-
specting the joint accounts, the mode and
time of balancing them, &i;. , as to any othei'.
Pettyt V. Janeson, 6 Muld. 146 ; Jackson
V. Sedgwick, 1 Swanst. 460. When a new
partnership is formed, for the purpose of
transferring property to it, so that it can-
not be attached by the creditors of a former
firm, a partner in the new (irm may main-
tain a bill for an account, notwithstanding
one of the objects of the formntion of the
firm was to delay, hinder, and defraud cred-
itors. Harvey v. Varney, 98 Mass. 118.
{d) Gainsborough v. Stork, Barnard.
312. See Stoughton v. Lynch, 2 Johns.
Ch. 218 ; Roberts v. Totten, 13 Ark. 609.
If it be stipulated that one partnei- shall
make up and state the joint accounts, and
he do so in the absence of his copartner,
ex parte, it is the duty of the latter to
look into them within a leasonable time,
and to point out the errors, if any exist ;
or he will be considered as having ac(pii-
esced in the correctness of the accounts as
stated on the books of the firm. In
stating the accounts of partners, as be-
tween themselves, the entries on the part-
nership books, to which both parties have
had access at the time when those entries
were made, or immediately afterwards, are
to be taken, primd facie, as correct; subject,
however, to the right of either party to
show a mistake or error in the charge or
credit. Heartt v. Corning, 3 Paige, 566,
572. And see Lynch v. Bitting, 6 Jones
Eq. 238. Post, Ch. xvi.
(e) By articles of partnership, it was
agreed that just and true accounts should
be made out half-yeaily, and signed by
the partners ; and that such accounts
should not afterwards be called in ques-
tion, except for errors 'discovered in the
216
THE LAW OP PARTNERSHIP.
[CH. VII.
method of closing the accounts and dividing the jiroperty at dis-
solution. Tiiese provisions, however, Avill be considered when we
speak of the dissolution of a partnership.
§ 168. Provisions for giving Care and Skill and Time. — The
general law of partnership requires of each partner, as we have
already seen, due devotion of his time and care to the concerns
of the firm, and entire absence from all business on his own
account which can interfere with this duty to the firm. (/)
Sometimes the articles of partnership contain provisions on this
point ; (^) and they may have the effect of enlarging the power
of a partner to engage in other and independent employments.
For if they provide that no partner shall engage in this or that
business, specifying them particularly, the maxim, that the
expression of one thing excludes what is not expressed, might
leave each partner at liberty to engage in other branches of busi-
ness not enumerated, (h) But this would not be pressed too
lifetime of all the partners. The accounts
were made out b)^ one of the partners ;
and, after the death of two of the other
partners, it was discovered that the ac-
counts were fraudulent. It was held, by
Sir Lancelot Shadwell, Vice-Chancellor,
that the fourth partner wiis entitled to
have the accounts of. the partnership
taken from the date of the articles.
Oldaker v. Lavender, 6 Sim. 239. See North
British Bank v. Collins, 28 Eng. L. & Eq. 7.
(/) American Bank-Note Co. v. Ed-
son, 56 Barb. 84. Where there are no cov-
enants, a man may engage in as many part-
nerships as he pleases, provided he does
not violate the principle stated in the text.
Caldwell v. Lieber, 7 Paige, 483, 494, per
"Willard, V. C. If justice require it, one
partner will be enjoined from engaging in
any business prejudicial to the firm,
whether there be a covenant against it or
not. Marshall v. Johnson, 33 Ga. 500.
The right of a partner who withdraws
from the firm to engage in the same busi-
ness which the remaining partners are
prosecuting, or in any rival or hostile
business, will be considered when we come
to treat of the consequences of dissolution,
and therein of retiring partners. [And see
post, § 181, note.]
{g) " In partnership engagements, a
covenant, that the partners shall not carry
on for their private benefit that jiaiticular
commercial concern in which they are
jointly engaged, is not only permitted,
but is the constant course." Morris v.
Colman, 18 Ves. 438; Universities of
Oxford and Cambridge v. Richardson, 6
Ves. 706. And, in such case, if one of
the partners violate this covenant, the
rest may join in suing him for the breach ;
he being in that respect several from them
all, and they all joint against him. Thim-
blethoip V. Hardesty, 7 Mod. 116 ; Eccle-
ston V. Clipsham, 1 Saund. 153 ; Spencer
V. Durant, Comb. 115 ; Saunders v. John-
son, Skin. 401.
(A) In Glassington v. Thwaites, 1 Sim.
& S. 132, Sir John Leach said: "If some
of the proprietors of a morning paper are
also the proprietors of an evening paper,
they may have a stronger interest to pro-
mote the success of the evening ])aper
than of the morning paper, and a strong
temptation to use the information ob-
tained at the expense of the morning
paper for the benefit of the evening paper.
This temptation forms a powerful objec-
tion in all cases to the partner in the
concern of one newspaper being permitted
to be a partner in the concern of any
other newspaper. But it is an objection
founded on the principle of policy and
discretion, against which parties may
protect themselves by their contracts ;
and, accordingly, it is a common cove-
nant, in such partnership articles, that no
partner shall be the proprietor of any
§ 169.] RIGHTS AND DUTIES OF PARTNERS. 217
far. No such maxim or principle vrould coiuitcrvail the general
principle requiring good faith and mutual co-operation between
the partners. And, therefore, it would not permit a partner to
injure his firm, for his own benefit, by allowing any mere impli-
cation to give him power to do so. (i) But, on the other hand,
any agreement respecting the business would be extended by con-
struction far enough to give to partners the protection it was
intended to afford, (j") It seems, however, that an agreement
not to engage in the same business, on the partner's own account,
does not prevent him from canvassing for future business when he
shall be by himself, (/c) But if a partner, under such agreement,
violate it by engaging in independent business, equity may require
of him to admit his partners as partners also in that business, (l)
If, however, a partner under such agreement, with the consent of
his partners, enters into or forms a new copartnership for the
same business, this will not make the partners of the new firm
coj)artners in the old firm, (w)
§ 169. Provisions for a Dissolution. — Equity has in general full
power to decree dissolution, and to remove a copartner for suffi-
cient reasons ; but, if this subject enters into the articles, ail
provisions respecting it — as to the cause, the time, the manner,
and consequences — will be respected, so far as they do not
conflict with justice ; and an equitable construction will be given
to any language on the subject. (») ^ Thus, if insolvency be
other newspaper. In the present case, art or mystery, he should give six months'
there is actually a covenant that the pro- notice of his intention, at the end of
prietors will not be concerned in any other which the other party should be at liberty
morning paper, which, by implication, to continue the trade on his own account,"
affords the conclusion that it was the in- it was held, that the party giving notice
tention of the parties that they might could not carry on the trade elsewhere on
engage in the concern of any evening his own account ; but that he must either
paper." See also Caldwell v. Lieber, 7 continue the partnership, or give up such
Paige, 483, 496. tiade altogether. Cooper v. Watlington,
(0 This is well illustrated by the case 2 Chitty, 451, 3 Doug. 413.
from which we have just quoted. Glas- {/c) Coates v. Coates, 6 Madd. 287.
sington v. Thwaites, 1 Sim. & S. 124. (/) Sonierville v. Mackay, 16 A'es. 382.
(j) Where two entered into partner- See Caldwell v. Lieber, 7 Paige, 482 ;
ship for eleven years, in the trade of Moritz v. Peebles, 4 E. D. Smith, 135.
brewers, and agreed that, "if during the (m) Bosanquet v. Wray, 6 Taunt. 597.
term either should desire to quit the said («) The case of Blisset v. Dauiel, 11
1 A partner may institute proceedings to enforce a provision for dissolution in the
articles. Meredith v. Ewing, 85 Ind. 410. Where the articles provided for ter
mination of the partnership by written notice, given by one partner, to take effect in
sixty days, and one partner paid to the other a bonus for admission into the partner-
ship, the other had a right immediately to terminate the partnership by notice, with-
out cause. Swift v. Ward, 80 la. 700, 45 N. W. 1044.
218
THE LAW OF PARTNERSHIP.
[CH.
VII.
named as a cause for which a partner may be removed, this will
be held to mean any actual inability to pay one's debts, through
Hare, 493, expniplities the view in which
courts of equity regard clauses of expul-
sion in deeds of coiiartner.ship, and the
manner in which such jirovisioua aie con-
strued, and their operation controlled, so
as to prevent their workin<^ injustice or
0]>])ression. The firm of Jolin Freeman &
Copper Company had carried on a very
large business for more than a century,
when, in 1844, the then partners, includ-
ing the plaintiff, Blisset, and six other
persons, executed new articles, though in
the form which had always been used by
the ancient firm. By these articles the
firm was to continue fourteen years from
the 30th June, 1843. The joint efl'ects
were estimated at 72,000Z., the whole capi-
tal being jiut at 112,500/., divided into
twenty-five shares of 4,500^. each. It was
provided • " that it shall be lawful for the
holders of two-thirds or more of the shares
for the time being, from time to time to
expel any partner, by giving to or leaving
fur him, at his then or last place of abode
in England or Wales, a notice in writing,
under their hands, of such expulsion ;
which, in that event, shall operate from
and at the time of the giving or leaving
such notice." Notice of the dissolution
of the firm as to the expelled partner,
drawn in a jirescribed manner, and signed
by the remaining partners, was to be pub-
lished in certain papers.
Under these articles the joint business
was harmoniously conducted for some
years. Finally, at a meeting of the then
partners, on the 26th August. 1850, the
plaintiff had a dispute with Vaughan, one
of the defendants, and the manager of the
joint business. On the 29th August,
at their usual meeting, all the partners
signed the balance-sheet of the 30th June
tln'n last. On the evening of that day,
however, the plaintiff received a notice
that he was expelled from the firm, drawn
according to the terms of the paitnership
deed ; and the prescribed notice of disso-
lution was, as far as practicable, published
in the specified pajiers. The plaintiff,
however, refused to sign the notice of dis-
solution. Jt farther appeared that none
of the partners, except Vaughan, desired
their connection with the plaintiff to cease,
and that they had been induced to sign
the notices of expulsion and dissolution
by' the suggestions and arguments of
Vaughan, and his threats to leave the
management of the business if they did
not.
Upon these facts the Vice-Chancellor
(Sir W. P. Wood) said that, among other-
questions, this arose, viz. : Whether the
power of expulsion, in the articles of part-
nership, could be exercised, without any
cause assigned, by partners holding two-
thirds of the occupied shares, by their
signing a note in the form prescribed by
the articles, without any previous meeting
in committee with each other. And it
was held, that no previous meeting of the
partners was necessary, and that no cause
for giving the notice of expulsion was
necessary to be assigned or established.
The court then considered the ques-
tion, Mhether, assuming this power of ex-
I)ulsion to exist, it had been so exercised
that the court would give effect to it, and
declare that the plaintifi' had ceased to be
a partner. The Vice-Chancellor said that
all the partnership stipulations must rest
upon a basis of good faitli ; that the jirin-
ciples of good faith, as applied to partner-
ship, had settled that a partnership cannot
be dissolved by any jiartner for his own
benefit ; that, therefore, the literal con-
struction of the present articles could not,
in all cases, be enforced ; that the power
of expulsion, given by the articles in the
])resent suit, to two-thirds of the partners,
was never created with the view that it
might be exercised by them for their own
private benefit ; that it was inserted m
the deed to be used, not for the benefit of
the two-thirds exercising the power, but
on behalf of the whole partnership. Ap-
plying these principles to the case at bar,
his Honor held, that, considering the con-
cealment from the plaintiff of any in-
tention on the part of the partners to
act on the clause of expulsion until after
he had signed the annual balance-sheet,
and in view of the fact that Vaughan
had procured the concurrence of the other
partners to the expulsion, for his own ben-
§ 170.]
RIGHTS AND DUTIES OF PARTNERS.
219
inadequacy of means, and not be limited to a formal insol-
vency under the statute, (o) In general, however, it would be
held, that a partner should not be liable to removal for the first
steps towards, or imperfect doing of, an act which it is agreed
shall give the right of removal, but only for its completion. (/?)
§170. Provisions for Arbitration. — Not unfrequentlv, articles
of partnership contain a clause, that all disputes between the
partners, or all questions arising at dissolution, or certain other
questions, shall be submitted to arbitration. (^) But the same
rule will doubtless be applied to this provision in the articles as
to a similar one in policies of insurance, or indeed any other
instrument. Upon this subject, the law was settled, somewhat
suddenly, but decidedly, in England, both by statute (r) and by
adjudication, (s) and for reasons which may operate upon the
efit, and by the use of threats, and bj' tlie
undue exercise, in other ways, of his in-
fluence upon the minds of his cojiartncrs,
there being no proof of any misconduct on
the part of the plaintiff, the power of ex-
pulsion given by the articles had not, in
the present instance, been exercised bona
fide.
See, also, as an interesting case of the
expulsion of a partner, under provisions in
the articles of copartnership, Patterson v.
Silliman, 28 Pa. 304.
(o) Parker v. Gossage, 2 C, M. & R.
617 ; Biddlecombe v. Hand, 4 A. &; E.
332.
(^;) By articles of copartnership, it was
provided, that it should be lawful for the
partners to dissolve the partnership as to
any partner who should make any mort-
gage, pledge, sale, assignment, or other
disposition of his share of the jjartnership
stock and effects, or who should become
bankrupt or insolvent, or should permit
any part of the partnership property to be
taken in execution for his separate debt.
It was held, that a partner was not de-
barred, by the said articles, from giving a
warrant of attorney, and that it was only
in case it produced a certain effect, that
his coj)artners were empowered to deter-
mine the partnership. Mills v Osborne,
7 Sim. 37.
(q) Where one partner gave his son a
power of attorney "to act on his behalf
in dissolving the partnership, with author-
ity to appoint any other person, as he
might see fit," it was held, that this gave
the son power to submit the account to
arbitration. Henley v. Soper, 8 B. & C.
16. Such an agreement to refer will be
strictly confined to the special matters of
reference. De Pusey v. Du Pont, 1 Del.
Ch. 82.
(/■) By section 11th of the Common-
Law Procedure Act, 1854 (17 & 18 Vict,
ch. 125), if the parties to an instrument,
in writing, have agreed to refer to arbitra-
tion any existing or future differences be-
tween them, a court or judge may, at
discretion, upon application of the de-
fesidants or any of them, stay proceedings
in an action commenced by any of the
])arties, against any or all the rest, in re-
spect of the matters so agreed to be referred,
if there is no sufficient reason why such
matters should not be referred according
to the agreement. See Russell v. Pelle-
grini, 6 E. & B. 1020 ; Wallis v. Hirsch,
1 C. B. N. .S..416. It is to be observed,
that this statute does not have the effect
of making a covenant to refer a good plea
in bar in an action at law upon the subject-
matter agreed to be referred. See Liv-
ingston V. Ralli, 5 E. & B. 132.
(.<f) The general principle, applicable to
provisions of this character, has certainly
been, until quite recently, that no mere
agreement to refer a controversy to arbi-
tration will be allowed to oust the proper
courts of their jurisdiction. Thompson v.
Charnock, 8 T. R. 139 ; Con tee v. Dawson,
2 Bland, 264 ; Hill v. Hollister, 1 Wilson,
129. See Allegre v. Insurance Company,
6 H. & J. 413 ; Eandel v. Chesapeake, &c.
220
THE LAW OF PARTNERSHIP.
[CH, VII.
courts of this country when the question shall come before them
hereafter. If the parties choose to agree to an arbitration, then
questions may arise as to the effect of an award ; and these will be
considered in a subsequent chapter.
§ 171. Provisions for power of Majority. — The general powers
Canal Co., 1 Harr. (Del.) 233, 275 ; Gray Cas. 811, per Lord Chancellor Cranworth ;
V. Wilson, 4 Watts, 39 ; Stone v. Dennis, Thompson v. Charnock, 8 T. R. 139. In
3 Port. 231 ; Thomas v. Freilericks, 10 Q. Livingston v. Ralli, supra, Coleridge, J.,
B. 775 ; Haggart w. Morgan, 4 Sandt. 198 ; said: "We should be ousting the court
Frink v. Ryan, 4 Hi. 324. Hence, it lias of its jurisdiction if, where a party corn-
been considered very doubtful whether an plains that an agreement is broken, the
action would lie between partners for the defendant was allowed to answer : ' You
breach of a covenant to refer partnership cannot go to the court, because it is an
disputes to arbitration. Tattersall i-. agi-eement to refer, and the court will not
Groote, 2 B. & P. 131 ; Gray v. Wilson, enforce such an agreement.' The fallacy
4 Watts, 41. seems to be in confounding the distinction
But this doubt may be considered as to between an action for refusing to concur in
a great extent removed (at least as far as referring a difference, and an action upon
tiie English courts are concerned) by a the subject agreed to be referred. Setting
decision in the Court of Queen's Bench, up an agreement to refer, as a defence, is
Livingston v. Ralli, 5 E. & B. 132. Lord very diH'erent in effect from bringing an
Campbell, C. J., there said : " It is clear, action upon the subject itself."
on principle, that an action will lie for the Another reason generally given why, for
breach of an agreement to refer. There is breach of covenant to refer, no action can lie
an express promise, and abundant consid- maintained, is the difficulty of directing a
eration for the promise. Such an action juiy how to assess the damages ; which in
is not contrary to any principle of law or most instances, at least, wouid necessarily
to public policy ; it is most reasonable and be merely nominal. Tattersall v. Groote,
just that parties should be at liberty to 2 B. & P. 131; Street v. Rigby, 6 Ves. 818;
introduce into their contract a stipulation Mitchell v. Harris, 2 Ves. Jun. 134. "But
that, if any difference arises, it should be that is not a reason why the actios. shoiil4
referred to arbitration. It would be a not be maintained ; because, though the
great infringement on the liberty of the damages may not be substantial, the matter
subject if he were not to be permitted in question may be very important." Cole-
to refer a question to a domestic tribu- ridge, J., in Livingston v. Ralli, s)q>ra. It
nal. Then, what authority is there to seems, moreover, tiiat this objection as to
the contrary ? Lord Eldon, one of the the difficulty of calculating the damages
greatest of judges, seems to have enter- would be of no force where the covenant
tained a doubt, though I do not find any to refer contained a clause fixing upon a
decision by him upon the point. But certain sum, by way of liquidated damages
since I have known W^estminster Hall, for the breach, as was the usual course
the opinion has been that such an action adopted in refei'ences to arbitration under
is maintainable." The distinction is be- the civil law. 2 Story Eq. § 1461. Thus,
tween biinging an action upon the agree- in Street v. Rigby, 6 Ves. 818, Lord Eldon
ment to refer, and jdeading that agreement said : " There are prudential ways of draw-
in bar to an action upon tlie subject agreed ing these articles. There might have been
to be referred. In this latter case (though an agreement for liquidated damages to
not in the former), the doctrine applies, enforce a specific performance, if an action
that the courts of law cannot be divested could not produce sufficient damages, or
of their jurisdiction by an agreement to equity would not entertain a bill for a
refer ; and hence such a plea is not a good specific performance." Stone i: Dennis, 3
I)lea in bar to the action. Wood v. The Port. 239. See i7ifra, § 174, respecting
Copper Miners' Co., 17 C. B. 561, per provisions for damages in partnership
Williams, J.; Scott v. Avery, 5 H. L. articles.
§ 172.] RIGHTS AND DUTIES OF PARTNERS. 221
of a majority of the partners we have already considered. If the
articles give to a majority a power to bind the rest, this power
may be protected so far as it is expressed, but will not be
extended by implication or construction. It is necessarily con-
fined to matters which occur in the conduct of the partnership
business or interests, (i) A majority acting under such articles
may have no power, in case of difficulties, to sell out the whole
concern, against the will of the minority. (i<) But, in accord-
ance with principles which we have already considered, the
parties may, by long-continued acquiescence and recognition,
justify a court of equity in sustaining a course of conduct on the
part of the majority not authorized by the articles, and even
perhaj)s prohibited by them, (y)
§ 172. Provisions for Division of Profits. — Very frequently the
articles provide for the division of profits, and determine the
proportion in which each partner takes his share. There is
nothing to prevent their making any bargain on this subject
that they see fit to make. Where they make none, it is certainly
the general rule, both in law and equity, that the profits shall be
shared equally among the partners, (^w') But where, from ine-
quality of shares in the concern, or of contribution to it, coupled
with other circumstances of a similar indication, it must be
obvious that a different distribution was expected and intended,
a court of equity might be expected so to order, (x) ^
(t) Glassington v. Thwaites, 1 Sim. & {ic) Robinson v. Anderson, 20 Beav.
S. 131. 98, 7 De G. M. & G. 239 ; Webster v.
(it) Hence, where a partnership existed Bray, 7 Hare, 159. See Gill v. Geyer, 15
among a large number of persons in certain Ohio, 399.
newspapers, under an agreement that it {x) " Whenever a partnership adopts
.should be managed by a committee of five, a project, within the princi[)les of their
and by general meetings, at whit-h the agreement, for the purpose of profit, it
vote of the majority was to be binding, must be for the benefit of all the partners,
with a provision that any one wishing to in proportion to their respective interests
retire should first offer his share to the in the concern." Per Sedgwick, J., in
committee at a certain price, and, if they Gray v. Portland Bank, 3 Mass. 364.
declined to buy, might sell it to any other There a banking company had been in-
)}erson, — it was held, that the majority corporated with the privilege of creating
were not able to sell the whole concern a stock not less than one sum, nor greater
without the consent of all ; but that, where than another. The company oonmienced
all but two were desirous of retiring, they business with the smaller capital, but af-
might sell their own shares, without mak- terwards voted to increase it to the largest,
ing an offer of them to the committee. It was held, that those who held the stock
Chappie V. Cadell, Jac. 537. in the capital first raised had a right to
(«) Glassington v. Thwaites, 1 Sim. & subscribe for and hold the new stock in
S. 124, 131. proportion to their respective shares in the
1 Provision relnfinq to divisio'ii of profits. — Profits of a business consist of the excess
of income over ordinary expenditure. An investment for the permanent improvement
222 THE LAW OF PARTNERSHIP. [CH. VII,
5 173. Sharing of Loss. — Thus, if it was provided that one
should find all the money, and the other do all the work, and
that the profits should be divided, and the transaction resulted
in no profit whatever, but in a considerable loss, — it seems
formerly to have been held that the party supplying funds would
be obliged to sustain the whole of this loss; he could not call
on the other party to contribute to him any portion of it ; for,
as between themselves, they were partners only as to profits,
although the person buying and selling might have been liable
in solido, as a partner, for the debts incurred by the purchase,
or for the transport or sale of the merchandise, (m)
[The better view, however, is that although all or a large part
of the capital is furnished by one partner, the entire loss is to be
borne by all. Hence after payment of the debts, the contribu-
tions of partners to capital are all to be repaid before there can
be any division of profits. ^ And if the assets are not sufficient,
old. See Raymond v. Putnam, 44 N. H. Bosw. 507 ; Nevvbrau v. Snider, 1 W. Va.
160. 153 ; Lamb v. Grover, 47 Barb. 317 ,
(//() Huran v. Hall, 1 B. Mon. 159. Miller . Price, 20 Wis. 117.
See Irving v. Excelsior Fire Ins. Co., 1
of the firm property is not ordinary expenditure, and is not to be subtracted from
income in order to arrive at profit. It was so held, where one was to be paid by a
})roportion of the profits. Braun's Appeal, 105 Pa. 414. See Succession of Harris, 39
La." Ann. 443, 2 So. 39.
In the absence of any provision in the articles or other agreement, the partners will
be presumed to share the profits and losses equally. Paul v. Cullum, 132 U. S. 539 ;
Brewer v. Browne, 68 Ala. 210 ; Ligare v. Peacock, 109 111. 94 ; Fleischmann v. Gotts-
chalk, 70 Md. 523, 17 Atl. 384 ; Ratzer v. Ratzer, 28 N. ,J. Eq. 136. And if there is
no stipulation as to losses, it is jiresumed that they will be divided. Burgess v. Bad-
ger, 124 111. 288, 14 N. E. 850. But there is nothing to })revent the parties from making
such arrangements as they please with regard to sharing profit and loss. Paul v. Cullum,
132 U. S. 539 ; Welsh v. Canfield, 60 Md. 460 ; Fleischmann v. Gottschalk, 70 Md.
523, 17 Atl. 384.
Where the articles provided that " in the event of the net profits of the business in
any one year being so small that the portion of said T. W. & J. A. should not amount
to S2500 exclusive of the interest on their unpaid capital, that then it is agreed that
their accounts shall each be credited a sum sufficient to make that amount, unless such
deficit should occur from losses sustained by fire, robbery, or other causes outside of the
regular, ordinary business of the copartnership," it was held that the share of T. W.
was to made up to be $2500 profit every year by making the necessary credits on the
books of the firm, even if there was an actual loss. Welsh v. Canfield, 60 Md. 469.
In Fulmer's Appeal, 90 Pa. 143, it appeared that profits were to be divided according
to the capital actually paid in. Capital was to be equal and to be paid in as needed. Tlie
managing partner refused to let the other partner see the books, or to inform him how
their capital accounts stood. The other demanded to know, in order to equalize pay-
ments. It was held that since there was no wilful default in the latter, he could
have an equal division of the profits.
^ Nowell V. Nowell, L. R. 7 Fq. 538; Binney v. Mutrie, 12 App. Cas. 160;
Sangston v. Hack, 52 Md. 173 ; Whitcomb v. Converse, 119 Mass. 38 ; Living-
§ 174.] RIGHTS AND DUTIES OF PARTNERS. 223
after paying the debts, to repay the capital, the deficit must be
shared by all the partners , and the partner who has contributed
more than his share of capital is therefore entitled to contribu-
tion from the rest.^]
§ 174. Liquidate Damages for Misconduct of Partner. — Some-
times the articles provide that for some specified misconduct, or
breach of agreement, the offending partner shall pay a certain
defined sum, by way of liquidated damages. And this may bring
up questions which belong not so much to the law of partner-
ship as to the law of contracts. Whatsoever is, in fact, a penalty
for wrong-doing, or default of any kind, whether it be called
penalty or anything else, is, both in law and in equity, cut down
to an adequacy with the wrong done, so that it shall afford full
compensation, and nothing more. At the same time, there may
be wrongs anticipated, or at least provided for, of which it is diffi-
cult or impossible to determine, even when they occur, with any
exactness, the amount of damage they cause. In such a case,
parties may agree beforehand as to what shall be taken for the
amount of damages, if that thing happens. This is to agree
upon liquidated damages ; and in such a case courts will sup-
port the agreement, provided it is made in good faith, is reasonable
and not oppressive in its nature, and the damages are not, in
point of fact, excessive, or out of all due proportion to the dam-
age actually sustained, (^) If, however, liquidated damages are
agreed on even under that name, and the default to which they
apply causes damages of an exact amount, or of an amount which
can be exactly ascertained, the courts will often disregard the
agreement, and, in some form, give only adequate compensation. (^)
(?/) See the principles upon this sub- Eemhle v. Farren, 6 Ring. 141 ; Boys v.
ject stated, and the cases collected, in 3 Ancell, 7 Scott, 364 ; Heard v. Bowers, 23
Pars, on Cont. 156-163, 5th ed. [See 1 Pick. 455, 462 ; Grayi-. Crosby, 18 Johns.
Sedg. Dam. (Sth ed.) § 389 ct seq.] 219, 226 ; Hoag v. McGinuis," 22 Wend.
{z) Orry. Churchill, 1 H. Bl. 227, 232 ; 163 , Bagley v. Peddie, 5 Sandf. 192 ; Ses-
sion V. Blanchard, 130 Mass. 341 ; Hayes v. Hayes, (X. H.) 19 Atl. 571 ; Leserman
V Bernheimer, 113 N. Y. 39, 20 N. E. 869 ; Shea i'. Donahue, 15 Lea, 160. So where
land was bought with A.'s money and sold by B.'s skill, the profits to be divided, it
was held that there were no profits to divide until enough land had been sold to repay
A.'s contribution and all e.^penses. Coward v. Clanton, 79 Cal. 23, 21 Pac. 359.
1 Hellebush v. Coughlin, 37 F. R. 294 ; Turner v Turner, (Ky.) 5 S. \V. 457 ;
Jones V. Butler, 87 N. Y. 613 ; Emerick v. Moir, 124 Pa. 498, 17 Atl. 1 ; Wipperman
V. Stacy, 80 Wis. 345, 50 X. W. 336. But where the advances of a partner were to be
repaid by a greater share of the profits, which were to be equally shared after the
advances had been repaid, it was held, upon dissolution before entire repayment of the
advances, that the copartner was not bound to share the loss. McCormick v. Stofer,
(Ky.) 12 S. W 151.
224 THE LAW OF PARTNERSHIP. [CH. VII.
If the pgreement be one which, in fact and substance, deter-
mines beforehand damages for a default, of that kind that these
damages ought to be so liquidated ; and if, on the other hand,
the sum is a reasonable one, — the court will sustain it as liqui-
dated damages, even though these damages are called a penalty,
or by no name whatever, (a) So, at least, a court of equity
would decide. (6) And if courts of law were constrained to
treat as a penalty what the parties so called, the effect would
be the same ; because this penalty would need no cutting down
to make it adequate.
There is one rule on the subject of liquidated damages appli-
cable to articles of partnership, and to all other contracts. No
one bargain for liquidated damages is enforced by the courts,
unless the damages agreed upon are for one distinct breach only ;
or, if for many, are payable only when all these breaches are com-
mitted, and they are such that the actual amount of damages
thence resulting cannot be ascertained. If, for example, the
articles enumerate many duties and many agreements, and it is
agreed that, for any breach thereof, the olTending party shall pay
a certain sum of money, such a bargain would seldom or never be
enforced. It puts all the breaches on the same footing; it puts
a breach of all on the same footing as a breach of any one ; and
it brings together broaches of which some may cause damages
as ascertainable as the withholding a certain debt, while some
are as incapable of exact estimate as the violation of a general
promise of good conduct, (c)
sions u. Eichmond, 1 E. I. 298, 303 ; to be decided by the judge upon a con-
Jordan V. Lewis, 2 Stew. 426 ; JVlead v. sideration of the whole instrument." Per
Wheeler, 13 N. H. 353. Wilde, C. J., in Sainter v. Ferguson, 7 C.
(a) See Lowe r. Peers, 4 Burr. 2225 ; B. 727.
Tarrant v. Olniius, 3 B. & Aid. 692 ; (6) If liquidated damages are legally
Fletcher v. Dyehe, 2 T. R. 32, 36 ; Birch due, equity will not relieve against them.
V. Stephenson, 3 Taunt. 469 ; Denton v. East India Co. v. Blake, Finch, 117 ;
Eichmond, 1 Cr. & M. 734 ; Duckworth Small v. Fitzwilliams, Free. Ch. 102 ;
V. Alison, 1 M. & W. 412 ; Leighton v. Eolfe v. Peterson, 2 Bro. P. C. 436 (Dub-
Wales, 3 M. & W. 545 ; Crisdee v. Bolton, lin ed.) ; 6 Bro. P. C. 470. And if a
3 C. & P. 239 ; Legge v. Harlock, 12 Q. lessee of land covenant that he will not
B. 1015 ; Price i-. Green, 16 M. & W. plough a certain part of it, and that, if
346 ; Galswoi'thy v. Strutt, 1 Exch. 659 ; he do so, he will pay a certain sum per
Dakin v. Williams, 17 Wend. 447, 22 acre, e(|uity will neither enjoin the coven-
Wend. 201 ; Pearson v. Williams, 26 antor from violating his covenant, nor
Wend. 630 ; Heard i'. Bowers, 23 Pick, relieve him from the agreed penalty, if he
455, 463; Mead y. Wheeler, 13 X. H. 351. do violate it. Woodward v. Gyles, 2
"Whether the sum mentioned in an Vern. 119.
agreement to be paid for breach is to be (c) Astley v. Weldon, 2 B. & P. 346 ;
treated as a penalty, or as liquidated and Kemble r. Farren, 6 Bing. 141 ; Char-
ascertained damages, is a question of law, rington v. Laing, 6 Bing. 242 ; Boys v.
§ 175.] RIGHTS AND DUTIES OF PARTNERS. 225
§ 175. Provisions for Appropriations of Property to a Partner. —
If the partners choose to agree that certain items of property
used by the firm, as the house or store occupied by them, or the
fixtures, or implements, or other chattels which are not for sale
or use, or even certain specified parts or portions of the goods
or merchandise bought and sold, shall not belong to the com-
mon stock, but be owned by one or more of the partners, or by
the whole of them, in severalty, — there is nothing to prevent
such a bargain, and nothing to interfere with its force or oper-
ation among the partners themselves, (t^) ^ The agreement
might give rise to conflicting rights, and to difficult questions
of fact ; but there is no rule which ])revents their making- it.
When, however, such a bargain is considered with reference to
the creditors of the firm, a different state of tilings arises. In
case of the insolvency of such a firm, or of any firm, there are
usually two classes of creditors ; those to whom the copartnership,
as such, is indebted; and tiiose to whom the several partners,
or some of them, are indebted. We shall presently see that, by
an universal rule, founded on obvious justice, the creditors of
the firm are exclusively entitled to all the assets of the firm, until
tlicir debts are paid, and that the law is tending to give the
creditors of the separate partners an equally exclusive right to
the separate or private property of the indebted partner. Now,
can the respective rights of these classes of creditors be made
dependent upon the pleasure or the bargains of the partnership ?
To a certain extent, this may be so; but it is not easy to draw
the line exactly, and say where the power of the partners, in this
respect, terminates. If by the original articles, or by any sub-
Ancell, 7 Scott, 364 ; Davies v. Penton, 6 them, see 3 Pars, on Cont. 157, 159, and
B. & C. 216 ; Galsworthy v. Strutt, 1 Exch. notes, 5tli ed.
659 ; Atkyns v. Kinnier, 4 Exch. 776 ; (c?) We have ah-eady seen that the
Shute V. Taylor, 5 Met. 67; Bagley contribution of one partner to the common
V. Pedtlie, 5 Sandf. 192 ; Beale v. Hayes, stock, or even the contributions of all the
f. Saiiilf. 640 ; Gower v. Saltmarsh, 11 partners, and thus the entire capital of
Mo. 271 ; Carpenter i?. Lockhart, 1 Ind. the partnership, may consist exclusively of
434 ; Bright v. Rowland, 3 How. (Miss.) the use of property. The questions which
398 ; Gheddick v. Marsh, 1 N. J. 463 ; arise upon the retirement, bankruptcy,
Curry v. Larer, 7 Barr, 470. See particu- &c., of partners respecting the transmu-
larly Galsworthy v. Strutt, Atkyns v. tation or conversion of joint property into
Kinnier, and Bagley v. Peddie, supra, as separate property, and vice versa, will be
cases well exhibiting the modern English considered, hereafter, when we treat of the
and American doctrines on this subject ; dissolution of a firm by those means,
and for the dilfereuce, if any, between
^ Where one pai'tner is to have the exclusive possession of firm property, he may
maintain a possessory action "against another partner who takes it. Ivey v. Ham-
mock, 68 Ga. 428.
15
226 THE LAW OF PARTNERSHIP. [CH. VII.
sequent agreement, three men who enter into partnership, and
transact business as A., B., & Co., contract with each that no
part of their merchandise shall be or form a part of the common
property of the firm, but that each partner shall own in severalty
onc-thii-d part of everything bought, and one-third of the pro-
ceeds of every thing sold; and if this firm should become
insolvent, and the several and private creditors claim all the
merchandise of the firm as liable to their processes under this
contract, leaving nothing for the creditors of the firm, — no
court would ever look with favor on such a claim. This is so
obvious, that precisely this arrangement probably never was
made, nor will bo. But if, on the other hand, the partners
agree that the house which one of them owns, and the whole
firm use, shall remain the property of that one partner ; or if
they agree that this piece of property bought and paid for by the
firm, and used by them, shall belong to one partner alone, and
be charged to him, and that piece of property to another, — such
arrangements, made in good faith, and when no insolvency was
apprehended, and in themselves reasonable, would be sustaiued
by the courts. But they would hesitate to go farther. It is
said by Justice Story, that "In partnership articles it is some-
times agreed that the real estate and fixtures belonging to the
firm shall not be treated as partnership property, as between
the partners ; but that all the partners shall have a several and
individual interest therein. In such cases, the interests of the
partners will be treated throughout as their several and separate
estate ; and, of course, in cases of bankruptcy of the partners, it
will be distributable to and among their separate creditors
respectively, in preference to their joint creditors." (e) A
similar statement is made by Collyer. (/) The authorities
cited go no farther than that real property, bought and paid
for from the partnership funds, may be appropriated to one
partner, and the price charged to him, and that a subsequent
insolvency of the firm will not divest his separate title ; or that
real property, originally owned and held by one partner alone,
may be, by agreement, used by the partnership, without becom-
ing j)artnership property. (^) But we apprehend that the
practical rule now would be, certainly in England, and probably
(«) Story on Part. § 205. ogous cases at large when we come to treat
(/) Collyer on Fart. § 217. of the real estate of a firm, and of the
(g) Smith v. Smith, 5 Ves. 189 ; Ex rights of joint and separate creditors upon
parte Smith, 3 Madd. 63. We shall have the dissolution of a firm by banki'uptcy.
occasion to consider these and other anal- {S^ie post, ch. 11, and ch. 15, sect. 4.)
§ 176.] RIGHTS AND DUTIES OP PARTNERS. 227
in this country, that property, whether real or personal, which
was bought by partnership funds, or put by a partner into
partnership stock, either formally and technically, or actually and
substantially, and in such a way that it is held forth to per-
sons dealing with them as partnershij) property, could not be
divested of this character and made private and several property,
merely by an agreement of the partners ; at least, not in respect
to any parties who are not made acquainted with the agreement
before trusting the firm.^
§ 176. Provisions respecting Firm-Name. — Articles almost
always provide what shall be the name of the firm ; this name
and style may be, as we have seen, whatever the partners
wish ; ((//y) and it should always be adhered to. If any partner
uses any other name to designate the firm, it is, in fact, a breach
of this contract ; and, if any injury results from it, he would be
resi)onsil)le to those who suffered, whether they were his copart-
ners or other ])ersous. (/*) It is, however, not very unusual, in
this country, to find the long name of a firm shortened in prac-
tice ; Christian names are dropped, or other changes introduced,
to make the name of the firm easier to write or to speak. Such
a change being made so often, so publicly, and by such persons,
that the sanction of the firm may be implied, becomes their legal
name ; and the firm is bound by it, as they are not by any name
that is not strictly their own, unless it be so sanctioned, (z) If
the firm have adopted, as its proper name and style, John Smith
<fe Thomas Brown, neither Smith & Brown, nor John Smith &
(gg) Crawford v. Collins, 45 Barb, and engagements for the firm b_y a name
269. shorter than that provided for in the
(A) .Marshall v. Colman, 2 Jac. & W. articles, and praying for an injunction to
268. In this case, Lord Eldon said : " I restrain them from so doing, the Lord
have no difficulty in saying, that where Chancellor, though he refused the motion,
the members of a partnership contract said : " These gentlemen will do well
by covenant that the firm shall be A., B., (if they mean to protect themselves from
C, & D., that it is a breach of that the interference of this court) to use all
covenant for A. to sign those in.struments the names in the concern : they must do
to which the covenant refers in the name that, or the court will be under the
of A. & Co. ; but it is no less a breach of necessity of awarding an injunction, or
that covenant for D. to sign his own dissolving the partnership." We have
name, adding ' for self and partners,' already had occasion to consider at large
because by these words it can no more the name which a firm may adopt, and by
be known who are his partners than by which one partner may bind it. Tlie right
the word 'Co.' " And the plaintiff's bill of a surviving partner to use the name of
complaining that certain of his partners the old firm will be treated of hereafter,
(defendants) had entered into contracts (j) See ante, § 97.
1 See a7ite, § 99.
228 THE LAW OF PARTNERSHIP, [CH. VII.
Co., nor John Smith for self and partner, bind the firm, nor
create a partnership debt which is to be paid from j)artnership
assets, unless the peculiar circumstances of the case, in some
way, make that another name of the firm. For a firm may liave
two names. It is not very uncommon for a partnership to use
one name in one place and another name in another ; or one name
in one branch of business, or one class of transactions, as in buying
or selling, or conveying, and another in a different class, as for
accepting, signing, or indorsing negotiable paper, (y) But it
would be a lax and dangerous pi-actice to use two or more ways
of naming the firm, indiscriminately, in all business. In New
York, the use of fictitious names is prohibited by statute ; and
the designation " & Company," or " & Co.," must represent an
actual partner or partners, other than those whose names are
stated, (/r) ^
AVhere the partnership name is not agreed upon in articles,
and is written, that which is used in keeping books and accounts,
upon bills of parcels, or on negotiable paper, especially if it is
generally known, becomes the partnership name. {I)
(j) Williamson v. Johnson, 1 B. & C. (/) T^e Roy v. Johnson, 2 Pet. 176 ;
146 ; ante, § 97. ante, § 97.
(k) 3 Rev. Stat. N. Y. (ed. 1859) 978 ;
Acts of 1833, ch. 281, §§ 1, 2.
1 Erie, J. has said that the statute seems not to have been a very useful one. Gay
V. Seibold, 97 N. Y. 472, 476. Since this is the feeling of the court, it is natural that
the statute should have been strictly interpreted. Thus it has been said not to invali-
date a transaction unless the false name was used in that transaction. Gay v. Seibold,
97 N. Y. 472. And it is no defence to a carrier for the loss of property marked with
the fictitious firm name. Wood v. Erie Ry., 72 N. Y. 196. Where a husband and
wife claimed in good faith to be partners, and the " & Co." represented the wife, it was
held to be a violation neither of the letter nor of the spirit of the statute. Zimmer-
man V. Erhard, 83 N. Y. 74.
The California code (§ 2468) requires persons doing business under fictitious names
to file and publish a certificate showing the names and residences of all members of the
firm, and provides that until this is done the partnership shall not maintain any action
upon contracts made or transactions had in the partnership name. It has been held
that an assignment of such a claim is not void, and the assignee may sue on it though
the rerpiired certificate has not been filed. Cheney v. Newberry, 67 Cal. 126, 7 Pac.
445 ; Wing Ho «. Baldwin, 70 Cal. 194, 11 Pac. 565. Where the firm name shows
only the surname of the partners it is not a fictitious name. Pendleton v. Cline, 85
Cal. 142, 24 Pac. 659 ; Carlock v. Cagnacci, 88 Cal. 600, 26 Pac. 597.
§ 177.] RIGHTS AND DUTIES OF PARTNERS. 229
SECTION YII.
OF THE RIGHTS OF PKOPEKTV OF THE PARTNERS INTER SE.
§ 177. What constitutes Partnership Property. — It may be well
to determine, in the first {)l;ice, what is partnership projjerty. In
general, by this phrase is understood whatever belongs to the
partnership. This may l)e real property ; but the law of partner-
ship, in respect to real [)roperty, is so much affected by the differ-
ence, both at common and statute law, between that property and
personal property, and the system of rules, springing in part from
their conflict and in part from their combination, is so peculiar,
that it is thouglit best to consider the whole subject of the real
property of partners in a separate chapter.
The personal property of a partnership consists mainly of the
goods and merchandise Avhich it buys and sells, or makes and
sells. The question may arise, at what time property becomes
partnership property. If it be sold to a partner in the firm, act-
ing for the firm, it is, of course, partnership property as soon as
the sale is complete ; for by the sale it passes from the seller to
the buyer, and there is no other buyer than the firm. But if
goods are sold and delivered to one partner, without any knowl-
edge on the part of the seller that he buys for the firm, and
without any act of his indicating that- he so buys, and the firm
becomes insolvent before the goods are actually mingled with the
partnership goods, the question may arise, whether the partner-
ship creditors, or the several creditors of that partner, take the
goods. This question must be answered by ascertaining from all
the circumstances, to whom the sale was actually made ; for if
the partner bought, in fact, as agent, although his agency was
unknown, and even if it were, and continued to be, purposely
concealed, this circumstance should not affect the rights of the
creditors of either class, (m) Nor can any presumption of law
that the goods were bought for the firm arise ; although if the
(m) Saville v. Eobertson, 4 T. R. 720 ; answer to the qnestiou whether, at the
Post V. Kiniberly, 9 Johns. 470 ; Gouth- time of their purchase, the partnership
waite V. Duckworth, 12 East, 421 ; Everitt was actually in being, and capable of
V. Chapman, 6 Conn. 347. In these cases owning property, or whether it was only
and other analogous ones, the question agreed upon, and dependent for its actual
when goods purchased by one partner existence upon the happening of some
become the property of the partnership, future event,
depends, in great measure, upon the
230 THE LAW OF PARTNERSHIP. [CH. VII.
goods were such as the firm dealt with, and such as that partner
bought at otlicr times for the firm, here would be good ground for
argument that he so bought these goods. Still, as he might law-
fully have bought them for himself, the burden of proof must be
upon the creditors — whether of the lirni or of a partner — who,
in order to obtain the goods for their own benefit, must maintain
an affirmative in respect to the title ; and this may depend upon
the form of the action, and the parties between whom it arises.
Such questions are not very unfrequent in practice, but have not
often passed into adjudication ; the reason being, that they are
questions of fact rather than of law.
Xot only all the goods and merchandise properly so called, but
all chattels bought by the partnership, or otherwise coming to
them, as their furniture, books, &c.,are partnership property ; and
so also all bills of exchange and notes, or other evidence of
debts, and all debts or accounts or balances, or other claims ; and
all shares in companies, or scrip, bought with partnership funds,
or otherwise assigned to the partnership, and not transferred to
the individual partners and charged in their accounts, would be
regarded as partnership property.
It may be well to remark, that a gift or devise of property to a
part of the partners in a firm, even if it be on account of a loss
sustained by the firm, or be otherwise a consequence of the part-
nei'ship connection, does not make the property given or devised
partnership property, or give any right to it or interest in it to
the other partners, (n) ^
{n) 2 Swanst. 571, 572. And where partnership property, and that the creditors
two American citizens residing at Balti- of the partnership had no claim on them, as
more, and a French subject residing at St. against the separate creditors of the Ameri-
Domingo, were in ])artnerslHp and owners cans. Campbell w. Mullett, 2 Swanst. 551.
of certain ships captured by British cruis- But it seems that, if in a similar case of the
ers, and the commissioners, appointed seizure of partnership effects, instead of
under the 7th article of the treaty of compensation made to one partner, his
commerce of 1794, between Great Britain proportion of the joint property be restored
and America, for awarding compensation to to him, m specie, the goods so restored
American subjects who had suffered losses will be held never to have lost their
by capture for which they could obtain no character of partnership property, and will
redress in the ordinary tribunals, awarded, therefore be divisible among the several
in compensation of the ships of the ])art- partners according to their respective
nership captured, certain sums to the two interests. Thompson v. Ryan, 2 Swanst.
Americans, with express exclusion of the 555. S;'e Rowley v. Adams, 8 Jur. 994,
French citizen as an alien enemy, — it was 1000 ; Clarke v. Richards, 1 Younge & C.
held that the sums so awarded were not 351, 383. In this last case, it was held,
1 Where a firm transfers all its assets to a corporation, and each partner receives
stock of the corporation in patj'ment, the stock is the individual property of the part-
ners. Singer v. Carpenter, 125 111 117, 17 N. E. 761.
§ 178.] RIGHTS AND DUTIES OF PARTNERS. 231
§ 178. Title to Partnership Chattels. — [The personal property
belonging to a partnership is not owned by the individual part-
ners, but by the firm. Consequently title maybe conveyed to the
firm in the firm name, as by a bill of sale or chattel mortgage. ^
Consequently a jjartner has no interest in any specific property ,2
and if he attempts to transfer his interest in specific property,
no such interest passes.^ A partner has, however, an interest in
tlie firm assets as a whole, which he may sell, mortgage, or
pledge,^ even when the partnership is being wound up, and the
assets are in the hands of a receiver.^
The interest of a partner which he transfers by such a convey-
ance is his distributive share of the assets after the partnership
accounts are settled and tlic debts paid.^ And when the partnership
is insolvent the purchaser of a partner's interest gets nothing.''
If one partner without authority attempts to mortgage or sell
the partnership assets, under such circumstances that title does
not pass, the whole interest of the partner passes.^ By agree-
ment between the partners the assets may be divided and become
individual proi)erty of the partners ; ^ but a single partner cannot
demand a part of the assets,^'' nor should they be shared, pending
a final settlement, till all the accounts are adjusted." ^^J
that where a personal office or employ- is not necessarily a trustee of the profits of
ment is purchased with the partnership the office for the other partners, after the
funds for the benefit of the pai-tnership, term of the partnership had expired,
the partner in whose name it is purchased
1 Kellogg V. Olson, 34 Minn. 103, 21 N. W. 36-4. And a partner who has conveyed
to the firm ceases to own the property. Ringo v. Wing, 49 Ark. 457, 5 S. W.787.
2 Tait V. Murphy, 80 Ala. 440, 2 So. 317; State ;;. Bowden, 18 Fla. 17; Deeter
V. Sellers, 102 Ind. 458, 1 N. E. 854. Since taxes are assessed upon the property
which belongs to the firms, they are to be paid out of the assets of the firm, not by
the partners in proportion to their respective interests, or to their respective balances
on the firm books. Meguiar v. Helms, (Ky.) 14 S W. 949.
3 Xichol V. Stewart, 36 Ark. 612.
* Collins's Appeal, 107 Pa. 590.
* Schurtz V. Romer, 82 Cal. 474, 23 Pac. 118.
6 Bank v. Carrollton R. R., 11 Wall. 624; Nichol v. Stewart, 36 Ark. 612;
Deeter v. Sellers, 102 Ind. 458, 1 N. E. 854; Bowman v. Spalding, (Ky.) 2 S. W.
911 ; Sherwood v. Creditors, 42 La. Ann. 103, 7 So. 79 ; Still v. Focke, 66 Tex. 715 ;
2 S. W. 59. See Buck Stove Co. v. Johnson, 7' Lea, 282.
7 Mayer v. Garber, 53 la. 689, 6 N. W. 63.
8 Slieehy v. Gi-aves, 58 Cal. 449 ; Carrie v. Cloverdale Banking & Commercial Co.,
90 Cal. 84, 27 Pac. 58 ; Burbank v. Wiley, 79 N. C. 501.
9 McKinney v. Pjaker, 9 Ore. 74 ; Weaver v. Ashcroft, 50 Tex. 427. Or the
property of one partner. Stanton v. Westover, 101 N. Y. 265, 4 N". E. 529 ; Miller
V. Estill, 5 Oh, St, 509, See Singer v. Carpenter, 125 III. 117, 17 N. E. 761;
post, § 252.
1'' See Kuhn v. Newman, 49 la. 424.
" Hall V. Clagett, 48 Md. 223.
232
THE LAW OF PARTNERSHIP.
[CH. VII.
§ 179. Proportional Interests of Partners. — Partners may agree
to own the stock, as they may to share the prolits, in any propor-
tions that they please. And, if they make no agreement, there is
a presumption of law in favor of an equality of interest in the case
of the property, as there is of the profits. The authorities cited
in the note will show that this presumption, though very general,
is not quite universal ; (o) and it may be rebutted, both in relation
(o) Fan- V. Johnson, 25 111. 522. The
existence of this presiiniption has not,
however, been uniformly admitted in the
English law. See Peacock v. Peacock, 2
Camp. -15, and the opinion of Lords Broug-
ham and Wynford, in Thomjison v. AVil-
liamson, 7 Bligh, N. s. 432, 5 Wils. &
Sh. 16. This case was heard on appeal
to the House of Lords from the Scottish
Court of Ses-sion, and was decided mainly
with reference to the law of Scotland.
But the Lords, whose opinions are re-
ported, took occasion to examine the law
of England on the point, and, mainly
upon the authority of Peacock v. Peacock,
came to the conclusion that it was not
at variance with what they adjudged to
be the law of Scotland. Their opinion
was, that where parties are in partnership
without agreement, it is not a necessary
jiresuniption of law that the profits are to
be divided in equal shares. Lord Wyn-
ford said: " If I was to direct a jury, or
was sitting in a situation to exercise an
opinion both upon the law and the fact,
I should say, if there be no evidence to
guide my judgment, I will divide it
equally ; but I will not be content with
merely written evidence, I will look at
the circumstances, and I will infer as
strongly from the circumstances the in-
tentions of the parties as from the written
evidence." And Lord Brougham : " If I
was trying at iiisi priiis the question what
proportion the partners in a concern were
severally entitled to, I should be disposed
to advise the jury, leaving the matter to
them, that an equal division would be a
convenient doctrine of fact, and form the
ground for a convenient inference to be
drawn, in the absence of other evidence :
but that would only be supposing that
there was no other evidence in the cause ;
if there was an}' .other evidence that could
be found to alter the proportions, that
evidence must furnish the rule, and that
would be au additional ground for saying,
that it must be a presumption of fact
and not of law." And even where there
was no evidence. Lord Brougham stated,
as the ojiinion of Lord Wynford, of
one of the Chief Justices, and of him-
self, that a jury should in all cases be
directed to take into consideration " the
fairness of an eipial division ; but not
discountenancing evidence, rather court-
ing evidence, rather regretting that there
was no evidence, and only having recourse
to that presumption in the last resort, for
want of evidence." See also the opinion
of the Master of the EoUs, in Lake v.
Gibson, 1 Eq. Cas. Abr. 291 ; Sharpe v.
Cummins, 2 Dow. & L. 504. These are
the principal, if not the only, common-
law authorities, which are clearly at vari-
ance with the doctrine of the text : Mr.
Justice Story, indeed, says (Story on
Part. § 24 n. (3) ) : "It is true, that,
in the case of Thompson v. Williamson,
a doubt was thrown upon this doctrine
(the presumed equality of the shares of
partners), as a doctrine of the coTiimon
law, by Lord Wynford and Lord Broug-
ham ; but I cannot think that it is suc-
cessfully maintained by the reasoning
contained in their opinions. Each of
these learned judges admitted on that
occasion, that, if there is nothing to guide
the judgment of the court to give unequal
shares, there is no rule for them to go by,
but to give in equal shares. What is
this but affirming, that, in the absence
of all controlling circumstances leading to
a different conclusion, the presumption of
law is, that the partners are to take in
equal shares ? " We conceive, however,
that a consideration of the entire opin-
ions of the two Lords in that case shows
that, in their view, the question what
proportions the partners in a concern are
severally entitled to, is never, in the
absence of special agreement, any thing
§ 179.]
RIGHTS AND DUTIES OF PARTNERS.
233
to the property and to the profits ; and, as we should say, more
easily in respect to the property than as to the profits, (j?) For
if A., 1)., & C. combine their property in very different propor-
tions, it is still very possible, and indeed very frequent, in fact,
that he who brings less capital brings more skill or more labor,
and that the profits are therefore equalized. But while the pro-
fits resulting from this mingling of mouey and labor and skill are
equal, so far as refers to the stock alone, we should say that the
law would listen favorably to all evidence and all circumstances
which tended to preserve the same proportions of interest in the
but a question of fact to be passed upon by
the jury. They both admit that there may
be instances in which the inference may
be made that the partners in a concern
have e(pial shares. But, if we unth'r-
stand their views, this inference is not
to be made by the court, but can onlj' be
drawn by the jury. That is, the pre-
sumption of equality of shares among
partners is not a presumption of law, but
a presumption of fact. And the question
must always be submitted to the jury.
And it is obvious, from the whole ten-
dency and scope of tiie opinions of the
two Lords, that unless the question of
the distribution of interest were presented
in this simple form, " Given that A. &
B. are partners ; what are their shares?"
they did not contemplate that the pre-
sumption of ecjual shares among partners,
which they allowed to exist, could have
any operation. " It is scarcely possible,"
says Lord Wynford, " for a case to occur
in wdiich there will not be circumstances
which it is fit to submit to the considera-
tion of a jury, and which would induce a
jury to give in unequal siiares."
(p) The presumption of equality of
interest may be rebutted, not only by
proof of an express agreement between
the parties to share unequally, but b}"^
evidence of any modes of dealing, or of
any transactions, from which such a con-
tract can be implied. In Stewart v.
Forbes, 1 McX. & G. 137, 146; the
Lord Chancellor said : " The plaintiff's
bill rests upon the supposition that, from
1830 to 1840, Sir Charles Forbes and the
plaintiff were equal partners ; and Pea-
cock V. Peacock, 2 Camp. 45, 16 Ves. 55,
56, was relied on as a foundation for that
assumption. In that case, it was prop-
erly held, that, in .the absence of any
contract between the parties, or any deal-
ing from whicli a contract might be
inferred, it would be assumed that tlie
parties had carried on their business on
terms of an equal partnership. That case
has no application to the present, because
there is, in this case, conclusive evidence,
not from any form of contract, but from
the books of the business and the deal-
ings between the parties, that such were
not the terms on which the parties carried
on their business. An equal partnership
implies not only an equal participation de
facto in profits and loss, but a right in
each partner to claim and insist on such
])articipation. This is what the law has
im[ilied in the absence of all evidence of
a contrary intention of the parties. But
what would have been the decision in
Peacock v. Peacock, if the books and
accounts, instead of absolute silence as to
tlie shares of the partners in each year,
had described the shares to which the
partners were entitled in the business,
and had attributed to the plaintiff four-
sixteenths only of the shares of the busi-
ness ? These entries are as conclusive of
the rights of the parties as if they had
been found prescribed in a regular con-
tract." See Webster v. Bray, 7 Hare,
159. It is not to be assumed, however,
tliat the annual stock taken by a partner-
ship necessarily represents the interests
of the several partners in the firm ; but
it may or may not do so, according to the
purpose for which, and the mode in
which, it is made up. Travis v. Milne,
9 Hare, 153.
234
THE LAW OF PARTNERSHIP.
[CH. VII,
capital stock which originally existed. Practically, this question
cannot often arise. If the hrni be insolvent, its stock is all gone,
and all questions of ownership disappear when there is nothing to
own. Such (juestions, in practice, come only at dissolution, by
death or otherwise ; or when some withdrawal or diminution of
stock is i)roposed. Then they will generally be determined by
the articles ; for they are seldom omitted when there is great ine-
quality in the contributions to be made by the different partners.
If not so determined, it might be that law or equity would pre-
sume that the same proportions of ownership and interest continue
which originally existed ; and, certainly, comparatively slight evi-
dence would suffice to establish this. Whether, in the absence of
special agreement upon the point, any presumption exists, and
what it is, and whether of law or of fact, and what are its
grounds, and what its strength, must depend, not on the law of
partnership alone, but on that law in connection with the princi-
ples of evidence. But notwithstanding some conflict, as indicated
in the cases cited in the previous note, we are of opinion that the
prevailing rule of law that partners are interested in stock and
profits in equal proportions, in the absence of any evidence to the
contrary, may be considered as pretty well settled both in Eng-
land and this country, (g)
iq) Thompson v. Williamson, cited in
preceding note, although the cUda re-
specting the English law, which it con-
tains, are entitled to great respect, as the
opinions of eminent judges, is yet ex-
pressly said by Lord Brougham to be
decided as a question of Scottish law.
And even as an adjudication under the
law of Scotland, which is founded upon
the civil law, it has been thought open to
question. See Story on Part. § 24, and
note. Of Peacock v. Peacock, which
stands alone among the common-law au-
thorities, Lord Eldon, who had directed
the issue, said : "The result of the issue
that was directed appears to be extraor-
dinary. Tlie proposition being that the
son was interested in some share, not
exceeding a moiety, the jury in some way,
upon the footing of a quantum meruit,
held him entitled to a quarter. I have
no conception how that principle can be
applied to a partnership." Stewart v.
Forbes, 1 McN. & G. 137; Webster v.
Bray, 7 Hare, 159 ; M'Gregor v. Bain-
brigge, 7 Hare, 164 n. In this country,
it never seems to have been controverted,
that in the absence of any contract upon
the subject, the partners were interested
in equal proportions, however diti'erent or
unequal their contributions to the joint
concern. Gould v. Gould, 6 Wend. 263 ;
Taylor v. Taylor, 2 Murph. 70 ; Conwell
V. Sandidge, 5 Dana, 210, 211 ; Lee v.
Lashbrooke, 8 Dana, 214; Jones v. Jones,
1 Ired. Eq. 332 ; Honore v. Colmesnil, 1
J. J. Marsh. 506 ; Turnipseed v. Good-
win, 9 Ala. 372 ; Donelson v. Posey, 13
Ako 752, 772 ; Stein v. Roliertson, 30
Ala. 286, 292 ; Roach v. Perry, 16 III.
37. So, if a shipment is made to part-
ners, they are held by the Prize Court to
take in equal moieties, unless upon the
original papers a different proportion ap-
pears. The San Jose Indiano, 2 Gall.
268, 303.
It is to be observed that, in the above
cases, no distinction is taken between the
property and the profits of a firm, aj
regards the application of the presump-
tion of an equality of interest between
the partners. In Farrar v, Beswick, 1
§ 180.] RIGHTS AND DUTIES OF PARTNERS. 235
§ 180. Insurance of Partnership Property. — [The personal prop-
erty of a partnership may be insured and the jjoUcy taken out in
the firm name. When the property of a firm is insured under a
poHcy whieh forbids assignment of the property insured, it often
becomes a question whether certain deaHngs by a partner with
his interest will avoid the policy. Since the partnership is the
real owner, and one partner cannot transfer any interest in tbe
property, but only his right to an account, it would seem that a
sale of his interest in the partnership should not be held to be an
assignment of property ; and therefore that tlie policy should not
become void under a clause forbidding assignment of the property
insured, by sale or otherwise.
In accordance with this view the better oj)inion is that where a
partner conveys his interest to a copartner the policy is not
avoided under such a clause.^ The same reasoning would seem to
apply to a conveyance of his interest by a partner to a third
person. The partnership alone can transfer a chattel ; the part-
ner transfers only his right to an account. There is some authority
for such a rule ; ^ but the prevailing view would seem to be that
the policy is avoided by such a transfer.^
Under such a clause if a sole owner insures property, and then
forms a partnership with a stranger, putting in the property as
capital, it has been held that the policy is not avoided, but the
assured may recover to the extent of the interest remaining in him.*
Where on the other hand it is provided that if the title of the
Moody & K. 527, the presumption that also, in Gould v. Gould, 6 Wend. 263 ;
the several partners were equally inter- Donelson v. Posey, 13 Ala. 772. See
ested, was applied as to the stock only ; so Penny v. Black, 9 Bosw. 310.
1 Drennen v. London Assurance Corp., 20 F. R. 657 ; Dermani v. Home Ins. Co.,
26 La. Ann. 69 ; Powers v. Guardian Ins. Co., 136 Mass. 108 ; Pierce v. Nashua Ins.
Co., 50 N. H. 297 ; Combs v. Shrewsbury Ins. Co., 34 N. J. Eq. 403 (scmbh) ;
Hotfman v. Aetna Ins. Co., 32 N. Y. 405 (overruling Bodle, v. Chenango Co. Ins. Co.,
2 N. Y. 53) ; West v. Citizens' Ins. Co., 27 Oh. St. 1. (So even of a release by one
tenant in common to the other. Lockwood v. Middlesex Assurance Co., 47 Conn.
553.) Contra, Finley v. Lycoming Ins. Co., 30 Pa. 311 ; Wood v. Rutland & Addison
Ins. Co., 31 Vt. 552 (semble) ; Keeler v. Niagara Ins. Co., 16 Wis. 523 (sembh). In
Hobbs V. Memphis Ins. Co., 1 Sneed, 444, the assignee partner was allowed to recover
only for his original interest.
2 West V. Citizens' Ins. Co., 27 Oh. St. 1 (semble). See Powers v. Guardian Ins.
Co., 136 Mass. 108.
8 Drennen v. London Assurance Corp., 20 F. R. 657 (semble) ; Shuggart v.
Lycoming Ins. Co. , 55 Cal. 408.
* Seanlon v. Union Ins. Co., 4 Biss. 511 ; Cowan v. Iowa State Ins. Co., 40 la.
651 ; Manley v. Ins. Co. of North America, 1 Lans. 20. But query. See McEwan
V. Western Ins. Co., 1 Mich. N. P. 118, where, however, the policy forbade a change
of title.
236 THE LAW OF PARTNERSHIP. [CH. VII.
insured property is transferred or changed the policy shall be void,
it seems to be pretty generally agreed that the transfer of a part-
ner's interest in the property changes the title, and avoids the
policy.^
Since the policy is in the nature of a specialty, only the parties
to it can sue ; and therefore though one partner has assigned his
interest, he must join in the action as a party plaintiff.^
Where the policy was to be void if the party assured was not
sole and unconditional owner of the goods for his own use, it was
held that a surviving partner could not recover on a policy taken
out by him, since he held in trust.^]
§ 181. Good-Will. — There is yet another thing which is cer-
tainly, in some respects, partnership property, but which it is not
so easy to define ; and this is the good-will of the firm.* A dis-
1 Dix V. Mercantile Ins. Co., 22 111. 272 ; Hartford Ins. Co v. Ross, 23 Iiid. 179;
Hathaway v. State Ins. Co., 64 la. 229, 20 N. W. 164. So of course on a dissolu-
tion and division of the assets, Dreher v. Aetna Ins. Co., 18 Mo. 128 ; upon
partition between co-tenants, Barnes v. Union Ins. Co., 51 Me. 110 ; and upon
conveyance of an undivided interest in individual property. Western Massacluisetts
Ins. Co. V. Riker, 10 Mich. 279. But there is no cliange of title upon the ajipoint-
meut of a receiver of the partnership assets, for title remains in the pai'tners. Keeney
v. Home Ins. Co., 71 N. Y. 396 ; and there is at lea.st one decision to the effect that
a sale of his interest by one partner to another is not such change of title as will
avoid a policy. Burnett v, Eufaula Ins. Co., 46 Ala. 11. Query whether the
decision may not be supported.
2 Fireman's Ins. Co. v. Floss, 67 Md. 403, 10 Ath 139; Tate v. Citizens' Ins. Co.,
13 Gray, 79.
3 Crescent Insurance Co. v. Camp, 64 Tex. 521.
* Good-will : — Good-will is defined by Lindley as " the benefit arising from connec-
tion and reputation ;" and its value to be "what can be got for the chance of being
able to keep that connection and improve it." 1 Lind. Part. * 439. Whatever the
terms by wliich we define it, it seems that so far as it has a transferable value, it con-
sists in the additional value which a business possesses wken it can be sohl as " a going
concern." In order to preserve the good-will, the business must be kept in the condi-
tion so described. AVedderburn v. Wedderburn, 22 Beav. 84. Good-will is more than
the mere habituation of customers to a certain locality (which seems to have been the
idea of Lord Eldon, Cruttwell v. Lye, 17 Ves. 335). If business premises are burned,
for instance, the fire cannot destroy the good-will. The good-will inheres in the busi-
ness, not in the locality ; and though the plaoe of business is removed, the good-will
contiuues. Cliurton v. Douglas, Johns. 174. But see Musselman's Appeal, 62 Pa. 81.
The good-will of an inn is however local. Chittenden v. Witbeck, 50 Mich. 401, 15
N. W. 526 ; Elliot's Appeal, 60 Pa. 161. It is sometimes said that there is good-will
in a professional practice, as for instance, that of a jihysician. See Warfield v. Booth,
33 Md. 63. It is doubtful, however, if this is projjcrly called good-will. A sale of such
an interest by one physician to another is nothing more than the agreement of the sell-
ing party to retire from practice and to recomtnend his patients to his successor. Hoyt
V. Holly, 39 Conn. 326. See D wight v. Hamilton, 113 Mass. 175.
The good-will of an established business is now clearly recognized as property ; so
much so. that'a wrongful injury to a man's business, though no other injury is suffered,
constitutes an actionable tort. Riding v. Smith, 1 Ex. D. 91 ; Temperton v. Russell,
§ 181.] RIGHTS AND DUTIES OF PARTNERS. 237
tinctiuii has been taken, in this respect, between the interest of
a })artnershi}j resting on the contracts of the firm with a third
37 Sol. Jour. 423. An assigmnent of an interest in the good-will of a business is a
conveyance of property, and must be stamped as such. Potter v. Connuissiouer,
10 Ex. 147.
Since the good-will of a business is property, the good-will of a business conducted
by a partnership is eviilently firm profjerty, and cannot be used by one member of the
firm as his individual property. So long as the firm business continues, it is like any
of the assets of the firm ; it may be transferred by the combined action of all the part-
ners. Cruess t-. Fesshsr, 39 Cal. 33(5 ; Herfort v. Cramer, 7 Col. 483 ; Wallingford v.
Burr, 17 Neb. 137. It cannot, of course, be transferred by an individual partner.
Thus, a devise by one partner of his interest in the good-will, apart from any interest
in tlie business, is void, llobertson v. (juiddington, 28 Beav. 529. Being incorporeal,
it cannot be seized on execution and sold by a sherilf. Helmore v. Smith, 35 Ch. D.
436 (C. A.). It exists entirely apart from the stock in trade, and does not necessarily
pass with a sale of the stock. Ravvson i;. Pratt, 91 lud. 9. But see McFarland v.
Stewart, 2 Watts, 111.
A sale of all interest in a business, or in all the assets of a business, transfers the
g'ood-will. Hoxie v. Chaney, 143 Mass. 592, 10 N. E. 713 ; Merry v. Hoopes, 111
N. Y. 415, 18 N. E. 714.
Upon dissolution it is evident that some immediate disposition must be made of the
good-will, or else, the business transactions having entirel}' ceased, the good-will is lost.
If the dissolution is from any cause but death, either partner has a right to secure a
sale of the good-will for the benefit of the partnership. Bradbury v. Dickens, 27 Beav.
53 ; Pawsey v. Armstrong, 18 Ch. D. 698 ; Sheppard v. Boggs, 9 Neb. 257, 2 N. W.
370 ; Bininger ;;. Clark, 60 Barb. 113 ; Dayton v. Wilkes, 17 How. Pr. 510. It would
seem to be within the power of the court to appoint a receiver, in order that the
business may be kept up and sold as a "going concern." Turner v. Major, 3 Giff. 442 ;
Taylor v. Neate, 39 Ch. D. 538 ; Levi v. Karrick, 8 la.' 150 ; Marten v. Van Schaick,
4 Paige, 479.
In case of death, the good-will does not survive beneficially to the surviving part-
ner ; and if the survivor continues the business without a break, he will be obliged to
account for the value of the good-will. Wedderburn v. Wedderburn, 22 Beav. 84, 104 ;
Smith V. Everett, 27 Beav. 446 ; Mellersh v. Keen. 28 Beav. 453 ; Dougherty v. Van
Nostrand, 1 Hoff. Ch. 68 ; Ranmielsberg v. Mitchell, 29 Ohio St. 22.
The value of the good-will in such cases is very materially affected by the circum-
stances about to be stated. Hall v. Barrows, 33 L. J. Ch. 204, and cases supra.
Where the good-will of a business is sold, it would seem that the sellers should be
allowed to do nothing to detract from the value of the good-will. Unless the purchaser
can prevent the members of the selling firm from entering into business again in the
neighborhood, much of the value of the good- will is lost. Yet it is held that any mem-
ber of the selling firm may enter upon the same business, in the same neighborhood.
Cruttwell V. Lye, 17 Ves. 335 ; Shackle v. Baker, 14 Ves. 468 ; Harrison v. Gardner,
2 Madd. 198 ; Kennedy v. Lee, 3 Mer. 441 ; Porter i'. Gorman, 65 Ga. 11 ; Bergamini
V. Bastian, 35 La. Ann. 60 (sale by sole trader) ; Hoxie v. Chaney, 143 Mass. 592, 10
N. E. 713. He may even solidt the customers of the old firm. Pearson v. Pearson, 27
Ch. D. 145 (C. A.) ; Vernon i;. Hallam, 34 Ch. D. 748 (overruling Labouchere v. Dawson,
L. R. 13 Eq. 322 ; Ginesi v. Cooper, 14 Ch. D. 596 ; Leggott v. Barrett, 15 Ch. D.
306). And may advertise his connection with the business. Hookham v. Pottage, L. R.
8 Ch. 91 ; Labouchere v. Dawson, L. R. 13 Eq. 322. See post, § 347, note (x). So
where a retiring partner sells the business, including the good-will, to the continuing
partners, the former may enter again into the same business, in an adjoining shop, and
solicit the old customers. Churton v. Douglas, Johns. 174 ; Cottrell v. Manufacturing
Co., 54 Conn. 122, 6 Atl. 791 ; Williams v. Farrand, 88 Mich. 473, 50 N. AV. 446 ;
238 THE LAW OP PARTNERSHIP. [CH. VII.
party, and tlmt which has no such foundation, (r) We have
much doubt, however, whether this distinction rests on good
(r) Lord Eldon has thus stated and ex- In tliat sense, therefore, the good-will of
plained this distinction : " Where two a trade follows from and is connected
persons are jointly interested in trade, and with the fact of sole ownership. There is
one, by purchase, becomes sole owner of another way in which the good- will of a
the partnership property, the very circum- trade maybe rendered still more valuable :
stance of sole ownership gives him an ad- as by certain stipulations entered into be-
vantage beyond the actual value of the tween the parties at the time of the one
property, and which may be pointed out relinquishing his share in the business ;
as a distinct benefit essentially connected as by inserting a condition that the with-
with the sole ownership. In the case of drawing partner shall not carry on the
the trade of a nursery-man, for instance, same trade any longer, or that he shall not
the mere knowledge of the fact that he is carry it on within a certain distance of the
sole owner of the projjcrty, and in the sole place where the partnership trade was
and exclusive management of the concern, carried on, and where the continuing part-
gives him an advantage which the other ner is to carry it on upon his own sole and
partner, supposing him to carry on the separate account." Kennedy v. Lee, 3
same trade, with other property not the Mer. 452.
partnership property, would not possess.
Dayton v. Wilkes, 17 How. Pr. 510. But the selling partner or partners thus re-enter-
ing into business must not do so in such a way as to seem to be carrying on the old
business • as by advertising that he has removed from tlie old place to the new. Hall's
Appeal, 60 Pa. 458. This when done is usually done by using the old firm name or a
similar one ; which is accordingly forbidden. Myers v. Buggy Co., 54 Mich. 215, 19
N. W. 961 ; Williams v. Farrand, 88 Mich. 473, 50 N. W. 446.
In accordance with this general rule, a surviving partner may do business without
rendering himself liable to tlie estate of the deceased, provided he does not engage in
business in such a way as to continue the old business, thereby gaining an advantage.
Davies v. Hodgson, 25 Beav. 177 ; Smith v. Everett, 27 Beav. 446 ; Mellersh v. Keen,
28 Beav. 453 ; Rammelsberg v. Mitcliell, 29 Ohio St. 22. The same is true of a liqui-
dating partner. Musselman's Appeal, 62 Pa. 81. Or of either partner, upon dissolu-
tion without agreement as to a continuance of the business. Caswell v. Hazard, 121
N. Y. 484, 24 N. E. 707.
In Williams v. Farrand, 88 Mich. 473, 483, 50 N. W. 446, McGrath, J., defends
the established rule as follows. "A retiring partner conveys, in addition to his interest
in the tangible effects, simply the advantages that an established business possesses
over a new enterprise. The old business is an assured success, the new an exj)eriment.
The old business is a going business, and produces its accustomed profits on the day
after the transfer. It is capital already invested, and earning profits. The continuing
partner gets these advantages. The new business must be built up. The capital taken
out of the concern will earn nothing for months, and in all probability the first year's
business will show loss instead of profit. For a time, at least, it is capital awaiting
investment, or invested, but earning nothing. The retiring partner takes these chances
or disadvantages."
In Massachusetts there seemed a tendency, at one time, to hold that a sale of the
good-will of a business carried with it an agreement not to compete in such a way as to
derogate from the value of the thing granted. Thus the court restrained from compet-
ing the seller of the good-will of a medical practice. Dwight v. Hamilton, 113 JIass.
175. And of a milk-route. Munsey v. Butterfield, 133 Mass. 492. It has since been
held, however, that these decisions turned on the exceptional nature of the business
sold. Hoxie v. Chancy, 143 Mass. 592, 596, 10 N. E. 713.
If the sale of a business with its good-will includes an agreement by the seller to
§ 181.] RIGHTS AND DUTIES OF PARTNERS. 239
authority, or good reason. The claims or interests of the
partnership arising iVoni contracts made with them, or on
their vested and exchisive rights, however accjuired, seem to
be excluded from the meaning of " good-will ; " for the only
pro[)er signification of the word must be, that benefit or advan-
tage which rests only on the good-ivill, or kind and friendly
feeling of others, and which, of course, can be wholly lost
without giving rise to any legal right, or ground of complaint.
This simple meaning of " good-will " we take to be the true
technical and legal meaning of the word. Lord Eldon defined
this about as well as it can be defined, when he said, that " the
good-will of a trade is nothing more than the probability that the
old customers will resort to the old place ;" although this defini-
tion is open to the objection that it localizes that interest which
we call good-will, and makes it altogether dej)endent upon place,
and wholly independent of persons, (s) This is, nevertheless, an
exact statement of the legal meaning of good-will. It is a hope
or expectation, which may be reasonable and strong, and may
rest upon a state of things that has grown up through a long
period, and been promoted by large expenditures of money.
And it may be worth all the money it has cost, and a great deal
more ; but it is, after all, nothing more than a hope, grounded
upon a probability.
There is some difficulty, no doubt, in treating this hope as
property ; but if that which is, in fact, a valuable interest, were
not treated as one, injustice would be done, and therefore both
law and equity treat the good-will of a business as a valuable
pecuniary interest, (0 although it differs in important respects
from tangible property, or legal choses in action. Thus, it
cannot be valued as a separate property, or, at least, is not
(s) Criittwell V. Lye, 17 Ves. 335, 346. Ves. 468 ; Harrison v. Gardner, 2 Madd.
This definition, as we have above inti- 198, 219 ; Cruttwell v. Lye, 1 Rose, 123 ;
mated, makes good-will local, and an inci- 16 Am. Jur. 87, 92.
dent of the place ivhere business has been (f) Dougherty v. Van Nostrand, 1
ea.rned on, and not oi the pcrso)is by whom Holf. Ch. 68; Williams v. Wilson, 4
it has been conducted. It is in this sense, Smidf. Ch. 379. As to how far a name
only, that good-will is recognized by the law which the firm have used in their busi-
as a pecuniary interest. Hence the sale of a ness, and have made valuable, may be
trade with the good-will leaves the vendor treated as of the nature of good-will^ see
at liberty to set up the same trade in any post.
other situation. Shackle v. Baker, 14
refrain from competing, or from carrying on business in the neighborhood, this agree-
ment will be enforced by the court. Bassett v. Pereival, 5 All. 345 ; Angier v. Weblier,
14 All. 211 ; Grow v. Seligman, 47 Mich. 607 ; Williams v. Farrand, 88 Mich. 473, 50
N. W. 446. See Vernon v. Hallam, 34 Ch. D. 748.
240 THE LAW OF PARTNERSHIP. [CH. VII.
by the law, although it often is by parties themselves, (?/)
and might be so valued without difficulty in equity, although
it is said that a contract for the sale of a good-will will not be
enforced in equity. (•?;) The executor of a deceased partner can
realize the share of the deceased in the good-will, only wlicn
he can compel a sale of the stock and premises, and then the
good-will goes with them, (iv) For, as a general rule, by the
conveyance of a shop or store, the good-will of the business
carried on in it passes, although nothing is said about the good-
will. (.?■) And if an executor cannot compel a sale of the premises,
or, as it seems, if the premises are not, in fact, sold, the exe-
cutor gets no advantage from the good-will, for that remains
entirely with the surviving partners who carry on the same
business in the same place. And if tlie executor attempts to use
the name of the old firm in such wise as to secure to himself a
portion of the good-will, it is said that he will be restrained by
injunction. (3/) But this can only apply so far as to prevent
fraud on his part. If he continues the same business in another
place, and advertises the fact that he is the executor of a partner,
and carries it on with the same facilities and the same advantage
to customers as was done by the old partnership, there is cer-
tainly no right in the surviving partners, who hav-e paid nothing
for the good-will, to })revent his doing so.
From these and similar difficulties, it has been said by high
authorities that the good-will of a business is not partnership
property, and remains wholly with the surviving partners, (z)
(«) Hairison v. Gardner, 2 Madd. (>) Chissum v. Dewes, 5 Russ. 29.
108. See Kennedy v. Lee, 3 Meiiv. 441, 452.
(y) In Baxter v. Connoly, 1 Jac. & W. (v) Lewis v. Langdon, 7 Sim. 421.
580, Lord Eldon said: "The court cer- See Staats v. Howlett, 4 Denio, 559. A
tainly will not execute a contract for the retired paitner, who sets up in business
sale of a good-will ; at the same time, it on his own account, will not be allowed
will not enjoin against any y)roceeding at so to advertise Lis former connection as to
law under such an agreement. Suppose, lead the public to believe that he is car-
for instance, there is a contract for the rying on the business of the old fii'm.
good-will of a shop ; it cannot be con- Hookham v. Pottage, L. R. 8 Ch. 91.
veyed, and the court would say, (^o and Nor will a partner continuing the busi-
make what you can of it at law ; if you ness be allowed to use the old firm name,
can recover, very well, we won't prevent to the prejudice of the retiring partner.
you ; if you cannot, very well again, we McGowan, &c. Co., v. McGowan, 22 Ohio
won't assist you." Coslake ■;;. Till, 1 St. 370. See also, as to use of firm name
Russ. 376, 378 ; Bozon v. Farlow, 1 Mer. alter dissolution, Benninger v. Clarke, 10
459. See Shackle v. Baker, 14 Ves. 468. Abb. Pr. n. s. 264.
(w) Crawshay v. Collins, 15 Ves. 224, {z) In Hammond v. Douglas, 5 Ves.
227 ; Featherstouhaugh v. Fenwick, 17 539, tlie Lord Chancellor, Loughborough,
Ves. 309, 312; Dougherty r. Van Nos- "was clearly of opinion, that upon a
trand, 1 Hotf. Ch. 70. partnership without articles the good-will
§ 181-]
RIGHTS AND DUTIES OF PARTNERS.
241
Wc cannot but think, however, that an American decision affirm-
ing it to be partnership property, and capable of division, rests on
better reason. (a) And it would always be in the power of equity
to ascertain its value, by evidence offered to a Master; or, at
least, if there can be no agreement, by a sale of the good-will,
and if that be inseparable fj-om the shop or store, then that mio-ht
be sold also, for this, if for no other reason. It has been held, in
another American case, that a receiver of a partnership may be
directed by the court to carry the business on, in order to pre-
serve a valuable good-will, (b)
A distinction has been taken in this respect between the
good-will of a partnership in trade, and that of a profcssioiial
partnership. Lawyers or physicians may become partners ; but
the good-will attached to such a firm must be considered more
as a i)ersonal than as a local thing, (c) It is not a probability
that the old customers will go to the old place, but to the same
persons, wherever they may be. And, if one died, it would be
very hard — as has been said by an English equity judge — to
require the other to give up his business and sell out, in order to
determine the value of the good-will, (d) And probably the
business-office which successful lawyers or physicians had occu-
survives ; and a sale of it cannot be com-
pelled by the representatives of the de-
ceased partner, being the right of the
survivor, which the law gives him to carry
on the trade. It is not partnership stock
of which the executor may compel a
division." See Lewis ('. Laugdon, 7 Sim.
421. Chancellor Kent gives his sanction
to this doctrine ; 3 Kent Comm. [64] ;
and though it was doubted b}' Lord Eldon
in Crawshay v. Collins, 15 Ves. 224, 227,
yet this doubt has been considered over-
ruled by the case of Lewis v. Langdon,
supra.
(a) Dougherty v. Van Nostrand, 1
Hoff. Ch. 68.
{b) JIarten v. Van Shaick, 4 Paige,
479. The court directed the receiver to
carry on the business in this case ; the
very thing which was considered by the
Vice-Chancellor in 7 Sim. 421, to he
beyond the power of equity, and there-
fore to show that the good-will of a busi-
ness could not belong to the firm, but
remained to the survivor. See AVilliams
V. Wilson, 4 Sandf. Ch. 379.
(c) Though, for the reason stated in
the text, there is properly speaking no
good-will belonging to professional part-
nershij)S, yet it is very common for at-
torneys, solicitors, physicians, &c., to
agi-ee, upon selling out, to secure their
customers to those who succeed them.
The policy of sanctioning agreements of
this character has been doubted. But
their validity is not questioned ; though
equity, it seems, will not specifically en-
force them. Candler v. Candler, Jac.
231 ; Whittaker v. Howe, 3 Beav. 389,
393 ; Bozon v. Farlow, 1 Meriv. 459.
(d) Farr v. Pearce, 3 Madd. 78. Here,
Farr & Pearce had been partners in the
business of surgeon, apothecary, &c., un-
der articles. Sir John Leach, V. C, said:
"When such jiartnerships determine, un-
less there be stipulations to the contrary,
each must be at liberty to continue his
own exertions ; and, where the deter-
mination is by the death of one, the
right of the survivor cannot be affected.
Such jiartnerships are very different from
commercial partnerships." Another case
is mentioned by Collyer as having been
decided on the same principle. Spicer v.
James, Rolls, M. T. 1830; Coll3'er ou
Part. § 164.
16
242 THE LAW OF PARTNERSHIP. [cn. VII.
pied would bring but little more for their occupancy. Tliere are
instances which might fall between these in this respect. The
business of an apothecary, in this country, is almost altogether
commercial. In England, it is, in great proportion, the business
of a medical practitioner. Here, therefore, the good-will might
be treated as a commercial one ; there, as a professional one. (e)
§ 182. Trade Name and Trade-Marks. — The question of the
right to use a trade name has come before the courts, and it
would seem that this could not be treated as of the nature of
good-will, or as a valuable interest which the court could recog-
nize and protect, mainly from the want of adequate power in a
court. (/) ^ But of late years new and excellent principles and
(c) See Farr v. Pearce, in preceding And in Holden v. M'Miikin, 1 Pars. Sel.
note. In 16 Am. Jur. 87, the good-will Cas. 270, 282, it is held that a newspaper
of a newspaper establishment is consid- is subject to the same rule as a commer-
ered to stand on the same footing as the cial partnership.
good-will of a professional business. See (/) See Lewis v. Langdon, 7 Sim. 421;
Keene v. Harris, cited in 17 Ves. 338, 342. "Webster v. Webster, 3 Swanst. 490.
1 Firm name. We have already seen (ante, § 97) that it is the right of a partner-
ship to take any name it pleases ; and this name may, in the absence of statute,
include the names of persons not partners, and of none who are partners. This is
sometimes forbidden by statute (ante, § 176). The right of a firm to include in its
firm name the name of a person not a member is however subject to exceptions. Thus
it is provided by statute in Massachusetts (Pub. Stats, ch. 76, § 6) that no one can
use the name of another in business without the written consent of the person named
or his representative. Whether the name used is that of any particular bearer of the
name is a question of fact, to be proved by the person objecting. Hallett v. Cum-
ston, 110 Mass. 29. When consent is thus given to a ])erson, who aftervvaids takes a
partner, the latter cannot continue the use of the name after the death of him to whom
the consent was given. Lodge v. Weld, 139 Mass. 499, 2 N. E. 95. Even in the absence
of statute, the use of the name of a retiring partner in a firm name, in such a way as
to subject the retiring partner to liability or to the possibility of being sued, may be
restrained by him. Scott v. Rowland, 26 L. T. Rep. 391 ; Gray v. Smith, 43 Ch. D.
208 (C. A.); Peterson v. Humphrey, 4 Abb. Pr. 394 ; McGowan Bros. P. & M. Co. v.
McGowan, 22 Ohio St. 370.
Where a firm name has been adopted and used by a partnership, it may have ob-
tained a value in itself, similar to the value of a good- will or of a trade-mark, which the
court ought to protect. And during the life of the firm the name will be so protected,
by preventing strangers who have no right to do so from using it. This will be done
as a matter of course if the name is not that of the party who adopts it. Other con-
siderations, however, ay)ply when the person to be restrained himself bears the name
used. No man can be restrained from using his own name in business, simply
because another has a right to use the same name in the same business ; in order
to have him restrained from using his own name it must be shown that the use com-
plained of is for the purpose and with the effect of deceiving the public. Burgess v.
Burgess, 3 DeG. JL & G. 896; Turton v. Turton, 42 Ch. D. 128; Iowa Seed Co. v. Dorr,
70 la. 481, 30 N. W. 866 ; Russia Cement Co. v. Lepage, 147 Mass. 206, 17 N. E. 304 ;
Meneely v. Meneely, 62 N Y. 427; Carmichel v. Latimer, 11 R. 1. 395. "Where a
person is selling goods under a particular name, and another person, not having that
name, is using it, it may be jiresumed that he so uses it to represent the goods sold by
himself <as the goods of the person whose name he uses ; but where the defendant sells
goods under his own name, and it happens that the plaintiff has the same name, il
182.]
RIGHTS AND DUTIES OF PARTNERS. 243
rules have been adopted in England and in this country in
respect to trade-marks, They are considered property, so far
that parties using them falsely and injuriously are now cer-
tainly liable in damages to those who have a right to them, and
does not follow that the defendant is selling his goods as the goods of the plaintiff. It
is a question of evidence in each ease whether there is false representation or not." Tur-
ner, L. J., in Burgess?;. Burgess, 3 DeG. M. & G. 89C, 905. One who has disposed of the
right to use his own name as a quasi-tTade-mark may however be restrained from using
it himself. Horton Mfg. Co. v. Horton Mfg. Co. 18 F. K. 816 ; Kussia Cement
Co. V. Lepage, 147 Mass. 206, 17 N. E. 304. See McLean v. Fleming, 96 L'. S. 245.
The most difficult question as to the right in a firm name arises upon dissolution,
upon a sale of the whole or j)art of a business.. The better view wouhl apju-ar to be
that the purchaser of a business gets no right, without an exj)ress agreement, to use
tlie name of the selling firm : whether he is a stranger or one of the selling firm.
Gray v. Smith, 43 Ch. D. 208 (C. A.); Horton Mfg. Co. v. Horton Mfg. Co., 18 F. R.
816 (scmble); Williams i-. Farrand, 88 Mich. 473, 50 N. W. 446. But .see Levy u.
Walker, 10 Ch.D. 436 (C. A.); Holmes v. Holmes, B. & A. Mfg. Co., 37 Conn. 278 ;
Adams v. Adams, 7 Abb. N. C. 292. Nor can the purchaser advertise himself as
"successor" of the seller. Williams r. Farrand, 88 Mich. 473, 50 N. W. 446;
Morgan v. Schuyler, 79 N. Y. 490. If it is desired to secure the right to use the firm
name, the purchaser should get an agreement tliat he may use it. Where such an
agreement is made, the purchaser cannot in his turn (unless the name is a trade-mark)
transfer his right to use it to another. Horton Mfg. Co. v. Horton ilfg. Co., 18 F. R.
816. See Lodge v. Weld, 139 Mass. 499, 2 N. E. 95. Whether the right to the use
of the name passes or not is often immaterial. If the name is composed of the
surnames of individuals, it is clear that no one that does not bear the name can
object to the use of it. Rogers v. Taintor, 97 Mass. 291. Unless, therefore, the
name were used in such a way as to deceive, the purchaser could not usually be pre-
vented from using it.
Where there is a dissolution, but no sale of the business, the question is more free
from dilHculty. If a firm is dissolved during the lifetime of the partners, with no
provision as to the use of the firm name, it seems clear that either partner may use
the old firm-name, as he is entitled to continue the business, subject to the limita-
tion, however, that he must not involve his copartner in liability. Banks v. Gibson,
34 Beav. 566 ; Caswell v. Hazard, 121 N. Y. 484, 24 N. E. 707. But it would seem
to be in the power of either partner, by filing a bill for an account, to have the value
of the fimi name brought into the firm assets.
It has been decided in some cases that the right to use the firm name survived ;
and since a surviving partner could not subject the estate to any liability by using it,
he might do so. Lewis v. Langdon, 7 Sim. 421 ; Robertson v. Quiddington, 28 Beav.
529 ; Staats v. Hewlett, 4 Den. 559. But it would seem that if the name has any
value, the firm and not the surviving partner is entitled to the benefit of it ; and
therefore that if the surviving partner continues to use the firm name the estate of the
deceased, while not, perhaps, entitled to prevent the use of it, may require the survivor
to account for its value. Fenn v. Bolles, 7 Abb. Pr. 202. The earlier cases must
probably be considered overruled, along with the old decisions which held that the
good-will survives.
A former partner, whether or not he has disposed of the good-will and right to the
firm name, may in a proper manner advertise his connection with the old firm, as that
he is " late of" the firm. Williams v. Farrand, 88 Mich. 473, 50 X. W. 446 ; Binin-
ger V. Clark, 60 Barb. 113 ; Peterson v. Humphrey, 4 Abb. Pr. 394. But this may
not be done in a way to deceive the public, as by making the words "late of" so
inconspicuous as to be overlooked. Hookham v. Pottage, L. R. 8 Ch, 91 ; Smith v.
Abbott, 5 Abb. N. C. 274.
244 THE LAW OF PARTNERSHIP. [CH. VII.
equity will restrain tliis unlawful use. Qg) ^ We cannot but
think that this right partakes so much of the nature of good-will
that it will be included within that term, or otherwise recognized
and jirotccted by courts, if they have power to do so. {h) Of copy-
rights and patent- rights no question is made : they often form
a valuable portion of the stock of bookselling and other com-
mercial partnerships. (^)
§ 183. Lien of Partner on Firm Property. — It is said in some
cases, and in text-books of high authority, that each ])artner has
a lien on the common property, first, to secure the payment of
the common debts, for which each partner is liable in solido,
and then to secure to him his own share in the partnership prop-
erty, after the debts are all paid. And it is also said that this
lien may be followed out, and made to attach, in some cases,
to the proceeds of partnership property, which has been wrong-
fully sold. We should consider this topic here, but it is closely
connected with another principle generally stated with it ;
namely, that it is through this lien that the right of creditors of
the partnership to the property of the partnership, as pledged to
the payment of their debts, is to be worked out.
This is much the most important aspect of this topic of lien,
in a practical point of view ; and, regarding the doctrine of
((/) The right and property of a firm to note to 2 Kent (9th ed.), [372]. See also
and in a trade-mark are of course the 6 West. L. J. 337.
same as that of an individual. The fol- (h) In Hine y. Lart, 10 Jur. 106, it seems
lowing cases upon the general subject to have been considered by the court that
may be consulted as exemplifying the a trade-mark was partnership property,
proposition of the text. Taylor v. Car- See Lewis v. Langdon, 7 Sim. 421.
penter, 2 Woodb. & ]\I. 1 ; 11 Paige, Equity will not however decree the sale
292, 2 Sandf. Ch. 603, 3 Story, 458 ; of a partner's interest in a firm brand or
Amoskeag llauufacturing Co. v. Spear, 2 trade-mark, its value being too insubstan-
Sandf. 599 ; Coats v. Holbrook, 2 Saudf. tial upon which to set a value. Taylor v.
Ch. 586 ; Knott v. Morgan, 2 Keene, 213; Bemis, 4 Biss. 406.
Rodgers v. Nowell, 5 C. B. 109 ; Farina (i) Parkhurst v. Kinsman, 1 Blatchf.
V. Silverlock, 1 DeG. & J. 434. The 488, 495 ; Penniman v. Munson, 26 Vt.
cases are well collected and examined in 164; Lovell v. Hicks, 2 Younge & C.
481.
^ Trade-murks. When one buys another's interest in a business he buys the right
to use and to prevent others from using the trade-marks belonging to the business.
Publishing Co. v. Gage, 11 Can. 306 ; Hall v. Barrows, 33 L. J. Ch. 204 ; Hoxie v.
Chaney, 143 Mass. 592, ION. E. 713 ; Williams v. Farrand, 88 Mich. 473, 50 N.W. 446 ;
Merry v. Hoopes, 111 N. Y. 415, 18 N. E. 714. Though a mere sale of the chattels or
real estate of the business by one partner to another without any agreement as to the
business, does not carry with it an exclusive right to the good-will or trade-marks: and
the selling partner may use the latter. Smith v. Walker, 57 Mich. 456, 24 N. W.
830, 26 N. W. 783 ; Huwer v. DannenhofFer, 82 N. Y. 499 ; Hazard v. Caswell, 93
N. Y. 259. See Kidd v. Johnson, 100 U. S. 617, 620.
§ 183.] RIGHTS AND DUTIES OF PARTNERS. 245
lien as of more moment to the creditors than to the partners
themselves, we defer the consideration of it until we treat of
the rights and remedies of third persons against the firm. And
then we shall state our dissent from some of the views fre-
quently expressed of this lien, and endeavor to show how it
needs to be qualified or modified before it can harmonize with
the law of partnership, or the general law-merchant.
246 THE LAW OF PARTNERSHIP. [CH, Vlli
CHAPTER Yin.
OF THE REMEDIES OF PARTNERS INTEK SE.
SECTION I.
GENERAL CONSIDERATIONS.
§ 184. Nature of Action by or against Partnership. — The rela-
tion of partners, and the legal status of a partnership, are
peculiar ; and the remedies which each partner has against
another are equally so, and it is sometimes difficult to define
them. A partnership is not a corporation, nor a legal person ;
and yet the common law yields so far to the reasons and necessi-
ties of the law-merchant as to consider the partnership as a quasi
corporation, or, at least, to recognize it as having some kind and
measure of personality. Perhaps it might be better if our law,
like the Scotch law (founded on the civil law), carried this per-
sonality so much farther as to permit actions by or against the
firm, without reference to the individual partners, (a) In some
instances, it might be useful and safe to permit (as the Scotcli law
permits) (aa) a partner to proceed against a partnership, or the
firm against a partner, much as may be done in the case of a cor-
poration. Nothing of that kind is known to the common law ; (b)
and it may be that equity has now established principles and
methods which practically answer as well.^ But in equity an
{r,) 2 Bell Comer. Bk. 7, V. p. 510 Tinal v. Bright, Minor, 103; Estes v.
(fijt) Ibid. AVhipple, 12 Vt. 373 ; Bracken v. Ken-
(b) Upon the ground, that the same ncdy, 4 111. 558, 564 : Myrick v. Dame,
person cannot in the same suit be both 9 Cush. 248, 254 ; Homer v. Wood, 11
])laintiff and defendant of record, no Cush. 66 ; Banks r. Mitchell, 8 Yeig. 111.
action can be maintained between one and Though a partner, payee of a negotiable
the firm of which he is a member. De note made by his firm, cannot sue the
Tastet V. Shaw, 1 B. & Aid. 664 ; Neale v. makers, his indorsee may recover upon it.
Turton, 4 Bing. 149 ; Teague v. Hubbard, Smith v. Lusher, 5 Cow. 688 ; Thayer v.
8 B. & C. 345 ; Chadwick v. Clarke, 1 C. Buffum, 11 Met. 398 ; Davis i-. Briggs, 39
B. 700; Westcott v. Price, Wright, 220 ; Me. 304 ; Fulton v. Williams, 11 Cush.
1 Where a partner makes a loan to the firm and takes a firm note, although of
course he cannot sue the firm upon it, it is a perfectly valid note. If he indorses
§ 185.] OF THE REMEDIES OF PARTNERS INTER SE. 247
action to recover money wrongfully paid to defendant by a partner
should make the defaulting partner a party. (66) In this country,
where equity and law have, in many States, approached closely
together, and seem to be tending towards unity, there may be
still less need of any remedies in addition to those now made use
of. But many questions in the use of these remedies certainly
demand better and more certain answers than can now be made.
They, however, can be given authoritatively only by adjudication,
or by legislation.
§ 185. Partnership Questions not generally cognizable at Law. —
As a general rule, the law will not take cognizance of questions
which relate to the partnership between living partners, (c) ^ The
108, 110. So, if the partmn-ship be payee v. Lyman, 1 Story, 423. But the assignee
of a note madi; by one of tlu; partners, the of a partner who is tlie payee of a no7i-
technical impediment to a suit on the ncyotiable note made by tlie partnership,
note is removed by actual negotiation, and cannot sue on the note, since his assignor
tlie holder may claim a valid title through could not. Hill v. McPherson, 15 Mo.'
the indorsement of the firm. Per Shaw, 204. If a firm is the first indorser of a
C. J., in Parker v. Macomber, 18 Pick, note, the holder, being a partner therein,
509. See Babcock v. Stone, 3 McLean, cannot sue a subsequent indorser on the
172. And where one wlio is a member of note : it being a good answer to the suit
two firms makes a promissory note in the of the holder, that, as a member of the
name of one firm, payable to a person who copartnership, he stands in the relation
is a member of the other firm, tlie payee of a prior indorser. Decreet v. Burt, 7
may sue and recover upon it at law ; and Cush. 551.
the admissions of the common member of (hb) Atkinson v. Mackreth, L. R. 2 Eq.
both firms cannot be given in evidence 570 ; [Penniman v. Jones, 58 N. H. 447 ]
to defeat a recovery on the instrument. (c) Or as the rule is laid down by
Moore v. Gano, 12 Ohio, 300. See Baring Abbott, C. J. : " One partner cannot main-
it to a purchaser for value, the latter may recover upon it. Roberts v. Ripley, 14
Conn. 543 ; Cutting v. Uaigneau, 151 Mass. 297, 23 N. E. 839 (semblc) ; Walker
V. Wait, 50 Vt. t)68. But the mere assignee of such a note or other claim cannot
sue, since he must do so in the name of his assignor. Davis v. Merrill, 51 Mich.
480, 16 N. W. 864. Except in jurisdictions where an assignee of a claim may sue
in his own name. Frank v. Anderson, 13 Lea, 695.
But where a firm note to a partner is merely indorsed to a formal party for
purposes of suit, it is of course subject to all equities that exist against the part-
ner. Wintermute v. Torrent, 83 Mich. 555, 47 N. W. 358. And it would seem
that it could not in this case be enforced at all, since the partner's claim is always
sulijeet to the state of accounts between the firm and the partners. Thompson v.
Lowe, 111 Ind. 272, 12 N. E. 476 ; Cutting v. Daigneau, 151 Mass. 297, 23 N, E.
839. But see Carpenter v. Greenop, 74 Mich. 6G4, 42 N. W, 276.
So where a partner borrows money from the partnership and gives a note,
though the firm cannot sue, its indorsee may do so ; and in those jurisdictions
where an assignee of a chose in action may sue in his own name, one to whom
the mere claim of a firm against a partner for borrowed money is assigned may
sue the partner. Bank of British N. Amer. v. Delafield, 126 N. Y. 410, 27 N. E.
797 ; (especially, as the court says, where the partner is shown to be indebted to the
firm in a much larger amount.)
1 Until accounts are settled and a balance struck, one partner cannot maintaia
248 THE LAW OF PARTNERSHIP. [CH. VIII.
reasons for this are substantial and of much weight. One is,
that if a partner calls on another to acknowledge or satisfy any
tain au action against his copartner for maintain no action against the partnership
work and labor performed, or money for the amount of his expenditures, because
expended on account of tlie ])artnership." he cannot be both plaintilf and defendant
Hohnes v. Higgins, 1 B. & C. 76. It is of record ; nor against his cojjartners, for
unnecessary to adduce here the numerous the reason stated hereafter in the text, that
authorities upon tliis point ; for, as is until an account of the partnership con-
said hereafter, the wiiole of this section cerns is taken, it is impossible to tell
consists simply in a statement of the whether he is really a debtor or creditor of
exceptions to the general rule. We have the other partners. But, after a trial and
already seen that, for his personal services verdict for the plaintiff, it is too late for
in tlie affairs of the partnersliip, as a the defendant to object that the sul)j('ct-
general rule, no partner is entitled to com- matter of the suit was a copartnershi])
peusatiou, even as an item of account contract between liim and the ]ilaintifl'.
between the partners. For his advances The objection should be made at the trial,
and outlays in behalf of the firm, each Smith v. Allen, 18 Johns. 24.5. See
partner is, indeed, entitled to the proper Gomersall v. Gomersall, 14 Allen, 60 ;
credits, whenever the partnership accounts and Crottes v. Frigerio, 18 La. Ann. 283.
are made up. But we have seen that he can
an action at law against another on a partnership claim. Broda v. Greenwald, 66
Ala. .038; Fisher v. Sweet, 67 Cal. 228, 7 Pac. 657 ; Price v. Drew, 18 Fla. 670;
Bowzer v. Stoughton, 119 111. 47, 9 N. E. 208; Mereditli v. Ewiug, 85 Ind. 410;
Lang V. Oppenheim, 96 Ind. 47 (but see Anderson v. Ackerman, 88 Ind. 481 ) ; Hall v.
Clagett, 48 Md. 223 ; Learned v. Ayres, 41 Mich. 677, 3 N. W. 178 ; Arnold v. Arnold, 90
N. Y. 580 ; Elmer v. Hall, {Pa. ) 23 Atl. 971 ; Dowliiig v. Clarke, 13 R. 1. 134 ; O'Neill v.
Brown, 61 Tex. 34. In accordance with the general rule, where a partner is to be
paid for his services by the partnership, he cannot recover the amount from liis
copartner at law ; his only remedy is an accounting. Holmes v. Higgins, 1 B. &
C. 74 ; Milburn v. Codd, 7 B. & C. 419 ; O'Brien v. Smith, 42 Kas. 49, 21 Pac.
784; Stone v. Mattingly, (Ky.) 19 S. W. 402; Duff v. Maguire, 99 Mass. 300;
Younglove v. Liebhardt, 13 Neb. 557, 14 N. W. 526 ; Weaver v. Upton, 7 Ired.
458; Hills v. Bailey, 27 Vt. 548. The same is true where a partner sells goods to
the firm. Marks v. Stein, 11 La. Ann. 509 ; Remington v. Allen, 109 Ma.ss. 47 ;
Course v. Prince, 1 Mill C. R. 416. So where he lends money to the firm. Per-
ring V. Hone, 4 Ring. 28 ; Coliey v. Smith, 2 Moo. & R. 96 ; Mickle v. Peet, 43
Conn. 65 ; Springer v. Cabell, 10 Mo. 640 ; Sieghortner v. Weissenborn, 20 N. J.
Eq. 172 ; O'Neill v. Brown, 61 Tex. 34. So where he leases premises to the firm.
Pio Pico V. Cuyas, 47 Cal. 174 ; Johnson v. Wilson, 54 111. 419. So where he
pays out money for the use of the firm. Sadler v. Nixon, 5 B. & Ad. 936 ; Rob-
son V. Curtis, 1 Stark. 78 ; Goddard v Hodges, 1 Cr. & M. 33 ; Brown v. Tapscott,
6 M. & W. 119 ; Ross v. Cornell, 45 Cal. 1-33 ; Crossley v. Taylor, 83 Ind. 337 ;
Hennegin v. Wilco.xon, 13 La. Ann. 576 ; Phillips v. Blatchford, 137 Mass. jUO ;
Lyons v. Murray, 95 Mo. 23, 8 S. W. 170 ; Harris v. Harris, 39 N. H. 45 ; Mur-
ray V. Bogert, 14 Johns. 318 ; Ives v. Miller, 19 Barb. 196 ; Torrey v. Twombly,
67 How. Pr. 149 ; McDonald v. Holmes, 22 Ore. 212, 29 Pac. 738 ; Leidy v.
Messinger, 71 Pa. 177 ; Fessler v. Hickernell, 82 Pa. 150 ; Merriweather v. Harde-
man, 51 Tex. 436.
Nor can a partner sue his copartner at law when the obligation of the
latter runs to the firm. Thus where a partner receives mone)' on account of the
firm, his copartner cannot bring an action for his share. Fromont v. Coujdand, 2
Bing. 170 ; Bovill v. Hammond, 6 B. & C. 148 ; Russell v. Byron, 2 Cal. 86 ;
Stanton v. Buckner, 24 La. Ann. 391 ; Riarl v. Wilhelm, 3 Gill, 356 ; Smicii v.
§ 185.] OF THE REMEDIES OF PARTNERS INTER SE. 249
claim in which the partnership is interested, the plaintiff will
cither j)rcvail and recover damages to which he must himself
eventually contribute, or be defeated, and perhaps be obliged to
pay to the defendant something which gives the plaintiff" a right
to call at once on the defendant to refund a part of what he
pays, (c?) The second reason is little more than a development
or consequence of the first. It is, that no partner has a several
and personal claim on any other partner for any matter in which
the partnership is interested, because neither can the ])artners be
separated, — all being interested, both as plaintiff's and as defend-
ants,— nor can any claim or item of claim be separated from the
other interests of the partnership. One ])artner may to-day pay
much more or much less than the sum which would fall upon him
to pay, in proportion either to the numbers of the partners, or to
his share or interest in the concern. But yesterday he may have
done just the reverse ; and the charge or credit of yesterday must
be brought into connection with the charge or credit of to-day,
before it can be ascertained whether he has paid too much or too
little, and therefore whether he may claim of the other partners,
or they of him. But, to settle this question finally and justly, the
charges and credits of all other days, and not only so, but of all
the other partners, must be taken into consideration, before it can
be ascertained whether the plaintiff" has a valid claim against the
defendant, {e)
(d) Milburn v. Codd, 7 B. & C. 419, England, 4 Mylne & C. 171, 172. See
421. FnuK'isco v. Fitch, 25 Barb. 130 ; Morin
(e) Lord Chancellor Cottenham ex- v. Martin, 25 Mo. 360 ; Hammond v.
plains the disability of partners to sue Hammond, 20 Ga. 556 ; Wiggiii v. Cum-
each other, in Richardson v. Bank of niings, 8 Allen, 153.
Smith, 33 Mo. 557 (see Bethel v. Franklin, 57 Mo. 466) ; Towle v. Meserve, 38
N. H. 9; Young v. Brick, 3 N. J. L. (2 Penn.) 664; Graham v. Holt, 3 Ired.
300 ; Devore v. Woodruif, 1 N. Dak. 143, 45 N. AV. 701. See Wright v. Cobleigh,
21 N. H. 339 (statutory). So where a jiartner buys goods of the firm, no action
can be brought against him for the price of the goods by his copartner. Page v.
Thompson, 33 Ind. 137 ; Ivy v. Walker, 58 Miss. 253. But see Bennett v. Smith,
40 Mich. 211.
But in some jurisdictions one partner is allowed to maintain an action for
liis share of the profits where the accounts may be easily adjusted, as where all the
debts are paid, and nothing remains but to ascertain to whom the balance is due.
See post, § 194; Clarke v. Mills, 36 Kas. 393, 13 Pac. 569; Wheeler v. Arnold,
30 Mich. 304 ; Aldrich v. Lewis, 60 Miss. 229. This is not infrequently allowed
where the partnership was in a single tranisaction. Finlay v. Stewart, 56 Pa. 183 ;
Meason v. Kaine, 63 Pa. 335 ; Kutz v. Dreibelbis, 126 Pa. 335, 17 Atl. 609 ; Fry
V. Potter, 12 R. L 542.
See an exhaustive collection of the authorities, Ames, Cas. Part. p. 451, n.
250 THE LAW OF PARTNERSHIP. [CH. VIII,
The ol)jections to the cognizance by law of the claim of a part-
ner, against a partner on partnership account, resolve themselves
into this : The balance against every partner, on parcnership
account, is, like every other debt to the partnership, a part of the
stock or property of the partnership ; all this is first bound to
the debts of the firm, and, after these are })aid, it all belongs to
the partners severally, in due proportion. No one, therefore, can
make good his separate claim or title to one of these debts or
balances, any more than he can to the sej)arate debt of any credi-
tor of the firm or a severed portion of the merchandise. There
is, indeed, no separate claim until adjustment of all the claims ;
and therefore no ground for maintaining such a suit at law.
It may be said that there is, in fact, in each partner a kind of
latent but vested interest in his share, and a proportionate claim
au'ainst every partner who withholds his share; and that the pro-
cess of account and adjustment gives no title, but only ascertains
its extent and measure. Something like this is true ; and equity
proceeds on principles not very different. But the common law
cannot, for tlie reason that it has no methods nor processes by
which it could cause, or regulate, or recognize the account and
adjustment necessary to define the personal claim of each partner.
Certainly it cannot do this as easily and as completely as equity can
do it ; and this is substantially the reason why equity has juris-
diction over all cases of this kind. (/)
( f) " It is a geueral rule, that between was due at the execution of the deed,
partners, whether tliey are so in general or and whether the sum has been reduced in
for a particular transaction only, no ac- any and what degree by the intermediate
count can be taken at law." Per Abbott, gains of the partnership business. Such
C. J., in Bovill v. Hammond, 6 B. & C. an account cannot be taken by a jury,
149, 151. And in Eogers v. Rogers, 1 and consequently no issue could be taken
Hall, 391, it was expressly held, that a on the debt on which the defendants
court of law cannot take jurisdiction of rely." "The short objection to this ap-
accounts between partners. See Harvey plication is," said Chambre, J., "that
V. Criekett, 5 M. & S. 336, 340 ; Smith the court cannot direct a partnership
V. Barrow, 2 T. 11. 476, 478 ; Nugent v. account to be taken, without assuming a
Locke, 4 Cal. 318 ; McKnight v. Mc- jurisdiction that does not belong to it."
Cutchen, 27 Mo. 436. In De Tastet v. Chapman v. Koops, 3 B. & P. 289 ;
Shaw, 1 B. & Aid. 664, 663, Lord Ellen- Parker v. Pistor, 3 B. & P. 288. See
borough, C. J., delivering the opinion of Jndd v. Harris, 6 Vt. 185 ; Spear v.
the court, said: "The only mode in Newell, 13 Vt. 288; Beach v. Hotchkiss,
which a fact can be controverted in an 2 Conn. 425.
action at law, namely, by taking an i.ssue The action of account may be brought
to be tried by a jury, is impracticable in between partners wherever that action is
the present case : because the debt con- in use ; but it seems properly applicable
stitntes an item in a partnership account ; only wliere the ])artnership has come to
and the paitnership account must be an end. 1 Story Eq. §§ 659-665.
taken in order to ascertain how much
§ 180.] OF THE REMEDIES OF PARTNERS INTER SE. 251
The limits between legal and equitable jurisdiction in relation
to questions arising- under partnership are, on the whole, suffi-
ciently well defined, although there are some questions upon
which an unfortunate degree of obscurity still rests. We will, in
the first place, considijr those cases of which courts of law take
cognizance, and then those which are referred to equity.
SECTION II.
QUESTIONS BETWEEN PARTNERS COGNIZABLE AT LAW.
§ 186. Demands Distinct from Affairs of Partnership. — Partners
may sue their partners, or be sued by them, on any matter not
connected with the partnership, as freely, and in precisely the
same way, as if they were nijt partners ; for the plain reason,
that, outside of the partnership^ they are not partners. So if one
partner sells his separate property to his partner, this does not
make it partnership property ; and the seller may sue the buyer
for the price, at law. {ff) Nor does it make any difference whether
this personal and separate contract or debt becomes afterwards
connected with the partnership, or is so at the time in the inten-
tion of the parties, if it be not on account of the partnership, so
as to involve all the partners. Thus, if one partner, who has
taken more than his proportion from the partnership, and there-
fore has a large debit against him on the partnership books, wishes
to reduce this debit, and borrows money from another partner,
confessedly to be paid to the ))artnership in reduction of this
debit, the borrower is bound personally to the lender, and the
lender can sue personally the borrower. And, if a partner sues a
partner on any independent and several indebtedness, the defend-
ant cannot set off or recoup any alleged balance which he claims
that he should have against the plaintiff, on partnership account,
■when that account shall be hereafter settled and balanced. ((/)
(ff) Elder v. Hood, 28 111. 5-38. between the partners can be foniided on
(g) Ives u. Miller, 19 Barb. 196. See it. Buell v. Cole, 54 Barb. 353. The
Roberts v. Fitler, 13 Pa. 265 ; Molony v. neglect, however, of a defendant to enjoin
Davis, 48. Pa. 512; [Wood v. Brush, 72 a suit at law against him by a copartner,
Cal. 224, 13 Pac. 627 ; Jones v. Shaw, in respect to their partnership dealings, '
67 Mo. 667 ; McKay v. Overton, 65 Tex. does not prevent his maintaining a bill
82; Tomlinson v. Nelson, 49 Wis. 679.] for an account after judgment in the suit.
Though one partner give another his and offsetting against it so much as upon
promissory note, if it be before and in aid settlement shall be found just. Gregg v
of settlement, and may not be found to Brewer, 67 111. 525.
be due on settlement, no ^uit at law
252
THE LAW OF PARTNERSHIP.
[CH. VIII.
§ 187. Demands arising before Partnership launched. — So, too, a
partner can sue a partner on any contract or transaction arising
before the partnership, although referring to the partnership, {h)
Thus, if one proposed partner borrow money of another, to be
advanced by the borrower as a ))art of his contribution to the
stock of the partnership, the borrower is liable at law ])ersonally
to the lender, whether the money so borrowed is so used and
applied by the borrower or not. (i) ^
(/() Goddard v. Hodges, 3 Tyrw. 209.
Where the plaintiff contracted to do cer-
tain work for a joint-stock company for
a given sum, and afterwards caused his
name to be inserted in the books of the
comi)any as a holder of shares therein, —
lield, that this did not affect his right to
sue the company in res))ect of the ])rior
contract. Lucas v. Beach, 1 Scott N. K.
350, 1 M. & G. 417. See Holmes v.
Higgins, 1 B. & C. 74 ; Fox v. Clifton,
6 Bing. 776 ; Howell v. Brodie, 6 Bing.
N. C. 44 ; Cheny v. Clark, 3 Vt. 431 ;
Currier v. Webster, 45 N. H. 226.
(i) Helme v. Smith, 7 Bing. 714, opin-
ion of Parke, J. Ex parte Notley, 1
Mont. & A. 46 ; Elgie v. Webster, 5 M.
& W. 518 ; Bumpass v. Webb, 1 Stewart,
19 ; Scott V. Campbell, 30 Ala. 728 ;
Duncan v. Lyon, 3 Johns. Ch. 362 ;
Bailey v. Stai'kc, 6 Ark. 191 ; Biernan
V. Brashes. 14 Mo. 24 ; French v. Styr-
Jng, 2 C. B. N. s. 357 ; [Bull v. Coe, 77
Cal. 54, 18 Pac. 808 ; Bates v. Lane, 62
Mich. 132, 28 N. W. 753.] See CoUamer
V. Foster, 26 Vt. 754 ; Pool v. Delancy,
11 Mo. 570 ; Currier v. Rowe, 46 N. H.
72.
The above cases show that if A., enter-
ing into partnership with B., at B.'s
request advances for him the amount of
capital B. has agreed to contribute to the
joint funds, this is a loan of money by
A. to B. , and constitutes a debt, arising
previous to the partnership, which A.
may recover at law pending the jiaitner-
ship, and though the partnership accounts
ai'e unsettled. See also Williams v. Hen-
shaw, 11 Pick. 84; Crater v. Binninger,
45 N. Y. 545. So one partner may sue
another for money loaned to pay the
hitter's share of an execution against the
firm. Chamberlain v. Walker, 10 Allen,
429. And if persons enter into partner-
ship, and pay in their respective contri-
butions, one of them cannot now recover
back his share from the others, though
the concern prove a losing one and is
abandoned. The shares of all the part-
ners are now only subject to an account.
See opinion of Cockburn, C. J., in French
V. Styring, supra; Nockels v. Crosby, 3
B. & C. 819, 824, opinions of Holroyd
and Littledale, JJ. See also Gale v.
Leckie, 2 Stark. 107 ; Townsend v.
Goewey, 19 Wend. 424 ; Manning v. Wads-
worth, 4 Md. 59 ; Rockwell v. Wilder,
4 Met. 561 ; Wright v. Michie, 6 Gratt.
354 ; Robinson v. Mcintosh, 3 E. D.
Smith, 221. It has been said, that it is
not competent for partners to agree in
their articles that such person as a major-
ity of them shall afterwards appoint shall
have the power to sue in his own name
for moneys agreed to be contributed by
each ]iartner to the general fund. For-
tune V. Brazier, 10 Ala. 791. But query.
See jjost, § 191, and note (m).
1 Where A. buys one-half of B.'s stock in trade and enters into a partnership
with him in the business, the purchase of the goods is not a partnership matter, and B.
may sue at law for the purchase-money. Kinney v. Robison, 49 Mich. 247, 1&
N. W. 120. Or if B. fails to keep his agreement as to the sale, A. may sue at law
for breach of the contract of sale. Reid v. McQuesten, 61 N. H. 421. The purchase-
money goes of course to B. individually, not to the new partnership. Ball v. Farley,
81 Ala. 288, 1 So. 253.
§ 188.]
OF THE REMEDIES OF PARTNERS INTER SE.
253
§ 188. Demands arising after Termination of Partnership. — So,too,
if the contract or transaction arise after the termination of the
partnersliip, although it have a reference to it, an action at law is
still maintainable. (^ ) Thus, if there were three partners, and the
partnership is dissolved by consent, and there is a charge against
one of them for a thousand dollars, and he borrows money from
another partner to pay it, and does so pay it, the lender can sue
the borrower, although the accounts are unsettled, and it is
uncertain where the final balance will lie or what it will be. (^)
But if, in such a case, the accounts are all adjusted and balanced,
and it is certain that the lender owes the borrower, as partner, on
{j) Causes subsequent to dissolution,
from which a right of action between
partners may ari.se, may be such as origi-
nate solely in the relations of partners
to tliird persons. Osborne v. Harper, 5
East, 225 ; Wright v. Hunter, 1 East, 20,
5 Ves. 792. See Butcher v Forman,
6 Hill, 583. See Wright v. Cumpsty,
41 Pa. 102, where the plaintiff and de-
fendant dissolved partnership, but, before
the formal and public dissolution, the
defendant contracted large debts in the
name of the old firm, which the plaintiff
paid. It was held that the plaintiff
might recover the amount in an action
against the defendant as money paid to
his use. Hntton v. Eyre, 6 Taunt. 289,
1 Marsh. 603. But if there are more
than two partners, and if, after dissolu-
tion, by the misconduct of one, the rest
are compelled to pay money to third par-
ties, it is important to ascertain whether
such payment is made out of a joint fund,
or by the several contributions of each ;
for, after dissolution, there is generally no
joint stock or fund, and if such payment
is made by an aggregate of the several
funds of the contributing partners, then
each contributor must bring a separate
action for the amount of his advance,
because, quoad that payment the con-
tributors are not partners. See Osborne u.
Harper, supra ; Graham v. Robertson, 2
T. R. 282 ; Brand v. Boulcott, 3 R. &
P. 235 ; Kelby v. Steel, 5 Esp. 194 ;
Manahan v. Gibbons, 19 Johns. 109, 112,
426 ; Doremus v. Selden, 19 Johns. 213.
Of the foregoing cases, it is to be
observed, that the parties were not part-
ners at the time of action brought ; that
the cause of action accrued subsequently
to dissolution ; and that the subject-
matter of the suit was in no way con-
nected with the partnershij) nor with
the partnership accounts. See Milburn v.
Cod.l, 7 15. & C. 419. Though the plain-
tiff anil defendants had ceased to be part-
ners, and the cause of action had accrued
after their dissolution, yet the subject-
matter of the suit was deemed to be
properly an item of the unsettled partner-
ship accounts, and the plaintiff's action,
therefore, not maintainable. See De Jar-
nette v. McQueen, 31 Ala. 230.
(k) A. & B. dissolved partnership, and
A. assumed the possession and entire con-
trol of the partnership stock in trade.
In disposing of the goods, he sold a part
of them to B., who signed a bill of sale,
acknowledging the purchase of A. It
was held fhat A. might recover the value
of the goods in an action at law against
0. Caswell V. Cooper, 18 111. 532. The
plaintiff and three other persons entered
into partnership for a single adventure,
the plaintiff furnishing all the capital.
The defendant was one of the four part-
ners, and the adventure being closed, and
the firm dissolved, the capital was de-
posited with the defendant for the plain-
tiff. It was held that it thereby became
the individual property of the plaintiff,
and could be recovered by him of the
defendant. Myers v. Winn, 16 111. 135.
See Warbritton v. Cameron, 10 Ind. 302 ;
Rockwell V. Wilder, 4 Met. 562 ; Ronclie
V. Pendergrast, 3 H. & J. 33 ; Chnmbir-
lain V. Walker, 10 Allen, 429. See Wycoif
V. Purnell, 10 Iowa, 332.
254 THE LAW OP PARTNERSHIP. [CH. VIII,
tliis final balance, what he thus owes might be applied by way of
set-off to the lender's action. But not unless the accounts are
settled. (0 1
§ 189. Private Debt. — If the parties to a debt or contract can
be considered in reference to it as only joint sureties or joint con-
tractors, (m) or connected in any other way than as partners, (w)
the disability of partnership does not apply, although they may
be partners generally, (o)
(Z) Ives V. Miller, 19 Barb. 196. See share in profits in such a way that they
Pool V. Delaney, 11 Mo. 570 ; Scott v. are partners qnoad third persons, but yet
Campbell, 30 Ala. 728 ; Coleman i;. Cole- are not partners inter se, there is nothing
man, 12 Rich. L. (S. C. ) 183; [Great- to prevent an action being maintained by
house r. Greathouse, 60 Tex. 597.] either against the other. Hesketli i;. Blan-
(??i) Burnell v. Minot, 4 J. B. Moore, chard, 4 East, 144.
340 ; Helme v. Smith, 7 Bing. 709, 713, As to a distinction between a general
714; Holmes c. Williamson, 6 M. & S. 158 ; and a special partnership, see Galbraith v.
Ansell V. Waterhouse, 6 M. & S. 390, per Moore, 2 Watts, 86. See Brigham v.
Bayley, J. ; Blackett v. Weir, 5 B. & C. Eveleth, 9 Mass. 538 ; Jones v. Har-
385, 388 ; Batard v. Hawes, 2 E. & B. raden, 9 Mass. 540 ; Gow on Part. [79],
287. citing Abbott v. Smith, 2 W. Bl. 947 ; per
{u) ir a person is only a nominal part- Lord Kenyon, Merryweather v. Nixon, 8
ner, but, from being held out as a part- T. R. 816 ; Graham v. Robertson, 2 T. R,
ner to third persons, is obliged to pay the 2S2 ; Herries v. Jameson, 5 T. R. 556 ;
debts of the firm, he may, in an action Evans v. Yeatherd, 2 Bing. 133 ; Wilson
against the actual partner, show the true v. Cutting, 4 Moore & S. 268 ; Koel v.
nature of his relations to the firm, and Bowman, 2 Litt. 46 ; Wright v. Hunter,
recover the whole amount he has been com- 5 Ves. 792.
pelled to pay. Latham v. Kenniston, 13 (o) As where four persons, who had
N. H. 213. In like manner, if persons acted as directors of a proposed railway
1 Where upon dissolution or otherwise one partner agrees with the other to assume
certain firm debts, and fails to pay them, the copartner, upon being obliged to pay the
debt, may maintain an action at law for the amount ; for the debt has ceased to be
due from the partnership. The copartner has assumed the position of a mere surety,
and the contract by which this has been done is a matter entirely apart from the part-
nership. Kellogg V. Moore, 97 111. 282 ; Warring r. Hill, 89 Ind. 497 ; Lire Bur-
gess, 83 Me. 339, 22 Ath 222; Graham r. Thornton, (Miss.) 9 So. 292; Neil v.
Greenleaf, 26 Oh. St. 567 ; Miller v. Bailey, 19 Ore. 539, 25 Pac. 27 ; Scott's Appeal,
88 Pa. ;73 ; Clarke's Appeal, 107 Pa. 436 ; Edwards v. Remington, 51 Wis. 336, 8 N.
W. 193 ; Jewell i>. Ketchum, 63 Wis. 628, 23 N. W. 709 ; Webster t;. Lawson, 73 Wis.
561, 41 N. W. 710. But no action will lie without showing either a particular time set
for i)ayment, or the lapse of a reasonable time. Geise v. Ragan, 80 Ga. 732, 6S. E. 697.
If the agreement takes the form of a covenant to pay debts, and is broken, the co-
partner may of cour.se sue even if he has not paid the debt himself. Miller v. Bailey,
19 Ore. 539, 25 Pac. 27. This would most frequently ha pen if a time was limited
for payment.
Where upon dissolution onepartner agrees to pay the debts of the firm, his copartner,
who has previously supplied goods to the firm, may sue at law for the price of them.
Throi)pr. Richardson, 132 Pa. 399, 19 Atl. 218. Where upon dissolution one partner
agreed to collect the firm debts and pay over half of what he collected to his cojiartner,
the latter may maintain an action at law on the agreement. Ferguson v. Baker, 116 N.
Y 257, 22 N. E. 400,
§ 190.]
OF THE REMEDIES OF PARTNERS INTER SE.
255
§ 190. Separation by Agreement from Partnership Business. — It
is quite clear that cei-taiu particular aud distinct transactions
may be separated from the atiairs or business of the partnership,
by the agreement of the parties. (/?) ^ Then those persons who
are concerned in this separated matter are not as partners to
each other, although in all other business relations they remain
partners. And it may be added, the law will take cognizance of
any such separated transaction, and of any single one of which
the character or circumstances are such as to indicate that the
meaning of it is, that one partner shall pay a certain sum of
money to another partner before any account is taken ; wjiich
money is not to be carried into the general account when that is
taken, (q)
On similar grounds, a partner can sue a partner on his note
or indorsement or acceptance, (r) Nor do we think it would
company, being sued for debts contracted
on account of the concern, jointly retained
an attorney to defend them on their per-
sonal responsibility, it was held that one of
the four, who had paid the attorney's bill,
was entitled to sue the others for contribu-
tion. Tindal, C. J.: "If these four per-
sons entered into the contract with the
attorneys, distinct from their character of
members of the company, it appears to me
that the case does not fall within the gen-
eral rule." Edger v. Knapp, 6 Scott N.
R. 707, 712 ; Boulter v. Peplow, 9 C. B.
493 ; Sedgwick v. Daniell, 2 H. & N.
319.
ii)) Coffee V. Brian, 10 J. B. Moore,
341, 3 Bing. 54 ; Cross v. Cheshire, 6 Exch.
43. See Cousten v. Burke, 2 Harris & G.
300, 303; Collamer v. Foster, 26 Yt. 754 ;
Williams v. Henshaw, 11 Pick. 83, 84 ;
Gibson v. Moore, 6 N. H. 547 ; Caswell v.
Cooper, 18 111. 532 ; Buckner v. Ries, 34
Mo. 357. [Dakin v. Graves, 48 N. H. 45.]
The nisi ]}riits case of Robsou v. Curtis, 1
Stark. 7^, seems hardly reconcilable with
the principle of the foregoing decisions.
(q) See the language of Bayley, J., in
Jackson v. Stopherd, 2 Cr. & M. 361, 4
Tyrw. 330 ; and see Finlay v. Stewart, 56
Pa. 183.
(r) Preston v. Strutton, 1 Anst. 50 ;
Neale v. Turton, 4 Bing. 151 ; Bonafle v.
Fenner, 6 Sm. & M. 212 ; Grigsby v, Nance,
3 Ala. 347 ; Morrison v. Stockwell, 9 Dana,
1 72 ; Lomas v. Bradshaw, 9 C. B. 620.
See Teague v. Hubbard, 8 B. & C. 345 ;
Case V. Maxey, 6 Cal. 276. [McSherry r.
Brooks, 46 Md. 103 ; McKay v. Overton,
65 Tex. 82.] And where it is ascertained
by two partners who are about closing
their concerns, that a balance will cer-
tainly be due by one of them to the other
on a final settlement, although the true
balance cannot at the time be ascertained,
then if such debtor partner gives his note
to the creditor partner for a sum within
the balance which it is acknowleilged will
be due to him on the final settlement, such
note is given upon a good consideration,
and is equivalent to an express promise to
pay the given sum mentioned ; and the
payment of such note may be enforced at
law, though the balance is not struck be-
tween them. Rockwell v. Wilder, 4 Met.
556. See Ives r. Miller, 19 Barb. 196 ;
Pool V. Delaney, 11 Mo. 570. See Grid-
^ As where one partner assents to the other taking partnership property to his
individual use, in consideration of an agreement to pay half its value to the partner
individually. Purvines v. Champion, 67 111. 459 ; Neil v. Greenleaf, 26 Oh. St. 567.
So if one partner agrees to pay a copartner a share of his profits, the latter may main-
tain an action at law upon breach of the agreement. Emery v. Wilson, 79 N. Y. 78
256
THE LAW OF PARTNERSHIP.
[CH. VIII.
be competent for the defendant to defeat such an action oy
showing- that it was in fact, on i)artnership account, or a part-
nership debt, because this would vary by evidence a written
contract, (s)
So, too, if a partner receives a sum of money actually belong-
ing to his partner, but carries the same to partnership account,
the partner to whom the money belongs may, nevertheless, sue
the partner who received it. (t) And, in general, the mere fact
that a transaction is entered upon partnership books or accounts
as belonging to the partnership will not prevent a suit by the
partner to whom it actually belongs ; as only the fact of, and not
the appearance of, partnership interest could defeat his suit.
If there be a firm of more than two persons, and, on settle-
ment, one is found to have withdrawn more than his share, the
other two may have a joint action against him thereon ; but
neither one of the other two can sue separately, although he has
an assignment of all the rights and interests of his associates in
the assets of the firm, {tt)
ley V. Dole, 4 N. Y. 486. In Van Ness v.
Forrest, 8 Craiicli, 30, it was held, that
a promissory note, given by one partner to
another for the use of the copartnership,
will sustain an action in the name of the
promisee against the maker, notwithstand-
ing the connection, and that the money,
when recovered, would belong to the co-
partnership.
(s) It should be remembered, with res-
pect to negotiable paper, that credit is
deemed to be given exclusively to those
whose names appear on the face of the
paper, and that it is not allowable to add
parties by ]iarol. See 1 Pars, on Notes &
Bills, pp. *93, *102. But, to an action on
a note given by an outgoing partner for
assets, he may set up in defence an agree-
ment, that, for any notes or accounts that
.should prove worthless, he should be
allowed a deduction pro tanto. Bethel v.
Franklin, 57 Mo. 466.
(0 The i)laintiff, and Robert Smith, his
father, had been in partnership, during
wliich time one Keate became indebted to
them in 531/. Robert Smith died, leaving
plaintiff his sole executor. Subseijuently,
the plaintiff took the defendant into part-
nership, and Keate became indebted to
these two in the further sum of 301. He
afterwards became involved, and his effects
were assigned to trustees, for the benefit
of his creditors. Two payments were made
in the course of distribution at different
times. The first, which was made to the
plaintiff and defendant, was divided
between them according to their several
proportions ; that is, tlie proportion of the
former debt of 531/. to tlie plaintiff's separ-
ate use, and the proportion of the 30/. in
moieties between them. After this, the
trustees transmitted a bill of exchange to
the plaintiff and defendant in their joint
names, and the defendant alone received
the money under the title of Smith & Bar-
row. The plaintiffs proportion of this
second dividend, so far as related to his
oiiginal debt, was 79/. 14s. 6d. The ques-
tion was, whetlier the plaintiff could re-
cover this sum from the defendant, in an
action for money had and received to the
plaintiff's use, it being contended for the
defendant that it was money received on
account of a partnership transaction, and
therefore not recoverable in the present
action. It was held that he could main-
tain this action. Smith v. Barrow, 2 T.
R. 476. See Coffee v. Brian, 10 J. B.
Moore, 341, 3 Bing. 4 ; ante, note (p).
Cross t). Cheshire, 7 Exch. 43.
{tt) Wiggin V. Cummings, 8 Allen,
353.
§ 191.]
OF THE REMEDIES OF PARTNERS INTER SE.
257
§ 191. Action on Partnership Agreement. — If tllC articles of
partnership, or other agreements between the partners, are under
seal, covenant will lie for any breach of the agreement to enter
into partnership, or of any stipulation for payment, advances, or
other acts for setting the partnership into operation, although
accounts between the partners which are subsequent to the part-
nership require to be investigated and adjusted in a court of
equity. (?^)
{u) Venning v. Leckie, 13 East, 7 ; Ex
parte Notley, 1 Mont. & A. 46 ; Glover v.
Tuck, 24 Wend. 153 ; Tevrill v. Richards,
1 Nott & McO. 20 ; Williams v. Heiishaw,
11 Pick. 81 ; Ellison v. Chapman, 7 Blackf,
224 ; Bailey v. Starke, 6 Ark. 191. In
like manner, covenant will lie, subject to
the qualification stated in the text, for the
breach of any of the stipulations in the
articles of pai'tnership after the partner-
ship has actually begun. Glover v. Tuck,
supra ; Want v. Reese, 1 Biiig. 18 ;
Hatcher v. Seaton, 2 M. & W. 47; Bedford
V. Brutton, 1 Scott, 261, 262 ; M'Arthur v.
Ladd, 5 Ohio, 514, 521 ; Duncan v. Lyon,
3 Johns. Ch. 351, 362 ; Hayes v. Flowers,
25 Miss. 168 ; Ridgwny v. Grant, 17 111.
117 ; Manning v. Wadsworth, 4 Md. 70 ;
Hall V. Stewart, 12 Pa. 213 ; Capen v.
Barrows, 1 Gray, 376. But covenant
does not lie, on an agreement of partner-
ship, to com[)el the payment of a balance
due to the partnership from one of the
partners. Niveny. Spickerman, 12 Johns.
401. An action will lie between partners
for the breach of a covenant to account.
And in the simple case of a single, or at
most but temporary, breach of partnership
covenants, unless the bill pray for, and
there are just grounds for, dissolution,
equity will not interfere by injunction or
otherwise ; but will leave the injured
party to his action of covenant, as the more
appropriate remedy. Marshall v. Colman,
2 Jao. & W. 266.
Each partner, committing a breach of
his covenant, may be sued by all the rest
jointly for the joint damage sustained by
them in respect thereof : for the covenant
of each covenantor is, in contemplation of
law, made with all the rest, excluding
himself, and all the rest are joint as against
him; "for if there be twenty partners,
and one of them covenants with all the
rest, he is, in that respect, several from
them all, and they all joint against him."
rcr curiam in Thimblethorpe v. Hardesty,
7 Mod. 117 ; Vesey v. Mantell, 9 M. & W.
323 ; Eccleston v. Clipsham, 1 Saund.
153; Wright v. Michie, 6 Gratt. 354,
358; Spencer v. Durant, Comb. 115;
Saunders v. Johnson, Skin. 401 ; Caj)en v.
Barrows, 1 Gray, 376. It was held in
one Massachusetts case, on the supposed
authority of an English decision, that
where three or more copartners have con-
tributed severally and in diH'erent propor-
tions to the joint stock, and one of them
withdraws from the coiiartnership, in vio-
lation of their mutual agreement, each has
his several remedy for a breach. Dunham
V. Gillis, 8 Mass. 462. See Thomas v.
Pyke, 4 Bibb, 418. But Dunham v. Gil-
lis has been overruled, and the authority
of the case upon which it was decided
strongly questioned, in Capen v. Barrows,
supra, by Metcalf, J., in delivering the
opinion of the court. Though partners
covenant, each respectively with the
others, and with their respective execu-
tors, administrators, &c., upon the death of
one of the partners, a covenantee, his right
of action survives to his co-covenantees.
Eccleston v. Clipsham, 1 Saund. 153.
As in actions of covenant between part-
ners, so in actions upon simple contracts,
each partner is regarded as contracting
with the rest, excluding himself, and may
be sued b}' all the rest jointly for the vio-
lation of his contract ; he being several
from them all in respect of the breach, and
they all joint against him. Venning v.
Leckie, 1,3 East, 7.
Though partners cannot, by agreement
among themselves, give an authority to
any one of them to bring an action in his
name against persons not members of the
firm, there is no objection to their empow-
17
258
THE LAW OF PARTNERSHIP.
[CH. VIII.
Whenever there has been any breach of an express stipulation
between persons who are partners, an action for damages will be
sustainable, unless the breach, or the stipulation itself, or both,
are such that they involve the whole partnership business and
accounts, and the damages can be determined only by first
settling those accounts, (v) Thus, if one partner agrees to pay
another a certain salary, or commission, or other compensation
for his services over and above his share of the profits, and inde-
pendently of them, it would seem that an action at law can be
maintained on this promise, (w) And the same rule would
probably apply to the breach of any distinct and indejiendent
agreement in the articles of partnership, unless the difficulty of
eriiig one of their number to be the sole
plaintitf in actions to be brought inter se
in the course of the partnership business.
" Such an agreement is, in effect, an under-
taking not to object on account of all who
ought otherwise to have joined in the
action not being joined." Per Best, C. J.,
in Radenhurst v. Bates, 3 Bing. 463, 470 ;
Cross V. Jackson, 5 Hill, 478- In this last
case, the property and interest of a large
association were, by their articles, vested
in trustees thereafter to be elected, and the
subscribers agreed to pay to such trustees
their respective subscriptions. Cowen, J.,
said : " The effect was, on the trustees
\)eing elected, as provided by the articles,
to vest every legal right of the company in
them, the right to sue the defendant in
their own names inclusive. Had it been
left for the law to imply a promise, it
would, no doubt, have looked to the other
stock subscribers as the promisees, because
the consideration came from them ; and,
in that case, the action must have been in
the names of the whole." Niven v. Spick-
erman, 12 .Johns. 401. See Davies v.
Hawkins, 3 Moore & S. 488. See also For-
tune V. Brazier, 10 Ala. 791, for a case
hardly reconcMlable with the above author-
ities ; Brown v. Tapscott, 6 M. & W. 119.
(v) Capen v. Barrows, 1 Gray, 376.
See Bedford v. Bnitton, 1 Bing. N. C. 407.
See Andrews v. ?jllison, 6 J. B. Moore,
199 ; and compare Bedford v. Brntton,
sicprrt, with Estes v. Whipple, 12 Vt. 373.
See also Ridgway v. Grant, 17 111. 117.
[Hnntv. Reilly, 50 Tex. 99.]
(w) Paine v. Thacher, 25 Wend. 450.
in Weaver v. Upton, 7 Ired. 458, the
action was covenant, and the breach as-
signed the non-payment of $450 by the
defendant to the i)laintiff. The covenant
was contained in articles of copartnership
between Upton & Weaver, and was as
follows: "The said Upton, of the first
part, bargains and agrees to give me, the
said Weaver of the second part, four hun-
dred and fifty dollars, to manage the busi-
ness, which I agree to manage according
to the best of my judgment." In this
action, the defendant's counsel moved to
nonsuit the plaintiff, upon the ground that
the covenant amounted to an article of
copartnershiji, and that the $450, for the
non-payment of which the covenant was
alleged to have been broken, was to be
allowed out of the funds of the copartner-
ship. A nonsuit was accordingly entered,
and ui)on appeal the judgment was affirmed.
The court said : " The parties were stipu-
lating concerning the partnership business,
and the terms on which it was to be carried
on ; and, among others, that Upton bar-
gained and agreed to let Weaver have $450
for his services that year. It seems to us
that it woulil be against justice and right
to construe the covenant to be an agree-
ment by Upton, that he would pay that
sum out of his own pocket. We think
that it was an item in the expense account
of the firm, and that the firm should jiay
it." The case of Hills v. Bailey, 27 Vt.
548 is (piite similar. When ]>artners
agree to put into the firm a specified
amount, each may sue the other for a
breach of the agreement. Truitt <;. Baird,
12 Kas. 420.
§ 193.] OF THE REMEDIES OF PARTNERS INTER SE. 259
determining the damages without a general settlement should
make the action nugatory, and be sufficient to defeat it. ^
§ 192. Inability of Partner to Sue another not therefore Abso-
lute. — The common law formerly allowed to a partner scarcely
any remedy whatever against a partner. It seemed to say that
partners have agreed to trust each other, and waive all legal
rights. Malynes expressly declares that, " partners cannot sue
each other by the law. If two men have a wood jointly, and
the one selleth the wood and keepeth the money all to himself,
in this case his fellow shall have no remedy against him by the
common law ; for as they, when they took the wood jointly,
put each other in trust, and were contented to occupy and
deal together, so the law suffereth them to order the profits
thereof." (x) But the law, in these days, would not suffer the
one to do so great a wrong to the other. We have already seen,
and shall again see, that the law sustains actions, and gives
remedies, between partners, unless more substantial and suffi-
cient reasons than the mere theory, or rather fancy, stated by
Malynes, interferes to prevent the law from doing justice.
If a partner gives his copartner a sum of money for a specific
purpose, and the copartner keeps the money, there is authority
and reason for holding that the partner who gave the money
may sue him who received and holds it. (?/) So a partner may
sue his partner on a matter separated by an award, (j/^)
§ 193. Demand founded upon Balance of Account. — There are
no cases in which an action at law by partner against partner is
maintained, so numerous or diversified as those which are founded
{x) Malynes, Lex Merc. 310. were not himself a member of the societv,
(y) See Sharp v. Warren, 6 Price, 131, and that he had placed himself out of the
where the auditor of a benefit club, him- protection of his situation in the society by
self a member, having misapplied the funds his conduct in withdrawing. See Smith
of the society and refused to pay them over, v. Barrow, 2 T. R. 476 ; Cross v. Cheshire,
it was held, that the proper officers of the 6 Exch. 43.
club, suing in its name, might maintain (i/y) One partner ma}' sue another on
indebitatus assumpsit against him for the an award upon a partnership matter in
amount, on the ground that the defendant's dispute between them, otlier partnership
carrying away the money, and leaving the matters being still unsettled. Blakeley v.
society, made him liable to them, as if he Graham, 111 Mass. 8.
^ When an agreement for a partnership is entered into, but one party refuses to
carry it out by enteiing into the business, the other party has an immediate right of
action against him for a breach of contract. Goldsnuth v. Sachs, 17 F. R. 726, 8
Sawy. 110 ; Powell v. Maguire, 43 Cal. 11 ; Mann v. Bowen, 85 Ga. 616, 11 S. E. 862 ;
Vance v. Blair, 18 Ohio, 532 ; Hill v. Palmer, 56 Wis. 123, 14 N. W. 20. The same
is true of an agreement fixing the term of the partnership. Terry v. Carter, 25 Miss.
168 ; Bagley v. Smith, 10 N. Y. 489 ; Addams v. Tutton, 39 Pa. 447.
260 THE LAW OF PARTNERSHIP. [CH. VIII,
upon the striking of a balance. There is much conflict and uncer-.
tainty among them, most of which, we think, might have been
avoided by a distinct recollection of the reasons and principles
obviously a})plicable to such cases.
The general rule is, that a partner may sue at law a partner
on a promise to pay a balance which has been struck and agreed
upon. (2) The reason for this is clear and certain ; it is, that
all the reasons for refusing this remedy at law disappear from
such a case. For, in the first place, as to a settled balance,
they are no longer partners. If the settlement has closed their
concerns, or has followed the dissolution of the partnership,
they are no longer partners at all ; if the partnership goes on,
they are not partners as to this balance, because it has been
taken out of the current accounts, separated from the partner-
ship, and appropriated to the partner to whom it is due. In
the next place, there is no longer any objection on the ground
that the law cannot take an account of the partnership debts
and means, and take into view all those facts and considerations
which are necessary in order to ascertain who owes the other,
and how much. The law cannot do it, and equity will not do it ;
for it has been done already by the parties themselves. As there
is now no reason for a court to do it, the inability of a court to
do it constitutes no reason for refusing cognizance of the case,
§194. Whether Final Balance Required. — We apprehend the
true rule to be, that courts of law should sustain any action
between partners of the character above described. But the
question is sometimes decided on more technical grounds. Some-
times it is said that no such action will be maintained, unless for
{z) And, as we have already seen, an 1 Hall, ISO ; Calvert v. Marlow, 6 Ala.
action may be maintained upon .such a 342; Gulick u. Gulick, 2 Green (14 N. J.),
promise, notwithstanding a covenant to 578 ; McCoU v. Oliver, 1 Stew. 510 ; Fan-
account between the parties. Moravia v. ning v. Chadwick, 3 Pick, 420 ; Van
Levy, 2 T. R. 483, note. See, in illustra- Amringe v. Ellmaker, 4 Barr, 281. So, if
tion of the general principle enunciated in it is agreed between a surviving partner,
the text, Preston v. Stratton, 1 Aiist. 50; and the representative of one deceased, that
Brierly v. Cripps, 7 C. & P. 709 ; Wray v. the former will pay the latter a certain
Milestone, 5 M. & W. 21 ; Henley v. sum of money in consideration of all inter-
Soper, 8 B. & C, 16 ; Winter v. White, 1 est in the partnership account being relin-
Br. & B. 350 ; Ozeas v. Johnson, 1 Binn. quished, an action of assumpsit to recover
191, 4 Dall. 434 ; Walker v. Long, 2 P, the sum agreed upon may be maintained,
A. Browne, 125 ; Young v. Brick, 2 Pen- Wells v. Wells, Ventr. 40. [Cochrane v.
ning, 663 ; Beach v. Hotchkiss, 2 Conn, Allen, 58 N. H. 250.] See Lane v Tyler,
425 ; Lamalere v. Caze, 1 Wash, C. C. 49 Me. 108 ; Holyoke v. Mayo, 50 Me.
435 ; Wetmore v. Baker, 9 Johns. 307 ; 385 ; Nims v. Bigelow, 44 N. H. 376 ;
Murray v. Bogert, 14 Johns. 318 ; Clark y. Goble v. Howard, 12 Ohio, 165 ; Wright
Dibble, 16 Wend. 601; Attwater i;. Fowler, v. Cumpsty, 41 Pa. 102,
§ 194.] OF THE REMEDIES OF PARTNERS INTER SE. 261
a final balance. And this was asserted somewhat obiter perhaps,
in Massachusetts, at a time when the equity powers of the
Supreme Court of that State were not so extensive as they now
are ; and it was added, that all the different States concur in
this. But after remarking that in some of our States, and in
England, no suit at law, even for a final balance, can be mam-
tained, unless upon an express promise to pay this balance, the
court go on to say that, in Massachusetts, this is unnecessary ;
and the suit will be maintained although the accounts are not
closed between the partners, and there exist outstanding debts ;
provided these debts are valueless, or the plaintiff tenders them
to the defendant before the action, (a)
It would seem, therefore, that the phrase " final balance " is
not used in a very strict sense, although, in another part of the
same decision, the court ask, " Is the account a final balance,
and will the payment in this suit be an absolute termination of
all the partnership accounts between these parties ?"(^) the
last clause of this sentence being in the nature of a definition
of a final balance.
It is certain, as our notes show, that there are high authori
ties which recognize a rule requiring that the balance should
be final, meaning that the accounts should be closed and this
balance be the result, and that there should be also an express
(«) Williams v. Henshaw, 11 Pick. 81, Gray, 376, 382. In Haskell v. Adams,
82. several members of a company gave its
{b) In Williams v. Henshaw, 12 Pick, agent their note, which was discounted,
378, the question, as stated by the court and money raised for the use of the corn-
was, " whether one partner, after the ex- pany. The company being dissolved, the
piration of the joint concern, or even after partners who gave the note brought as-
dissolution, can, at any time, without any surapsit against another partner to recover
settlement, without any agreement with or the proportion of the amount of the note
notice to his copartner, by assuming all due from him. The company was still in
the outstanding debts, maintain assumpsit debt, and no adjustment of their atiairs
against him for any balance which may be had been made. It was held that the
due." The court held that he could not; action couhi not be maintained,
and for the reason, that, notwithstanding It may be inferred from all the above
a judgment for the plaintiff' on a balance cases that the balance which is treated as
thus made out, " in many ways new bal- final is one occurring upon the dissolution
ances might arise, which would give rise of the firm. And in Dickinson v. Granger,
to new actions, and thus create a multi- 18 Pick. 317, the court say expressly : "A
plicity of suits." See Brinley v. Kupfer, final balance of course can never arise till
6 Pick. 179 ; Sikes v. Work, 6 Gray, 433. after a dissolution." Before one partner
In Wilby v. Phinney, 15 Mass. 116, the can sue another at law, there must be a
expression " final balance " seems to be dissolution, a final settlement, a balance
used with great latitude. See Fanning v. struck, and a promise to pay. Balances
Chadwick, 3 Pick. 420, 423 ; Rockwell v. struck preparatory to a settlement will not
Wilder, 4 Met. 561. See also Haskell v. su]iport an action. Burns v. Nottingham,
Adams, 7 Pick. 59 ; Capen v. Barrows, 1 60111. 561.
262
THE LAW OF PARTNERSHIP.
[CH. VIII.
promise to pay this balance, (c) But this is going further than
the weight of authority, and much further, we think, than the
reason of the case extends. The later English authorities appear
to have established the rule in that country, that an express
promise is not necessary, because a promise is implied in clos-
ing the accounts and stating the balance, (d)
(c) That there must be an express
promise to pay a balance seems to have
been held by BuUer, J., in Moravia v. Levy,
2 T. R. 483, note ; though in Foster v.
Allauson, 2 T. R. 479, the same judge
said that he had no difficult}' in holding
that the dissolution of a previously exist-
ing partnership and the settlement of an
account were, in point of law, "a sufficient
consideration for a {iromise ; " which re-
mark seems as applicable to an implied as
to ah express promise. But in Fromont
V. Coujiland, 2 Bing. 170, it was distinctly
intimated by the court, mainly upon the
authority of the cases just cited, and con-
trary to tlie nisi prius case of Rackstraw v.
Imber, Holt N. P. 368, that there must be
an express ))romise. It is to be observed,
however, that the court also held, that no
balance had been struck between the
parties, and that the case was decided,
partly at least, on that ground. In this
country, Fromont i'. Coupland, and Mo-
ravia V. Levy, have been followed in quite
a number of the States. Thus, in New
York, one partner cannot recover a balance
of accounts, except there be an express
promise to pay it. Casey v. Brush, 2
("aines, 293 ; Halsted v. Schmelzel, 17
Johns. 80 ; Westerlo v. Evertson, 1 Wend.
532 : Townsend v. Goewey, 19 Wend. 424 ;
Pattison v. Blanchard, 6 Barb. 537. So
in South Carolina : Course v. Prince, 1
Mill C. R. 416. In Illinois : Davenport
V. Gear, 3 111. 495 ; Frink v. Ryan, 4 III.
322 ; Chadseyi-. Harris, 11 111. i51 ; Blue
V. Leathers, 15 111. 32. And see Wycoff v.
Purnell, 10 Iowa, 332. In Pennsylvania,
the early cases seem to hold, that the prom-
ise upon which one partner may recover
from another a balance of accounts need
not be express. Ozeas v. Johnson, 1 Binn.
191, 4 Dall. 434 ; Lamalere v. Caze, 1
Wash. C. C. 435 ; Hourguebie v. Girard,
2 Wash. C. C. 212 ; Williams;;. Henshaw,
11 Pick. 81. But in Killam v. Preston, 4
W. & S. 14, the court seemed inclined to
hold, apparently upon the authority of the
earlier English cases, that the jiromise
must be express. But this was not directly
ruled. And in Van Amringe v. Ellmaker,
4 Barr, 281, the court held, that, conced-
ing the principle that assumpsit will not
lie by one partner to recover from the other
a balance due upon the settlements of the
partnership accounts, without proof of an
expi'ess promise to pay, yet the execution
of a note for the balance due after settle-
ment was a sufficient express promise. See
Brown v. Agnew, 6 W. & S. 235 ; Hamil-
ton V. Hamilton, 18 Pa. 20. Whether an
express promise is requisite in New Jersey
and in North Carolina, see Jaques v. Hulit,
1 Harrison (16N. J.)38 ; Gulick i;.Gulick,
2 Green (14 N. J.) 578 ; Graham v. Holt,
3 Led. 300.
(d) Rackstraw v. Imber, Holt N. P.
368. The plaintiff and defendant, having
dissolved partnership, met to adjust their
accounts. The defendant admitted a cer-
tain balance to be due from him to the
plaintiff, and offered to pay it, if the plain-
tiff would sign a certain deed. The plain-
tiff refused to sign the deed, and brought
the present action for the admitted balance.
It was held that he was entitled to recover.
See Henley v. Soper, 8 B. & C. 16, 21. In
Wray o. Milestone, 5 M. & W. 21, the
plaintiff and defendant, beside having other
general dealings, had also been partners in
a particular adventure for the purchase and
sale of wool. They came to a general
account, of which a debit against the
defendant for loss on wool formed one
item. The defendant signed the account,
and admitted the balance due. The pres-
ent action was brought to recover the
amount of the item entered in the account
as the "loss on wool." Upon motion for
a new trial, one of the questions was,
whether a sufficient promise by the defend-
ant was proved. Lord Abinger, C. B. :
§ 194.] OF THE REMEDIES OF PARTNERS INTER SE. 263
The act of settling the account and striking the balance is
itself the plainest acknowledgment of an indebtedness which is
wholly liberated from all complication with the accounts of the
partnership : it grows out of them, but only out of their termina
tion and settlement. Nor can we doubt that this rule of law
must prevail in this country also, (e)
Then, as to the question whether the balance must be a final
one, we cannot but think that it is quite enough if it be a balance,
or a debt, distinctly separated from the partnership accounts,
either by their entire settlement, or by a settlement which may
be partial as to the affairs of the partnership, but complete as to
this debt. If not absolutely final, perhaps a presumption will
always exist that it remains connected with partnership affairs.
But, as it is perfectly well settled that a partner may sue his
copartner on a cause of action which never pertained to the part-
nership, it seems quite as certain that he should have his action
for a cause which he can show to have been cut out from the part-
nership by himself and his partners jointly, and to be as completely
separated from it as if there had never been any connection
between them.
It is undoubtedly necessary that all the partners should be bound
by the settlement, or by the agreement by which this matter was
separated from the partnership. (/) In few words, we think it
"The account being settled, there is an Exch. 43. In this case, a promise by the
unqualitied acknowledgment, signed by defendant to pay the plaintiff, his partner,
the defendant, that 15/. is due from bim the sum sued for, was implied from the
to the plaintiff on the general balance of defendant's admission, that, through his
accounts between them." . . . " If the own improper use of the partnership name,
item forms part of a settled account, with the plaintiff had been compelled to expend
a promise to pay the balance, I think there that sum for the defendant's sole benefit,
is no need of an express promise to pay the (c) In Massachusetts, an action by one
particular item." Parke, B. : "There is partner against another to recover a Vjalance
no occasion to go thiough the form of of accounts, may be sustained upon an
words that he promises : the transaction implied promise. Williams v. Henshaw,
speaks for Itself." Maule, B. : "I know 11 Pick. 79 ; Wilby f. Phinney, 15 Mass.
of no rule of law which requires in this, or 116, 121; Brigham v. Eveleth, 9 Mass.
in any other case, an express promise." In 538; Fanning y. Chadwick. 3 Pick. 420 ;
Jackson v. Stopherd, 2 Cr. & M. 361, to Dickinson v. Granger, 18 Pick. 317. So
which we have aln-aily referred, two per- also in Alabama, MColl v. Oliver, 1 Stew,
sons who had worked a coal-mine having 510 ; Pope v. Randolph, 13 Ala. 214 : and
dissolved partnership, and made an agree- in Vermont, Spear v. Newell, 13 Vt. 288.
ment for the division of a certain portion (/) See Gill v. Kuhn, 6 S. & R. 333 ;
of their property, the nature of their bar- Coiir.se v. Prince, 1 Mill C. R. 416 ; Bo.vill
gain for the division and the subsequent v. Hammond, 6 B. & C. 149, 151, per
actual use by one partner of the whole Littledale, J. ; Carr r Smith, 5 Q. B. 128 ;
jtroperty, was held to raise an implied Chadsey v. Harris, 11 111. 151 ; Morrow v.
obligation on him to pay the other partner Riley, 15 Ala. 710 One partner may im-
for a moiety of it. Cross v. Cheshire, 7 pliedly assent to and be bound by an
264
THE LAW OF PARTNERSHIP.
[CH. VIII.
not necessary that the balance should be general as well as final ;
but it is sufficient if it be so far final that the decision of the
question will be final upon all parties, and that nothing which can
hapi)en to the partnership will make it necessary or just to
review this decision, {y)
account stated So lield, per Washington,
J., in Lanialere v. Caze, 1 Wash. C. C.
437. But see Killani v. Preston, 4 W. & S.
14. See also Beach v. Hotchkiss, 2 Conn.
425 ; Kobinson v. Williams, 8 Met. 454.
((/) It seems to be well established by
the English cases (to some of which we
have already alluded), that the balance for
which a suit will lie between partners is
not necessarily a general balance of all the
accounts between them, but may be a
balance in respect of specific njatters,
which, by agreement, have lieen insulated
from the general accounts. So in Jackson
V. Stopherd, 2 Or. &. M. 361 ; Cottee v.
Brian, 3 Bing. 54 ; Cross v. Cheshire, 7
Exch. 43 ; Brown v. Tapscott, 6 M. & W.
119. So where a balance of accounts is
taken, and a note given as the balance,
that must be paid ; although there are
subsequent accounts upon which the [layee
may eventually be found in arrears.
Preston v. Strutton, 1 Anst. 50. Tlie
plaintiff and defendant were partners in a
stage-coach company, which was dissolved
in the month of November. The plaintiff's
action was for the recovery of certain
balances of accounts, by which it appeared
that, -during the partnershiji, a balance
was struck every month ; and that for the
months of September, October and No-
vember, balances had been found due from
the defendant to the plaintiff, though the
balance for November had since been paid.
It was held that the plaintiff might recover
the balances in his favor on the September
and October accounts. Brierly v. Cripps,
7 C. & P. 709 ; Carr v. Smith, 5 Q. B. 128.
In Vermont, a ])artner can recover only a
balance found due to him upon dissolution,
and after the adjustment of all the i)art-
nership dealings. Spear v. Newell, 13 Vt.
288; Warren v. Wheelock, 21 Vt. 323.
See Sawyer v. Proctor, 2 Vt. 580. The
same is true in Illinois. Davenport v.
Gear, 3 111. 495 ; Chadsey v. Harrison, 1 1
111. 151 ; Burns v. Nottingham, 60 111.
531 ; and is apparently the doctrine of the
following cases : Graham v. Holt, 3 Ired.
300 ; Pope v. Randolph, 13 Ala. 214 ;
Killam v. Preston, 4 W. & S. 14 ; Haldei-
man v. Halderman, 1 Hempst. 558 ; Chase
V. Garvin, 19 Me. 211. The proposition of
the text is sustained in the case of Gibson
V. Moore, 6 N. H. 547, in which all the
leading authorities are reviewed, and a
conclusion reached which seems to be
founded both upon the better authority
and the better reason. There the plaintiff
and defendant had been partners. A
controversy having arisen respecting some
of their ])artnership affairs, they referred
the matters in dispute to arbitration. The
referees awarded that the defendant should
pay the plaintiff $88.08, and the defendant
promised to pay the award. But there had
been no settlement of the general concerns
of the partnership, nor any final balance
struck. The present action was assumpsit
on the award, and the court held that it
might be maintained. Parker, J., said :
" In the present case, there has been no
final balance struck. The settlement of
the partnership concerns generally still
remains to be made. But, by agreement
between the parties, in relation to a
specific portion of the partnership trans-
actions a final adjustment has been made.
The partners have agreed to close thus far,
and one has agreed to pay the other a
certain sum notwithstanding. Nor is it
of any importance that the debts of the
partnershij) are not all paid, if such be the
fact. Creditors cannot object. They will
have the responsibility of both partners
still, nor is the jiayment of money by one
partner to the other to their p»rejudice. If
it was, that could not prevent the part-
ners from adjusting the concerns between
themselves, so as to create a liability from
one to the other. They are not parties
here, nor their rights in question. If
partners can pledge the partnership
property for the debt of an individual
partner, and creditors cannot hold it
(Whitney v. Dean, 5 N. H. 249), they
196.]
OF THE REMEDIES OF PARTNERS INTER SE.
265
§ 195. "What is a Settlement of Accounts ? — It is of no impor-
tance how the settlement has l)een made ; whether by the parties,
or by law, or by arbitration, (h) Indeed, a suit on an award has
been maintained, where the partners submitted " all differences "
between them to the arl)itrators, on the ground that an award in
such a case is a final settlement of the partnership : and this rule
was applied in one case where tlie plaintiff could not have sued
the defendant on the agreement to submit. (0
So where the settlement did not embrace all the debts, some of
no great amount being left outstanding, the plaintiff was per-
mitted to enter a remittitur as to these, (y) It is said that if
there be a dissolution or expiration of the period of partnership,
no partner can, without the consent of his copartner, assume all
the outstanding debts as belonging to him, and, allowing their
full value, so strike a balance, and sue his copartner, (k) But it
must be true that the mere existence of outstanding debts ought
not, of itself, to defeat the right of a partner to an action at law,
if everything but these debts is settled and determined, and he is
willing either to take them all at their face, or allow and transfer
them all to his partner as of no value whatever. (Q
§ 196. Mistake in Accounts. — If the accounts have been
may surely make any adjustment of the
partnership interests among themselves
that they think expedient." And see,
upon the same point. Sawyer v. Proctor, 2
Vt. 580 ; Vau Ness v, Forrest, 8 Crauch,
30.
It seems to be established, both in
England and in this country, that, if the
partnership affairs are so nearly adjusted
that there remains but a single item to
li(iuidate, one partner ma}' maintain an
action against his copartner for a balance
due him growing out of the partnership
transactions, such balance being so far
final as to remove the difRc.ulty as to part-
nership. Robson I'. Curtis, 1 Stark. 78 ;
Bovill V. Hammond, 6 B & C. 149, per
Bayley, J., dissent ieiUe ; Musier v. Trum-
])0ur, 5 Wend. 274 ; Westerlo v. Evertson,
] Wend. 534 ; Gibson v. Moore, 6 N. H.
549 ; Clark v. Dibble, 16 Wend. 603 ;
Byrd v. Fox, 8 Mo. 574 ; Brubaker v.
Robinson, 3 Pen. & W. 295 ; Van
Amringe v. Ellmaker, 4 B:irr, 283.
(h) Henly v. Soper, 8 B. & C. 16, 20.
[Abell V. Piiillips (Ky.), 13 S. W. 109.]
See Gibson v. Moore, 6 N. H. 547 ; Brierly
V. Cripps, 7 C. & P. 709 ; Preston v.
Stratton, 1 Anst. 50 ; Wray v. Milestone,
5 M. & W. 21.
(i) Winter V. White, 3 J. B. Moore,
674. See Buruell v. Minot, 4 J. B. Moore,
340.
(J Brinley v. Kupfer, 6 Pick. 179. See
cases at end of preceding note, and Sikes
V. Work, 6 Gray, 433 ; Frink v. Ryan, 4
111. 322.
{k) Williams v. Henshaw, 12 Pick.
378.
(0 Rockwell V. Wilder, 4 Met. 556,
561. The existence of outstanding debts
due the firm will not necessarily defeat an
action of assumpsit between ]iartners for
a balance, if the plaintiff show that the
outstanding debts are incapable of collec-
tion, and thus that the judgment rendered
will make a final settlement between the
partners. And in such case, especially
if an assignment of all the outstanding
debts be seasonably given or tendered to
the other party, the action may be sus-
tained. Per Morton, J., in Williams v.
Henshaw, 11 Pick. 79.
266
THE LAW OF PARTNERSHIP.
[CH. VIII.
settled, and one partner can prove tliat he paid too much to the
other, by some mistake or ignorance of fact or of accounting,
there would not seem to be any reason — unless one should grow
out of the peculiar circumstances of the case — to prevent him
from recovering, at law, what he has thus overpaid, {m)
In New Hamjishire, it is provided by statute that " any copart-
ner or joint-owner may maintain an action of assumpsit against
one or more of his copartners or joint-owners, to recover his just
share of any goods or chattels, choscs in action, or the proceeds
thereof, received by such copartners or joint-owners, and not
accounted for, delivered, paid, or otherwise settled for on
demand." (n)
§197. Contract to Render Accounts. — If, in the articles of
partnership, or even independently of them, one partner cove-
(?)j) Bond V. Hays, 12 Mass. 34 ; Chase
V. Garvin, 19 Me. 211. If an account
between partners has been stated, in
which there is a manifest error in the
figures, or in the principles u[)on which it
is adjusti'd, the amount really due to the
injured party may be recovered in assump-
sit, leaving the dissolution and settlement
otherwise unaffected. But where there is
no actual adjustment of accounts, and one
partner purchases the interest of another
for a gross sum, but the purchase is
affected by fraud, the defrauded partner
may wholly avoid the contract, and have
the accounts reopened ; but his remedy is
in equity. Chase v. Garvin, supra.
Upon the principle stated in the text,
if, after the dissolution of a partnership,
settlement of the accounts, and division
of the profits, some of the former partners,
from causes arising subsequently to the
dissolution, are compelled to incur heavy
expenses on the account of the former
partnership, an action would apparently
lie by them, against the other partners, to
recover their proportion of such ex))end-
iture. Graham v. Robertson, 2 T. R. 282.
See Kennedy v. M'Fadon, 3 Harris & J.
194. So if a partnership has been dissolved,
and the partnership accounts adjusted,
and one partner is afterwards obliged to
pay an outstanding claim not provided
for, he may maintain assumpsit against
his copartner for the proportion of it which
the latter ought to pay by reason of his
joint liability. Brown i;. Agnew, 6 W. &
S. 235, 238. [Whetstone v. Shaw, 70 Mo.
575.] See Dickinson v. Granger, 18 Pick.
315, 317 ; Kelley v. Kauffman, 18 Pa.
351. But an agreement between two part-
ners after dissolution, to the effect that
they would "quit even" to avoid the
expenses of a chancery suit, does not
authorize one to maintain an action at
law against the other to recover con-
tribution for a partnership debt subse-
quently paid. De Jarnette v. McQueen, 31
Ala. 230. See Fanning v. Chadwick, 3
Pick. 420. One partner may sue another
for money advanced, if the transaction be
single, not involving the rights of credi-
tors, or an adjustment of partnership
accounts. Russell v. Grimes, 46 Mo. 410 ;
Finlay v. Stewart, 56 Pa. 183. See also
Wells V. Simonds, 51 How. Pr. 48. Or
for his share of the declared profits, if by
mutual agreement one ])artner is made
general manager, and is from time to time
to pay over declared dividends of profit to
the others. Wadley v. Jones, 55 Ga. 329.
Or for his share of the assets after dissolu-
tion and actual division. Hunt v. Morris,
44 Miss. 314 ; Dakin v. Graves, 48 N. H.
45. Or for money paid on a firm debt,
which, on dissolution, the other partner
had agreed on receipt of the assets to pay.
Hinkie v. Reid, 43 Ind. 300. Or for a
sum agreed by one partner to be paid to
the other, for his interest in the concern.
Wells V. Carpenter, 65 111. 447.
(w) Revised Statutes of New Hamp-
shire, ch. 180, § 4, p. 358.
§ 198.]
OF THE REMEDIES OF PARTNERS INTER SE.
267
nants with another that he will account, it seems clear that an
action of covenant lies for a breach, (o) And it was said, some
years since, in Massachusetts, that assumpsit would lie on such a
promise between j)artners. («?) Such an action would be main-
tained now everywhere.
§ 198. Demand for Contribution. — A difference has been made
between an action at law between partners for contribution, and
those we have been considering, for which it is not easy to see
sufficient reason. Courts, at least in England, seem to have held,
or judges have said, that a partner who has paid money for the
partnership, may, generally, sue his copartners for contribution, (q)
(o) Foster v. Allanson, 2 T. R. 479 ;
Want V. Reece, 1 Bing. 18; Owston v.
Ogle, 13 East, 538 ; Duncan v. Lyon, 3
Johns. Ch. 362 ; Bailey v. Starke, 6 Ark.
191. See Niven v. Spickernian, 12 Johns.
401.
ip) "Wilby V. Phinney, 15 Mass. 120.
{q) The rule usually laid down upon
this point is, that contribution may be
obtained in an action of assumpsit by one
partner against another, for money laid
out for the defendant's use. But it has
always rested rather upon the dicta of
eminent judges than upon the authority
of adjudged cases, and, in the general
form in which it has been customary to
state it, may be considered as no longer
supported even by the weight of English
authoritj'. See Abbott v. Smith, 2 W.
Bl. 947. Other cases and dicta which are
sometimes cited in support of the right to
contribution between partners, we have al-
ready referred to ; and they are, we think,
better explained upon other grounds.
See Wright v. Hunter, 5 Ves. 792; § 187,
and note ; Holmes v. Williamson, 6
Maule & S. 159 ; Blackett v. Weir, 5 B.
& C. 385, 388 ; Evans v. Yeatherd, 2
Bing. 133. Wooley v. Batte, 2 C. & P.
417, is, perhaps, the most direct adjudica-
tion in favor of contribution at law be-
tween partners. See Milburn v. (.'odd, 7 B.
& C. 419, per Bailey, J.
Mr. Gow, in the first and second edi-
tions of his work on Partnership, laid
down the rule that, "in an action of
assumpsit, for money paid to his use, one
partner may enforce from his copartner
contribution towards a debt, which the
single partner may have discharged, but
for which the firm were jointly liable."
Gow on Part. (2d ed.) 90. In the sub-
sequent editions, however, the rule is
greatly (jualitied, and its operation re-
stricted to the case of partners in a single
transaction. For the rule in its changed
and limited shape, he cites numerous
cases. Abbott v. Smith, 2 W. Bl. 947 ;
Merry weather v. Nixon, 8 T. R. 186 ;
Evans v. Yeatherd, 2 Bing. 133 ; Merries
V. Jamieson, 5 T. R. 556, per Lord Ken-
yon ; Ansell v. Waterhouse, 6 M. & S.
390, per Bayley, J.; Holmes v. Williamson,
6 M. & S. i58 ; Carlen v. Drury, 1 Yes. 6t
B. 157 ; Wright v. Hunter, 5 Ves. 792 ;
Burnell v. Miuot, 4 J. B. Moore, 340.
But these cases seem to be very far from
establishing the proposition for which they
are cited. In some of them are to be found
dicta of judges asserting the general right
of contribution between joint defendants ;
in some, contribution is actually enforced,
but between persons who are not partners,
but simply joint contractors, or otherwise
jointly connected ; while in others, the
question before the court is the compe-
tency of a witness, his competency de-
pending upon his liability to contribute,
either in law or in equity, to a demand
which his testimony establishes. The
distinction, if any, which these cases
suggest, is one between persons who are
simply joint contractors, and between
those who hold to each other the closer
relation of partners ; that is, it i.s between
parties who are partners, and those who
are not, and not between different kinds
of partners. And the difference as to the
right of contribution, between those who
are partners and those who are merely co.
268
THE LAW OF PARTNERSHIP.
[CH. VIII.
This is the more remarkable, because the whole doctrine of con-
tribution is originally only equitable. Every reason against other
actions at law, between copartners, would seem to apply to those
for contribution. One partner pays money to-day, and another
to-morrow; and the only way of determining the questions which
might arise from such payments would seem to be, to credit the
paying partner with the amount he pays, and give this item its
due place and weight in the general account of the partnership.
We find but little, or rather notliing, in American jurispru-
dence, (r) and nothing in the reason of the case, to sustain an
action at law by a partner against his partner for contribution,
unless the facts of the case and the whole character of the trans-
action insulate it from the general accounts of the partnership,
and bring it within those reasons which, as we have said, seem to
us sufficient to sustain any action at law between partners, (s) ^
debtors or co-contractors, as well as the
reason for it, is obvious. They are thus
stated by the court in White v. Harlow, 5
Gray, 463, 468: "Where two indepen-
dent parties owe a joint debt, and one
pays the whole, which he may be com-
pelied to do by the creditor, the law, in the
absence of any express agreement of sucli
debtors, implies a promise of the co-
debtor, to him who has thus paid the
whole, to pay him one-half of the com-
mon debt thus discharged. But, when
one partner thus pays the whole debt, the
law implies no such promise : it merely
authorizes him to charge the whole to the
firm in partneiship account, of which he
will have the benefit, as a credit on settle-
ment of that account, voluntarily, or by
a suit in equity."
(r) The American authorities, indeed,
seem to be against the right of contribu-
tion as between partners. And in this
respect no distinction is made between
trading and professional partnerships.
Westerlo v. Evertson, 1 Wend. 532 ;
Gridley v. Dole, 4 Mill, C. R. 486 ; Law-
rence V. Clark, 9 Dana, 257 ; Kennedy v.
McFadon, 3 H. & J. 194 ; Bracken v.
Kennedy, 4 111. 564 ; Brown v. Agnew, 6
\V. & S. 238 ; Roberts v. Fitter, 13 Pa.
265 ; Haskell v. Adams, 7 Pick. 59 ;
White V. Harlow, 5 Gray, 463 ; Morin v.
]\Iartin, 25 Mo. 360 ; De Jarnette v. Mc-
Queen, 31 Ala. 230.
(s) As where one partner claims con-
tribution of another in respect of some
transaction whicli has been separated from
the partnership accounts ; or has arisen
after dissolution and settlement ; or is a
consequence, not of the relations of the
partners inter se, but of their relations to
third persons. Graham v. Kobertson, 2
T. K. 232 ; Brown v. Agnew, 6 W. & S.
235 ; Kelly v. Kauffman, 18 Pa. 351. Or
where the parties to tlie suit for contribu-
tion are to be regarded as joint contract-
ors, or in any other light than as partners.
Ansell V. Waterhouse, 6 M. & S. 390 ;
Holmes v. Williamson, 6 M. & S. 158 ;
Burnell v. Minot, 4 J. B. Moore, 340 ;
^ The general rule is that a partner cannot sue for contribution, even after dissolu-
tion, till the accounts are settled ; since it cannot be known until that time whether
one partner is indebted to the firm or to the other partner. Ante, § 185, note 1.
But after an accounting has been had, one partner who has been since called upon
to pay a firm debt not included in the account may maintain an action for contribu-
tion. Sears v. Starbird. 78 Cal. 225, 20 Pac. 547 ; Jepson v. Beck, 78 Cal. 540, 21
Pac. 184 ; Whetstone v. Shaw, 70 Mo. 575 ; Logan v. Trayser, 77 Wis. 579, 46 N.
W. 877.
§ 200.]
OF THE REMEDIES OF PARTNERS INTER SE.
269
SECTION III.
QUESTIONS BETWEEN PARTNERS COGNIZABLE ONLY IN EQUITY.
§ 199. Equitable Jurisdiction over Partnership Affairs. — The
reasons which have already been given for the refusal of courts
of law to sustain generally actions between partners, indicate,
with sufficient clearness, the classes of cases in which courts of
equity give relief. It may be said that they will give relief wher-
ever law will not, and that it is the general rule that law will not
sustain suits l)etween partners. The preceding section may be
considered as stating the exceptions to this rule ; and all cases
which do not come under one or other of these exceptions come
under the rule.
§ 200. Demands between Firms having a Common Member. —
One important class of actions, in which suits at law are not
maintainable, needs more particular attention. It consists of cases
in which one firm has a cause of action against another firm, and
there is some one person who is a member of both firms. There
can be no action at law between those firms, (t} There is a rule
Edger v. Knapp, 6 Scott N. R. 707, 712 ;
Sedgwick V. Daniel], 2 H. & N. 319 ;
Forbes v. "Webster, 2 Vt. 58 ; Dupuy v.
Johnson, 1 Bibb, 562. Or where there is
a special agreement between partners
authorizing one of them to lay ont money
on partnership account, with a stipulation
that they will each contribute, in due
proportion, such sums as may be neces-
sary to reimburse him. Brown v. Tap-
scott, 6 M. & W. 119 ; Geddes v. Wallace,
2 Bligh, 270 ; Waugh v. Carver, 2 H. Bl.
235 THuttou V. Eyre, 6 Taunt. 289 ; Li
re Webb, 2 J. B. Moore, 500 ; Murray v.
Bogert, 14 Johns. 318. There must be
actual payment of a joint debt, before one
{)artner can recover contribution. Max-
well V. Jameson, 1 B. & Aid. 51 ; Taylor
V. Higgins, 3 East, 169 ; Gumming v.
Hackley, 8 Johns. 202. See Dunn v.
Lee, 1 J. B. Moore, 2 ; Barclay v. Gooch,
2 Esp. 571 ; Ex parte Sergeant, 1 Glyn &
J. 183. Neither will a suit for contribu-
tion he maintained, either at law or in
equity, in consequence of a recovery
against one partner under a judgment in
an action on a tort. Merryweather r.
Nixon, 8 T. R. 186 ; Ansell v. Water-
house, 6 M. & S. 390 ; Vose v. Grant, 15
Mass. 521 ; Thweatt v. Jones, 1 Rand.
328 ; Dupuy v. Johnson, 1 Bibb, 565 ;
Pecks V. Ellis, 2 Johns. Ch. 131 ; Lingard
V. Bromley, 1 Ves. & B. 114, 117. See
also Seddon v. Connell, 10 Sim. 79, 86 ;
Attorney-General v. "Wilson, Craig & Ph.
1, 28; Miller v. Fenton, 11 Paige, 18.
As to rights arising from payments of
money under illegal contracts, see Aubert
V. JIaze, 2 B. & P. 371 ; Ex parte Bell,
1 M. & S. 752 ; Watson v. Fletcher, 7
Gi-att. 1 ; Sullivan v. Greaves, Park on
Ins. 8. See Booth v. Hodgson, 6 T. R.
405 ; Tenant v. Elliott, 1 B. & P. 3 ;
Farmer v. Russell, 1 B. & P. 296 ; Sharp
V. Taylor, 2 Phillips Ch. 801, 818; Thomp-
son V. Thompson, 7 "Ves. 473 ; Anderson
V. Moncrieff, 3 Dess. Ch. 124. See Edgar
V. Fowler, 3 East, 222. A partner who
redeemed lands of the firm from execution
was held entitled to contribution, in
Downs V. Jackson, 33 111. 464.
(i) Bosanquet v. Wray, 6 Taunt. 598;
270
THE LAW OF PARTNERSHIP.
[CH. VIII.
which, though technical, or rather formal, would suffice to prevent
it. It is the rule which prevents the same party from being both
plaintiff and defendant of record ; for then a man would sue him-
self. We have already remarked that a partnership j)ossesscs a
kind of personality, and that it is, for many purposes, a kind of
corporation. The law of partnership, as it is incorporated into
the common law, acknowledges this substantially as the founda-
tion of its whole system ; but it never acknowledges it formally.
The names of all the partners — as a general rule — must be set
forth, both as to the plaintiffs and the defendants. They should
be described as " co-partners, under the name and style of A., B.
& Co." But these words, however usual and proper, and for some
purposes necessary, are, in law, words of descrij)tion ; and A. B.
<fe C. can no more sue A. D. & E. than A. can sue A. In addition
to this technical reason, however, it may be said that such suits
would frequently involve an intricate combination of interests, to
which the processes of law are not adequate. If the plaintiff firm
recover, in such a case, A. would receive a sum which he must
contribute to raise, and the account might possibly involve all of
those of both partnerships. This, with the entire sufficiency of
Maiuwaring v. Newman, 2 B. & P. 120 ;
Motfatt V. Van Milligen, 2 B. & P. 124,
note ; Jones v. Yates, 9 B. & C. 532 ;
Griffith V. Chew, 8 S. & R. 30 ; Portland
Hank v. Hyde, 11 Me. 196 ; Eastman v.
Wright, 6 ' Pick. 320, 321 ; Graham r.
Hariis, 5 Gill & J. 489 ; Barley v. Harris,
8 N. H. 235 ; Rogers v. Rogers, 5 Ired.
E4. 31 ; Calvin v. Markliam, 3 How.
(Miss.) 343 ; Green v. Chapman, 27 Vt.
236 ; Englis v. Fnrniss, 4 E. D. Smith,
587 ; Haven v. White, 39 111. 509. Upon
the same principle, a plaintiff cannot
summon himself, nor can several plaintiffs
summon one of their own number, as a
trustee, in the process of foreign attach-
ment. Belknap v. Gibbens, 13 Met. 471.
See Portland B.uik v. Hyde, 11 Me. 196.
And where there are two firms, with a
partner common to each, in an action
against one of them the other cannot be
summoned as trustee ; for the reason that
tlie trustee process is a mode of enforcing
hy a suit at laio the contract between the
trustee and the principal debtor, for the
benefit of the creditor of the latter.
Denny v. Metcalf,28 Me. 389.
In Pennsylvania, by act of April 14th,
1838, it was enacted that no action by
partners or several persons against part-
ners or several persons should abate, nor
the action be defeated by reason of one or
more individuals being or having been
members of both firms, or being or having
been of the parties plaintiffs, and also of
the parties defendants, in the same suit ;
the acts and declarations of the partner
or persons so being of both the parties,
plaintiffs and defendants, to affect each
party res{)ectively to the same extent as
the acts and declarations of the other
partners or persons, plaintiffs or defend-
ants, would affect the respective firms or
parties ; provided, that no act or declara-
tion of the party shall be given in evi-
dence in his own favor to the prejudice of
others. For cases under this statute, or
bearing upon it, see Hepburn v. Curts, 7
Watts, 300 ; M'Fadden v. Hunt, 5 W. k
S. 468 ; Tassey v. Church, 5 W. & S.
468 ; McConkey v. Rogers, Brightly N.
P. 450. [See post, § 229.]
§ 202.] OF THE REMEDIES OF PARTNERS INTER SE. 271
equity for such cases, has doubtless prevented courts or legisla-
tures from annulling or modifying this rule.^
§ 201. Effect of Death, &c., of the Commo.i Member. — It is applied
with equal strictness after the death of the partner common to
both firms, or of any other partner, and after the dissolution of the
partnership in any way. (v) The foundation of the rule is, that a
party cannot sue himself, because he cannot contract with him-
self ; and, therefore, there never was a valid contract at law between
these two firms. (?^') But an action may be maintained on any
transactions subsequent to the deatli of the common partner, or
his withdrawal from either firm, (a;) So far as this disability is
merely technical, it may be doubted whether it exists in tlie case
of a dormant or secret partner.
§ 202. Dormant Partner as Party to Suit. — The rule Seems to be,
that the creditors of a partner are not obliged to include the name
of a secret partner among the defendants. (^) There is an obvious
{v) Bosanquet v. Wray, 6 Taunt. 598 ; sues a defendant, with whom alone he
De Tastet v. Shaw, 1 B. & Aid. 664 ; believes he has contracted but who in
Burley v. Harris, 8 N. H. 235; Portland truth has a dormant partner, the defendant
Bank v. Hyde, 11 Me. 196. See Englis w. may plead in abatement that his partner
Furniss, 4 E. D. Smith, 587. And in ought to be joined, unless it be shown that
Ohio, a surviving partner cannot maintain the interest of the plaintiff is thereby
proceedings in rem for supplies furnished materially altered, and that it is no injury
by the copartnership to the vessel of his to the plaintiff to compel him to bring
copartner ; the water-craft law of that a new action against the two, and to allow
State not creating a new, artificial person, them therein to set off a debt contracted
with capacity to contract, but merely giv- by the plaintiff, as the plaintiff believed,
ing an accumulative remedy against the to the other partner alone, but in which
owner himself. Thompson i: Steamboat both partners are in truth equally inter-
J. D. Morton, 2 Ohio St. 26. See Milter ested. But this case may now be considered
V. Andres, 13 Ga. 366. [See /^os/!, § 231.] as overruled, and the rule to be, that,
{w) Rose I'. Poulton, 2 B. & Ad. 822. if the plaintiff have no means of knowing
{x) Bosanquet v. Wray, 6 Taunt. 598. the e.xistence of the partnership, the part-
One member of a firm may sue another ner sued cannot plead in abatement the
firm of which his copartners were members, non-joinder of a dormant partner. De
on a covenant executed to him by that Mautort v. Saunders, 1 B. & Ad. 398 ; Ex
firm. MuUany v. Keenan, 10 la. 224. parte Hodgkinson, 19 Ves. 294 ; Ex parte
{y) It was held in one case, Dubois v. Norfolk, 19 Ves. 458 ; Ex parte Watson,
Ludert, 5 Taunt. 609, that if a plaintiff 19 Ves. 462 ; Ex parte Matthews, 3 Yes.
1 The principle is well established that no action at law will lie between firms
having a common member, for the reasons given in the text. Hall v. Kimball, 77 111.
161 ; Crosby v. Timolat, (Minn.) 52 X. W. 526 ; Beacannon v. Liebe, 11 Ore. 443, 5
Pac. 273. But a bill in e(puty will lie in such a ca.se. Crosby j;. Timolat, (Minn.)
52 N. \V. 526.
Where a specific debt, not part of a general account, is due from one firm to the
other, it may be assigned, and in a jurisdiction where the assignee of a chose in action
may sue in his own name, the assignee may sue the debtor firm. Beacannon v. Liebe,
11 Ore. 443, 5 Pac. 273. The same is true at common law in case of the indorsement
of mercantile paper.
272
THE LAW OF PARTNERSHIP.
[CH. VIII.
reason for this. Why should the creditor lose a remedy, and the
firm acquire a protection, merely by the firm's keeping secret the
name of one of them ? or why should the creditor be bound to
place on record a name which he does not know, and is hindered
from knowing by his debtors ? The rule seems to go further, how-
ever. If the creditor knows the name of a secret partner, it would
seem that he is under no obligation to make him defendant, (z)
And there is some reason for this ; partly in the advantage of a
uniform rule, and much more in the principle that the firm should
be estopped from requiring that another should make public what
they themselves choose and endeavor to keep private.
But the rule is sometimes said to go still further, even to the
converse proposition, that the firm, in their own action, need not
name a dormant or secret partner; and, therefore, the want of his
name cannot be taken advantage of, by abatement or otherwise.
The reasons which apply to the other side of this rule have no
application whatever to this. But, as a mere matter of convenience,
there is perhaps no objection to this proposition, although we are
not certain that the authorities, when well considered, sustain this
rule where the firm is plaintiff, (a) But to go further : If a firm
& B. 126 ; Baldney v. Ritchie, 1 Staik.
338 ; Doo v. Chippenden, cited in Abbott
on Shipping ; Sylvester v. Smitli, 9 Mass.
119 ; [Tynberg v. Cohen, 67 Tex. 220, 2
S. W. 734.] See Cookingham v. Lasher,
2 Keyes, 454, and Bird v. McCoy, 22
Iowa, 549.
(z) If he was unaware of the dormant
partner, at the time of making the con-
tract sued upon, he may or may not, at his
election, join the dormant partner. Ex
parte Hamper, 17 Ves. 412 ; Ex parte
Liddle, 2 Rose, 36 ; Grellier v. Neale, 1
Peake, 146 ; Robinson v. Wilkinson, 3
Price, 538 ; Ex parte Layton, 6 Ves. 438 ;
Hoare v. Dawes, 1 Doug. 371 ; Wilson v.
Wallace, 8 S. & R. 55 ; Page i-. Brant, 18
111. 37 ; Cleveland y. Wood word, 15 Vt.
302 ; Blin v. Pierce, 20 Vt. 25 ; Hagar v.
Stone, 20 Vt. 106. But if the plaintiff
sue only the ostensible members of a firm,
and the non-joinder of the rest is objected
to, it will be for the jury to say whether,
at the time the plaintiff contracted,
he knew or had the means of know-
ing that others were jointly interested
with the defendants ; or, in other words,
to decide with whom the contract was
intended to be made. Stanstield v. Levy,
3 Stark. 8 ; Mnllett v. Hook, 1 Moody &
M. 88 ; Be Mautort v. Saunders, 1 B. &
Ad. 398 ; Ex parte Layton, 6 Ves. 438 ;
Davies v. Hawkins, 3 M. & S. 488, 492 ;
Boiitield V. Smith, 12 M. & W. 405. See
Robinson v. Wilkinson, 3 Price, 538.
Where, by direction of the plaintiff, the
writ was served on one only of two part-
ners in trade, when the declaration showed
that the plaintiff knew the names of both,
and a verdict was obtained upon a plea of
non-assumpsit, pleaded by the partner on
whom the writ was served, it was held
that the judgment should be arrested.
Shields v. Oney, 5 Munf. 550.
(a) Skinner ;;. Stocks, 4 B. & Aid. 437.
See Ross v. Decy, 2 Esji. 469, note ;
George v. Claggett, 7 T. K. 361, note;
Rodwell V. Redge, 1 C & P. 220; Gordon
V. Ellis, 2 C. B. 821 ; Cothay v. Fennell,
10 B. & C. 671 ; Alexander v. Barker, 2 Cr.
& J. 133 ; Robson v. Dniramond, 2 B. &
Ad. 303.
It appears, from the cases just above
cited, to be the doctrine of the English
cases that the dormant partner may be
coplaintiff with the ostensible partner in a
suit upon a contract made by the latter
upon partnership account. As to the other
§ 202.]
OF THE REMEDIES OF PARTNERS INTER SE.
273
should seek to sue another firm, when one partner in either is a
secret partner in the other, because he need not be named in that
one, or even if he is secret in both, and therefore need not be
named in eitlier, we should have much doubt whether such a suit
could be maintained against the substantial reasons which oppose
it, until it were otherwise determined by adjudication.
And if it be said that, if the partner common to both be only
nominal (6) in one, or both, having no real interest whatever,
sucii a suit may be maintained, we should have some doubt if he
were nominal in both, and more, if he were nominal in one and
actual in the other ; because a merely nominal partner is a perfectly
real partner as to those parties. It seems to be agreed that, if the
action is brought on a written contract, in which all tlie names are
used, the want of interest in one does not sustain an action without
him, or an action which makes him both plaintiff and defend-
ant, (c) And we should be inclined to think the relation of part-
question, whether in such a case the
secret partner must join or wliether the
ostensible partner may sue alone, we have
already indicated the principles by which,
we think, it should be answered. The
English cases seem rather to favor the
doctrine that the ostensible partner may,
if he chooses, sue without joining the
secret members of the firm. He is regarded
as an agent, contracting, in his own name,
Barstow v. Gray, 3 Me. 409 ; Ward v.
Leviston, 7 Blackf. 466 ; Monroe y. Ezzell,
11 Ala. 603 ; Bank of St. Mary's v. St.
John, 25 Ala. 566, 621-624; Gregory v.
Bailey, 4 Harr. (Del.) 256; Speake v.
Prewitt, 6 Tex. 252 ; Jackson v. Alex-
ander, 8 Tex. 109 ; Keane v. Fisher, 9 La.
Ann. 70, 74. But when the ostensible
and secret partners all sue, on a partner-
ship contract, the defendant may make
for an undisclosed principal, in which the same defences, whether by offset or
case either the agent or the principal may
sue upon the contract. Sims v. Bond, 5
B. & Ad. 389. See Mawman v. Gillett, 2
Taunt. 327 ; Lloyd v. Archbowle, 2
Taunt. 324 ; Lereck v. Shaftoe, 2 Esp.
468; Brassington v. Ault, 2 Bing. 177 ;
Steel V. Western, 7 J. B. Moore, 31.
In the United States the rule of the
English coui-ts has been followed, and
it has been generally held, that the osten-
sible partner is the only necessary part)'
plaintiff to a suit to enforce a partnership
contract, though the dormant partner may
be joined. Mitchell v. Dall, 2 H. & G.
159, 171 ; Clarkson v. Carter, 3 Cow. 84 ;
Hawley r. Cramer, 4 Cow. 717; Clark v.
Miller, 4 Wend. 628 ; Boardman i'. Keeler,
2 Vt. 65 ; Lapham v. Green, 9 Vt. 407 ;
Morton v. Webb, 7 Vt. 123 ; Curtis v.
Belknap, 21 Vt. 433 ; Lord v. Baldwin, 6
Pick. 352 ; Wood v. O'Kelley, 8 Cush.
406 ; Wilson v. Wallace, 8 S. & R. 55 ;
otherwise, as if the action had been
brought in the name of the acting partner
with whom the contract was actually made.
Hilliker v. Loop, 5 Vt. 116 ; Lapham v.
Green, 9 Vt. 407 ; Lord v. Baldwin, 6
Pick. 352 ; Ward v. Leviston, 7 Blackf.
466 ; Rose v. Murckie, 2 Call, 409 ; Beach
V. Hayward, 10 Ohio, 455. The right of
set-off in such cases is provided for by
statute in Massachusetts, Pub. Stat. ch.
168, § 9. In New York, since the code,
which provides (§ 111) that "every action
must be prosecuted in the name of the
real party in interest," a dormant partner
is a necessary party as a plaintiff in an
action for the recovery of a partnership
debt, founded on a partnership contract,
whether the relief sought be legal or
equitable, Secor v. Keller, 4 Duer, 416.
(6) Ante, § 96.
(c) Guidon v. Robson, 2 Camp. 302.
18
274 THE LAW OF PARTNERSHIP. [CH. VIII.
nership, and the law springing out of this relation, should have
much the same effect as a written contract.
§ 203. Demand of Firm grounded on the Tort of a Member. —
This question has arisen where a hrm has a right of action, and
the cause of action is, in the whole or in part, the fraud of one of
the partners. If A. fraudulently transfers his own pi-opcrty, he
cannot, generally speaking, bring any action to recover this property,
because he cannot avoid his own act, nor found his right upon his
wrong-doing. But if A., of the firm of A., B., & Co., fraudulently
transfers the negotiable paper of A., B., & Co., in payment of his
own debt, under circumstances which would make the transfer
null as to the partnership, it has been objected to the action of A.,
B., & Co. for the paper, that A, cannot be a plaintiff in such an
action and that B. & Co. cannot sue without A. (d)
But such an objection is wholly technical, nor do we think that
even on technical ground it is unanswerable. The law is familiar
with instances of a party's name being used by others, for their
exclusive benefit, and against his will. An assignee for value of a
chose in action so sues in the name of the assignor ; and, after
notice given of the assignment, the debtor is bound only to the
assignee, and the assignor, who is nominal plaintiff, can neither
withdraw nor defeat the action, nor release the judgment; having,
in fact, no more power over the action, and no more to do with it,
than if his name were not used, (e) If there be some objection to
the application of a similar rule to the case under consideration,
there may be less to permitting B. & Co. to sue, on the ground
that the fraud of A. removes him from all interest and from the
case. Nor are cases wanting which, at least, incline to this view. (/)
(d) Jnnes V. Yates, 9 B. & C. 532. v. Mclntyre, 31 Ala. 532. See opinion of
Sykes & Bury being in partnership, Sykes Parker, C. J., in Greeley v. Wyeth, ION.
gave the moneys and bills of the partner- H. 18, and of Bigelow, J., in Homer v.
ship in payment of his separate debt, and Wood, 11 Cash. 68. Craig v, Hulschezer,
in fraud of his copartners, the party 34 N. J. 363. [Where one partner wrong-
receiving the property being privy to the fully delivered partnership property to his
fraud. Sykes & Bury having becoirie individual creditor, the other partner
bankrupt their assignees brought trover for could not replevy the property, but must
the bills, anil assumjjsit for the money, go into equity. Hoff v. Rogers, 67 Miss.
The court of King's Bench held, that the 208, 7 So. 358.]
])laintitfs could not recover. The doctrine In Pennsylvania, where equitable rem-
of .[ones V. Yates was approved in Greeley edies are administered through the medium
V. Wyeth, 16 N. H. 10. See Wallace v. of common-law forms, the English rule, as
Kelsall, 7 M. & W. 264, 273 ; Gordon v. laid down in Jones v. Yates, lias been
Ellis, 7 M. & G. 607, 622 ; Brewster r. distinctly denied any operation. Purdy v.
Mott, 5 111. 378 ; Daniel v. Daniel, 9 B. Powers, 6 Barr, 492.
Mon. 195 ; Buck v. Mosley, 24 Miss. 170 ; (c) 1 Pars, on Cont. (5th ed.) 230.
Goode V. McCartney, 10 Tex. 193 ; Nail (/) There are dicta to the effect, that
§ 203.] OF THE REMEDIES OF PARTNERS INTER SE. 275
Even if it should be held that a partner cannot release or assign
to his copartner his share of a partnership debt, so as to authorize
a suit by the partner alone, — a proposition which we do not think
would now be universally held, although an unavoidable inference
from the strict and technical rules of the common law, — it does
not necessarily follow that the same rule w^ould be applied where
a partner destroys or loses his right by his fraud. The true
objection is, so far as there is any one of substance, that if the
fii-m or the other partners alone recovered, it would be recovered
as the property of the firm, and the fraudulent party would have
his share. It must be admitted that this objection has much
weight. But perhaps it might be obviated by reduction or severance
of damages, by set-off, or recoupment, or in some other similar
way, at law, {g) as well as it could be in equity. And it certainly
would be a great hardship to deny to the innocent parties any
relief, either at law or equity. (A) ^
in such a case the injured partners could dissolution of that partnership, it was
not sue without joining their fraudulent agreed between them that Evans should
copartner ; since, the action being ex con- receive some of the debts, and Morgan the
trcictii and the contract joint, the remedy otliers. Tliis debt was to be paid to Mor-
nuist also be joint, and the partners can gan, and the defendant had accordingly
have no joint capacity, except when all paid it to him. They called ilorgan to
sue together. See opinion of Lord Ten- prove this case, and Lord Kenyon held him
terden, C. J., in Jones v. Yates, 9 B. & ('. a competent witness, as the judgment in
539 ; of Bigelow, J., in Homer v. Wood, this cause would not conclude his right.
11 <"ush. 6-t. In Longman v. Pole, Moody He was examined, and on his evidence the
& JL 223, Lord Tenterden, C. J., in sum- defendant obtained a verdict. Evans v.
ming up, said : " I think, in point of Silverlock, 1 Peake, 21.
law, this' action is maintainable ; if a per- (g) Daniel v. Daniel, 9 B. Mon. 195.
son colludes with one partner in a firm to (h) " The defrauded jjartner may, per-
enable him to injure the other partners, haps, have a remedy in equity, by a suit
I think they can maintain a joint action in his own name against his partner and
against the person so colluding." Perhaps, the person with whom the fraud was com-
however, this case is distinguishable, on mitted." Per Lord Tenterden, C. J., in
the ground that the action was aise for a Jones r. Yates, 9 B. & C. 539. " If a
tort. The following case is somewhat more partner, fraudulently or improperly, with-
in point. Assumpsit for goods sold and out the consent of his partners, applies
delivered. The defendant's counsel stated the partnership funds to his own private
that the plaintiff and one Morgan were in purposes, or for his own private profit or
partnership together; and that, on a emolument, or invests the same improperly
1 In a case of this sort the firm is the party wronged, not the innocent
partners. They sue only as representing the firm, and should, it would seem,
recover what the firm is entitled to, — namely, the whole amount of the firm property
wrongfully taken. If the defendant has any rights in the matter, they are rights
against the wrongdoing partner, not against the firm ; and should be enforced
against him individually. By his act in this case he cannot charge the firm prop-
erty even with a lien. If the defendant has any right against the firm, it is to
secure compensation for his loss out of the wrongdoing partner's distributive share
of the assets, if any.
276
THE LAW OF PARTNERSHIP.
[CH. VIII.
If a partner bring a bill in equity against tbe other partners,
for a settlement of the affairs of the firm, the fraudulent char-
acter of the purpose for which the firm was formed is no de-
fence, {hh)
§ 204. Equity the Principal Tribunal for Partnership Questions. —
As equity is undoubtedly the principal tribunal for the abjudica-
tion of questions arising under the law of partnership, it is perhaps
always able to give relief or remedy in cases which justly called
for it, and cannot obtain it at law. (^) The most frequent instances
of actual resort to equity are for a dissolution, or for a sale in the
course of settlement by law ; for an account, either general or
particular, under some specific agreement ; for contribution ; (j*')
for the enforcement of rights, given either by law or by agreement
of the partners ; for a remedy for wrong done by a partner, or
prevention of it by injunction against him; for an injunction
against third parties, to prevent them aiding a partner in doing a
wrong to the partnership; — sometimes for specific performance
of agreement to enter into partnership ; — in general, for all frauds
or mistakes of fact ; (/c) — and in some cases for a manager or
receiver of the business or the property of the partnership. Some
in his own name and for his own use, the
other partners have a right, if they can
distinctly trace the investment, and elect
so to do, to follow the partnership funds
into the new investment, and treat it as
trust property held by that partner for
the benefit of the firm, and as liable to be
accounted for by any jierson into whose
possession the same may come, who is not
a bo7m fide purchaser for a valuable con-
sideration, without notice." Per Story,
J., in Kelley v. Greenleaf, 3 Storj', 101.
See Halstead v. Sbepard, 23 Ala. .^58 ;
Purdy V. Powers, 6 Barr, 494.
(hh) Harvey v. Varney, 98 Mass. 118.
(i) See Hamilton v. Cummings, 1
Johns. Ch. 517.
(j) "Wright V. Hunter, 5 Ves. 792 ;
Abbot V. Smith, 2 W. Bl. 947, 949.
Hence, in a case where five persons, in
partnership as coach proprietors, had in-
curred a partnersliip debt, which the cred-
itor, after the death of one of the part-
ners, recovered in an action against the
survivors, on a bill filed for that purpose
against the representatives of the deceased
partner, by the partner who had ])aid the
damages and costs of the action, Sir John
Leach decreed contribution, not only for
the damages, but also for the costs.
Thomas v. Lichfield, Kolls, H. T. 1831,
cited in Collyer on Part. ( Perkins' ed. )
§ 287. See Browne v. Gibbins, 5 Bro.
P. C. 491, 3 Bro. P. C. 127 (Dublin ed. ) ;
Sells V. Hubbell, 2 Johns. Ch. 397 ;
Jones V. Morgan, 16 Jur. 238.
(k) Throughout the whole of this
section, we shall constantly meet with
illustiations of the interference of ecjuity,
wherever fraud taints the intercourse of
persons who became partners fairly, and on
a basis of mutual good faith. Here we shall
only remark that if, in the original agree-
ment of association, there has been fraud,
imposition, misrepresentation, or oppres-
ion, equity may declare the partnership
void ah initio. Howell v. Harvey, 5 Ark.
270, 278 ; Tattersall v. Groote, 2 B. & P.
135, per Lord Eldon ; Hynes v. Stewart,
10 B. Mon. 429 ; Fogg v. Johnston, 27
Ala. 432. And the injured party may file
a bill for the return of any premium he
may have paid for the sake of becoming a
partner. Per Lord Eldon, in Tattersall v.
Groote, supra ; Pillans v. Harkness, Colles
P. C. 442 ; Hamill v. Stokes, Daniell, 20,
4 Price, 161. See Evans v. Bicknell, 6
Ves. 174, 182 ; Akhurst v. Jackson, 1
§ 204.] OF THE REMEDIES OF PARTNERS INTER SE. 277
of these topics we shall consider separately. Here we would
remark that the legal maxim, " de minimis non curat lex^'' is
applied with a wide meaning in equity. It is a general rule, that
good reasons must be given, and facts proved making out a strong
case of considerable damage, before equity will interfere. {V)
The principal exception to this rule is in cases of fraud. Where
that is clearly proved, a court of equity is usually prompt in sup-
pressing or punishing the fraud, although the amount of injury
resulting from it may not be large, (m) Perhaps it may be useful
to advert to the question, whether money which a partner seeks to
recover will be taken from or paid to the funds of the partner-
ship; for this is very generally a test question, which may determine
whether the proper remedy is at law or equity. Thus, we mentioned
covenant or assumpsit as maintainable on an agreement to pay
money before a partnership, and to establish or launch a partner-
ship ; but neither of these actions will be sustained, if the money
when paid is to be paid out of the funds of the partnership, or if
recovered is to be added or credited to those funds, (w)
It was said in the preceding section that actions at law will lie
between partners, in general, on any contract, transaction, or
indebtedness which is taken out of and separated from the part-
nership accounts, before, during, or after the partnership. Now,
we have in the question, whether the money is either to come
from or be paid to the partnership, or is to remain the benefit or
loss of the partner only, and never to appear in the accounts of
the partnership, perhaps the best way of determining whether the
cause of action is so separated from the partnership as to be
sufficient for a suit at law.
Swanst. 89 ; Colt v. Woollaston, 2 P. Wms. which he procured the funds contributed
154 ; Green v. Barrett, 1 Sim. 45 ; Blain as his share of the capital of the firm, is
V. Agar, 1 Sim. 37. Or for an account no ground for annulling or rescinding the
and a receiver. Ex parte Broome, 1 Rose, contract of partnership. Ingraham v.
69, 71. See, however, Clifford v. Brooke, Foster, 31 Ala. 123. See Stein v. Rohert-
13 Ves. 131, and the comments upon the son, 30 Ala. 286.
last two cases in 2 Hov. Supp. 327. And (1) See post, ch. 14.
he will be re.stored, as far as possible, to (m) The maxim, de minimis non curat
his original situation. Hynes y. Stewart, fea;, " is never applied to the positive and
10 B. Mon. 429; Fogg?'. Johnston, 27 wrongful invasion of another's property."
Ala. 432. See Oldaker v. Lavender, 6 Sim. Per Cowen, J., in 5 Hill, 175.
239. But upon a bill by one partner (n) Bedford v. Brutton, 1 Scott, 245,
against his copartners, for an account and 261, 262, 1 Bing. N. C. 407 ; Pearson v.
liis share of the profits, a fraud perpetrated Skelton, 1 M. & W. 504. See Andrews v.
by the plaintiff upon one of his copart- Ellison, 6 J. B. Moore, 199 ; Caldicott v.
ners, in a transaction prior to and in- Griffiths, 8 Exch. 898, 9 04 per Maule, J.
dependent of the partnership, by means of
278 THE LAW OF PARTNERSHIP. ' [CH. VIII.
SECTION IV.
ON THE METHODS AND PROCESSES OF EQUITY APPLICABLE IN CASES
OF PARTNERSHIP,
§ 205. Decree for Specific Performance. — A decree for specific
performance is one of the important and most frequent means
of relief and remedy in equity. We have already spoken of it in
reference to a pi-ayer for this relief against one who refuses to carry
into effect an agreement for a partnership. In general, it will be
applied by equity, as between partners, whenever the performance
of a certain duty, or of a distinct promise, is prayed for, which
duty or promise the court can enforce or cause to be executed effi-
ciently and adequately, while there is no adequate remedy at law
for a breach of it. (o)
But, as has been already intimated, there must always be duties,
as of general good conduct, of skill or care, or the like, which it is
impossible for the court to regulate or enforce by a decree ; and
nothing is done in such cases unless a positive mischief is threat-
ened, which may be prevented or remedied by injunction or other
means. Q)} Equity will grant this remedy only where the part-
(o) Thus, equity has enforced an agree- (/?) It was held, in quite a number of
ment, made upon the dissolution of a part- cases in England, that equity would not
nership, that a particular book used in the prohibit tlie violation of a negative term
trade should become the exclusive property in an agreement, unless it had the power
of one of the partners, and that a copy of of enforcing tlie positive part of the same
it should be delivered to the other. Lingen agreement, upon the principle that the
V. Simpson, 1 Sim. & S. 600. So if one court should not interfere at all, nnless it
partner receives moneys, but does not could administer full and entire relief,
enter the receipts in the partnership books, Kemble v. Kean, 6 Sim. 383 ; Kimberly i».
relief will be granted in equity. Goodman Jennings, 6 Sim. 340 ; Baldwin v. Useful
V. Whitcomb, 1 Jac. & W. 593. So, if the Knowledge Society, 9 Sim. 393 ; Gervais
continuing and incoming partner agree to v. Edwards, 2 Drury & W. 80. The same
give the retiring partner their joint and doctiine was asserted in the American case
several bond to indemnify him against the of Hamblin v. Dinneford, 2 Edw. Ch. 529.
debts of the first partnership, it seems that But the later English cases have adopted
this agreement may be specifically en- a different principle. Rolfe v. Rolfe, 15
forced. Warren v. Taylor, 8 Sim. 599. An Sim. 88 ; Dietrichsen v. Cabburn, 2
injunction against the breach of a part- Phillips, 52 ; Lumley v. Wagner, 5 De G.
7iership covenaiit is often equivalent to a & S. 485. It is now held that where a
decree for specific perfoi'mance ; as where contract contains covenants to do certain
the active members of a firm aie enjoined acts, and also to ab.stain from doing certain
from u.sing, in the joint business, any acts, a court of equity has jurisdiction to
other than the name agreed upon in the restrain the breach of a negative, though
articles as the style of the partnership, it may have no power to compel specific
See post § 214. performance of the affirmative covenants ;
§ 205.]
OF THE REMEDIES OF PARTNERS INTER SE.
279
iiership is for a definite period, or such decree is necessary to
invest one of the partners with legal rights which he could not
otherwise possess, (p/?)
Thus, if a partner covenants to give his whole business time and
attention to the C(jnccrns of tlie partnership, no specific perform-
ance would be decreed on a prayer setting forth that he was
generally negligent and inattentive. But such a covenant would
be construed as an enforcement of the rule of law, that a part-
ner must not engage in other business which interferes with his
duties to the firm or otherwise injures it ; and the court would
restrain a partner, under such covenant, from engaging in any
independent business, (^y) And if the plaintiff, in his bill for spe-
cific performance or in iiis separate bill, prays that an account of
the profits of this forbidden business may be taken, and a share
paid to them, as if it were done on their joint account, equity —
supposing the justice of the case ui)on all its facts so to require —
would grant this relief, (r) ^
as in the case of an agreement by a musician
to sing at a particular theatre, and not to
sing at any other, in which case an in-
junction may be granted against the breacli
of the latter portion of the agreement
But it seems that in such cases the court
will not interfere, if it is apparent that
its jurisdiction cannot be beneticially exer-
cised. Ibid. In Lumley v. Wagner, supra,
all the authorities are reviewed, and the
principles governing the question elab-
orately discussed. See Johnson v. Shrews-
bury,'&c. R. Co., 3 De G., M. & G. 927.
The doctrine, that where a contract
has both a positive and a negative term,
and the jiositive term is of such a nature
that performance cannot be compelled by
ei[uity, it will not interfere to prevent the
violation of the negative term, seems
never to have been applied to articles of
partnership, though " it does not appear
why cases of actual partnership should be
more favored, in the exercise of the juris-
diction by injunction, than others." Per
Lord Cottenliam, in Dietrichsen v. Cab-
burn, 'Z Phillips, 59. Thus in Kenible v.
Kean, supra, Sir L. Shadwell, V. C,
SMid : "In the case where the parties are
j)artners, and one of the partners contracts
that he shall exert himself for the benefit
of the partnership, though the court, it is
true, cannot compel a specific performance
of that part of the agreement, yet, there
being a partnership subsisting, the court
will restrain that party (if he has coven-
anted that he will not carry on the same
trade with other persons) from breaking
that part of the agreement. That is, in
case of a partnership." See Morris?;. Col-
man, 18 Ves. 4-37.
{pp) Whitworth v. Harris, 40 Miss.
483 ; Freeman v. Smith, 2 Wall. 160 ;
Buxton V. Lister, 3 Atk. 383 ; Anony-
mous, 2 Ves. 629. 630 ; Birchett v. Boi-
ling, 5 Munf. 442 ; Hibbert r. Hibbert,
Collyer on Part. § 203.
[q) Kemble v. Kean, 6 Sim. 333 ;
Morris v. Colman, 18 Ves. 437 ; supra,
note (p).
(r) Somerville v. Mackay, 16 Ves. 382 ;
Moritz V. Peebles, 4 E. D. Smith, 135.
1 A contract for entering into a partnership cannot usually be enforced in equity.
An agreement calling upon a party to engage in business is of course incapable of
enforced sjiecific performance. Morris v. Peckham, 51 Conn. 128 ; Buck ii. Smith,
29 Mich. 166 ; Meason v. Kaine, 63 Pa. 335 ; Reed v. Vidal, 5 Rich. Eq, 289. Such
terms of the articles as are capable of specific performance will be enforced by a court
280
THE LAW OF PARTNERSHIP.
[CH. Yin.
§ 206. Decree for Dissolution, and for Account. — We connect
these topics, in this section, because a court of equity frequently
decrees an account between partners; ahiiost always, however,
where there has been or is to be a dissolution of the partnership.
Indeed, courts of equity have intimated, with much distinctness,
that they would not decree any account, unless there either was a
dissolution, or the bill prayed for a dissolution, (s) As we have
said, this is generally the case in point of fact ; and there are rea-
sons as well as high authority for the rule ; reasons which, how-
ever, may perhaps be summed up in this : that a partner, who is
driven to a court of equity as the only means by which he can get
an account from his partner, may be supposed to be in a position
which will be benefited by a dissolution ; in other words, such a
partnership as that ought to be dissolved, (t)
We apprehend, however, that the question is one which is per-
(s) Forman v. Hoinfray, 2 Ves. & B.
329 ; Waters v. Taylor, 15 Ves. 10 ; Los-
combe V. Russell, 4 Sim. 8 ; Kiiebell v.
White, 2 Yomige & C. Excli. 15. These
last two cases have been sujjposed to over-
rule the doctrine of Sir John Leach in
Harrison v. Armitage, 4 Madd. 143, and
Richards v. Davies, 2 Kuss. & M. 347 ;
Camblat v. Tupery, 2 La. Ann. 10. One
partner cannot demand an acconnt in re-
spect of particular items, and a division
of particular parts of the property ; but
the account must necessarily embi-ace
everything. Baird v. Baird, 1 Dev. &
B. 524 ; McRae v. McKenzie, 2 Dev. &
B. 232.
(t) In Forman v. Homfray, 2 Ves. &
B. 330, Lord Eldon placed the reason of
the rule upon the ground of convenience,
saying : " If a partner can come here for
an account merely, pending the partner-
ship, there seems to be nothing to pre-
vent his coming anniially." This objection
was met by Sir John Leach, Master of the
Rolls,- in Richards v. Davies, 2 Russ. &
M. 347, as follows : " It is objected that,
if such a suit be entertained, the defend-
ant may be vexed by a new bill whenever
new profits accrue ; but what right has
the defendant to comjilain of such new bill
if he repeats the injustice of withholding
what is due to the plaintiff? Would not
the same objection lie in a suit for tithes,
which accrue de anno in annum ? " In
Knebell v. White, 2 Younge & C. Exch.
21, Alderson, B., remarking upon this
point, said : " Then what is the prin-
ciple ? It seems this, that where there is
an open account, in which the antecedent
items, respecting which the account in
equity is sought to be taken, are neces-
sarily connected with, and not capable of
being severed from, the other items of the
account which are to arise in future, the
court will not interpose ; for, if it did, it
would tolerate the bringing of a suit
which could never come to an end till the
account itself was closed, for the state of
the account would be continually chan-
ging whilst it was under discussion and
settlement. The party who seeks redress
must put it in the power of the court to
close finally, by its decree, the disjjute
between the parties. As soon as he does
this, he is entitled to its assistance. In
the case of a partnership, therefore, he
must pray a dissolution."
of equity. Thus one partner may be enjoined from depriving another of a share in
the direction of the business, Tillar v. Cook, 77 Va. 477 ; as by denying him attcess
to the books, or other information about the business. Katz v, Brewington, 71 Md. 79,
20 Atl. 139. And where it is necessary in order to secure certain propert}' rights to
the complainant, specific performance to that extent may be decreed even of an agree-
ment to form a partnership at will. Somerby v. Buntin, 118 Mass. 279.
§ 207.]
OF THE REMEDIES OP PARTNERS INTER SE.
281
fectly open to the discretion of the court, and the rule, if there be
a rule, goes no farther than the reason of it.
§ 207. Account without Dissolution. — If a partner prays for an
account, and his case shows that he has need of one, that it is his
only effectual remedy, and that he cannot get it without the aid of
the court, but shows also that, as soon as an account is rendered,
no sufficient cause of dissolution will remain, and circumstances
from which the court could infer that a continuance of the part-
nership desired by both would be neither injurious nor useless, —
in such a case, we know not why a decree for an account should
not be rendered ; and we have no doubt that it would be by most
of our courts, if not by all. (u)
In England, an account has been decreed upon a bill praying
for the establishment of the partnership, (i/)
A prayer for dissolution is often made, and the power of equity
to grant it for good cause is doubted by no one. This subject,
(h) Perhaps it may now be said that
there is no general, or, at least, no uni-
versal, rule, to the effect that equity will
not decree an account between partners,
unless there be dissolution, or a prayer
for it. The cases before Lord Eldon,
supra, § 206, note (t), in which he
affirmed the existence of such a rule,
may perhaps, be deemed to have turned,
in a great measure, upon their own par-
ticular circumstances. In Harrison v.
Armitage, 4 Madd. 143, and Richards v.
Davies, 2 Russ. & M. 347, Sir John Leach
expressly rules, that though the court
could not camj on a partnership, except
with a view to dissolution, yet it might
and would, if justice so required and the
petitioning partner had no other remedy,
decree an account of the past partnership
transactions, though there was no disso-
lution, actual or prayed for. A different
])rinciple governed the decision of the
court in Loscombe v. Russell, 4 Sim. 8,
and was approved in Knebell v. White,
2 Younge & C. Exch. 15, in both of which
cases the opinion attributed to Lord Eldon
was followed, as being the sounder and the
better established. But the English cases
strongly incline in favor of the opinion
of Sir John Leach, and this may now be
considered as the received doctrine. In
Wallworth v. Holt, 4 Mylne & C. 619,
635, 639, Lord Chancellor Tottenham,
speaking of the two supposed rules, —
"the one binding the court to withhold
its jurisdiction, except upon bills praying
a dissolution, and the other requiring that
all the partners should be parties to a bill
praying it," — says : " The result of these
two rules would be that the door of this
court would be shut in all cases in which
the partners or shareholders aie too num-
erous to be made parties ; which, in the
present state of the transactions of man-
kind, would be an absolute denial of jus-
tice to a large portion of the subjects of
the realm, in some of the most important
of their affairs. If that were the rule
of the court, — if a bill, in no case,
would lie to compel a man to observe the
covenants of a partnership deed, — it is
obvious that a person fraudulently in-
clined might, of his mere will and pleas-
ure, compel his copartner to submit to
the alternative of dissolving a partner-
ship, or ruin him by a continued viola-
tion of the partnership contract." See
farther Bentley v. Bates, 4 Jur. 552 ;
Hills V. Nash, 10 Jur. 148 ; Walburn v.
Ingilby, 2 Mylne & K. 61, 76.
In Pennsj'lvania it has been decided
that a court of equity will entertain a
bill for an account by one partner against
the other, although the bill does not con-
template a dissolution of the partnership.
Hudson V. Barrett, 1 Pars. Sel. Cas. 414.
See Pirtle v. Penn, 3 Dana, 240, 248.
(y) Knowles v. Haughton, 1 1 Ves. 168.
282 THE LAW OF PARTNERSHIP. [CH. VIII.
however, lias not only a special importance, but some peculiar dif-
ficulties; and we propose to treat of Dissolution by Decree — its
causes, methods, and consequences — by itself.
So, too, equity is often called upon to decree a sale of the part-
nership property ; but, as this would itself amount to a dissolution,
or at least arrest the business of the partnership for the time being;,
and would be an exertion of the power of equity which could never
be called for unless where there was or should be a dissolution,
we shall consider this subject in connection with that of the dis-
solution of partnership ; not, however, altogether in the chapter
on dissolution by process of law ; for a sale may also be decreed
where the dissolution is by expiration of a limited period by agree-
ment of the partners, or by the death of one or more of them.
§ 208. Account how Settled. — Perhaps the aid of equity is not
invoked in any cases in which it is more indispensable, or more
useful, than when it is asked to settle the accounts between the
partners. And it may be well to say something of the principles
by which it will be guided in making such settlement.
In the first place, it is perfectly competent for the partners to
agree, at their own pleasure, how the accounts shall be settled ;
and if such agreements are entered into in good faith by all the
parties, and are not in themselves oppressive and injurious,
they will be carefully respected, (z) And not only will equity
thus regard express agreements how to settle, but will draw from
the words, or from the acts of the parties, considered in connec-
tion with all the circumstances, whatever inference or information
it can as to their original or subsequent intention and understand-
ing, and will, on the same condition that this method be honest
and not injurious, carry it into effect. Thus, if there have been
many settlements, or even one, previously made between the part-
ners, if this be not now objected to by either of them for good
cause, and be not itself obviously and considerably objectionable,
the court will be disposed to adopt this as an example and pre-
cedent, and direct the future accounts to be made up on the same
principle, (a)
{z) Jackson v. Sedgwick, 1 Swanst. 460. the articles should not be executed. Lord
And this remains true, though the articles Cowper decreed an account of the part-
containing the provision respecting the nership according to the terms of the
modeof taking the accounts be not actually draft of the articles, so far as the same
executed by the parties. As where arti- were reduced to a certainty. Worts i:
clcs were entered into for a ]iartnership, Pern, 3 Bro. P. C. 558.
and, two of the partners being esquire (a) Jackson v. Sedgwick, 1 Swanst.
beadles of the University of Cambridge, 460, 469 ; Pettyt v. Janeson, 6 Madd.
it was agreed to conceal the partnership 146 ; a^ite, §§ 164, 167, and notes,
from the University, and therefore that
§ 209.] OF THE REMEDIES OF PARTNERS INTER SE. 283
If it be necessary, equity will, on sufficient proof, compel the
production of concealed articles, or agreements as to the method
or principles of accounting ; or, if they are ascertained, but cannot
be produced, will order an account to be taken in conformity with
them. The topic of " account " has, however, so much extent and
importance in the law of partnership, that we propose to consider
it in a chapter by itself.
If a partner files a bill in equity against his copartners, after the
termination of the copartnership, it has been held that all the
parties are to be regarded as actors ; and the decree should settle
the partnei'ship concerns between all the partners, as if each had
filed a bill against his copartners, (nw)
It may be regarded as a general rule, that a bill in equity by a
partner for a balance must show a final settlement of the partner-
ship affairs, or ask the court to make such a settlement, (nnn)
When there is a prayer to restrain a partner from acting as a
partner until an account and settlement, and also for this account
and settlement, and the affidavit filed by the defendant asserts
(without contradiction) that the plaintiff has possession of the
partnership books, and that the defendant is, for this cause, unable
to render a true account, or to put in a full answer, it seems that
the bill will be dismissed, although improper conduct on the part
of the defendant be not denied, (i)
§ 209. Decree for Injunction. — There is nothing in the prac-
tice or principles of equity as to the enforcement of specific
rights strictly peculiar to cases of partnership. The essentials to
give equity jurisdiction are three : There must be a contract,
which may be express or implied, but must be valid at law ; there
must be an infringement of this contract which is not technical
merely, but material and substantial ; and the remedy at law
must be inadequate. In such cases a court of equity will frame
its remedy so as to make it in the greatest degree complete and
effectual ; and this may be in a positive form, by decree of spe-
cific performance, or in a negative form, by injunction. The for-
(nn) Raymond v. Carne, 45 N. H. 201. then move the court to stay proceedings
(nnu) Williamson v. Haycock, 11 against him for not putting in his full
Iowa, 40. answer, until he has been assisted with
(i) Littlewood v. Caldwell, 11 Price, that inspection. It seems, that, in such
97. But where the bill calls for a dis- cases, a motion by the defendant for the
covery which the defendant cannot make production of the books and accounts,
completely without seeing the partnership before anawer, will be refused. Pickering
books and accounts, which are not in his v. Rugby, 18 Ves. 484. See Kelly v.
possession, but which he believes to be Eckford, 5 Paige, 548, 550 ; 3 Daniel)
in the hands of the plaintiff, he must put Ch. Pr. (Perkins' ed.) 2071, 2072.
in an answer stating to that effect, and
284 THE LAW OF PARTNERSHIP. [CH. VIII.
mer having been somewhat considered, we will now treat of the
lattcr.i
Injunction is one of the most stringent measures, as well as
one of the most efficacious remedies, within the practice or power
of equity. It is never made use of on slight or merely tem-
porary grounds. (6) The reasons against interfering between
married parties are regarded — not only in the civil law, to
which we have already referred, but at common law — as having
some application to partnerships, (c) Mere failure or infirmity
of temper, disputes, which, however vexatious, are not positively
injurious, or other similar troublesome but tolerable grievances,
will not induce equity to apply this remedy. Nor will injunction
issue where there is reason to believe that it will not be effi-
cacious and entirely remedial; nor in case it will probably inflict
an extreme inconvenience, or other mischief, beyond what the
character or exigency of the case calls for or justifies, (d)
It is said that equity will not interfere, by injunction, where
there is only a single breach of a covenant, actual or threatened,
or but one or two ; and not unless there are many or a series of
similar wrong-doings, such as would amount to a course of bad
and injurious conduct, (e) This may be a rule which would
operate as far as the reason of it goes ; which is, that for such
single breaches the injured party may be left to his remedy at
law, while the proper course, in a case of continued bad conduct,
is to put a stop to it. But there can be no arbitrary rule that
equity will not interfere, by injunction, in a case of a single
{b) Gootlman v. Whitcomb, 1 Jac. & (c) Goodman v. Wliitcomb, 1 Jac. &
W. 592 ; Marshall v. Colman, 2 Jac. & W. W. 592.
266 ; Wray v. Hutchinson, 2 Mylne & K. (d) Smith v. Fromont, 2 Swanst. 330.
235 ; Henn v. Walsh, 2 Edw. Ch. 129. (e) Marshall v. Colman, 2 Jac. & W.
266.
1 Injunction. One partner, without asking for a dissolution, may in an exceptional
case secure the aid of equity to prevent his copartner from doing him a wrong. Thus
a partner may be enjoined from carrying on another business, contrary to the provis-
ions of the articles. Levine v. Michel, 35 La. Ann. 1121. So a partner may be en-
joined from excluding his copartner from the business. Anonymous, 2 K. & J. 441 ;
'Rutland Marble Co. v. Ripley, 10 Wall. 339.
Upon dissolution, a partner may have an injunction pending the account to prevent
any disposition of the assets by his copartner which would cause irreparable loss.
Wilkinson v. Tilden, 9 F. R. 683. Or to i)revent any fraudulent or mischievous deal-
ing with the property. Shannon v. Wright, 60 Md. 520. So a surviving partner may
he enjoined from so dealing with the assets as to waste them, especially if he is in-
solvent. Fletcher v. Vandusen, 52 la. 448 ; Gable v. Williams, 59 Md. 46 ; Jennings
I'. Chandler, 10 Wis. 21. So upon dissolution one partner may be enjoined from
advertising a discontinuance of the business (ante, § 181), or from using the old firm
name in such a way as to hold out his former copartner as still a partner {ante, § 182).
§ 211.] OF THE REMEDIES OF PARTNERS INTER SE. 285
breach, if, in other respects, the conduct of the defendant calls
for, and is suited to, equitable relief.
§ 210. May issue without Dissolution. — A question has arisen,
somewhat analogous to one we had occasion to consider in refer-
ence to a prayer for account, which is, whether injunction will be
decreed where dissolution is not decreed, or is not asked for.
Our general answer would be the same. But it seems to be much
more clearly determined, that neither dissolution nor a prayer for
it is a necessary foundation for injunction, than that they are not
necessary for an account. (/)
It is undoubtedly true, that so extreme a remedy as that of
injunction — which entirely arrests the proceedings of the person
against whom it is aimed, and utterly disables him as to the
subject-matter of it — would seldom issue, unless it were made
necessary by a grievance which would suffice for a decree of dis-
solution, if that were called for, or seemed to be the proper
remedy. But not only does this decree issue without dissolution,
but its propriety was not questioned, even in a case where the
prayer of the bill was .for the protection and preservation of the
partnership, of which the defendant threatened dissolution. (^)
§ 211. Injunction to restrain Misconduct of Partner. — The Cases
are numerous and varied where injunction has been sought and
granted to restrain a partner from making an improper use of
the partnership property, credit, or name. This may be by vio-
(/ ) In Marshall v. Colman, 2 Jac. & v. "Wallace, 2 MoUoy, 540 ; Natusch v.
W. 266, it seems to have been questioned Irving, Gow on Part. App. 398, 406 ;
by Lord Eldon whether equity would in- Cooper, 358 ; Loscombe v. Russell, 4 Sim.
terfere between partners by injunction, 11 ; Heun v. Walsh, 2 Edw. Ch. 129 ;
unless there was ground for, and the bill Glassington v. Thwaites, 1 Sim. & S. 124,
prayed a dissolution of, the partnership. 130, note.
But in Charlton v. Poulter, 19 Ves. 148, (g) An application was made, some
note, where the partnership was for an years ago, to the court of chancery, for an
unexpired term, the court restrained the injunction to inhibit the defendants from
gross personal misconduct of one partner, dissolving a commercial partnerehip ; the
though there was no prayer for a dissolu- other side proposed to defer it, as not
tion before the expiration of the term, having had time to answer the affidavits ;
Tlie principle of this last case seems to be but it was insisted, that this was in the
supported by the opinion of Lord Eldon in nature of an injunction to stay waste, and
Goodman v. Whitcomb, 1 Jac. & W. 592. that irreparable damage might ensue. At
And in Mills v. Thomas, 9 Sim. 609, Sir length the court deferred it, the defend-
L. Shaiiwell, V. C, said: "I am of ants undertaking not to do anything pre-
opinion that the court ought to interfere judicial in the mean time. But no doubt
between copartners, whenever the act arose concerning the general propriety of
complained of is one that tends to the de- such an application. .Chavany v. Van
struction of the partnership property, not- Sommer, cited in 3 Wood. Lee. 416, n., 1
withstanding a dissolution of the partner- Swanst. 512, n. ,
ship may not be prayed." See Anderson
286 THE LAW OF PARTNERSHIP. [CH. VIIL
lation of partnership articles, or a breach of a duty imposed by
law, or a wrongful act forbidden by law. Thus, if a partner
becomes grossly intemperate, or involves the partnership foolishly
in debt, or wastes its resources, (A) or becomes insolvent, (^) or
obstructs or embarrasses or lessens the partnership business, (y)
or misapplies its property, (A-) or in any way injurious to the
partnership grossly misconducts, (/) — equity will not only re-
strain him from the particular wrongful acts complained of, but,
more generally, from using the name of the firm on any negoti-
able jiaper, or from contracting any debt for the partnership, or
receiving any payment. (w«) But a disability so general as this
would amount to a dissolution of the partnership, and that would
in most cases be preferred as the most complete and adequate
remedy.
It has even been intimated that equity would interfere in this
way if a partner should put himself in a position which lays him
under a strong temptation to interfere with the interests or dam-
age the business of the firm, (w) Nor do we see any reason why,
in a case of this kind, of sufficient magnitude, the court should
refuse its interference until something had been done to show
that the temptation had been yielded to and wrong actually inflicted.
§212. Injunction after Dissolution. — If a partnership have
been dissolved, and either of the partners attempt to carry on the
former business for their own benefit, and in a way injurious to
the former partners, the injured partners may have an injunc-
tion, (o) 1 So, if an account has been finally settled between the part-
ners, and one or more of the partners has undertaken to pay all the
outstanding debts, or certain specified debts, and to indemnify
the other partner, if he be compelled to pay any of these debts,
and this other partner, being obliged to pay them or any of them,
should obtain and retain money which, by the contract of settle-
(h) Mills V. Thomas, 9 Sim. 606, 609 ; (m) The usual form of the order for an
Gratz V. Bayard, 11 S. & R. 41, 48. injunction against a partner, is, " that an
(i) Lawson v. Morgan, 1 Price, 303. injunction be awarded against, &c., from
(j) Charlton i>. Poulter, 19 Ves. 148, n. entering into any contract or contracts,
{k) Williams v. Bingley, 2 Vern. 278, and from accepting, &c., any bills, &c., in
note; Master t). Kirton, 3 Ves. 74. the name of the copartnership, &c." Seton's
(?) Glassington v. Thwaites, 1 Sim. & Decrees, 308. See Williams v. Bingley, 2
S. 124 ; Hood v. Aston, 1 Rnss. 412. As, Vern. 278, note.
if a partner removes the partnership books (n) Glassington w. Thwaites, 1 Sim. &
from the place of business of the firm, he S. 133. See Burton v. Wookey, 6 Madd.
will be restrained by injunction from keep- 367.
ing them at anv other place. Greatrix v. (a) De Tastet v. Bordenave, Jacobs,
Greatrix, 1 De G. & S. 692. 516. {Ante, § 182, note.]
1 See Wilkinson v. Tilden, 9 F. R. 683.
§ 214.] OF THE REMEDIES OF PARTNERS INTER SE. 287
ment belongs to the indemnifying partners, they might bring an
action at law for the money so retained. If, however, the settle-
ment and agreement of indemnification could not be used as a
defence, or by way of estoppel or set-off or otherwise, equity
would interfere and decree an injunction against these proceed-
ings at law. (p) Generally, as we have already seen, courts of
law would refuse jurisdiction of a question of partnership, where
they could not give adequate remedy. And in this country, the
more liberal practice of courts of law, and the marked approach
of equity and law towards each other, would render unnecessary,
perhaps always, such an exercise of the powers of equity.
Still, it is clearly within the system of equity jurisdiction and
action, and the authorities show that this remedy has been
applied. (^)
§ 213. To restrain carrying on of Business. — If, upon settle-
ment, it is agreed that one or more of the partners shall not
exercise or carry on a certain trade within certain limits, and a
valuable consideration, either by other agreements, or in any way,
is given for this ; or if on submission to arbitrators of the affairs
of a partnership for final settlement, an award is made to the
same effect, and tlie partner so inhibited does set up or exercise
that trade or business, in violation of the agreement or award, —
injunction would issue against him. (r) And this has been
granted where the inhibition did not appear expressly in the
award, but it was proved that the award was made on that basis, (s)
So too, if, during a partnership, a partner establishes and carries
on a business adverse and injurious to that of the partnership,
which, as we have seen, the law forbids him to do, — or even
threatens and prepares to do this, — he will be restrained by
injunction. (Q
§ 214. To restrain Tvrongful use of Trade Name. — So if a part-
ner use the name of the firm in any wrongful way, he will be
{])) Gold V. Canliam, 1 Cas. Ch. 311, 2 from thai stipulated in his agreement
Swanst. 325. Where, on the dissolution with D. Devau v. Fowler, 2 Paige, 400.
of a copartnership between D. & F., D. (q) See preceding note,
agreed with F. that F. should take all the [r) Williams v. William.s, 2 Swanst.
stock and effects, and pay all the debts 2.'i3, 1 Wilson Ch. 473, n. ; Harrison v.
due by the Hrni, and afterwards F. became Gardner, 2 Madd. 198 ; a«<e, § 181 and
insolvent and threatened to dispose of all note
the partnership property and apjiropriate (s) Harrison v. Gardner, supra.
the same to his own individual use, leaving (<) See Burton v. Wookey, 6 Madd.
tlie debts unpaid ; upon a bill filed for 367 ; Coates v. Coates, 6 Madd. 287 ; Long
that purpose, an injunction was granted v. Majestre, 1 Jolins. Ch. 305 ;a?ife,§150,
restraining F. from disposing of the part- ct seq., and notes ; § 211, note (n).
uership property in a different manner
288 THE LAW OF PARTNERSHIP, [CH. 7111.
restrained, (w) And it is intimated that injunction will issue,
if he signs tlie instruments of the firm with a name which pur-
ports to be the name of the firm, but is not so in fact or by
the agreement of the partners, (v)
§ 215. Injunction against or for Surviving Partner. — Causes for
injunction sometimes arise where one of the partners has de-
ceased. We shall presently see that this event always makes,
strictly speaking, a dissolution ; but it may leave certain rights
behind it which will be protected by injunction. Thus, any mis-
application of the partnership funds by the surviving partner
will be prevented by injunction, (w) But there must be sufficient
evidence of the fact, or of imminent danger ; for a mere appre-
hension that the surviving partner may abuse his powers will not
induce a court to restrain and embarrass him in the exercise of
these powers, {x) Where the representatives of the deceased do,
or propose to do, a wrong to the surviving partners, the latter
may have their remedy by injunction. As, if the deceased held
a lease, or other real chattel or real estate, in his own name, but
actually as partnership property and for the partnership, and his
executors propose to hold or apply this as the private assets of
the deceased, they will be restrained by injunction. (?/)
§ 216. Injunction against Third Persons. — As partners who suf-
fer from misconduct of their copartners may have injunction
against them, so they may against third parties who are parti-
cipant with the partners in tiie wrong-doing. Thus, if a partner,
in fraud of the firm, makes or accepts or indorses negotiable
paper with the name of the firm, but for his own use, injunction
against negotiating or using the same will issue against a third
party in possession of the note, unless he came into possession of
it for value, and in ignorance of its fraudulent origin, (z)
Where a note was made by one who had been a partner of tlie
firm until its dissolution, and who signed it with the name of the
firm, it was doubted whether injunction should issue against
(it) As if he accept or negotiate laills of the partnership premises. Elliot v. Brown,
exchange, in the partnership name, but not 3 Swanst. 489, n.
for partnership purposes. Ante, § 211, (x) Woodward v. Schatzell, 3 Johns,
cases cited in note (k) ; post, note {z). Ch. 412 ; Walker v. Trott, 4 Edw. Ch. 38.
(y) Marshall r. Colman, 2 Jac. & W. As to the rights and powers of surviving
266. partners generally, see ost.
{w) Hartz v. Schrader, 8 Ves. 317. (ij) Alder v. fouracre, 3 Swanst. 489.
Thus, upon motion by the representatives (s) Hood v. Aston, 1 Russ. 412, 415 ;
of a deceased partner, the surviving part- Jervis v. White, 7 Ves. 413. See Master
ner will be restrained from bringing eject- v.' Kirtan, 3 Ves. 74 ; CoUyer on Part,
ment upon his title, as surviving lessee of §340, note (1); Newman v. Milner, 2
Ves. 483
§ 216.]
OF THE REMEDIES OF PARTNERS INTER SE.
289
the liolder, because he could make no use of the note at law ; it
being, in fact, a note without a signature, (a) But the better
doctrine undoubtedly is, that the use of the partnership name
after its dissolution will be prohibited by injunction, because it
may not only expose the former partners to a suit at law, but, if
they should have been remiss in giving notice of their dissolu-
tion, it might, under some circumstances, bind them to the pay-
ment of the paper in the hands of an innocent holder for
value, (b).
We shall hereafter consider, in a separate chapter, the manner
in which the creditors of the firm and of the separate partners
may obtain from the i)roi)crty of the firm or of the separate part-
ners the security or payment to which they are entitled. The
subject is one of much difficulty as well as importance. We will
not anticipate it here so far as to inquire what rights of attach-
ment or levy a sej)arate creditor has on the property of the firm,
or on tiie interest of the separate partner who is his debtor, in
that property. We will say, only, that if such creditor proceeds, or
proposes to proceed, to an interference with the property of the
firm, — whether by attachment or levy, — to which he has no legal
{(i) Ryan v. Mackmath, 3 Bio. C. C 15,
{b) As far as Ryan v. Maekniatli, supra,
nan be reganled as autliority for the rule
that equity will not restrain the ini])roi)er
use of the jnirtnership name by one of the
partners after dissolution, it is no longer
law. Lord Chancellor Thurlow there de-
cided that he would not order an instru-
ment to be delivered up and the name to
be erased, upon which an action could not
be maintained at law. Upon the same
princi])le, it has been said that equity
would not restrain by injunction the use
of the partnership name after dissolution.
But the doctrine of Lord Thurlow in Ryan
V. Mackmath has since been overruled. It
is now clearly settled that courts of equity
have jurisdiction to order an instrument to
be delivered up and cancelled, notwith-
standing it be void at law, and, perhaps,
even though its nullity be apparent on its
face, wherever the circumstances of the
individual case render such interference
expedient. See Ryan v. Mackmath, 3 Bro.
C. C. 1.5 (Perkins' ed.), and notes, Hamil-
ton V. Cummings, 1 Johns. Ch. 517, 520;
Grover v. Hugell, 3 Russ. 432 ; Hodgson
V. Murray, 2 Sim. 515, 3 Sim. 382 ; Simp-
son u. Howden, 3 Mylne & C. 97, 104;
Peirsole v. Elliott, 6 Pet. 95 ; Duncan v.
Worrall, 10 Price, 31 ; Thompson v. Gra-
ham, 1 Paige, 384 ; Pettit v. Shepherd, 5
Paige, 493 ; Torrey v. Buck, 1 Green Ch.
306 ; Jones v. Perry, 10 Yerg. 59 ; Maise
V. Garner, Mart. & Y. 383 ; Garrett v.
Miss. & Ala. R. Co., 1 Freem. Ch. 70:
Sessions V. Jones, 6 How. (Miss.) 123 ;
Leigh V. Everhart, 4 T. B. Mon. 379, 380 ;
2 Story E(i. §§ 698-702 ; 1 Madd. Ch. 301.
The authority of Ryan v. Mackmath
not being valid to prevent courts of equity
from restraining the use of a partnership
name after dissolution, there would seem
to be no reason why they should not do
this, but, on the other hand, as suggested
in the text, strong reason why they should.
In Webster v. Webster, 3 Swanst. 490, n.,
an injunction to restrain surviving part-
ners from using the name of a deceased
partner, in the firm of the trade, was
refused. Possibly this case was decided
upon the ground that the right to retain
the partnership name, considei'ed as an in-
terest of the nature of good-will, survived
to the I'emnining partners. See Lewis D.
Langdou, 7 Sim. 421.
19
290
THE LAW OF PARTNERSHIP.
[CH. VIII.
right, it would seem to be clear that the firm, and, perhaps,
that the joint creditors of the firm, may have such interference
restrained by injunction, (c)
(c) A court of law will not interfere and
compel the cieditor of one partner to delay
satisfying his execution out of the partner-
ship effects till an account can be taken
and the debtor partner's interest ascer-
tained. Parker v. Pistor, 3 B. & P. 288 ;
Chapman v. Koops, 3 B. & P. 289. But in
these very cases it is intimated that relief
may be had, by the debtor's partners, or
the j)artnership creditors, by bill in equity.
And the true conclusion to be drawn from
a view of the English authorities is, that a
separate creditor to whom execution has
issued for the debt of one partner will be
restrained from taking the partnership
effects thereon until an account has been
taken, and his debtor's interest, which is
alone properly subject to the execution,
ascertained. Eden on Inj. 31. See Skipp
V. Harwood, 2 Swanst. 586, 587 ; Lowndes
i\ Taylor, 1 Madd. 423. Such an injunction
will be granted at the suit of the surviving
partner, Newell t-. Townseud, 6 Sim. 419 ;
or of tlie joint assignees in bankruptcy of
the firm, Taylor v. Field, 15 Ves. 559;
Bevan v. Lewis, 1 Sim. 376 ; Anon., 2
Ca. Ch. 38 ; and, upon the same principle,
the propertj' of the partnership will be
protected in equity, whether the proposed
interference proceed from assignees for
value of one partner's interest from his
assignees in bankruptcy, or from his
executors or administrators. Taylor v.
Fields, 4 Ves. 396 ; 15 Ves. 559 ;' Barker
V. Goodair, 11 Ves. 85 ; Dutton v. Mor-
rison, 17 Ves. 206-209. And, it seems,
that, if, in cases of this nature, execution
be satisfied before injunction can be ob-
tained, the court may interfere, and stay
the money in the hands of the sheriff ;
whom the plaintiff should properly make
a party by su]tplemental bill, if the money
has come into his hands since the injunc-
tion issued, or by the original bill, if the
money was in his hands at the time,
franklin v. Tliomas, 3 Meriv. 225, 234 ;
Hawkshaw v. Parkins, 2 Swanst. 549. See
Axe V. Clarke, 2 Dick, 549. After judg-
ment at law against a firm for a debt, a
court of equity will not, it seems, at the
instance of one partner, grant an injunc-
tion to stay execution on the giound that
he had retired from the partnership long
before the debt was incurred, and that tiie
plaintiff at law was apprised of it ; because
such circumstances would constitute a
good legal defence. Protheroe v. Forman,
2 Swanst. 227.
Wliat we have already stated as the
doctrine of the English cases, namely,
that etjuity will, by injunction, restrain
the judgment creditor of a single partner
from satisfying his execution out of the
partnersiiip effects, and will compel him
to wait till an account has been taken, and
the interest of the debtor partner in the
joint property definitely ascertained, —
has been laid down as the rule verj- gener-
ally b}' the English text-writers. See 1
Madd. Ch. 132, 189 ; Gow on Part. [144] ;
Collyer on Part. § 831 (Perkins' ed.);
Eden on Inj. 31. In op[iosition to this
conclusion, however, we have high au-
thority in this country. In Moody v.
Payne, 2 Johns. Ch. 548, the precise point
came before Chancellor Kent, and was
decided contrary to the rule we have
above supposed to be deducible from the
English cases. Judge Story's opinion, on
the other hand, is in consonance with the
doctrine of the text. Story on Part. § 264.
And Chancellor Kent himself, while main-
taining that Moody v. Payne is in accord-
ance with the weight of authority, seems
to intimate that, in his own opinion, the
contrary doctrine is founded on the better
reason. In 3 Kent Comm. [65], note, he
says, after referring to Moody v. Payne
and Judge Story's comments thereon :
" As I have already observed, the more fit
and suitable rule of practice would seem
to be, to have the adjtistment of the part-
nership account precede the sale. But the
current of authorities, as I read them, is
the other way, and they are emphatically
so in New York." See, in support of this
last remark, Phillips v. Cook, 24 Wend.
398, 408 ; Matter of Smith, 16 Johns. 106,
note; Hergman v. Dettlebach, 11 How.
Pr. 46. The decision in Moody v. Payne
§ 217.]
OP THE REMEDIES OF PARTNERS INTER SE.
291
§217. Preliminary Injunction. — IIow injunction may be ob-
tained can be ascertained only by a consideration of the processes
and practice of equity, which is a topic by itself. It may, however,
be proper to remark, in this connection, that, usually, injunction
is not issued until after the defendant has answered, or has had a
sufficient opportunity to answer, (d) Tiie reason is obvious : the
court would not apply so stringent a measure on a mere ex parte
statement or evidence. But it is also obvious that there may be
cases — in partnership as well as elsewhere — in which an in-
junction must be granted at once, in order to be of any use, and
where, of course, delay would be the same thing as refusal. On
this point the English cases rest, or at least suggest, a distinction
which is somewhat technical. If the act which is complained of
is waste, or distinctly in the nature of waste, injunction will issue
at once, on a bill and affidavits, if they satisfy the courts that
there is sufficient cause, (e) But if there be no waste, then
there must be delay until an answer is filed. (/ ) We doubt
whether this rule has much force, or frequency of application, in
was also approved and followed in Sitler v.
Walker, 1 Freem. Ch. 77. See Church v.
Knox, 2 Conn. 514, 524 ; Brewster v.
Hammet, 4 Conn. 540 ; Witter v. Rich-
ards, 10 Conn. 37, 43. See the opinions
of Parker, C. J., in Morrison v. Blodgett,
8 N. H. 252, 253, and Dow v. Sayward,
14 N. H. 9, 13. See also Hill v. Wiggin,
21 N. H. 292.
On the other hand, it was distinctly
held, in Place v. Sweetzer, 16 Ohio, 142,
that while partnership goods may be levied
upon nnder execution against one of the
partners, for his separate debt, the sale in
such case may be restrained by injunction
till the interest of the partner is ascer-
tained. And in Cammack v. Johnson, 1
Green, Ch. 163, the court intimated its
opinion to be to the same effect, though it
was not considered necessary to decide the
question. So also in White v. Woodward,
8 B. Mon. 484. See further Moore v.
Sample, 3 Ala. 319, 320.
The above are the principal direct au-
thorities upon the point under discussion.
In none of them, perhaps, is the general
principle upon which the question turns
thoroughly investigated ; and it is evident
that the answer to the question must
de])end upon the right of control over the
partnership effects which the creditor of a
single partner acquires by a judgment and
execution against him. We shall, therefore,
refer to this subject again when we coTue
to speak of the remedies of the creditors of
individual partners.
{d) Anonymous, 1 Ves. 476 ; Lawson v.
Morgan, 1 Price, 303 ; Adams Eq. (Am.
ed.) [355-357] ; 3 Daniell's Ch. Pr. (Per-
kins' ed.) 1886 ; Hartridge v. Rockwell,
R. M. Charlt. 264 ; Ogden v. Kip, 6
Johns. Ch. 160, 161.
(e) As in case of the insolvency of the
active partner, who continues to make con-
tracts in the name of the partnership.
Lawson v. Morgan, 1 Price, 303. See Pea-
cock V. Peacock, 16 Ves. 51 ; Hartz v.
Schrader, 8 Ves. 317 ; Chavany v. Van
Sommer, M. T. 10 Geo. 3, 3 Wood. Lee.
416, n., 1 Swanst. 512, n. ; Read v. Bow-
ers, 4 Bro. 441 ; Collyer on Part. (Per-
kins' ed. ) § 349, note.
{f)"lt is a great mistake, and one
very commonly made, to imagine that all
the numerous cases wherein very much in-
convenience, and even loss, may be suf-
fered, by consequence of the acts sought to
be restrained, are, therefore, in the nature
of waste." Per curiam, Cohnn V. Horner,
5 Price, 537. See also Littlewood v. Calil-
well, 11 Price, 97, and Hilton v. Granville,
4 Beav. 130.
292
THE LAW OF PARTNERSHIP.
£CH. VIII.
England, and we think it would have little or none here. Un-
less, indeed, it should be construed as merely a compendious way
of stating the true rule ; which must be, that equity will not
issue an injunction, unless all the case is in and both sides have
been heard ; or unless there is enough of statement and evidence
before the court to convince them that immediate remedy is de-
manded, and there is no apparent probability of its working un-
due mischief, {g) In such case, a temporary or preliminary
injunction will issue, precisely on the same grounds and in the
same way as in cases not of partnership. And this temporary or
preliminary injunction will be made only extensive enough to
avert immediate and impending danger, and will afterwards be
dissolved or modified or made absolute, as shall seem to be proper
upon a hearing of the whole case. (A)
§ 218. Decree for a Receiver. — If an injunction arrests all
proceedings on the part of a partner, the appointment of a
receiver actually ousts him from all possession and control.^
{g) See 2 Story Eq. §§ 959 a, 959 h, and
Adams Eq. 357, as to the discretion which
courts of equity always exercise in the
issuing of injunctions, and the care with
which the right of all parties will be pro-
tected.
(h) A special injunction being usually
granted till answer or further order
(Seton's Decrees, 305, 306 ; Eden on Inj.
325). a defendant may apply to have it dis-
solved, not only upon putting in his
answer, but upon atfidavit before answer.
1 Newl. Ch. Pr. 226 ; 3 Daniell, Ch.
Pr. (Perkins' ed.) 1894, 1895. And not-
withstanding the general rule, that to ob-
tain or continue an injunction, affidavits
cannot be received, in contradiction to
assertions positively made by the answer
(Eden on Inj. 108, 326 ; 3 Daniell, Ch. Pr.
(Perkins' ed.) 1827, 1883, 1884), yet there
being no question of title between the
parties (id.; 1 Newl. Ch. Pr. 227 ; Adams
Eq. 356), in cases of waste, and of mis-
conduct of parties analogous to waste, affi-
davits filed jjrior to the answer may be
read against it, as to facts of waste or mis-
management, though it is otherwise as to
affidavits filed after the answer. Id.;
Smythe v. Smythe, 1 Swanst. 252, 254,
n. ; Norway r\ Rowe, 19 Ves. 144 ; Charl-
ton V. Poulter, 19 Ves. 148 ; Peacock v.
Peacock, 16 Ves. 49, 51 ; Lawson v. Mor-
gan, 1 Price, 303 ; Eastburn v. Kirk, 1
Johns. Ch. 444. See Roberts v. Anderson,
2 Johns. Ch. 202 ; Poor v. Carleton, 3
Sumn. 81, 82 ; Smith v. Cummiugs, 2
Pars. Sel. Eq. Cas. 92 ; Lessig v. Lang-
ton, Bright. N. P. 191 ; Renton v. Chap-
lain, 1 Stock. 62. In case of imminent
danger of injury to a complainant partner,
the court may, after appearance, allow a
temporary injunction to issue upon ])ro-
posed amendments to the bill, granting,
at the same time, an order to show cause
why the bill should not be so amended,
and the injunction continued. Hayes v.
Heyer, 4 Sandf. Ch. 485. Where both au
injunction and a receiver are sought, as in
some cases, the injunction may be granted,
but the receiver refused. Hartz v.
Schrader, 8 Ves. 317. The application for
the injunction, and the appointment of a
receiver, should be made the subject of two
successive motions. Lawson v. Morgan, 1
Price, 303.
1 Receiver. — A court of eqiiity in the proper case has power to appoint a receiver of
partnership property. Cox v. Volkert, 86 Mo. 505. He does not get legal title to the
property, Ijut only right of possession and of disposition. Keeney v. Home Ins. Co.,
71 N, Y, 396. If it is necessary to bring au action upon a firm claim, the receiver is
§ 218.] OF THE REMEDIES OP PARTNERS INTER SE. 293
This is, therefore, even a more stringent measure than the former.
And if a partner prays that a receiver may be appointed, or that
some person be authorized, to manage the concern and act as a
quasi receiver, the rule that the prayer will not be granted, unless
the case entitle tlie plaintiff to a dissolution, seems to be quite
well settled as a rule of practice. (/)
(j) Goodman r. Whitcomb, 1 Jac. & Ch. 129; Garretson v. Weaver, 3 Edw.
W. 589 ; Oliver v. Hamilton, 2 Anst. 453 ; Cli. 385 ; Roberts v. Eberhardt, 1 Kay.
Waters v. Taylor, 15 Ves. 10 ; Harrison 148 ; Walker v. House, 4 Md, Ch. 39 ;
V. Annitage, 4 Madd. 143 ; Richards v. Birdsall v. Colie, 2 Stock. 63 ; 1 Barb.
Davies, 2 Russ. & M. 347 ; Smith v. Jayes, Ch. Pr. 662.
4 Beav. 503 ; Henn v. Walsh, 2 Kdvv.
to bring it in his own name. Henning v. Raymond, 35 Minn. 303, 29 N. W. 132 ;
Kirkpatrick v. McElroy, 41 N. J. Eq. 539, 7 Atl. 647.
During the continuance of the partnership, one partner may ask for a receiver (always,
it would seem, as ancillary to a dissolution) in case the cojiartner's conduct is fraudu-
lent, or in some other way threatens to injure complainant's interest in the business.
Barnes v. Jones, 91 Ind. 161 ; Shannon v. Wright, 60 Md. 520. Such is the case where
the defendant is alleged to be insolvent and wasting the assets, Phillips v. Trezevant,
67 N. C. 370; or deliberately breaking up the business, Sutro v. Wagner, 23 N. J. Eq.
388, 24 N. J. Eq. 589. Mere dis[)ute or ill-feeling between the partners is not suffi-
cient ground for a receiver, Loomis v. McKenscie, 31 la. 425. Nor is the fact that a.dis-
solution will be decreed enough to secure the appointment of a receiver. It is necessary
also to show that there are disputes as to the disposition of the property, and conflicting
claims by the partners. Bufkin v. Boj^ce, 104 Ind. 53 ; Whitman v. Robinson, 21
Md. 30 ; Wilson v Fitchter, 3 Stoct. 71 ; Richards v. Baurman, 65 N. C. 162. In New
York, however, it would seem that a receiver will be appointed as of course if the cir-
cumstances justify a decree for dissolution. Marten v. Van Schaick, 4 Paige, 479 ;
McElvey v. Lewis, 76 N. Y. 373. See Jordan v. Jliller, 75 Va. 442.
Where one partner has the right to settle the affairs of the partnership, as for in-
stance if the articles give him the right, or he is the sole surviving or solvent partner,
a receiver will not be appointed without good cause to take the settlement out of his
hands. Ex parte Owen, 13 Q. B. D. 113 (C. A.); Heflebower v. Buck, 64 Md. 15;
Quinlivan v. English, 44 Mo. 46; Kilbreth v. Root, 33 W. Va. 600, 11 S. E. 21. But
if the settling partner neglects his trust, or abuses it by mismanagement or wasting the
assets so that the property is in danger, a receiver will be appointed. Word v. Word,
90 Ala. 81, 7 So. 412; Millers. Jones, 39 111. 54; Berry v. Folkes, 60 Miss. 576;
Ballard v. Callison, 4 W. Va. 326.
Even after the property has been conveyed to a trustee for creditors, the court may
in case of dispute interfere and appoint a receiver. Naylor v. Sidener, 106 Ind. 179.
If one of the partners is a suitable person for the trust, it is natural and proper that
he should be appointed receiver. Collins w. Barker, (1893)1 Ch. 578 ; Reynolds v.
Austin, 4 Del. Ch. 24. The receiver should be given control of all the propert}' of the
partnership. Morey v. Grant, 48 Mich. 326. After a receiver is appointed, the prop-
erty is within the control of the court, and it is therefore too late for a creditor to se-
cure priority by attachment or other judicial pi'oce.ss. Jackson v. Lahee, 114 111. 2S7,
2 N. E. 172 ; McGowan v. Myers, 66 la. 99, 23 N. W. 282. Though after the busi-
ness has been wound up, and a balance in the receiver's hands adjudgetl to belong to
one partner, it may be reached by a creditor of that partner, since it is now too late
to interfere with the proceedings of the court. Willard v. Decatur, 59 N. H. 137.
And before decree on the bill a creditor may levy. Ross v. Titsworth, 37 N.J. Eq. 333.
294 THE LAW OF PARTNERSHIP. [CH. VIII.
It has, perhaps, some exceptions. If a wrong-doing partner
seeks to exclude his copartner from any knowledge of the busi-
ness, or from any share in the management of it, the injured
partner may have a receiver to take and keep possession of the
property until the courts determine the rights of the partners;
and in the mean time the decree may provide for the continuance
of the business. It is not, however, to be denied, that strong
authorities insist that a receiver can be appointed, without dis-
solution, only for the most stringent reasons, {k}
But, in general, wherever the main purpose of the suit is to
compel partners to perform in good faith their own agreements
or their obvious duties, and the appointment of a receiver seems
necessary to prevent great mischief from being done before the
main question can be settled, we presume that such appointment
would be made. {1}
It has indeed been distinctly decided in England, that the
absence of a prayer for dissolution is not a sufficient ground for a
demurrer to a bill praying for the appointment of a receiver, (wi)
§ 219. Receiver after Dissolution. — The far greater number of
appointments of receivers occur in cases where a dissolution has
taken place or is necessary or is intended ; (w) and one or more
of the partners violates either the express agreements or articles
of the partnership, or some obvious and certain duty imposed by
law. (o) The most frequent cause — and it is one that is, perhaps,
{k) Wilson V. Greenwood, 1 Swanst. of a partnership, the court will not deter-
480. See next note, and Case of Hale v. mine the questions arising between the
Hale. partners, the only object then being to
(l) See Const w. Harris, Turner & R. protect the assets until the determination
496, 517 ; 3 Dan. Ch. Pr. 1967; Milbauk of the rights. Blakeney v. Dufaur, 15
i;. Revett, 2 Meriv. 405, 406 ; Glassington Beav. 40. See Sloan v. Moore, 37 Pa.
V. Thwaites, 1 Sim. & S. 130, and note ; 217-
Roberts v. Eberhardt, 1 Kay, 148. In (?/i) Fairthorne v. Weston, 3 Hare,
Hale V. Hale, 3 McN. & G. 79 (see same 387.
case, 12 Beav. 414), the general doctrine (ji) See Fairburn v. Pearson, 2 McN.
on this point was said to be, that where it & G. 144. In this case, Lord Chancellor
is not the object of the suit to obtain a Cottenham refused, upon motion, to ap-
dissolution of the partnership, but, on the point a receiver of a partnership, where
conti'ary, to continue the partnership, it is the question raised was whether the part-
not according to the practice of the court nership had been dissolved, but ilirected
to grant, in the course of that suit, the ap- an issue to try the fact. See Goulding v.
jwintment of a receiver and manager. Bain, 4 Sandf. 716.
And the only limitation upon this doc- (o) Harding v. Glover, 18 Yes. 281 ;
trine adverted to was where a party was so Estwick v. Conningsby, 1 Vern. 118;
conducting himself that, unless a manager Crawshay v. Maule, 1 Swanst. 507; Henn
was a[ipointed before the hearing, the part- v. Walsh, 2 Edw. Ch. 129 ; Gowan v. .Tef-
nership concern might, in the mean time, fries, 2 Ashm. 296. But in accordame
be destroyed. Upon motion for a receiver with what we have already seen with res-
§ 219.]
OF THE REMEDIES OF PARTNERS INTER SE.
295
always sufficient — is the taking exclusive possession by a partner
of the property or books of the partnership, and his refusal to
admit his copartner to his rights as to the property and the busi-
ness. ( /?) But the same reason and the same principle apply to
any other instance of substantial wrong on the part of a partner,
implied or threatened, of such a kind that the court can only
prevent it by taking the property and books out of his hand, (q}
It is to be observed, however, that exclusive possession alone
is not sufficient cause. This may result from the articles, or the
agreement, or the plaintiff may not object to it ; (?-) for it must
be an injurious and unjustified possession of the books or prop-
erty. And the ground on which receivers are appointed in such
cases is, that every partner has the same perfect right to hold the
property and manage the business that every other partner has ;
and that the violation of this right is one of the greatest wrongs
that can be done to a partner, (s)
pect to other modes of equitable interl'er-
eiice, a receiver will not be granted on
slight grounds. Speights v. Peters, 9
Gill, 472 ; Hammil v. Hammil, 27 JId.
679. Dissolutiun alone is not sufficient,
Harding i'. Glover, supra ; and there must
be more than trifling misconduct, Good-
man V. Whitcomb, 1 Jac. & W. 589, 593 ;
Const V. Harris, Turner & R. 518. Thus
a receiver will not be appointed merely
because partners quarrel, Texiere v. Da
Costa in Chancery, Nov. 1815, cited in
Collyer on Part. § 354, note; Henn v.
^Valsh, 2 Edw. Ch. 129 ; nor because an
injunction ex parte has been granted,
Garretson v. Weaver, 3 Edw. Ch. 385.
And the dissolution which takes place on
the refusal of an appointee under a will to
become a partner is clearly not a dissolu-
tion arising from the exclusion of the
appointee by the surviving partner ; and
will, therefore, be no foundation for a
receiver. Kershaw v. Matthews, 2 Russ.
62.
(p) Wilson V. Greenwood, 1 Swanst.
471, 483 ; Blakeney v. Dufaur, 15 Beav.
40 ; Const v. Harris, Turne'* & R. 525.
See Norway v. Rowe, 19 Ves. 144, 159;
Katsch V. Schenck, 13 Jur. 668 ; Peacock
i". Peacock, 16 Ves. 49 ; Milbank v.
Revett, 2 Meriv. 405, 406 , Harding r.
Glover, 18 Ves. 281. See farther Speights
V. Peters, 9 Gill, 472 ; (inwan v. Jeffries,
2 Ashm. 296 ; Wolbert u. Harris, 3 Halst.
Ch. 605 ; Hall v. Hall, 12 Beav. 414 ;
Boyce v. Burchard, 21 Ga. 74. Upon
apparently this ground of exclusion, it
seems to be held, in New York, that if a
general assignment to pay creditors has
been made by one partner, under circum-
stances which make it clear that it is the
act of one. partner only, without the knowl-
edge and approval of the other partners,
the assignment may be declared void, and
a receiver appointed. See Rutter v. Tallis,
5 Sandf. 610 ; Hayes v. Heyer, 3 Sandf.
284, 293, 4 Sandf. Ch. 485; Wetter r.
Schlieper, 4 E. D. Smith, 707.
{q) See Gowau v. Jeff"ries, supra, as to
when the court will take the joint property
out of the possession of the parties, l\v ap-
])ointing a receiver. See also Butchart i*.
Dresser, 4 De G., M. & G. 542 ; Geortner
V. Trustees, &c., 2 Barb 625, 628 ; Smith
V. Jeyes, 4 Beav. 503 ; Hale v. Hale, 4
Beav. 369.
(?•) Blakeney v. Dufaur, 15 Beav. 40 ;
Parkhurst i-. Muir, 3 Halst. Ch. 307. And
where one partner thus has the legal and
rightful possession and control of tlie
partnership funds, the court interferes to
take them out of his hands with great re-
luctance, and only for cogent reasons.
Walker v. Trott, 4 Edw. Ch. 38 : Drury
V. Poberts, 2 M<1. Ch. 157 ; "Waters v.
Taylor, 15 Ves. 10, 15.
"(s) Gowaii V. Jeffries, 2 Ashm. 296 ;
Butchart v. Dresser, 4 De G., M. &G. 542.
296
THE LAW OF PARTNERSHIP.
[CH. VIII,
§ 220. Temporary Receiver to Preserve Business. — 111 some
cases a receiver has been appointed to carry on the business, in
order to preserve the good-will until it can be sold. (^) And the
receiver appointed for this, or indeed for any purpose, sometimes
continues to act for a considerable time, as for one or two or
more years, (m) But the appointment is in its nature a tempor-
ary one. (v) Courts sometimes object very strongly to a long
continuance of it, and cut it short by order of sale or settle-
ment, (^iv')
A difference must be made in this respect, however. Where
the receiver is appointed to wind up a concern, he generally holds
possession until a final and completed settlement ; and this may
require a long period. The receivership of insolvent banks in
some instances continues for years, and the settlement of a
widely extended partnership business may require as much time
as that of any bank. But where a receiver has only to hold
possession for a definite purpose, and carries on the business to
preserve the good-will or for any similar object, the court will
hasten the completion of his duty and the discharge of his
appointment as much as they can without doing harm,
§ 221. Appointment of Receiver Discretionary with Court. —
Hence, where it appeared that each of two
joint adventurers was e<pially entitled to
the possession of the joint effects, and one
had enjoined the other from receiving or
disposing of the same ; on the application
of the latter, a like injunction was granted
against the former, without any proof of
insolvency or other special cause for depriv-
ing him of the control ; and on the latter's
motion, also, a receiver was api>()inted,
though his original complaint contained no
prayer for a receiver. McCracken i\ VV^are,
3 Sandf. 688. If the partner ajiplying
for a receiver has the property in his own
])ossession, there will generally be no
ground for appointing one. Smithy. Lowe,
1 Edw. Ch. 33 ; though, if the defendant
be insolvent, and persist in negotiating
hills of exchange in the partnership name,
and in applying the money to his own pur-
poses, a receiver may be appointed, Hoff-
man V. Duncan, 17 Jur. 825. Nor will a
right to a receiver exist on the part of a
partner, icho has practicallif the sole direc.
tion of the business, merely because the
other partner will not co-operate with
him. Roberts v. Everhardt, 1 Kay, 148.
{(■) Marten v. Van Schaick, 4 Paige,
479. In this case, where the partnership
was in a political newspaper, the good-will
constituted a chief part of the value of
the joint projterty. See Williams v. Wil-
son, 4 Sandf. Ch. 379.
(«) See Crane v. Ford, Hopkins, 114.
(v) Waters v. Taylor, 15 Ves. 10 ;
Const V. Harris, Turner & R. 496, 518 ;
Goodman v. Whitcomb, 1 Jac. & W. 592 ;
Marten v. Van Schaick, 4 Paige, 479 ; Wol-
bert V. Harris, 3 Halst. Ch. 605.
(w) Crane v. Ford, supra, where, the
owners of a steamboat being in litigation,
a receiver had been appointed under
whom the vessel had run for two years ;
a third season approaching, and it being
necessary to lit out the vessel, or to let
it lie useless, the court thought it highly
inconvenient and unfit that such ojwra-
tions should be conducted under its direc-
tion for so long a time, and ordered a sale.
A receiver appointed by the courts of one
State has no power to act in a foreign
jurisdiction. Harvey v. Varney, 104
Mass. 436 ; Booth v. Clark, 17 How. 322.
§ 221.]
OF THE REMEDIES OP PARTNERS INTER SE.
297
The application for a receiver is always addressed to the discre-
tion of the court, and is therefore answered very differently,
as the merits of the case or the objections to such appointment
affect the court, (a:) In England, it was said in one case, and
that a case of embezzlement, that a receiver would not he ap-
pointed but on the most extreme and gross abuse, because it
would destroy the business. (?/) This would be a good reason
where the appointment would have that effect, and where a
closing of the business is not desired, (z)
But, on the other hand, it seems to be understood in this
country, (a) and certainly in New York, (i) that whenever part-
ners are wholly unable to agree among themselves as to the
disposition and control of the property and business, and neither
consents to the possession and control which the other claims or
desires, a receiver will be appointed on application, almost as a
matter of course, and as a first step towards a final settlement
of the affairs of the partnership, (c)
(x) The discretion whicli the courts
exercise in the appointment of a receiver
is well illustrated in those cases where ex
parte applications are made. As a general
rule, a receiver will not be appointed un-
til after the defendant has answered.
Holden v. McMakin, 1 Pars. Sel. C'as.
284 ; 3 Dan. Ch. Pr. (Perkins* ed.) 1974.
But in urgent cases, where it appears to
the court that the merits of the case, as
shown by the affidavits, require the imme-
diate appointment of a receiver, the court
may do so upon the plaintiff's motion
before answer. Wilson v. Greenwood, 1
Swanst. 483 ; Duckworth v. TrafFord, 18
Ves. 283 ; Gowan v. Jeffries, 2 Ashm.
296 ; 3 Dan. Ch. Pr. (Perkins' ed.) 1974.
So also it is clear that, as a general rule,
a receiver ought not to be appointed until
after notice to all the interested parties,
unless the court can see that delay would
work irreparable injury to some or all of
the parties, when a receiver may be ap-
pointed without notice. People v. Nor-
ton, 1 Paige, 17 ; Williamson v. Wilson,
1 Bland, 418 ; Gowan v. Jeffries, supra,
3 Dan. Ch. Pr. (Perkins' ed.) 1975, n.; 1
Barb. Ch. Pr. 667, 669 ; Edw. on Re-
ceivers (Rev. ed.), 13-16.
(il) Oliver v. Hamilton, 2 Anst. 453.
{z) Waters v. Taylor, 15 Ves. 10. See
Madgwick v. Wimble, 6 Beav. 495.
(a) See Speights v. Peters, 9 Gill, 472 ;
Williamson v. Wilson, 1 Bland, 418, 426 ;
Walker v. House, 4 Md. Ch. 39 ; Terrell
V. Goddard, 18 Ga. 664. In Birdsall v.
Colie, 2 Stock. 63, complainant filed his
bill, praying a dissolution of partnership,
an account, and a receiver. The bill
charged improper conduct on the part of
the defendant, the partner. Defendant
answered, denying all charges of improper
conduct, &c. It was held, that when a
partncrshijt is dissolved by mutual consent,
or determined by the will of either party,
a court of chancery will not, as of course,
without any other reason, except that
such is the wish of one of the parties
interested, assume the control of the busi-
ness, and place it in the hands of a mere
stranger. Otherwise, if the partnership
is not determinable at will, and the court
is resorted to for the purpose.
{b) Law V. Ford, 2 Paige, 310 ; Mar-
ten V. Van Schaick, 4 Paige, 479 ; Mc-
Crackan v. Ware, 3 Sandf. 688 ; Goulding
V. Bain, 4 Sandf. 716 ; Williams v. Wil-
son, 4 Sandf. Ch. 379 ; Dunham v. Jarvis,
8 Barb. 88 ; Wetter v. Schlieper, 4 E. D.
Smith, 707.
(c) Perhaps the difference which has
been supposed to exist between the Eng-
lish and AmericaTi law on this point (see
Gowan v. Jeffries, 2 Ashm. 304) is after
all rather seeming than real, and arises
rather from an apiiarent contradiction in
298
THE LAW OF PARTNERSHIP.
[CH. VIII.
Although one only is acting partner, having the property in
his possession, buying and selling, keeping the accounts, <fcc., a
receiver will be appointed to take these things out of his hands,
on allegation and evidence that he abuses his powers or neglects
his duties, and in either way importantly endangers the interests
of his copartners, (t?)
§ 222. Appointment of Partner as Receiver. — It is not un-
common for the appointment of receiver to fall upon one of the
partners, (e) Of course this is not done where there are charges
and countercharges, and a conflict of interests and rights. But
the terms of the rule, as it has been laid
down by the courts of the respective
countries, than fioni any substantial dif-
ference in practice. Waters v. Taylor, 15
Ves. 10, above cited, note (i>), was decided
upon its particular facts, the subject-mat-
ter of the partnership being of a peculiar
nature. And the language of Chancellor
Walworth may not be irreconcilable with
that used by the court in Oliver v.
Hamilton, 2 Anst. 453, all the circum-
stances being taken into consideration.
In Oliver v. Hamilton, a partner applied
for a receiver, while the trade was going
on ; and it does not appear, from the im-
perfect report of the case which we have,
that a dissolution of the partnership was
either asked for or desired. If it was not,
then it was a case, where, as we have seen
{ante, § 218), the court always interferes
with great reluctance, both from a regard
to the interests of the parties, and be-
cause it is no part of its i)roper jurisdic-
tion to assume for an indefinite period
and purpose the carrying on of trade.
On the other hand, in Law v. Ford, 2
Paige, 310, and Marten v. Van Schaick, 4
Paige, 479, the leading New York cases
on the subject, a receiver was asked for to
wind up the affairs of the partnership, a
dissolution having already taken place, or
being desired of the court. But where
there is a dissolution, then, both in Eng-
land and the United States, any substan-
tial wrong done or threatened to the joint
interests is sufficient ground for the ap-
pointment of a receiver. And in neither
country will a receiver be granted for
slight reasons, merely because there is an
apprehension of danger or loss, or because
partners quarrel.
(d) Jeffreys v. Smith, 1 Jac. & W.
298 ; Crawshay v. Maule, 1 Swanst. 495 ;
Bentley v. Bates, 4 Younge & C. 182 ;
Winget V. Heathcote, cited id. 187 ; Hart
V. Clark, 19 Beav. 349; Sheppard v. Oxen-
ford, 1 Kay & J. 491. See Roberts v. Eber-
hardt, 1 Kay, 148 ; Norway v. Rowe, 19
Ves. 144 ; Christian v. Lenhouse, cited
19 Ves. 157, 159.
(e) Wilson v. Greenwood, 1 Swanst.
471, 484 ; Waters v. Taylor, 2 Ves. & B.
299, 306 ; Jeffreys v. Smith, 1 Jac. & W.
298 ; Ex parte Stoveld, 1 Glyn & J. 303,
307 ; Blakeney v. Dufaur, 15 Beav. 40 ;
Brenan v. Preston, 2 De G., M. & G. 813;
Hoffman v. Duncan, 18 Jur. 69. In
Hubbard v. Guild, 1 Duer, 662, the court
expressed the opinion, " that, in all cases
where the dissolution of a partnership is
occasioned solely by the insolvency of
one of the partners, the solvent partner
ought to be appointed receiver, when his
capacity and integrity are unquestioned."
See Freeland v. Stansfield, 16 Jur. 792.
And, in the appointment of a receiver,
the recommendations of those most inter-
ested, and who are most likely to sustain
injury without one, will generally be most
regarded. The being a near relation of
either party is not in itself an absolute
disqualification; but it must be allowed to
have its weight when connected with
other circumstances. Williamson v. Wil-
son, 1 Bland, 418, 427. The general rule,
however, is, that no person should be
appointed a receiver who is a party to the
cause, and not wholly disinterested in the
subject-matter of the suit. 3 Dan. Ch.
Pr. (Perkins' ed.) 1971; Edw. on Re-
ceivers (Rev. ed.), 473. And though
generally, by the order of the court di-
recting the appointment, a proper salary
is directed to be allowed the receiver, yet,
§ 222.] OF THE REMEDIES OF PARTNERS INTER SE. 299
where a partner prays for a receiver, and the other partner makes
no suggestion of wrong against the plaintiff, or of mischief which
would arise from his receiving the appointment, there are many
obvious reasons for giving it to him. No one knows or ought
to know as wel as he the condition of the partnership, and
what measures are required to preserve or promote its interests.
Indeed, his relation to the firm affords the strongest reasons
for appointing him, unless there grow out of the same relation
stronger reasons against the appointment.
In one case where a partner thus appointed used the money of
the partnership in his own business and made profits, the other
partner was not permitted to have a share of them. (/) It
would seem that an extraordinary indulgence was granted to the
receiver in that case. Still the case is not quite similar to those
in which a partner, in wrong of the firm, makes money out of a
business which belongs to it, or to those in which a surviving
partner who by law takes all the effects and has all the power of
the partnership, but only for the purpose of settlement, and then
continues the business for his own profit. (^) Where a partner
is receiver to hold the property and business, if he has money of
the firm in hand, he may earn interest upon it on , his own
responsibility (unless prohibited or otherwise directed by the
decree), and, as the partnership may charge him with the money
and with the interest, and is not liable for any loss of it, it is
enough if he allows full interest ; always providing nothing in
the character of the case or in the appointment makes this use
of the money illegal. (A)
If a surviving partner abuses his power, and the representa-
tives of the deceased apply for a receiver, the same principles
and rules would be applied as in any case in which one of the
partners who has a rightful possession and management makes
a wrongful use of his possession, (i) If equal protection can
If he is an interested party, namely, a and well-established principles which reg-
partner, where the suit is between part- ulate the conduct and liabilities of re-
ners, he will not be permitted to have any ceivers. We have already seen that,
salary or emolument. 3 Dan. Ch. Pr. when a person is himself interested in the
(Perkins' ed.) 1972, 1976, 1984. See subject-matter over which he has control
cases cited supra, in this note. [Berry v. as receiver, he will not usually be allowed
•Tones, 11 Heisk. 206.] to derive any benefit or emolument from
(/) Whitesides v. Lafferty, 3 Humph, his position. And see Edw. on Receivers
150. (Rev. ed.), pp. 573, 596; and the
(f/) Jnte, § 219, note (/>). remarks of Lord Eldon, there quoted, in
{h) Whitesides v. Latterty, 3 Humph. Shaw v. Rhodes, 2 Russ. 539.
150. It may well be doubted whether (/) Wilson v. Greenwood, 1 Swanst.
this case is consistent with the general 480 ; Crawshay v. Maule, 1 Swanst. 507 ;
300 THE LAW OF PARTNERSHIP. [CH. VIII.
be given to the representatives of the deceased, by requiring
security from the surviving partner, that order may issue instead
of the appointment of a receiver ;(/) but not necessarily, {k}
If the surviving partner insists upon carrying on the business,
and employing therein the assets of the deceased, the court will
interfere, and appoint a receiver, if that seems to be the best
remedy, (l) Where all the partners are dead, upon a suit between
their representatives a receiver will be appointed, almost as a
matter of course. (??i)
§ 223. Practice on Appointment of Receiver. — An injunction
is sometimes granted, or a receiver appointed by the court directly
on application and affidavits. Where the parties agree to the
person, there can be no objection to this. The English rule is,
to refer the case to a master, who will make an appointment,
after a hearing of both parties, if they wish to be heard, and
will report his appointment to the court for confirmation, unless
that be waived or is obviously unnecessary, (w) And this we think
the safer practice, and suppose it to be frequently adopted in this
country, (o)
§ 224. Powers and Duties of Receiver. — The powers and
duties of a receiver, when appointed in a suit between partners,
are essentially the same as when he is appointed pending a con-
Gratz V. Baj-ard, 11 S. & E. 41, 48 ; there is a copartnership, there is a con-
Walker V. House, 4 Md. Ch. 39 ; Jacquin fidence between the parties, and, if the
V. Buisson, 11 How. Pr. 385, 394 ; Collins one dies, the confidence remains, and he
«. Yonng, 1 Macq. 385 ; Clegg t?. Fish wick, shall receive; but, when both are dead,
1 McN. & G. 294. See Hartz v. Schrader, there is no confidence between the repre-
8 Ves. 317 ; Evans v. Evans, 9 Paige, sentatives, and, therefore, the court will
178 ; Renton v. Chaplain, 1 Stock. 62, appoint a receiver." Walker v. House, 4
70 ; Hubbard v. Guild. 1 Duer, 662. Md. Ch. 39, 43.
ij) Estwick V. Conningsby, 1 Vern. (?i) The master's judgment as to the
118 ; Higginson v. Air, 1 Desaus. 427, proper person is never disturbed, unles.s
429. some substantial objection be shown. If
(k) In Law v. Ford, 2 Paige, 310, such objection be shown, the court will
where the suit was between living part- then refer it back to the master to review
ners, a receiver was appointed, notwith- his report. 3 Dan. Ch. Pr. (Perkins' ed.)
standing that the partner who was in 1976, 1979, 1981 ; Edw. on Receivers
possession of the partnership books and (Rev. ed. ), ch. 4, yip. 95, 96. See Lot-
effects was willing to give security for the timer v. Lord, 4 E. D. Smith, 183 ; 1
faithful application of the effects in pay- Barb. Ch. Pr. 669, 673.
ment of the debts. (o) In some of the States, as it seems,
(/) Madgwick v. Wimble, 6 Beav. 495 ; the court, without any reference, will
Clegg V. Fishwick, 1 McN. & G. 294 ; directly receive and act upon the nomina-
Walker v. House, 4 Md. Ch. 39. tions of the parties of suitable ])ersons
(m) The ground of the appointment for receiver. William.son v. Wilson, 1
of a receiver in such a case is thus stated Bland, 418, 427 ; Go wan v. Jeffries, 2
by Lord Kenyon, in Phillips v. Atkinson, Ashm. 296, 307.
2 Bro. C. C. (Perkins* ed.) 272 : " Where
§ 224.] OF THE REMEDIES OF PARTNERS INTER SE. 301
troversy between other parties. He is always the officer of the
court, and, as such, takes into his possession the partnership
property, {p) receives the issues and avails thereof, and is bound
to account for such receipts whenever the court requires, {q)
Not un frequently he not only receives and gets in outstanding
funds, but also superintends and carries on the partnership
business, (r)
The rules by which the receiver is to govern his action in any
given instance, and the methods or principles by which, in each
particular case, he is to manage and carry on the partnership
business and collect and receive and dispose of its funds, cannot
be described in general terms. They are, for the most part,
dependent upon the decree appointing him ; in which his powers
and duties are generally defined and enumerated with much
minuteness. («)
By the same decree, partners or other persons who have done
or are supposed to threaten wrong, are usually restrained from
any acts which would interfere with the duties of the receiver, or
in any way render the appointment less useful and effectual, (f)
In England, we believe, the receiver is not authorized to bring
suits at law or in equity, unless merely to collect debts, and
(p) The general principle as to the 418, 435, 436; Walker v. House, 4 Md.
property which the receiver will take Ch. 39, 51.
into possession, by virtue of his appoint- (r) Ante, § 220, and notes ; 3 Dan.
nient, is that he will assume not only Ch. Pr. (Perkins' ed.) 2006. In the case
everything liable to be taken under an of Banks v. Gould, decided by Chancellor
execution at law, but also everything that Kent, and cited in Edw. on Receivers
is considered in equity as assets. 3 Dan. (Rev. ed. ), 316, et seq., inasmuch as the
Ch. Pr. (Perkins' ed.) 1970; Edw. on firm had two establishments, one at
Receivers (Rev. ed.), 6. Hence, the re- Albany and the other in New York, two
ceiver of a partnership will take, as part receivers were appointed. The writer
of the assets of the tirm, real estate held above cited remarks, however, that it
in severalty by the different partners, may be a question whether the course
but purchased and used for partnership should not have been to have had one
purposes, and paid for with partner- receiver, with liberty to appoint an agent,
ship funds. Smith v. Danvers, 5 Sandf. See cases cited in Edw. on Receivers
669. (Rev. ed.), 324.
[q) 2 Story Eq. §§ 831-833 ; 3 Dan. (s) Smith on Receivers, 186 ; 2 Story
Ch. Pr. (Parkins' ed.) 1949, 1976, 1977 ; Eq. § 833 ; 3 Dan. Ch. Pr. (Perkins' ed.)
Wolbert v. Harris, 3 Halst. Ch. 605, 622. 1987, 1988 ; Edw. on Receivers (Rev.
A receiver appointed in a partnership ed. ), 5. See Skip v. Harwood, where a
suit, even without any formal assign- receiver was appointed for a brewery, 3
ment, becomes trustee of the assets for Dan. Ch. Pr. (Perkins' ed.) 1968, note;
all the firm creditors ; and, while this 1 Dick. 114.
trust continues, one partner cannot give a (t) See siqjra, Skip v. Harwood ; and,
preference, nor can a creditor gain one by for a general form of the decree appoint-
judgment. Edw. on Receivers (Rev. ing a receiver of a partnership, Edw. on
ed.), 341; Waring v. Robinson, 1 Hoff. Receivers (Rev. ed.), 341. See also Se-
Ch. 524 ; Williamson v. Wilson, 1 Bland, ton's Decrees, 323.
302 THE LAW OF PARTNERSHIP. [CH. 7III.
not always for that. (?<) But in this country the power is fre-
quently, not to say generally, given to him, to bring any actions
necessary for the proper discharge of his duties, (u) and provision
is made for the indemnilication, out of the effects in his hands,
of those in whose names he brings such actions, {iv)
§ 225. Torts between Partners. — Pleadings in equity, in a suit
between partners, would be more properly considered in a treatise
on Chancery Practice and Pleading. Little variation from the
ordinary rules and practice seems to be required by the fact that
the cause of action between the parties arises from their relation
as copartners. Some points, which might be considered under this
head, are treated of under the particular topics with which they
seem to be more particularly connected. Thus, in the chapter on
Account, we shall endeavor to show who may file a bill for an
account, who must be made parties, and what pleas are held to be
a good bar to such a bill, and equity topics are discussed in other
places. Here, therefore, we will only add, that, if the fact of the
partnership is disputed in a suit inequity purporting to be between
partners, a court of equity may direct an issue to ascertain the
truth ; (a;) and, it seems, may even order that the parties them-
selves be examined at the trial, (t/) But such an issue will not be
directed, unless the point is very doubtful, (z)
So far as there are personal torts, they can hardly have any
relation to the partnership ; and neither party can be affected in
right, obligation, or remedy, by the fact that he is a partner, (a)
{u) Estwick V. Conningsb)', 1 Vern. the issue directed to be tried was whether
118 ; Dacie v. John, McClelaud, 575 ; 2 a party was a real or a nominal partner.
Story Eq. §§ 833,834; Seton's Decrees, (y) De Tastet r. Bordenave, Jac. 516.
323. But see, on this point, 2 Dan. Ch. Pr.
(i') See the remarks of Ames, C. J., in (Perkins' ed.) 1298.
Tillinghast r. Champlin, 4 R. I. 173, 188. (z) Forster v. Hale, 5 Ves. 308, 322;
See Iddings v. Bruen, 4 Sandf. Ch. 417, Metcalf v. Ro}'al Exchange Ass. Co., Bar-
422 ; Green v. Bostwick, 1 Sandf. Ch, nard. 343. As to the constitutional right
185, 186. which citizens may have, in the different
(w) 3 Dan. Ch. Pr. (Perkins' ed.) States, to have matters of fact, alleged in
1977, 1991; Edw. on Receivers (Rev. the bill and denied by the answer, tried by
ed.), 136, 342, 343; Seton's Decrees, 323, a jury, see Sedgwick Const. Law, 542-
324. A receiver cannot maintain an ac- 548 ; 2 Dan. Ch. Pr. 1289, note (1) ;
tion of trover, in his own name, for part- Adams Eq. [376], 815, note.
nership effects converted before his ap- (a) Where one partner, by violence,
pointnient ; he must sue in the name of forces his copartner out of the business
the firm. Yeager v. Wallace, 44 Pa. 294. premises of the firm, and threatens such
{x) Peacock v. Peacock, 16 Ves. 49; copartner with violence and danger to his
Ex parte Langdale, 18 Ves. 300 ; Binford life, if the latter should venture again to
V. Dommett, 4 Ves. 756 ; Jacobsen v. enter the premises, and it is necessary for
Hennekenius, 5 Bro. P. C. 482, 1 Bro. P. such copartner to enter and use the prem-
C. (Dublin ed. ) 432. In this last case, ises for the purposes of carrying on his
§ 226.]
OF THE REMEDIES OF PARTNERS INTER SE.
303
Of torts in relation to the partnership or its property, nearly all
will be comprehended either in fraud or waste ; for both of which
the remedy in equity is promi)t and efficacious, (b) as we have
already seen.^
§ 226. Conversion by Partner of Firm Property. — Some question
may exist whether the rules of law, in cases of tenancy in common,
do not apply in this respect to cases of partnership. A tenant in
common may maintain trover against a cotenantfor a destruction,
total or partial, of the common property by him. (c) It has been
held, that a sale of the whole, without authority, may be regarded
as such destruction, (d) But no tenant in common can maintain
ordinary business as partner, the court
will permit the latter to exhibit articles of
peace against the former. Regina v. Mal-
linson, 16 Q. B. 367.
(b) The plaintiff and defendant were
partners ; and it appeared, by the com-
plaint, that the action was brought to
recover damages for the fraudulent removal
by the defendant of a stock of goods be-
longing to the firm An order of arrest
was applied for upon affidavits setting
forth the fraud. Duer, J., refused to
grant the order ; holding that the action
was not maintainable, and that the plain-
titf had no proper remedy but in a suit for
an injunction and a receiver. Approved
by the court in Gary v. Williams, 1 Duer,
667.
(c) Buller, N. P. 34 ; 2 Saund. on PI.
& Ev. 1163 ; Cowan v. Burgess, Cooke,
58 ; Seldon v. Hickock, 2 Caines, 167 ;
Tubbs V. Richardson, 6 Vt. 442 ; Hurd v.
Darling, 14 Vt. 214 ; Herrin v. Eaton, 13
Me. 193 ; Guyther v. Pettijohn, 6 Ired.
388.
(d) The doctrine, as at present settled
by the English authorities, is, that the mere
sale of a chattel by one of two tenants in
common is not a conversion for which his
cotenant can maintain trover. The dis-
position of the chattel must be such as
amounts to a destruction of it. See May-
hew V. Herrick, 7 C. 13. 229. In this case,
the point was elaborately discussed, and
all the leading authorities reviewed. See
Higgius V. Thomas, 8 Q. B. 908 ; Barton
V. Williams, 5 B. & Aid. 395, 402, 403 ;
Farrar v. Beswick, 1 il. & W\ 685, 688 ;
Jackson v. Anderson, 4 Taunt. 24 ; Fen-
nings V. Grenville, 1 Taunt. 241 ; Heath
V. Hubbard, 4 East, 110 ; Graves v. Saw-
cer, T. Raym. 15 ; 1 Chitty P. C. 90, 91,
179, note ; 2 Saund. PI. & Ev. (5th Am.
ed.) pt. 2, 1164, 1166, 1168. In this
country, the rule has been frequently laid
down, without qualification, that a tenant
in common may bring trover against his
cotenant, for a conversion, by a sale, of the
entire property held in common. Wilson
V. Reed, 3 Johns. 175; Hyde v. Stone, 9
Cowen, 230, 7 Wend. 354 ; Tyler v. Taylor,
8 Barb. 585 ; Farr v. Smith, 9 Wt-nd. 338 ;
White V. Osborne, 21 W'end. 72 ; Odiorne
V. Lyford, 9 N. H. 511 ; White v. Phelps,
12 N. H. 386 ; Thomson v. Cook, 2 South.
580 ; Weld v. Oliver, 21 Pick. 559 ;
Starnes v. Quin, 6 Ga. 84 ; Rains v. Mc-
Nairy, 4 Humph. 356 ; Smyth u. Tankers-
ley, 20 Ala. 212 ; Perminter v. Kelly, 18
Ala. 716 ; Cowles v. Garrett, 30 Ala. 341.
1 It was held in Mills v. Fellows, 30 La. Ann. 824, that one partner cannot bring
an action against his copartner for an injury to the business caused by the debauchery
and bad habits of the latter. It is a good ground for dissolution ; but if the partners
continue the business, and the wrongdoing is thus in a sense condoned, the court will
not bring the scandal to light. In Boughner v. Black, 83 Ky. 521, however, it was
held that where A. sold an interest in his business to B., and now sued on a note given
in payment, B. might recoup damages suffered from the fraudulent acts of A. in the
course ol the firm business, whereby the good-will and credit of the firm were damaged :
since that is a cause of action for a partner.
304
THE LAW OF PARTNERSHIP.
[CH. VIII.
trover grounded on the mere possession of his cotenant, however
exclusive this cotenant insists upon making it, for the technical
reason that each tenant in common is entitled to the possession of
the property, (e) Nor should we think that trover would lie by a
partner, against his copartner, for constructive destruction by a
sale of the whole thing, because, by the law of partnership, a part-
ner has this power of sale. (/) Nor should we think it would lie
in general for the actual destruction of a thing by a copartner.
For, although a partner has no legal right to destroy anytliing, —
unless by possibility even that sliould be fairly incident to the
business of the partnership, — yet, if he does destroy it, this might
be taken as an appropriation by him, to be charged to him on
account ; and this charge would then be settled like others, only
by a settlement of accounts.^
It has been held in this country, that detinue may be maintained
by a surviving partner against the representatives of a deceased
partner, for the books of account of the firm ; (^) and there is a
See, however, Tubbs v. Richardson, 6 Vt.
442 ; Sanborn v. Merrill, 15 Vt. 700 ; Pitt
V. Petwa}-, 12 Ired. 69. Perhaps, however,
notwithstanding the language of some
cases, and the actual adjudication in
others, the rule in this country is, after
all, to be considered as substantially the
same with the English rule. That is, in
both countries, a sale of the common prop-
erty by one cotenant may be per se a con-
version, — is always admissible evidence of
it, — but is not necessarily a conversion
upon which trover may be founded, unless
it is tantamount to a destruction of the
subject of the tenancy. See St. John u.
Standring, 2 Johns. 468 ; Mersereau v.
Norton, 15 Johns. 179 ; Bell v. Lagmans,
1 Monroe, 40 ; Hinds v. Terry, Walker,
80.
(e) Co. Litt. 200 ; Buller N. P. 34 ;
1 Salk. 290 ; Holliday v. Cam sell, 1 T. R.
658 ; Fennings v. Grenville, 1 Taunt. 241 ;
St. John V. Standring, 2 Johns. 468 ;
Mersereau v. Norton, 15 Johns. 179 ;
Gilbert v. Dickerson, 7 Wend. 449 ; Tyler
V. Taylor, 8 Barb. 585 ; Weld v. Oliver, 21
Pick." 559, 562 ; Cole v. Terry, 2 Dev. &
B. 252 ; Fightmaster v. Beaslj', 7 J. J.
Marsh. 415 ; Dainu. Cowing, 22 Me. 347 ;
Weeks v. Weeks, 5 Ired. Eq. Ill, 119.
See Lowe v. Miller, 3 Gratt. 205 ; Agnew
V. Johnson, 17 Pa. 373. In Illinois, the
common-law rule is so far modified by stat-
ute as to allow one tenant in common to
support trover against a cotenant who
assumes exclusive control over the joint
property. Benjamin v. Stremple, 13 111.
466. See 2 111. .Stat. (1863) 960.
The general principle holds after the
bankruptcy of a partner, and his assignees
cannot maintain trover against the other
partners, their representatives, or assigns.
Fox V. Hanbury, Cowp. 445 ; Smith v.
Stokes, 1 East, 363; Smith v. Oriell, 1
East, 368 ; Salomons v. Nissen, 2 T. R.
674, 682.
(/) Montjoys v. Holden, Litt. Sel. Cas-
447 ; Hyde v. Stone, 9 Cowen, 230. See
Furlong v. Bartlett, 21 Pick. 401 ; Wilson
V. Reed, 3 Johiis. 175, 178.
(g) Murray v. Mumford, 6 Cow. 441.
The ground taken by the court in this case
was, that a dissolution of a partnership did
not, ipso facto, destroy the joint tenancy
of the partners in the partnership property,
and create a tenancy in common, but the
1 But where the individual property of one partner, used in the business, was de-
stroyed by the negligence of the other partner, the owner may sue his copartner at law
for the destruction. Newby v. Harrell, 99 N. C. 149, 5 S. E. 284.
§ £28.] OF THE REMEDIES OF PARTNERS INTER SE. 305
similar, thoiiofh perhaps not quite an equal, reason for allowing
the same action, by a partner, against a partner who keeps wrong-
ful possession of the books. We deem the reason insufficient in
both cases, and the remedy itself unnecessary. Indeed, detinue
is almost wholly disused. And the remedies of equity are so com-
pletely adequate, wherever a partner is injured by the wrong-doing
of his copartner in matters relating to the partnership, that we
doubt whether any resort to law in such cases can be necessary,
or will be sanctioned l)y the courts.
§ 227. Fraud inducing Entrance into Partnership. — [One who has
been induced to enter into a partnership by the false represen-
tations of his copartner may maintain an action at law for the
deceit.^ The measure of damages is the net amount of money
he has paid in, and compensation for his time.^
He may also maintain a bill to rescind the partnership agree-
ment. He will then be entitled to a restitution in integrum by
the allowance of damages or otherwise, to an injunction against
the use of his name as partner, and to an indemnity against the
firm debts.3]
§ 228. Statute of Limitations between Partners. — The statute of
limitations begins to run at the death of a partner, in favor of his
personal representatives against a claim to have an account of
profits received by him. (//?/) *
partnership continueil, for the purpose of take in settlement at the time of dissolu-
settling the partnership affairs ; that, in tion, is demurrable for non-joinder of the
case of dissolution by death, the surviving other two. .Johnston v. Freer, 51 Ga. 313.
partner was entitled to all the choses in (yy) Weisman v. Smith, 6 Jones, Eq.
action, and other evidences of debt belong- 124. Partners inter sese hold partnership
ing to the firm, and was entitled to the effects for each other under an implied
exclusive custody and control of them ; trust ; and the statute of limitations rests
that the books of account were incidents to upon their respective claims against each
the debts or choses in action ; and that other, in this regard, and begins to run on
whoever was entitled to the one was, of the occurrence of a breach of trust ; and,
course, to the other. See Clowes v. Haw- when one is to collect and pay over the
ley, 12 Johns. 487. A bill in equity by funds, the statute is not set in motion till
one copartner, against one of three other there is a failure in the performance of that
copartners, to recover his share of a sum of duty. Condrey v. Gilliam, 60 Mo. 86.
money obtained by the otlier three by mis-
1 Baldey v. Brackenridge, 39 La. Ann. 660, 2 So. 410 ; Hale v. Wilson, 112 Mass.
444.
2 Mycock V. Beatson, 13 Ch. D. 384 ; Richards i;. Todd, 127 Mass. 167.
8 Newbigging v. Adam, 34 Ch. D. 582 (C. A.) ; Oteri v. Sealzo, 145 TJ. S. 578 ;
Smith V. Everett, 126 Mass. 304 ; Andriessen's Appeal, 123 Pa. 303, 16 Atl. 840.
* Statute of Limitntions : — The statute of limitations may be a bar to the claim of
one partner against another. As the ordinary renied\- of one partner against another is
in equity, the defence to a bill for an accounting is strictly not the statute of limita-
20
306 THE LAW OF PARTNERSHIP. [CH. VIII.
tions, but laclies or lapse of time. Philippi v. Pliilip]n, 61 Ala. 41. Where the part-
nership articles are under seal, and secure the right to an account, the right will not
be barred until the period of limitations for sealed instruments has elapsed. Near v.
Lowe, 49 Mich. 482, 13 N. W. 825.
In Illinois the statute of limitations begins to run against a partner's claim from the
time of dissolution. Pierce i\ McClellaii, 93 111. 245 ; Askew v. Springer, 111 111. 662 ;
Blake v. Sweeting, 121 111. 67, 12 N. E. 67 ; Bonney v. Stoughton, 122 111. 536, 13
N. E. 833. Thus, it runs from the death of a partner. Quayle v. Guild, 91 111. 378.
The same rule seems to prevail in Iowa. Richards v. Grinnell, 63 la. 44, 18 N. \V.
668.
The better view, however, seems to be opposed to this. One partner may, to be
sure, bring a bill for an accounting at once upon dissolution ; but until a demand for an
accounting is made, either by bringing a bill or otherwise, neither party is in default to
the other for not rendering an account. There must be some refusal to account or
other adverse act in order to set the statute running. Rencher v. Anderson, 95 N. C.
208. And the mere fact of death or dissolution is not enough. Riddle v. Whitehill,
135 U. S. 621.
Since one partner generally has no cause of action against the other till the debts
are paid, the statute does not begin to run until all debts are paid at least. Brewer v.
Browne, 68 Ala. 210 ; Miller v. Harris, 9 Baxt. 10] ; Jordan v. Miller, 75 Va. 442 ;
Logan V. Dixon, 73 Wis. 533, 41 N. W. 713. And the true rule would seem to be
that the statute begins to run only when the accounts are settled and a balance .struck ;
for until that time there is no indebtedness between the partners. Hendy r. March,
75 Cal. 566, 17 Pac. 702 ; Rice v. Peunypacker, 5 Houst. 279 ; Holloway v. Turner,
61 Md. 217 ; McDonald i'. Holmes, 22 Ore. 212, 29 Pac. 735. In Minnesota, under a
peculiar statute, the right of a partner to an account is barred six years after the last
assets are paid in to the copartner. McClung v. Capehart, 24 Minn. 17. In Alabama
it is six years from the last item of the account. Wells v. Brown, 83 Ala. 161, 3 So.
439 ; Haynes v. Short, 88 Ala. 562, 7 So. 157.
§ 230.] OF REMEDIES BY PARTNEKS AGAINST THIRD PARTIES. 307
CHAPTER IX.
OP REMEDIES BY PARTNERS AGAINST THIRD PARTIES.
§ 229. Remedies for Breach of Contract. — As a general rale, a
partiiersliip has the same remedy, and in the same form, agahist
a thu'd party, that one person has against another, (a) We need
only advert to the exceptions to this rule, or the qualifications it
has received. One of tliese, derived from the principle that no
person can sue himself, or, in other words, that the same person
cannot be plaintiff and defendant of record, we have already
referred to. (b)
§ 230. Discharge by one Partner. — It must be true, that a firm
cannot bring an action against a third party, on any paper, or
any indebtedness which has been discharged in any way by one
of the firm, so that there is a perfect defence against one of the
plaintiffs, (c) For, if he must be one of the plaintiffs, the action
(a) If coplaintiffs sue for a debt due to
them as partners, they must declare as
partners ; or, perhaps, it may be sufficient
to prove their partnership. Woodworth
V. Fuller, 24 111. 109.
(b) Ante, § 200 ; Bosanquet v. Wray,
6 Taunt. 597 ; Mainwaring v. Newman, 2
B. & P. 120; Motfat v. Van Millenger,
2 B. & P. 124, n. ; Portland Bank v.
Hyde, 11 Me. 196 ; Englis v. Furniss, 4
E. D. Smith, 587 ; Green v. Chapman,
27 Vt. 236 : Rogers v. Rogers, 5 Ired.
Eq. 31 ; Lacy t;. LeBrun, 6 Ala. 904 ;
Griffith V. Chew, 8 S. & R. 30, 31 ;
Tindal v. Bright, Minor, 103 ; Banks v.
Mitchell, 8 Yerg. Ill ; Miller v. Thorn,
R. M. Charlt. 180 ; Cole v. Reynolds, 18
N. Y. 74 (though otherwise by statute in
New York) ; Eastman v. Wright, 6 Pick.
316. Under the code in Indiana, if a
partner refuses to join as jilaintiff, he may
be made a party defendant. Hill v.
Marsh, 46 lud. 218.
(c) A release by one partner is a bar to
any action by the firm, even though made
p2iis dm-rein continuance. Phillips v.
Clagett, 11 M. & \V. 84; Rawstorne v.
Gandell, 15 M. & W. 304; Campbell
V. MuUett, 2 Swanst. 569 ; Bristow v.
Taylor, 2 Stark. 50 ; Porter v. Taylor, 6
M. & S. 156 ; Arton v. Booth, 4^ J. B.
Moore, 192 ; Furnival v. Weston, 7 J. B.
Moore, 356 ; Salmon v. Davis, 4 Binney,
375 ; Emerson v. Knower, 8 Pick. 63 ;
Pierson v. Hooker, 3 Johns. 68 ; Bruen
r. JSIarquand, 17 Johns. 58 ; Gates v.
Pollock, 5 Jones, 344 ; Smith v. Stone,
4 Gill & J. 310 ; McBiide v. Hagan, 1
Wend. 326 ; Doremus v. McCormick, 7
Gill, 49; Wallis v. Wallace, 6 How.
(Miss.) 254; Halsy v. Fairbanks, 4 Mass.
206. But, as the authority of a single
partner to release or receis'e payment
arises only from the partnershii>, it is
necessarily limited to the partnership
scope, in the ordinary methods of business.
308 THE LAW OP PARTNERSHIP. [CH. IX.
cannot proceed if it cannot be maintained by him.^ "Whether this
objection passes away when the partner discharging the debt is
only dormant and secret, or nominal, is, in fact, the same as tliat
considered before, when treating of the relations of two firms with
a common partner. There is this difference, however. A secret
partner, who actually is one, or a nominal partner who is set forth
as one, may lawfully discharge any debt due to the firm ; and,
therefore, we should say such an action would not lie, unless the
discharge had been fraudulent as against the firm, and the fraud
brought home, in some way, to the debtor.
§ 231. Action by Firm against another having Common Member. —
As matter of usage and practice, a firm having paper which they
cannot sue, because one of themselves would necessarily be plaintiff
and defendant, may indorse the paper to a third party, and there
seems to be no objection to his bringing an action upon it at
law. (t?)
(d) Davis v. Briggs 39 Me. 304 ; Penn v. Stone, 10 Ala. 209, though the
Thayer w. Biiffum, 11 Met. 398; Pitcher indorsee was also assignee of the partner's
V. Burrows, 17 Pick. 361 ; Parker v. Ma- share both of as.sets and liabilities, and so
comber, 18 Pick. 509 ; Temple v. Seaver, ultimately liable to contribute ; because
11 Cush. 314 ; Smith v. Tustin, 5 Cow. this did not render him a partner. But,
688 ; Blake v. Wheadon, 2 Hayw. 109 ; if the note is not negotiable, it is subject
Babcock v. Stone, 3 McLean, 172 ; Hey- to the same defences in the hands of the
wood V. Wingate, 14 N. H. 73. So in indorsee as in those of the payee, being
1 "Where one partner, not having authority to do so, agreed to submit a firm claim
to arbitration, and the rest of the firm brought suit in spite of the award, it was held
that they might thus sue, joining the other partner as a formal party. The rule that
all joint parties must have a cause of action or none can recover does not, the court
said, a]iply in the case of partnership. Fancher v. Bibb Furnace Co., 80 Ala. 481,
2 So. 268.
"Where one partner assigned firm property in payment of his individual debts, it
was held in Pennsylvania that the other partner might sue in trover, like any
tenant in common whose cotenant has wrongfully transferred the property ; recover-
ing, of course, half the value of the property. McNair v. "Wilcox, 121 Pa. 437, 15
Atl. 575.
But this seems to lose sight of the fact that a partner is only technically a tenant
in common, and has no beneficial interest in the property. The firm should be able to
get from the wrongdoer the whole value, not half the value ; and the partner has no
more right to get half the value of the property in damages than to get three quarters
or nothing at all. The better view is that taken in Illinois, where it is held that the
partner cannot sue in tort. Sindelare v. Walker, 137 111. 43, 27 X. E. 59.
C. had dealings with S., who came to owe him a balance. S. formed a ])artnership
with A., of which C. had notice, and dealings continued between C. and the new firm.
The firm gave C. its checks on account, which C. by agreement with S. applied to the
old balance owed by S. This was held a misapplication; and though the firm could
not recover these payments, since S. would be a necessary party, there was nothing
to prevent it, througli A., from insisting that the checks be applied on the firm debt
Cornells v. Stanhope, 14 E. I. 97.
§ 232.] OF REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 309
It has been questioned, in some cases, whether the death of the
person who is a j)artner in both the firms removes the bar to an
action between them. This is denied by some authorities ; but we
have doubts whether there be a positive rule to this effect, (g) As
the bar of a common partner affects not the contract but the
remedy, when the death of the common partner removes this
technical bar, we should say the survivors might sue. (^ee) ^ As a
general rule, it must be true, that no action can be sustained by a
copartuershij), properly setting forth the names of the i)artners, if
either of them is disabled from bringing that suit. And the cases
must be few, if any exist, in which the law indulges the firm with
suppressing the name of the disabled partner, and so bringing the
action.
§ 232. Alien Partner. — In the case of an alien enemy, the rule
seems to be established ; and, as a consequence of it, no partner-
ship, of which one member is an alien, can bring, in either of the
countries to which the partners belong, any action during a war
between those countries. (/) How it would be if one partner —
all being citizens of one of the belligerents — resided in the country
a mere assifjnment of a chose in action. (/) McConnel v. Hector, 3 B. & P.
Hill V. McPheison, 15 Mo. 204. In 113 ; Albretcht v. Sussman, 2 Ves. & B.
Tinirall v. O'Baniion, 7 B. Mon. 603, the 323 ; and see O'Meales' v. Wilson, 1 Camy>.
same doctrine is held, though it does not 482. All causes of action which accrued
clearly appear that the note there was not prior to the war are suspended during the
negotiable. war. But, if the cause of action arises
(e) In Bosanquet v, Wray, 6 Taunt, during the war, it seems that the firm are
597, it is said, the death of the partner precluded from suit at any time, if their
does not remove the bar, as that "goes partner be affected with a hostile character
to the root of the contract." This asser- when the contract was made. Thus in
tion is repeated by the text-writers, CoUyer Griswold i'. Waddington, 16 Johns. 488,
on Part. § 642, Story on Part. § 234, Gow the plea of alien enemy was held a bar to
on Part. 119, 120, and in many cases, an action brought by a firm after return of
See De Tastet v. Shaw, 1 B. & Aid. 664 ; peace on a balance accrued during war.
Burly V. Harris, 8 N. H. 233, 235. See one partner — though a native of the
also Addison on Cont. 732 ; but it does country where the suit was brought —
not seem to have been expressly decided being resident in the belligerent country
until Miller v. Thorn, R. JI. Charlt. 180. when the balance accrued. And, by the
It is not, however, clear fiom authority or doctrine of the courts both of England
on principle that this rule is universal, and America, it would seem tliat the right
[See ante, § 201.] to contract is destroyed eo instanti war is
(cp.) This is expressly held in Lacy v. declared. See The Venus, 8 Cranch, 253.
Le Brun, 6 Ala. 904.
^ Under a statute allowing an action to be brought against one partner on a claim
against a firm, a partnership having a claim against another with a common member
may sue the other members of the latter firm. Alexander v. King, 87 Ala. 642, 6 So.
382 ; Alexander w. Jones, 90 Ala. 474, 7 So. 903 ; Morris v. Hillery, 7 How,
(Miss.) 61.
310 THE LAW OF PARTNERSHIP. [CH. IX.
of the other, is a question of some difficulty. The true principle
must be, that the rights of the partnership Avere unaffected by
their residence alone, if there were nothing of adherence to the
enemv. (,</) But it might be very difficult to make this distinction
applicable, where the foreign residence of the partner was perma-
nent, or even long, (/i)
§ 233, Partnership between Man and "Wife. — A different ques-
tion, previously adverted to, arises, where, by the law of a foreign
land, husband and wife may form a mercantile partnership, or
both be members of one. At home, they could, of course, bring
any action. But, in England and in this country, a wife cannot
join with her husband in any such action ; and it is said that an
action by such a tirm cannot be maintained. (») It is, however,
possible that the recent legislation of some of our States, giving to
the married woman, so far as her property is concerned, almost
the status of a single woman, might be construed to permit such
an action. The rule that, whenever the lex loci comes into question,
the lex loci fori shall determine all questions of remedy, might
oppose such an action. But this rule has only been applied to such
questions as arise under the statute of limitations, and, perhaps,
those of infancy ; (/) and, on the other hand, the question of dis-
ability to make the contract is determined by the law of the place
of the contract. On the whole, we should expect that an American
court would say, either that the wife might sue with the husband,
because of her unquestionable right, at home, or that she could
neither sue nor be regarded in this country as a partner, and that
her name might be omitted. But the simpler, and certainly the
(g) Collyer on Part. § 647, citing Rob- tional Law, 45, it is said that " domicile
erts V. Hard}', 3 M. & S. 533 ; but see by residence in the enemy's country is
next note. considered as adherence to the enemy, in-
(h) Roberts v. Hardy, 3 M. & S. 533; asmuch as it increases his strength through
O'Mealey v. Wilson, 1 Camp. 482 ; The contribution of taxes and other means,
Julia, 8 Cranch, 195 ; The Rapid, 8 and consequently imposes a hostile char-
Crancli, 160, 161. In Griswold v. Wad- acter or the person domiciled." It should
dington, 16 Johns. 479, Kent, C. J., says seem, therefore, that mere residence, if it
of the prohibition of intercourse : " It clearly appear, will, if not shown to be
reaches to all interchange or transfer or compulsory, amount to adherence to the
removal of property, to all negotiation enemy rnd support the plea of alien
and contracts, to all communication and enemy.
all locomotive intercourse ; to a state of (/) Collyer on Part. § 646, citing Cosio
utter occlusion to any intercourse but one v. De Bernales, Ryan & M. 102. There
of open hostilitj', to any meeting but in is, however, no case which decides this
actual combat." This utter and rigid question. See the next and following
veto on all intercourse arises eo instanti notes. [See ante, § 20.]
war is declared. See The Venus, 8 {j) Thompson v. Ketcham, 8 Johns,
Cranch, 253. In 2 Wildman's Interna- 189.
§ 234.] OF REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 311
safer, way would be, to indorse the paper over, if it were negoti-
able, to some third person who could be made plaintiff.
§ 234. Indorsement of Firm Paper to Partner. — As there is no
doubt tliat a firm can indorse their paper to any third party, who
may then sue it, so we suppose it clear that they may indorse it
over to one of their number, who may then bring the suit in his
own name. (A;) Nor do we sec why this indorsement may not be
made by the partner who is indorsee. It is every day's practice to
make a note ])ayable to the maker's own order. There is no such
practice of indorsing to the order of the indorser, because he must
then indorse again, in order to designate and authorize a third
person to bring suit, and this he can do as well at first. Bnt,
where there is any reason for a payee's indorsing to his own order,
we see no objection to it ; and we should say there could be none
to a partner's writing as indorser the name of the firm, and as
indorsee his own. (I) This power, however, is confined to negoti-
able paper. In many of our States, the common law as to choses
in action has been materially modified ; but, where it remains in
force, no partner can transfer and assign his interest in a chose in
action to the other partner or partners, so that the transferee may
bring his action at law in his own name, (in) In equity it would
be otherwise ; (n) but such a transfer, for consideration, would
{k) Bailey v. Lyman, 1 Story, 396 ; In Towle v. Harrington, 1 Cush. 146, a
Bolton V. Puller, 1 B. & P. 546 : Goddard note was made by one firm to another,
V. Lyman, 14 Pick. 268 ; Russell v. Swan, there being a common partner in both.
16 Mass. 314. In Estabrook v. Smith, 6 After the death of the common partner,
Gray, 570, it was held, that a partner the survivor indorsed the note to himself,
might transfer a partnersiiip note by in- The indorsement was held void, but only
dorseitient in the partnership name to his because the note survived to him as part-
copartner, but could not by an indorse- ner, and his indorsement to himself was
ment in his own ; though it was argued null. But a partner's right to indorse
that to require the name of the copartner with the partnership name the partnership
as indorser on the note was to compel him paper to himself seems implif'dly admitted,
to indorse to him.self. But it has been (?re) The common law (without statu-
held, that where the indorsement by the tory provision) has nowhere been so modi-
firm was merely colorable, to avoid the fied that the mere assignee of a chose in
objection that tlie maker was a partner, it action can sue in his own name. A mere
was held still to be the note of the firm, assignment, therefore, by one partner to
and that no action could be maintained his copartner of a partnership demand,
upon it by the indorsee. Ti])ton v. Nance, gives no right to the assignee to sue in his
4 Ala. 194. If the indorsement be in the own name. Tate v. Mut. Fire Ins. Co.,
name of one partner only, it passes 13 Gray, 79 ; Russell v. Swan, 16 Mass.
no interest. Mclntire v. McLaurin, 2 314, and cases cited in note {p), infra.
Humph. 71. (") An assignee has not, however, a
(I) Burnham v. Whittier, 5 N. H. resort to equity, merely because he cannot
334 ; Kirby v. Coggswell, 1 Caines, 505 ; sue in his own name ; for, as courts of
and see Estabrook r. Smith, 6 Gray, 570. law admit him to sue in the name of his
312
THE LAW OP PARTNERSHIP.
[CH. IX.
authorize the transferee to use the name of the transferring part-
ner, at law, nor could he interfere with the suit in any way. (o)
§ 235. Who must join as Parties. — It must he the general
rule, that all those who were partners at the time a deht was con-
tracted, are those to whom it is due, and they should join in any
action to recover the del)t. (jo) And it is, moreover, an unques-
tioned rule, that no agreement between partners can alter the
liability or mode of liability of their debtor, without his assent
Thus, by no assignment of a debt due to the partnership by one
of the partners, can he acquire the right to sue it in his own
name. (9-) If, however, the assent of the debtor sufficiently
appear, and be on a good consideration, an action may be main-
tained by the partner who is assignee in his own name, (r)
assignor, his remedy at law is complete,
and equity will not entertain his claim
unless inequitable defences are set up in
liis assignor's name. See 1 Pars, on Cont.
(5th ed.) 224, note {d), and cases there
cited and examined ; especially Ontario
Bank v. Mumford, 2 Barb. Ch. 596.
(o) Eastman v. Wright, 6 Pick. 316,
322. By the assignment, all property is
divested from the assignor, who becomes
thereby a merely nominal party, with no
interest for a release to act upon, and the
release is therefore merely null. Raw-
storne v. Gandell, 15 M. & W. 304. But
notice must also be given the debtor, as
without this, which is practically a revoca-
tion of the partner's authority to receive or
discharge the debt, the debtor has a right
to presume each partner still possessed of
that authority wliich the mere fact of part-
nership confers.
{p) Jell V. Douglass, 4 B. & Aid. 374 ;
Dob V. Halsey, 16 Johns. 34 ; Hewes v.
Bnyley, 20 Pick. 96 ; Gushing v. Marston,
12 Gush. 431 ; Gage v. Rollins, 10 Met.
348 ; Halliday v. Doggett, 6 Pick. 359 ;
Pearson v. Parker, 3 N. H. 366 ; Parker
V. Gregg, 23 N. H. 416 ; Horbach v. Huey,
4 Watts, 455 ; Allen v. White, Minor,
365 ; Snodgrass v. Broadwell, 2 Litt. 353 ;
Wright V. Williamson, 2 Penning. 978 ;
Wilson V. Wallace, 8 S. & R. 53 ; Tate v.
Mut. Fire Ins. Co., 13 Gray, 79 ; Speake
V. Prewilton, 6 Tex. 352 ; Jones v. Gates,
9 B. & C. 532 ; Garrett v. Handley, 3 B.
& C. 462 ; Cooke v. Seely. 2 Exch. 746 ;
Driver v. Burton, 17 Q. B. 989 ; Greeley
V. Wyeth, 10 N. H. 15.
(q) Huey V. Horbach, 4 Watts, 455 ;
Clark V. Howe, 23 Me. 560 ; Degroot v.
Darby, 7 Rich. 117 ; Gushing v. Marston,
12 Gush. 431 ; Russell v. Swan, 16 Mass.
314 ; dictum in Radenhurst v. Bates,
3 Bing. 470 ; Wood v. Rutland Ins. Co.,
31 Vt. 552. But it seems to have been
thought that on dissolution a sole right
of action might vest in remaining part-
ners, without an}' assent or new promise
by the debtor. Collyer on Part. § 658,
citing Evans v. Silverlock, Peake 21 ;
Atkinson v. Laing, Dowl. & R. N. P. 16.
1 Lindley Partn. 403, remarks that tins
case "is more than questionable." We
should say that Mr. Collyer's proposition
is without authority, and tliat there is no
such exception as "severance by dissolu-
tion," to the necessity of joinder of all the
partners on a partnership demand. In
Louisiana, however, it seems that the
li(piidating partner on a dissolution of the
firm may maintain an action in liis own
name, only setting forth the fact that the
transaction arises out of the business of
the firm. White v. Jones, 14 La. Ann.
681.
(r) Degroot v. Darby, 7 Rich. 117;
Cook V. Beech, 10 Humph. 412 ; Howell
^.Reynolds, 12 Ala. 128 ; McLanahan v.
Ellery, 3 Mass. 269 ; Moore v. Hill, 2
Peake, 10 ; Stevens v. Lunt, 19 Me. 70,
72 ; Wood v. Rutland Ins. Co., 31 Vt.
552 ; Aspinwall v. Lond. & N. W. R. R.
Co., 11 Hare, 325 ; Armsby v. Farnam,
16 Pick. 318.
§ 235.] OP REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 313
When such valid assent is given, the action by the assignee in
his own name is upon a new contract substituted for the old one
on principles similar to those of novation ; (s) the discharge of the
debtor from his liability to the firm forming the consideration of
the new promise, {t} Where, however, the assignment is by an
old firm to a new one which includes the old, there would seem
to be but two parties in question ; for the old firm and the new
one are one quoad this contract, and the promises of discharge of
the old liability, and of payment of the new one by the firm and
the debtor respectively, are mutually considerations one for the
other, (u) In like manner a new contract may arise by the
implied assent of the debtor, who has paid one or more of several
joint creditors their respective shares, to pay the other his sepa-
rate share, and the latter may maintain his separate action
therefor, (v)
Persons who leave the firm and cease to be partners may
transfer the debt so as to retain no interest in it ; but still their
names should be used, (tv) On the other hand, those who come
into the firm after the debt is created may acquire an interest in
it, and the debt will be collected for their benefit ; but still their
names cannot be used, (z) This is true even where the debt was
originally contracted with the understanding that it should be a
continuing contract, contemplating successive changes in the
house, and intended to go through them all and be always a debt
to the house, whoever may be its copartners, (i/)
(s) See Pars, on Cont. vol. i. pp. 217- returned, A. & B. agreed to divide, and
222, 5th ed. the master subsequently paid A. his share.
(t) This new promise may be express, B. demanded his of the master, who
as in Howell v. Reynolds, 12 Ala. 12S, and refused, but offered to " pay the true
Wood V. Rutland Ins. Co., 31 Vt. 582 ; owner." It was held that this would be
or implied, as it was in Cook v. Beech, 10 construed as a direct promise to pay B.,
Humph. 412, from the debtor's drawing a and that he might sue accordingly. So
bill for the amount of the debt in favor of also Burn v. Morris, 3 Caines, 54.
the assignee; or from his admissions, as (iv) Pease v. Hirst, 10 B. & C. 122 ;
in Degroot v. Darby, 7 Rich. 117. Dobbin v. Fo.ster, 1 Car. & K. 323. In
(u) See Armsby r. Farnam, 16 Pick. Atkinson v. Laing, 1 Dowl. & R. N. P.
318. 16, a contrary doctrine wa.s held by Lord
(y) Garrett v. Taylor, 1 Esp. N. P. Tenterden ; but see this case examined,
117 ; Kirkman v. Newstead, 1 Esp. N. P. supra, n. (q).
117 ; Baker v. Jewell, 6 Mass. 460 ; (x) Pease v. Hirst, 10 B, & C. 122 ;
recognized in Medbury v. Watson, 6 Met. Wilsford v. Wood, 1 Esj). 182 ; where an
257 ; Blair v. Snover, 1 Halst. 153 ; Hoi- incoming partner, whose entry had been
land V. Weld, 4 Me. 255 ; Horbach v. antedated on the partnership deed, was
Huey, 4 Watts, 455 ; Beach v. Hotch- not allowed to join in an action on a con-
kiss, 2 Conn. 697. In Austin v. Walsh, tract made prior to his entry, but sub-
2 Mass. 401, A. & B. jointly consigned a sequent to the date of the deed,
cargo, directing the master to keep the (y) Pease v. Hirst, 10 B. & C. 122.
proceeds till called on. Before the vessel In this case, a note was made to A., B.,
314
THE LAW OF PARTNERSHIP,
[CH. IX.
§ 236. Guaranty how affected by Change in Firm. —- Intimately
connected with this topic is tlie question, how far a guaranty,
bond of indemnity, and the lil^e, are construed as covering matters
subsequent to a change of the firm by tlie retirement or accession
of a partner or partners ; and when it ceases to have any opera-
tion after such change. We give the authorities on this subject in
the note, (z) It will be seen that the general rule, as now estab-
C. , D., & E., partners in a banking house,
as security for advances to be made by
them. A. and B. left the firm, and new
members entered it ; and advances were
also made by the new firm. The note was
handed by the old firm to the new, but
not indorsed. An action thereon by the
old firm for the new advances was held
rightly brought by them, and by them
only ; the security covering the new
advances being evidently intended to be a
continuing one.
{z) The earliest case is that of Wright
t. Kussell, 3 Wils. 532. Here a bond,
conditioned for the faithful service of W.
Baird as cleik, was made to the yilain-
titf, Wright. Wright subse(iuently took
a partner. Baird then left his service,
but re-entered that of the new firm ; and,
while in their service, committed a breach
of trust by embezzling the money of the
firm. In an action of debt on the bond,
judgment was given for the defendant;
De Grey, C. J., saying : " The law is,
that a surety shall not be bound beyond
the terms of his engagement, as under-
stood at the time he entered into it. Here
Wright, by his own act, takes in a part-
ner. From that moment the suretyship is
at an end. If there is one, there may be
twenty partners taken in. Is the surety
liable if Baird disobeys the orders of any
one of these partners ? Or can the surety
be called upon to insure the money of all
of the partners? Certainly not." In Bar-
clay V. Lucas, 1 T. R. 291, however. Lord
Mansfield held, that bonds of this nature
were given to the house, and not to the
individual ; and that, therefore, they
extended the ap])lication of the bond to a
new firm, if the old name was preserved.
In this case, considerable reliance was
placed on the recital by which the partners
were to take the clerk into their employ,
•'in their shop and counting-house.'' And,
in another case, it was admitted to be the
common understanding among merchants,
that the firm, and not the individual part-
ners were meant to be guaranteed from
loss : per Mansfield, C. J., in Weston v.
Barton, 4 Taunt. 673. But the case of
Barclay v. Lucas, seems clearly not law.
In Barker v. Parker, 1 T. R. 287, where
the bond guaranteed faithful service to
" A. B., and his executors," Lord Mans-
field held that this did not cover breaches
committed by the cleik while in the ser-
vice of the executors of A. B., who kept
on in the same business after the death of
their testator. He attempted to sustain
Barclay v. Lucas, by the distinction that
the change in that case was only by the
accession of a new partner, the old firm
still continuing. But this distinction is
expressly against the case of Wright v.
Russell, supra, and must fall with the
case of Barclay v. Lucas, which rests solely
upon it, if the case of Wright v. Russell
be law. Of this there is now little doubt.
In Myers v. Edge, 7 T. R. 254, Lord
Kenyon said : " I very much approve of
the case from Wilson ; " and decided the
case before him on its authority. Stor}',
Part. § 250, note 3, says : "Barclay v.
Lucas was a case which was supposed to
contain language importing a provision
of this [a continuing] character ; but great
doubts may well be entertained whether
the case can be maintained upon any such
interpretation." So in Weston r. Barton, 4
Taunt. 673, it was said by Mansfield, C.
J. ; " The propriety of Barclay v. Lucas
has been very much questioned." In this
last case, the condition was for repayment
to five bankers of an}' money advanced by
these five, or any or either of them ; and
it was held, that even this did not cover
advances made by the survivors after one
had died, Mansfield, C. J., saying: "There
may be many very good ivnsons for such a
construction. It is veiy probable that sure-
ties may be mduced to enter into such a
§ 237] OF REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 315
lislied, is tlmt siicli change discharges a bond of indemnity. And
the principle is applied with equal force to simple guaranties, (a)
And on the same ground any change in a firm materially altering
ite character discharges the surety, although the members of the
firm remain unchanged. (/') So where there is an alteration, by
removal or accession, in the parties whose conduct is guaranteed,
the bond is discharged of farther operation, (c) And a contract
with an ostensible partner, which has particular reference to his
individual skill, has been held not to survive to the dormant
pai'tner. (d)
Fiom the cases cited in the notes to the last paragraph and
ti-oni the nature of partnership, we should draw the general con-
clusion, that a bai'gain with a firm expires with the dissolution of
the firm, or with any change in it, and is not assignable or trans-
ferable by the firm to one of the partners, or to a stranger. For
this the obvious reason may be given, that any contract with a
firm may be supposed to be made with the persons composing it,
because they are partners. It may be impossible to say that the
bargain was made on the credit, pecuniary or moral, of this one
or that one. The party has a right to say that he made it with
all, because they were all there, and each contributed what he
did. whether of money, skill, or character.
§ 237. Parties to Formal Contracts. — Only those who are
securit}- by a confidence which they repo.se ner was not known to the guarantor, she
in the integrity, diligence, caution, and could only claim that the guaranty was at
accuracy of one or two of the partners. In an end because she had contracted with the
the nature of things, there cannot be a partners in interest, and not in name
partnership, consisting of several persons, merel}\ This position, however, doe.s not
in which there are not some persons pos- bring the case within the reason of personal
sessing these (qualities in a greater de- confidence reposed actually, or by legal
gree than the rest ; and it may be that intendment, in the known members of the
the partner dying or going out is the very firm, as assigned by Lord Mansfield in
person on whom the sureties relied." The Weston v. Barton, supra, and followed in
same was held in Arlington v. Merrick, 2 Arlington v. Merrick, and Strange v. Lee,
Saund. 412 ; Stranger. Lee, 3 East, 484. snpra ; and the authority of this case,
(«) Myers v. Edge, 7 T. R. 254 ; Spiers therefore, finds no support in those.
V. Houston, 4 Bligh, N. s, 515 ; Ex parte (b) Thu.s, in Dance v. Girdler, 1 P>os.
Kensington, 2 Ves. & B. 79 ; H jlland v. & P. n. s. 34, the incorporation of the
Teed, 7 Hare, 50. So in Ex part'- McGee, obligees had this effect.
9 Ves. 697, an agreement to pay bills into (c) Sim.son v. Cook, 1 Bing. 452 ;
a banking-house was held discharged by L^niv. of Cambridge v. Baldwin, 5 M. &
the bankruptcy of the partners, and an W. 580 ; Bellairs v. Elsworth, 3 Cam]),
action was held, to lie against the assignees 53 ; Russell v. Perkins, 1 Muss. 368 •,
in bankruptcy for bills paid subsequently London Ass. Co. v. Bold, 6 Q. B. 514.
to that event. In the case of Dry v. Davy, (d) Robson v. Drummond, 2 B. & Ad.
10 A. & E. 30, it was even held that the 303. .■^nd see Stevens v. Benning, 1 Kaj
retirement of a dormant partner put an & J. 168, 6 De G., M. & G. 223.
end to a guaranty. If the dormant part-
316
THE LAW OF PARTNERSHIP.
[CH.
IX-
named as parties in contracts under seal can sue upon such con-
tracts, (e) But it has been held, that where a deed was made to
a partnership by the name of the firm, the then existing partners
might sue upon it, and parol evidence was admitted to show who
those were. (/) And in another case a bond to the trustees of a
trading company, to secure the faithful services of a clerk, was
held to remain in full force so long as the clerk acted in that
capacity, notwithstanding the fluctuations of the company, (ff)
Where the partners have substituted a deed for a simple contract,
the latter is merged in the former, and those only who are parties
to the deed can sue upon it. {g)
The same limitation of the parties to the action to those whose
names appear on the instrument prevails in the case of negotiable
paper, and all those parties must sue. {h) If the note be indorsed
in blank, then, of course, all or any of tlie partners may sue
thereon, (i)
§ 238. Parties to Simple Contracts. — If a simple Contract be
made with one partner for the benefit of the firm, it may be sued
by all, (j") and cannot be sued excepting by all the partners,
(c) Cabell v. Vanghan, 1 Saund. 291,
f; Metcalfe v. Rycroft, 6 M. & S. 75 ;
Vernon r. Jefferys, 2 Str 1146 ; Lefevre v.
Boyle, 3 F>. & Ad. 877 ; Elile v. Purdy, 6
Wend. 629; Petrie v. Bury, 3 B. & C.
354 ; Ex parte Williams, Buck, 13, 15,
note ; Scott v. Godwin, 1 B. & P. 74.
Thus it is .said, in Montague v. Smith, 13
Mass. 405 : " When covenants are made
by or between two or more parties, al-
though the covenant be for the benefit of
a third person, mentioned in the instru-
ment, the action must, nevertheless, be
brought by the parties."
(/) MoUer v. Lambert, 2 Camp. 548 ;
1 Lindley on Part. 386.
(/) Metcalf u. Bruin, 12 East, 400, 2
Camp. 422.
(</) Evans i". Bennett, 1 Camp. 303,
note. "There has been no case where,
the interest being the same as that secured
by deed, it has been holden that assumpsit
would lie," Lord Ellenborough, Schack v.
Autorg, 1 M. & 8. 574 ; but the interest
intended to be .secured by the two must be
identical. See Twopenny v. Young, 3 B.
& C. 208, and Dean t'. Newhall, 8 T. R.
168 ; Solly v. Forbes, 2 Br. & B. 38,
Ih) In actions on bills and notes, only
the parties thereto can, but all these must,
sue. Guidon v. Robson, 2 Camp. 302 ;
Bawden t- . Howell, 3 M. & G. 638 ; Pease
V. Hirst, 10 B. & C. 122 ; Sitfkin v.
Walker, 2 Camp. 307 ; Wliitney v. Mc-
Kechnie, 1 Bosw. 427. In Boswell v.
Dunning, 5 Harr. 231, because the note
was indorsed in full to a firm, by the firm
name, proof was required of the partner-
ship.
(0 Ord V. Portal, 3 Camp. 239 ; Att-
wood i\ Rattcnbury, 6 J. B. Moore, 579 ;
Machell v. Kinnear, 1 Stark. 499. But if
it appear affirmatively, by the defendant,
that the note was delivered to third per-
sons, in the first place the plaintiffs must
show a delivery to themselves by such
holders. Id.
(j) Garrett v. Handley, 4 B. & C. 664 ;
Alexander v. Barker, 2 Cr. & J. 133 ;
Skinner v. Stocks, 4 B. & Aid. 437 ; Cook
V. Seely, 2 Exch. 746 ; Halliday v. Daggett,
6 Pick. 359 ; Creel v. Bell, 2 J. J. Marsh.
309 ; Fortune v. Brazier, 10 Ala. 793 ;
Stevens v. Lunt, 19 Me. 70 ; Wright v.
Williamson, 2 Penn. 978 ; Pearson v. Par-
ker, 3 N. H. 366. [Beakes v. Da Cunha
(N. Y.), 27 N. E. 251.] This is, indeed,
the case in all implied contracts that arise
in the course of the partnership business ;
for, as the implied promise must follow
§ 238.J OF REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 317
unless there be some express language or circumstances which
make it a bargain with one only ; (k) whereas such contracts, in
cases where the parties to be benefited and the one making the
contract do not stand in the relation of partners, may generally
be sued either by the party whose name is used, (1) or by the
})arti('S actually interested, though their names be not used, (m)
But this differs from the case supposed in the last paragraph,
thus ; A promise to a present firm, with the understanding that
others may come in and profit by it, is still no bargain with
those others. They are not known, and are indeed uncertain as
yet. But a bargain with one of a firm for the interest and bene-
fit of all the firm is a present bargain with all the firm. And
thus the rule remains good that those, and only those, with whom
the bargain is made can sue upon it. The exception where a bar-
gain is made under seal with one for the interest and benefit of
others, in wliich case only those named as parties can sue, arises
from the peculiar law of specialties, which prevents any persons
not named from coming in as parties.
the consideration, it is raised to the firm
from whom the consideration moves. Boggs
I'. Curtin, 10 S. & R. 211 ; Lee v. Gibbons,
14 S. & R. Ill ; Uhner v. Cunningham, 2
Me. 118, 119 ; Addison on Cent. 743 ; 1
Pars, on Cont. (5th ed.) 26.
{k) Sims V. Bond, 5 B. & Ad. 389 ;
Garrett v. Handley, 3 B. & C. 462 ; Oliver
V. Burton, 17 Q. B. 989; Warner v.
Griswold, 8 Wend. 665 ; Piatt r. Halen,
23 Wend. 456 ; Ewing v. French, 1 Blackf.
353 ; Ward v. Leviston, 7 Blackf. 466 ;
Doremus v. Sehlon, 19 Johns. 213 ; Burn
V. Morris, 3 Gaines, 54 ; Munroe v. Ezzel,
11 Ala. 603. Thus, in Wood v. O'Kelly, 8
Gush. 406, where the question whether a
mesmeric doctor shouki join as coplaintitT,
in an action for medical services, his part-
ner, the woman who slept in the clairvoy-
ant state, and with whom he divided the
net profits after paying expenses, the court
below ruled, that, if the woman was a
silent partner, she need not be joined. In
the court above, it was not necessary to
consider the question. The court, however,
said : " It is not necessarj' that a dormant
partner should be joined with the osten-
sible partners of a firm, in an action
against a person who dealt only with the
ostensible [tartners."
(J) Ward V. Leviston, 7 Blackf. 466 ;
Rodwell V. Ridge, 1 G. & P. 220 ; Skinner
V. Stocks, 4 B. & Aid. 437 ; Desher v.
Holland, 12 Ala. 513 ; Warner v. Griswold,
2 Wend. 665 ; Lapham v. Green, 9 Vt
407 ; Curtis v. Belknap, 21 Vt. 433 ;
Sims V. Bond, 5 B. & Ad. 393 ; Colhurn
V. Phillips, 13 Gray, 64, 66 ; Sims v.
Brittain, 4 B. & Ad. 375.
(m) Arden v. Tucker, 4 B. & Ad. 815 ;
Rodwell V. Ridge, 1 C. & P. 220 ; Lapham
V. Green, 9 Vt. 407 ; Cothay v. Fennel,
10 B. & C. 671 ; Alexander v. Barker, 2
Cr. & J. 133, 138 ; Robson v. Drunimond,
2 B. & Ad. 303, 307, 308, per Parke and
Littledale, JJ. ; Stacy v. Decey, 2 Esp.
169, n. ; Skinner v. Stocks, 4 B. & AhL
437 ; Garrett v. Handley, 4 B. & C. 664 ;
Curtis V. Belknap, 21 Vt. 433 ; Creel v.
Bell, 2 J. J. Marsh. 309 ; Pitts v. Mower,
18 Me. 361 ; Story on Agency, § 160, and
cases cited ; Halliday v. Doggett, 6 Pick.
359; Ward y. Levis'ton, 7 Blackf. 466;
Edmund v. Caldwell, 15 Me. 340. But
the party for whose benefit the contract
was made must also be the one from whom
the consideration moves, or he can main-
tain no action, Mellen v. Whi])ple, 1
Gray, 317, 321, 322 ; Colburn v. I'hillips,
13 Gray, 64, 66 ; with one or two well-
defined exceptions, Id.
318 THE LAW OF PARTNERSHIP. [CH. IX,
But where a written but not sealed contract is entered into
with one partner, it not appearing on the face of the contract
that he was acting on behalf of the firm, he may sue alone, on
that contract. In such a case, the action may be maintained
either in the name of the person with whom alone the contract
was ostensibly made, or in that of the parties who can be shown
to be really interested, (w)
§ 239. Contracts of Insurance. — Partnersliip contracts for
insurance are governed by the same rule, that those, and only
those, by whom the bargain is made can sue upon it, excepting so
far as the rule is modified by the law of insurance, which, under
certain circumstances, permits persons by whose authority and
for whose benefit a policy is made, to sue, although their names
are not mentioned, (o) By that law, the persons named in the
policy may sue, and they alone can sue, unless the policy is made
" for all whom it may concern," or contains other general words
of equivalent import, (p) The reason of this is, that the insurers
are entitled to know whom they insure, or else to know that they
insure unknown persons, that they may make their terms accord-
ingly, (q) An insurance by one partner in his own name and
without general words, although on property belonging to the
firm, covers only his interest, and the firm cannot maintain an
action on such a policy, (r) Whether the partner insured, in an
action for the whole loss, averring in his declaration an entire
interest, can upon proof of the firm ownership recover any thing,
and, if any thing, whether his ^^ro rata share only, or the whole,
has been variously decided. Some of the cases, including a deci-
sion of the United States Supreme Court, given by Marshall, C. J.,
which is entitled to the highest respect, holding that lie cannot
recover at all ; (s) others, that he may to the extent of his interest
(9i) Curtis V. Belknap, 21 Vt. 433. Ins. § 20 ; Graves r. Boston M. Ins. Co., 2
And see Skinner v. Stocks, 4 B. & Aid. Cranch, 419.
437 ; Cothay v. Fennell, 10 B. & C. 671 ; (q) Dumas v. Jones, 4 Mass. 647.
perLittledale, J.,in Robson f. Drummond, (r) Graves v- Boston M. Ins. Co., 2
2 B. & Ad. 303; Phillips i>. Peunywit, 1 Cranch, 419; Pearson v. Lord, 6 Mass.
Ark. 59. 81 ; Turner v. Burrows, 5 Wend. 541. See
(o) Grove v. Dubois, 1 T. R. 112; also Bell v, Ansley, 16 East, 141 ; Hibbert
Cumining v. Forrester, 1 M. & S. 497 ; v. Martin, 1 Camp. 538 ; Cohen y.
Hagedorn r. Oliverson, 2 M. & S. 426 ; 2 Hannam, 5 Taunt. 101 ; Lawrence v.
Pars, on Maritime Law, 29, and note 3. Sebor, 2 Caines, 203.
(p) Finney v. Bedford Coin. Ins. Co., (s) In Graves v. Boston M. Ins. Co.,
8 Met. 348 ; Turner v. Burrows, 5 Wend. 2 Cranch, 419, it was held, that a partner
541 ; Jefferson Ins. Co. v. Cotheal, 7 Wend, insuring for an individual and entire in-
72 ; Finney v. Warren Ins. Co., 1 Met. 16 ; terest can recover nothing, but must suffer
1 Phillips on Ins. §§ 391, 392; 2 Duer on a nonsuit, on its appearing that he was
§ 241.] OP REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 319
as a partner ; (t) and others still, that he may recover the whole
loss, (u)
§ 240. Novation. — There is no doubt that a contract made
with a firm, and therefore with all the members of a firm, may
be exchanged for any other by the act or consent of all the par^
tics. Thus, a sale is made to a firm, who owe for it. But the
merchandise is transferred by the firm to one partner, who agrees
to pay for it. By this alone the obligation of all the partners is
not in the slightest degree affected. But if the seller, upon being
applied to, consents to the arrangement, and agrees to discharge
the firm and take this partner alone as his debtor, the arrange-
ment would be valid in law, although some doubt might arise
from the fact that, as this partner was already bound with all the
rest, his new promise is no consideration for the discharge of the
rest. By the principle of novation, if the new debtor is altogether
a new person, his promise is sufficient consideration ; and, as the
separate promise of a partner would bind his separate property to
this debt (we shall presently consider the question whether part-
nership debtors can claim any of the private property of partners
until their private debts are discharged), we should incline to
believe that this would be consideration enough. (?/')
Where no objection of this kind comes in, it is certain that such
a transfer would be effectual ; (x) as if a sale were made by a firm
and the debts transferred to one partner, and the debtor, being
discharged by the other partners, agreed to pay that one ; (i/) or
if a guaranty were made to a firm, and transferred to one part-
ner ; or made to one partner, and by him transferred to a firm ;
and the guarantor, for any sufficient consideration, agreed to the
transfer.
§ 241. Remedies for Torts. — It is plain that there may be torts
against a firm jointly, as well as against any or all the partners.
And there is no reason why the firm may not as such sue the
only jointly interested in the property ; (u) In Horn v. Clarkson, 1 Caines, 276,
the loss being a joint one, which he could and Lawrence v. Sebor, 2 Caines, 203, the
neither insure nor recover for separately, courts admit a recovery in such case for
either in whole or jiro rata. The same the entire value insured. [For the effect
doctrine is held in Cohen v. Hannam, 5 upon a policy of insurance on partnership
Taunt. 101, denying the authority of Page property of a transfer of a partner's in-
V. Fry, 2 B. & P. 240. terest, see ante, § 180.]
(t) Dumas v. Jones, i Mass. 647 ; (w) See niite, § 235, note {p) ; note (y).
Turner v. Barrows, 5 Wend. 541 ; Page v. (x) See aiite, § 235, note {p).
Fry, 2 B. & P. 240; Irving v. Excelsior (?/) Cook v. Beech, 10 Humph. 412;
Fire Ins. Co., 1 Bosw. 507 ; Murray v. Degroot t: D.uby, 7 Rich. 117 ; Howell r.
Col. Ins. Co., 11 Johns. 302, 311. Reynolds, 12 .\la. 128.
320
THE LAW OP PAETNERSHIP.
[CH. IX.
wrong-doer at law. {z) But the rule would doubtless be strictly
applied, that damages could be recovered only for the joint injury
sustained, {a) Thus an action would lie for seducing away one
in their employ, (5) for turning any business from them by fraud
and falsehood, or for any fraud against the whole firm, or for
slander of them as merchants, (c) or for conversion of tbe pro-
perty of the lirm ; {d) or, indeed, for any injury wrongfully inflicted,
whether by negligence or with wrongful intent, (e) So, too, if an
injury affected two or more members of a firm jointly, and not
the rest, those who were jointly injured could sue jointly. (/)^
(z) Addison v. Overend, 6 T. R. 766 ;
Cabell V. Vaughau, 1 Wms. Sauiid. 291,
m. and notes ; Glover v. Austin, 6 Pick.
209 ; Bloxani v. Hubbard, 5 East, 407 ;
Cooke V. Baeliellor, 3 B. & P. 150 ; Foster
V. Lawson, 3 Bing. 452 ; Ta3'lory. Church,
8 N. Y. 452, 1 E. D. Smith, 479 ; Sewall
V. Catlin, 3 Wend. 291 ; Patten v. Gurney,
17 Mass. 186, followed in Medbury v.
Watson, 6 Met. 246, 257, 258. A dormant
partner may join in trover. Robinson v.
Mansfield, 13 Pick. 139. The rule is often
laid down that partners may join in an
action ex delicto for an injury affecting
their joint interest. Best, J., in Foster v.
Lawson, 3 Bing. 455. It is more correct
to say that they must. Patten v. Gurney,
17 Mass. 185 ; cases cited supra ; Ward v.
Brampston, 3 Lev. 362. If they do not
join, it can, however, only be taken ad-
vantage of by plea in abatement. Deal v.
Bogue, 20 Pa. 228 ; Gibson v. Stevens, 7
N. H. 352, 358 ; 1 Chitty PI. 65 ; Gow on
Part. 136 ; Pickering v. Pickering, 11 N.
H. 141 ; Nightingale v. Scammell, 6 Cal.
506 ; Anonymou.s, W. Jones, 253. Or the
court may abate the writ ex officio. Hart
V. Fitzgerald, 2 Mass. 509.
(a) Barratt v. Collins, 10 J. B. Moore,
446 ; Haythorn v. Lawson, 3 C. & P. 196 ;
Pechell V. Watson, 8 M, & W. 691. Thus
in Garland v. Noble, 1 J. B. Moore, 187,
it was held, that on a submission to arbi-
tration of all matters in dispute between a
partnership and an individual, only the
joint claims of the firm were in issue. The
same was the case in Barratt v. Collins,
siipra. See the cases in note (h), infra.
(h) Story on Part. § 258.
(c) Lewis V. Cliapnian, 19 Barb. 252,
where a jjostscript to a letter saying ^^con-
fidential ; had to hold over a few days for
the accommodation of L. & H.," was held
libellous if false, when addressed to the
creditors of L. & H. ; but held in the
Court of A])peals to be for the jury to de-
termine as a question of interest, 16 N. Y.
369 ; Foster v. Lawson, 3 Bing. 452 ;
Cooke V. Bachellor, 3 B. & P. 150}
Sewall V. Catlin, 3 Wend. 291 ; Haythorn
V. Lawson, 3 C. & P. 196 ; Bumage v.
Prosser, 4 B. & C. 247 ; Williams v.
Beaumont, 10 Bing. 270; Taylor w. Church,
1 E. D. Smith, 279, 8 N. Y. 452; Le
Fanu V. Malcomson, 1 H. L. Cas. 637. In
this last case, a charge of cruelty to
employes was held an injury to the firm
in their trade, for which they could sue
jointly. See also Davis v. Davis, 1 Nott &
McC. 290 ; Backus v. Richardson, 5 Johns.
483, 485 ; Ware v. Clowny, 24 Ala. 707 ;
Babonneau v. Farrell, 15 C. B. 360.
{d) In trover or trespass for injuries to
the joint property, the partners can (and
must) join. Wilson v. Comine, 2 Johns.
280 ; Patten v. Gurney, 17 Mass. 185, 187,
per Parker, C. J., ; Glover r. Austin, 6
Pick. 209.
(p) Weller v. Baker, 2 Wils. 414,
423 ; Patten v. Gurney, 17 Mass. 185 ;
Medbury v. Watson, 6 Met. 257, 258.
Thus case lies by a firm against an officer
if he improperly give up property attached
at their suit. Commercial Bank v. Wil-
kins, 9 Me. 28.
(/) This question seems most gen-
1 One partner cannot sue individually for a tort which causes injury to the firm
business. Bigelow v. Reynolds, 68 Mich. 344, 36 N. W. 95. And where a firm sues
for a tort, for instance a libel, committed upon it, the damages recovered can only be
§ 242. j OF re:medies by partxkus a(;alnst third parties. 32i
§ 242. Damages Recoverable. — It might not always be easy to
draw the line between dainages, which wei-e recoverable in such
an action, because they were joint, and those which were not
recoverable, because they were not joint. (//) Thus, if a libel
charged insolvency or dishonesty upon any one partner, he, of
course could sue ; but, in strict law, he could not recover in this
several suit for any damage done to the firm of which he was a
member, and not even, we should say, for his share of this
damage. For this the firm must sue, and, in this suit, they could
recover only for the damage all sustained jointly, (h)
eially to have arisen where the joint prop-
erty has been seized or sold and delivered,
on execution against one partner, for his
separate debt. In fact, it would seldom
arise in any other way, except perhaps in
the case of collusion between one partner
and some third party, to slander or de-
fraud the firm ; since the injury, to admit
of a joint action as partners by two or
more members of the firm to the exclusion
of another member, must touch them in
their i)artnership property or interest in
that property, and yet not aflect the ex-
cluded partner, by reason of the act by
which the injury is caused being justifiable
as to him, or one for which he is respon-
sible. In many of the States, it is held,
that the sheriff may seize, and deliver to
the ])urchaser the specific property of the
firm, and that the ]iurchaser thereby be-
comes tenant in common with the other
partners of that property : as in Maine,
New York, Alabama, Iowa, Illinois, North
Carolina, Texas, Michigan, Ohio, New
Jersey. So in England ; but see next
chapter. In case, therefore, the purchaser
should undertake to convert the property
by a destruction o*" it, or, as is held in
some courts, by a sale, trover would lie
against him, as against any tenant in
common, by the other partners excluding
the debtor partner. Wilson v. Reed, 3
Johns. 175 ; Mayhew v. Herrick, 7 C. B.
229, per Maule and Cressweli, JJ. ; White
V. Osborne, 21 Wend. 72 ; Hyde v. Stone,
7 Wend. 354.
{a) In trover by one partner against a
sheriff who has sold the whole property on
a levy, for the separate debt of the copart-
ner, in the absence of precise proof of liis
interest the partner may recover a moiety,
Walsh V. Adams, 3 Denio, 125 ; Deal v.
Bogue, 20 Pa. 228 ; or the proportion of
his oiigiiial interest in the goods if this
appear. Deal v. Bogue, 20 Pa. 228.
(h) One jiartner can recover for a libel
on him in the way of his trade, although
the libel also affects the firm. Harri-
son Bevington, 8 C. & P. 708 ; Rob-
inson V. Marchant, 7 Q. B. 918 ; and even
though the firm has already recovered for
its injury through the same libel. Taylor
!.'. Church, 1 E. D. Smith, 279. See Le
Fanu V Makomson, 1 H. L. Cas. 637,
where the libel referred to occur-
rences " in some of the Irish factories,"
and the plaintiff was allowed by innuendo
to show that this was applied to himself,
though his name did not appear therein.
The (juestion of damages being one for the
jur\', it was intimated by Coleridge, J.,
that where on the face of the declaration
the damage is partly joint, and partly
several, the course in such a case would
be to limit the proof at the' trial. Robin-
son V. Marchant, 7 Q. B. 923 ; Taylor v.
Church, 1 E. D. Smith, 279, affirmed on
error, 8 N. Y. 452; Foster i\ Lawson, 3
Bing. 452. Perhaps the doctrine on this
subject may be briefly stated thus : An ac-
tion on such libel, either by the firm, or the
single partner, or by both, will lie ; both
may declare without proof of special dam-
age, and the jury will be presumed to have
for injury to the firm business. Nothing can be recovered for injury to the feelings of
the partners. Donaghue v. Gaffy, 53 Conn. 43, 2 Atl. 397. The firm may sue and
recover damages suffered by it by reason of a wrongful attachment of its proj)erty.
Watts V. Rice, 75 Ala. 289.
21
g22 THE LAW OF PARTNERSHIP. [CH. IX
Possibly the principle of exemplary damages, which, although
called in question by high authority, is, we thiiiic, certainly admis-
sible in some actions for tort, and, possibly in all, might come in
aid of the plaintiff, and help to remove the difficulty, {i) If a
third person colluded with a partner to defraud the firm, there
would be very great difficulty in permitting the whole firm,
including the fraudulent partner, to sue this third person ; and,
also, some difficulty in maintaining a suit by the other partners
for the damage done to the firm, (j) This latter action, however,
has been sustained, and we have no authority for supposing the
former maintainable. But what damages could be recovered in
such an action, whether all that the firm sustained, or only the
proportion of the suing partners, we are not informed, (k) We
should have said, that an action, by all the partners, including the
fraudulent partner, and using his name only for the benefit of the
innocent partners, and recovering, therefoi-e, only the share of
damage sustained by the innocent partners, (Z) might have satis-
fied the justice of the case, and the technical rules of law, quite as
well.
§ 243. Equitable Relief. — We know nothing in the law of partner-
ship which limits the power of equity in giving the partnership re-
lief against third parties. We mean, that in all cases of this kind,
the same reasons for giving relief would be required, and the same
selection of remedy, whether by injunction, discovery, specific per-
formance, or otherwise as in similar cases which did not concern
partnership, (m) There is, however, one question which has
confined themselves to the injury of the one of its members for injury to their real
party plaintiff. If they allege special dam- or personal property, and for all wrongs
age, the proof will be limited at the trial, done to them."
If the libel be such that the respective (k) By the analogy of cases in trover
injury cannot be distinguished, the defect against sheriffs for sales of the entire
mustbe specially demurred to. Injuries, property of the firm, it would seem that
however, to the j.ersonal ieelings cannot of the extent of the recovery might be for the
course be included in a joint suit by the shares of the innocent partners. But as
firm. Haythorne v. Lawson, 3 C. & P. 196. the defendant is guilty of acquisition of the
(i) Taylor v. Church, 1 E. D. Smith, property by a fraud, though against the
279, 8 N. Y. 452, and cases cited ; and plaintiffs only, this would perhaps estop
see Lewis v. Chapman, 19 Barb. 25'2. tim from claiming any property there-
Also, see Symonds v. Carter, 32 N. H. under ; for the law would not permit him
458 ; Cramer v. Noonan, 4 Wis. 231 ; Fry to divide his own fraud.
V. Bennett, 4 Duer, 247. V) See the preceding note.
(j) Longman v. Pole, Moody & M. 223. {m) Hood v. Aston, 1 Russ. 416 ; Jer-
In the Metropolitan Saloon Omnibus Co. vis v. White, 7 Ves. 413 ; Motley v. Doun-
V. Hawkins, 4 H. & N. 87, 92, Longman man, 3 Mylne & Cr. 1 ; Knott v. Morgan,
V. Pole was cited and affirmed ; and it 2 Keen, 213 ; Small v. Atwood, Younge,
was even said by Watson, B. : " But it is 456 ; Fenn i'. Craig, 3 Younge & C. 216 ;
clear that an ordinary partnership would Clay v. Rufford, 8 Hare, 281 ; Douglas V,
have a right to maintain an action against Horsfall, 2 Sim.. & S. 184.
§ 243.] OF REMEDIES BY PARTNERS AGAINST THIRD PARTIES. 323
arisen, where a partnership has prayed for an injunction, to prevent
a several creditor of a partner from interfering with the partner-
ship property, which comes up as a question of the remedies of
partnerships against third persons. It is, in fact, however, a ques-
tion as to the riglits and remedies of third persons against the
partnership ; and this general subject we will not proceed to
consider, adding only to this section, that where the partnership
is itself illegal, or where the action or the object of the action is
illegal, no suit can be maintained by a partnership, any more,
than it could be by an individual, under the same circumstan-
ces, (w) It has, however, been held that, when one partner seeks
in equity a settlement of the partnership, the fact that the firm
was established for a fraudulent purpose is no defence, (ww) But
this is not certain.
{ri) Biggs V. Lawrence, 3 T. R. 454, (nn) Harvey v. Varney, 98 Mass. 118 ;
where the partnership was formed for but see Sampson v. Shaw, 101 Miiss. 145.
smuggling.
324 THE LAW OF PARTNERSHIP. [CH. X.
CHAPTER X.
OF THE REMEDIES OF THIRD PERSONS AGAINST THE PARTNERSHIP AND
AGAINST PARTNERS.
§ 244. Appropriation of the Property to the Debts. — The reme-
dies of third parties against the firm and its members are gener-
ally the same as those which exist in relation to individuals.
Similar actions at law, and similar suits in equity, with such va-
riation as the nature of the case suggests and requires; similar
attacliment, whether direct or foreign attachment, or garnishee
process, and similar levy and execution ; but always subject to one
modification or exception, which has caused much conflict and un-
certainty in practice, and of which all the effects and all the rules
are not yet determined. This exception arises from the fact that
there may be creditors of the partnership, and creditors of the sev-
eral partners ; and the rights and claims of these two classes of
creditors are conflicting.
In the days of Salkeld and Loi-d Raymond, one hundred and
fifty years ago, the extreme inadequacy and incompleteness of
the law of partnership are proved by the fact, that a creditor of a
partner got at once by execution the share of the indebted partner
in the partnership property. If there were two partners, — and nt
that time it would seem that there were seldom more, — a cred-
itor of one got judgment and execution against him, and levied it
upon the partnership property, of which the sheriff (although he
seized the whole) sold one-half. If there Avere three, he sold one-
third : if four, one-quarter, (a) The progress of the change is not
very distinctly exhibited in the reports ; but it began early, (/>)
(«) Heyden v. Heyclpii, 1 Salk. 392 ; account was taken on a reference before a
Jacliy V. Butler, 2 Ld. Raym. 871 ; Master in Chancery. But in Parker v.
Mariott v. Shaw, Comyn, 277 ; Bachurst Pister, 3 B. & P. 288 ; Chapman v. Koops,
V. Clinkard, 1 Show. 169. 3 B. & P. 289, this equitable process by a
(b) It seems to have been received in court of law was emphatically refused by
the time of Lord Mansfield. In Fox v. Lord Alvanly. See the history of the
Hanbury, Cowp. 445, the sale by the change, examined in Ex parte Smith, 16
sheriff was limited to the share of the part- Johns. 102, note; 3 Kent Comni. 65, note
ner after the settlement of all the partner- (a) ; Am. Jur., Oct. 1841, art. 3.
ship accounts ; to ascertain which, an
§ 215.] OF THE REMEDIES OF THIRD PERSONS. 325
find it has loii<^ since been the well-cstablislicd rule and practice,
that no private creditor of a partner could take, Ijy his execution,
any thing more than that partner's share in whatever surplus re-
mained after the partnership effects had paid the partnership
deljts.(6')
§ 245. Nature of Interest of Partnership in its Property. — There
are two entirely distinct, and indeed oi)posite, ways of viewing a
commercial partnership. One of them regards it as a modified
tenancy in common ; the other regards it as a modified corpora-
tion. It is certain that a partnership is neither a tenancy in com-
mon nor a corporation ; and it is equally certain that it has some
of the attributes and qualities of each of these forms of joint own^
ership. The question, which lies at the bottom of the difficulties
presented by our present topic, seems to us to be this : Which of
these two things does partnership most nearly approach?
Exactly so far as a partnership is a tenancy in common, it has no
existence as a body by itself, and has no property, and no debts
or creditors. Just so far as it is a corporation, it has an indei)cn-
dent existence, and its own property, and its own debts. And
precisely, as in recent times it has been found necessary, in this
country, where so much business is done by corporations to impart
to corporations many of the qualities of partnership ; and just as
during the difficult and tedious process of adjusting this new con-
dition of joint ownership and joint action, many mistakes were
made and much mischief dune, until the just medium was found,
and the reconciling principle which best protects the interests of
all concerned ; so, in reference to partnership, we apprehend that
mischief has been caused by the difficulty of adjusting its true
relation to a corporation, or, in other words, in determining the
degree in which the law will acknowledge a voluntary mercantile
(c) Washburn v. Bank of Bellows Falls, 31 N. H. 292 ; Church v. Knox, 2 Conn.
21 Vt. 278, 284 ; Matlock v. Matlock, 5 523 ; Witter v. Richards, 10 Conn. 41 ;
Ind. 403 ; Andrews v. Keith, 34 Ala, 722 ; Tilley v. Phelps, 18 Conn. 294 ; Eiee v.
Rodriguez v. Hetfernan, 5 Johns. Ch. 417; Au.stin, 17 Mass. 206; Brewster v. Ham-
Murray V. JVIurray, 5 Johns. Ch. 60 ; Del- mitt, 4 Conn. 540 ; Smith v. Barker, 10
monico v. Guillaume, 2 Sandf. Ch. 366 ; Me. 458 ; Commercial Bank v. Wilkins,
Smith V. Jackson, 2 Edw. Ch. 28 ; U. S. 9 Me. 38 ; Douglas v. Winslow, 20 Me.
V. Hack, 8 Pet. 275 ; Moody v. Payne, 2 89 ; Doner v. Stauffer, 1 Barr, 198 ; Deal
Johns. Ch. 548 ; £'xjD«rte Smith, 16 Johns, v. Bogue, 20 Pa. 228; Greene v. Greene,
102 ; Walsh v. Adams, 3 Denio, 12.^> ; Lyn- 1 Ohio, 244 ; Place v. Sweetzer, 16 Ohio,
don V. Gorham, 1 Gall. 367 ; Tappan v. 142 ; Sutcliffe v. Dohrman, 18 Ohio, 181 ;
Blaisdell, 5 N. H. 193, per Richardson, C. Winsten i;. Ewing, 1 Ala. 29 ; Lucas v.
J. ; Gibson v. Stevens, 7 N. H. 352; Mor- Laws, 27 Pa. 211 ; Hubbard v. Curtis, 8
rison v. Blodgett, 8 N H. 244, 254 ; New- Iowa, 1, 14 : Ridgway v. Clare, 19 Beav.
man v. Bean, 21 N. H. 93 , Hill v. Wiggin, 11 ; Ross v. Henderson, 77 N. C. 170.
326 THE LAW OP PARTNERSHIP. [CH. X.
partnership as a quad independent body, and the consequences
which it will derive from this acknowledgment.
We have no doubt whatever that the rule (now, as has been
said, perfectly established), which shuts out the creditors of the
several partners from the partnership i)ruperty, until that has paid
the partnership debts, is derived directly from this acknowledg-
ment ; and it would seem to be an inevitable consequence of any
recognition of a partnership as a body by itself, having its own
creditors and its own effects ; and we are also confident that most
of the difficulties which still embarrass this subject will be removed
by a more distinct recognition, and more direct application, of the
same principle.
§ 246. Theory of Lieu of Creditors ou Partnership Property. — Not
many years since, there began, — perhaps not with Lord Eldon,
but confirmed by him,(6?) — a way of explaining the rights and
determining the remedies of partners, by supposing a kind of lien
on the partnership property, by the partners, and a kind of lien
by the creditors on the partners' lien. This is not the language
used ; but, it is said, that partners have a lien on the property for
the payment of the debts, and that creditors have a quasi lien, and
by means of this, and through the lien of the partners, they
worked out their effectual remedy against the property, (e)
{(i) Lord Hardwicke held that a part- that deficiency according to their propor-
ner, or his representatives, had a specific tions. But while they remain solvent, nnd
lien upon the partnership stock for his the partnership is going on, the creditor has
surplus. West w. Skiji, 1 Ves. Sen. 239. no equity against the effects of the parlner-
See Dodington v. Hallett, 1 Ves. Sen. 498, ship." " But still, in either of these cases
499 ; by Lord EUlon, in Ex parte Younge, [dissolution by efHux of time, the death
2 Ves. & B. 242, because the parties were of one partner, the bankruptcy of one, or
part-owners and not partners. The the- by dry, naked agreement], the community
ory, as upheld by later authorities, is un- of interest remains ; that is necessary, until
doubtedly founded on the remarks of Lord the affairs are wound up ; and that re-
Eldon, in Ex parte Ruffin, 6 Ves. 119, fol- quires that what was partnership propertv
lowed by Ex parte Williams, 11 Ves. 4. before shall continue, for the purposes of
In the latter case, he said: "I have fre- a distribution, — not as the rights of the
quently, since I decided the case of Ex creditors, but as the rights of the partners
parte Ruffin, considered it, and I approve themselves, require. And it is through
of that decision." " The grounds on which the fiperation of administering the equities,
I went in Ex parte Ruffin were these : as between the pnrtners themselves, that
Among partners clear equities subsist, the creditors have that opportunity ; as,
amounting to something like a lien. The in the case of death, it is the equity of the
property is joint ; the debts and credits deceased partner tliat enables the creditors
are jointly due. They have equities to to bring forward the distribution." Also,
discharge each of them from liability, and Ex parte Kowlandson, 2 Ves. & B. 173 ;
then to divide the surplus according to Ex parte Fell, 10 Ves. 348. See Conwell
their proportions ; or, if there is a defici- v. Sandidge, 8 Dnna, 278, 279.
ency, to call upon each other to make up (e) Story on Part. §§ 360, 361.
246.]
OF THE REMEDIES OP THIRD PERSONS.
327
This theory is certainly obscure, and hardly capable of being
definitely stated ; nor docs it appear to lead in any direct or dis-
tinct way to the result, for the sake of which it seems to have been
constructed. There is no doubt that creditors of the firm have an
e(iuitable pi'cference, or right, which courts of equity enforce, (/)
But not much is i^ained by regarding this as a lien.(//)
It seems to be admitted by Mr. Justice Story, who built upon this
theory almost all the remedy of the creditors, that partners have
no lien, unless in case of insolvency or dissolution ,• or, certainly,
that the creditors do not get their quasi lien, unless in these
cases. It is not easy to see how either insolvency or dissolution
creates any lien, although, in these new circumstances, new rights
arise, or, at least, are developed, and come into prominence, and
the courts of ecpiity recognize and enforce them. And this we
suppose to be what is meant. (^)
(/) Rr par/e Willmms, 11 Ves. 6 ; Ex
parte Rulfiu, 6 Ves. 126, 127 ; Ex parte
Kendall, 17 Ves. 526 ; Hoxie v. Carr, 1
Sumner, 181 ; Ex parte Rowlandson, 2
Ves. & B. 172 ; Appeal of York Co. Bank,
S2 Pa. 446; Baker's Appeal, 21 Pa. 76;
Doner y. Stantter, 1 Pen. & \V. 198 ; Wilson
V. Lojier, 13 B. Mon. 414 ; Jones u. Liisk,
2 Met. (Kv.) 356; Stout v. Fortune, 7
Iowa, 183 ; Campbell v. Mullett, 2 Svvanst.
575 ; Cross on Lien, 198 ; Washburn v.
Bank of Bellows Falls, 19 Vt. 278. Author-
ities upon the point might be multiplied
almost indefinitely. This is the recog-
nized and decided law of all the New Eng-
land States. Most of the other States
have also recognized it ; and no one has
expressly denied its existence or obliga-
tion, so far as we know, with the excep-
tion of Pennsylvania and Georgia. See
Witter V. Richards, 10 Conn. 37 ; Egberts
V. Wood, 3 Paige, 517 ; McCulloch v.
Dashiell, 1 H. & G. 96 ; Hall v. Hall, 2
McL'ord Ch. 302 ; Wooddrop v. Wards, 3
Desaus. 203 ; Smith v. Johnson, 2 Edw.
28 ; Commercial Bank v. Wilkins, 9 Me.
28. Further see Pearson v. Keedy, 6 B.
Mon. 128 ; Black v. Bush, 7 B. Mon. 210 ;
Ladd V. Griswold, 9 111. 25 ; Reese v
Bradford, 13 Ala. 837 ; Matlock v. Mat-
lock, 5 Ind. 403 ; Miller v. Estill, 5 Ohio
St. 508 ; Allen v. Centre Vale Co., 21
Conn. 130 ; Williams v. Gage, 49 Miss.
777 ; Gordon v. Kennedy, 36 Iowa, 167
In Pennsylvania, it wag denied in Bell v.
Newman, 5 S. & R. 78 ; Inre Sperry, 1
Ashm. 347 ; and, in Georgia, in Ex parte
Stelibins, R. M. Charlt. 77 (though this
case was decided under a statute, and was
exceptional in its circumstances); and
questioned in Cleghorn v. Ins. Bank of
Columbus, 9 Ga. 319. But it is now
otherwise in both States. The right has
been recognized in Pennsylvania, in Appeal
of York Co. Bank, 32 Pa. 446, and other
ca.ses cited ; and in Georgia, in Hoskins v.
Johnson, 24 Ga. 625, 630, where it is called
an equity. In the case of Burtus v. Tis
dall, 4 Barb. 588, Strong, J., says : "It
is clearly settled that the joint creditors
have, then, the first equitable claim upon
the whole, for the satisfaction of their
debts." Sometimes the copartnership pro-
perty is called a trust fund for the benefit
of creditors ; and sometimes it has been
said that the copartnership creditors have
a lien, or qxinsi lien, upon it. But what-
ever may be the exact nature and extent
of these rights, it is certain that the joint
debts have a claim of priority of payment
out of the whole of the joint funds.
(//■) See Mayer v. Clark, 40 Ala. 259.
{<j) If the private creditor levies on the
joint property, and, on an account being
taken to find the amount covered by the
levy — viz., the debtor's share— if it ap-
pear that there is enough to satisfy both
the joint and separate creditors, the former
cannot be said to be ])referred. If there i.s
not enough to satisfy both, then there is
328
THE LAW OF PARTNERSHIP.
[CH. X.
§ 247. Theory of Legal Ownership by Partnership. — We appre-
hend that there is a simpler view of this subject, which is at least
equally efficient, and is open to no important objection. It is that
which we have already intimated. A partnership is a legal body
by itself ; we do not say it is a corporation, because it wants some
of the most essential elements of incorporation. But we say it is
a body by itself, and is so recognized by the law for some purposes,
and should be — always in a proper way and to a proper degree —
for all purposes. And among these purposes is the placing of its
relation to its creditors on the basis of contracting its own debts,
and having its own creditors, and possessing its own projjcrty,
which it applies to the payment of its debts. After this relation
is exhausted, or after this work is done, there is a resolution of
this l)ody into its elements. Then come up the new relations be-
tween those who were the members of this body and those who
were its creditors. If the joint debts have been so paid, in full,
there are no joint creditors, and they who were jjartners own the
remaining property, free from all encumbrance, except each other's
rights, and they share this remainder between them. If the funds
of the partnership were insufficient to pay its debts, they who were
its members are now the debtors of those who were before only
the creditors of the partnership ; and, like other debtors, must
pay their debts by whatever means they can. (A)
an insolvency, and the joint creditors are
preferred. So, in the case of marshalling
of assets. This, therefore, seems to be the
sense in which the numerous cases are to
1 e taken which admit the equitable lien
only in case of insolvency. Washburn v.
Bank of Bellows Falls, 19 Vt. 278 ; Hub-
bard V. Curtis, 8 Iowa, 1 ; Jones v. Lusk,
2 Met. (Ky.) 356; Stout w. Fortune, 7
Iowa, 183; Burtus v. Tisdall, 4 Barb.
571 ; Pearson v. Keedy, 6 B. Mon. 128 ;
Story Eq. Jur. § 676 i Griffith v. Buck,
13 Md. 102 ; Campbell v. Mullett, 2
Swanst. 551. As the joint creditor has no
lien or equity till dissolution and insol-
vency, any bond _fidc assignment ])rior
thereto would seem to convert the joint
into separate property, and removes it from
the operation of the lien. Cross on Lien,
198; Ex parte Ruffin, 6 Ves. 119; Ex
pro'/e Williams, 11 Ves. 3; Hunt v. Wa-
terman, 2 E. I. 298 ; Smith v. Edwai-ds,
7 Humph. 106 ; Miller v. Estill, 5 Ohio
St. 508 ; Campbell v. Mullett, 2 Swaust.
575 ; Ex parte Fell, 10 Ves. 347 ; Griffith
V. Buck, 13 Md. 102 ; Rogers v. Nichols,
20 Tex. 719 ; Stout v. Fortune, 7 Iowa,
183 ; Jones v. Lusk, 2 Met. (Ky.) 356 ;
Holmes v. Hawes, 8 Ired. Eq. 21 ; Wilson
V. Soper, 13 B. Mon. 414 ; Reese v. Brad-
ford, 13 Ala. 846 ; Ex parte Peake, 1
Madd. 358. So where one partner sells
out to another who assumes the debts.
City of Maynoketa v. AVilley, 35 Iowa, 323.
See also Giddings v. Palmer, 107 Mmss.
269. After dissolution, if one partner pur-
chase the interest of the other, agreeing to
assume the debts, he becomes the piincipal
debtor, of whom the retiring paitner is
surety ; and creditors of the firm, hnving
knowledge of this equity, are bound to
regard it in their subsequent dealings with
the parties. Smith v. Shelden, 35 Mich.
42.
(A) Various attributes of a partnership
favor this view. Thus, the delectus persu-
ncirum, the necessity of a joint suit by or
against them, the doctrines of equit^hle
§ 248]
OF THE REMEDIES OF THIRD PERSONS.
829
§ 248. How far Recognized at Law. — The law does not HOW
make this recoguitiou in the i»hiin and simple way we have stated,
and drawn from it all those niferences to which it would seem to
lead. Thus, lon<^ after it was established that the creditors of
the partnersliip had a priority of right to the partnership effects
over private creditors of the partners, it was (juite as well estab-
lished that the creditors of the partnership could levy upon the
private effects of tlie partners, just as freely as their private credi-
tors could; thus giving to the creditors of the partnership a
double charge, — priority in one respect, and equality in the
other. It seems, however, to have hecomc a rule in the settle-
ment of bankrupt aiul insolvent concerns, to apply a more just
and reasonable principle ; namely, to give to the creditors of the
partnership all the effects of the partnership if necessary for their
debts, leaving only tlie surj)lus, if these debts were paid to the
private creditors ; and to give to the several private creditors the
private assets of the several partners, applying only the surpkis
to tlie debts of the partnership. (/) There was some fluctuation
back and forth ; but this j)rinciple finally prevailed in England,
and, as almost all insolvencies were settled there in chancery, this
may be considered as their method of settling such estates. (^ )
preference, and of the joint and several
linbility of partners, are well explained on
this basis, without resoiting to the theory
of quasi and dependent lien. In many of
the eases involving the claims of the joint
creditors on the partnership fund, the
word " lien " is not used, but the right of
the partnership creditor is termed a trust ;
and, in some cases, is held operative di-
rectly on the fund, antl not through the
medium of the partner's lien. Tillinghast
V. Ciiamplin, 4 R. I. 173 ; Burtus v. Tis-
dall, 4 Barb. 571, 588.
((■) This was first held in a. d. 1715,
in Ex parte Crowder, 2 Vern. 706; fol-
lowed by Ex parte Cooke, 2 P. Wnis.
500.
(j) The older rule in bankrurtcy, giv-
ing a full satisfaction out of the sepa-
rate estate to the separate creditors, was
first broken in upon by Lord Thurlow,
in Ex parte Hayden, 1 Bro. Ch. 454,
which introduced the important modifi-
cation that the separate estate might be
had recourse to, by the partnership cred-
itors, whenever there was neither joint
estate nor a solvent partner. This some-
what anomalous rule, making the nature
of the debt depend on the presence or ab-
sence of joint assets (see per Lord Eldon,
in Ex parte Pinkerton, 6 Ves. 814, note),
seems farther to have been extended, by
Lord Thurlow in Ex parte Hodgson, 2
Bro. Ch. 5, to an absolute equality as to
the separate estate between the joint and
separate creditors ; and ap])arently, this
continued to be the rule till the decision
of Lord Rosslyn in Ex parte Elton, 3 Ves.
238, A. D. 1796, when the principle of the
old rule of exclusive satisfai:tiou of the
separate creditors from the separate estate
— tlie partjiership creditors coming in only
for the surplus — -was restored, and was fol-
lowed for some time. Ex arte Clay, 6
Ves. 813 ; Ex parte Kensington, 14 Ves.
448. For the history of this fluctuation,
see Allen v. Wells, 22 Pick. 453 ; Bard-
well v. Perry, 19 Vt. 292, where it is con-
cisely set forth ; Murray v. Murray, 5
Johns. Ch. 60, where it is given at greater
length. The earlier rule, restricting the
joint creditors from recourse to the sepa-
rate estate, was adopted from bankruptcy
into equity, receiving only the modifica-
330
THE LAW OF PARTNERSHIP.
[CH. X.
Ill this country there were some, but rather faint, attempts
to establish the same principle. Recently these have been
renewed with more vigor and more success. And we believe
that a principle which is so obviously just and reasonable and
consistent with the true theory of partnership, will before long be
settled and established with us. (k) ^
tion that if no joint, estate subsisted, and
there was no solvent partner, the firm cred-
itors might come upon the separate fund
pari passu with the separate creditors. See
accordingly Cowell v. Sikes, 2 Russ. 191 ;
Gray y. Chiswell, 9 V'es. US ; Ex pui-te
Kendall, 17 Ves. 514. In Gray v. Chis-
well, it was decided expressly that sepa-
rate creditors were entitled to be paid
first out of the separate fund, if there
was any joint fund, however small, for
the joint creditors to follow ; Lord El-
don remarking that it was the first time
the case had been presented in equity,
though in bankruj)tcy the question was
familiar. But in Devaynes v. Noble, 1
Meriv. 529, 562, 564, it was held by Sir
William Grant, that though the common
law had, unlike the law-merchant, made
all partnership contracts joint, equity, fol-
lowing the law-merchant, would hold
them several, by operating through its
jurisdiction to correct a mistake, to re-
form the contract. Hence, he held, that
equity would admit a partnership creditor
to come directly upon the separate estate,
without regard to the accounts between
the partner and his firm. His ruling was
conHrme<l by Lord Brougham on appeal.
2 Russ. & M. 495. It had been already
followed in Sumner v. Powell, 2 Meriv.
37 ; and since in Wilkinson v. Hender-
son, 1 Mylne & K. 582 ; also, in Thorpe
V. Jackson, 2 Younge & C. 553, where it
was held, that the same rule applied also
to joint debtors not partners in trade.
And this seems to be the undoubted law
in England, Story Eq. Jur. § 676 ; Red-
field, J., in Washburn v. Bank of Bellows
Falls, 19 Vt. 278 ; and, to some extent, in
this country. But this rule is confined
solely to cases where the partnership cred-
itors seek to come upon the separate as-
sets of one partner, and there are no com-
peting sejiarate creditors. See the cases
cited accordingly ; also. Hills v. M'Rae, 9
Hare, 297 ; Harris v. Farwell, 13 Beav.
403 ; Brett v. Beckwith, 3 Jur. N. s. 31.
But if there are separate creditors, it seems
to be the present equity doctrine that, as to
equitable assets, if there be no joint fund
or solvent paitner, whether the separate
estate be solvent or not, the separate cred-
itors must first be satisiied out of their
fund, and the joint creditors take only the
surplus, if any. Ridgway v. Clare, 19
Beav. 311 ; Addis i^. Knight, 2 Meriv.
117; Croft r. Pyke, 3 P. Wms. 112 ; while,
if both estates are solvent, the joint cred-
itors can come upon either ; or, if the
joint fund be solvent, and the separate in-
solvent, the joint creditors can follow the
latter, as, by their payment, the seiiarate
estate has a credit to that amount in the
joint estate, which the separate creditors
can pursue. Ridgway r. Clare, 19 Beav.
311 ; Ex parte Sperry, 1 Ashm. 357 ;
Walker v. Eyth, 25 Pa. 216 ; Lawrence v.
Trustees of Orphan House, 2 Denio, 577;
Patterson v. Ijrewster, 4 Edw. Ch. 352.
(k) The preference of the sej^arate
creditors, as a rule of ecjuity, is affiimed
by Chancellor Kent. Murray v. Murray,
5 Johns. Ch. 60 ; 3 Kent Comm. 65,
citing Wilder v. Keeler, 3 Paige, 167;
Morgan v. His Creditors, 20 Mart. (La.)
599 "; McCulloch v. Dashiell, 1 H. & G.
96 ; Payne v. Matthews, 6 Paige, 19 ;
Hall V. Wood, 2 McCord Ch. 302 ; Bow-
den V. Schatzell, 1 Bailey E(p 360 ; Cam-
mack V. Johnson, 1 Green Ch. 163. The
joint estate of a partnership is first liable
for the joint debts, and the sepaiate estate
of the respective partners for their sepa-
rate debts ; and neither class has a right
to go to the fund previously belonging to
the other, until the creditors having pre-
ference are fully paid. In re McLean, U.
1 We have seen {ante, § 178) that when a partner transfers his interest in the firm,
the assignee gets no interest in the assets, but only the partner's right to a share of the
§ 249.] OF THK REMEDIES OF THIRD PERSONS. 331
§ 249. Suit by or against a Partnership. — [At COmillOll law
S. Dist. Ct. 15 N. B. R. 333 ; Murril v. the more modified doctrine is iiiaintaiued,
Neil, 8 How. 421 ; Bass i;. Estill, 50 Miss, that the partnership creditoi-s will be
300. So also see Patterson v. Brewster, admitted ?J«ri passu, only when they have
4 Edw. Ch. 352 ; Crockett v Crain, 33 no joint fund, Bridge v. McCulloiigli, 27
N. H. 452 ; North K. Bank v. Stewart, Ala. 661 ; Kodgers v. Meranda, 7 Oiiio St.
4 Bradf. 254 ; Ganson v. Lathro[), 25 Barb. 179 ; Brock v. Bateman, 25 Ohio St. 60y ;
455 ; Morrison v. Kentz, 15 111. VJ'i ; or there is no solvent partner, Daniel v.
Hubbard ?•. Curtis, 8 Iowa, 1. Elsewhere Townsend, 21 Ga. 155.
net jn'otits after an account is taken. If all the partners transfer their interests the
transaction would seem to be the same. Whoever held the legal title, the beneficial
interest would be in the firm, and none of the assignees would have any beneficial
interest until the firm debts were paid and the accounts adjusted. The firm credit-
ors would therefore lose nothing, as they should not, by the fact that all the
partners instead of all but one, had sold out. Lord Eldon's tli£ory of the quasi-
lien of the firm creditors works out here, however, a startling and unjust result.
Since by this theory the creditors have no rights except through the partners, it
follows that if all the partners release their lights, the derivative rights of the credit-
ors are gone. It is held that they do so release their rights when they all assign
their interests. Case v. Beauregard, 99 U. S. 119 ; Goldsmith v. Eichold, 94 Ala.
116, 10 So. 80; Jones v. Fletcher, 42 Ark. 422; Young v. Clapp, (111.) 32 N. E.
187. Contra, Meuagh v. Whitwell, 52 N. Y. 146.
The theory is carried so far that where the interests of all the partners or of
the last partners having claims are sold out upon executions in favor of individual
creditors, their "liens," and conseciuently the firm creditors' " ^Jtresi-liens," upon the
firm property are gone. Jones v. Fletcher, 42 Ark. 422 ; Doner v. Stauffer, 1
Pen. & \V. 198 ; Coover's Appeal, 29 Pa. 9.
This principle is invoked to establish the rights of joint creditors of the part-
ners who are not firm creditors. If joint creditors of the partners bring suit and
attach or seize on execution partnership property, later attaching partnership
creditors cannot interfere ; a reason given is that the partners cannot object, and
therefore, partnership creditors have no right to do so. Hoare v. Oriental Bank,
2 App. Cas. 589 (semble) ; Hall v. Richardson, (N. H.) 20 Atl. 978; Saunders y.
Reilly, 105 N. Y. 12, 12 N. E. 170 ; Davis v. Delaware & Hudson Canal Co.,
109 N. Y. 47, 15 N. E. 873 ; Snodgiass's Appeal, 13 Pa. 471. See, to the same
eti'ect, Couchman v. Maupin, 78 Ky. 33 ; Citizens' Bank v. Williams, 128 N. Y.
77, 28 N. E. 33. Contra, Commercial Bank v. Mitchell, 58 Cal. 42.
Where one partner transfers the assets to his copartner a question arises of a
different sort. There is in that case an intention to pass the property from the
firm to the purchasing partner. Both parties acting together have power to convey
firm property of any kind ; and here therefore the legal title {»asses. The firm
creditors have no more right to complain than the creditors of any debtor who has
conveyed away his property ; they can complain, that is, only when the convey-
ance is a fraud upon creditors. In the ordinary case, therefore, the firm creditors
have no right to complain, and no claim upon the property transferred. Schleicher
V. Walker, 28 Fla. 680, 10 So. 33 ; Stanton v. Westover, 101 N. Y. 265, 4 N.
E. 529. And the same thing is true if the transfer is not to one of the partners,
but to an individual creditor of a partner, or to a third party, provided all the
the partners assent. See post, § 251, note {q). Young v. Clapp, (111.) 32 N. E.
187 ; Woodmansie v. Holcomb, 34 Kas. 35 ; 7 Pac. 603 ; Schmidlapp v. Currie, 55
Miss. 597 ; Fulton v. Hughes, 63 Miss. 61 ; Sexton v. An<lerson, 95 Mo. 373, 8
S. W. 562; Pepper v. Peck, (11. I.) 20 Atl. 16. When one partner thus agrees
332 THE LAW OF PARTNERSHIP. [CH. X.
the partnership is not recognized as a person capable of being
tliat the other shall leave all the assets, and the latter agrees to pay the firm
debts, this would seem to be a personal contract, and not to give the firm creditors
any claim as such on the assets. Goembel v. Arnett, 100 111. 34 ; Parker v. Aler-
ritt, 105 111 "^QS (scmble) ; Trentinan v. Swartzell, 85 Ind. 443 ; Vosper v Kramer,
31 N. J. Eq. 420 ; Alpaugh v. Savage, (N. J.) 19 Atl. 380. In Indiana it is held
that tht firm creditors become indiviilual creditors of the purchasing partner,
and may share pari passu with his other individual creditors. Warren v. Farmer,
100 Ind. 593. But it is sometimes decided that the purchasing partner takes the
assets in trust, and will be reipiired to hold them for the jiartnershij) creditors. P)0w-
man v. Spalding, (Ky.) 2 S. W. 911 ; Phelps v. McNeely, 6(5 Mo. 554. So in
Virginia, where the agreement was to pay the debts "out of the assets." Shackelford
V. Shackelford, 32 Gratt. 481. See also Parker v. Merritt, 105 111. 293.
If however the transfer leaves the firm insolvent, and no equivalent is obtained,
the transfer would seem to be a fraud on the creditors ; who in that case have a legal
claim on the property conveyed. If one or both of the partners continue solvent, the
creditors have a remedy, and the conveyance seems good. But if the firm and the
partners are insolvent, the conveyance should be held fj-audulent in law, what-
ever the intent of the {)arties. Ex parte Mayou, 4 De G. J. & S. 664 ; Ex parte
Suowball, L. R. 7 Ch. 534; Goodbar v. Gary, 16 F. R. 316; Keith v. Fink, 47
111. 272; Smith v. Smith, (la.) 50 N. W. 64; Kelley v Flory, (la.) 51 N. W. 181 ;
Roop V. Herron, 15 Neb. 73, 17 N. W. 353; Caldwell v. Bloomington Mfg. Co., 17
Neb. 489, 23 N. W. 336 ; Morehead v. Adams, 18 Neb. 569, 26 N. W. 242 ; Clements
V. Jessup, 36 N. J. Eq. 569, 572 (sembic) ; Wilson v. Robertson, 21 N. Y. 587;
Menagh v. Whitwell, 52 N. Y. 146 ; Bulger v. Ro.sa, 119 N. Y. 459, 24 N. E. 853 ;
De Caussey v. Baily, 57 Tex. 665 (semble); Darby v. Gilligan, 33 W. Va. 246, 10 S.
E. 400; Baer w. Wilkinson, 35 W. Va. 422, 14 S E. 1 ; David v. Birchard, 53
Wis. 492, 10 N. W. 557 ; Keith v. Armstrong, 65 Wis. 225, 26 N.W. 445 ; Cribb v.
Morse, 77 Wis. 322, 46 N. W. 126. See Davies v. Atkinson, 124 111. 474, 16 N. E. 899 ;
or it should at least be lield that a knowledge of the insolvency by the part-
ners conclusively proves them to have been acting fraudulently in fact. Johnston v.
Straus, 26 F. R. 57 ; Phelps v. McNeely, 66 Mo. 554 ; Reyburn v. Mitchell, 106 Mo.
365, 16 S. W. 592.
It is held, however, by a strong body of authority that if the transfer was bona
fide it holds, even if in fact the firm was insolvent. Case v. Beauregard, 99 U. S.
119 ; Huiskamp v. Moline Wagon Co., 121 U. S. 310 ; Coffin v. Day, 34 F. R. 687 ;
Reynolds v. Johnson, 54 Ark. 449, 16 S. W. 124; Sickman v. Abernathy, 14 Col.
174, 23 Pac. 447 ; Allen v. Center Valley Co., 21 Conn. 130 ; Ellison v. Lucas, 87 Ga.
223. 13 S. E. 445 ; Hapgood v. Cornwell, 48 111. 64 ; Hanford v. Prouty, 133 111. 339,
24 N. E. 565 ; Purple v. Farrington, 119 Ind. 164, 21 N. E. 543 ; Poole v. Seuey, 66
la. 502, 24 N. W. 27 ; Woodmansie v. Holcomb, 34 Kas. 35, 38, 7 Pac. 603 (f<emb/c) ;
Howe V. Lawrence, 9 Cush. 553 ; Richai-ds v. Manson, 101 Mass. 482 ; Hanover Nat.
Bank v. Klein, 64 Miss. 141 ; Dimon v. Hazard, 32 N. Y. 65 ; Wilco.\ v. Kellogg, 11
Ohio, 394 ; Sigler v. Bank, 8 Oh. St. 511 ; Gallagher's Appeal, 114 Pa. 353, 7 Atl.
237 ; Carver Gin & Machine Co. v. Bannon, 85 Tenn. 712, 4 S. W. 831. A distinc-
tion is made in Arnold v. Hagerman, 45 N. J. Eq. 186, 17 Atl. 93, between a convey-
ance with and one without knowledge of the insolvency ; the latter only being upheld.
And it is clear that if there is in fact a fraudulent intent the conveyance is voidable.
Flack V. Charron, 29 Md. 311.
In New Hampshire firm property cannot be diverted from the debts of existing
firm creditors, even by consent of all the partners. Kidder v. Page, 48 N. H. 380;
Caldwell V. Scott, 54 N. H. 414. Though it may be applied to other purposes as
against subsequent firm creditors. Farwell v. Metcalf, 63 N. H. 276.
A firm creditor who has secured a legal interest in the property, as by attachment,
inay of course hold it against any subsequent act, even an act in which all partners
§ 250] OF THE REMEDIES OF THIRD PERSONS. 333
sned ; and it must sue and be sued in the names of the partners ^
And therefore in order to get a judgment v.hich will bind all
the partners, service must be made upon all. Service upon one
partner is not enough,^ though if one partner is sued, he is
concluded by a judgment ; ^ and since the partners arc liable
severally as well as jointly, if both partners are non-resident
the property of one may be attached and made liable for the
debts.* Where one partner dies pending suit, since firm del)ts
survive, the action may proceed against the survivors without a
bill of revivor ; ^ and if a partner dies before suit is begun, the
surviving partners alone must sue or be sued, without joining
the representative of the deceased partner.^]
If the partnership is changed, whether by a former partner
withdrawing, or a new one coming in, it is a general rule, that
those persons who were ))artners when the contract was formed,
whether it was express or implied, and they only, can sue upon
the contract. (iV)
§ 250. Suit in Partnership Name by Statute. — [The position of
a defendant firm has been much changed by statute. The most
important loi'm of statute is that allowing a firm to sue and be
sued in the firm name.' Some such statutes allow judgment to
be issued in this case only against the firm property, not against
the partners individually ;^ and therefore when a married woman
is member of a firm, there is no difficulty in suing the firm.^
(h) Cannin.<,'liam r. Munroe, 15 Gray, 471 ; Tay v. Ladd, 15 Gray, 296. But see
Page V. Wolcott. 15 Gray, 536.
join. Schleicher v. Walker, 28 Fla. 680, 10 So. 33 {semble) ; Carter i'. Galloway, 36
La. Ann. 473, 730 ; Robinson v. Allen, 85 Va. 721, 8 S. E. 835.
When the property of the firm is fraudulently assigned to an individual creditor,
the firm creditors may follow and take the goods. Hartley v. White, 94 Pa; 31. And
where a partner conveys his own interest, though the legal title passes, the firm cred-
itors may follow the goods. Conant v. Frary, 49 Ind. 530 ; Hiscock v. Phelps, 49
N. Y. 97; Morss v. Gleason, 64 N. Y. 204; Lewis v. Anderson, 20 Ohio St. 281 ;
Cunningham v. Ward, 30 W. Va. 572, 5 S. E. 646.
1 Lewis V. Cline, (Miss.) 5 So. 112 ; Dunham v. Shindler, 17 Ore. 256, 20 Pac. 326.
2 Tabler v. Bryant, 62 Mis.s. 350.
3 Hall V. Cook, 69 Ala. 87 (by statute).
* Daly V. Bradbury. 46 Minn. 396, 49 X. AV. 190.
5 Davis V. Davis, 93 Ala. 173, 9 So. 736 ; Bucki v. Cone, 25 Fla. 1, 6 So. 160 ;
Dunman v. Coleman, 59 Tex. 199.
,6 Ba.ssett V. Miller, 39 Jlich. 133 ; Cragin v. Gardner, 64 Mich. 399, 31 X. W.
206 ; Nehrboss v. Bliss, 88 N. Y. 600 ; Dial t-. Agnew, 28 S. C. 454, 6 S. E. 295 ;
Watson V. Miller, 55 Tex. 289. See post, § 349.
T Stuart V. Corning, 32 Conn. 105. See U. S. Express Co v. Bedbury, 34 111. 459
8 Jackson v. Litchfield, 8 Q. B. D. 474 (C. A.) ; Clark v. Cullen, 9 Q. B. D. 355 ;
Haralson v. Campbell, 63 Ala. 278 ; Watts v. Rice, 75 Ala. 289 ; O'Brien v. Fogle-
song, (Wyo.) 31 Pac. 1047.
* Yarbrough v. Bush, 69 Ala. 170.
334 THE LAW OP PARTNEUSniP. [CH. X.
After the firm assets hnve lieen exliausted, some means such as
bringing suit on the judgment, against the members of the firm
are provided for enforcing the partner's liability.^ But the debt
is merged in the judgment , and one who has ceased to belong
to the firm before judgment is obtained cannot afterwards be
reached. Only members of tlie firm against which the judg-
ment is obtained can be held upon it, even secondarily .^ In
Kansas, however, a judgment against the firm in the firm name
binds also all the partners who were served, and the property of
either partner may be levied on.^
There seems to be no reason why the individual partners
should not be joined in an action brought against the firm by
name. In Louisiana a single partner may be joined with the
firm.* And action may still be brought as at common law
against the individual partners, with the same result of holding
both firm and individual property.^
Another common form of statute provides that a firm may
be bound by a judgment when only one partner is served with
process. Such a judgment ordinarily binds the firm property,
and the individual property of the member actually served.^
This sort of statute has no extra-territorial force. Though it is
recognized in another State as binding on the partner actually
served, it will not be enforced against the firm property outside
the State,'^ nor against a partner who was not served.^]
§ 251. Residence of a Partnership. — [Where a firm may be
sued by name, can it be said to have a residence ? Not at any
rate in the United States courts, since in those courts, in spite
of the State statutes, the partnership cannot sue and be sued by
name. If the jurisdiction depends on citizenship, that of the
partners must be alleged.^ But it seems clear that a statute of
this sort recognizes, at least for purposes of procedure, the true
nature of a partnership as an entity ; and that it should therefore
1 Ruth V. Lowrey, 10 Neb. 260, 4 N. W. 977 ; Leach v. Milbum Wagon Co., 14
Neb. 106, 15 N. W. 232.
2 Cambetbrt v. Chapman, 19 Q. B. D. 229.
8 Stout V. Baker, 32 Kas. 113, 4 Pac. 141.
* Martin v. Meyer, 45 F. R. 435.
s Haralson v. Campbell, 63 Ala. 278 ; AVatts v. Rice, 75 Ala. 289 ; Leinkauff v.
Munter, 76 Ala. 194.
6 Harford v. Street, 46 la. 594 ; Hedges v. Armistead, 60 Tex. 276 ; Texas & St
L. R. R. V. McCaughey, 62 Tex. 271.
7 Bowler v. Huston, 30 Gratt. 266.
8 Conley t'. Chapman, 74 Ga. 709.
» Adams r. May, 27 F. R. 907.
§ 252.] OF THE REMEDIES OF THIRD PERSONS. 335
be recognized as having a residence distinct from that of the
individual partners.^]
§ 252. Exemption from Attachment or Execution. — [Whore a
debtor whose property is attached, or an insolvent, is allowed to
retain part of his property as exempt from execution, a partner
cannot claim any part of the partnership property as so exempt ;
for th(3 property belongs to the partnership, not to the partner.^ Nor
can the exemption be claimed by the partnership ; for it is meant
to protect individual debtors.^
There is nothing to prevent a division of the firm property by
all the partners among themselves, if it is done in good faith.
The property then becomes separate property of the partners.* If
this is done for the express purpose of claiming an exemption,
it would seem not to be bona fide ^ but a device to avoid creditors,
and exemption should not be allowed.^ Certainly after attach-
ment or levy of execution it is too late to make such a division ;
the creditor has a prior lien, and the partners can claim no
exemption.^
Similarly if all the firm assets are bona fide conveyed to one
partner they become his individual property ; ^ and he may there-
fore claim an exemption, though the firm is insolvent.^]
1 Fitzgerald v. Grimmell, 64 la. 261, 20 N. W. 179.
'■« In re Corbett, 5 Sawyer, 206 ; Schlapback v. Long, 90 Ala. 525, 8 So. 113 ;
Richardson v. Adler, 46 Ark. 43 ; Cowan v. Creditors, 77 Gal. 403, 19 Pac. 755 ;
Bates V. Callender, 3 Dak. 256, 16 N. W. 506 (scmble) ; State v. Bowden, 18 Fla. 17 ;
Smith V. Harris, 76 Ind. 104 ; Ex parte Hopkins, 104 Ind. 157, 2 N. E. 587 ; Pond
V. Kimball, 101 Mass. 105 ; Baker v. Sheehan, 29 Minn. 235, 12 N. W. 704 ; Prosser
V. Hartley, 35 Minn. 340, 29 N. W. 156- Wise v. Frey, 7 Neb. 134; Gaylord v.
Imhoff, 26 Oh. St. 317 ; First Nat. Bank v. Hackett, 61 Wis. 335, 21 N. W. 280 ;
McNair v. Rewey, 62 Wis. 167, 22 N. W. 339. But see contra, Blanchard v. Paschal,
68 Ga. 32 ; Skinner v. Shannon, 44 Mich. 86, 6 N. W. 108, even though the claim-
ant has overdrawn his account : McCoy v. Brennan, 61 Mich. 362, 28 N. W. 129.
For the same reason a minor heir of one partner cannot claim out of partnership
property the allowance granted by statute before the payment of debts. Succession of
Pilcher, 39 La. Ann. 362, 1 So. 929. Nor can a widow claim such allowance. Sellers
V. Shore, 89 Ga. 416, 15 S. E. 494 ; Julian v. Wrightsman, 73 Mo. 569. Nor can a
widow claim a statutory "exemption " in partnership property where her husband was
a partner, so long as the partnership affairs are unsettled. Little v. McPherson, 76
Ala. 552. For exemption of partnership land see pof:t, § 265, note 1.
3 In re Blodgett, 10 N. B. R. 145 ; Guptil v. McFee, 9 Kas. 30 ; Pond v. Kimball,
101 Mass. 105 ; State v. Spencer, 64 Mo. 355 ; Russell v. Lennon, 39 Wis. 570.
4 McKinney v. Baker, 9 Ore. 74 ; Weaver v. Ashcroft, 50 Tex. 427.
8 Gill V. Lattimore, 9 Lea, 381. Contra, Bates v. Callender, 3 Dak. 256, 16 N. W.
506 , State v. Kenan, 94 N. C. 296.
6 State V. Day, (Ind.) 29 N. E. 436 ; Wise v. Frey, 7 Neb. 134. Contra, Stout v.
McNeill, 98 N. C. 1, 3 S. E. 915.
7 Stanton v. Westover, 101 N. Y. 265, 4 N. E. 529 ; Miller y. Estill, 5 Oh. St. 508.
8 Goudy V. Werbe, 117 Ind. 154, 19 N. E. 764 j Burton v. Baum, 32 Kas. 641, 5
Pac. 3 ; Mortley v. Flanagan, 38 Oh. St. 401.
336 THE LAW OF PARTNERSHIP, [CH. X.
S 253. Right of Partnership Creditors to Proceed against the
Partners. — There is perhaps no great practical objection in per-
mitting the creditors of the partnership to go at once for their
payment to the partners personally, and their private property,
where there is no insolvency of the partnership ; because, if a part-
ner is obliged to pay such a debt, he may charge his payment to
the firm, and so be allowed it on the general settlement, or in
account. This is the present rule and practice ; each partner being
liable m soUdo, although the wliolc partnership is solvent and
accessible, and the action must be brought against all. {ly But
it would be more consistent with the true theory, and in all respects
a better rule, we think, if the creditors of the partnership were in
no case — fraud, of course, excepted — permitted to proceed against
the private effects of a partner severally, until they had exhausted
all those means of the partnership which were accessible to them,
and available without too much cost or difficulty, (m)
S 254. Rights of Private Creditors against a Partner's Interest. —
When we come to the question of the rights and remedies of a
private creditor of one partner in respect to that partner's share
of the partnership, we shall find much uncertainty still remaining.
We apprehend, however, that a careful adherence to two principles
•will remove most of the difficulty. One of these is, that a creditor
of any debtor can secure to himself, and for his own benefit by
(0 In cases at law, there never has Ves. 119; Abbot w. Smith, 2 W. Bl. 949,
been a doubt of the iininediate liability of per De Grey, C. J. ; Jones v. Clayton, 4
each partner to have the judgment against M. & S. 349 ; Villa v. Jonte, 17 La. Ann.
the firm fully satisfied from his assets, or 9 ; Nicholson v. Janeway, 1 Green (IST. J.),
of his liability m .so/i'f^o. Woolley i;. Kell)', 285.
1 B. & C. 68 ; Herries v. Jamieson, 5 T. (m) See ante, § 248, note (k).
R. 556 ; Ld. Eldou in Ex parte Ruffin, 6
1 If a firm creditor attaches the separate property of a partner, levies, or gets a
judgment lien, before attachment, levy, or judgment by an individual creditor, the
attachment or judgment lien of the firm creditor has priority over the lien of the in-
dividual creditor, so as to hold the separate property. Louden v. Ball, 93 Ind. 232 ;
Gillaspy v. Peck, 46 la. 461 ; Allen v. Wells, 22 Pick. 450 ; Wisham v. Lippincott, 1
Stock. 353 ; Howell v. Teel, 29 N. J. Eq. 490 ; Meech v. Allen, 17 N. Y. 300 ;
Barrett o. Furnish, 21 Ore. 17, 26 Pac. 861 ; Cummings's Appeal, 25 Pa. 268 ; Bard-
well V. Perry, 19 Vt. 292; Straus v. Kerngood, 21 Gratt. 584. But see Crockett v.
Grain, 33 N. H. 542 ; Bowker v. Smith, 48 N. H. Ill ; Moody v. Lucier, 62 N. H. 584.
It has been intimated that if there are partnership assets from which the firm
creditor may get payment, equity will interfere to protect the individual creditor. See
l7i re Lewis, 8 N. B. R. 546 ; hi re Sandusky, 17 N. B. R. 452 ; Louden v. Ball, 93
Ind. 232 ; Meech v. Allen, 17 N. Y. 300.
For the same reason, a del)t due to an individual partner may be garnisheed by a
firm creditor. Fullam v. Abrahams, 29 Kas. 725 ; Stevens v. Perry, 113 Mass. 380 ;
Straus « Kerngood, 21 Gratt. 584. Contra, Jarvis v. Brooks, 23 N. H. 136 ; Weaver
V. Weaver, 46 N. H. 188 ; Myers v. Smith, 29 Ohio St. 120.
§ 255 ] OF THE REMEDIES OP THIRD PERSONS. 387
attachment and levy, only the proi)erty, interest, or right which
liis debtor has ; (w) the other is, that this he may thus secure.
The first point, therefore, is to adopt no theory and no conclusion
which will offer to an attachment, or to execution, anything more
or anything else than the debtor has.
§ 255. Partner's Interest in Firm Property. — What, then, is the
right or interest or proj)erty of a partner to or in the effects of
the partnership? Certainly, not a separate and exclusive right to
any part or portion of it ; or any right of any kind to any one part
rather than to any other part ; or any other right or interest than
that which all the other j)artners have, (o) It follows, therefore,
that he can have no right or interest which is such in kind or in
degree as prevents all or any of his copartners from having pre-
cisely the same ; and the right which he has is the same as theirs
in reference to the whole ami every j)art of the proi)erty. We
cannot, therefore, define this right of any one partner better than
we have already done, by calling it an ownership of all the
property of the firm, subject to the ownership of the copartners,
who hold it all subject to his ownership. This is at least the
foundation of his property and interest ; and from this he derives
certain rights as incident to it. Thus, if no special agreement
forbids, each partner may disencumber his interest from the rights
of the others, by giving up his right to all the other shares or
interests. That is, each one may Jiave his own share in severalty.
But, to do this, the first step is to ascertain what this share is.
For it must be remembered, not only that the ownership of each
partner is subject to the ownership of all the others, but that
all the partners together hold the property subject to the right and
oldigation of the partnership as a body per se, to apply all its funds
to the payment of all its debts. (/>) Or, if this way of presenting
this right be objected to, then we say that all the partners own all
the ))roperty, sul)ject to the right of all the creditors to have their
debts paid and satisfied out of this property, {q}
(a) See ante, § 244, note (c), and cases {q) This ownership by partners, sub-
cited. And see Smith v. Emerson, 43 Pa. ject to the claims of creditors of tlie firm,
456. is made by Richardson, J., the foundation
(o) Lovejoy V. Bowers, 11 N. H. 404 ; of an able dissenting opinion against the
Black V. Bush, 7 B. Mon. 210 ; Daniel v. right of a sheriff to take specific articles of
Daniel, 9 B. Mon. 195 ; Church i*. Knox, the [lartuership stock for the debt of one.
2 Conn. 518. And see a7ite, § 244, note Wiles v. Maddox, 26 Mo. 77, 84. 'So by
('•), the cases with admit the partner's in- Parker, C. J., in Morrison v. Blodgett, 8
terest alone to be taken. See Cookingham N. H. 238. In Boyce v. Coster, 4 Strobh.
V. Lasher, 38 Barb. 656. Eq. 25, it is held that the share of each
{p) Washburn V. Bank of Bellows Falls, ])artner in the joint effects is subject to
19 Vt. 292; Warren V. Willis, 38 Tex. 225. his partners' liens for joint demands,
22
338 THE LAW OF PARTNERSHIP. [CH. X.
The partner who desires to separate his sliare of the common
property,' and own it free from any liability to others or any in-
terest in others, must settle the concerns of the partnership, in the
first place, so as to be sure that the debts are paid or provided for ;
and then he may call for a division of the joint projjerty, and
take his share to himself. He may do many other things by the
consent of others ; he may in that way sell out his interests to a
stranger, or to a third person, who is to come into the partner-
ship; or he may sell to his copartners. But no such arrangement
liberates his share from the debts of the firm; and nothing will
but their payment, or the agreement of the creditors, for consider-
ation, to discharge him. What the law ])ermits him to do, oi' cause
to be done, without tlie consent of others, is to settle the concern,
pay the debts, and then divide the surplus. This is, ])ractically
speaking, the whole of his right. And this, and only this, is there-
fore the right which his private creditor can acquire by attachment
or execution. That is, his creditor may put himself exactly in the
place of his debtor, both as to the power of the latter and as to its
limitations, (r)
§ 256. Right of Private Creditor to attach such Interest. — Tiie
creditor may, therefore, attach the interest of the debtor partner
in the partnership property. This is universally admitted, (s)
and, though aliened, was subject to their (r) Tappan v. Blaisdell, 5 N. H.
equities for a settlement. The right or 193. See Inbuscli u. Farwell, 1 Black, 566.
lien of the partners on the joint property (s) Chapman v. Koojis, 3 B. & P. 289 ;
for their own shares, and for the payment Moody v. Payne, 2 Johns. Cli. 548 ; per
of the ])artnership debts, is, however, an Parker, C. J., in Morrison v. Blodgett, 8
equity of theirs, and not primarily, if at N. H. 252, 253 ; Jarvis v. Hyer, 4 Dev.
all, of the partnership creditors, Hunt v- 367 ; Johnson v. Evans, 7 M. & G. 240 ;
Waterman, 2 R. I. 298 ; Miller i'. Estill, Mayhew v. Herrick, 7 C. B. 229 ; Holmes
5 Ohio St. 508 ; and may be barred, or the v. Mentze, 4 A. & E. 127. So the share
property removed from its operation, by any may be taken on mesne process in those
5o?ia_^(^fi assignment. Ex jmrte ^\i^n, Q States which confer this right. Pierce v.
Ves. 119 ; Ex parte Williams, 11 Ves. 3; Jackson, 6 Mass. 242 ; Burgess v. Atkins,
Miller v. Estill, 5 Ohio St. 508 ; Smith v. ^ Blackf. 337 ; Douglas v Winslow, 20
Edwards, 7 Humph. 106 ; Holderness v. Me. 89, 92, 93. Thus, in Pierce v. Jack-
Sliackels, 8 B. & '". 612 ; Lingeii v. Simp- son. Parsons, C. J., says : " A creditor of
son, 1 Sim. & S. 600 ; Campbell v. Mullett, one of the tirm has a right to attach the
2 Swanst. 575 ; Ex parte Fell, 10 Ves. partnership effects against all creditors
347; Griffith v. Buck, 13 Md. 102; whose demand is not upon the conqiany."
Rogers v. Nichols, 20 Tex. 719 ; Stout v. See also Allen v. Wells, 22 Pick. 450 ;
Fortune, 7 Iowa, 183 ; Jones v. Lusk, 2 AVashburn v. Bank of Bellows Falls, 19
Met. (Ky.) 356; Holmes v. Hawes, 8 Vt. 278 ; Bardwell r. Perry, 19 Vt. 292 ;
Led. Eq. 21 ; Wilson v. Soper, 13 B. Dow v. Sayward, 12 N. H. 276, 277 ;
Mon. 414 ; Reese v. Bradford, 13 Ala. Page v. Carpenter, 10 N. H. 77 ; Hill v.
846 ; Ex parte Peake, 1 Madd. 358. See Wiggin, 31 N. H. 292 ; Newman ?•. Bean,
ante, § 248, note. 21 X. H. 93 ; James ('. Strattnn, 32 111.
202.
§ 256.]
OF THE REMEDIES OF THIRD PERSONS.
339
But can he attach the very goods of the partnership ? or, to state
the question more accurately, Can the officer having the writ attach
any definite portion of the goods of the partnership, and take them
into liis possession ; or can he, holding an execution, take a portion
of the goods, and sell them to satisfy it ? There is much diversity
of opinion on this subject; but we are unable to regard it as at all
doubtful on i)riuci|)le ; that is, the conclusion to which the ])rni-
cij)lcs a|){)licable to the case lead seems to us inevitable. If there
be any doubt, it must arise from the inability of the law of ])avt-
nershij) to clear itself of the last remaining influence of the old
notion, that |)artnersiiij) was but one form of tenancy in common, (t)
The partner himself is wliolly without the right (unless by agree-
ment) of ai)proi)riating to himself in severalty anything whatever
which belongs to the common stock. All the partners together
cannot do it, if it be needed for the payment of the debts. (?i)
This is universally conceded. If a private creditor of a partner
attaches his interest in any form, his attachment is certainly
avoided by the insufficiency of the joint assets to pay the joint
debts, (v) How, then, can it be held, either that the partner, before
settlement of the debts and a division of the property, may, by his
own act, make some portion of it his own ; or that the partner
{/) And that this is so, see the later
cases of Johnson v. Evans, 7 J\I. & G.
240 ; Mayhew v. Herrick, 7 C. B. 229, in
which the coui't found the riglit of the
sheriff to take possession of specific articles,
on the old law as it stooil in Heydon v.
Heydon, 1 Salk. 392 ; Jackeyr. Butler, 2
Ld. Raym. 871 ; Bachurst v. Clinkard, 1
Shower, 169 ; namely, permitting the in-
terest of one partner to be taken as an
undivided moiety. See Garvin v. Paul, 47
N. H. 158.
(m) As to the restriction upon the part-
ners to assign in case of insolvency, actual
but not avowed or acted upon by ]>rocess
of court, see Allen v. Centre Vale Co., 21
Conn. 130. And see Jones v. Lusk, 2 Met.
(Ky.) 356 ; Dennis v. Green, 20 Ga. 386 ;
Burtus V. Tisdall, 4 Barb. 571 ; Lucas v.
Laws, 27 Pa. 211. [A7itc, § 248, note.]
(v) And this is true even though the
partnership creditors have commenced no
action for the recovery of their debts.
Pierce v. Jackson, 6 Mass. 242 ; Fisk v.
Herrick, 6 Mass. 271 ; Rice v. Austin, 17
Mas.s. 206 ; Commercial Bank v. Wilkins,
9 Me. 28 ; Lyndon v. Gorham, 1 Gall. 368.
The true reason why the resulting interest
of a partner in the partnership effects can-
not be attached or taken on execution lies
in the nature of the interest, which is not
a specific thing, having a distinct and in-
dependent existence ; but is a mere result
flowing from a comparison of accounts,
and may fall on either side as the balance
happens to be. A specific debt or demand
may be unliipiidated, but nevertheless has
its own independent existence, and may
be ascertained by computation or valuation.
Kot so with the interest of a partner in an
unsettled partnership account. It results
wholly from a comparison of the debts and
credits of the partnership in the first in-
stance, and then a comparison of the
accounts between the partners themselves.
If the partnership is insolvent, there is no
balance for division ; if solvent, then the
account between the partners may show
that the partner whose interest it is
attempted to attach has no claim to any
part of the balance. Agnew, J., Alter v.
Brooke, 9 Phila. 258 ; Knerr v. Hoffman,
65 Pa, 126.
340 " THE LAW OF PARTNERSHIP. [CII. X
himself lias no such rii;ht, but that his private creditor may say
the partner has such right, and possess himself of it by attach-
ment or levy or execution ? The courts which have, in recent
times, permitted a sheriff to attach the })roperty of a firm in a suit
against a partner, and sell the same on execution, hold also that
he must not pa}^ this over to the plaintiff, but must hold the ])ro-
ceeds subject to an account Avith the firm, to be paid to them for
their creditors if needed for debts or for the other partners if it
belongs to them on the settlement.^ Or else that the purchaser
takes the property as tenant in common with the other partners,
and subject to an account between the partners, which, if it event-
uate against him, will make his purchase give him nothing. (?t')
This is an acknowledgment that the partner holds his interest in
the joint property on terms and conditions which make it un-
reasonable to subject that property itself to attachment as his
property.
§ 257. Right to Advantage of Private Agreements betw^een Part-
ners. — We should say, therefore, that there is no general rule of
the law of partnership which rests on stronger reason than that a
private creditor cannot do this. But this rule is perhaps subject to
some qualification. How, for example, is the creditor affected by
})rivate agreements or arrangements between the partners ? (:?-)
These may be of two kinds : they may be favorable to the creditor,
or unfavorable. Thus, if the articles of copartnership permitted
anv one partner to withdraw one-third of the stock at his pleasure,
or some specific articles of the joint property, it would be for the
advantage of the creditor to acquire this right. If by the articles
no partner could ask for a settlement, or withdraw any stock, for
five years, it would be a hindrance to the creditor to be delayed so
long.
In considering the question how a private creditor of the part-
ner would be affected by such a bargain, if it were unfavorable, if,
— for example, the articles of partnership provided that an account
should be taken annually, and all the profits added to the stock
{ic) Philli[)S V. Cook, 24 Wend. 398, partnership debts are paid. Osborn v.
404 ; Johnson v. Evans, 7 M. & G. 240 ; McBride, 16 N. B. R. 22, See also
Mayhew v. Herrick, 7 C. B. 222 ; Lucas Menagh v. Whitwell, 52 N. Y. 146 ; Bank
V. Laws, 27 Pa. 211 ; White v. Jones, 38 v. Carrolton R. R., 11 Wall. 624 ; Garvin
111.159. If the interest of both members v. Paul, 47 N. H. 158; Barrett v. Mc-
of a partnership consisting of two be sold Kenzie, 24 Minn. 20, 1 N. W. 123.
on separate executions against each to the (x) Elliot v. Stevens, 38 N. H. 311,
same purchaser, he gets nothing till the 313.
1 Powers V. Large, 69 Wis. 621, 35 N.W. 53.
§ 257 ] OF THE REMEDIES OF THIRD PERSONS. 341
for five years, and that the partnership should not be dissolved, or
any of its stock withdrawn, for five years more, and eight of these
ten years remained, — it might be supposed that the well-known
principle, in constant apjdication, that no bargains between the
partners affect injuriously any third j)erson dealing with the part-
nership in ignorance of these bargains, would apply to this case.
The reason of this principle is, that all persons have a right to be-
lieve that all partnerships stand on the common ground of the law,
unless they are informed that it is otherwise. If this rule were
held to apply to an attaching creditor, we should say that a private
creditor of a partner, who knew of such an agreement when he
gave him credit, should be bourd by it as much as he would be by
any other lien or encumbrance on the partner's property. But
that, if he had no such knowledge or means of knowledge, he would
be unaffected by the agreement. There are cases which would,
indirectly at least, favor this conclusion. (?/) But as all partners
have a right to make any honest disposition of their affairs, or any
arrangements between themselves, which do not injuriously affect
those who deal with the firm, we should prefer to say that an
attaching creditor of one of the partners would be bound by such
a bargain, if made in entire good faith, and with no reference to
any insolvency either of the partner or of the firm. Practically,
however, it would make little or no difference. Where the interest
of the debtor was sold on execution, we apprehend that this would
work a dissolution of the partnership. The remaining partners
would not be bound to admit the purchaser as their partner during
these years ; and, on the other hand (the delectus pe7-sonaru7n being
mutual and equal), the purchaser would not be bound to become
and remain a partner with the others, against his wishes. The
parties could, of course, make what arrangement they chose. But,
if they could not agree, the legal effect of the sale and purchase
would be a dissolution ; and the legal effect of this would be an
annulling of those agreements, and a right on the part of the pur-
chaser to call at once for an account and settlement, and to take
his share in severalty.
On the other supposition, that, if the partner had made an
agreement adding to or enlarging his rights, the principle that the
creditor takes just what the debtor has, and is puf precisely in his
place, would give to him all the benefit of this agreement. And
the fact that he did not know it, would not prevent his profiting
by it, any more than it would prevent him from profiting by
(y) See Penn v. Stone, 10 Ala. 209.
342 THE LAW OF PARTNERSHIP. [CH. X,
property, theretofore unknown to him, of the partnership or of the
partner.
§258. Method of Attaching Partner's Interest. — The general
conchision to whieh we come, — and on this we rely very con-
fidently,— is, that a separate creditor of a partner, in pursuing
his remedy upon property of the firm, can attach or levy upon the
partner's interest in the copartnership ])roperty,and upon nothing
else, (a) But even where this is held, there is much diversity and
uncertainty as to the proper manner of doing it. We think, how-
ever, that a clear apprehension of the principle itself would lead
to a sufficient and unobjectionable method of carrying that prin-
ciple into effect.
We have no doubt that this interest of the partner may be
attached as well as any other interest or property, and levied upon,
and sold, to satisfy a judgment. The manner in which this is
done must depend somewhat upon the local statutory provisions.
In general, an officer ordered to attach this interest would do so
by indorsing such attachment on his writ ; he should then certainly
give immediate notice to the debtor, and it would l)e expedient
and proper to give such notice to the other partners. This interest
would remain under attachment. The firm could go on, dealing
as before, buying and selling, and delivering goods ; (5) because
this attachment did not take effect upon any specific interest in
any specific goods, but on the interest of the partner in the part-
nership concern.
We suppose that the transactions of the firm, after being noti-
fied of the attachment, are in good faith ; and, if so, it is no object-
tion to them that the debtor himself is active in these transactions,
or in part of them. But, whether he be active or not, if the trans-
actions are fraudulent as against the creditor, — that is, intended
to delay or defeat the recovery of his debt, — they might still be
valid as against him, and in favor of a stranger dealing honestly
with the firm in their way of business : but would be void in favor
of the creditor, as against the fraudulent partners, and as against
any third party co-operating in the fraud, or dealing with the part-
ners knowing the intention of fraud, and by thus dealing giving
(a) See ante, § 256, note (s) ; § 244, ever small, of the specific goods under
note Ic). execution, is a dis.solution. Id. ; Haber-
{b) The property of the partner in his shon v. Blurton, 1 De G. & S. 121 ;
share is not entirely divested, and the firm Waters v. Taylor, per Lord Eldoii, 2 Ves.
consequently dissolved, till sale under the & B. 301. The same-mode of attachment
levy. Morrison v. Blodgett, 8 N". H. 238 ; without seizure was held to be the only
Aspinall v. London & N. W. Pv. Co., 11, proper form in Pennsylvania. Deal v.
Hare, 325 ; but a sale of any part, how- Bogue, 20 Pa. 229.
§ 259.] OF THE REMEDIES OF THIRD PERSONS, 343
it efficacy ; for this would be co-operation, although the third party
had no other object in view but his own interest.
So affairs might go on until judgment was obtained, and an exe-
cution issued. For, if not, it would be in the power of any person,
by mere suit and allegation of a demand against a partner, to
arrest the wiiole business of a partnership more effectually than he
could do it by the allegation of a debt against the partnership
itself.i
§ 259. Sale of Partner's Interest on Execution. — When execu-
tion issued, the sheriff would sell the interest of the partner in
the ])artnership in the same manner in which he would sell any
other interest or riglit which he levied upon, — as a right to
redeem, or the like ; and the proceeds would be applied to satisfy
the execution, (c) 2
(c) This is admitted as the consequence ruled in Phillips i;. Cook, 24 Wend. 397 ;
of such levy and sale in the case of Wiles Waddell v. Cook, 2 Hill, 47, and note ;
V. Maddox, 26 Mo. 77, 84. The doctrine Walsh v. Adams, 3 Denio, 125, &c. Even
of the majority of the court in that case is in New Hampshire, the unfortunate effects
sustained by the decisions of every law of the ordinary method of attachment
court except those of New Hampshire, without the power to make it operative
Morrison ;-'. Blodgett, 8 N. H. 238 ; Gib- except in equity, because a mere contin-
son V. Steven, 7 N. H. 357 ; Page v. gent right is sold that no one cares to buy.
Carpenter, 10 N. H. 77 ; Hill v. Wiggin, have been so severely felt, that, in Hill
31 N. H. 292 ; and of Pennsylvania, Deal v. Wiggin, the result is described by the
V. Bogue, 20 Pa. 229 ; and of some earlier judge as aifording a secure means for
cases in New York, Crane v. French, 1 fraudulent debtors to get their money
Wend. 313 ; Ex parte Smith, 16 Johns, securely out of the reach of the law. Hill
102 , which were all conclusively over- v. Wiggin, 31 N. H. 292, 296.
1 The method of procedure in levying upon partnership property for the debt of
one partner presents much difficulty. The legal title to the partnership property is
necessarily in the partners, since the partiiersliip is not recognized at law as capable of
holding property. The partners are legally joint tenants, holding, however, in trust for
the partners. The purchaser on execution steps into the shoes of the debtor partner,
and becomes technically a tenant in common with the other partners. Noonan v.
Nunan, 76 Cal. 44, 18 Pac. 98 ; Marx v. Goodnough, 16 Ore. 26, 16 Pac. 918 ; Randall
V. Johnson, 13 R. I. 338.
It would seem that since the interest actually sold is a right to an account, and a
partner has no beneficial interest in a specific chattel, the sheriff ought not to levy
upon any specific chattel, but upon the partner's interest in all the assets, and that to
levy upon a specific chattel would be an act of ti'espass. But though some author-
ities hold that the only proper course is to levy upon all the assets (Gerard v. Bates,
124 HI. 150, 16 N. E. 258; Stumph v. Bauer, 76 Ind. 157), and that the actual
removal of a specific chattel is trespass (Sanborn v. Royce, 132 Mass. 594), the mere
fact of levying upon and selling a specific chattel seems not to be so regarded. On
the other hand, some authorities hold it proper to levy upon and sell a partner's
interest in a .specific chattel. Hershfield v. Claflin, 25 Kas. 166 (sembk); Fogg v,
Lawry, 68 Me. 78 ; Randall v. Johnson, 13 R. I. 338.
2 Upon execution against one partner the .sheriff may sell the partner's interest in
the firm assets ; but the purchaser gets only a right to ask for an account, and to have
344 THE LAW OF PARTNERSHIP. [CH. X.
The purchaser would not become a partner ; but he would
stand in the place of the partner whose interest he bought, and
paid to him the distributive share of the dehtor paitner. He irets no title to an)' specific
property. Farley v. Moog, 79 Ala. 148 ; Tait v. Murphy, 80 Ala. 440, 2 So. 317 ; Clark
». Cusliing, 52 Cal. 617 ; Nooiian r. Nunan, 76 Cal. 44, 18 Pac. 98 ; State v. Em-
mons, 99 hid. 452 ; Aultman v. Fuller, 53 la. 60 ; People's Bank v. Shryock, 48 Md.
427 ; Barrett v. McKeuzie, 24 Minn. 20 ; Lane v. Lenfest, 40 Minn. 375, 42 N. W.
84 ; Clements v. Jessup, 36 N. J. Eq. 569 ; Deane v. Hutchinson, 40 N. J. Eip 83, 2
Atl. 292 ; Staats v. Bristow, 73 N. Y. 264 ; Mar.x v. Goodnough, 16 Ore. 26, 16 Pan.
918 ; Cogswell v. Wilson, 17 Ore. 31, 21 Pac. 388 ; Wallace's Appeal, 104 Pa. 559 ;
Boro V. Harris, 13 Lea, 36 ; Meyberg v. Steagall, 51 Tex. 351 ; Lee v. Wilkins, 65
Tex. 295 ; McCutchon v. Davis (Tex.), 8 S. W. 123. Conseijuently if the firm is
insolvent the jmrchaser gets nothing. Staats v. Bristow, 73 N. Y. 264. And if in such
a case a sheriff wrongfully fails to levy, damages recoverable against him are nominal
only. State v. Emmons, 99 Ind. 452.
It would seem clear on principle that the sheriff should not deliver actual posses-
sion of the property to the purchaser on execution, since the latter gets no interest in
it ; for as no interest passes in a specific chattel, clearly no interest passes in all the
chattels. And there is authority to this effect. Lane v. Lenfest, 40 Minn. 375, 42
N. W. 84. Other authorities hold that since the purchaser becomes a technical tenant
in common he may take and hold the property, subject to the right of the other part-
ners to have it applied in payment of the firm debts. Wright v. Ward, 65 Cal. 525,
4 Pac. 534; Eandall v. Johnson, 13 R. L 338; Trafford v. Hubbard, 15 R. I. 326,
4 Atl. 762 ; Lee v. Wilkins, 65 Tex. 295 (semhle ; otherwise by statute). This is
held, although the debtor has overdrawn his accounts so that nothing is due him on
an accounting, and the seizure of the assets will break up the business. Wright v.
"Ward, 65 Cal. 525, 4 Pac. 534 ; Trafford v. Hubbard, 15 R. L 326, 4 Atl. 762. But
if the sheriff sells the chattels themselves, rather than the debtor's interest in them, it
is a wrong to the firm, and lie becomes a trespasser ab -initio. Daniel v. Owens,
70 Ala. 297 {scmbh); Snell v. Crowe, 3 Utah, 26, 5 Pac. 522.
It has been held that on execution upon a joint debt (not a firm debt) of the part-
ners, the sheriff may sell a chattel of the partnership. See ante, § 248, note. This
case is hardly consistent with the principle that the property belongs to the partner-
ship and not to the partners.
It has sometimes been held that no harm is done to the firm by the sale, and that
equity will therefore not enjoin it. Peck v. Schultze, 1 Holmes, 28 ; Jones v. Thomp-
son, 12 Cal. 191 ; Brewster v. Hammet, 4 Conn. 540 (but see Witter v. Richard.s, 10
Conn. 37); Sitler v. Walker, Freem. Ch. 77; Wickham v. Davis, 24 Minn. 167
(where the reason given was, that the partnership was insolvent); Moody v. Payne, 2
Johns. Ch. 548. But by the weight of authority the sale may be enjoined till an
account is taken. Bevan v. Lewis, 1 Sim. 376 ; Osborn v. McBride, 3 Sawy. 590 ;
Crane v. Morrison, 4 Sawy. 138 ; Cropper v. Coburn, 2 Curtis, 465 ; Moore v. Samjile,
3 Ala. 319 (sembh) ; Newhall v. Buckingham, 14 111. 405 (sewiJ/c) ; Hubbard v. Cur-
tis, 8 la. 1 ; White v. W' oodward, 8 B. Mon. 484 (semhle) ; Thompson v. Lewis, 34
Me. 167 ; Crooker v. Crooker, 46 Me. 250 ; Thompson v. Frist, 15 Md. 24 {semhle) ;
Sanders v. Young, 31 Miss. Ill (semhle) ; Cammack v. Johnson, 1 Green Ch. 163
{semhle); Place v. Sweetzer, 16 Ohio, 142; Nixon v. Nash, 12 Ohio St. 647 (semhle) ;
Meyberg v. Steagall, 51 Tex. 351.
Where both the firm creditors and the separate creditors attach the firm property,
or the separate creditors attach and the firm then goes into bankruptcy, the firm
creditors are preferred though their attachment is subsequent in time. Taylor r.
Fields, 4 Ves. 396 ; Garbett v. Veale, 5 Q. B. 408 ; King v. Sanderson, Wightw. 50 ;
Clark V. AUee, 3 Harr. 80 ; O'Bannon v. Miller, 4 Bush, 25 ; Howell v. Com. Bank,
5 Bush, 93 ; Commercial Bank v. Wilkins, 9 Me. 28 ; Douglas v. Winslow, 20 Me.
§ 2G0.] OP THE REMEDIES OF THIRD PERSONS. 345
acquire all of his rights wliich were necessary to make this inter-
est valuable and availal)lc. That is, he would have the right to
call for an account, and a settlement of the partnership concern,
and to take his share of any sur[)lus in severalty. And a court
of equity would probably render him the same assistance in
obtaining or enforcing these rights that they would to the partner
whose interest he has bought. This, however, like almost everv
thing else in equity, would be addressed to the discretion of the
court, and could not be claimed as a matter of strict and techni-
cal right. For if the case were one which admitted of easy and
accurate estimate, and certainly sufficient tender, and this were
made, the court would not require a settlement which would be
injurious to the partnership, and was asked for by this purchaser
only for oppressive or dishonest ])urposes.^
§ 2()0. Garnishment of other Partners. — An additional step to
that of attaching the separate partner's interest has been sug-
gested on high authority, (d) It is to sue the indebted partner by
(d) In Jlorrison v. Blodgett, 8 N. H. agninst one partner of the creditor firm ;
238, Parker, C. J., suggested, as a means and in Lyndon i>. Gorham, 1 Gallison,
of rendering available an attachment of 261, Mr. Justice Story recognized that
the partnership effects for the private debt course as likely to obviate some of the
of a paitner, the expediency and neces- dilfi:3ulties in the case then before the
sity of summoning the other partners as court. But we know of no case in
trustees. See also Treadwell v. Brown, 43 which a portion of the members or the
N. H. 290. A similar suggestion had whole partnership have been held as trus-
previously been made by Parsons, C. J., tees in a suit of foreign attachment, upon
in Fisk v. Herrick, 6 Mass. 271, where a the private debt of one partner. The
debtor of the partnership had been in- course thus suggested and approved is
eff ctually summoned as trustee in a suit entitled to the highest consideration, and
89 {semble) ; Thompson v. Lewis, 34 Me. 167 (i^cmhh) ; Pierce v. Jackson, 6 Mass.
242; Trowbridge v. Cushman, 24 Pick. 310; Tappan v. Blaisdell, 5 N. H. 190;
Linford v. Linford, 4 Dutch. 113 [scmbh); Eighth Nat. Bank v. Fitch, 49 N. Y.
539 ; Roberts v. Oldham, 63 N. C. 297 ; Overliolt's Appeal, 12 Pa. 222 : Coover's
Appeal, 29 Pa. 9 ; Crawford v. Baum, 12 Rich. 75. But contra, if at the time of the
attachment the firm was solvent, Willis v. Freeman, 35 Vt. 44 ; Lamoille V. R. R. v.
Bi.xby, 55 Vt. 235. See Cunningham v. Gushee, 73 Me. 417 ; De Caussey v. Baily, 57
Tex. 665.
1 Garnishment. — As with attachment, so it is with garnishment. A creditor of
an individual partner cannot reach a firm debtor, since no part of the debt is due to
the partner ; it is all owed to the firm. Church v. Knox, 2 Conn. 514 ; Orescent In-
surance Co. V. Bear, 23 Fla. 50, 1 So. 318; Trickett v. Moore, 34 Kas. 755, 10 Pac.
147 ; Peoples' Bank v. Shryoek, 48 Md. 427 ; Hawes v. Walthani, 18 Pick. 451 ;
Tobey r. McFarlin, 115 Mass. 98 ; Markham v. Gehan, 42 Mich. 74 : Barrett v. Mc-
Kenzie, 24 Minn. 20 ; Williams v. Gage, 49 Miss. 777 ; Sheedy v. Bank, 62 ]\Io. 17 ;
Atkins V. Prescott, 10 N. H. 120 (semb/e) ; Myers v. Smith, 29 Oh. St. 120 ; Sweet
V. Read, 12 R. L 121; Johnson r. King, 6 Humph. 233 ; Towne v. Leach, 32 Vt.
747; Singer v. Townsend, 53 Wis. 126. But see Parker v. Wiight, 66 Me. 302
{semble) ; McCarty v. Emlen, 2 Yeates, 190, 2 Dall. 277 ; Schatzill v. P>olton, 2 McC.
478, 3 McC. 33.
34G THE LAW OF PARTNERSHIP [CH. X.
process of foreign attachment or garnishee process or trustee pro-
cess, as it is variously called, and make the other partners
trustees. They would then be required to answer under oath;
and the interests, rights, and property of the })rincipal defendant
in their hands might thus be more effectually held. It might be
that our courts would find some difficulty hi the complete appli-
cation of such a system to practise, unless they were aided by
legislative provisions ; (e) and perhaps no other questions of com-
mercial law call so loudly, at this time, for such provisions.^
§ 261. Effect of Insolvency. — We have already remarked, that
the attachment by a separate creditor of a partner, of his debtor's
interest in the partnership, or of the goods themselves, is vacated
by the insolvency of the partnership, which leaves in the partner
no interest, and requires all the i)roperty to pay the debts. (/)
But it is also vacated by the fact of insolvency, prior to any proceed -
inu's founded thereon, whether there be a general process of
insolvency or suits by individual creditors. But a distinction
seems to be taken in this respect between the case of a dormant
(that is, secret) partner and a known partner. Thus, if a man
in business have a dormant partner, and a creditor of the first
sue him and attach his goods, this attachment shall not be post-
poned to a later attachment by another creditor, who discovers
this unknown partner, and makes him defendant, {g) For, if
both creditors stand on equal ground as to their claims, the fact
that one happens to discover, and sues, a partner not publicly
known, should give him no advantage over one who sues in fact
the partnership, and uses all the names that the firm enables him
to know. It is not so, however, in its reason, and, we think, not
on authority, where the creditors stand on different grounds.
Thus, if the first creditor dealt with the known partner only, and
did not deal with him in fact on partnership account, but did
may prove to be practically the best that Treadwell v. Brown, 41 N. H. 12; Bui-
can be pursneil in the present condition ol finch v. Winchenbach, 3 Allen, 161.
tlie law. But it is obvious that the law of (/) Lyndon v. Gorham, 1 Gall. 367;
partnership, taken in connection with the Commercial Bank ?'. Wilkius, 9 Me. 28.
law of trustee process or foreign attach- And see Fisk v. Herrick, 6 Mass. 271 ;
nient, offers some difficulties ; and we do Upham v. Naylor, 9 Mass. 490 ; Church
not know that this course has been gener- v, Knox, 2 Conn. fiH.
ally adopted. (g) French v. Chase, 6 Me. 166 ; Lord
(c) See Field v. Crawford and Trs., 6 v. Baldwin, 6 Pick. 348. See also Cam-
Gray, 116 ; Lane v. Felt, 7 Gray, 491 ; mack v. John.son, 1 Green, Ch. 164 ; Allen
V. Dunn, 15 Me. 292.
1 One partner cannot be garnisheed as debtor of his copartner on account of an
unascertained balance. Birtwhistle v. Woodward, 95 Mo. 113, 7 S. W. 465 ; Elmer v.
Hall{Pa.), 23 Atl. 971.
§ 262] OF THE REMEDIES OF THIRD PERSONS. 347
attach partnership proj)erty, then this attaclimont must yield to
one on winch partnership property is taken in a suit projierlv
hrought a<^ainst all the partners. And we apprehend the result
should be the same altliough the known partner was the only
defendant in both writs. That is, if a man transacted business
on his sole account, and also had a secret and silent partner, and
with him transacted another business, which was distinctly a
partnership business, and became insolvent, and creditors in his
own business attached his property, and creditors in the partner-
ship business also attached the property,. either before or after
the others, we suppose that a court of equity, if it could discrimi-
nate the debts and discriminate the property, w^ould give relief,
and appropriate the partnership property to the partnership debts,
and the private fjroperty to the private debts And we should
suppose that courts of law would now, generally at least, follow
the same rule to the same result.
§ 262. Set-off. — [A partnership debtor cannot set off against
the firm claim a debt due him from a partner individually ;i
though it may be done if all the partners assent.^ So a partner-
ship debt cannot be used as a set-off against the claim of a partner
individually, as by a bank against the deposit of a partneiv^ But
where a partnership debt is reduced to a judgment, since the
judgment runs against the partners individually, it may be used
as a set-off aganist the claim of an individual partner.*]
J Clark V. Tnylor, 68 Ala. 453 ; Watts v. Sayre, 76 Ala. 397 (judgment debts) ;
Cannon v. Lindsey, 85 Ala. 198, 3 So. 676 ; Edwards v. Parker, 88 Ala. 356, 6 So.
68-4; Morganthau v. King, 15 Col. 413, 24 Pac 1048; Weil v. Jones, 70 Mo 560;
Payne v. O'Shea, 84 Mo. 129; Colwell v. Weybosset Nat. Bank, 16 R. I. 288, 15
Atl 80.
2 Montz V. Morris, 89 Pa. 392
" International Bank v. Jones, 119 111. 407, 9 X. E. 885 ; Raymond v. Palmer, 41
La Ann. 425, 6 So. 692. Contra, Eyrich v. Capital State Bank, 67 Miss. 60, 6 So.
615 (because by statute an individual partner may be sued alone for a firm debt),
* Seligmann v. Heller Bros. Clothing Co., 69 Wis. 410, 34 N. W. 232,
348 THE LAW OF PARTNERSPIIP. [CH. XT.
CHAPTER XI.
ON THE REAL ESTATE OP A PARTNERSHIP.
§ 2G3. Partnership Land. — Formerly, the title of this chapter
could have found no place in a treatise on the law of partnership.
The distinction which existed at common law between real estate
and personal estate has been bridged over only of late. It used
to be deemed that the purposes of partnership, and the means
which it used, excluded all reference to land, and that the law
of partnershii) could not with propriety speak of land, (a) But
in England this doctrine has long been greatly modified ; and
now, by the assistance of equity, a tolerably convenient and con-
sistent system is in force there. Mr. Justice Story, in his treatise
on Partnership, (aa) remarlvs: "The doctrine (as to real estate),
under these circumstances, must be considered as open to many
distressing doubts." We apprehend, however, that a careful con-
sideration of American cases will show that, in this country, most
of these doubts have been dispelled. Indeed, few questions re-
main, in relation to this subject, as to which authority, illustrated
by the reasons and principles which are unquestionably appli-
cable, do not give us a sufficiently distinct and definite answer.
§ 264. Difference between English and American Lavr. — There
are two reasons why we might have expected an improvement in
the American law on this subject over that of England. One is,
our less rigid conservatism ; or, in other words, the wealter in-
fluence of precedent and prescription, and the greater facility
of change. This reason, however, applies to the whole body of
our law. The other applies peculiarl}' to this topic. It is, that
land is, with us, vastly more a matter of merchandise than in
England. It is every day's practice for individuals and partner-
la) In Pitts V. Waugh, 4 Mass. 424, the rule, jus accrescendi inter mercafore.%
where it was sought to charge a person as locvm non liahet, applied only to personal
partner in an action for the price of land property ; and it was also thought neces-
sold to the ostensible partner alone, the sary to provide against survivorship in
court said, " The law-merchant does not the partnership articles Jeffreys v. Snell,
extend to speculations in land;" and it 1 Vern. 217.
was formerly considered in England that [aa] Section P-3.
§ 265.] OF TUE REAL ESTATE OF A PARTNERSHIP. 849
ships to engage in business, of wLicli tlic principal, and some-
times the only element is trade or speculation in land. (6) There
is nothing to make this illegal, or, within proper bounds, impolitic
or undesirable. At all events, the law recognizes it, and must
take charge of it, as of all other social or business movements.
Questions to which such business as this gives rise not only come
before our courts with great frequency, and demand for their
settlement well-considered and well-established principles, but
they come in such a f(jrm as to compel important modifications
of the technical law of real estate, (c)
It must be obvious that these questions connect themselves
"with many others. But the remaining influence of the peculiar
law of real estate — an influence which must remain until our
whole system of law is changed by legislative authority — im-
parts to all the details of this subject a character peculiar to
them and common to them all ; and it is thought best to gather
under one head all that the law and practice of our American
courts have to say about the real estate of a partnership.
§ 265. When and how Real Estate becomes Partnership Prop-
erty.— The general rule is undoubtedly this: Real estate pur-
chased for partnership purposes, and appropriated to those
purposes, paid for by partnership funds, and necessary for part-
nership purposes, always becomes partnership property, (^e) ^
{h} This, after some doulits, see Pitts c. 3 How. (Miss. ) .360 ; Markham v. Merrett,
Waugh, 4 Mass. 424; Blake v. Nutter, 19 7 How. (Miss.) 437.
Me. 16 ; Coles v. Coles, 15 Jolins. 169, iii (e) Dyer v. Clark, 5 Met. 562 ; Howard
cases occurring before courts of law, was v Priest, 5 Met. 582 ; Buniside v. Mei--
early recognized in this country. See rick, 4 Met. 587 ; Delmonico ". Guilla-
Dudley v. I.ittlefield, 21 Me. 418 ; Fall unie, 2 Sandf. Ch. 336 ; Buchan t-.
River Whaling Co. v. Borden, 10 Gush. Sumner, 2 Barb. Ch. 165, 197 ; Duhring
469 ; Black v. Black, 15 Ga. 445 ; Gray v. Duhring, 20 Mo. 174 ; Matlock v.
V. Palmer, 9 Cal. 616 ; Smith v. Jones, 12 Matlock, 5 Ind. 403 ; Patterson v. Blake,
Me. 337 ; Ludlow v. CoojX'r, 4 Ohio St. 12 Ind. 436 ; Davis v. Christian, 15
1 ; Coster v. Clarke, 3 Edw. Ch. 238 ; Gratt. 11 ; Pierce v. Trigg, 10 Leigh,
Patterson j;. Grace, 10 Ala. 444 ; Row- 246 ; Jones v. Neale, 2 Pat. & H. 339 ;
land V. Boozer, 10 Ala. 690 ; In re Warren, Lacy v. Waring, 25 Ala. 625 ; Andrews
2 Ware (Davies), 320. And in England, v. Blown, 21 Ala. 437 , Owens r. Collins,
Dale V. Hamilton, 5 Hare, 369 ; Darby v. 23 Ala. 837 ; Pugh v. Currie, 5 Ala. 446 ;
Darby, 3 Drewry, 495. Tillinghast i: Champlin, 4 R. I. 173 ;
(c) Dudley v. Littletield, 21 Me. 418; Buckley v Buckley, 11 Barb. 43, Blake
Coster V. Clarke, 3 Edw. Ch. 238 ; Darby v. Nutew, 19 Me ie ; Holland i\ Fuller,
V Darby, 3 Drewry, 495 ; Dilworth v. 13 Ind. 195, 199 ; Overholt's Appeal, 12
Mayfield, 36 Miss. 40 ; Brady d. Calhoun, Pa. 222 ; Deloney v. Hutcheson, 2 Rand
1 Pen. & W. 140 ; Woodbridge v. Wilkins, 183 ; Hunt v. Benson, 2 Humph. 459 ;
^ That a firm may purchase and deal in lands is now perfectly well settled. This
is true although there are no written articles. Allison v. Perry, 130 111. K, 22 N. E.
350 THE LAW OF PARTNERSHIP. [CH. XI.
Nor does it seem to be material in what manner, or by what
agency, the land is bought, or in what name it stands. (/) It
Forde v. Herron, 4 Munf. 316; Goo.l- 11 Sim. 491; Townshend v. Devaynes,
burn V. Steveus, 5 Gill, 1 ; Si,:;ouiney v. MoiUai,ni od Part. Apj). 96. And see
Muiiii, 7 Conn. 11 ; Jarvis v. Brooks, 27 Roper on Husb. & \V. {Jar., ed.) 346, n. ,
N. H. 37 ; Cox v. McHurney, 2 Sandf. Broom v. Broom, 3 Myliie & K. 443 ;
561 ; Brooke v. Washington, 8 Gratt. Morris v. Barrett, 3 Younge & J. 384.
248 ; Peck v. Fisher, 7 Cusli. 386 ; Fall See also Kendall v. Rider, 35 Barb. 100 ;
River Whaling Co. v. Borden, 10 Cusli. Dupuy v. Leavenworth, 17 Cal. 262 ;
458 ; Savage v. Carter, 9 Dana, 408, 410, Butfum v. Biilfum, 49 Me. 108 ; Moran
411; Fairchild v. Fairchild, 64 N. Y. v. Palmer, 13 Mich. 367; North Penn.
471. These cases maintain the general Coal Co.'s Appeal, 45 Pa. 181 ; Willis v.
proposition in America. And this {lart- Freeman, 35 Vt. 44 ; Fowler v. Bailej',
nersliip title may be proved by parol, 14 Wis. 125.
notwithstanding the paper title. Sher- (/) Gilchrist, C. J., in Jarvis v.
wood V. St. Paul, &c. 21 Minn. 127 ; Brooks, 27 N. H. 37, 67 ; Dyer v. Clark,
York V. Clemens, 41 Iowa, 93 ; ante, § 6. 5 Met. 562 ; Howard v. Prie.st, 5 Met.
So in England, Phillips v. Phillips, 1 582 ; Pugh v. Currie, 5 Ala. 446.
Mylne & K. 649 ; Houghton i;. Houghton,
492. Thus, a firm may give a lease of its land. Williams v. Shelden, 61 Mich. 311,
28 N. W. 115. The owner of the land is the firm ; the individual partners have no
beneficial interest in the land. As in the case of personal property, the interest of a
])artner in the partnership real estate is only to a distributive share upon a final
accounting and settlement. Railsback v. Lovejoj', 116 111. 442, 6 N. E. 504; Bowen
V. Billings, 13 Neb. 439, 14 N. W. 152 ; Du Bree v. Albert, 100 Pa. 483. So where
one partner sells his interest in the partnership to a stranger, who is admitted to the
firm by parol, he has the same interest in the partnership real estate as the other part-
ners ; his assignor retains only a naked legal title. Marsh v. Davis, 33 Kas. 326, 6
Pac. 612 ; Collner v Greig, 137 Pa. 606, 20 Atl. 938.
The nature of the firm's interest in real estate is strikingly shown by the case of
Henry v. Anderson, 77 Ind. 361. In that case it apjieared that one partner made a
deed of land owned by him to the firm, but retained the deed. It was objected that
the deed was inoperative because he was both grantor and grantee ; but it was held
valid. His entire title was divested, and vested in the firm ; and the deed was
sufficiently delivered.
Since a partner has no individual interest in the land he cannot ask for partition.
Pennybacker v. Leary, 65 la. 220, 21 N. W. 575; Kru.schke v. Stefan, (Wis.) 53
N. W. 679. And a partner who does not hold a share of the legal title is not a ne-
cessary party to a suit for partition, brought by one with whom the partnership is a
tenant in common. Railsback v. Lovejoy, 116 111. 442, 6 N. E. 504.
But the partners may agree to withdraw partnershij) land from the common stock
and make it the individual property of one or both partners ; and if this is done in
good faith the partnership creditors cannot object. Shafer's Appeal, 106 Pa. 49 ;
Beckwith v. Manton, 12 R. I. 442, Kendall v. Hackworth, 66 Tex. 499. It may he
done by parol, since it is not technically a conveyance of the legal title, but a ]iartition
by joint tenants. Murrell v. Mandlebaum (Tex.) 19 S. W 880.
As in case of personal property, so in the case of real estate, a partner cannot
claim a homestead or other exemption from attachment or levy out of the partnership
real estate. Short v. McGruder, 22 F. R. 46; Levy v. Williams, 79 Ala, 171;
Trowbridge v. Cross, 117 111. 109, 7 N. E. 347 ; Van Staden v Kline, 64 la. 180, 20
N. W. 3 ; Drake v. Moore, 66 la. 58, 23 N. W. 263 ; Hoyt v. Hoyt, 69 la. 174, 28
N. W. 500 (against partner after payment of firm creditors) ; Lindley v. Davis, 6
§ 265.] OF THE REAL ESTATE OF A PARTNERSHIP. 351
may be conveyed to all the partners as tenants in common, and
this perhaps is the usual and the best way ; (^) or to one or more
(;/) Dyer v. Clark, 5 Met. 562 : Howard ute, deeds to the partners, by their in=
V. Triest, 5 Met. 582. See Colluiiib v. dividual names, create at law, in such
Read, 24 N. Y. 505 ; and as in many States, an estate in common.
States joint tenancy is abolished by stat-
Mont. 453, 13 Pac. 118 ; Spiro v. Paxton, 3 Lea, 75 ; Chalfant v. Grant, 3 Lea, 118.
Contra, Hunnicutt v. Summey, 63 Ga. 586 ; Blanuhard v. Paschal, 6S Ga. 32 (by
interpretation of Constitution). In South Dakota the lirm may claim an exemption,
which thereupon enures (as individual, not as firm property) to the pairners in pro-
portion to their shares. Betts v. Letcher, (S. D.) 46 N. W, 193. In South Carolina
it is held that individual paitners may claim an exemption, but only when there is a
surplus of assets over liabilities, since then the partners have an individual interest in
the land. Ex parte Karish, 32 S. C. 437, 11 S. E. 298, explaining Moyer v. Drum-
mond, 32 S. C. 165, 10 S. E. 952.
If the real estate has been so treated by the partners acting in good faith, as to
have become the individual jnoperty of one partner, he may claim exemption out of it.
Lindley v. Davis, 7 Mont. 206, 14 Pac. 717; Wiesenfeld v. Stevens, 15 S. C. 554;
Swearingeu /•. Bassett, 65 Tex. 267. As by sale to one partner of all the interest of
the other. Levy v. Williams, 79 Ala. 171. Of course such a withdiawal of tlie
property fi'om the tirm assets is inetlectual as against a prior attaching creditor.
Lindley v. Davis, 6 Mont. 453, 13 Pac. 118.
Since a partnership cannot hold the legal title to lajid, a deed to a firm by name
does not convey the legal title to the tirm. But a firm may by its name make a valid
contract ; and a deed to a firm by name operates as a valid contract to convey, and
gives the firm an equitable title. Blanchard v. Floyd, 93 Ala. 53, 9 So. 418;
Percifull v. Piatt, 36 Ark. 456 ; Tidd v. Rines, 26 Minn. 201, 2 N. W. 497 ; New
Vienna Bank v. John.son, 47 Oh. St. 306, 24 N. E. 503 ; Kelley v. Bourne, 15 Ore.
476, 16 Pac. 40 ; Sherry v. Gilmore, 58 Wis. 324, 17 N. W. 252.
However the deed is made, it should (in the absence of agreement to take title in
the name of one jiartner) mention the firm, in order that there may be notice of the
fact that it is firm land ; and either partner may insist on this being done. Davis v.
Davis, 60 Miss. 615; Traphageu v. Burt, 67 N. Y. 30; Kruschke v. Stefan, (Wis.)
53 N. W. 679 (semhle).
When a deeil of land runs to the firm by name, it is held in some jurisdictions that
all the partners, whether named or not, become at law tenants in common, in trust for
the firm. Slaughter v. Doe, 67 Ala. 494 ; Brunson v. Morgan, 76 Ala. 593 ; Southern
Cotton Oil Co. V. Henshaw, 89 Ala. 448, 7 So. 760 ; Powers v. Robinson, 90 Ala.
225, 8 So. 10 ; Printup v. Turner, 65 Ga. 71 ; Allen v. Whetstone, 35 La. Ann. 846;
Smith V. Sinnott, 44 La. Ann. 51, 10 So. 413. In such a case where one of the part-
ners dies before the convey;ince, the survivor and the gi-antor are tenants in common
of the legal title; and the heir of the deceased partner may go into e(|uity and get
a conveyance from the giantor. Blanchard v. Floyd, 93 Ala. 53, 9 So. 418.
In other jurisdictions it is held that if the name of any of the partners is contained
in the firm name, they take tiie legal title. Percifull v. Piatt, 36 Ark. 456 ; Gille v.
Hunt, 35 Minn. 357, 29 N. W. 2 (but .see Tidd v. Pines, 26 Minn. 201, 2 N. W. 497).
But if the firm name contains the name of none of the partners, the deed is inojier-
ative at law, and the grantor named retains the legal title in trust for tlu^ firm.
Percifull v. Piatt, 36 Ark. 456 ; New Vienna Bank v. John.son, 47 Oh. St. 306, 24
N. E. 503 ; Kelley v. Bourne, 15 Ore. 476, 16 Pac. 40 (semhle).
Where land is conveyed to the partners individually, but is bought for the firm, it
is firm land. Spalding v. Wilson, 80 Ky. 589 ; May i\ New Orleans & ('. 1!. R., 44
La, Ann. 444, 10 So. 769 ; Ross v. Henderson, 77 N. C. 170 ; Norwalk Nat. Hank
352 THE LAW OF PAUTNEUSHIP. [CH. XI.
ol' the partners, in trust for the whole partnership, and this is not
uncoiuniun; (//) or to a strang-er, under a similar trust, and this
is sometimes although not often done. (0 Nor is it necessary
that the trust should be e.xpressed ; for, however proper and
oxiK'dient this is, yet, if the trust be wholly omitted and have no
existence on record, the law will sometimes, (j) and equity always,
(/() Coster r. Chukc, 3 Edw. Cli. 428 ; execution of .a private creditor. This it
McOiiire i". IJiiuisey, 9 Ark. 418. does in jiursuance of a rule sometimes
(;■) Per Gilchrist, C. J., in Jarvis v. asserted in equity, that upon such levy
Brooks, 27 N. H. 37, 67 ; Moreau v. only the separate interest of the debtor can
Satlarans, 3 Sneed, 600 ; per Story, J., in be sold ; and it gives effect to this rule by
Ho.\ie V. Can; 1 Sumner, 173, 182. rendering tiie slieriff liable in trover or
(;■) The interference of a common-law tresi)ass if he sell more than this ; or by
court in behalf of the cestui que trust bene- su-s^iending judgment to await the result of
ficially interested in the partnership real a i)en(ling suit in equity, as in Peck v.
estate, is ordinarily only indirect and to a Fisher, 7 Cush. 386 ; or in some such in-
limited extent ; as in the case of a levy on direct mode. For a stay of sale, resort
V. Sawyer, 38 Oh. St. 339 ; Page v. Thomas, 43 Oh. St. 38, 1 N. E. 79. But see
contra, Holt's Appeal, 98 Pa. 257.
Where the title to land is in the name of one partner, but the land really belongs
to the firm, it is treated as the real estate of the firm ; it is commonly said that there
is a resulting trust for the firm, liiddle v. "Whitehill, 135 U. S. 621 ; Rice v.
Pennypacker, 5 Houst. 279 ; Paige v. Paige, 71 la. 318, 32 N. W. 360 ; Pepper v.
Thomas, 85 Ky. 539, 4 S. W. 297 (semble) ; Collins v. Decker, 70 Me. 23 ; Harris
V. Harris, 153 Mass. 439, 26 N. E. 1117 ; Way v. Stebbins, 47 Mich. 296, 11 N. W.
UK) ; Davis v. Davis, 60 Miss. 615 ; Bowen v. Billings, 13 Neb. 439, 14 N. W. 152 ;
Smith V. Jones, 18 Neb. 481, 25 N. W. 624 ; Messer v. Messer, 59 N. H. 375 ;
McCully V. JlcCully, 78 Va. 159 ; Diggs v. Brown, 78 Ya. 292; Case v. Seger, 4
Wash. St. 492, 30 Pac. 646. And so where a partner contributes land to a partner-
ship, but makes no conveyance, he holds the title in trust for the firm. Wiegand v.
Copeland, 14 F. R. 118 ; Batty v. Adams Co., 16 Neb. 44, 20 N. W. 15. Where the
legal title stands in the name of the partners, and the firm sells the land and receives
the consideration, but one partner does not join in the deed, he is a trustee for the
purchaser, and may be compelled to convey. Brunson v. Morgan, 84 Ala. 598,
4 So. 589.
The mere fact that Land is bought with money of the firm does not necessarily
make it firm property. It nuist also be bought for firm purposes. If bought with
firm money, but for individual purposes, it is the property of the partners individually.
Ames V. Ames, 37 F. R. 30 {semble) ; Rice v. Pennypacker, 5 Houst. 279 ; Alkire v.
Kahle, 123 111. 496, 17 N. E. 693; Chandler v. Jessup, (Ind.) 31 N. E. 1109;
Providence v. Bullock, 14 R. I. 353. On the other hand, the mere fact that land is
used by the firm does not make it j>artnership property. It may remain the property
of one partner (or conceivably of all the partners) though the use of it is allowed the
firm. Hatchett v. Blanton, 72 Ala. 423 : Goepper v. Kinsinger, 39 Oh. St. 429.
Whether the laud becomes partnership land is a question of intention, to be deter-
mined by the circumstances, and the concnnen(!e of payment and use by the firm
is usually conclusive. Ames v. Ames, 37 F. R. 30 ; Rice v. Pennypacker, 5 Houst.
279 ; Goepper v. Kinsinger, 39 Oh. St. 429. When two tenants in common own
land, and cany on a partnership business which ie ancillary to the land, — quarrying
stone, for instance, or farming, — the land still remains the land of the individual
partners. Steward v. Blakeway, L. R. 4 Ch. 603; Ratcliffe v. Mason, (Ky.) 17
S. W. 438 ; Berry v. Folkes, 60 Miss. 576.
§ 266.] OF THE REAL ESTATE OF A PARTNERSHIP. 353
supply this want, and treat the ownership as a distinct trust, if
only the trust exist and is capable of proof, and the land be in
fact and substance partnership property. We consider it an
established rule in equity, that any party holding the legal title
to land, however it may have come to him, will be held as trustee
for the partnership, if it be certain that the land was in fact a
part of their joint property as partners, (k) But although it be
held in the joint name of two or more persons, if there be no
proof that it was purchased with partnership funds for partner-
ship {)urposcs, it will be considered as held by them as joint-
tenants, or tenants in common ; and if they are copartners in
the ownership of the land, the partnership as to that will be t-er-
minated by a sale of the hintl. excepting so far as the proceeds
are needed for the debts of the partnership, (kk)
§ 266. Elements necessary to make Land Partnership Property.
— We consider that the thrt'C elements we have above stated
must unite, in order to make the real estate necessarily partner-
ship property. (Z) For if it be not purchased for partnership
purposes, and even if it be paid for by partnership funds, and
is in fact appropriated to the purposes of the partnership, it is
very possible that one partner is the owner of it, and is to be
charged with its value on the books, and credited with fair com-
pensation for its use. Such a fact may be proved ; but it will not
be presumed, (w) So, if not paid for l)y partnership funds, then
it is probably his property who does pay for it, whatever use he
permits to be made of it. (w) And if not appropriated to the
purposes of the partnership, however purchased and paid for, it
must be had to chancery to obtain an in- intention. Psr Story, J., in Hoxie v.
junction. And in most other cases, pro- Carr, 1 Sumner, 183 ; also, see Fall River
tection for this trust must be sought in Whaling Co. v. Borden, 10 Cush. 462.
equity. Rut this intention may, so far as all claim-
(k) Such a trust is necessarily implied ants, except bona fide purchasers without
in favor of the partnership where the prop- notice, are concerned, be held sufficiently
erty has been made partnership property established, if the purchase is made with
under the limitations above ; that is, partnership funds, even without intended
bought with partnership funds for part- or actual use for partnership purposes, un-
nership purposes, and employed for such less an express agreement appears vesting
purposes. See Dyer v. Clark, 5 ilet. 562 ; the beneficial as well as the legal interest
Pugh V. Currie, 5 Ala. 446 ; Morris v. in the gi'antee or grantees in the deed.
Barrett, 3 Younge & J. 384; Owens. v. Smith v. Smith, 5 Yes. 189; Hunt v.
Collins, 23 Ala. 837 ; [Hatchett v. Blan- Benson, 2 Humph. 459.
ton, 72 Ala. 423.] The doctrine rests on (?/i) Smith v. Smith, 5 Yes. 189;
the broad foundation of a resulting trust. Hunt v. Benson, 2 Humph. 459.
(kk) Thompson v. Bowman, 6 Wall. [n) Marvin v. Trumbull, Wright, 386 ;
316. Owens v. Collins, 23 Ala. 837 ; Wheatley
{/) Whether real property shall become -y. Calhoun, 12 Leigh, 264.
partnership stock or not is a question of
23
354
THE LAW OF PARTNERSHIP.
[CH. XI.
is ])0ssil)le that the firm, perhaps chang-hig their intention, from
the unfitness of the estate for their use or for any other reason,
had agreed that it should be his alone who uses it, and that he
should jiay the firm for it in some way. (o) Indeed, it might be
said, that even if real estate be purchased for, used for, and paid
for by the firm, it may still be shown not to be partnership pro})-
erty. This is not impossible ; but the strongest proof would be
required of a thing in its nature so improbable.
§ 267. Question one of Intention. — This is one of those ques-
tions which must be determined altogether from the intention of
the parties. It is impossible for a partnership, as such, to hold
the legal title of real estate. Only a person can do this ; and a
corporation, only because it is a person in law ; but this a j»art-
nership is not. On the other hand, a partnership may own, in
equity, real estate, without the least reference to the legal title,
it being of no importance who holds it or how he came by it,
excepting so far as these facts express or reveal the intention of
the partnership, (p ) If by that intention the property is treated
((/) See Fall River Whaling Co. v.
Borden, 10 Cush. 458. For cases where
laud was bought for special purposes, see,
where the estate was bought for the pur-
pose of supplying earth under a contract,
Moreau v. Salfarans, 3 Sneed, 595 ; to
build a furnace on, Ridgway's Appeal, 15
Pa. 177 ; for glass-works, McDermot v.
Laurence, 7 S. & R. 438 ; to build a hotel
on, Brownlee v. Allen, 21 Mo. 123; for
stores for merchants. Dyer v. Clark, 5
ilet. 562 ; for other purposes, Mattock v.
jSIattock, 5 Ind. 403 ; Roberts v. McCarty,
9 Ind. 16 ; Evans i'. Gibson, 29 Mo. 223 ;
Green v. Green, 1 Ohio, 244 ; Buckley v.
Buckley, 11 Barb. 43; public-houses and
lands l)ought by brewers, Phillips v. Phil-
lips, 1 Myhie & K. 649 ; Morris v. Barrett,
3 Younge & J. 384. If necessar}', and so
far as is necessary, real estate purchased
with partnership funds for partnership
business will be treated as personalty.
Hiscock V. Philips, 49 N. Y. 97 ; Pearce
V. Covert, 39 Wis. 252 ; Scruggs v. Blair,
44 Miss. 406 ; Heartt v. Rankin, 41 Iowa,
35 ; Shearer v. Shearer, 98 Mass. 107 ;
Drewry v. Montgomery, 28 Ark. 256 ;
Little V. Snedecor, 52 Ala. 167 ; Bank of
Louisville v. Hale, 8 Bush (Ky.), 672;
Manek v. Manck, 54 111. 281 ; King v.
Weeks, 70 N. C. 372 ; Lime Rock Bank
V. Phetteplace, 8 R. 1. 56 ; Nat. Bank v.
Sprague, 20 N. J. Eq. 13. Real estate
will be treated as partnership jiroperty,
though situated in a State where by stat-
ute provision it is not. Tillotson v. Tillot-
sou, 34 Conn. 335. A mill belonging to
one partner, and credited to him in the
partnership accounts at a certain value,
becomes partnership property ; and any
rise in its value becomes ]>artnership assets.
Ashton V. Robinson, L. R. 20 Eq. 25. See
also Waterer v. Waterer, L. R. 15 Eq. 402 ;
Hogle V. Lowe, 12 Nev. 286. If the real
estate be not purchased for the partnership
business, though purchased with the part-
nership funds, it will be held by the re-
spective partners as tenants. in common.
Russell V. Miller, 26 Mich. 1 ; Price v.
Hicks, 12 Fla. 365. Nor is real estate
not purchased with partnership funds,
though used for partnership purposes,
partnership property, unless there is evi-
dence beyond the use, under an agreement,
that there is an intention to make it part-
nership property. Alexander v. Kimbro,
49 Miss. 529; Frank v. Branch, 16 Conn.
261. [Hatchett v. Blanton, 72 Ala. 423.]
ip) In Markham v. Merritt, 7 How.
(Miss.) 487, it was said obiter by Sharkey,
C. J., that taking a deed as tenants in
common might be held a partition of the
joint fund ; but see, per Story, J., in
Hoxie V. Carr, 1 Sumner, 188, that that
§ 269.] OF THE REAL ESTATE OF A PARTNERSHIP. 355
by them and considered by them as partnership property, whether
tlie intention be expressly declared and agreed by the partners, or
only inferred from circumstances which do not admit of any
other equally reasonable and satisfactory explanation, then it will
be treated as |)artncrship property.
§ 268. Partnership Real Estate at Law. — In some of OUT
States, courts of law sit also as courts of equity ; in some they
are authorized to some extent to apply the rules of equity, while
sitting as courts of law ; and in some they have, from a kind of
necessity, taken to themselves this power, and applied equity
principles to such questions as those we have to consider. At the
same time, the distinction is obvious and certain between the
principles of law and their operation, and the principles of equity
and their operation. And this distinction in some form or other
is usually preserved, even by courts that administer both princi-
ples. We shall speak of them as entirely distinct.
In England, the legal title to real estate in respect to transfer
and conveyance is entirely distinct from that of personal estate.
In respect to inheritance, it is also different both in form and in
substance ; in respect to devises, it is different, but less so, prac-
tically, than in reference to the other two. In this country, the
law of real estate is even more distinct from that of personal
than in England, in respect to conveyance, owing to our excellent
and universal system of record : but in regard to inheritance, the
difference is formal only ; the same persons, in nearly all in-
stances, taking realty who would take personalty, though by a
different title and process, {q)
§ 269. Legal Title governed by Record. — We sliould infer,
therefore, that here as well as there the law would pay the utmost
regard to title by deed and record. And this is always so. Thus,
no partner or partners can convey any interest or title in or to
real estate, not held of record in their names, although it is part-
circumstauce was as evidence of intention, personal property ; and so whether the
per se, very slight, and never decisive, complainant acquired the property abso-
See Wilson v. Hunter, 14 Wis. 683 ; lutely as personal, or only a life-interest
where one of the partners who had not the therein, as tenant by curtesy ; and it was
legal title mortgaged laud, and it was held held, that the conversion of real property
good against subsequent mortgagees, with into personal was equitable only ; but the
notice. And see Howell v. Howell, 15 precise question was not definitely decided.
Wis. 55. Per Sharkey, C. J., in Markham I'. Merritt,
(q) In Davis f. Christian, 15 Gratt. 11, 7 How. (Miss.) 437. See Bradbury v.
a bill was filed for a share accrued to the Barnes, 19 Cal. 120, as to the right of one
complainant as husband of the daughter of partner to buy another's interest in the
a partner deceased, and one question was, real estate of the partnership,
whether she took such share as real or
356 THE LAW OF PARTNERSHIP. [CH. XI,
ncrship property beyond all question, (r) And in all actions at
law, no person can appear and rest upon his title, as plaintiff or
defendant, if the title by deed on which he rests is in some one
else, (s) And this is true of title by inheritance also. We
apprehend that some of our courts might find a way to dispose
of this title at law, as it would be done in equity ; but it would
be difficult to do this, and wherever equity powers could be exer-
cised, it would be unnecessary. We should say, therefore, that
at law the real estate of a partnership would pass to the legal
heir by inheritance ; that is, to the legal heir or heirs of him or
them in whom vyas the legal title : (0 and that it would also pass
by devise of the legal holder, although here courts of law might
perhaps take a wider liberty than in the case of inheritance.
Hence, too, at law, the general rule, as to the rights and lia-
bilities of dormant partners, is said not to apply to })artnerships
for the purchase and sale of land. Thus, if two are partners for
such a purpose, one of whom is silent and miknown, and the
other, in whose name the lands are taken and transferred, alone
becomes indebted for the price, it is said that the secret ])artner
cannot be sued for the price, on proof of his partnership, and
that the purchase was made and the debt incurred for the part-
nership, (y)
But we have some doubt whether these decisions do not rest
upon a recognition of a difference between land and personalty
which would not now be made. The reasons which compel courts
of law to regard the legal title to land by deed do not apply,
or certainly not with the same force, to courts of equity. Nor
.do we know any among the reasons which are held sufficient in
such a case to liind a secret partner when discovered, in an
ordinary case of partnership, which do not apply quite as well to a
case where land was a part of the partnership property, (w)
(r) Jackson v. Stanford, 19 Ga. 14, Met. 562 ; Burn.side v. Merrick, 4 Met.
where one partner, holding under a con- 537 ; Dilworth v. Mayfield, 36 Miss. 40 ;
veyance to the j)artners by their individual Andrews i'. Brown, 21 Ala. 437 ; Davis v.
names, attempted to convey the whole Christian, 15 Gratt. 11.
property, and the conveyance was held (v) Pitts v, Waugh, 4 Mass. 424 ; cited
valid, only as to his moiety. See Whit- and followed in Gray v. Palmer, 9 Cal.
man v. Boston & Maine R. R., 3 Allen, 616.
133. {w) Though the case of Pitts v. Waugh
(s) Story, J., in Hoxie i;. Carr, 1 Sum- is usually considered sound, as being
ner, 173, 177, 178 ; Benfield v. Solomons, merely at law, — see Fall River Whaling
9 Ves. 76 ; Harris v. Pollard, 3 P. Wnis. Co. v. Borden, 10 Cush. 485, — yet, so far
348. as it was rested by the court on the ground
(t) Pngh i'. Currie, 5 Ala. 446 ; Lang of an impossibility to have a partnership
V. Waring, 25 Ala. 625 ; Dyer v. Clark, 5 dealing in land, — such partnerships being
§ 270.] OF THE REAL ESTATE OF A PARTXERSHIP. 357
From the regard which is necessarily paid to the legal title, it
follows, as we have said, that no partner can convey any real
estate, or any interest in it, but he in whose name it stands.
Even equity cannot dispense with this rule. By the American law
and practice all title to land must be traced along an unbroken
chain of record. At every step, it must be legal title ; passing,
by legal conveyance, from him who has it to one capable of
taking it.
§ 270. Partnership Real Estate regarded as Personalty in Equity.
— On this point, tlie conflict of authorities I'enders it dithcult to
lay down a positive and certain rule. We think, however, that
there is a difference between the practice of the English equity
courts and our own ; and this difference can be defined and
explained, and the decided tendency, if not the established
rule, of the courts of each country, be ascertained.
The older authorities in England are opposed to any recog-
nition of real property as a ))art of the partnership stock, and
the later have yielded to the pressing necessity for this acknowl-
edgment, slowly and imperfectly. It was not until quite recently
that it has been full and complete ; and now it is carried further
in England than it is here. We suppose the rule of those courts
to be well expressed thus : " All property, whatever be its nature,
purchased with partnership capital for the purposes of partner-
ship trade, is and continues to be partnership capital, and has,
to every intent, the quality of personal estate." (x) These last
two clauses are, it will be noticed, quite distinct. It is one thing
to say that such real estate shall be considered, in every respect,
partnership property, and another thing to add that it has to
every intent the quality of personal estate. It is the first thing
now universally admitted at common law property." But the cases of Randall v.
— it must be considered overruled by the Randall, 7 Sim. 271, and Cookson v. Cook-
current of later authority ; and the rule, son, 8 Sim. 529, from which these con-
that a dormant or secret partner of a land elusions were drawn, would seem to be
company cannot be charged, would seem overruled by Essex v. Essex, 20 Beav. 442,
now to rest upon feeble reasons. and Darby v. Darby, 3 Drewry, 495. See
{x) Mr. Bisset, in his treatise on the Bell v. Phyn, 7 Ves. 453, and Eiple}' v.
Law of Partnership, after a review of all Waterworth, 7 Ves. 425. In the latter
the cases up to his time (1847), concludes, case, the whole law on this point was
among other things, that " real estate, pur- elaborately considered, and the Vice-Chan-
chased with partnership property, but not cellor held, after reviewing all the authori-
for partnership purposes, is not converted ties, that all real estate which was added
into personalty ; and that, though partners to the partnership stock, in whatever way
purchase with partnership funds the equity acquired, becomes converted absolutely
of redemption of mortgages devised to into personal property. See Bonner v.
them, the equity of redemption follows the Campbell, 48 Pa. 286.
mortgage, and does not become partnership
358 THE LAW OF PARTNERSHIP. [CH. XI.
only, we suppose, which the American courts say ; and the
English courts say that, and then add the latter.
§ 271. English Rule. — There are two reasons for this English
rule. One is, that the reluctance to admit real estate as by any
j)ossibility part of the i)artnership capital arose from the feeling
that only jjersonal property could be thus held ; and thei'efore,
wiien it became obvious that real estate must be acknowledged
as part of the partnership property, it seemed as if this was in
fact calling it personal property. The other reason is more sub-
stantial, and probably more opei'ative. The law of inheritance
is such, in England, that where a partner intended that his real
estate should be partnership stock, and so treated in all respects,
injustice would be done by treating it so until the partnership
account was settled and tei'minated, and then restoring to it its
character of real estate. For then the heir would take it, and
all the next of kin would lose it: one child would take all, and
the rest none. If the father had sold the land, and put the
money into trade, all would have shared it. And if he had put
his land into trade, and it must be considered that he in this way
made it personal estate so far as his partners and the creditors
of the firm were concerned, it would seem reasonable that he
should be considered as having intended to impart to the real
estate the character of personalty in all respects, and just to
carry this intention into effect, {y) Hence, it seems to be the
English rule, and is so stated in American cases which refer to
it, that the real estate of a partnership does not go to the heir
of a deceased partner or partners beneficially interested in it,
but to his personal representatives. (2) The following distinc-
tion might possibly be taken : Supposing three partners, one of
whom has the legal title to real estate which is partnership
property, and he dies. His heir would be held as trustee for
two-thirds of it (one-third to each partner), but the other third
he would hold as his own. Whereas, in the same case, if one of
the other partners who was thus beneficially, but not by legal
title, interested in one-third, had died, the partner holding the
(y) See per Sharkey, C- J., in Mark- before the more recent cases of Essex v.
ham i>. Merritt, 7 How. (Miss.) 437. Esse.K, and Darby w. Darby, overruling the
(2) This is the conclusion of Walworth, cases which gave rise to the doubt. See
Ch., in Buchan y. Sumner, 2 Barb. Ch. ante, note (x) ; Callumb v. Read, 24 N. Y.
199, 200 ; of Story, J., in Hoxie v. Carr, 505. So see the same conclusion in Duh-
1 Sumn. 173, 184 ; and Shaw, C. J., in ring v. Duhring, 20 Mo. 174. Compare,
Dyer v. Clark, 5 Met. 562, 578 ; and with these English cases, the case of
though this was questioned in Pnickley i-. Steward v. Blakeway, L. Fi. 6 Eq. 479.
Buckley, 11 Barb. 73-76, yet that was
§ 272.] OF THE REAL ESTATE OF A PARTNERSHIP. 359
title, or his heir, would be held as trustee, not for the heir of
that deceased partner, who had only an etiuitable title, but for
his personal representatives. We apprehend, however, that such
a distinction would be regarded as theoretical only, if admitted
at all ; and that the English rule, for the reasons we have stated,
would give to such real estate the character and qualities of per-
sonal ))roperty, as to all persons and under all circumstances.
§ 272. American Rule. — In this country, the rule is otherwise.
Neither of the reasons above stated apply to us. There is not,
and we know no reason why there should be, any reluctance to
recognize as partnership property any real estate which the
owners wish should be so considered. And when it has ful-
filled all its functions as personal property, in respect of the
partnership, the partners, and the creditors, and is no longer
wanted for these, it may now become, in their hands who have
the legal title, real estate, and subject to all incidents as such ;
because the same persons with us take the personalty and inhej-it
the realty, and it will be much sim[)ler and easier for them to
take at once as realty that which is realty. The following, then,
is the American rule : Real estate, purchased and held as part-
nership property, is so treated in equity, and subjected to all
the incidents of partnership property. If there be death, the sur-
viving partner, whether he hold the whole title, or hold it in
part, or hold none of it, if he be a creditor of the partnership,
has the same rights against the real estate, and only the same,
which any other creditor has. (a) But this real estate goes to
pay the debts of the partnership, and only after they are paid
does it, or what is left of it, become the property of the partners,
or their representatives, free from all claims ; and then it is
divided between them just as so much money capital would be.
But it then becomes at once real estate ; or, rather, all the inci-
dents and qualities of real estate revive.^ This rule goes upon
(a) Delaney v. Hutchesou, 2 Rand, property as to creditors ; and, in distribu-
183 ; Gray v. Palmer, 9 Cal. 616; Roberts tioii, private and partnership creditors are
V. McCarty, 9 Ind. 16. Abbott's Appeal, paid pari passu. Appeal of Second Nat.
50 Pa. 234. In Pennsylvania, if the part- Bank, 83 Pa. 203. See also Ebbert's
ners take a deed of real estate as tenants Appeal, 70 Pa. 79.
iu common, this fixes the character of the
1 It seems to be well established in this country, in accordance with the doctrine
stated in the text, that real estate owned by a partnership is converted into personalty
only for the purpose of settling the partnership affairs, by paying the debts and adjust-
ing the accounts of the partners. Riddle i'. Whitehill, 135 U. S. 621 ; Iii re Codding,
9 F. K. 849 ; Abernathy v. iloses, 73 Ala. 381 ; Strong v. Lord, 107 111. 25 ; Harris
17. Harris, 153 Mass. 439, 26 X. E. 1117 ; Foster's Appeal, 74 Pa. 391. An agreement
between the partners may, however, show that the land has been equitably converted
3G0 THE LAW OF PARTNERSHIP. [CH. XI
the ground of a trust imposed upon all who hold the legal title,
intopi'i-soiialty. Thus where it was agreed that upon the death of a partner a valua-
tion of his share shouhl be made, and the survivor upon paying the amount shouKl take
all the assets, it was held that the parc'hase-money tiius jiaid by the survivor should b&
distributed as personal estate. Maddouk v. Astbury, 32 N. J. Eq. 181. So where it
was provided by the articles that the firm shouhi not be dissolved by death, but should
continue, the interest of a deceased paitner is personalty for j>urposes of distribution.
Leaf's Appeal, 105 Pa. 505. A peculiar doctrine prevails in Kentucky. The general
rule is the same that jjrevails elsewhere ; the land is converted into pei'sonalcy only for
the purposes of the i)artnership. Lowe v. Lowe, 13 Bush, 688. But an agreement to
convert the land into personalty i.s implied when land is bought for the incidental pur-
poses of the partnership. Cornwall v. Cornwall, 6 Bush, 3Gy. The question whether
the purchase is incidental, and so the land is converted, or is for the purpose of dealing
with the laud as real estate, is to be determined according to the intention of the part-
ners at the time of the purchase, not according to the use actually made of the land.
Holmes v. Self, 79 Ky. 297 ; Flanagan v. Shuck, 82 Ky. 617.
Where the object of a farming partnership was to buy land, carry on farming opera-
tions till the land was paid for, and then own the land in common, it was said that
the land was not converted into personalty even for the purpose of paying creditors.
Berry v. Folkes, 60 Miss. 576. A more exact statement of the case would probably be
that the land was never the property of the partnership. The puri)ose of the jiartner-
ship was merely to cultivate the land, and the use only of the land was contributed.
See (Ditc, § 265, note ad Jin.
How far the English doctrine differs from the .\mericau is not clear. The interest
of a deceased partner in real estate of a partnership is recognized as personalty in so far
that a probate dut}', which is payable only on personal projjert}', is due uj)on it,
Attorney-General v. Hubbuck, 13 Q. B. D. 275 (C. A.). And where land was con-
veyed to two partners, for the partnership, as joint tenants, it was held that there was
no survivorship. Davies v. Games, 12 Ch. D. 813. But on the other hand, a devise
to charity of an interest in a partnership, a large part of whose assets is land, is within
the mortmain acts ; being a charge upon land, if not strictly an interest in it. Ash-
worth I'. Munn, 15 Ch. D. 363 (C. A.). And it has even been intimated that the sale
of an interest in a partnership formed to deal in lands is the sale of an interest in lands,
and within the Statute of Frauds. Gray v. Smith, 43 Ch. D. 208 (C. A.).
The whole discussion, whichever view is adopted, seems to i>roceed upon a mistaken
theory. Land of a partnership is not in truth converted into personalty either for one
purpose or for all purposes. So far as the partnership is concerned, it is })artnership
laud, and is treated as land. Thus, it may be taxed to the firm as land, Hubbard v.
"Winsor, 15 Mich. 146 ; and if a judgment is obtained against the firm, it becomes a
judgment lien on the land. In re Codding, 9 F. E. 849 ; Lauller v. Cavett, 87 Pa.
479 ; Pitts v. Spotts, 86 Va. 71, 9 S. E. 501.
AVhen the affairs of the partnership are undergoing settlement, the laud is among
the assets of tlie partnership, to be disposed of first in payment of the debts. If any is
left, it is to be devoted, like the personalty, to repaying the capital and advances of the
partners ; and neither i)artner can claim it till these matters are adjusted. "Wiegand v.
Copeland, 14 F. R. 118; Mendenhall v. Benbow, 84 N. C. 646; Betts v. Letcher
(S. Dak.) 46 X. W. 193 ; Lane v. Jones, 9 Lea, 627 ; Diggs v. Brown, 78 Va. 292. If
any land remains after this, it is to be divided among the partners, like the remaining
personal t}\ If the land has been sold, but a part of the proceeds remain, it is to be
divided in the same way. Powers v. Robinson, 90 Ala. 225, 8 So. 10.
As to the individual partners, they, as we have seen, have no interest in the land,
or in any specific property. Their only right is a claim against the partnership for a
distributive share of a final balance ; and this claim is of course personalty. If any
land remains after the debts are paid, it is still necessary to adjust the accounts of the
§ 272.] OF THE REAL ESTATE OF A PARTNERSHIP. 361
in behalf of all partnership objects ; and that trust once dis-
charged, the residue resumes its former character. (^>)
(b) Dyer v. Clark, 5 Met. 562 ; Bum- 81 Pa. 377, Pierce v. Covert, 39 Wis. 252;
side V. Merrick, 4 Met 537 ; Howard v. [Brewer v. Browne, 68 Ala. 210 ; Esjjy v.
Priest, 5 Met. 582; Peck v. Fisher, 7 Coiner, 76 Ala. 501.] But in Pierce v.
Cash. 386 ; Rice v. Barnard, 20 Vt. 479 ; Trigg, 10 Leigh, 406, it was held, by
Goodburn v. Stevens, 5 Gill, 1 ; Galbraith Tucker, J., that the purchase of real prop-
V. Gedge, 16 B. Men. 631 ; Buckley v. erty witii ])artnershii) funds and for part-
Buckley, 11 Barb. 43 ; Holland v. Fuller, nershij) i)urpo.ses, converted it absolutely
13 Ind. 195, 199; Mattock v. Mattock, into ])ersonalty. The court say: "It
5 Ind. 403; Buchan v. Sumner, 2 Barb, ought to replace the fund witlidrawn from
Ch. 165; Boyers v. Elliott, 7 Hunipli. tlie personal estate. By jilacing it asstock
204 ; Tillinghast v. Champlin, 4 R. I. 173 ; in the partnership, the deceased evinced a
Lancaster Bank v. Myiey, 12 Pa. 544 ; design to treat it as personalty, and it
Sumner v. Hani])son, 8 Ohio, 358 ; Greene ought to go accordingly. The representa-
V. Greene, 1 Ohio, 244 ; Coster v. Clarke, tives of the deceased can claim it only a^
3 Edw. Ch. 428 ; Lang v. Waring, 25 Ala. stock ; and as stock in trade it is, ex vi
625 ; Jones v. Neale, 2 Pat. & H. 339 ; termini, personal. And, accordingly, the
Hanir V. Howard, 3 Jones Eq. 440 ; Collins widow's dower was denied to her thereout,
V. Warren, 29 Mo. 236 ; Wesson v. Wash- although the partnership was solvunt."
burn Iron Co., 13 Allen, 95 ; Shearer v. The court were not unanimous in this
Shearer, 98 Mass. 107; Foster v. Barnes, opinion. No other American decision ha.s,
partners with the firm, and the land i.s therefore not yet individual i)roperty. And
even after these accounts have all been settled, and land belonging to the tirni remains
in the form of ])rotits to be divided, the partners would, strictly speaking, have no indi-
vidual property in the land before an actual division. But if they already own the
legal title to the land in common, the formality of a division is unnecessary, and the
partners would be held to own the land individually. A partner might therefore get
individual title to partnership land in one of two ways ; first, by an actual setting out
and conveyance of a portion of the land to him, by way of distribution of the profits or
otherwise ; second, by the fact that land wdiich is proper for distribution among the
partners is already legally theirs in the proportion to which on distribution they are
entitled. It is needless to say that when bind comes in this way to a partner, it comes
as real estate and not as personalty. See Ruckman v. Decker, 23 N. J. Eq. 283.
The same is true if in consequence of the death of a partner his distributive share is
handed over to his representatives. If the survivor chooses to distribute the assets of
the firm in the shape of land, it goes to the proper representatives of the deceased part-
ner as real estate, with all the incidents of real estate ; if, on the other hand, no land
remains after settling the affairs of the partnership, the balance, when paid over, is
received by the representatives of the deceased as personalty. Until the balance is thus
jiaid over, the representatives of the deceased have no interest in the specific property.
Roulston V. Washington, 79 Ala. 529. See Little v. McPherson, 76 Ala. 552 (personal
jiroperty). But since the surviving partner when dealing with the partnership land is
dealing with equitable rights, and may require the assistance of a court, it would seem
proi)er that he should first exhaust the personal assets before dealing with the land.
If that is true, land of a partnership dissolved by death would go to the representatives
of the deceased as real estate, unless the personalty was insufficient to pay the debts,
including the claims of the survivor. It would follow that the share of the deceased,
in whatever form paid over, should be regarded as real estate for the purpose of dis-
tributing the estate of the deceased, up to the value of the deceased partner's share in
the partnership lands supposing them to be owned in common. It seems that tiie duty
of the survivor is thus to exhaust the personal assets before coming upon the realty.
Walling V. Burgess, 122 Ind. 299, 22 N. E. 419 ; post, § 273, n. (A). But see contra,
Godfrey v. White, 43 Mich. 171, 5 N. W. 243.
362
THE LAW OP PARTNERSHIP.
[CH, XL
§ 273. Dower in Partnership Real Estate. — The English rule
would seem to cut this off. (c) But in this country it is quite well
settled that while dower yields to the claims of partnership cred-
itors, whether they are of the firm or strangers, and therefore can-
not be granted unti\ all the partnership debts are paid or secured,
yet, when this is accomplished, as the land is treated in the same
way as if it had never entered into partnership pro[)crty, dower
revives, {d) But the widow should be made a party to any bill
for an account or for a sale of the real property to pay debts, (e)
Otherwise, the purchaser might be liable to the widow's claim for
dower. (/) ^
it is believed, iiiaintaiiied this doctrine ;
and the hiter cases in Virginia, Davis v.
Christian, 15 Gratt. 11, and Jones t;. Neale,
2 Pat. & H. 339, treat the point as doubt-
ful, a decision thereon being unnecessary.
See ante, § 268, note [q). On the other
hand, dicta occur going to sustain an abso-
lute conversion in the case of a purchase of
land, under a stipulation for resale, made
either at the time, or agreed upon in the
partnershifP articles. Ludlow v. Cooper, 4
Ohio St. 1 ; Buck v. Winn, 11 B. Mon.
320 ; Divine v. Mitchuni, 4 B. Mon. 488 ;
Galbraith v. Gedge, 16 B. Mon. 631, 635 ;
Thayer v. Lane, Walk. Ch. 200 ; but in
none of these cases is the point decided.
See Dewey v. Dewey, 35 Vt. 555. As to
what joinder of interest is necessary to
make a partnership in lands, see White v.
Fitzgerald, 19 Wis. 480.
(c) Houghton V. Houghton, 11 Sim.
491 ; Morris v. Kearsley, 2 Younge &; C.
139.
((/) Dyer v. Clark, 5 Met. 562 ; Howard
V. Priest, 5 Met. 582 ; Coster v. Clarke, 3
Edw. Ch. 238 ; Galbraith v. Gedge, 16 B.
Mon. 631 ; Goodburn v. Stevens, 5 Gill, 1 ;
Smith V. Jackson, 2 Edw. Ch. 28. Thus,
if the firm become insolvent, the widow
loses dower. Greene v. Greene, 1 Ohio,
244 ; Duhring v. Duhring, 20 Mo. 174.
There is no dower in the real estate of a
partnership, till the adjustment of part-
nership accounts ; and any sale, whether
by mortgage, or on execution, or by decree
of court, will bar dower. Simpson v.
Leach. 86 111. 286; Uhler v. Semple, 20
N. J. Eq. 288 ; Willett v. Brown, 65 Mo.
138. On the other hand, if the i^roperty
passes out of the partnership to a stranger,
as he is not i)nvy to the trust, but holds
the estate discharged thereof, the widow
can claim dower of the vendee, as the holder
of the legal estate ; nor can he avail him-
self of the fact that the land was partner-
ship property, as the trust is wholly gone.
Markham v. Merritt, 7 How. (Miss.) 437.
In Tennessee, it is held, that, in conse-
quence of the act abolishing joint tenancy,
Stat. 1784, ch. 22, land of the jiartnership,
bought with its funds and used for its pur-
poses, unless within the exception in fa\'or
of "useful trade," &c., will have every
attribute of real property, and descend to
the heir, and not go to the personal rejjre-
sentatives. McAllister v. Montgomery, 3
Hayw. 94 ; Yeatman r. Woods, 6 Yeig.
20 ; Piper w. Smith, 1 Head, 93. In Vir-
ginia, on the other hand, it was held, in
Pierce v. Trigg, 10 Leigh, 406, that real
estate which became stock was entirely con-
verted into personalty, and the widow could
take no dower. But this decision seems
questioned in Davis v. Christian, 15 Gratt.
11.
(e) Pugh V. Currie, 5 Ala. 446.
(/) Thus, in Collins v. Warren, 29
Mo. 236, as this was not done, the sur-
vivor was not allowed to recover from the
widow, in an action of ejectment, more
than an undivided moiety ot the real
estate.
^ In accordance with the principles already stated, a widow can of course have no
dower in the land which, because of the unsettled atiairs of the firm, still remains part-
nership land. //( re Ran.som, 17 F. R. 331 ; Paige v. Paige, 71 la. 318, 32 N, W.
§ 274.] OF THE REAL ESTATE OF A PARTNERSHIP. 363
§ 274. Inheritance of Partnership Real Estate. — The heir always
takes the real estate in oi'der to suj)purt the legal title, and is
then held as trustee for all those purposes to which the land
must be devoted in order to make it effectually partnership prop-
erty ; {g) having, however, the right to require that the real property
shall not be sold to pay debts until all the personal property is
exhausted. (A) When these are all fuliilled, he then holds it
discharged from claim, precisely as if it had never been other-
wise. (J) If land be conveyed to partners, in fact as partnership
property, but in form to them as tenants in common, and one
dies, his heir becomes tenant in common with the other part-
ners, (y) Here, as before, he holds as trustee for the partnership
until this trust is discharged, and then for himself. And it is
said in England, that, in such a case, if the iieir has a beneficial as
well as legal interest, dower would be allowed. (/c) Here it cer-
tainly would be as soon as the estate were cleared from all liabil-
ity for the debts of the partnership. ^
(r/) See ante, § 264, note (t) ; § 269, v. Currie, 5 Ala. 446 ; Lang v. Waring, 25
note (0. Ala. 625 ; Andrews v. Brown, 21 Ala. 437.
(A) Laugv. Waring, 25 Ala. 625. So (i) Dyer v. Clark, 5 Met. 562. See
the heirs must be parties when a sale is also preceding note, and cases cited,
feoiight for i)aynieut of firm debts. Pugli {j) See preceding notes.
(k) See a«<e, notes (/i), (i).
360 ; Hamilton v. Halpin, 68 Miss. 99, 8 So. 739 ; Pierce v. Trigg, 10 Leigh, 406 ;
Parrish v. Parrish, 88 Va. 529, 14 S. E. 325 ; Martin v. Smith, 25 W. Va. 579. And
where the land is sold to pay firm debts, the widow cannot claim dower against the pur-
chaser. Willet V. Brown, 65 Mo. 138. See, however. Clay v. Field, 34 F. R. 375. In
Bowman v. Bailey, 20 S. C. 550, it was held that the widow of a partner might claim
dower against a purchaser from the firm, the firm creditors not being interested in the
controversy.
Where the debts of the firm are all paid, and a balance remains in the shape of land,
the widow has dower. Brewer v. Browne, 68 Ala. 210 ; Lenow v. Fones, 48 Ark. 557,
4 S. W. 56 ; Strong v. Lord, 107 111. 25. It has been held that where the real estate
of one partner was used and improved b}^ the firm, the widow has no claim to dower in
the improvements, for they are personalty of the firm. Grissom v. Moore, 106 Ind.
296, 6 N. E. 629.
1 There is no survivorship of the partnership real estate at law ; the legal title goes
to the heir of the deceased partner. Abernathy v. iloses, 73 Ala. 381 ; Southern Cotton
Oil Co. V. Henshaw, 89 Ala. 448, 7 So. 760 ; Percifull v. Piatt, 36 Ark. 456 ; Baker v.
.Mid<llebrooks, 81 Ga. 491, 8 S. E. 320 ; Cari:er v. Flexner (Kr.) 17 S. W\ 851. Though
there is survivorship of the title of a leaseliold interest, owned by the firm, since that is
personalty. Oram v. Rothermel, 98 Pa. 300. The heir, however, takes the title in
trust for the firm. Logan v. Greenlaw, 25 F. R. 299 ; Clay v. Field, 34 F. R. 375 ;
Merritt v. Dickey, 38 ilich. 41 ; Willet v. Brown, 65 Mo. 138.
Since the surviving partner has the right of disposing of the assets to pay the debts
and settle the accounts of the firm, he alone may make a valid conveyance of the jiart-
n.Mship land. Although he cannot convey the legal title, he disposes of the entire
ei[uitable interest ; and the purchaser may have a conve3'aiice from the heir of the
deceased partner by filing a bill in equity. The state of the legal title to the land is
364 THE LAW OF PARTNERSHIP. [CH. XL
11" lands are conveyed to partners in fact as partnership property,
but in form as joint tenants, equity will not permit any snrvivor-
ship, but will treat it as if the grantees had held it as tenants in
common. (Z)
§ 275. Devised Lands, whether different. — There Seems to be
some disposition in Euuhiud to mai^e some distinction between
lands bouaht by partnership funds for partnership purposes, and
those which are devUed to j)artners for the same purpose. (j)i)
We doubt, however, whether it would be carried out and fully ap-
plied in England. If a father, for example, having two sons who
were partners, devised to them lands either as tenants in common
or as joint tenants, but certainly as partners and for partnership
I)ui-poses, we think equity would use the legal title for partnership
j)ur})oses in the same manner as if it had been bought by the part-
ners and paid for by money bequeathed to them. We are quite
confident such would be the rule in this country, (ii) It has been
held in England, where mortgages were devised to partners and
(/) This e(iiiitable iuterference is more have declared the same equitable rule.
usual in England than in this country, Delaney v. Hutcheson, 2 Kand. 183 ;
Broom v. Broom, 3 Mylne & K. 443 ; Thayer' v. Lane, Walk. Ch. 200 ; Dyer r.
Morris v. Kearsley, 2 Younge & C. 139 ; Clark, 5 Met. 562 ; Sumner v. Hampson,
Houghton V. Houghton, 11 Sim. 491; 8 Ohio, 328 ; Duhriug y. Duhring, 20 Mo.
Fereday v. Wightwick, 1 Russ. & M. 45 ; 174 ; Evans v. Gibson, 29 J\Io. 236 ; Car-
as the statutes of most of the United States lisle y. Mulhern, 19 Mo. 56 ; [Davies v.
have changed joint tenancies into what are Games, 12 Ch. D. 813].
practically tenancies in common, by abol- (m) Phillips v. Phillips, as stated in
ishing the right of survivorship. See 1 Bisset on Part. 50.
"Washburn on Real Property, 408, where (?i) Dyer v. Clark, 5 Met. 562 ; Burn-
the several State statutes are referred to at side v. Merrick, 4 Met. 537 ; Howard v.
length. The American courts generally Priest, 5 Met. 582.
immaterial. The power of the survivor is just as great if the entire legal title was in
the deceased, in trust for the firm. Shanks v. Klein, 104 U. S. 18 ; Allen v. Withrow,
110 U. S. 119 ; Espy v. Comer, 80 Ala. 333 ; Davis v. Smith, 82 Ala. 198, 2 So. 897 ;
Br^en v. Richardson, 6 Col. 605 ; Van Staden v. Kline, 64 la. 180, 20 N. W. 3; Riley
V. Carter, (Md.) 25 Atl. 667 ; Hanson v. Metcalf, 46 Minn. 25, 48 N. W. 441 ; Mat-
thews f. Hunter, 67 Mo. 293; Easton v. Courtwright, 84 Mo. 27. Consequently a
creditors' bill against the survivor need not make the heir a part)'. Logan v. Green-
law, 25 F. R. 299. Nov is he a necessary party to a bill for an account between the
executor of the deceased partner and the survivor. Van Aken v. Clark, 82 la. 256, 48
N. W. 73. But if one of the objects of the bill is to secure a conveyance of the legal
title, the heir is of course a necessary part}'. Abernathy v. Moses, 73 Ala. 381.
Since the power of the surviving partner over the land is a result of the equity of
the firm, he can convey no interest in the land by a proceeding which is not approved
by a court of equity ; as by making a mortgage which operates as a preference to a
creditor. Espy v. Comer, 80 .Ala. 333. So by mortgaging to secure his individual
debts. Brown v. Watson, 66 Mich. 223, 33 N. W. 493.
After the partnership affairs have been settled, and real estate remains, the heir of
the deceased partner takes it and not his executor. Martin v. Morris, G2 Wis. 418, 22
N. W, 525. But see In re Ransom, 17 F. R, 331.
§ 276.] OP THE REAL ESTATE OF A PARTNERSHIP. 365
they bought the equities of redemption, thus completing title in
themselves, the land was not partnership property, nor to be treated
as personal property. The case was perhaps well decided on its
tacts, (o) But we believe no rule exists in England, and certainly
none in this country, that real estate so acquired should not be
considered partnership property, if it was intended so to be, and
was so treated, by the parties interested.
§ 276. Right of Creditors of the Firm to its Real Estate. — This
right whenever it arises, as will be inferred from what has been
said, is the same as it is to the personal estate of the partnership.
But it must be worked out by the power of equity to hold the
legal owner as trustee for those who are beneficially interested.
A question of some importance, at least in this country, arises, as
to when the creditors' right to real estate may be enforced. It is
this : Have the creditors of a firm, in equity, under all circum-
stances the same right to the real estate that they have to the per-
sonal estate of the firm ; or have they only a right to resort to
the real estate if the personal estate prove to be insufficient to pay
the debts ? The difference might be a very important one in this
country, so far at least as dower is concerned. It might, indeed,
be for the interest of the heir to have the land of a partnership
appropriated in the first place to pay the debts. If the firm were
insolvent it would made no difference, (p) If not, the heirs would
lose the land, but would save from the surplus of personal just as
much as they would lose in the land, and would take it free from
the encumbrance of dower. But, in such a case, a court of equity
applied a similar rule to that which obtains in the settlement of an
estate of a deceased person, (r/) The personal estate is applied to
the payment of debts in the first place ; if that be exhausted and
insufficient, then so much of the real estate is so applied as may be
necessary. And so it is in case of partnership ; and therefore the
(o) Phillips V. Phillips, Bisset on Part:, before the private creditors can take the
50. This case has not been questioned in jM-operty, or any part of it, by foreclosure,
any decision that we are aware of, and is Conant v. Frary, 49 Ind. 530.
recognized by Mr. Lindley, Law of Part. (q) The doctrine of marshalling assets
pp. 553, 554, though, it seems, with some will always be applied in cases where the
hesitation ; and it is certainly against the aid of equity is claimed to reach a fund, by
broad rules given by him as the result of one who has recouise to two funds in tiie
the EnglLsh authorities. [See EaiLsbach v. same right; that is, the creditor will be
Lovejoy, 116 111. 442, 6 N. E. 504]. compelled to resort to that fund which lie
(p) But see, in Lang I'. Waring, 25 Ala. alone has recourse to, and exhaust it,
625, that the heirs are not cut off from all before he can subject the other to his
defence, even by insolvency of the firm, demand. Adams' Eq. 271, 274, and cases
Where a partner mortgages partnership cited ; Bardwell v. Perry, 19 Vt. 292 ;
real estate to secure his individual debts, and, generally, cases cited ante, § 256,
the partnership creditors must first be paid note {u).
366 THE LAW OF PARTNERSHIP. [CH. XI
whole real estate of a partnership, if none of it were wanted for
payment of debts or partners' shares, would be as unaffected in
equity as at law ; and, if part of it were so wanted, that part only
would be treated as personal property, leaving the residue un-
touched. (/•)'
§ 277. Right and Power of the Partners as to the Real Estate.
— This seems to be, in equity, entire and complete, so far as the
payment of debt goes ; and, after that payment, so far as the
adjustment of the mutual claims or balances of the partners is
(r) In case of dissolution by the death Currie, 5 Ala. 446 ; Davis r. Cliiistian, 15
of a partner holding title to the firm's real Gratt. 11; Duhring v. Duhring, 20 Mo,
estate, neither the survivor nor the part- 174; Carlisle v. Miilhern, 19 Mo. 56;
uership creditors can claim the aid of a Richardson v. Wyatt, 2 Desaus. 471 ;
court of equity to compel the widow and Dillon v. Brown, 11 Gray, 179. In the
heirs to release their rights, until the ])er- cases where an apparent right has been
sonal as.sets are exhausted. Lang v. War- given to the survivor to call upon the heir
ing, 25 Ala. 625, correcting Andrews v. peremptorily to convey, it will always, we
Brown, 21 Ala. 437. As to the right of think, be found that the land was needed
partnership creditors, when the real assets to pay the debts of the firm. Pugh v.
are reijuisite to a full satisfaction of their Currie, 5 Ala. 446 ; Sumner v. Hampson,
debts, to call upon the heirs and widow to 8 Oitio, 328. And the case of Andrews v.
convey and release their rights, through Brown, 21 Ala. 437, which seemed to dis-
the medium of assent to a sale by the sur- regard this rule, was overruled on this
vivor, see Sumner v. Hampson, 8 Oliio, point by Lang v. Waring, 25 Ala. 625.
328; Lang v. Waring, supra; Pugh v.
1 The firm creditors may come upon the land of the partnership ; and they have
priority over the separate creditors of a partner, even if the land is in the name of that
partner only. Neither the partner himself nor his creditors have any right to the land
as against the firm creditors. Wiegand v. Copeland, 14 F. R. 118 ; Ames v. Ames, 37
F. K. 30 ; Paige v. Paige, 71 la. 318, 32 N". W. 360 ; Mallory v. Russell, 71 la. 63, 32
N. W. 102 ; Smith v. Jones, 18 Neb. 481, 25 N W. 624 ; Messer v. Messer, 59 N. H.
375 ; Ross v. Henderson, 77 N. C. 170 ; Page v. Thomas, 43 Oh. St. 38, 1 N. E. 79 ;
Clialfant v. Grant, 3 Lea, 118 ; Diggs v. Brown, 78 Va. 292 ; Hardy v. Norfolk M'f'g
Co., 80 Va. 404. So a mortgage of the land by the partner in whose name it stands,
to secure a pre-existing individual debt, is postponed to a later accruing firm claim.
Norwalk Nat. Bank v. Sawyer, 38 Oil. St. 339. The creditors may maintain a bill in
equity to reach the land and have it applied to their debts ; and this is their appro-
priate remedy. Wiegand v. Copeland, 14 F. R. 118 ; Ames v. Ames, 37 F. R. 30;
Golden State & M. Iron Works v. Davidson, 73 Cal. 389, 15 Pac. 20. And where a
partner in whose name it stands sells partnership land and invests the proceeds in other
land, the creditors may reach and apply to their debts the newly purchased land.
Chalfant v. Grant, 3 Lea, 118.
A transfer by one partner of his legal title to the partnership land does not affect
the right of the firm creditors to secure payment out of the land. Conant v. Frary, 49
Ind. 530 ; Hiscock v. Phelps, 49 X. Y. 97 ; Greenwood v. Marvin, 111 N. Y. 423, 19
N. E. 228 ; Lewis v. Anderson, 20 Ohio St. 281 ; Norwalk Nat. Bank v. Sawyer, 38
Ohio St. 339; Jones v. Smith, 31 S. C. 527, 10 S. E. 340 ; Cunningham v. Ward, 30
W. Va. 572, 5 S. E. 646. For this reason such a transfer cannot be in fraud of credi-
tors, and they have no right to coiii])lain of it or to have it enjoined. Jones v. Smith,
31 S. C. 527, 10 S. E. 340 ; Cunningham v. Ward, 30 W. Va. 572, 5 S. E. 646.
§ 277.] OF THE REAL ESTATE OF A PARTNERSHIP. 367
concerned, (s) But there is a limitation as to the power of a
partner over this real estate, which is this : No partner and no
proportion of the partners, can sell or transfer tlie real estate of
the firm — outright for money, or by way of mortgage to secure
a debt, or to assignees in trust for debts — without the consent
and authority of the other partners. The first point — that he
who happens to have the legal title cannot sell the real estate with-
out the consent and authority of the rest, so as to give title to a
grantee having notice — is evidently the law. And if he make
a mortgage to secure a debt, or an assignment in trust for credit-
ors, by which the legal title would pass, equity will not sustain
the transaction, even supposing it free from the taint of fraud, (t)
It would seem, therefore, that the power of a partner over the
real estate of the firm is less than that over the personal estate.
He may contract debts and make contracts which will indirectly
reach the realty, because this must finally be subject to the debts
of the firm. But he cannot directly convey or appropriate it,
excepting so far as he has the legal title in himself ; and then a
purchaser with knowledge, or the means of knowledge, takes the
land subject to all the equities of the partners, (u) ^ And, by the
(s) Dihvorth v. Jlayfield, 36 Mo. 40 ; (') Hanff v. Howard, 3 Jones Eq. 440 ;
Andrews v. Brown, 21 Ala. 437 ; Lang v. Baldwin v. .Johnson, Saxt. Ch. 441.
Waring, 2.5 Ala. 625 ; Pngh v. Carrie, 5 (u) Forde v. Herron, 4 Munf. 316 ; per
Ala. 446; Davis v. Christian, 15 Gratt. Walworth, Chancellor, in Buchan r. Sum-
11 ; Shearer v. Paiue, 12 Allen, 289. ner, 2 Barb. Ch. 175, 198.
1 A partner has no power to convey the real estate of the firm. Piatt v. Oliver,
3 McLean, 27 ; Anderson v. Tompkins, 1 Brock. 456 ; Brunson v. Morgan, 76 Ala.
593; Tapley v. Batterfield, 1 Met. 515; Berry v. Folkes, 60 Miss. 576; Coles w.
Coles, 1.5 Johns. 159. And he therefore cannot mortgage the real estate, even to
secure a firm debt. Printup v. Turner, 65 Ga. 71. Nor can he make a binding agree-
ment to convey land to an employee in lieu of wages. Berry v. Folkes, 60 Miss. 576.
There must generally be a special authority, delegated to one partner, to give validity
even to an executory contract for the sale of land employed in the partnership business.
Lawrence v. Taylor, 5 Hill, 107. But where a partnership is formed to deal in land
one partner may make a valid contract for the sale of land, since that is the regular
course of the business. Thompson v. Bowman, 6 Wall. 316 ; Rovelsky v. Brown, 92
Ala. 522, 9 So. 182 ; Chester v. Dickerson, 54 N. Y. 1.
If a partner attempts to convey the real estate of the firm, his deed is good as
against himself only ; it passes such part of the land as may finally come to him upon
distribution. Elliott v. Dycke, 78 Ala. 150 ; Printup v. Turner, 65 Ga. 71.
If the other partners consent, however, the deed of a single partner is effective to
convey partnership land. Sullivan v. Smith, 15 Neb. 476, 19 N. W. 620 ; Stroman v.
Yarn, 19 S. C. 307 ; Salinas v. Bennett, 33 S. C. 285, 11 S. E. 968 ; Frost v.
Wolf, 77 Tex. 455, 14 S. W. 440 ; Kumery v. McCulloch, 54 Wis. 565, 12 N. W. 65.
Such assent or authority may appear by express contract ; as where the articles of an
association to deal in lands provide that deeds shall be executed by the president and
secretary. Batty v. Adams Co., 16 Neb. 44, 20 N. W. 15. Or the authority may
368 THE LAW OF PARTNERSHIP. [CH, XL
same principle, it is held, in England, that the contracts of a
partner about the land of the firm — as for its sale, for example
— have no force, unless they are made with the consent and by
the authority of the firm. If this were shown, however, although
not in such a way as to give any interest or right or remedy at
law, equity would undoubtedly enforce the contract, if it were
itself legal.
A different question arises when a partner docs not undertake
to dispose of the property or interest of the firm in the real
estate, but sells his own interest in it to a stranger. This it has
been held he may do, and that the sale is valid as against his
copartners, although it would not be valid as against the creditors
of the firm, (im)
A sale of partnership real estate by order of court, to pay the
debts of a deceased partner, conveys only his interest as partner,
although the whole legal title was in the deceased, {mm)
§ 278. Conveyances of Partnership Land to Strangers. — We
have repeatedly remarked that the law respects and upholds the
legal title to land by deed and record. Nor will equity disregard
or supersede this in relation to innocent purchasers. Thus, if
land which certainly belongs to a partnership is held in the name
of one partner, and he conveys it for value to a person who has no
knowledge, or reasonal)le means of knowlege, that it belongs to
the firm, such person, we have seen, will hold it as against the
firm. ^ Of this there can be no doubt, and as little that if the
(uu) Treadwell v. Williams, 9 Bosw. {uiiu} M'Cormick's Appeal, 57 Pa. 54.
649.
appear from circumstances ; as where a firm took real estate in settlement of a debt,
intending to sell it at once, and title was taken in the name of one partner. It was
held that he had authority to convey it. Paton v. Baker, 62 Li. 704, 15 N. W. 586.
So where the deed was made by one partner in the jtresenoe and with the acquiescence
of the others. Ferguson v. Hanauer, (Ark.) 19 S. W. 749 ; Greer v. Ferguson (Ark.),
19 S. W. 966. Wlieie a partner absconded with all the available ])ersonal assets of the
firm, it was held that the copartner was authorized to convey the real estate for
the benefit of creditors. Sullivan v. Smith, 15 Neb. 476, 19 N. W. 620.
It was held in Smith v. Smith, 80 Cal. 323, 21 Pac. 4, 22 Pac. 186, 549, that one
partner may maintain an action to eject an intruder from land owned by the partner-
ship.
^ There is no doubt that a conveyance of the legal title to a purchaser for value of
partnership land, without notice of the partnership claim, gives him a valid title as
against either the partners or the firm creditors. McNeil v. Congregational Society, 66
Cal. 105 ; JIcMillan v. Hadley, 78 Ind. 590 ; Tarbell v. West, 86 N. Y. 280 ; Kepler
V. Erie Dime Savings & Loan Co., 101 Pa. 602. So an innocent mortgagee of the
partner who holds legal title is protected. Seeley v. Mitchell, 85 Ky. 508, 4 S. W.
190 ; Pi-iest v. Chouteau, 85 Mo. 398. The proper method of spreading upon the
record notice of the firm's right to laud would seem to be to put the land in the names
§ 278.] OF THE REAL ESTATE OF A PARTNERSHIP, 369
trrimtee knew, or had sul'ficieut means of kuowinu\ that it be-
longed to the firm, his title will be annulled, or he will be charged,
as trustee for tiie (irni. (^h) It is a much more difficult question
whether such inntjcent [jurchaser holds the property as against
creditors. In the absence of decisive authority, we should say,
on general principles, that he would. If a partner sells a part
of the merchandise of his firm, fraudulently against the firm or
its creditors, but apparently in due course of business, so as to
excite no suspicion, and give no notice to the purchaser, we should
say that the purchaser would hold it both as against the firm and
their creditors. On similar grounds, we should say that a regular
transfer of land, for value to an innocent stranger, would give
him title against the firm and the creditors of the firm, although
the firm were insolvent, and the sale fraudulent on the part of
the partner selling.
(v) M'Dermot v. Laurence, 7 S. & R. decision was sustained by the court in
438 ; Forde v. Herron, 4 Muuf. 316 ; bank. In the later cases of Kramer v.
Walworth, Chancellor, Buchan v. Sum- Arthurs, 7 Barr, 165, and Kidgway's
ner, 2 Barb. Ch. 198; Tillinghast v. Appeal, 15 Pa. 177, the same doctrine was
Champlin, 4 R. I. 173, 209; per Sliaw, recognized. But see Moderwell u. MuUison,
('. J., in Dyer v. Clark, 5 Met. 562, 580. 21 Pa. 257, Coder v. Huling, 27 Pa. 84,
Li some cases in Pennsylvania, a different where this doctrine seems somewhat quali-
doctrine prevails. In the earliest case, fied. Where, as is geuemlly the case, the
M'Dermot i\ Laurence, Tilghmau, C. J., purchaser is a creditor of one partner, it
carefully guarded against the case where seems held, that he will be postponed to
the ])urchaser had reasonable means of the demands of the partnership, —both
knowledge ; but in Hale v. Henrie, 2 creditors' and partners' claims, — notwith-
Watts, 145, the court, Gibson, C. J., standing the recorded title. Edgar v.
absolutely excluded evidence showing a Donnally, 2 Munf. 387 ; Jarvis v. Brooks,
clear knowledge of the partnership equi- 27 N. H. 36 ; Hantf u. Howard, 3 Jones,
ties, holding that the purchaser need only Eq. 440 ; Tillinghast v. Champliu, 4 R.
rely on the registered title ; and his I. 173.
of A. B. and C, as they are partners iu the firm of A. B. & Co. A conveyance to
three in certain shares, "such being their interests in " a certain firm, has been held
not to be notice that the land was partnership land. Van Slyck v. Skinner, 41 Mich.
186, 1 X. W. 971. It would seem clear that even though there is no notice on the
records of the claim of the partnership, a creditor of an individual partner in whose
name the land stands cannot hold the land against firm creditors. Crooker v. Crooker,
46 Me. 250 ; Jarvis v. Brooks, 27 X. H. 37. The rule in Pennsylvania is, however,
contra, Ridgway' s Appeal, 15 Pa. 177.
24
THE LAW OF PARTNERSHIP. [CH. XIL
CHAPTER XII.
OF DISSOLUTION.
§ 279. Duration of Partnership. — When a partnership is formed,
the partners may determine at their pleasure what its duration
shall be. A partnership, having once begun, will be persumed
to continue until there is some evidence of its termination, (a )
And, even after a dissolution, the partnership, or at least a kind of
community of interest, of power, and of liability, continues, as we
shall see, for some purposes, and for so long a time as is necessary
to carry those ])urposes into effect. In general, however, we may
say that a partnership ends by its dissolution. And we will now
proceed to consider the subject of dissolution of partnership ; and,
particularly, how many ways there are in which a partnership may
be dissolved, and what are the effects of each kind of dissolution.
Dissolution of partnership takes place in seven different ways :
1. By the provision of the articles. 2. By the will of all the jjart-
ners. 3. By act of one or more of the partners alone. 4. By a
change in the partnership. 5. By the death of a partner, 6. By
decree of a court of equity. 7. By bankruptcy.
§ 280. Partnership for Term of Years. — Perhaps there is no one
thing more frequently provided for by the articles than the dura-
tion of the partnership. Where this is done in a simple form, as
by the mere statement that " this partnership shall continue for
the period of five years from this date," there can be no question
about its meaning, and none about its legal obligation. When tiiat
period expires, or the time for dissolution arrives, the partnership
dies, of course. It may be continued by agreement, and often is ;
but this is, in fact, a new partnership. And the old articles are
of use only as evidence to assist in determining its terms ; and
they will be decisive on this point, if by the agreement the terms
of the new one are to be the same with those of the old. The
question often occurs, however, What can a partner do, who wishes
(a) Howe i\ Thayer, 17 Pick. 91. But partners ten months before the note in
in Rogers v. Reed, 18 Me. 257, the court suit was signed, was not evidence that
held, that evidence that persons were they were so at that time.
§ 281.] OF DISSOLUTION. 371
to terminate such a partnership before the agreed period arrives?
And we have already seen that there is much difficulty in determ-
ining how far the j)arties are bound by such agreement in
practice. No doubt exists that equity may decree dissolution for
cause, whatever be the agreement, or may I'cfuse such a degree,
and even enjoin a continuance of the partnersiiip. And we shall
presently see that certain acts, which would seem to be always m
the power of a partner, as a transfer of his interest, or his insol-
vency, or retirement in any way, generally dissolve the partner-
ship. And the question has arisen, whether equity will ever
compel parties to remain in this relation, after it has become cei'ta in
that there is no longer mutual confidence or regard or desire for
continuing the connection. This question we have already touched
upon ; {b) iind it is perhaps impossible to give even a general rule
on the subject, unless we venture to state this to be one : That
equity will not in such case decree a continuance of the partner-
ship because the agreed period has not expired, unless, in the first
place, a decided wrong and injury would be inflicted by the present
dissolution ; and, secondly, it is practicable for the court to insist
upon such a continuance as will in fact prevent the threatened
miscliief, without doing other harm, (c)
§ 281. Time of Dissolution Conditional. — The provision in the
articles on this subject may not be so simple as above suggested.
It may be that the partnership shall continue until certain cir-
cumstances occur, or until one partner or the other does certain
things. In such a case, there is no dissolution by the articles
until the circumstances occur, or the act be done. Difficult ques-
tions of fact may arise under such a clause ; but. so far as a ques-
tion of law can come from it, it must be governed by the ordinary
principles of contracts on a condition. (cZ)
(b) See ante, §§ 163, 207. And see Beaver v. Lewis, 14 Ark. 138 ; Mann v.
post, 309, note (c). Connell, 1 Whart. 388 ; Whitton v. Smith,
(c) Chavauy v. Van Somnier, cited I 1 Freem. Ch. (Miss.) 231 ; Blake v. Dor-
Swanst. 512, note, and 3 Wooddes. Lect. gan, 1 Greene (Iowa), 5-10; Garretson v.
416, note; Barring v. Dix, 1 Cox, 213; Weaver, 3 Edw. Ch. 385; Kennedy v.
Smith V. Jeyes, 4 Beav. 503 ; Harrison v. Kennedy, 3 Dana, 239 ; Gowan v. Jeffries,
Tennant, 21 Beav. 482 ; In. re Electric 2 Ashm. 296. As to seasonable time, see
Telegraph Co. of Ireland, 22 Beav. 471 ; Wheeler v. Van Wart, 2Jur. 252; Reade
Waters v. Taylor, 2 Ves. & B. 229 ; Skin- v. Bentley, 3 Kay & J. 271, 4 Kay & J. 65 ;
ner v. Dayton, 19 Johns. 538 ; Peacock v. Potter v. Gray, 1 R. I. 430. As to the
Peacock, 16 Ves. 56 ; Crawshay n. Maule, grounds on which equity will decree a dis-
1 Swanst. 495 ; Pearpoint v. Graham, 4 solution, see Meaher v. Cox, 37 Ala.
Wash. C. C. 234 ; Cape Sable Co.'s Case, 201.
3 Bland, 674 ; Monroe v. Conner, 15 Me. (d) See 2 Pars. Contr. (5th ed) 525-
180 ; Howell v. Harvey, 5 Ark. 281 ; 527.
372 THE LAW OF PARTNERSHIP. [CH. XII,
§ 282. Time of Dissolution impHed. — The articles may Olllit all
reference to the terminatiuu ot the partnership ; and sometimes
the agreemcnls as to the partnership are only oral, {e^ and some-
times the partners expressly agree simply to be partners, leav-
ing all tiie rest to their mutual but silent understanding, or to
time and the operation of law. (/) In these cases, it may be a
question whether the facts and circumstances do not imply or raise
a presunii)tion of law that there was some agreement for a definite
term. This (piestion has been not unfrequently mooted, and some-
times it seems to have been decided on doubtful principles. We
certainly should not deny that there may be such inferences or im-
plications ; but they should not readily be admitted.^
If, for exam})le, a partnership, needing land or a store for its
business, hired one, paying the rent from partnership funds, and
using it for partnership purposes, so as to leave no doubt that it is
partnership property, could it be said that the lease implies au
agreement that the partnership shall continue until the lease ex-
pires ? We think not ; and the best authorities lead to this con-
clusion. (.^) As a matter of actual prol)ability, such a lease is
very slight evidence of any such intention. They may have taken
it for many years, because they could not get it otherwise, and
■were willing to take the risk of disposing of it when they should
dissolve ; or they may have taken it in order to be sure, at all
events, of the premises as long as they might want them. Other
suppositions might be made . so many, indeed, that we think the
lease while standing alone would not amount, even if wholly un-
ex])lained, to prima facie evidence, either in fact or in law, of any
understanding that the partnership siiould last as long as the lease
run.
So, too, if the partnership entered into long and continuing con-
tracts of business, or engaged in some transaction which could not
be closed for a considerable period without great loss, we should
say, that nothing of this kind would be very strong evidence of a
(e) Ante, § 6. 298, 307 ; Alcock v. Taylor, Tamlyn,
(/) Ante, § 159. 506 ; Jeffeiys v. Smith, 1 Jac. & W. 301.
(g) Crawshay v. Maule, 1 Swanst. 495 ; See Marshall v. Marshall, cited 2 Bfll
Featherstouhaugh v. Fenwick, 17 Ves. Comin. 641, n. 3, and 633, n. 1.
^ Where it was provided in the articles of partnership between A & B, that if A
survived he might get all the assets upon payment of a certain sum to B's representa-
tives, and if B survived he should have all the assets without payment, it was held
not to be a partnership at will, but for the term of their joint lives. Dobbins v. Tatem,
(N. J. Eq.) 25 Atl. 544. For an agreement in which the circumstances were deemed
(with perhaps too little consi<leration) sufficient to show that the partnership was not at
will, see Ball v. Britton, 58 Tex. 57.
§ 283.] OF DISSOLUTION. 373
definite understanding or agreement for continuance. (A) There
may be many ways of transferring or cancelling such contracts, or
bringing such transactions to a close, or even of continuing them
after the partnership has closed. We should admit that all cir-
cumstances of this kind might be admissible and useful evidence
in connection with the general course of the business, the usage
relating to it, and all those facts which, looking to the future, im-
ply an intention in regard to it. But, so far as a general princij)le
can be given for this class of questions, it must, we think, be this :
That equity would not decide on such grounds that the partners
had mutually agreed to continue as partners for a certain period ;
unless no other theory so well satisfied and explained all the facts
of the case, and a permission to either partner to dissolve at pleas-
ure would work great mischief. Then, perhaps, equity might
prefer to decide that the parties had agreed to remain together,
and therefore should not part, rather than to say that one of them
should not exercise his right to dissolve the firm, because he would
thereby inflict an injury. {I.) But if one of several partnei's agrees
with a stranger for a sub-partnership, it is not to be implied,
merely from the absence of any agreement to the contrary, that
the duration of the sub-partnership is to be coextensive with the
original partnership, (j)
§ 283. Partnership for Temporary Purpose. — Partnerships are
sometimes formed for a single advcntui'c or enterprise. Then,
they terminate when that enterprise is brought to a close ; (^) for
the articles of agreement which limit the partnership to that
adventure imply that it ceases when that ceases ; but, for the pur-
pose of winding up those affairs, it continues until all past trans-
actions are closed. (/) But such a partnership may continue, by
express agreement, or by the partners going on to act as partners
in other transactions ; and this would not be considered as a new
(A) Featherstonhaugh y. Fenwick, 17 until an act of Pailiaraent should he had.
Ves. 298, 307. But see Potter v. Gray, 1 The Vice-Chancellor said : " It is my
R. I. 430. The mere fact that a firm has opinion that they could not dissolve until
incurred debts, and charged its assets for July, 1838 ; and, if so, then, as in an
their payment, is no evidence of an agree- ordinary partnership, they could not do it
nientthat the firm shall continue until its without notice." This point is not men-
debts are paid. See King ;; The Accumu- tioned in the report of the case in 9 Sim.
lative Assurance Co., 3 C. B. n. s. 151. 193. See Reade v. Bentley, 3 Kay & J.
{i) In Wheeler v. Van Wart, 2 Jur. 271, 4 Kay & J. 65 ; Potter v. Gray, 1
252, the deed of settlement constituting a R. I. 430.
company contained no clause limiting the {j ) Frost v. Moulton, 21 Beav. 596.
duration of the partnership ; but it pro- {k) Pothier, Contrat de Soc. Xo. 140-
vided that certain persons should be 143.
appointed directors until July, 1838, or (/) Petrikin v. Collier, 1 Barr, 247.
374 THE LAW OF PARTNERSHIP. [CH. XII.
and distinct partnership, but as a continuation of the original one,
and a continuation of the original terms, unless new parties came
in, or it could be shown, or inferred from circumstances, that the
terms were varied.
So, too, if the partnership were formed for dealing with a sub-
ject-matter certain to expire at a certain time, or even to expire
at any time, it must be understood as providing that the partner-
ship shall then expire, xis, if for traffic with a certain patent or
copyright, which had a definite number of years to run. We
apprehend, that, if such patent or copyright were renewed under
the general law, the partnership would still continue. But, if it
were renewed only by special statute or grant, a continuance of
the partnership would require a new agreement, (m)
§ 284. Dissolution by Will of all the Partners. — It is obvious
and certain that the contract of partnership is rescindable by all
who are parties to it, at their own pleasure, (w)^ But a majority
of the partners may not exclude one of the partners from the
firm without sufficient cause. It has been held not a sufficient
cause, that he paid into the capital a part only of what he agreed
to contribute, if that part had been accepted, and used in the busi-
ness of the firm. (w>i)
A technical distinction, still mentioned in our text-books, that,
if the contract of copartnership is under seal, it cannot be revoked
and cancelled excepting under seal, has never had any force in
equity ; and we do not suppose that it would now have any prac-
tical effect in law. (o)
(in) See Wheeler v. Van Wart, 9 Sim. dissolution, a written notice was put in,
193, 2 Jur. 252 ; Reade v. Bentley, 4 Kay signed by all the parties, which stated
& J. 656, 3 Kay & J. 271. that they had dissolved the partnership.
[n) See Master v. Kirton, 3 Ves. Lord EUenborough said it might be veiy
274. deserving of attention, whether a partner-
(nn) Hartman v. Woehr, -3 Green ship created by deed could be dissolved by
(N. J.), 383. anything short of a deed; but here, as
(o) This point was raised in Waith- against the party, who signed the notice,
man v. Miles, 1 Stark. 181. The partner- the partnership must be taken to have
ship deed was under seal. To prove a been dissolved by competent means. Same
1 Dissolution hy Mutual Consent. — By unanimous consent of the partners , a
partnership may be dissolved at any time, though the term has not expired. Bank of
Montreal v. Page, 98 111. 109. So where all the partners join in an assignment of tlie
assets for the benefit of creditors, it operates as a dissolution. AVells v. Ellis, 68 Cal.
243, 9 Pac. 80 ; but see Williston v. Camp, 9 Mont. 88, 22 Pac. 501. So the firm is
dissolved by a refusal of all the partners to proceed with the business. Ligare v. Pea-
cock, 109 111. 94. And the same is true where the partners wind up the business and
divide all the assets among themselves. Piichardson i-. Gregory, 126 111. 166, IS N. E.
777 ; Kennedy v. Porter, 109 X. Y. 526, 17 N. E. 426.
§ 286.] OF DISSOLUTION, 375
Not only would any express reniincialion have this effect, but a
general consent of the terminatitMi of the partnership would be
inferred from conduct or circumstances not otherwise explicable ;
as, by a tacit renunciation and sto})ping of business, settlement of
the debts and acc(junts, converting of the projiei'ty into money, or
division of it among the i)artncrs, sale of the good-will, or the
like. (/>)
§ 285. Dissolution by Incorporation. — It has been questioned
whether the incorporation »f the partners, lor a similar business,
would amount to a dissolution by consent. This has not unfre-
quently occurred in this countiy, where successful manufacturers
or mechanics have found their business so enlarged that it was
more convenient to transact it under the forms of a corporation.
Via should say that this fact alone would not necessarily be the
dissolution of the partnershij). But it never would stand alone.
The corporation would always have some defined relation to the
former partnershijt. Either it would be a substitute, taking all
its business and all its property, leaving it nothing to hold, noth-
ing to do, and nothing to be ; in which case it would be clear that
the partnership had died out ; or else some portion of the business
and the stock would be left for the firm, and some use made of it ;
and then it would remain for these purjtoscs. (cy)^
§ 286. Effect of Dissolution on the Interests or Rights of Partners.
Some general results follow a dissolution of j)artnersliij», or
some general principles apply to dissolution, which are especially
pertinent to dissolution by articles or by consent, and we will
present them in a general form now ; reserving the modifications
case not reported so fully, 4 Camp. 373. 11 Hare, 325 ; Pereus v. Johnson, 3 Sm.
In Hutchinson v. Whitiiehl, Hayes, '/8, & G. 419.
it was provided that the partnership should (7) See Goddard v. Pratt, 16 Pick,
be dissolved only by deed. It was held 412; The Cape Sable Company's Case, 3
that an award under a oubmission, both Bland, 674. There is no doubt that after
under seal, dissolving the partnership, was the incorporation the members of the firm
valid. The action of covenant lies for a are liable for all debts previously incurred.,
wrongful dissolution. Addams 0. Tutton, Haslett v. Wotherspoon, 2 Rich. Eq. 395.
39 Pa. 447. But if the new corporation assumes all
(p) For cases bearing on such ques- debts and liabilities of the old firm, and
tions, see Heath v. Sansom, 4 B. & Ad. the creditors assent thereto, they cannot
175 ; Jetferys v. Smith, 3 Euss. 158 ; on the failure of the corporation hold the
Johnson v. Evans, 7 M. & G. 240; Haber- former members of the firm. Whitwell
shon V. Blurton, 1 De Gex & S. 121 ; v. Warner, 20 Vt. 425.
Aspinall v. The London & N. W. R. Co.,
1 Where it was provided in the articles that the firm should be incorporated as soon
as might be, the partnership was held to be dissolved as soon as the corporation was
formed. Hennessy v. Griggs, 1 N. Dak. 52, 44 N. W. 1010.
376 THE LAW OP PARTNERSHIP. [CH. XII.
in tliem caused by particular methods of dissolution, until we
sjiccially consider those methods.
In the first place, a mere dissolution has no effect whatever on
the property of the partners, or their interest in the joint stock or
joint rights, or their power over old or existing debts due to them
or due from them ; excepting always that they have all entirely
lost the power of acting for each other, or binding each other, any
further than all joint debtors or joint creditors may do. Thus, if
we suj)pose a dissolution by articles or consent, and no s])ecial
agreement as to the powers or acts of the several partners, each
one has a perfect right to require, and through equity compel,
a final settlement and adjustment of all questions and all prop-
erty ; (r) and each one has the same power as to this, and all the
details connected with it, as any other. So, too, each partner has
as much right to any particular thing or things as any other ;
and all the others have as much right as he has. (s)i
As all are liable for the debts, so any one may make a payment
of any or all the debts, and charge such payment to the partner-
ship, without any express authority for this. (^) Even if he uses
property to pay the debt in a way that is fraudulent or injurious
to his former partners, and must, therefore, respond to them in
account or as damages for the act ; the creditor thus paid, pro-
vided he do not participate in the wrong, will hold his payment,
even if he were aware of the dissolution, (m)
(r) Ante, % 206. of the' partnership, and has the same
(s) Munifonl v. McKay, 8 Wpnd. 440. authority to deal with the property of the
See Downs v. Jaekson, 33 111. 464, on the partnership for partnership purposes as he
relative mutual liability of each partner had during the continuance of the partner-
for the partnership debts. And see Rob- ship. Tliis must necessarily be so. If it
bins V. Fuller, 24 N. Y. 570 ; Ward v. were not, at the instant of the dissolution
Tyler, 52 Pa. 393. See, on the relations it would be necessary to apply to this
and liabilities of partners after dissolution, court for a receiver in every case, although
Chapman v. Thomas, 4 Keyes, 216. the ])artners did not diH'er on any one
(/!) Lyon V. Haines, 5 M. & G. 541 ; item in the account." And see Darling v.
Smith V. Winter, 4 M. & W. 461 ; But- March, 22 Me. 184 ; Eoots v. Welford, 4
chart V. Dresser, 10 Hare, 453, 4 De G., Munf. 215; Woodford v. Downer, 13 Vt.
M. & G. 542. In this last case, it was 522 ; Union Bank v. Hall, 1 Harper, 245 ;
said : "Each partner has, after and not- Wood v. Braddick, 1 Taunt. 104.
withstanding the dissolution, full author- (u) See Butchart v. Dresser, 4 Russ.
ity to receive and i)ay money on account 430 ; Lewis v. Reilly, i Q. B. 349.
^ Tf after dissolution one partner makes exclusive use of the assets, he must account
to the other pai'tners for the value of the use. Ligare v. Peacock, 109 111. 94. So if
he converts the as.sets to his own u.se he must account for their value. King v. White,
63 Vt. 158, 21 Atl. 535. For the rule in case of dissolution by death, see post,
§ 346, note.
§ 288.] OF DISSOLUTION. 877
§ 287. Effect of Dissolution on Povrer over Firm Debts. — As to
the debts due to the partnership, any one partner may claim and
receive them for the partnership ; and his receipt would be bind-
ing on the partnership, in favor of an innocent debtor, (w) We
should apply the same principle to any method of payment.
Thus, if the partner compromised the debt, allowing an enormous
discount for immediate payment, with a design to abscond with
the money, or otherwise defraud the other partners, we should
say, as matter of law, that an entirely innocent debtor would still
be protected, although he knew of the dissolution, (w) But we
should also say, that, as matter of fact, any such circumstances
would strongly aid the proof of dishonesty, or even raise a pre-
sumption of it. For it would certainly be a general probability,
that a debtor of a partnership which he knew to be dissolved, if
he found one of tl>e partners so anxious to settle the account or
anticipate payment as to consent to great sacrifices, would infer
that mischief might be intended, and at least be sufficiently warned
to put him upon inquiry as to the honesty and validity of the pro-
posed transaction. But, we repeat, we should consider this a
question only of fact; for the rule of law must be, that a dissolu-
tion without especial agreement leaves all the partners on equal
ground, and gives to each an equal power of settlement, (x)
Therefore it is that such a dissolution is rare. Far more fre-
quently provision is made, either in the original articles or in an
agreement at the time of dissolution, as to the manner of settle-
ment; that is, who shall collect and jiay the debts, adjust and set-
tle the accounts, and (to use the common phrase) wind up the
concern. And such an agreement certainly affects all the part-
ners and all third parties who have notice or knowledge of it.
§ 288. "Winding up the Concern. — The general rule we take to
be this : The concerns of the partnership must be wound up in
some way and by some persons. The partners may provide for
this at their own pleasure. If they do not provide for it, the law
provides for it in the only possible way ; and that is by continu-
(v) See cases cited, mite, note (/). And that after the dissolution of a firm, one or
see Elliott v. Brown, 3 ,S\vanst. 489, n. ; more of the partners may make a com-
Hawkins v. Hawkins, 4 Jur. N. s. 1044 ; promise with any creditor of the firm,
Benhara v. Gray, 5 C. B. 138 ; Waithman which compromise shall only operate to
V. Jliles, 4 Camp. 373 ; Colnaghi v. discharge the debtor making the same.
Bluck, 8 C. & P. 464, as to other rights But such compromise shall not operate to
of partners after dissolution. prevent the other copartners from calling
(w) Union Bank v. Hall, 1 Harper, on the partner making the same for his
245. In New York, it is enacted by ratable portion of such debt,
statute passed April 18, 1838, ch. 257, (x) See cases in previous notes.
378 THE LAW OF PARTNERSHIP. [CH. XII
iiig the partnership, with its incidents of interest, power, and
obligiition, for the puri)ose of thus winding up, and therefore as
far as is necessary for thus winding up, and no further, {y) And
this power of a former partner has been held to pass to his admin-
istrator at his death, {yy)
It follows that every i)artner has full authority to do anything
the want of which would prevent this winding up, or leave it in-
complete ; and that he can do nothing which is not indispensable
for this })urpose. We say indis[»ensablc, in exclusion of what is
merely convenient, or even desirable and expedient, unless it can
be considered necessary for the proper settlement of the affairs of
the firm. And even a settlement by a partner after dissolution,
in fraud of the firm, would be valid in favor of a third party who
was wholly innocent, (^yyy^
§ 289. Settling or Liquidating Partner. — If the partners agree,
as they generally do, that one or more of them shall wind up the
business, while the others have nothing to do with it, this arrange-
ment confines the power to those thus designated ; but does not
enlarge this power in them, although it takes it away from the
others.^ It seems, however, to be well settled, that an authority
given to one partner " to close all business transactions of the late
firm ; " (2) " to settle up the business of the firm ; " (a) " to settle
(y) Ex jMTtc Williams, 11 Ves. 5 ; Pea- (yy) Mutual Institution v. Eusleii, 37
cock V. Peacock, 16 Ves. 57 ; Crawsliay v. Mo. 453.
Collins, 15 Ves. 227, 2 Russ. 342 : Wil- {yyy) Thrall v. Seward, 37 Vt. 573.
son V. Greenwood, 1 Swanst. 480 ; Craw- (z) Palmer v. Dodge, 4 Ohio St. 21.
shay V. Maule, 1 Swanst. 507 ; Butchart (a) Parker v. Cousins, 2 Gratt. 372 ;
V. Dresser, 4 De G., M. k G. 542 ; Payne Long v. Story, 10 Mo. 636 ; Martin r.
V. Hornby, 25 Beav. 280 ; Chajipell v. Walton, 1 McCord, 16 ; Parker v. Mac-
Allen, 38 Miss. 213 ; Thursby v. Lidger- omber, 18 Pick. 505 ; Fellows v. Wyman,
wood, 69 N. Y. 198. 33 N. H. 351.
1 Liquidating Partners. — Upon dissolution it is competent for the partners to
agree on one partner as special agent for winding up the affairs ; one who thereafter
deals with another partner in liquidation matters with notice of this appointment can
get no benefit thereby. Hilton v. Vanderbilt, 82 N. Y. 591. No express agreement
upon one partner as liquidating partner need be proved ; one may be shown to be the
lii]uidating partner by evidence of circumstances, as that he exercises the functions of
such otiice with the tacit consent of the other partners. Fulton v. Central Bank, 92
Pa. 112 ; Siegfried v. Ludwig, 102 Pa. 547 ; Campbell v. Floyd (Pa.), 25 Atl. 1033.
"When neither partner is created a liquidating partner, either may so act. Hawn v.
Land & Water Co., 74 Cal. 418, 16 Pac. 196.
In some cases of dissolution, one partner has the right to liquidate without special
agreement or appointment. Thus upon dissolution by bankruptcy the sole solvent
])artner has a right to take the assets and settle the affairs of the partnership. Vetter-
k'in V. Barnes, 6 F. R. 693 ; King v. Leighton, 100 N. Y. 386, 3 N. E. 594. It is,
however, a right which he may waive, as by permitting the assignee of the bankrupt
partner to administer the assets. Vetterlein v. Barnes, 6 F. R. 693.
§ 290.] OF DISSOLUTION. 379
all demands in favor of or against the firm;" (5) "to settle busi-
ness of the firm, and for that purpose to use their name ;"((?)
" to settle business of the firm and sign its name for that pur-
pose ;" (d) " to use the name of the firm in liquidation, only of
past business," (e) — confers no more power than the partner
would have by the general pi'inciples of the law of partnership.
In one case, however, the court were of the opinion that the
authority given to use the partnership name conferred a greater
power than would have otherwise existed, and held that it was for
the jury to find, from the course of trade, and the usage and cus-
tom of merchants, as well as from the notice itself, whether this
power extended to the renewal of a note which had been dis-
counted at a bank previous to the dissolution. (/) When one
partner takes all the assets, for the purpose of settlement, equity
may require him to indemnify the other partners against the
liabilities of the firm, (^ff) If a partner, under such an authority,
receives a note, in payment of a debt due to the firm, payable to
bearer, it seems that the legal title to such note will vest in such
partner alone ; and, therefore, he will be able to give a good title
to it by delivery. {(/)
§ 290. Power of Settling Partner to Contract. — The questions
which refer to this rule have arisen principally where any former
jiartner, and especially where a pai'tner authorized by the rest to
settle the concern, has issued new paper, or indeed entered into
any new contract. This may be not only honest, but in the high-
est degree advantageous, to all concerned. Thus, a creditor may
be willing to renew a note or bill, or take a note or bill for a
former purchase on a credit which has expired ; and, unless lie
can have this note or bill in the name of the firm, he insists upon
all his money, which can neither be refused nor paid without dis-
aster. It is an unquestioned principle of law, that after a dissolu-
tion the authority of a former partner to bind the others is gone,
(b) Lockwood v. Conistock, 4 Mc- firm, by an imlorsement in blank, in pay-
Lean, 383. ment of a debt, it was held, that such
(c) National Bank v. Norton, 1 Hill, note, being payable to bearer, might be
572. legally transferred to a third person by
(fZ) Hamilton v. Seaman, 1 Ind. 185. another partner, who was authorized to
(e) Martin v. Kirk, 2 Humph. 529. settle the concerns of the partnership. On
(/) Alyers v. Huggins, 1 Strobh. 473. a settlement of partnership affairs, if it is
(ff) Cook V. Jenkins, 35 Ga. 113. agreed that one of the partners shall
ig) See the language of Shaw, C. J., collect a note and accounts, for the
in Parker v. Maconiber, 18 Pick. 505, benefit of both, it will be presumed that
where the individual note of a partner, the money, as fast as received, shall be
made after the dissolution of the partner- divided between the parties. Metcalf v
ship, was transferred by the holder to the Fonts, 27 111. 110.
380 THE LAW OF PARTNERSHIP. [CH. XII,
except as to the settlement of the estate of the old partnership ;
and it is usually stated that he has no power to make any new
contracts.^ It is obvious, however, that a strict construction of
this rule might prevent the partner whose duty it is to settle up
the estate from accomplishing this object in the most judicious
manner. So far as the question is still an open one, we should
consider the true rule to be, that no contract can be made by one
partner, after dissolution, by which the others will be bound,
unless such contract is necessary for settling up the business of
the concern in the most judicious manner.
§ 291. Other Powers of Settling Partner. — The duty of settling
partners is similar in many respects to that of trustees and
agents ; (/;) and they should, in settling up the affairs of the old
firm, have all the rights which agents usually have by the usages
of the l)usiness in which the old firm was engaged. In the lan-
guage of the Supreme Court of Maine, " The dissolution operates
as a revocation of all authority for making new contracts. It
does not revoke the authority to arrange, liquidate, settle, and
pay those before created." (i) Thus, in a case where a bill of
exchange was drawn in blank by one partner, to the order of the
firm, and indorsed before the dissolution of the firm, it was held,
that it might after that event be filled up and negotiated, (j/' )
And, after dissolution, one partner may waive demand and notice,
this being considered as merely a modification of an existing
liability ;( A:) he may also, it has been held, lawfully assign to a
creditor of the firm a demand due to the partnershij) ; (/) or
acknowledge in the partnership name, after dissolution, a bal-
ance due from the partnership, (m) If a note is signed by a
firm payable to the order of one of its members, this person
may indorse the note after the dissolution of the firm, so as to
bind it. (n)
(h) Washburn v. Goodman, 17 Pick, tlie dissolution. Cunningham v. Bragg,
519. See Wilson v. Stilwell, 14 Ohio, 37 Ala. 436. See also Gannett v. Cun-
464 ; Parker v. Phillips, 2 Cush. 175. ningham, 34 Me. 56.
See also Caldwell v. Stileman, 1 P»awle, (j ) Usher v. Daunce}', 4 Camp. 97 ;
212 ; Beak v. Beak, 3 Swanst. 627. Lewis v. Reilly, 1 Q. B. 349. See Myers
(i) Darling v. March, 22 Me. 184. v. Standart, li Ohio St. 29.
But the power to give a note, in renewal (/r) Darling v. March, 22 Me. 184.
of one given before dissolution, is denied {I) Milliken v. Lnring, 37 Me. 408.
in Lumberman's Bank v. Pratt, 51 Me. (m) Ide v. Ingrahani, 5 Gray, 106.
563. The same rule was held where a {n) Temple v. Seaver, 11 Cush. 314.
note was given for a debt created before
^ A continuing partner can make no new contract whi(di shall bind the firm. Ante
§ 131 et seq.; Goodspeed v. Wiard Plow Co., 45 Mich. 322; Gardner v. Conn, 34 Oh.
St. 187 ; Batik v. Green, 40 Oh. St. 431 ; Lee v. Stowe, 57 Tex. 444.
§ 292.]
OP DISSOLUTION.
381
111 Pennsylvania, the courts have fully adopted the principle
that as to past transactions the partnership continues until
they are settled. Thus, it is held that after dissolution a partner
may borrow money to pay partnership debts, (o) and may renew
the notes of the firm ; {]?) or give notes in the firm name, in pay-
ment of fii'in debts. (7)
§ 292. Power to deal with Negotiable Paper. — There are, how-
ever, other authorities, which construe the rule that a jortner
cannot make a new contract after dissolution very strictly, and
hold that the power of a surviving partner not only does not extend
to the giving of a note, (r) or accepting of a bill, (.s-) in the firm
name, after dissolution, for a pre-existing debt of the firm, even
though it be antedated so as to bear date before the dissolu-
tion, (Q but also that he cannot renew bills or notes given by the
partnership before dissolution, so as to bind his former copart-
ners, (m) or indorse notes given to the firm before dissolution, so
as to vest the title in the indorsee, (v)
Nor, it has been held, can he indorse notes belonging to the
firm at the time of the dissolution, so as either to render the
other partners liable on his indorsement, or to pass a valid title
to the notes, {iv') It has even been doubted whether a note in-
(0) Estate of Davis & Desauque, 5
Whait. 530.
(p) III. ; Brown r. Clark, 14 Pa. 469.
(q) liobinson v. Taylor, 4 Barr, 242.
(/•) Lockwood V. Conistock, 3 lleLean,
383 ; Bank of Port Gibson i'. Baugh. 9
Sm. & M. 290; Hamilton v. Seaman, 1
Inil. 185; Perrin v. Keene, 19 Me. 355 ;
Lusk V. Smith, 8 Barb. 570. [See ante,
§ 131.] In Mitchell v. Ostrom, 2 Hill,
520, the note in suit was signeil, "Late
firm M., J., E., & Co." The settlement
of a book account, by a note on time,
given in the name of the firm, by the
remaining partner authorized to liquidate,
does not bind the retiring jiartners. They
stand to the remaining partner in the re-
lation of sureties; and the latter cannot
bind them to any new contracts, im])0sing
adilitional burdens. Smith v. Sheldon,
35 Mich. 42.
(s) Tombeekbee Bank v. Dumell, 5
Mason, 56.
(t) Wrightson v. Pnllan, 1 Stark. 375 ;
Lansing v. Gaine, 2 Johns. 300.
in) Palmer v. Dodge, 4 Ohio St. 21 ;
National Bank v. Norton, 1 Hill, 572 ;
Parker v. Cousins, 2 Gratt. 372 ; ^Martin
V. Kirk, 2 Humph. 529; Long v. Story,
10 Mo. 636 ; Stone v. Chaniberlin, 20
Ga. 259. In Bank of South Carolina v.
Humphreys, 1 McCord, 388, the firm dur-
ing the continuance of the partnership,
had written a letter to the holder of a
note against them, requesting permission
to renew it, until the expiration of a cer-
tain time, during which time a renewal
was given by one partner, hut subsequent
to the dissolution. It was held that the
firm was not bound. See Van Valken-
burgh V. Bradley, 2 Iowa, 108, overrul-
ing Kemp V. Coffin, 3 Greene (la.), 190.
And see Richardson v. Moies, 31 Mo. 430.
{v) Sanford v. Mickles, 4 Johns. 224 ;
Fellows V. Wyman, 33 N. H. 351. See
also Geortner v. Trustees, &c., 2 Barb.
625 ; White v. Tudor, 24 Tex. 639 ;
Cavitt V. James, 39 Tex. 189. See § 291,
note (n).
(iv) Abel f. Sutton, 4 E.sp. 108; San-
ford V. Mickles, 4 Johns. 224 ; Parker v.
Macomber, 18 Pick. 505 ; Humphries v.
Chastain, 5 Ga. 166. See Fowle v. Har-
rinicton, 1 Cush. 146.
382 THE LAW OF PARTNERSHIP. [CH. XII.
dorscd before dissolution, but nofrotiated afterwards, will bind the
firm ; (.r) but, if negotiated in good faith for the purposes for which
it was indorsed, we are inclined to think it would, although the
contrary doctrine has been held, {y)
§ 293. Settling Partner acting with Express Authority. — One
partner, after dissolution, may, of course, bind his copartner by
any of the above acts, if he have an express authority for that
purpose. And such authority may be given by parol, although
the terms upon which the i)artnership was dissolved should be in
writing. Thus, where a retired partner stated that he left the
assets and securities of the firm in the hands of the continuing
})artner, for the purpose of winding up the concern, and that he
had no objection to his using the partnership name, it was held
that the jury were justified in finding that the continuing partner
had authority to indorse promissory notes so left in his hands, in
the partnership name. (2) So an authority by parol to continu-
ing partners to sell a negotiable note made to the firm before
dissolution, will authorize an indorsement of such note, " without
recourse," in the name of the firm, (a) This authority may also
be given by implication ; as where one partner receives a note as
his portion of the property of the firm. In such case, he may
indorse it without recourse; (6) but without authority, either
express or implied, it has been held that such power does not
exist, (c) So it has been said, that the settling partner's transfer
of a bond would be good, under his general authority, {d)
§ 294. Po-wer to do Acts Necessary for Winding up, — And it
is certain, as has been already said, that for all ordinary transac-
tions, the power of each partner must be equal to that of any
other partner, unless the power of acting in behalf of the firm is
confined by agreement to one ; and then this power of this one
must be complete for the purpose of winding up, unless expressly
limited. Therefore, the settling partner may pay and receive
payment, (e) may sell goods consigned to the firm before dissolu-
{x) Per Lord Kenyoii, in Abel v. in which judgment had heen obtained by
Sutton, 4 Esp. 108. all the partners before the dissolution, it
((/) In Glasscock v. Smith, 25 Ala. was held, that the remaining partners had
474. The question was raised, but not authority under that power to give to the
decided, in Mechanics' Bank v. Hildreth, defendant a note for the payment of the
9 Cush. 359. sixpences, under the Lords' Act, on behalf
(:) Smith v. Winter, 4 M. & "VV. 454. of themselves and the retiring partner.
In Burton v. Issitt, 5 B. & Aid. 267, by a (a) Yale v. Eames, 1 Met. 486.
deed of dissolution of partnership, a power (h) Waite v. Foster, 33 Me. 424.
was reserved to the remaining partners to (c) Fellows v. Wyman, 33 N. H. 351.
use the name of the retiring jiartner in (d) Morse v. Bellows, 6 N. H. 568.
the prosecution of all suits. In an action (e) Butchart v. Dresser, 10 Hare, 453,
§ 295.] OF DISSOLUTION. 383
tion, (/) and may compromise debts in any way which does not
indicate fraud, {g) ^ So, too, he may midoubtedly exchange
goods, but always for the purpose of winding up the old concern.
He has power to draw a bill upon a debtor of the firm, and, on
its being accepted, to sue him in the firm name ; {h) to release a
debt due to the firm ; {i) to pledge shares of stock which the firm
had contracted to buy, but had not paid for, to raise the money
to pay for the shares ; (^ ) to collect, compound, and release debts
of the firm. (Jc) But, anything done by him, however innocent
and projjcr in itself, would not be within the scope of his au-
thority, if it was done for the purpose of continuing the business
of the firm, or o])ening it anew, instead of winding it up. {I)
It may be doul)ted, too, whether he can, without especial
authority, buy goods so as to bind the other partners for the
purchase. It is not uncommon, in practice, for a settling partner
to make small purchases, in order to complete an assortment of
goods on hand, and promote the sale thereof. If he does this
with cash, in good faith, the seller certainly holds the money,
and we should have no doubt that he might credit himself with
such payments in his account. But, if he buys on credit, we do
not think that the other ))artners would be held, unless they dis-
tinctly authorize the purchase. (m)
§ "295. Power of Court of Equity over Settlement. — All the
partners, and each partner, have the right of requiring that the
settlement should be made with reasonable promptitude, and with
entire respect for the rights and interests of each one. And, of
course, no partner can have any rights inconsistent with these
rights of his copartners, {n) And if anything is done which
should not be done, or left undone which should be done, a court
4 De G. M. & G. 542. See also Paiker i'. (/.) Huntington v. Potter, 32 Barb.
Phillips, 2 Cush. 175, 178 ; Washburn v. 300.
Goodman, 17 Pick. 519, 536 ; Fereira (J) 'Wilson v. Greenwood, 1 Swanst.
V. Sayres, 5 W. & S. 210 ; Beak v. 481 ; Crawshay v. ilaule, 1 Swanst. 507 ;
Beak, 3 Swanst. 627. Ex parte Williams, 11 Ves. 3.
(/) Herberton v. Jepherson, 10 Barr, (m) See Minnit v. Whinnery, 5 Bro. P.
124. C. 489, 2 Bro. P. C. (Dublin ed. ) 323,
('/) Bass V. Taylor, 34 Miss. 342. 16 A'in. Abr. 244 ; Vice v. Fleming, 1
(h) King V. Smith, 4 C. «& P. 108. Younge & J. 227 ; Ex prn-te Harris, 1
(/) Napier v. McLeod, 9 Wend. 120. JIadd. 583.
{j) Hutchart v. Dresser, 10 Hare, 453, {n) See Lees v. Laforest, 14 Beav. 2.')0 ;
4 De G. M. & G. 542. [But one partner Cleggy. Fishwick, 1 ilc. & G. 294 ; Perens
after dissolution cannot usually pledge the v- .Tohnson, 3 Sm. & G. 419 ; Clements v.
assets even to pay the debts. Roots v. Hall, 2 De G. & J. 173.
Mason City Salt Co., 27 W. Ya. 483.]
1 Buxton V. Edwards, 134 Ma.ss. 567 ; Conrad v. Buck, 21 W. Ya. 396.
384 THE LAW OB^ PARTNERSHIP. [CH. XII.
of equity will intci't'ere. There is, perhaps, no class of questions
or of cases in which equity so readily or so usefully exerts its
power as in those which arise under dissolution of ])artnership.
The guiding principle in its action is, to preserve equally the
rights of all parties, (o) Hence, no partner can make any use
of the projjcrty for his own particular benefit; but he will be held
chargeable for all the profits and advantages which may accrue
from such use, either as trustee, or in some other adequate
way. (^j)) And, as a general rule, each partner has an equal right
to the i)ossession of the partnership property. If the firm is dis-
solved, and the partners cannot agree as to the division of it, a court
of equity will appoint a receiver to collect and apply the effects, {q)
Nor can any i)artner claim to himself any especial commission
or payment for his services in settling, unless there be an agree-
ment to that effect ; the reason which forbids this after dissolu-
tion being the same which forbids such claim for services in
the ordinary partnership business ; namely, the entire equality
of the partners, unless they agree uj)on some inequality, (r) So
too, all compositions or compromises of debts, all settlements,
and all the transactions which follow dissolution, must be for the
common and eipial benefit of all the partners, (.s)
§ 296. Effect of Dissolution upon Third Parties. — No dissolu-
tion of any kind affects the rights of third parties, who have had
dealings with the partnership, without their consent. This is a
universal rule, without any exception whatever, {t) Undoubtedly,
(o) Bennett's Case, 18 Beav. 339, 5 De v. Lashbrooke, 8 Dana, 219 ; Paine v.
G. M. & G. 284 ; Benson v. Heathoin, 1 Thatcher, 25 "Wend. 450 ; Andeison r.
Younge & C. 326 ; York & North Mid- Taylor, 3 Led. 420 ; Reyl>old v. Dodd, 1
land R. Co. v. Hudson, 16 Beav. 485; Harr. (Del.) 401 ; Newland v. Tate, 3
Maxwell v. The Port Tennant Co., 24 Ired. Eq. 232 ; Phillips v. Turner, 2 Dev.
Beav. 495 ; Richardson v. Larpent, 2 & B. Eq. 123 ; Donglierty v. Van Nos-
Younge & C. 507 ; Harris v. The North trand, 1 Hoff. Ch. 68 ; Washburn v.
Devon R. Co., 20 Beav. 384. Goodman, 17 Pick. 519 ; Hite v. Hite,
{p) Kclley V. Greeuleaf, 3 Story C. C. 1 B. Mon. 179. But see Bradley v. Cliaiii-
9:5, 101 ; Featherstonhnugh v. Fenwick, berlin, 16 Vt. 613; Wilby v. Phinney, 15
17 Ves. 298; Pothier, Contr. de Soc. ch. Mass. 120.
8, § 4, art. 150. See also Leach v. Leach, (,9) See Porter v. Wheeler, 37 Vt. 281 ;
18 Pick. 68; Dougherty w. Van Nostrand, Beak v. Beak, 2 Swanst. 627; Page v.
1 Hoff. Ch. 68, 70. MeCrca, 1 Wend. 167 ; Bracket i'. Wins-
(7) Terrell v. Goddard, 18 Ga. 664. low, 17 Mass. 153; Hainmatt v. Wyman,
See Stevens v. Yeatinan, 19 Md. 480. 9 Mass. 139; Stevens v. Morse, 7 Me. 36.
(r) Caldwell v. Lieber, 7 Paige, 483 ; (t) Story on Part. § 334 ; Ault v.
Thornton v. Proctor, 1 Anst. 94 ; Frank- Goodrich, 4 Russ. 430. Gow on Part. ch.
lin V. Robinson, 1 Johns. Ch. 157, 165 ; 5, § 2, p. 240, 3d edit. ; Blundell v.
Bradford v. Kiniberly, 3 Johns. Ch. 431 ; Winsor, 8 Sim. 613. Dissolution does
Burden v. Burden, 1 Ves. & R. 170 ; Lee not release the partnership fiom their lia-
§ 297.] OF DISSOLUTION. 385
the jiartnei'S may agree as they please about their joint property and
all the parts of it; and so they jnay about their joint obligations.
And all such agreements are valid, so far as they do not affect
the rights of strangers ; but, where they do, they are wholly
void. Thus, three partners may agree to-day to dissolve, and to
divide all the property in a certain way, specifying that one shall
have this, another that, and the third that thing. Or they make
such an agreement about some one or more things, and not about
all. And these agreements determine the property in these
things effectually as to the partners themselves. But they are
all responsible in solido for the debts due by the firm ; and all
the joint j)roperty of the firm is just as liable for the joint debts,
after such division or settlement among themselves, as it was
before, (u)
§ 297. Dealing with any Partner Protected. — So, too, it is very
common fur the })artners to agree not only that one of them mai/
settle and wind up the partnership concern, but that one or more
shall wind it up, and for that purpose shall have in full property
all the goods or funds and business, or a certain j)art of tliem,
and shall pay all the debts ; and this he undertakes to do. Such
an agreement is so far binding on the partners, that, if either of
the others is obliged to pay a debt thus assumed by a partner, the
partner paying may have his action for the money against the
partner who undertook to pay. But, so far as the creditors are
concerned, all the partners remain just as responsible to all the
creditors, after such an agreement, as they were before, (v)
Thus, an agreement between the partners, that one of them shall
settle up the affairs of the concern, collect and pay the debts,
and the like, will not prevent any person from effectually paying
to any partner a debt due the firm; {iv) even though the debtor
has notice of the arrangement, (a:) And a payment, after dis-
solution, to an insolvent partner, has been held to be good, where
bility on a continuing but still unexecuted things past, the partnership continues,
contract. Dickson v. Indiana Mfg. Co., and always must continue." See Smyth
63 Ind. 9. V. Harrie, 31 111. 62. And see a some-
(u) Smith V. Jameson, 5 T. R. 601 ; what peculiar case on this subject, Mayer
Dickenson v. Lockyer, 4 Ves. 36; Cum- v. Clark, 40 Ala. 259; and Myers v.
niins V. Cummins, 8 I red. Eq. 723 ; Smith, 15 Iowa, 181.
Wood V. Braddick, 1 Taunt 104 ; Hoby (v) Pee Rodgers v. Maw, 4 Dowl. &
V. Roebuck, 7 Tanut. 157 ; Graham v. L. 66 ; Smith v. Jameson, 5 T. R. 601.
Wichels, 1 Or. & M. 188. In Wood v. (w) King v. Smith, 4 C. & P. 108 ;
Braddick, Heath, J., says : "When a Diitf v. East India Co., 15 Ves. 198;
l)artnership is dissolved, it is not dissolved Coombs v. Boswell, 1 Dana, 473.
with regard to things past, but only with (x) Porter v. Taylor, 6 M. & S. 156.
regard to things future. With regard to
25
386 THE LAW OF PARTNERSHIP. [CH. XII.
the partner was insolvent at the time the firm was formed, and
known to be so to the other partners, (y) But where the legal or
equitable interest in a partnership has been transferred to an
assignee, a debtor who should ])ay a debt to either of the part-
ners, after notice of such assignment, would be liable to the
assignee. (2) And a payment to the executor of a deceased
partner is not good, (a)
§ 298. Consent of Creditor to Special Arrangement. — Though
these agreements between the partners do not affect the creditors,
without their consent, yet it is certain that, if, in any case, they
do consent, and for sufficient consideration, they become parties
to the agreement, and are bound by it. (ft) The question whether
they have assented, and, if so, whether on good consideration,
arises sometimes under every form of dissolution ; but far more
frequently where there is a change among the members, — one or
more going out, and one or more new ones coming in. And then
it is important to ascertain who are the debtors or the creditors,
under an obligation which existed at the time the contract was
made; that is, whether a retiring partner is freed from this
obligation, or whether an incoming partner lias assumed it. "We
shall consider the principles applicable to these cases more
fully when we treat of this particular form of dissolution ; at
present, remarking only, in the first place, that the consent of the
creditors to an arrangement which discharges some of their debt-
ors, may be expressed or implied from circumstances distinctly
indicative of their knowledge of the transfer or change of the
indebtedness, and of their concurrence and consent ; and in the
next place, that this concurrence and consent, whether expressed
or implied, will not suffice to exonerate the partners whom it is
intended to discharge, unless there be a valuable consideration
for it. Because, as every creditor has the liability of every part-
ner, he only lessens his security by taking one for the whole ;
and his agreement to do this can bind him no more than any
other agreement to discharge a debt, unless he gains some advan-
tage by it, — which may be, by added security, better terms of
payment, more favorable business, or any other benefit, — or
unless those whom he discharges undergo, at his instance or
request, a loss by reason of his concurrence and consent, by pay-
(7/) Major V. Hawkes, 12 111. 298. («) "Wallace v. Fitzsimmons, 1 Dall.
(2) Gordon v. Freeman, 11 111. 14. 248.
See also Pritchard v. Draper, 1 Russ. & (b) Buller J., in Tatlock v. Harris,
M. 191. 3T. R. 180.
§ 299.] OF DISSOLUTION. 387
iiig something to him who undertakes to pay the debt, or in some
other way ))cnefitin<>- him at their own cost, (c)
§ 299. Notice of Dissolution. — Another most important subject
connected with dissohition is notice. For, on the same principles
which hold a principal bound by the acts of his general agent
whose authority he had revoked, unless he has given sufficient
notice of his revocation, any person who deals with one profess-
ing to act for himself and others as partners in a certain firm,
and believes that he so acts, and is justified in that belief, either
by what those others so held out as partners have done or have
failed to do, has both a legal and a moral right to hold them as
partners, (ci) This is true of every dissolution, excepting that
by the death of a partner, (g) which event is said to operate an
universal notice, or, at least, to render a notice unnecessary. But
a creditor, having knowledge of a dissolution of a copartnership
when he gives credit to it, cannot recover from members who
have retired, however the knowledge was communicated to
him. (ee) And this is true where the dissolution is by the death
of a partner, and the debt is contracted with one having knowl-
edge of the death, {eee} The chief importance of this require-
ment of notice, and the principal questions arising under it,
belong to cases of dissolution by change, in which the retiring
partner must give notice of his retirement, or continue to be held
as partner ; and we shall consider when notice and what notice is
necessary, more fully, when we treat of that form of dissolu-
tion. (/)
(c) See, oil these questions, Kirwan v. the firm, will bind the firm to those who,
Kirwan, 2 Cr. & M. 617 ; Thompson f. having previously dealt with the firm,
Percival, 5 B. & Ad. 925 : Lodge t". Dicas, have had no notice of the dissolution.
3 B. & Aid. 611 ; David v. EUice, 5 B. & Dickinson v. Dickinson, 25 Gratt. 321.
C. 196, 1 C. & P. 369 ; Thomas v. Shil- See also Lovejoy v. Spofford, 93 U. S. 430.
libeer, 1 M. & W. 12-4 ; Evans v. Drum- (c) Devaynes v. Noble, Houlton's Case,
mond, 4 Esp. 89 ; Reed i\ White, 5 Esp. 1 Meriv. 616, Johnes' Case, 1 Meriv. 619,
122 ; Heath v. Percival, 1 P. Wms. 682, Brice's Case, 1 Meriv. 620 ; Webster v.
1 Str. 403 ; Bedford v. Deakin, 2 B. & Webster, 3 Swanst. 490 ; Blades c. Free,
Aid. 110 ; Featherstone v. Hunt, 1 B. & 9B. & C. 167; Smoutr. Ilbery, 10 M. & W.
C. 113; Spenceley v. Greenwood, IF. 1; Carapanari v. Woodburn, 15 C. B. 400.
& F. 297; Robinson v. Wilkinson, 3 One who suffers his name to be used in a
Price, 538 ; Gough v. Davies, 4 Price, firm after his retirement is responsible to
200 ; Blew v. Wyatt, 5 C. & P. 397 ; new customers as well as old, who do not
Hart V. Alexander, 7 C. & P. 746 ; Harris have actual knowledge of the change. He
V. Farwell, 15 Beav. 31. Krueger, 2 Low. 66 ; and is estopped to
{d) See Vice v. Fleming, 1 Younge & J. deny his responsibility, Speer v. Bishop,
227 ; Willis v. Dyson, 1 Stark. 164 ; 24 Ohio St. 598.
Rooth V. Quill, 7 Price, 193 ; Galwey v. (ee) Davis v. Keyes, 38 N. Y. 94.
Mathew, 1 Camp. 402, 10 East, 264 ; {eee) Stanwood v. Owen, 14 Gray, 195.
Pecker v. Hall, 14 Allen, 532. A new (/) See Chamberlain t». Dow, 10 Mich,
contract, after dissolution, in the name of 319. [See Post, § 315 ct seq.]
388 THE LAW OF PARTNERSHIP. [CH. XII.
^ 300. Actions and Remedies after Dissolution. — As the fact of
dissolution has no elt'ect whatever on the rights of third persons,
or on the rights of the firm against third persons, so it is a gen-
eral rule, that actions hy and against the firm must continue to
he what they would have been l)cfore the dissolution. That is,
all the names of the partners must be used in an action brought
by the settling partner, for a debt due to the firm : ' and, if a
debt owed by the firm is sued, not only can all the old partners
be sued, {g) but it is not enough to make the settling partner sole
defendant, even if he have undertaken to pay all the debts of the
firm, unless it is intended to discharge all the other partners.
A dissolution may put an end to a right or interest held by a
partnership, if it be held on condition that the partnership exists,
or if it be of such a nature that the law considers it as existing
only while the partnership exists ; but not if the continued exist-
ence of the right or interest is independent of the existence of
the partnership. Thus, a common lease to a firm, from a stranger,
is a property which survives the dissolution. All the partners
continue to be bonnd for the rent, and all are entitled to the
beneficial use of, or interest in, the lease. But if it is stipulated
that it be held during the partnership only, the lease is terminated
by the dissolution, (i) So, a lease held by the partners, as part-
ners, from one of them, is terminated by the dissolution ; and
the lessor may at once re-enter, without notice, (j*')
§ 301. What Acts Dissolve a Partnership : Outlawry. — Disso-
lution of partnership may occur by the act and intent of some of
the partners only, or as the effect of some act or condition of
theirs. (Jc) Without now speaking of these acts or conditions,
which are good cause for a decree of dissolution, we nmy speak
of some which, of themselves, operate a dissolution.^ One of
(f/) Dobbin v. Foster, 1 C. & K. 323. Featlierstouhangh v. Fenwick, 17 Yes. 298;
(i) Waithnian v. Miles, 1 Stark. 181. Crawshay v. Maule, 1 Swanst. 508 ; Miles
(j) Colnaghi v. Bluck, 8 C. & P. 464. v. Thomas, 9 Sim. 606.
(k) Peacock v. Peacock, 16 Ves. 50 ;
1 Atkinson v. Laing, Dowl. & Pi. N. P. 16, contra, is of ver)' doubtful authority.
'* The propriety of this decision is more than questionable." 1 Lind. Part. 286.
2 There are certain acts or events which dissolve a partnership by operation of law.
Thus the marriage of a female partner, Brown v. Chancellor, 61 Tex. 437 ; post, § 302.
So where a male and a female partner intermarry. Bassett v. Sliepardson, 52 Mich. 3,
17 N. W. 217. Upon the declaration or outbreak of a war, partnership with an enemy
is dissolved. Leftwich v. Clinton, 4 Lans. 176. Death or bankruptcy of a partner
dissolves the partnership as a matter of law (see post, §§ 304, 342 ; ch. xv.). And for
a similar reason the sale on execution of a partner's interest in the firm operates as a
§ 302.] OF DISSOLUTION. 38'J
thcso, at common law, is outlawry ; and, although we know
nothing of this here, we have conviction for felony. In England,
wiiere attainder forfeits the property of the convict to the king,
who cannot be a tenant in common with a subject, it not only
dissolves the partnership, but transfers to the king all the joint
property of the partnership. That effect of the rule exists now
in England only in theory, if it ever was applied to a case of
partnership. In this country we know nothing of it. But still,
we su))pose that a conviction for felony would here operate a
dissolution, of itself, and without waiting for a decree. But it
may be open to question whether notice is necessary in this case.
If a convicted partner used the name of the firm, apparently in
its business, immediately after his conviction, we should say, that
it would bind the linn to a party wlio had no knowledge of the
felony, and no especial means of knowledge.
§ 802. Marriage. — So, on the marriage of a female partner, the
other i)artner may dissolve the partnership ; for all the rights,
interests, and property she can hold as partner, pass at once to
the husband, by the common law, as completely by marriage as
they would by any transfer ; and she loses all power of binding
herself by any contract. (Z)
Her husband cannot claim, as matter of right, to be admitted
as partner; and if he becomes so by agreement, it is a new part-
nership. And even if, by some valid contract, the marriage
leaves her property under her control, she loses by marriage the
power of independent personal action in matters of business, and
this would sufhce to 0])erate a dissolution. But if any peculiar
agreements or trusts, or other circumstances, prevented this mar-
riage from operating a dissolution of itself, a court of equity
would deem it suthcient cause for a decree of dissolution, in al-
most any supposable case. (Z/)
(I) Nerot V. Buniand, i Ross. 247 ; and no definite period ; and either party,
see Browu v. Jewett, 18 X. H. 230. therefore, might at an}' moment have put
(U) Both Watsou and Gow, in their an end to it by notice. Miss Nerot mar-
works ou partnei'ship, say tliis question ried Mr. Burnand, without consulting her
has never been directly decided ; but in brother ; or, at least, without his assent.
Xerot V. Burnand, 4 Russ. 260, Lord If she chose so to change her situation as
Lyudhurst said : " When did the partner- to make Mr. Nerot, in point of fact, — if
ship terminate ? It was a partnership for the partnership went on, — a partner with
dissolution. Post, § 30-4 ; Wilson i'. ^Yaugh, 101 Pa. 233 ; Carter v. Roland,
53 Tex. 540.
The insanity of a partner does not of itself operate as a dissolution, even after the
partner has been adjudged insane by a court. Past, § 361 ; Besch v. Frolich, 1 PhiL
172 ; Raymond v. Vaughn, 128 111. 256, 21 N. E. 566.
390 THE LAW OF PARTNERSHIP. [CH. XII.
^ 803. Guardianship. — On botli of these priiieiples combined,
a partner who passes under guardianship for any reason —
whether improper conduct or weakness of inind or other cause —
has, in the first place, his property taken out of his hands, and,
in the next place, is deprived of the power of entering into valid
mercantile transactions ; and, therefore, he must cease to be a
partner. The guardian, entering into possession, becomes tenant
in common with the other partners, and has a right to an account.
But it would seem that such guardianshij) dissolved the partner-
ship of itself. If not, it would undoubtedly be deemed good
cause for a dissolution by a decree, (wi)
§ 304. Bankruptcy or Execution. — Bankruptcy or insolvency
is of such magnitude that it will be considered in a chapter by
itself. Here we will only say, that the i-eason why bankruptcy of
the firm, or of a partner, necessarily produces a dissolution of
the jiartnership, is, that it operates at once an absolute transfer to
assignees of the property of the whole firm, or of the whole in-
terest of the bankrupt partner in the property of the firm. Hav-
ing no longer any ownership, either in the stock or in the profits,
all foundation for the relation of partner is taken away. The
very same reason applies, and with the same effect, to aiiy cause
or act which takes from a partner all this ownership or interest.
It may be his voluntary and absolute transfer for a considera-
tion, or his transfer by way of mortgage ; but then it produces
dissolution only when the mortgagee takes possession. Strictly
and technically speaking, a transfer by way of pledge would have
this effect at once, because possession in the pledgee is essential
to the nature of a pledge. Or it may be a levy of execution
upon the partner's interest and subsequent sale. (/) We should
Burnaiid, Mr. Nerot had a right, the 13; Cod., lib. 4. tit. 37, b. 7; Pothier,
moment he received notice of that step, Pand. lib. 17, tit. 2, n. 67 ; 2 Bell's
to act upon it, and say, ' Yoiu' marriage Comm., b. 7, ch. 2, pp. 634, 635 (5th
has put fin end to the partnership.' No ed. ); Griswold v. Waddington, 16 Johns.
delay took place in that respect ; for the 438, 491 ; Milne v. Bartlet, 3 Jur, 358.
bill was filed as early as Hilary Term, (j) In Griswold v. Waddington, 16
1820, the marriage having taken place Johns. 491, Kent, Ch., says : " In speak-
towards the close of the preceding year, ing of the dissolution of partner.shii>s, the
I agree, therefore, with the Vice-Chancel- French and civil law writers say, that
lor, in saying that the partnership was partnerships are dissolved by a change of
dissolved on the 16th of September, 1819." the condition of one of the parties, which
There is, however, some room for doubting disables him to perform his part of the
if this case holds anything more than duty ; as by a loss of liberty, or banish-
that; as it was a partnership for no limited ment, or bankruptcy, or a judicial pro-
period, either party could j)ut an end to it hibition to execute his business, or by
by notice. confiscation of his goods. The English
(m) Doniat, b. 1, tit. 8, § 5, arts. 12, law of partnership is derived from the
§ ^05.]
OF DISSOLUTION.
391
say, however, that an attachment on mesne process wouhl not
have tliis effect, nor any further process until actual transfer, if,
in the mean time, the partner retains possession, (k^
§ 305. Assignment. — Whether a partner has or has not a right
to terminate the partnership at his pleasure, (w?) it is certain that
an assi<!;nmcnt by one i)artner, of all his interest in the joint
])roperty, to the other partner or partners, operates at once the
withdrawal of the assignor and a dissolution of the firm. For
here the other partners assent to the transfer, by their acceptance
of it; and, therefore, no (picstion could be raised as to the right
of the assignor, (w) And an assignment to a third person may
have the same effect, (o)
same source ; and, as the cases arise, the
same piinciples are applied. The jirin-
ciple here is, that when one of the parties
becomes disabled to act, or when the
business of the association becomes im-
practicable, the law, as well as common
reason, adjudf^es the partnership to be
dissolved." Fox v. Hanbury, Cowp. 44.5 ;
Skipt?. Harwood, 2 Swanst. 58t) ; William-
sou ?'. Wilson, 1 Bland, 418 ; Gowan v.
Jeffries, 2 Ashm. 305 ; Moodj' v. Payne,
2 Johns. Ch. 548 ; Button v. Morrison,
17 Ves. 194, 206. Morton, J., in deliver-
ing the opinion of the court in Arnold v.
Brown, 24 Pick. 93, limits the effect as
follows : " The insolvency of one or both
l)artners, we think, would not produce
this effect. The insolvency of one might
furnish to the other sufficient ground for
declaring a dissolution. But, in this State,
the inability to pay the company or the
private debts of the partners, would not,
]icr sc, operate as a dissolution. In Eng-
land, bankruptcy, and in some of our
States where insolvent laws exist, legal
insolvency, may produce a dissolution.
Wherever the one or the other opeiates to
vest the bankrupt's or insolvent's property
in assignees or other ministers of the law,
it would produce that effect. Probably a
voluntary assignment by a partner of all
his property would do the same. In such
cases, the partner, being divested of his
pro{ierty, and rendered unable to perform
the duties ot a partner, would, of course,
cease to be one ; and his assignees coming
in as tenants in common, and not partners,
the partnership would be dissolved." On
this, see Crispe v. Perritt, Willes, 467, 1
Atk. 133 ; Hague v. Rolleston, 4 Burr.
2174 ; Smith v. Stokes, 1 East, 363 ;
Smith V. Oriell, 1 East, 368 ; Ex parte
Williams, 11 Ves. 5 ; Wilson v. Green-
wood, 1 Swanst. 482 ; Harvey v. Crickett,
5 M. & S. 336 ; Barker v. Goodair, 11
Ves. 78 ; Marquand v. New York Manuf.
Co., 17 Johns. 529 ; Waters v. Taylor, 2
Ves. & B. 299. In Haborshon v. Blurton,
1 De G. & S. 121, it is expressly decided
that execution and assignment of the in-
terest of one of the i)artners in a firm dis-
solves the partnership. And see Renton
V. Chaplain, 1 Stockt. (N. J.) 62. So, a
sale by one partner of all his interest to
his copartner works a dissolution of the
partnership, Rogers v. Nichols, 20 Tex.
719 ; or sale to a stranger or partner,
Cochran v. Perry, 8 W. & S. 262 ; Reece
V. Hoyt, 4 Ind. 169; Marquand v. The
New York Manuf. Co., 17 Johns. 525.
[k) On questions connected with the
attachment of the property of one member
of a partnership, see ante, § 253 ; Esta-
brook V. Messersmith, 18 Wis. 545. See
post, 305.
(m) Equity would probably restrain to
prevent irreparable mischief. See Chavany
V. Van Somnier, 3 Woodd. Lect. 416, n.,
1 Swanst. 512, n.; Blisset v. Daniel, 10
Hare, 493.
(?(.) Heath v. Sanson, 4 B. & Ad. 175 ;
Cochran v. Perry, 8 W. & S 262.
(rt) Jefferys v. Smith, 3 Russ. 158 ;
Mar([uand v. N. Y. Manuf. Co., 17 Johns.
525 ; Horton's Appeal, 13 Pa. 67 ; Con-
well V. Sandidge, 5 Dana, 210 ; Parkhurst
V. Kinsman, 1 Blatchf. 488. See Merrick
V, Braiuard, 38 Barb. 574. In Buford v.
392 THE LAW OF PARTNERSHIP. [CH. XII,
So an assignment, in good faith, by a partner, of all the joint
property in trust, for the payment of the debts of the firm, which,
as we have seen, may be valid, would seem to operate a dissolu-
tion, (p') And so would a sale on execution and levy upon the
interest of an insolvent partner in the joint property. (5-) I]ut
an attachment alone, in mesne process, only giv^es a lien to llie
creditor; and docs not transfer to him the property, and, there-
fore, does not dissolve the partnership, (r) These cases of as
signmcnt to pay debts, and sale on execution, however, belong
rather to the subject of dissolution by bankruptcy. Let us con-
sider here what right a partner has to terminate the partnership
at his own will, and by his direct action.
§ 306. Partnerships at Will. — While the courts have found much
difliculty in compelling parties to remain together, when a ])art
of them wish for a separation, it has never been said, that a con-
tract for a partnership, for a time certain, is, as to this limitation,
wholly inoperative in law or in equity. On the other hand, it is
universally agreed, that where there is no such limitation, — that
is, where the contract is not for a certain time, — it is always in
the power of any one partner to dissolve the partnership, at his
own pleasure, and for no other cause than that pleasure, (s) ^
Neely, 2 Dev. Eij. 481, the general doc- Cii. 62 ; Joliiison v. Evans, 7 M. & G. 240.
trine was assented to ; but as the assign- A ])uiehase by otlier partners of tlie share
ment in that case was as security for a so sold, must be made under circumstances
debt, and it was agreed by all parties that placing it beyond susi>ici<)n ; otherwise,
the assignor should continue in business the sale will be set aside, the jiartners
as the agent of the assignee, it was held being treated as the trustees of Iho other
that the jjartnership was not dissolved, partner. Perens v. Johnson, 3 Sm. & G.
And, if, notwithstanding such assignment, 419.
the assignor continues to act as a partner, [r) Arnold v. Brown, 24 Pick. 38.
and transacts business as before, there is {s) Peacock v. Peacock, 16 Ves. 49 ;
no dissolution. Taft v. Buffum, 14 Pick. Featherstonhaugh v. Fenwick, 17 Ves.
322. 298, 307 ; Alcock v. Taylor, 1 Tanilyn,
ip) See Gordon v. Freeman, 11 111. 14. 506 ; Cravvshay v. Maule, 1 Swanst. 495,
(q) Habershon v. Blnrton, 1 De G. & 508 ; Ex parte Nokes, 1 Mont, on Part.
S. 121 ; Aspinall v. London & N. W. R. 114, n. ; Skinner v. Tinker, 34 Barb.
Co., 11 Hare, 325 ; Skip v. Harwood, 2 333.
Swanst. 586 ; Kenton v. Chaplain, 1 Stock.
^ Diasohttion hy Act of a SbigJe ' Partner : Partnership at JVill. — Where no time
is named for the continuance of the partnership, it is a partnership at will, and any
partner may dissolve it at any time. Blake f. Sweeting, 121 111. 67, 12 N. E. 67 ;
Fletcher v. Reed, 131 Mass. 312 ; Walker v. Whipple, 58 Mich. 476, 25 N. W. 472 ;
McElvey v. Lewis, 76 N. Y 373. The same is true of a ])artnershii) terminable
on sixty days' notice. Swift v. Ward, 80 la. 700, 45 N. W. 1044. The ordinary
method of terminating a partnership at will is by notice to each member of the
firm. It is terminated as soon as the notices are received, without the necessity
of any action by the other partners. Green v. Waco State Bank, 78 Tex. 2. The
will may however be exercised in another form ; the sale of all interests of a part-
§ 306.] OF DISSOLUTION. 393
Still it has been intimated that the dissolution must be in good
faith, and not unreasonable in point of time or manner, or unne-
ner at will is eijually eiructual to terminate the partnership. Blaker v. Sands, 29
Kas. 551.
It has sometimes been suggested that the exercise of the will by a partner is
not elfectual to dissolve the partnership unless it is bona fide. This seems, how-
ever, not to be sound. A notice, though given inala fide, does, it would seem,
dissolve a i)artnership at will (Swift v. Ward, 80 la. 700, 45 N. W. 1044),
though it might perhaps give the other partners a claim for damages. See Fletcher
V. Reed, 131 Muss. 312; Ball v. Britton, 58 Tex. 57. Certainly the bona fide
exercise of the right to dissolve gives the other partners no right to claim damages.
Fletcher v. Reed, 131 Mass. 312 ; Walker v. Whipple, 58 Mich. 476, 25 N. W.
472. For partnerships which though no term was named were held not to be part-
nersliips at will, see nnte, § 282.
The exclusion from tiie business of one partner by his copartner is of course an
exercise of the right of dissolution, and the partnership thereupon ceases. But
though the excluded partner is no longer interested in the business, the other
has certainly no right to an exclusive use of the firm assets. If he takes possession
of them, he maj' be treated as a constructive trustee ; and the excluded partner may, it
would seem, get the value of his share of the assets, together with the profits realized
from the use of such share. Major v. Todd, 84 Alich. 85, 47 N. W. 841 ; Zim-
merman V. Chambers, 79 Wis. 20, 47 N. W. 947.
A mining partnership is peculiar, in that tliere is no dilectiis personarum.
Therefore a sale of his interests by one partner does not dissolve a mining partner-
shi]); the purchaser takes the seller's place in the firm. Lamar v. Hale, 79 Va.
147. Therefore the right to dissolve such a ))artnership, when tliere is no fixed
term, passes to the purchaser ; and he may dissolve by giving notice. Galigher v.
Loekhart, 11 Mont. 109, 27 Pac. 446.
Dissolution by Act of a Sing/e Partner : Partnership for a Term. — It would
seem unreasonable that one partner should have the power by any act of his to
dissolve, against the will of his copartner, a partnership for a term. If, for instance,
by an assignment of his interest in a partnership to a stranger either partner may
force a dissolution, every partnership becomes practically a partnership at will.
This has been acknowledged in Michigan to be true. There is no such thing, it
is there said, as a partnership indissoluble for a term. It wa.s held that a partner
may at any time dissolve a partnership, at least as to liability to third persons
upon subsequent contracts, by merely giving notice to them of a refusal to con-
tinue liable as a partner. Solomon v. Kirkwood, 55 Jlicli. 256, 21 X. W. 336.
And it is ordinarily said that the assignment of a partner puts an end to the
partnership. McCall v. Moss. 112 111. 493 ; Conrad v. Buck, 21 AV. Va. 396. It
is of course true that under ordinary circumstances this must be so, since the
purchaser may file a bill for an account ; but the better view seems to be that his
right to have the firm wound up may be subject to modification by circumstances.
Riddle V. Whitehill, 135 U. S. 621.
The act of one partner may certainly be such as to give his copartner a right to consider
the partnership at an end. In such a case the dissolution is not properly called the act
of a single partner, but of all the partners. Thus where one partner refuses to go
on with the business, he ceases to have any right to claim an interest in the
business ; the other may treat it as a dissolution. Ligare v. Peacock, 109 111.
94 ; Miller v. Chambers, 73 la. 236, 34 N. W! 830 ; Henry v. Bassett, 75 Mo.
89 (semble). So where one partner embezzles the assets and runs away, his copartnei- may
treat the partnership as dissolved. Strong v. Stapp, 74 Cal. 280, 15 Pac. 835. On the
same principle, although the assignment by one partner of his interest should be held
not to work a dissolution, against tlie wi!l of his copartners, the latter wouM unquestion-
394 THE LAW OF PARTNERSHIP. [ JH. XII
cessarily injurious to the other partners, (ss) In order to effect
a dissohition in sucii a case, it is necessary for the partner wishing
to dissolve to give notice to the other partners, (t)
Where a partnership for a limited period expires, and is con-
tinued by an agreement which does not provide for any further
limitation, the effect of the original limitation is wholly exhausted,
and the new partnership is dissoluble at the will of any partner ;
although all the other provisions and arrangements are continued
over, either expressly or by implication, (i^) It may be said,
however, that where all these are carried over, if they seem dis-
tinctly to imply that the partnership must needs continue for a
definite period, the law might be more willing to imply such a
bargain, than it is, as we have seen, from a mere lease for a time,
or from similar circumstances.
§ 307. Power of Partner to Dissolve by Roman Law. — The
Roman law, as stated in the Digest (tf) and as explained or
exhibited by Domat, (a;) contains principles on this subject which
are not only not expressly adopted in the English or V^merican
jurisprudence, but which might seem to be opposed to the highest
and clearest authority. It may be inferred from Domat, that
every partner has a perfect right to terminate the partnership
when he will, even if entered into for a time certain. He must,
however, take a convenient and suitable opportunity and method
for the exercise of this right ; and must do this for honest pur-
poses, and with due regard to the safety and advantage of the
other partners. The line is not very distinctly drawn. But it
seems that lie may, at any moment and for any cause, dissolve
the partnership so as to renounce or lose all the benefit of it ;
but that he would not be permitted to free himself or his pro-
(ss) This was so held in the well- the old covenants are infnsed into the
considered case of Howell v. Harvey, 5 new series of transactions, with the single
Ark. 270. [Sed query : See note 1.] exception of the covenant for duration ;
(t) Eagle I'. Bucher, 6 Ohio St. 29.^. for either may instantcr dissolve the pro-
See also Van Sandau v. Moore, 1 Russ. longed partnership, but the original
46-t ; Wheeler v. Van Wart, 9 Sim. 193. stipulations are continued." See also
(u) Featherstonhaugh v. Fen wick, 17 Gould v. Horner, 12 Barb. 601 ; Bradley
Ves. 298, 307 ; Crawshay v. Collins, 15 v. Chamberlin, 16 Vt. 613 ; U. S. Bank
Ves. 218. In Booth r. Parks, 1 Alolloy, v. Binney, 5 Mason, 176, 185. See post,
465, the Lord Chancllor states the rule § 310, note {d).
thus : " The partners, after the expiration {!/;) Dig. lib. 17, tit. 2, 1. 14.
of the partnershij) term, continuing to (x) 1 Domat, tit. 8, § 5, art. 1-8.
carry on the trade without a new deed, all
ably have the right to treat it as such. It would seem clear that the assignment of
his interest by one partner to his single copartner must work a dissolution, since all the
partners agree. See a7ite, § 305, note (n) ; but see contra, Waller v. Davis, 59 la. 103,
12 N. W. 798.
§ 309.] OF DISSOLUTION. 395
perty from the just claims of the other partners, which may
extend so far as to rerpiire that the partnershii) shall continue for
a season. He cannot therefore seize a moment to dissolve a part-
nership when he sees the opportunity of making a great gain by
a sei)aratc transaction, which ought, with all its advantages, to
belong to the firm. And if he does, in this way and for this pur-
pose, seek to dissolve the partnership, the court would declare
the dissolution void, or ineffectual for the time, and the partner-
ship to continue until it could be terminated without wrong to
anybody. We think a court of equity would ap})ly similar prin-
ciples to this question. (?/)
§ 808. Power of Equity in Case of Dissolution. — If we Suppose
a partner, with wrongful intent, to declare a dissolution at such a
time, and for such purposes, or with such an effect, that the
Roman law would declare that there was no dissolution, and so
preserve the rights of the partners, it may be asked, what an
English or American court would d(j. It would not, we appre-
hend, deny the right of diss(jlution, or the fact of dissolution ;
nor perhaps in any w^ay restrain the jjartuer from the exercise of
this right. But, it being settled that the partnership is now dis-
solved, the whole effect and influence of this dissolution is in the
bauds and within the power of e(piity. It may be that the other
partners would be subjected to wrong and loss, if the use of the
firm name could not be continued in completing its transac-
tions, or otherwise in protection of their interests ; and yet that
the court would be reluctant to authorize the use of the name of
a firm which had ceased to exist. But it is hardly possible that
the same results could not be reached in some other way, which
would be within the resources of ecpiity. And it must be certain
that any court of equity would bo willing to use all its authority,
in any lawful way, to carry the dissolution into effect ; or, in
other words, to direct the winding np of the concern in such a
way as to protect the honest partners from any loss through the
wrongful act or wrongful purpose of a cojiartner. And if it be
true, as we suppose, that equity could always do this, and would
always do it when practicable, it follows that the difference
between the Roman law and the English, or our own, is only a
difference in the rules or methods by which the two systems of
law accomplish the same results.
§ 309. Method of effecting Dissolution. — There is no exactly
defined way in which a partner who has the. right to terminate a
{if) See Cliavany v. Van Soininer, 3 Woodd. Lect. 416, n., 1 Swanst. 512, n. ;
Blisset V. Daniel, 10 Hare, 493.
306 THE LAW OF PARTNERSHIP. [CH. XII.
partnership must or should exercise this right. All that is requi-
site is, that lie should make this ])urpose distinctly known to the
other partners ; and, as soon as it is known, it takes effect, (z)
The notice must he explicit ; and it is not enough to propose to
dissolve on certain terms, unless these terms are accepted, (a)
So, a notice that a partner's share has been forfeited is not
enough ; because this is construed to mean merely that the part-
ner named has ceased to have any interest in the concern, {b) A
partner may undoubtedly make this dissolution prospective ; and
this is the usual way of doing it. It is obvious that only peculiar
circumstances could justify a partner, morally speaking, however
it might be legally, in saying to his copartners, at once and
without notice or preparation : From this moment the partner-
ship ceases to exist. And such conduct would certainly induce
a court of equity to examine closely into the motives which led
to it, and into the effects resulting from it, that they might pre-
vent injurious consequences. Still, however, it is always possible
that there may be good reason for the sudden exercise of this
right, of the existence of which there seems to be no doubt, where
the partnership is not formed for a time certain. It may be that
no other course would prevent the firm from rushing into waste-
ful and dangerous contracts, or from pursuing a path which might
lead to ruin. And, therefore, on the one hand, the court would
not presume that such a dissolution was wrongful in intent or
eft'ect, although they would listen to evidence showing it to be so.
And, on the other hand, as soon as such a declaration was made,
be its purpose or circumstances what they might, there is no
reason for supposing that the partnership would exist a moment
longer, (c)
(z) See ante, § 306 and note (s). ton, 19 Johns. 538 ; Mason v. Connell, 1
{a) Hall V. Hall, 12 Beav. 414 ; Van "Whart. 381. In Bishop v. Bnckles, 1
Sandau v. Moore, 1 Russ. 463 ; Wheeler v. Hotf. Cli. 534, the court said : "The law
Van Wart, 9 Sim. 193. See Mellersh v. of the court then requires something more
Keen, 27 Beav. 236. than the mere will of one l)arty to justify
(b) Hart v. Clarke, 6 De G., M. & G. a dissolution. But it seems to me that
232. but little more should be demanded. The
(c) The question whether one partner principle of the civil law is the most wise,
may, by his own mere will, dissolve a Why should this court compel the con-
partnership formed for a definite period, tinuance of a union, when dissension has
has been much discussed in this country marred all prospect of the advantages
and in England. It appears to have been contemplated by its formation ? By refus-
assumed that there is no such power, iu sing to dissolve it, the power of binding
Peacock v. Peacock, 16 Ves. 57 ; Crawshay each other, and of dealing with the part-
V. Maule, 1 Swanst. 508 ; Wheeler v. Van nership property, remains, when all con-
Wart, 9 Sim. 193, 2 Jur. 252 ; Pearpoiut fidence and all combination of effort is at
V. Graham, 4 Wash. C. C. 232. The right an end. The object of the contract is
is forcibly maintained in Skinner v. Day- defeated."
§ 310,] OP DISSOLUTION. 897
§ 310. Need not be by Written Notice. — The dissolution of the
partnership by the act of a partner, or at his will, does not require
a written declaration of his will ; nor even any especial spoken
words, or, indeed, any words whatever. He must manifest his
desire of withdrawing from the partnership. He may do this as
he pleases; and, however it be done, it has the same effect. But,
if he only manifest his desire of leaving the partnersliip at a
future time, this is not a present dissolution. Nor is there any
way to manifest the purpose of immediate withdrawal, except by
such withdrawal ; and this is a dissolution. This could hardly
be by act without words. But he may manifest, by a course of
action, such withdrawal. He may engage wholly in other busi-
ness, and take no part whatever in the interests or concerns of
the partnership. This would rather make him a silent partner,
or give good cause for the other partners to reject him, or per-
haps obtain a decree for his removal, than amount to evidence
that he had in fact withdrawn himself. It may, however, be said,
hypothetical ly, that such conduct might be carried so far as to
have that significance and effect. And then the dissolution would
take place, not wdien the other partners acceded to his wish, but
when it became certain what his wish was. The only rule appli-
cable to such questious must be this : The wish of a partner to
dissolve a partnership which is at will, while it remains unex-
pressed, can have no force nrjr effect; but it operates to cause a
dissolution as soon as it is distinctly expressed, whatever be the
form or manner of this expression, (t^)
(d) In Van Sandau v. Jloore, 1 Russ. accounts of the partnership dealings and
463, Lord Eldon says : "The bill proceeds transactions taken, up to that very
on two grounds : one, that ilr. Van moment) ; yet one difficulty which has
Sandau could by mere notice put an end often occurred to me as of great weight in
to the company ; the other, that if notice cases like the present, with reference to
alone was not sufficient for that purpose, the dissolution of the company by notice,
yet there has been such conduct on is this : What avails it that you give
the part of the secretary and other mem- notice to A. B. of putting an end to the
bers as to entitle the plaintiff to call for a company, if you do not give notice to the
dissolution ; and, in either case, he prays three hundred other individuals of whom
that an account may be taken of the it is composed ? Has not every one of
partnership dealings and transactions, these individuals the same common-law
Now, though, according to the law of the right to notice, before the partnership can
country, a company or partnership formed be dissolved ? If, on the other hand, it is
by parties agreeing to become copartners said, that it is not necessary to give
may be dissolved at any moment by one of notice to all the partners, it must be on
the partners, and though his copartners the ground that the deed has made some
cannot answer his notice of dissolution by provision declaring that notice not to be
saying, ' Here is your money, get out of necessary, which, but for particular piovi-
the concern, and leave us to ourselves,' sions, would be necessary ; and that case
{because he has a right to have all the must be proved from the deed itself,"
398 THE LAW OP PARTNERSHIP. [CH. XIIL
CHAPTER XIII.
OP A CHANGE IN THE PARTNERSHIP.
SECTION I.
OP THE EPPECT OP ANY CHANGE IN THE PARTNERSHIP.
§ 311. Change in Firm puts End to Partnership. — The retire-
ment of a partner may take place in many ways. He may simply
withdraw, carrying with him and retaining all his interest in
the property. Or he may retire, by transferring his interest to
a stranger, who tlien holds it as tenant in common with the otlier
partners. Or he may transfer it to one who is received by the
other partners, and becomes a copartner with them. However it
takes place, it is plain that, if a partnership consists of but two
persons, the retirement of either one puts an end to that partner-
ship. And it may now be considered as a settled rule of the law
of partnership, in England and in this country, that the retire-
ment of any one partner from a firm consisting of any number of
partners operates a dissolution of that firm. The Institute says,
" Cum allquis renunciaverit socletati, solvitur societasT (^ci) In
Roman practice, mercantile copartnerships consisting of many
partners, if not common, were certainly known. Only of late
years has this rule been asserted ; and it was qualified by Lord
Eldon, who was almost its author, and ever was its highest author-
ity, by the phrase, " unless it was otherwise provided." (5) We
apprehend, however, that the rule comes of necessity from the
very nature of partnership, and admits of no qualification what-
ever. Thus, if we take the qualification mentioned by Lord Eldon,
— that of an express provision to the contrary, — it is plain that,
even if it is so provided, the remaining partners can only form a new
partnership. The qualification is, therefore, equivalent to saying,
that the old partnership is dissolved unless a new one is formed ;
which is meaningless. We suppose the truth to be, that if a
(a) Inst. L. 3, t. 26, § 5 ; Potluer on (h) Cravvshay v. Collins, 15 Ves. 228 ;
Part. ch. 8, § 3, p. 141. Peacock v. Peacock, 16 Ves. 49 ; Howe
V. Thayer, 17 Pick. 95.
§ 312.] OF A CHANGE IN THE PARTNERSHIP. , 399
partner retires, — whether by voluntary act, bankruptcy, expulsion,
or death, or if a new partner comes in, by any means whatever, —
in either of these cases, the old partnership ceases to exist, (c)
Where a mortgage was given to a firm consisting of " A. and
B." to secure advances to the mortgagor, and a third partner was
taken in, and the name changed to "A., B., and Co.," and the
business was continued and conducted precisely as before, it was
held that this addition dissolved the first firm, and that the new
firm could not avail themselves of the mortgage, {cc) ^
§ 312. Old Partnership cannot continue to Exist. — This rule
is directly opposed to a common practice, and, perhaps, to a com-
mon understanding. We have in this country many ancient firms,
in which there may not be one person who was a partner from
the beginning. In England, there are firms which have survived
some generations; (c^) but the name has never been changed, and
the l)u.siness has gone on without deviation or interruption. But
we still say that the partnership is dissolved by every change,
because every partnership consists of certain persons who are all
liable for the debts, who all own a certain joint property, and who
all have certain powers to act for and to bind each other. Those
who owe the firm owe only them, and those to whom the firm is
indebted have claims only on them. If from this partnership any
persons go out, or if any come into it, and the old partners and
the old debtors and creditors agree, there will be the least possible
break to the succession. But this agreement no more makes the
old firm identical with the new, than the son's inheritance of his
father's property, coupled with an accepted promise to be respon-
sible for all his debts, makes the son the same individual with the
father. That this mere agreement, however effectual in sustaining
and continuing a businesb, cannot preserve the identity of the old
partnership, may be seen from this supposition : If A., B., & C.
have for a long time been partners, and conclude to retire, and D.,
E., & F. say to them, It is a pity to scatter so profitable a business
and lose so good a custom, and we will buy your good-will, and
(c) Yulliamy v. Noble, 3 Meriv. 614 ; Union Ins. Co., 1 Xott & McC. 559. See
Crawshay v. Maule, 1 Swanst. 509 ; post, § 353 et seq.
Crawford v. Hamilton, 3 Madd. 251 ; (cc) Abat v. Penny, 19 La. Ann. 289.
Scholefield v. Eichelberger, 7 Pet. 586 ; (d) See Blisset v. Daniel, 10 Hare,
Dyer v. Clark, 5 Met. 575 ; Washburn 493.
V. Goodman, 17 Pick. 519 ; White v.
1 So where one partner gave the use of his property to a firm, and afterwards
retired, the right to use the [)roperty ceased ; and an assignee of all the assets of the
remaining partners had no right to the property. Rapier v. Gulf City Paper Co., 64
Ala. 330. See in re Beck's Estate, 19 Ore. 503, 24 Pac. 1038 ; post § 342.
400 THE LAW OF PARTNERSHIP. [CH, XIIT.
take all your stock, and pay all your debts, and hold by assign-
ment all the debts due to you, and bring to you the consent of all
your debtors and creditors, — one would hardly say, that the old
firm continued over, or was identical with the new one. One firm
succeeds the other ; and, if the later firm chooses to adopt the
name of the earlier, this does not make them one and the same.
And, if one member of the old firm comes into the new firm, this
does not make them one. And if all remain but one, or all remain
and a new one is added, here also is a new firm, which can no
more have the effects, and choses in action of the old, nor be
liable for its debts, without a new and distinct agreement between
all parties interested therein, than if the change were entire, and
the name also.
We have dwelt the more strongly on this principle, — and shall
have occasion to refer to it again, — because a disregard of it has
led to some confusion in the authorities in relation to the rights
and obligations of a retiring partner, and of an incoming partner,
— a suljject which we shall now proceed to consider.
SECTION ir.
OF A RETIRING PARTNER.
§ 313. Liability of Partner after Retiring. — The right of a
partner to retire is the same thing as the right to dissolve a partner-
ship ; because retirement is dissolution. This we have already con-
sidered ; and it has also been stated, that he may retire in either
of many ways. The effect of the retirement (excepting so far as
mutual agreements vary it) is nearly the same in all. He neither
loses property by it, nor relieves himself from any liability. (/) ^
(/) But see Savage v. Rockwell, 32 N. Y. 501.
1 Each partner continues liable, after dissolution, upon all contracts of the firm
made before dissolution. Dickson v. Indianajiolis Cotton Mfg. Co., 63 Ind. 9 ; Good-
epeed v. Wiard Plow Co., 45 Mich. 322, 7 N. W. 902. Thus where before dissolu-
tion a firm of attorneys received a note to collect, a partner is liable for the note or
its proceeds after dissolution, though the note was collected and the proceeds converted
ifter dissolution by the other partner. Waldeck v. Brande, 61 Wis. 579, 21 N. W.
533. Similarly, where one is requested before the dissolution of a fii'm to pay its
iebta, each partner is liable to him for a payment made after dissolution. Lee v.
Stowp, 57 Tex. 444.
If after dissolution the settling partner gives a note whether in the firm name or in
^lis own, for a firm debt, the liability of the other partner is not discharged. Gardner
'). Conn, 34 Oh. St. 187 ; Lutterloh v. Mcllheuny Co., 74 Tex. 73, 11 S. W. 1063 ;
White V. Boone, (Tex.) 12 S. W. 51.
§ 314.] OP A CHANGE IN THE PARTNERSHIP. 401
If he retires with the consent of the other partners, there is an
implied promise on their part to pay the debts of the firm and
save him harmh'ss, but only to the extent of the assets of the
firm. PJe is still liable in solido for the debts existing when he
retired. But, if he pays more than his proportion, he may have
contribution fi'oni his former copartners, (./f)
§ 314. Sale of Interest by Retiring Partner. — If a partner
" sells out," — to use a common phrase, — either to the remaining
partners, ((/) or to a stranger, the question may arise whether, in
addition to what he actually transfers, he comes under any
obligation which a court of law or of equity could recognize. Not
nnfrequcntly, the articles of copartnership provide that the
remaining partners may take the interest of an outgoing partner
at a valuation, or they prescribe other terms ; and these agree-
ments a court of equity will enforce, (c/g} [Whether the selling
partner may establish a new business in the same locality has
already been considered.^] The answer of the law is, that he may
do this very thing, with an exception, perhaps, as to the use of
the old name. In other words, the purchasers of a partner's
shai-e in the property, and the " plant " (as it is called in Eng-
land), buy the good-will attached to the merchandise, but do not
purchase from him any obligation not to lessen the value of what
they buy by his interference with it, unless there be an express
stii)ulation to that effect. Then this bargain " in restraint of
trade," as it is called, would be governed by precisely the same
principles in the case of a retiring partner as if it were a sale of a
business by a sole trader to a stranger. These principles are now
established with a considerable degree of precision. A promise
on a consideration, not to carry on a certain trade within cer-
tain limits, is valid,, at law as well as in equity, (i) But a
{/) Hobbs V. Wilson, 1 W. Va. 50. Barrett, 1 Pick. 443 ; Nobles v. Bates, 7
(g) As to liow the remaining partner Cow. 307 ; Chappel v. Brockway, 21
takes, see Dimon v. Hazard, 32 N. Y. 65. Wend. 157 ; Jarvis v. Pe'ek, 1 Hoff. Ch.
{gg) Quinlivan u. English, 42 Mo. 362. 479; Grasselli v. Lowden, 11 Ohio St.
(t) Broad v. Jollyfe, Cro. Jac. 596 ; 349. The cases show a gradnal enlarge-
Mitchell V. Reynolds, Fortescne, 296, 1 ment of the rule which prohibits contracts
P. Wnis. 181 ; Davis v. Mason, 5 T. R. in restraint of trade, until at the present
118; Bunn w. Guj', 4 East, 190; Gale y. day — at least in this country — almost
Reed, 8 East, 80 ; Bryson v. Whitehead, anything in the contract which can be
1 Sim. & S. 74 ; Young v. Timmins, 1 Cr. construed as a limitation of it is deemed
& J. 331 ; Proctor v. Sargent, 2 M. & G. sufficient to take it out of the rule.
20 ; Hilton v. Eckersley, 6 E. & B. 47 ; Thus, in Stearns v. Barrett, supra, a
Pierce v. Fuller, 8 Mass. 223 ; Stearns v. promise not to use certain machines in
I Ante, §§ 181, 182.
26
402 THE LAW OF PARTNERSHIP. [CH. XIII.
general promise not to carry on a certain trade anywhere, is void
as against the policy of the law. (j ) The courts of England, and
still more of this country, are quite liberal in the application of this
rule ; and almost any limits are sufficient. It may be added that
the contract of sale by a retiring partner might contain such
phrases as, " I being about to change my business," or " intending
to give up all business," or other words so distinctly indicative of
his purpose not to interfere with the fullest enjoyment of what he
sells, that a court of equity would either construe this as a con-
tract to that effect, or as a fraudulent deception by the seller, and
on one or other of these grounds restrain him from injurious inter-
ference, although there might not be enough in the contract to
sustain an action at law for the breach of it. (/:)
§ 315. Notice of Retirement. — Much the most important ques-
tion in relation to a retiring partner, is, by what means and to
what extent he may terminate his liability for the debts of the
partnership, so that it shall attach to no new obligations ; and how
he may escape from his liability for existing obligations.(?)
To the first question, the immediate and general answer is, he
must give notice of this retirement, and cannot be held as a part-
ner for any new obligation, by those who have this notice of dis-
solution or of retirement; (11} nor by those aaIio have knowledge
thereof, however communicated. (Z//) But many nice questions
have arisen under the application of this rule. (??t)
any of the United States, except Massa- gather. Cooper v. AYatson, 3 Dong. 443,
chusetts and Rhode Island, was held good, 2 Chitty, 451.
because " agreements to restrain trade in {I) See ante, § 299. And see Park v.
particular places are valid in law, and may Wooten, 35 Ala. 242 ; Williams v.
be enforced." Bowers, 15 Cal. 321. One partner may
(j) Alger V. Thacher, 19 Pick. 51 ; a exempt himself from future liability by
leading case, which fully presents the giving express previous notice that he will
earlier authorities, English and American ; not be bound. Matthews v. Dare, 20
Hilton V. Eckersley, 6 E. & B. 47. See Md. 273. See Am. Linen Thread Co. v.
also Jones v. Lees, 1 H. & N. 189; Wortendyke, 24 N. Y. 550 ; Spaulding y.
Dunlop V. Gregor}% 10 N. Y. 241 ; also, Ludlow Woolen ]\Iill, 36 Vt. 150.
cases cited in preceding note. (i^) Robb v. Mudge, 14 Gray, 534 ;
(k) The obligation of the retiring part- Lange v. Kennedy, 20 Wis. 279.
ner is frequently deterraitied by the Ian- (III) Davis v. Keyes, 38 N. Y. 94.
guage of the articles, or in some such (m) See Vice v. Fleming, 1 Y'onnge &
way. Thus, where it was provided that, J. 227 ; Willis i\ Dyson, 1 Stark. 164 ;
on giving notice, either party should have Rooth v. Quin, 7 Price, 193 ; Galway v.
liberty " to quit the trade and mystery of Matthew, 1 Camp. 464, 10 East, 203;
a brewer," and the other might continue Godfrey v. Turnbnll, 1 Esp. 371 ; Abel
the trade upon his own account, it was v. Sutton, 3 Esp. 108 ; Kilgour v. Finly-
held, that the party leaving could not son, 1 H. Bl. 155 ; Bernard v. Torrance,
engage in the brewery trade on his own 5 Gill & J. 383.
account, but was bound to quit it alto-
§ 316.] OP A CHANGE IN THE PARTNERSHIP. 403
Tlie reason of the rule is perfectly obvious. They whom he
authorizes to think liini a partner may hold him as such ; and
being a partner, and being known as a partner, he authorizes all
to think him so who do not know that he has ceased to be one. If
wo supi)ose no fraud on his part, there is negligence on his part ;
and, of two innocent persons, he should suffer whose negligence
caused the error. (/<)^
§ 31 G. Notice how Given. — The Commercial world fully recog-
nizes this necessity of notice ; and the custom of giving it is uni-
versal. Sometimes personal notice is given orally, or, which is
better, by letter to all who deal with the concern ; sometimes by
advertisement; sometimes only by a change of name upon the
signs of the firm, and sometimes by a change in the name of the
firm itself ; sometimes by all these methods together. In this
country, much the most usual methods are advertisement, with a
change in the names upon the sign ; (o) in addition to this, notice
(?;.) Parkin v. Carrntlicrs, 3 Esp. 246 ; City Bank v. Howard, 35 N. Y. 500 ;
Williams v. Keats, 2 Stark. 290 ; Brown Ennis v. Williams, 30 Ga. 691 ; Parsley
V. Leonard, 2 Cliitty, 120 ; Newsome v. v. Ramsey, 31 Ga. 619 ; Ellis v. Broiison,
Coles, 2 Camp. 617 ; Dolman v. Orchard, 40 111. 455 ; Denman v. Dosson, 18 La.
2 C. & P. 104 ; Carter v. Whalley, 1 B. Ann. 9 ; Zollar v. .lanvrin, 47 N. H. 324.
& .\d. 11 ; Tombeckbee Bank v. Dumell, (o) See Wrightson v. Piillan, 1 Stark.
5 Mason, 56 ; Lansing v. Gaine, 2 Johns. 375, called Wright v. Pulham, 2 Chitty,
3(10 ; Ketcham v. Clark, 6 Johns. 144, 121 ; Watkinsou v. Bank of Penn,, 4
148 ; Le Roy v. Johnson, 2 Pet. 198, Whart. 432 ; Prentiss v. Sinclair, 5 Vt.
200; Princeton & K. Turnpike Co. v. 149; Graves v. Merry, 6 Cowen, 701;
Gulick, 16 N. J. (1 Har.) 161 ; Butfalo Ketcham u. Clark, 6 John.s. 144,147.
^ Notice of dissolution of copartnerhip must ordinarily be given in order to protect
a retiring partner from subsec|uent liability upon contracts made in the name of the
firm. A retiring partner remains liable to those who have not had sufficient notice
of the dissolution. Duff v. Baker, 78 La. 642, 43 N. W. 463 ; Stimson v. Whitney,
130 Mass. 591 ; Hixon v. Pixley, 15 Nev. 475 ; Clement v. Clement, 69 Wis. 599, 35
N. W. 17.
This is on the ground of estoppel. The retiring partner is not really a partner after
dissolution. If he lends money to the continuing partner he is a mere creditor, and
may compete with, the other creditors in insolvency, or even receive a preference.
Richardson v. Davis, (Miss.) 11 So. 790. Therefore where defendant retired from a
firm and another was admitted, and goods were sold by an old customer to the new
firm before notice, and the check of the new firm received after notice, and dishonored,
it was held that the creditor had the option, either to. hold the old firm, including the
defendant, on the ground of estoppel, or the new firm without defendant, but could not
hold both defendant and the new firm ; and he having sued the new firm, defendant
was discharged. Scarf v. Jardine, 7 App. Cas. 345.
Notice is not necessary in cases where the dissolution is by act of law. Thus, no
notice need be given of dis.solution by bankruptc}' ; all persons must take notice of
that. Eustis v. Bolles, 146 Mass. 413, 16 N. E. 286. So of dissolution by war.
Griswold v. Waddington, 15 Johns. 57, 16 Johns. 438 ; Bank of New Orleans v.
Matthews, 49 N. Y. 12. As to dissolution by death, see post, § 323 et seq.
404 THE LAW OF PARTNERSHIP. [CH. XIII.
bv letter is frequently given to the customers of the firm. If a
change is made in the name of the firm, this is the most effectual
of all. Indeed, if it be a change which leaves out the name of the
retiring partner, it would be, of itself, nearly sufficient and
decisive. For every new contract would be in the name of a firm
of which he never was a member , and, if the change is l)y droj)-
ping his name, it would seem to be complete notice. It is true,
however, that a partner may be not named ; and it may be true
that a partner who has been active and known may wish to be-
come silent and unknown, and therefore wish his name dropped.
In such case, he would still be liable ; and therefore he would be
liable if the circumstances connected with his sup])osed responsi-
bility justified strangers or customers in believing this to be the
case, (p)
§ 317. Difference as to Notice bet'wreen Old and Ne-w Cus-
tomers. — An important distinction is made between those who are
customers of the firm, or who have dealt with it as having the re-
tiring partner among the partners, and those who are only new
customers, beginning their dealings with the firm after the retire-
ment.^ For a new customer holds, generally, only those who are
{p) 3 Kent Comm. Lect. 43, p. 67 ; ed. ; Watson on Part., eh. 7, p. 384 ; 2
Gow on Part., ch. 5, § 2, pp. 248-251, 3d Bell Comm., b. 7, pp. 460-643, 5th ed.
1 Notice to former customers. — As to all tliose who have dealt with the firm before
dissolution, there must be actual notice of tlie withdrawal of a partner to ])rotect liim
from liability. Moline Wagon Co. v. Hummell, 12 F. R. 658, 14 F. R. 155 ; Bloch
V. Price, 32 F. R. 562 ; Nicholson v. Moog, 65 Ala. 471 ; Joseph v. Sonthwark Foundry
& Mach. Co. (Ala.), 10 So. 327 ; Richards v. Hunt, 65 Ga. 342 ; Meyer v. Krohn,
114 111. 574, 2 N. E. 495 ; Strecker v. Conn, 90 Ind. 469; Iddings v. Pierson, 100
Ind. 418 ; Rose v. Coffield, 53 Md. 18 ; Sibley v. Par.sons (Mich.), 53 N. W. 786;
Martin v. Fewell, 79 Mo. 401 ; Stoddard Mfg. Co. v. Krause, 27 Neb. 83, 42 N. W.
913 ; Nat. Shoe & Leather Bank v. Herz, 89 N. Y. 629 ; Long v. Garnett, 59
Tex. 229 ; Gilchrist v. Brande, 58 Wis. 184, 15 N. W. 818. Direct notice to tlie
customer is not re(|uired ; if he had knowledge of the withdrawal, by whatever means,
it is enough. Uhl v. Bingaman, 78 Ind. 365 ; Backus i-. Taylor, 84 Ind. 503. The
number of former transactions between firm and customer are immaterial ; a single
previous dealing with the firm entitles the one so dealing to actual notice of dissolu-
tion. Bloch V. Price, 32 F. R. 562. But see Rocky Mountain Nat. Bank v. McCas-
kill, 16 Col. 408, 26 Pac. 821. Receipt of notice by the customer must be proved.
It is not enough to prove that a written notice was mailed to him. Meyer i'. Krohn, 114
111. 574, 2 X. E. 495. Notice given to the agent with whom the contract sued on was
made is sufficient. Hunt'?;. Colorado Milling & Elevator Co., 1 Col. App. 120, 27 Pac.
873. Where after dissolution a former customer continued to do business with the
continuing partner, and received in yiayment checks signed by him individually, it
was held sufficient notice of dissolution. Kehoe v. Carville (la.), 51 N, W. 166.
Notice to the world. — It is obviously impossible to give actual personal notice of
withdrawal to all the world ; but in order to escape future liability a retiring partner
must take measures to make public the fact of his withdrawal. If he takes pro]>er
measures of this sort, he is held to have given sufficient notice of withdrawal to all the
§ 317.J OF A CHANGE IN THE PARTNERSHIP. 405
actually partners ; because he has no past dealings to furnish a
foundation for the belief that the retiring member is a partner.
To this rule there are exceptions. Precisely as one who buys for
the first time has a valid claim on a party who by his own act or
consent is held out as a jjartner, although he is not one, so a new
customer of an old firm may sell to it on the credit of one who has
long been known as a partner, and whose retirement has been kept
secret. This credit would appear to be justified by the retiring
partner, and therefore would hold him. But it would seem that
the notice which would destroy this credit with new customers is
quite different from that which would have this effect upon old
customers. Perhaps a general rule may be stated thus : In re-
spect to persons who have had dealings with the firm, it is neces-
sary to show either notice to them of a dissolution, {q) or actual
knowledge on their })art, or, at least, adecpiate means of knowl-
edge, of the fact, (r) And, as to those who have not been dcal-
(7) Conro v. Port Henry Iron Co., 12 Humiih. 418; Deford v. Reynolds, 36
Barb. 54 ; Graves v. Merry, 6 Cow. 701 ; Pa. 325 ; Scheifflin v. Stevens, 1 Wins.
Ketchara v. Clark, 6 Johns. 144 ; Chipp r. No. 1, 106.
Rogers, 12 N. Y. 283 ; Magill v. Merrie, (,-) See mfra. And see Reilly v. Smith,
5 B. Mon. 168 ; Pope v. Risley, 23 Mo. 16 La. Ann. 31 ; Williamson v. Fox, 33
185; Hutchiiis v. Bank of Tenn., 8 Pa. 214; Vernon v. iManhattan Co., 17
world except former customers. Joseph v. Sonthwark Foundry & Machine Co. (.lla.),
10 So. 327 (scmble) ; Rocky Jlountain Xat. Bank v. McCaskill, 16 Col. 408, 26 Pac.
821 (semble); Richardson v. Snider, 72 Ind. 425.
The common method of giving notice i.s by publication in a newspaper ; which is
usually sufficient. In re Frazer, [1892] 2 Q. B. 633 ; Rose v. Coffield, 53 Md. 18
(semhle) ; Polk v. Oliver, 56 Miss. 566 ; Stoddard Mfg. Co. v. Krause, 27 Neb. 83, 42
N. W. 913. The newspaper must, however, be one circulating in the vicinity.
Richards v. Butler, 65 Ga. 593. And it must be one of general, not limited circula-
tion, and published a reasonable number of times. Ellison v. Sexton, 105 N. C. 356,
11 S. E. 180. Equity has jurisdiction to compel a partner to sign a notice of with-
drawal for publication. Hendry v. Turner, 32 Ch. D. 355.
Though publication of notice is the common method by which a retiring partner
is protected, it is not the only way. Anything is sufficient which makes knowledge
of the withdrawal public. Polk v. Oliver, 56 Miss. 566. Therefore, general notoriety
is a fact to be considered by the jury. Lovejoy v. Spafford, 93 U. S. 430 ; Central
Nat. Bank v. Frye, 148 Mass. 498, 20 N. E. 325. Whether the fact is sufficiently
public is in a doubtful case a question for the jury. Polk v. Oliver, 56 Miss. 566.
Merely ceasing to hold out one's connection with the business (as by advertising) is
not enough. Uhl v. Harvey, 78 Ind. 26. Public change in the firm name by dropping
the name of one partner may be ; but not a change of name which does not consist of
dropping the partner's name, for instance, from "Davis Creamery" to " Beloit
Creamery." Coggswell r. Davis, 65 Wis. 191, 26 N. W. 557. Organization of a
partnership into a corporation is not notice of dissolution, if the two could possibly
co-exist. First Nat. Bank v. Conway, Q7 Wis. 210, 30 N. W. 215. In Elverson
V. Leeds, 97 Ind. 336, where a sole trader carried on business as " Leeds & Co.," it
was held that upon selling out to another he must give notice, like a retiring partner
But see Gathright v. Burke, 101 Ind. 590.
406 THE LAW OF PARTNERSHIP. [CH. XIII.
ers, a retiring' partner can exonerate himself from lial)ilitv by
publishing notice of the dissoliition,(.s') or by showing knowledge
of the fact. A notice by public advertisement, in a usual way and
to a usual extent, or any notice which, under the circumstances,
■was equal to a public advertisement, would always be sufficient to
protect the retiring j)artner against new customers ; (^) because it
is obviously impossible for him to know who may thereafter deal
with that firm. But he does know or may know who have dealt
Avith it, and may make it sure that they have notice ; and therefore
it is his duty to make this certain, and he takes upon himself tlie
risk of their ignorance. Mr. Justice Story appears to go so much
further as to hold that no new customers can hold the retiring-
partner, unless he permits his name to be used by the old firm,
although he gives no notice whatever. But, in this remark, he
goes somewhat beyond the prevailing authorities. And, in his
note to the passage, he seems to apply his rule only to new cus-
tomers who do not know who were the old partners, or who had
no reason to believe the retiring partner to have becm and still to
be one. And such new customers could not, of course, hold a
retiring partner. A considerable lapse of time between the retire-
ment, and the contracting of the new debt, would, of course, go
very far to show that it was not, or should not have been, con-
tracted on the credit of the retiring ]iartners.(?/)
§ 318. Actual Knowledge equivalent to Notice. — Notice is in-
tended to give knowledge ; and therefore knowledge, however
acquired, generally renders notice unnecessary, and protects a
retiring partner who has done nothing. (r) Whether a person has
"Weml. 526, 22 Wentl. 183 ; Watkinson v. Clapp r. Rogers, 12 X. Y. 283 ; Magill'r.
Bank of Peini., 4 AVhart. 482 ; Mitchum Merrie, 5 B. Moii. 168; Siinonds v. Strong,
V. P)nnk of Ky., 9 Dana, 166 ; MauUlin v. 24 Vt. 642.
Bank of MoMle, 2 Ala. 502 ; Coddington (t) Minnit v. AVhinner}', 5 Bro. P. C.
V. Hunt, 6 Hill. 595; Goddard v. Pratt, * 489, 2 id. (Dublin ed.)'^ 323; Ahel r.
16 Pick. 431, 434; Ex parte Burton, 1 Sutton, 3 E.sp. 108; Wrightson v. Pullam,
Gill & J. 207 ; Ex pnrte Leaf, 1 Deacon, 1 Stark. 375, called Wright v. Pull,am, 2
176 ; Shurlds v. Til.son, 2 McLean, 458 ; Chitty, 121 ; Kilgour v. Finlyson, 1 H.
Prentiss v. Sinclair, 5 Vt. 149 ; Pitcher Bl. 155 ; Nott v. Downing, 6 La. 680 ;
V. Barrows, 17 Pick. 365. Lan.sing v. Gaiue, 2 John.s. 300 ; Shurlds
(s) Parkin v. Carruthers, 3 Esp. 248 ; v. Tilson, 2- McLean, 458 ; Mowatt r.
Gorhani v. Thompson, Peake, 42; Ander- Rowland, 3 Day, 353; Taylor v. Young,
son V. Weston, 6 Bing. X. C. 296; Graham 3 Watts, 339. See also Deering v. Flan-
i'. Hope, Peake, 154 ; Bernard v. Torrance, ders, 49 N. H. 225.
5 Gill & J. 383 ; Lucas v. Bank of Darien, (u) See Merrit v. Pollys, 16 R. Mon.
2 Stewart, 280 ; Amidown v. Osgood, 24 355. See post, § 322.
Vt. 278 ; Burgan v. Lyell, 2 Mich. 102 ; (v) Hart v. Alexander, 2 M. & \V. 484 ;
Johnson v. Totten, 3 Gal. 343 ; Davis v. Prentiss t). Sinclair, 5 Vt. 149; Martin v.
Allen, 3 N. Y. 168 ; Princeton Turnpike Walton, 1 McCord, 16.
Co. V. Gulick, 16 N. J. L. (1 Har.) 161 ;
§ 318.]
OF A CHANGE IN THE PARTNERSHIP.
407
actual knowledge of a dissolution, is a question of fact for the jury,
and not of law for the court.(2i;) But a partner who actually
retires as to all his rights and interests may consent to leave his
name in the firm, or to a use of it by the old partners ; and, while
he thus consents, even by his silence alone, if he knows it, he
does not retire as to his responsibilities, (x) And a customer
who knows that he has retired as to his interests, but has no
notice, and has no notice of the retirement, may be led to
believe that notice is withheld because the partner intends to con-
tinue responsible. xVnd, if he is justified in this belief by all the
circumstances, however erroneous it might be, the mere knowl-
edge, on his part, of the retirement, without notice, would hot
prevent him from holding the partner, (y) If one of several part-
ners retires, and notice thereof is given, but the business continues
(lo) Deford v. KeynoMs, 36 Pa. 325 ;
Hart V. Alexander, 2 M. & W. 484 ;
Hiitehius v. Sims, 8 Humph. 423 ; .Merrit
V. Pollys, 16 B. Mon. 355. In D.'fonl v.
Reynolds, supra, A. & B., under the style
oF A. & Co., had done business for some
time with C. & Co. In April, 1853, B.
retired. Prior lo this time, all drafts
drawn l>y C. & Co. were upon the firm of
A. & Co., and their letters were so ad-
dressed. But from the time of the dissolu-
tion, C. & Co. drew on A. alone, and their
letters were addressed to hiin alone. Their
accounts were, however, kept with A. &
Co. until December, 1853 ; and their clerk
testified that he did not know of the dis-
solution until this time. The jury found
that C. & Co. were ignorant of the dissolu-
tion ; and the court refused to set asi<le
the verdict, although not satisfied with it.
In Irby v. Vining, 2 MeCord, 379, it is
said to be sufficient evidenci^ of knowledge,
if such circumstances be proved as to leave
no rational doubt that the party knew of
the dissolution. Actual notice is neces-
sary to persons theretofoi-e dealing with
the firm. Denn)an v. Dosson, 19 La.
Ann. 9 ; Zollar v. Janvriu, 47 N. H. 324 ;
Kirk man v. Snodgrass, 3 Head, 370 ;
Austin V. Holland, 69 N. Y. 571. Actual
knowledge, however obtained, is notice.
Davis V. Keyes, 38 N. Y. 94 ; Young v.
Tibbetts, 32 Wis. 79 ; Deering v. Flanders,
49 N. H. 225. See also Tudor v. White,
27 Tex. 584. And the burden of proof
of notice is on the partner denying liability
on account of dissolution. Kenney v. At-
water, 77 Pa. 34. It may be inferred
from circumstances ; but publication in
two newspapers, neither of them published
in the place where the creditor resides or
taken by him, is insufficient. Howell ;;.
Adams, 68 N. Y. 314. Perhaps, if the
papers were regularly sent to the creditor,
the notice would be sufficient. Rolierts
V. Spencer, 123 Mass. 397.
(./•) A person who continues to act as a
partner after dissolution, is liable as a
partner. Emmet v. Butler, 7 Taunt. 599;
Mulfonl V. Griffin, 1 Fost. & F. 145; Fuldo
V. Griffin, 1 Fost. & F. 147 ; Ketcham i\
Clark, 6 Johns. 144. So it is generally
held that a person allowing his name to
remain is liable. Parkin v. Carruthers, 3
Es[). 248 ; Williams v. Keats, 2 Stark.
290 ; Dolman v. Orchard, 2 0. & P. 104 ;
Stables v. Elej^ 1 C. & P. 614 ; Amidown
V. Osgood, 24 Vt. 278 ; [Nicholson v.
Jloog, 65 Ala. 471]. But see Jenkins v.
Blizard, 1 Stark. 418.
In Conro v. Port Henry Iron Co., 12
Barb. 56, the court said: "The continu-
ance of the same sign on the store, the
form of the bills against the company, not
objected to, of notes and receipts given, of
notices posted in the name of the company,
contracts made in the company name by
the president and other officers, and other
acts and declarations of the officers, in-
dicated a continuance of the business on
the responsibility of the company."
(ll) Thus, in Brown v. Leonard, 2
Chitty, 120, it is held, that a partner who
gives notice that he has ceased to be a
408 THE LAW OF PARTNERSHIP. [CH. XIII.
to be carried on as before, those partners, as to whom no notice
is given, will be presumed to hold the same relation to the concern
as before. (2)
§ 319. Who are Former Customers. — Whether there has been
a previous dealing with the firm — that is, whether a plaintiff had
a right to require one kind of notice, or only another — is some-
times a difticult question. That the dealing must be with the
firm directly, and not merely the purchase of their paper for a
third person, is, we think, evident. (a) A more purchase for
cash would probably not be enough. (i) But selling goods to a
firm and delivering them, to be paid for afterwards, although no
term of credit is fixed, would make the sellers dealers, and entitle
them to notice, (c) So a bank which has previously been in the
habit of discounting not^s and bills for a firm, {d} or a person who
has been in the habit of indorsing for a firm, (e) or of lending his
note to it for its benefit, (/) is a dealer. As a general rule, pre-
vious dealing, which would entitle a person to notice, most be dur-
ing the continuance of the partnership ; but in one case where
goods had been delivered after dissolution, but before any publica-
tion of it, at the store formerly occupied by the old firm, in which
the retiring partner still remained, though in the capacity of a
clerk, and the old sign was up, it was held that the seller was to
be considered a dealer, and entitled to notice. (^)
§ 320. Notice of Retirement of Dormant Partner. — The same
principle which makes this distinction between new customers
and old customers protects a dormant or unknown partner wlio
retires and gives no notice whatever.^ He was bound for any
partner, but who has saiel that his name accommodation notes. The first note was
is to continue for a certain time, is liable discounted by the defendants, and re-
to a person to whom such notice is given, newed several times. It was held tliat the
for the acts of the other partners. defendants were dealers. Only those who
(z) Howe V. Thayer, 17 Pick. 91. have habitually dealt with a firm are en-
fa) Hutchins v. Bank of Tennessee, 8 titli^l to actual notice. A single transac-
Humph. 418. See Grinnau v. Baton tion does not amount to habitual dealing.
Rouge Mills Co., 7 La. Ann. 638. Mi-rritt v Williams, 17 Kas. 287 ; Clapp
(b) Dictum in Clapp v. Rogers, 12 N.Y. v. Rogi-rs, 12 N. Y. 283.
283. {(•) Hutchins v. Sims, 8 Humph. 423.
(c) Clapp w. Rogers, 12 N. Y. 283. (/) Hutchins v. Hudson, 8 Humph.
{d) Hutchins v. Bank of Tennessee, 8 426.
Humph. 418. See also City Bank v. Mc- (g) Amidown v. Osgood, 24 Vt. 278.
Chesney, 20 N. Y. 240 ; City Bank v. In Wardwell v. Haight, 2 Barb. 549, »
Dearborn, 20 N. Y. 244 ; National Bank person who had two previous dealings
V. Korton, 1 Hill, 572. In Vernon v. with a firm was held entitled to actual
Manhattan Co., 17 Wend. 524, 22 Wend, notice.
183, the note was the last of a series of
1 A dormant partner, properly so called, is not bound to give notice of withdrawal.
Elmira Iron & Steel R. M. Co. v. Harris, 124 N. Y. 280, 26 N. E. 541. But the mere
§ 320. J OF A CHANGE IN THE PARTNERSHIP. 409
obligations incurred by the firm while he was in it, because he
was then a partner in fact, and not because he was supposed to
be one : in other words, he was bound because of his participa-
tion in the business and profits, and not because the creditors of
the firm became so on his credit. When he leaves the firm, there-
fore, all the reason for holding him responsible expires ; and he
is not obliged to give any notice, or take any step to withdraw a
credit which never existed. (A) A dormant partner is, however,
liable for the whole of a debt contracted during his partnership,
just as any other partner is. And, if he is known to any customer,
so far as relates to that customer he is not a dormant or unknown
partner, and, therefore, notice should be given to that customer.
"Whether the customer was ignorant of the partnership or not, is
a question of fact, and sometimes is a diflBcult one. But a knowl-
edge on his part must be clearly shown, to entitle him to notice, if
the partner were generally unknown. («') As the fact of the part-
nership may have been accidentally divulged without the knowl-
edge or intention of the dormant partner himself, it would always
be wise to guard against a danger of this kind, by giving the
usual notice. The question has arisen, whether, if A., B., and C.
are in business, under the firm and style of A., B., 6i Co., and C.
retires, he is bound to give notice to dealers with the firm who
have no knowledge that he is a partner. We exhibit the present
state of the authorities in our note. (/) In Scotland, a dormant
{h) Scott V. Colmesnil, 7 J. J. Marsh. Bill, 37 111. 76 ; Ellis v. Bronson, 40 111.
416 ; Kelley v. Hurlburt, 5 Cow. 5-34 ; 455.
Evans v. Drummond, 4 Esp. 89 ; Ana- (i) Carter v. Whalley, 1 B. & Ad. 11 ,
stronj^ V. Hussey, 12 S. & R. 315 ; Benton Farrar v. Deflinne, 1 C. & K 5S0 ; Edwards
V. Chamberlin. 23 Vt. 711 ; Kennedy v. v. McFall, 5 La. Ann. 167.
Bohannon, 11 B. Mon. 120 ; Ayrault v. {j) In Edwards v. McFall, 5 La. Ann.
Chamberlin, 26 Barb. 89 ; Warren v. 167, the defendant was a partner of A.
fact that the name of a partner is not disclosed does not bring him within this
rule. If he takes part in the business, though not advertised as a partner, he is liable,
until notice of withdrawal, to former customers though his connection with the busi-
ness was not known ; for they are cognizant of the financial standing, if not of the
personality of the film. Elkinton v. Booth, 143 Mass. 479 ; Elmira Iron & Steel
K. M. Co.'v. Harris, 124 N. Y. 2S0, 26 N. E. 541 ; Shamburg v. Euggles, 83 Pa. 148 ;
Shamburg v. Abbott, 112 Pa. 6. But as to those who have not dealt with the firm, he
need not give notice of withdrawal if his connection with the firm was unknown.
Austin V. Appling, 88 Ga. 54, 13 S. E. 955 ; Cook v. Penrhyn Slate Co., 36 Oh. St.
135 ; Benjamin v. Covert, 47 Wis. 375, 2 N. W. 625. Any one who knows of the
existence of a partner, though dormant, may hold him liable unless proper notice of
withdrawal has been given. Beckett v. Ramsdale, 31 Ch. D. 177 (C. A.) ; Lieb v.
Craddock, 87 Ky. 525, 9 S. W. 838 ; Clark v. Fletcher, 96 Pa. 416.
A special partner in a limited partnership need not give notice of withdrawal. Tilge
V. Brooks, 124 Pa. 178, 16 AtL 746.
410
THE LAW OF PARTNERSHIP.
[CH. XIII.
jiartner must give notice of dissolution, as well as an ostensible
one. {k)
§321. Notice must be Reasonable. — The question, whether
notice has been given, or, if given generally, whether it was
brought home to the knowledge of a customer, is governed, in the
case of a retiring partner, by the rules applicable to a question of
notice in other cases. It is usually a mixed question of law and
fact ; although, if the facts are found, the reasonableness of the
notice is properly a question of law only. In England, or at least
in London, a usage sanctioned by the courts requii-es that notice
of retirement and dissolution should be given in a newspaper, pub-
lished in London, under the name of " The London Gazette." (I)
There, also, all bankruptcies are published , and it is a cant phrase
for becoming a bankrupt, that a party " finds himself in the
'Gazette.'" No such usage is known here, and would be impos-
sible as to any one paper for the whole nation ; but it might,
perhaps, usefully obtain as to some one paper in each of our prin-
cipal commercial cities. As the law stands, however, the party
giving notice by advertisement may take his choice of newspapers.
If, however, he selected one which was very obscure and unknown,
or had but little circulation among merchants, it might be a fact
& Co. It was contended that, as his
name diil not appear in the style of the
firm, he was a dormant partner. But the
court said : " We are not prepared to say
that a person can he styled a dormant
partner who enters into a partnership with
A., under the style of A. & Co. The
words ' & Co.' hold out to the world that
some one else is concerned besides A. The
term ' dormant ' seems more properly
ap[)licable to the case of a party associat-
ing himself in business with A., who trans-
acts the business in his { A.'s) sole name. "
See Mitchell v. Dall, 2 H. & G. 159, 171.
Where A. & B. were in business under the
name of A. & Co., and a person dealing
with the firm did not know that B. was in
the firm, it was held that B. was not a
dormant partner. Deford v. Reynolds, 36
Pa. 325. See also Western Bank of Scot-
land V. Needell, 1 Fost. & F. 461. A
similar rule is laid down in Goddard v.
Pratt, 16 Pick. 428 ; but the case of
Grosvenor v. Lloyd, 1 Met. 19, has been
thought to countenance the doctrine that
an unnamed partner in sucli a firm would
not be bound to give notice in such a case.
This inference does not necessarily follow,
however ; because the ruling of the court
below, upon which the case came up, was
somewhat peculiar, and did not jiresent
this i)recise question. The court below
had instructed the jury that a secret part-
ner was liable after his withdrawal, if no
notice of the dissolution was given. The
effect of that instruction was to make the
partner designated under the "Co."
secret ; and the higher court, bj' ordering
a new trial, may perhaps be taken to have
repuiliated that doctrine, and to have
sustained the contrary doctrine of Goddard
V. Pratt. See also Benton v. C'hamberlin,
23 Vtr 711 ; Heath v. Sausom, 4 B. &
Ad. 172 ; Carter v. Whalley, 1 B. & Ad.
11 ; Bernard v. Torrance, 5 Gill & J. 583.
{k) Hay v. Mair, Ross on Part. 639.
(I) In Trough ton v. Hunter, 18 Bcav.
470, the partnership had been dissolved
by judicial decree. One of the partners
refused to sign the notice of the dissolu-
tion which had been prepared for ])ulilica-
tion in "The London Gazette," and it
appeared that it was the usage of that
paper not to publish any notice unless
signed by all the partners. The court
ordered the partner to sign the notice.
§ 322.]
OF A CHANGE IN THE PARTNERSHIP.
411
which would lead a court or jury towards the conclusion that the
])arty intended to satisfy tlie letter of the law, but n(jt its spirit,
and to withhold notice rather than to give it ; and, of course,
such a notice would not be deemed " reasonable " by the court.
A similar remark may be made, but with less force, perhaps, as
to the number of times the advertisement was published, and
even as to the place which it occupied in the newspaper. There
can be but one general rule applicable to all these questions ; and
that is, that the retiring partner cannot have the benefit of the
notice, unless he shows that it was such reasonable and sufficient
notice as the usage of merchants requires, (m) or brings home
actual knowledge of it to the customer. For, even if he tried to
prevent the notice from being known, he will still have the full
benefit of it so far as it was known.
§ 322. Circumstances when sufficient Notice. — If the retiring
partner does not publish the fact in any newspaper, it has been
held that the mere notoriety of it will seldom or never protect
him. (n) It is, however, always ])ossible that this notoriety
may be so extreme, and so connected by circumstances with
an individual customer, that both court and jury would re-
gard it as dispensing with special notice, (o) And a sufficient
(»i) In Grinan r. Baton Kongo Mills
Co., 7 La. Ann. 638, the business of
making bricks and sawing lumber was
carried on at Baton Kouge. Tlie members
of the firm all lived in New Orleans,
where they had an office, kept by an agent.
It was held that notice of dissolution pub-
lished in a paper at Baton Kouge was not
sufficient to exonerate those known to be
partners as to persons residing at New
Orleans, who had had no jirevious deal-
ings with the firm. See also Deford v.
Keynolds, 36 Pa. 325. In Wardwell v.
Haight, 2 Barb. 549, the dissolution of a
firm doing business in Rochester was con-
cealed fifteen months ; and notice then
was published in Rochester six days before
goods were purchased in New York on
the credit of the firm. The court consid-
ered the sellers as dealers, and therefore
entitled to actual notice ; but said, if they
had not been, this notice would have been
insufficient. It was also said that a notice
must be public and notorious, so as to put
the public on its guard. See Bank of the
Commonwealth v, Mudgett, 45 Barb. 663.
(n) Pitcher v. Barrows, 17 Pick. 361 ;
City Bank v. McChesney, 20 N. Y. 240 ;
Gorham v. Thompson, Peake, 42. The
testimony of a witness, that he had
notice of the dissolution of a partnership
at a particular time, cannot be given in
evidence in a suit between others, in which
the dissolution of the partnership at that
time becomes material. Shaffer v. Snyder,
7 S. & R. 503.
(o) Where a witness testified that he
had given notice of the retirement of a
partner, and of the general dissolution
of the partnership, and that he was
"confident that all the neighborhood
were notified in two days," and on cross-
examination was asked whether he gave
such notice to the other creditors as he
had testified he gave to the one in ques-
tion, and he said he had, and gave the
names of the persons, — it was held that
it was competent to call the persons
named, and to prove that such notice had
not been given them ; but that it was not
competent for the other side to call any of
the persons named to prove that they had
412 THE LAW OF PARTNERSHIP. [CH. XIII.
lapse of time since the retirement might supply the want of
notice, (oo)
The taking a note of one partner (the firm having been dis-
solved two years before), signed with the firm name, and the
words added, " in liquidation," would be evidence from which the
jury might infer knowledge, (p) And a change of partnership in
a banking-house is sufficiently notified to the customers of the
house by a change in the printed cheques. (^) So a change in a
name painted on a counting-liouse, and circulars sent to old cor-
respondents, but no public notice given, is sufficient notice to the
world, (r) But a mere change of name is not always enough ; (s)
nor a change of pursuits, or a removal from the State of one
partner; Q) nor is the incorporation of the firm ; (w) or the fact
that a deed of assignment, constituting a dissolution, was put on
record. (?') If the notice was only by advertisement, it must go
further [to protect the retiring partner against former customers].
It has been held that proof that tlie customer regularly received
the newspaper was sufficient, {iv) But the prevailing rule now
seems to be, — at least in this country, where, as has been said,
we have no one newspaper in which merchants may expect to
find all information of this kind, — that it is not enough, of
itself, to prove that the very number of the paper containing the
advertisement was delivered at his house, or even traced to his
hand, (x) And, in point of fact, the multiplication of news-
received sucli notice. Howe v. Thayer, 17 {ic) For the rule in England, see God-
Pick. 91. frej' V. Turnbull, 1 Esp. 371 ; Wricrhtson
{no) Fanners' Bank v. Green, 30 N. J. v. PuUan, 1 Stark. 375, called Wricjht v.
L. 316. Pulham, 2 Chitty, 121 ; Godfrey r^ Mmc-
(p) Merrit i*. Pollys, 16 B. Mon. 355. auley, 1 Peake, 155 ; Newsome v. Coles, 2
iq) Barfoot v. Goodall, 3 Camp. 147. Camp. 617 ; Norwich Nav. Co. v. Theo-
(?•) M'lver !'. Humble, 16 East, 169. bald. Moody & M. 151. But in respect to
(s) As if a firm which consisted of A. persons who have been dealers with the
B. & C, doing business under the name firm, notice in the "Gazette," is not suf-
of A. & B., on the retirement of C. and of ficient. Graham v. Hojie, Peake, 154. In
A., should do business under the style of Jenkins v. Blizard, 1 Stark. 418, it is not
B. & D., even if the fact of the change of stated expressly whether the party sought
name were known, it would not be equi- to be charged with notice was a previous
valent to notice of the retirement of C, - dealer or not ; but it would seem that he
especially if the firm was carried on under was from the concluding remarks of Lord
a more general designation which remained Ellenborough. Notice was publislied in
unchanged. Howe v. Thayer, 17 Pick, the " Gazette," and once in the " Morning
91. Chronicle." Tliis last paper was taken by
(t) Lucas V. Bank of Darien, 2 Stew, the party sought to be charged. It was
280. held that this was evidence to go to the
{u) Goddard v. Pratt, 16 Pick. 432. jury of knowledge of the dissolution.
(v) Pitcher v. Barrows, 17 Pick. (x) Vernon v. Manhattan Co., 17
361. Wend. 526, 22 Wend. 192 ; Boyd v. Cann.
§ 323] OP A CHANGE IN THE PARTNERSHIP. 413
papers, to say nothing of their size, seems to forbid all reasonable
inference that he who takes a news[)aper, or even reads in it,
reads the whole of it, or becomes apprised of all the facts stated
in it. But, if it could be shown that the customer's attention
was, in any especial way, drawn to the advertisement, — even,
|)erhaijs, by being placed prominently before him, — the evidence
miglit be thus made sufficient. But our courts seem to be tend-
ing— wisely, as we think — to the requirement of personal notice,
by circulars, to all the customers of the firm, if the old name be
retained.
§ 323. To whom Notice should be Given. — Some question may
arise as to the person to whom notice should be given. If given
to one of a partnership, in this as in all other cases of bond fide
notice all are certainly bound. (^) So, if to an agent, the prin-
cipal is bound. (2) If to a stockholder in a corporation, (a) — a
bank, for example, — it is no notice to the bank, unless it can be
carried further, and shown to have reached those who were
intrusted with its management. It has been held, that casual
notice, by an advertisement, reaching a director, did not bind the
bank, (h) And, upon the whole, the actual practice of the coun-
ti-y may supply suiFicient reason for the distinction. But if a
notice were given to a director, expressly for the bank, and to be
communicated to the board or cashier and acted upon, this must
be sufficient, (c) We should doubt, however, whether notice to a
stockholder, with a distinct request that he should communicate
the fact to the directors or officers, would bind the bank, unless
tiiis communication was made ; because a stockholder is under no
obligation to communicate such information, and has no official
authority to receive it. (tZ) It may be considered as a general
rule, that, where it is necessary to give notice, it is not sufficient
that the necessary steps for this purpose were taken, if notice
was not received, (g)
10 Md. 118 ; Pope v. Risle}', 23 Mo. 185 ; {a) 1 Pars, on Coiit. (5th ed.) 77 and
Watkinson v. Baiikof Penn.,4 Whart. 482 ; notes.
Hutrluusv. Bankof Tenn.,8 Humph. 418 ; (b) National Bank r. Norton, 1 Hill,
Wliitev.Murphy, 3Piich. 369. ButseeBank 572. In Lucas v. Bank of Darien, 2
of So. Car. v. Humphreys, 1 McCord, 388. Stew. 280, the fact that one partner after
(y) BignoJd v. Waterhouse, 1 M. & S. dissolution became a director in a bank
249 ; Ex parte Waithman, 1 Mont. & A. was not notice to the bank of the dissolu-
374; Haywood y. Harmon, 17 111. 417; tion. And see preceding note.
Bouldin v. Paige, 24 Mo. 594. See Lan- (c) National Bank 1;. Norton, 1 Hill,
sing V. M'Killup, 7 Cow. 416 ; Powell v. 578 ; Bank of the United States i'. Davis,
Waters, 8 Cow. 670 ; Watson v. Welles, 5 2 Hill, 264.
Conn. 468. {d) See cases in preceding notes.
(;) Page v. Brant, 18 111. 37. (e) Johnson v. Totten, 3 Cal. 313.
414 THE LAW OF PARTNERSHIP. [CH. XITI.
The principle, that, after a partnership is dissolved, one part'
ncr dealing with a person having no notice of the dissolution
may bind his late copartner, applies only to transactions in the
usual course of the firm's business. (/)
§ 324. Retiring Partner whether discharged from Liability. — A
I'ctiring partner is, as we have seen, liable for the existing debts
of the firm, in precisely the same way and to the same extent as
before he left it: and yet it is very common for the partners to
agree that they who remain, perhaps with the new ones who
come in, shall pay all the debts ; and the retiring partner, as a
consideration for this agreement, gives up or leaves behind iiim a
proportionate ])art of the joint property.^ Such an agreement
is perfectly valid between the partners ; but has no effect at all
upon the creditors, unless they become parties to it. {g) It fol-
lows, therefore, that the creditors of the firm may not only
include the retiring partner in any action against the firm, but
may satisfy an execution against the firm from his property, as
freely as from that of any remaining partner, {h) But, when
they have done so, the retiring ])artner has his action against the
remaining partners, on their contract to pay that debt. It is
usual to add, \d^ the bargain between the partners, a clause of
indemnity ; but whether they do or do not promise to hold him
harmless, if they promise to pay the debt, and he pays it, he has
his action, (i)
Where, upon a dissolution, it was agreed that the assets of
the firm should be placed in the hands of one partner, and he
agreed that he would therefrom pay the debts of the partner-
ship, it was held that he had only agreed to apply the assets
(/) Whitman v. Leonard, 3 Pick. Eldon, 6 Ves, 119; Harries v. Jamieson,
177. 5 T. R. 556 ; Wooley v. Kelly, 1 B. & C.
((/) Harris v. Lindsay, 4 "Wash, C. C. 68. And see Allen v. Wells, 22 Pick.
98, 271 ; Kirwan v. Kirwau, 2 Cr. & M. 450.
617. (/) Hohart v. Howard, 9 Mass. 304 ;
(h) Lodge V. Dicas, 3 B. & Aid. 611 ; Brewer v. Worthington, 10 Allen, 329.
per DeGrey, C. J., 2 W. Bl. 947, and Ld. See Thurber v. Corbin, 51 Barb, 215.
^ Where npon dissolution one partner agrees to pay the firm debts, the other becomes,
as between the two, a mere surety and entitled to the rights of a surety. Thus upon
payment of a firm debt he is entitled to the benefit of all securities. Johnson v. Young,
20 W. Va. 614. And an extension of time by a creditor who has knowledge of the
agreement discharges the retiring partner. Fernald v. Clark, 84 Me. 234, 24 Atl. 823 ;
Brill V. Hoile, 53 Wis. 537, 11 N. W. 42. If a firm creditor with knowledge of this
agreement accepts a new note in renewal of the debt it will be held such a giving
of time as to discharge the surety. Leithauser v. Baumeister, 47 Minn. 151, 49 N. W.
660 ; Bank v. Green, 40 Oh. St.431 ; Gates v. Hughes, 44 Wis. 332 (snmble).
§ 325.] OF A CHANGE IN THE PARTNERSHIP. 415
to the debts, but did not absolutely assun;ie the payment of
them, (ii)
§ 325. Novation by means of Creditors' Consent. — If, liowevei*.
the creditors becouic parties to this agreemeut, for consideration,
they are of course bound by it , and then they cannot sue the retir-
int^ j)artuer.* In such case, something like the novatiou of the
civil law has taken place. A debt due from the whole lirni has
been discharged, and a new debt from a part of the firm has been
created. The old debt has been paid by the new one. But there
must be some consideratioti for the release of the retiring ])art-
ner. In almost all cases where the creditor agrees to this, there
is some reason for it in fact, which serves as a consideration.
Either the retiring ])artner gives up something because of the
assent of the creditor, or the creditor gains something in time,
or in business, or in some other way ; and there are few cases in
the books, and few we apprehend in practice, in which a creditor,
who agrees with partners tliat one of them shall retire and be
released from his debt on the engagement of the others to pay
it, is afterwards permitted to sue this partner. It is seldom, of
course, that such bargains are made in cases of insolvency ; for
the obvious futility of it, and entire absence of motive for it, or
effect from it in such a case, would prevent an attempt to make
or carry out an agreement of this kind by an insolvent firm.
And, if the firm be solvent, no harm is done to the creditor by
limiting his choice among debtors, all or any of whom can pay
him.
It is said that the adequacy of the consideration cannot be
inquired into, (j) And, if a creditor of a firm contracts or
(u) Topliff V. Jackson, 12 Gray, 56.5. In Lyth v. Ault, 7 Exch. 667, debt was
(j) Lyth V. Ault, 7 Exch. 667, per brought against A. & B. A. pleaded that
Pollock, U. B. tlie action was for goods sold to A. &
In Lodge v. Dicas, 3 B. & Aid. 611, a B. as partneis ; that afterwards A. being
creditor of a firm, on its dissolution, about to retire, and the business to be car-
agreed to look only to one partner. It ried on by B. alone, of which the plaintitf
was held that the agreement was void for had notice, an agreement was made between
want of consideration. See also David r. the plaintiff and defendant, by which
Ellice, 5 B. & C. 196 ; Thomas v. Shilli- the plaintiff was to be paid \2l. in part
beer, 1 M. & W. 124, and Wildes v. Fes- payment of her debt, and the plaintiff was
senden, 4 Met. 12, where this question is to abandon her claim against A. and look
discussed at length. Lodge v. Dicas is, to B. alone. The jury having found the
however, no longer authority in England, issue of fact in favor of the defendant, a
1 Where upon dissolution one partner agrees to pay the debts, and a creditor knows
of the arrangement and assents to it, there is a novation, and as to him the retiring
partner is discharged. Regester v. Dodge, 6 F. R. 6, 19 Blatch. 79 ; Bank v. Green, 40
Oh. St. 431.
416 THE LAW OP PARTNERSHIP. [CH. XIII.
agrees with a new firm to take their security in discharge of that
of the old, the retiring partner is discharged from any liability
to pay the debt ; and whether such an agreement has taken ))lace
is a question of fact for the jury, (/c) To discharge the retiring
partner, however, it is not sufficient to take a new security ; but
there must be an agreement to discharge him from the liability
of the old fii-m. (/)
§ 326. Implied Consent of Creditors. — It is quite seldom that
creditors of a lirm assent to such an arrangement ex])rcssly and
directly, but it is very common for them to do so by implication ;
and numerous ca,ses turn upon the question. What circumstances
imply such assent on the part of the creditors ? The cases we
cite will show that the courts construe with some liberality the
question of assent ; and that of consideration, with so much that
it seems to be now almost implied in the assent, {m) But a cred-
itor's mere transfer in his ledger of an account against a firm, to
the private account of one partner, without the knowledge of the
firm, does not preclude the creditor from suing the firm, (n)
If the creditor has no security, and no paper evidence of his
debt from the firm, and, after the partner retires, he accepts from
the new firm, with knowledge of the retirement, the security or
paper of the new firm, — this would seem to be not only an assent
on his part, but an assent on consideration ; for the acquiring
either of additional security, or of paper which he may, by dis-
count, at once convert into money, is consideration enough for
the promise implied in his assent, even though there is no new
partner in addition to the old in the new firm, (o)
motion was made for judgment for the {m) See Hart v. Alexander, 2 M. &
plaintiff no7i ohstnnle veredicto, on the W. 484 ; Harris v. Lindsay, 4 Wash. C.
ground tliat tliere was no new consideration C. 98, 271; Delaud v. Amesbury Mfg.
for the agreement. Parke B., said Thomp- Co., 7 Pirk. 244.
son V. Percival, 5 B. & Ad. 925, suhstan- (n) Barker r. Blake, 11 Mass. 16. See
tially overruled Lodge v. Dicas, 3 B. & also Armsby v. Farnani, 16 Pick. 318 ;
Aid. 611. Pollock, C. B., said that it was Averill v. Lyman, 18 Pick. 351 ; Baring
not easy to make a distinction between the v. Crafts, 9 Met. 380.
case at bar and Lodge y. Dicas ; but in (o) Evans v. Drummond, 4 Esp. 92 ;
that case the defendant was not proved to Reed v. White, 5 Esp. 122 ; Thompson v.
have known of the agreement of the plain- Percival, 5 B. & Ad. 925; Sheeliy v.
tiff to take the liability of the other part- Mandeville, 6 Cranch, 264 ; Stephens v.
ners. Martin B., said: "I think that Thompson, 28 Vt. 77; Isler j;. Baker, 6
Lodge V. Dicas is overruled, and it is bet- Hum)ih. 8.5. In this latter case, however,
ter to say so than to attempt to distinguish the ]ilaiutiff had taken a note signed by
between the ca.ses." the firm name, which the court held good
{k) Harris v. Farwell, 15 Beav. 31 ; as against the signer, but not as against
Thomp.son v. Percival, 5 B. & Ad. 925. the estate of the deceased partner ; an
(I) Harris v. Farwell, 15 Beav. 31 ; inquisition of lunacy having been found
Bedford v. Deakin, 2 B. & Aid. 210. against the latter, after the goods were
§ 327.J
OF A CHANGE IN THE PARTNERSHIP.
417
If he has securities I'rom the old firm, and gives them up, and
receives from the new firm what is only the same, excepting that
the paper loses one name and gains another, being that of a
present instead of a j)ast firm, — here there is undoubtedly consid-
eration enough, whether the new name be better or worse, com-
mercially speaking, than the name that is lost, {p ) And if the old
security is given up for the new, it seems that the old is so effec-
tually destroyed that, if the creditor afterwards i-eturns the new
to the remaining partner or partners, and receives from them the
old, this will not revive the obligation of the retiring partner, {q)
§ 327. Old Claim retained as Additional Security. — If he takes
new security, agreeing to hold the retiring jjartner only as surety
for the debt, there must be some consideration, even for this
modified discharge; but if there is one, or anything which can
be called one, then the retiring ])artner will be held only as surety,
and not as a joint del)tor. lie will, therefore, be discharged by
any indulgence to the remaining partners, who are the princit)al
debtors, which would suifice to discharge any surety; and the
general rule here is, that mere delay in calling for the debt does
not discharge the surety ;(r) nor even a promise of delay, if it be
not so far binding as to estop the creditor from a suit against the
new firm, (s) But, if it would have this effect, then it injures
the guarantor, becaufie he can no longer secure himself by paying
the debt and suing for it in the name of the creditor; and, there-
fore, by such indulgence he is discharged, (t)
bought by the firm, but before the firm given for the amount, signed by B. It
note was given. A joint action was was held, that A. was thereby diseharo-ed.
brouglit by the promisee against the ad- (/)) Bedfonl v. Deakin, 2 R. & Aid.
ministrator oJ" tlie deceased and the part- 210 ; Hart v. .Alexander, 2 M. & W. 484 ;
ner who gave the note, and there was a Harris v. Farwell, 15 P>eav. 31; Yarnell v.
count for the note and one for goods sold Anderson, 14 Mo. 619. See also Sheehy
and delivered. The court held that the v. Mandeville, 6 ('ranch, 264 ; Stephens
inquisition of lunacy found against the v. Thompson, 28 Vt. 77 ; Isler v. Baker,
partner, ipso facto, dissolved the partner- 6 Humph. 85.
ship ; but that the note, being good
against the giver, discharged the debt of
the firm on account ; and, a verdict hav-
ing been found against the joint defend-
ants, ordered a new trial.
In Harris v. Lindsay, 4 Wash. C. C.
(q) Arnohl v. Camp, 12 Johns. 409.
(r) That mere delay to sue a principal
rloes not discharge a surety, see Freeman's
Bank v. Rollins, 13 Me. 202 ; Townsend
V. Riddle, 2 N. H. 448 ; Strong v. Foster,
17 C. B. 201 ; Hunt v. Bridgham, 2
98, 271, A. & B. were in ])artnership, and Pick. 581. See also 2 Pars, on Cont. (5th
A. retired, and B. went on with another ed.) 26, note (/) and cases cited,
person ; and afterwards this firm was dis- (s) In such a case, the agreement is of
solved and another formed, which was no effect. Reynolds v. Ward, 5 Wend,
also dissolved. The amount due from 501 ; Hogaboom v. Herrick, 4 Vt. 131 ;
these three firms to a creditor of all of death v. Sims, 5 How. 192.
them was consolidated, and three notes {t) Oakelley v. Pasheller, 4 CI. & F.
207, 10 Bligh, N. s. 548.
27
418 THE LAW OF PARTNERSHIP. [Ctt. XIII
If the creditor takes new security, retaining the old, without
any specific arrangement, it might be thought that such a trans-
action implied precisely the change above spoken of ; that is, an
acceptance of the new firm, who give this security, as principal
debtors, and of the former partner as their surety. It seems
rather to be regarded, however, as not affecting the liability of
the retiring partner at all. And the creditor in such case retains
the liability of the retiring partner, although that partner did not
himself know that the old securities were retained, {u)
Generally, if a person having a demand against a firm gives
up the evidence of it to one of the partners, that he may collect
it from the others, and thus enables him to represent to the
others that he has paid the debt, and they settled with him on
this basis, we should not consider the partners so settling as
liable to the creditor ; but if the partner merely says to them
that he has the evidence of the debt, and does not produce it,
and they settle with him as above, they do it at their own
risk, (u)
It is quite clear, that if the creditor, when he receives the new
securities, expressly reserves all his rights against the old firm
or retiring partner, he retains them unimpaired, (w. ) And the
question always exists, where there is neither express reservation
nor express release, whether the whole transaction, illustrated by
such circumstances as indicate the intention of the parties, falls
within one or other of the principles above stated.
§328. Consent whether implied from Silence. — Frequently the
new firm goes on in its regular business, the accounts of the cus-
tomers are transferred from the old to the new, and the custom-
ers, knowing the retirement and change of parties and transfer
of accounts, say nothing, but continue their dealings with the
new firm ; perhaps depositing and drawing, or buying and selling,
or receiving interest and settling accounts, all just as before,
taking no particular notice of the change.^ The question then
occurs, What is the legal significance and effect of such conduct?
{u) See Harris v. Lind.say, 4 Wash. (w) Bedford v. Deatin, 2 Stark. 178,
C. C. 271, and cases cited in note (w), 2 B. & Aid. 210 ; Yarnell v. Anderson,
infra. 14 Mo. 619 ; Smith v. Kogers, 17 Johns.
Ir;) Featherstone v. Hunt, 1 B. & C 340.
1130.
1 Mere silence on the part of the creditor is not enough to bind him : an express
assent on his part to the arrangement must be shown in order to discharge the retiring
partner. Campbell v. Floyd, (Pa.) 25 Atl. 1033 ; Wadhams v. Page, 1 Wash. St. 420,
25 Pac. 462 ; Barnes v. Boyers, 34 W. Va. 303, 12 8. E. 708. But see Anderson v.
Holmes, 14 S. C. 162.
329.]
OP A CHANGE IN THE PARTNERSHIP.
419
and it seems to be well settled that the mere receiving of interest
from the new lirm will not discharge the old ; {x} and although
the transferring the old account to the new firm is not necessarily
an adoption by the creditor of the new fii-ni as his sole debtors, (y)
yet this fact, together with the other circumstances of the case,
may be evidence from which a jury would be authorized to find
that the creditor hud impliedly assented to the discharge of the
old firm, (z) An eminent English judge, speaking of a case in
which the retiring partner was held, says : " The court was sub-
stituted for a jury in that case ; and I very much doubt whether
twelve merchants would have determined it as the court did." (a)
And he appears to think that what the merchants would do, that
the court should do.
In respect to the burden of proof, it has been held, that when
the liability at a given time of all the partners is proved, the
burden is on those of them who seek to escape continued liability,
to show a cessation. (A)
§ 829. Liability of Retiring Partner for Trust Money. — In a few
cases, the question has arisen, as to the continued liability of a
retiring partner for money applied to partnership uses with the
(x) In Gough V. Davies, 4 Price, 200,
it was held that a person depositing
money with his bankers, and taking their
accountable receipts, does not, by con-
tinuing to leave his money in the bank
after the dissolution of the original firm
and the constitution of a new one, which
consists of some members of the old bank
and of other persons, discharge the part-
ners who have retired, although he receives
interest regularly from the new firm, gives
them no notice, and continues to transact
business with them for four years and
until their insolvency. In Harris v. Far-
well, 15 Beav. 31, a customer of a bank-
ing firm had deposited money in it on
interest. On the death of one of the
firm, the business was carried on by the
survivors and a new member. A. received
interest from the new firm until their
bankruptcy, and then made an affidavit
that the new firm was indebted to him for
money had and received by them to his
use. It was held that the fact that in-
terest was paid was not conclusive, be-
cause it might have been paid by them
as agents, and that the affidavit could not
be construed as an agreement to dischars:e
the old firm. See also Daniel v. Cross, 3
Ves. 277 ; Devaynes v. Noble, 1 Meriv.
529, 566 ; Blew v. Wyatt, 5 C. & P. 397.
(y) See Ex parte Appleby, 2 Deacon,
482 ; Kirwan v. Kirwan, 2 Or. & JI. 617.
(::) See Thompson v. Percival, 5 B. &
Ad. 925 ; Hart v. Alexander, 2 M. & W.
483 ; Brown v. Gordon, 16 Beav. 302.
In Benson v. Hadfield, 4 Hare, 32, there
is a dictum, that where a partner retires
from a firm, and a customer has notice of
his retirement, and afterwards continues
his dealing with the new firm, without
making any claim on the retired partner,
a jury may, from the circumstances, pre-
sume that the customer agreed to dis-
charge the retired partner, and to accept
the new firm as debtors, instead of the
old one. In deciding whether such an
agreement ought to he presumed, the na-
ture of the dealings subsequently to the
retirement, the form of the accounts ren-
dered, the time elapsing, and other cir-
cumstances, are most material.
(a) Hart v. Alexander, 2 M. &. AV.
493.
(b) Kirwan v. Kirwan, 2 Cr. & M. 617.
420 THE LAW OF PARTNERSHIP. [CH. XIII.
knowledge of the partners, by one of the partners who had tlie
money in his possession as trust-money. We cannot donbt what
the law should be in such cases. In the first place, this is to
all intents a borrowing of money by the firm. It may be said,
it is a borrowing from one of the partners, and if he agrees with
another, who retires, never to call upon him for the debt, there is
an end of it. But it is plain that the borrowing is not — at least
in etiuity, and we think that courts of law would adjudicate such
a (piestion on ])rinciples of equity — a borrowing from the part-
ner who is trustee, but from the cestui que trust, or from the
trust-fund. It is scarcely possible that such use of trust-money
is legal and proper as against the cestui que trust, without his
express consent. Nothing is gained, therefore, by showing that
the legal estate, and all legal rights, are in the lending partner ;
for, if he exercises these rights in an illegal way, they who arc
participant of the wrong cannot be permitted to profit by it.
We say, therefore, that a retiring partner should be held for such
a debt, unless he show, expressly or by sufficient implication, a
receipt or release from the parties who are actually interested in
the trust-fund, and are competent to give such release, and who
give it for some legal consideration, (c) But if a partner holding
the money of a stranger, as his agent, puts that money into the
firm, this does not make the stranger a partner, {cc)
§ 330. Appropriation of Payments. — The general principles
which are ai)i)licable to this subject are these : If money is paid,
the paying debtor may appropriate it as he will ; if he does not,
the creditor may ; if neither do, the law will appropriate it in
such way as will do justice to all parties, (d) Of these three
rules, the first is clear and unqualified : no doubt exists that one
who owes many debts may insist that his payment shall discharge
which of them he will ; and, if he points it out, the acceptance of
the money discharges that debt, (e) The second may not be so
(c) Dickenson v. Lockyer, 4 Ves. 36 ; berger, 22 Pa. 492 ; Sneed v. Wipster, 2
Smith V. Jameson, 5 T. R^ 601. A. K. Marsh. 277.
{cc) Harper v. Lampsing, .33 Cal. 650, (c) Whether the debtor has appro-
(d) Simson v. Ingham, 2 B. & C. 65 ; priated the payment or not, is a qnestion
Jones V. Maund, 3 Younge & C. Exeh. of intent for the jury. As to what cir-
347 ; Brazier o. Bryant, 2 DowL P. C. cumstances will warrant a finding of such
477 ; Chitty v. Naish, 2 Dowl. P. C. 511 ; appropriation by the debtor, see Tayloe r.
Peters v. Anderson, 5 Taunt. 596 ; Alex- Sandiford, 7 WHient. 14 ; Mitchell v. Dall,
andria v. Patten, 4 Cranch, 317 ; Cremer 2 H. & G. 159, 4 Gill & J. 361 ; Fowke v.
V. Higginson, 1 Mason, 338 : Franklin Bowie, 4 H. & J. 566 ; Robert i'. Garnie,
Bank v. Hooper, 36 Me. 222 ; Hamilton 3 Caines, 14 ; West Branch Bank v.
V. Benbury, 2 Hayw. 385 ; Hargroves v. Moorehead, 5 W. & S. 542 ; Scott v.
Cooke, 15 Ga. 221 ; Pennj'packer v. Urn- Fisher, 4 T. B. Mon. 387 ; Stone v. Sey-
§ 330.]
OF A CHANGE IN THE PARTNERSHIP.
421
certain. Some authorities have inclined to require of the creditor
an ap[)ropriation at the time of payment, saying that, if it be not
then appro|)riated, the law will determine any subsequent appro-
priation. This is the rule of the civil law. (/) But we consider
it well settled that this is not the rule of the common law ; for
althouuh it is clear that a creditor cannot wait until the time of
the trial to make his appropriation, (^) or, it would seem, until a
controversy has arisen, (A) yet he is not obliged to make the
apj)ropriation immediately, but may wait a reasonable time. (/)
Tlie reason of the rule would be, jjcrhaps, as well satislied by say-
ing, that the creditor nuiy make his election and api)ropriation
at any time before a change of circumstances takes place which
would vary the rights of the parties, and therefore render an
appropriation favorable to the creditor injurious to some one
else, (j) The right of an appropriation by the creditor is not
conclusively exercised by entries in his books, if these are not
connnunicated to the other party ; (^:) but the entries are decisive
niour, 1.') (WiMul, 19 ; Newiiiavch v. Clay,
14 East, 239 ; Shaw v. Picton, 4 B. &
C. 715. If the debtor pay with one
intent and the creditor receive with
another, the intent of the debtor shall
govern. Keed v. Boardman, 20 Pick.
441. It is not necessary for the debtor
who pays money to make a specific ap-
propriation of it at tiie time of the paj'-
ment : it is sufficient, if it can be collected
from other circumstances, that he in-
tended at the time of payment to appro-
priate it to a speciHc purpose. Shaw v.
Picton, 4 B. & C. 715 ; Waters v. Tomp-
kins, 2 Cr. M. & R. 723.
(/) That this is the rule of the civil
law, see Di^'. lib. 46, tit. 3, § 1, 3. See also
Clayton's Case, Devaynes v. Noble, I
Meriv. 572. In Hill v. Southerland, 1
Wash. (Va.) 133, it is said, that it is
incumbent on the creditor to make a
recent application by entries in his books
or papers, and not to keep parties and
securities in suspense, changing their sit-
uation from time to time, as his interest
governed by events might dictate.
((/) United States v. Kiikpatrick, 9
W'heat. 737.
(A) See dic/a in United States v. Kirk-
patrick, 9 Wlieat. 737, per Story, J. ;
Fairchild v. Holly, 10 Conn. 184, per
Williams, J.
(/) Sec Fairchild v. Holly, 10 Conn.
184, per Williams, J. ; Alexandiia v.
Patten, 4 Cranch, 317 ; Simson v. Ingham
2 B. &C. 65.
{j ) In Alexandria v. Patten, 4 Cranch,
317, the judge in the court below ruled,
that if the debtor at the time of making
the payment did not direct to which ac-
count it should be applied, then the
creditor might immetliately make the
application; " hut such application must
have been recent, and bpfore any alter-
ation had taken place in the circumstances
of" the debtor. In delivering the opin-
ion of the court, granting a new trial,
Marshall, C. J., said : " No principle is
recollected which obliges the creditor to
make this apjilication immeiliately . . .
In declaring that the election, which they
supposed to devolve on the plaintitf, if
the application of the money was not
understood at the time by the parties, was
lost if not immediately exercised, the
court erred. " No notice ayipears to have
been taken of the other branch of the
ruling, viz., that the application must be
before any change of circumstances, which
certainly a))pears to be a reasonable rule.
(k) In Simson v. Ingham, 2 B. & C.
65, there were transactions between a
London banking com]>any and a country
firm. On the death of one of the members
422 THE LAW OP PARTNERSHIP. [CH. XIII.
of the question, if the charges are made by the consent of all the
parties. (/)
§ 331. Appropriation by New Firm. — We apply thesc ))rinciples
to the case of a retiring partner, thus : For the debts existing
when he retires, he continues responsible ; for new ones, created
after his retirement (the requisite notice having been given), he
is not resitonsible ; and when the remaining partner, or the new
i]vm, pai/ money after his retirement, if that is appropriated to
the old debts, it relieves the retiring partner ; if to the new debts,
the old debts are nut jjaid, and the retiring partner remains
responsible.
Now, the firm which pays is the paying debtor; and, by the
first rule above stated, has the right of appropriating its payment.
Nor is there any limit to the exercise of this right, excepting the
universal limit, that it must not be exercised fraudulently. If
the new firm pay money which is a part of its old fund or of the
profits of its old business, and which the retiring partner had a
right to have appropriated to the old debts, and believed was so
appropriated, any appropriation by the new firm of such payment
to the new debts would be fraudulent, and therefore void so far as
the new firm was concerned. If the receiving creditor knew
notliing of the appropriation, he could not, on learning it after-
wards, set it up against the retiring ))artner ; if he knew it and
the accompanying facts, he would be ])articipant in the fraud, and
therefore could not enforce it ; if he knew the appropriation,
hut did not know the attendant circumstances, and therefore was
personally innocent, the question woidd be more difficult. We
should say, however, that the retiring partner now would not be
bound by it. It would be somewhat like a transfer of his prop-
erty, without his consent or authority, which could give no title to
of the country bank, a balance was due the firm up to tlie time of the death ot the
London bankers. During the month fol- partner ; and tlie other, a new account,
lowing, the London banker received sums containing all jjayments and receipts snl),
in payment more than sufficient to dis- sequent to that time. The court heU
charge the balance due ; but during the that the entry of the payments to tl.n
same time they advanced money on ac- credit of the old accouTit, by the London
count of the country bank, to an equal bankers, not being communicated to th»*
amount. At first, the London bankers country bank, did not amount to a com,
entered in their books all receipts and plete ai)i)ropriation ; and that the London
jiayments, made after the death of the bankers might apply the payments re.
deceased partner to the account of the ceived subsequently to the death of the
old firm ; but they did not send any deceased partner to the debt of the new
account to the country bankers until two firm. See also Barker v. Blake, 11 Mass.
months after the death of the deceased 16.
partner, and then they sent two distinct (/) AUcott v. Strong, 9 Cush. 323.
accounts, — one the account of the old
§ 333.] OF A CHANGE IN THE PARTNERSHIP. 423
it even to an innocent holder. Nor could the holder complain ;
because, not having himself appropriated the money, he would be
in the same position as if the firm had not. (wi)
Jiut if the new firm, honestly, and for adequate business causes,
appropriated the payment to the new debts, — as, for example,
because they had bought goods on a very short credit of an
old customer whose earlier claims had not matured, or in any
such cases, — the approjjriation would doubtless bind the retiring
partner.
§ 332. Appropriation by Creditor. — If the paying firm make
no aj)propriation at all, the receiving creditor may make any
which is honest. If, in expectation of the insolvency of the new
firm, he discharged iheir debts, leaving those unpaid on which he
could hold the retiring partner, it might well be doubted whether
this appropriation was honest, and therefore whether it was valid.
8o, if he made no appropriation until he had learned the insol-
vency of the new firm, and then made his entries so as to hold
tlie retiring partner, 'this would not be valid. (?i) But, as before,
an appropriation made by him of unappropriated payments, made
in a manner and at a time not indicative of wrongful purpose,
would be binding on all parties. It scarcely needs to be said, that
no party, having distinctly made an appropriation, would be per-
mitted afterwards to change it, for his own benefit and to the
injury of others, (o)
§ 333. Appropriation by the Law. — If the appropriation became
matter of law, the leading principle would be, to do justice by it
to all concerned, and the first rule for carrying this into effect is,
to appropriate payments in order of time ; that is, the first pay-
ment would be appropriated to the oldest debt, the next to the
next, and so on. And no general equities between the parties
would be suffered to disturb this order, unless they were very
(m) Thompson v. Brown, Mooily & M. items ; and that the case of Thompson v.
40. See also Fairchild v. Holly, 10 Conn. Brown, siqira, did not apply because T.
175; Johnson v. Boone, 2 Harr. (Del.) was liable to the plaintiff lor the entire
172 ; Sneed v. Wiester, 2 A. K. Marsh, debt due upon both accounts. But in
277. such a case it has been held, that the
In Smith v. Wigley, 3 Moore & S. creditor may apply the payment in dis-
174, W. & T. were partners, and indebted charge of the individual debt, and not to
to the plaintiff. They dissolved the part- the debt due by the firm,
nership, and T. became indebted after- (n) See cases ante, § 3.30, and notes,
wards on his separate account. It was (o) This principle is admitted in Sim*
held, that payments by T. after the dis- son v. Ingham, 2 B. & C. 65. See antCf
solution must go in reduction of the § 330, note {(),
entire account, and discharge the earliest
424
THE LAW OP PARTNERSHIP.
[CH. XIII.
strong, (p) But the court would respect any indication of aj)})ro-
priation arising from the payments themselves. Thus, if, when
purchases were made, bills were given, a bill for each purchase,
each idcutificd by its exact amount, or by the term of credit, or
both, the payment of money for that bill would of course not only
take it up, but would pay for that })urchase ; and the same jirin-
cij)le would require that if no bills were given, Ijut pui-chases
were made on definite credits, payments answering exactly in
time and amount to those credits would be appropriated to them,
without inquiring whether these were earlier or later debts, ((y)
And, generally, any payments of which the appropriation seemed
to be indicated or required by business arrangements would be
ado|)ted by the courts, (r)
§ 334. Appropriation to Debt of Owner. — One of the most Cer-
tain indications might arise from asking to whom did the money
belong. It is perfectly obvious that if the money belongs to an
old firm, it must pay the debts of that firm; if to the new firm,
it must pay their debts. Indeed, this is saying no more than
" No creditor can pay the debt of one person with the money of
another." (i-) If a person has an account with a banking firm
(p) See cases in the two following
notes.
iq) See Taylor v. Kymer, 3 B. & Ad.
320. Thus, where an agent who had, in
a previous account, charged himself with
a balance due from him, continued to re-
ceive money for his jirincipal and to pay
money out, it was held, that his payments
were not necessarily to be first applied to
the extinction of the previous balance,
where the receipts were e(iual to the pay-
ments. Lysagt V. Walker, 5 Bligh,
N. s. 1.
(>•) See Taylor v. Kymer, 3 B. & Ad.
320 ; Stoveld v. Eade, 4 Bing. 154 ;
Newniarch v. Clay, 14 East, 240. In
Wiekham v. Wickliam, 2 Kay & J. 478,
J. F. & Sons, as agents of the plaintiffs,
sui)plie(l goods to the firm of S. & W.
upon the footing of the latter becoming
debtors to the plaintiffs. They also sup-
])lied the same firm with other goods on
their own behalf, and made no distinction
in their accounts. E. F. was a partner in
both firms. It was held, that communi-
cations made by the firm of J. F. & Sons
to the plaintiffs, admitting a large debt
due from the firm of S. k W., and under-
taking that E. F. would use his hiflueiice
as a partner with S. & W. to secure its
reduction, upon the faith of which com-
munication the plaintifis forbore to sue
S. & AV., precluded the firm from treating
their debt to tlie plaintiffs as one which
had been liipiidated by the appropriation
of the jiayments made by tliem to the firm
of J. F. & Sons, in order of date. lu
Henniker v. Wigg, 4 Q. B. 793, wliere a
bond was given to secure payments by A
to B. of a si)ecified sum, and certain pay-
ments were afterwards made by A., Lord
Denman, C. J., after stating the general
rule, that, where there is an open account,
the first item on the debit side is dis-
charged by the first item on the credit
side, said : " But it is equally certain
that a ]iarticular mode of dealing, and
more es])eciall}' any stipulation between
the parties, may entirely vary the case ;
and tliis would be the effect in the present
instance, if it should appear that this
bond was given to secure the plaintiffs
against advances whi;'h they miglit from
time to time make to the defendant."
(s) See cases, ante, §§ 330, 331, and
note (l).
§ 334.]
OP A CHANGE IN THE PARTNERSHIP.
425
which is dissolved, and his account continues as before, so that
the transactions before and after the dissolution are comprised in
one account, payments made by the new firm are construed to be
in liquidation of the earliest items on the joint account, and not
of the new account merely. (0 And if, upon the dissolution,
the old account is struck, and the balance due carried to a new
account, and del)ts are afterwards incurred and payments made
generally, the payments are first applied to li(]uidate tbe first
item, — the balance of the old account. (?<) But, if a new account
is opened with the new firm, the creditor may apply a ireneral
payment to the new account, {v} And, in ueneral, the doctrine
of appropriation, and the right of election, apply only where the
del)ts or accounts are distinct in themselves, and are so regarded
and treated by the parties. If the whole may be considered as
one continuous account, the general rule is, that the payments are
to be applied to the earliest items of the account, (w)
(/!) Clayton's Case, Devaynes v. Noble,
1 Meiiv. 572 ; Peinberton v. Oakes, 4
Ku9s. 168 ; Siiiison v. Ingham, 2 B. &
C. 65, per Bayley, J. ; Simson v. Cooke,
1 Bing. 452 ; Williams i\ Kawlinson, 3
Bing. 71 ; Field v. Carr, 5 Bing. 13 ;
Bodenhani v. Purchas, 2 B. & Aid. 39 ;
Smith V. Wigley, 3 Moore & S. 174 ;
Livermoie v. Rand, 26 N. H. 85 ; Allcott
V. Strong, 9 Cash. 323 ; Farnam v. Bou-
telle, 13 Met. 159. See also Penuell v.
Deffell, 4 De G. M. & G 372 ; Beale v.
Caddick, 2 H. & N. 326. And this rule
applies as well between partners them-
selves as between partners and third per-
sons. Touhnin v. Copland, 3 Younge &
C. (Exch.) 625, 7 CI. & F. 349. In New-
march V. Clay, 14 East, 239, there were
three partners, one of them being dormant
and nnknown. Goods had been furnished
to them by the plaintitf, and bills received
in payment. The partnership was then
dissolved, the dormant partner retiring.
Other goods were then furnished, and the
bills given before the dissolution of the
partnership were dishonored, and new
bills given, which were more than suffi-
cient to cover the debts of the old part-
nership. It was held that the delivering
up the old bills, on receipt of the new,
was evidence of a particular appropriation
of the new bills in payment and discharge
of the old debt, of which the dormant
partner might avail himself in an action
on the case for goods sold and delivered,
brought against him jointly with the other
two partners.
((() Sterudale v. Hankinson, 1 Sim.
393 ; Allcott v. Strong, 9 Cush. 323.
(v) Logan V. Mason, 6 W. & S. 9.
See Simson v. Ingham, 2 B. & C. 65,
cited supra, § 330, note (j).
(w) Clayton's Case, Devaynes r. Noble,
1 Meriv. 609. See also Brooke v. Enderby,
2 Br. & B. 70 ; Smith v. Wigley, '3
Moore & S. 174 ; United States v. Kirk-
patrick, 9 W^heat. 720 ; Jones v. United
States, 7 How. 681 ; Postmfister-General
V. Furber, 4 Mason, 332 ; United States
V. W'ardwell, 5 Mason, 82 ; Gass v. Stim-
son, 3 Sumner, 98 ; Fairchild v. Holly,
10 Conn. 175; McKenzie v. Nevius, 22
Me. 138 ; United States v. Bradbury, 2
\Vare (Daveis), 146. In Bank of Scot-
land V. Christie, 8 CI. & F. 214, the doc-
trine of Clayton's Case was applied to
payments made to a bank by surviving
partners, on a debt due from the firm' to
the bank. But payment will not be
applied to the earliest items in an account
if a different intention is clearly expressed
by the debtor, or by both parties, or where
such intention can be gathered from the
particular circumstances of the case. See
Taylor v. Kymer, 3 B. & Ad. 320 ; Hen-
niker v. W'igg, 4 Q. B. 792 ; Capen v.
426 THE LAW OP PARTNERSHIP. [CH. XHI.
§ 335. Wrong of Debtor as affecting Application of Payments. —
If debtors commit a breach of trust in respect to certain ]irop-
erty, and afterwards make payment generally on account to their
creditor, who is ignorant of the breach of trust, these payments
are not considered as payment of the trust account, although it is
earlier in date than the other items, (a?) And if payments are
made on an open account for advances, and some of these grew
out of illegal transactions, the payments are to be appropriated
to the reduction of the legal, and not the illegal, part of the
demands. (?/)
SECTION III.
OP AN INCOMING PARTNER.
§ 336. Liability of Incoming Partner. — A new partner is of
course liable for all the subsequent debts of the firm, in the same
manner as any other partner ; and it is equally obvious that he is
not liable for the old debts, unless he assumes them for considera-
tion. (2!)^ If, however, he assumes them at all, there is con-
Alilen, 5 Met. 268 ; Dulles v. De Forest, bankruptcy, exclusive of the amount of
19 Conn. 190 ; Wilson v. Hirst, 1 Nev. the exchequer bills, exceeded the amount
& M. 742 ; Beall v. McOiillough, 27 Md. of the balance due at the time of the
645. death. The estate of the deceased part-
fa:) Claj'ton's Case, Devaynes v. Noble, ner was held liable for the amount of the
1 Meiiv. 572. This case decided two exchequer bills.
points. First, that above stated ; and {y) Ex parte Randleson, 2 Deac. &
second, the following : Clayton deposited Ch. 534.
exchequer bills with a firm of bankers, (z) Thus, in Young v. Hunter, 4 Taunt,
for safe-keeping ; and directed tliem to 582, and in Ketchum v. Durkee, Holf. Ch
take in exchange for them, at their ma- 538, it was held, that the fact that the
turity, other bills to be held by them in new partners derived a benefit from goods
the same manner, and to apply the pro- sold to the old firm did not render them
ceeds to their own use. There was also a liable for the price of the goods. So, if
general banking account between the par- the goods are ordered before and delivered
ties. One of the partners died, and the after he joins, he is not liable. AVhitehead
firm some time afterwards became insol- v. Barron, 2 Moody & II. 248. See also
vent. Between the death and the bank- Beale v. Mouls, 10 Q. B. 976 ; Bremner v.
nTf)tcy, the payments niade to Clayton by Chamberlayne, 2 C. & K. 560 ; Keriidge '-.
the survivors exceeded the amount of the Hesse, 9 C. & P. 200 ; Beech v. Eyre, 5 M.
cash balance due at the death, and the & G. 415. And a member of a provisional
amount of the bills. But their receipts committee is not liable for services per-
on his account, during this time, exceeded formed for the company after he joins, if
the sum jiaid ; and the balance due at the they are performed in consequence of an
1 Where a new partner is admitted to a firm, or an old partner leaves it, a new ]iart-
nership is formed ; and neither the incoming partner nor the new hrm is liable for the
§ 336.] OF A CHANGE IN THE PARTNERSHIP. 427
sidcration enough in his admission into the firm's business to
bind him to those from whom the consideration comes. As to
others, the question is more difficult. For instance, the new part-
ner, by his contract witli the old firm, agrees to assume all the
old debts, and be liable for them like tlie other partners ; and
they agree that he sliall be jointly interested with them in the
stock, tlie business, and the profits. There is no doubt of the
validity of this contract as between the partners ; and, therefore,
if they or any one of them are obliged to pay any of the old debts,
they will have as effectual a remedy against the new partner as
they would have had if he had been with them when the debts
were contracted. It is, however, another question, whetlier the
creditors of the firm can hold the new partner merely on his con-
tract with the old partners.
Older given previously to his joining, thousand. Sometime afterwards, B. be-
Newtou V. Belcher, 12 Q. B. 921. And came a partner with A., and ordered biicks
if goods are sold to a firm, and the from time to time, which were used for a
old firm is dissolved, and one of the old partnership purjiose. It was held, that
partners unites with a new one, and forms each order was a new contract ; and that
a new firm, the new partner is not liable B. was liable as partner for all the bricks
on a note given for the goods by the old received after he became a partner, though
jiartner in the new firm's name. Poin- the court said, that, if the contract had
dexter v. Waddy, 6 Munf. 118. See also been for a certain number of bricks at so
Shinetf v. Wilks, 1 East, 48. In Hart v. much per thousand, B. would not have
Tomlinson, 2 Vt. 101, it is lield, that a been liable. See also Helsby v. Mears, 5
new partner is not liable for an old debt, B. & C. 504. But see Scott v. Beale, 6 Jur.
although the firm name is unchanged, and x. s. 559, for a case the soundness of which
no notice is given ; and that, if the new seems very questionable. See Sternburg
partner dies pending the suit this makes v. Callanan, 14 Iowa, 251, confirmed and
no difference. In Dyke i;. Brewer, 2 C. adopted in Cadwallader v. Blair, 18 Iowa,
& K. 828, a person agreed with A. to 420 ; Hartley v. Kirlin, 45 Pa. 49 ; Thrall
furnish him with bricks whenever he v. Seward, 37 Vt. 573 ; Updyke ;;. Doyle,
wanted them, at a certain price per 7 R. I. 446 ; Francis f. Smith, 1 Du vail, 121.
debts of the old firm. First Nat. Bank v. Hall, 101 U. S. 43; Hatehett v. Blanton,
72 Ala. 423 ; Ringo v. Wing, 49 Ark. 457, 5 S. W. 787 ; Bracken v. Dillon, 64 Ga.
243; Paradise v. Gerson. 32 La. Ann. 532; Parmalee v. Wiggenhorn, 6 Xeb. 322;
Kountz V. Holthouse, 85 Pa. 235 ; Shoemaker Piano Mfg. Co., v. Bernard, 2 Lea, 358 ;
Mc Linden v. Wentworth, 51 Wis. 170, 8 N. W. 118.
So where the continuing partners borrow money to pay a debt of the old firm, to
the lender's knowledge, or give a new note in renewal of a note of the old firm, the
new firm is not liable. Citizens' Nat. Bank i\ Mine, 49 Conn. 236 ; Elkin v. Green,
13 Bush, 612.
On the other hand, where the new firm borrows money to pay the debts of the old
fii'm, or pays such debts with the proceeds of goods sold to them, it would seem clear
that the lender or seller ti'usted the credit of the new firm, and should be confined to
his remedy against it. Penn. Nat. Bank v. Furness, 114 U. S. 376. See however
Barbydt v. Perry, 57 la. 416, 10 N. W. 820, where it was held that the seller of goods
in such a case was entitled to be subrogated to the rights of creditors of the old
firm who had been paid with the proceeds of his goods.
428 THE LAW OF PARTNERSHIP. [CH. XIII.
§ 337. Assumption of Old Debts by Incoming Partner. — It is
said that wlicrc a partner comes in, and agrees to take all the
stock and be liable for all the debts, it is a novation of the debts,
and therefore the new partner is bound. But by the law of nova-
tion (which is perhaps the latest law borrowed from the civil law)
the new debt is not obligatory, unless the old one is discharged ;
and the old one cannot be discharged without the consent and- con-
currence of the creditor. And on this ground the creditor could
not hold the new partner merely on his contract with the old ones.
If it be said that the creditor's assent to the reception of addi-
tional security may be presumed, it must be replied, that this re-
ception of new security may also imply the loss of the old security ;
for it may be and often is the case, that the new partner takes the
place of an old and retiring partner. A bargain between all the
parties, including the creditor, that the old partner should be re-
leased and the new one taken, would undoubtedly be valid. But
the assent of the creditor to such an arrangement cannot be pre-
sumed, («) on the ground that it is necessarily advantageous to
him. On the whole, we should say that the law of contracts and
the law of partnership lead to the conclusion, that the new partner
is not bound to the old creditors, unless on a promise to them, for
a consideration ; (^) both of which might of course be indirect,
and implied by circumstances.' If a person or a firm hold on
(ri) Catt V. Howard, 3 Stark. 5. they are not parties to it. Ex parte Wil-
li) In Cooke's Bankrupt Laws, 538, it liams, Buck, 13 ; £a; parte Freeman, liuck,
is said, that "where new partners are 471; Ex parte Fry, 1 Glyn & J. 96. In
taken into a trade, and it is agi'eed that Ex parte Sandham, 4 Deac. & Cli. 812, it
the stock of, and debts due to, the old is said, that, to make the new firm liable
firm should become the capital of the new for the debts of the old, the new partners
partnership, and that the new firm should must adopt the old debts, and the cred-
take upon themselves the payuient of the itors must assent, either expressly or
debts of the old firm, and the new part- imjiliedly. See also Ayrault v. Chamber-
nership becomes bankrupt, — the creditors lain, 26 Barb. 88. In £'x /jarte Williams,
of tlie old firm may prove as joint credit- Buck, 13, it is said, that very little would
ors of the new ; " citing Ex parte Brig- be required to show the assent of the
ham (1792) ; Ex parte Clowes, 2 Brown, creditors. If a debtor, who has entered
C. C. .595, &c. This, however, is not now the into a partnership, proposes to a creditor
law ; for it is well settled that, if there is to transfer his debt to the firm, and the
an express contract between the partners creditor agrees, he cannot prove his debt
that the new ones shall be res[)onsible for against the separate estate of the debtor,
the debts of the old firm, the creditors Ex parte Whitmore, 3 Deac. 365. Sea
cannot sue upon the covenant, because Stewart v. Rogers, 19 Md. 98.
^ If upon a change in the firm the incoming partner or the new firm agrees to pay
the debts of the old firm, the better view would seem to be that stated in the text ;
that the creditors of the old firm, not being parties to the contract, could not sue upon
It. If a creditor agreed (expressly or impliedly) to release from the debt the members
§ 388.] OF A CHANGE IN THE PARTNERSHIP. 429
lease real estate, it seems that a new partner, coming in after the
lease, will not be holden to the landlord for the rent. But, if he
joins with the old partners in a promise to the landlord to pay an
increase of rent for a consideration, he will be bound for this in-
crease, although the promise is only oral ; but such collateral prom-
ise will not bind him for the rent originally payable. (W;)
§ 338. Implied Assumption of Debts. — Whether the new incom-
ing partner has thus assumed the old debts, is sometimes a diffi-
cult question of mixed law and fact. It certainly may be implied
by circumstances ; and what circumstances should, in any one case,
imply it, is a question partly for the court and partly for a jury.
Paying of interest on a debt, with a knowledge, without objection,
that the new firm pays the interest, would warrant a jury in find-
ing such an assumption of the old debt.(c) And perhaps any
single fact of like kind would hav^e the same effect. All of these
things are evidence for a jury, or matter foi' a court to infer such
adoption. For it must be obvious that a transfer of the account
from the old to the new, and payments made on it, through a long
course of time, by the new firm, with the knowledge and without
tlie objection of the new partner, would justify a belief that he
was submitting to this actual assumption of the old debts because
it was for his interest or a part of his bargain. (tZ)
(bb) Hoby r. Roebuck, 7 Taunt. 157. itself show an assumption of such debt hy
(c) Ex parte Jackson, 1 Ves. Jr. 131. the incoming partner. Shamburg y. Rug-
See Kirwau v. Kirwan, '2 Cr. & M. 617. gles, 83 Pa. 1-18. See also Babcock v.
Payment of interest by an unincorporated Stewart, 58 Pa. 179.
banking association, on a debt existing (d) In Ex parte Jackson, 1 Yes. Jr.
when a new member comes in, will not of 131, Lord Chancellor Thurlow said : " If
of the old firm, on consideration of the agreement by the new firm to pay, a novation
would take place, and the new firm would of course be liable. In many jurisdictions
it is held that the new firm is not liable to the creditor without a novation. Supra,
note (h) ; In re Isaacs, 3 Sawy. 35 ; Goodenow v. Jones, 75 111. 48 ; Wild v.
Dean, 3 All. 579 ; Ayres v. Gallup, 44 Mich. 13 ; Parnialee v. Wiggenhom, 6 Neb.
322 ; Morehead v. Wriston, 73 N. C. 398 ; Kountz v. Holthouse, 85 Pa. 235. So in
case of sale to a third party, who promised to pay the debts. Hayes v. Knox, 41 Mich.
529, 2 X. W. 670.
In some jurisdictions a third party is alloweil to sue upon a contract made for his
benefit, though a stranger to it. In these jurisdictions the creditors are of course
allowed to sue the new firm upon their agreement with the members of the old firm.
Ringo V. Wing, 49 Ark. 457, 5 S. W. 787 ; Dunlap v. McXeil, 35 Ind. 316 ; Poole
V. Hintrager, 60 la. 180; 14 X. W. 223; Hannigan v. Allen, 127 N. Y. 639. 27
K. E. 402 ; Peyser v. Myers, 135 N. Y. 599, 32 X. E. 699 ; Shoemaker Piano Mfg.
Co., V. Bernard, 2 Lea, 358. If a partner of the new firm gives a note to the cred-
itor, in payment of the old debt, the note is clearly authorized, and binds the firm.
Silverman v. Chase, 90 111. 37. Whether the incoming partner or the new firm has
assumed the debts is a question which may be proved in each case by the circumstan-
ces. Frazer v. Howe, 106 111. 563; Serviss v. McDonnell, 107 X. Y. 260, 14 X. E. 314 ;
Peyser v. Myers, 135 X. Y. 599, 32 N. E. 699.
430 THE LAW OF PARTNERSHIP. [CH. XIII.
In one case where the new and old partners exccnted a deed,
which recited terms of contract, implying an assumption of the
debt, though the words of convenant contained no such agreement,
it was held that the new partner was bound by the recital. ((^) And,
in general, whatever might be the form or technical effect of the
contract, if in substance it amounted to an agreement by the incom-
ing partner to share in the debts due from the firm, he would be
held accordingly.
§ 339. Incoming Dormant Partner. — A difference in regard to a
new partner, who is to be an unknown and dormant partner, has
been pressed, perhaps, too far. There is indeed, no difference
between an unknown and a known partner, excepting that the
known partner is liable on the credit he gives, as well as on his
interest, and the unknown partner on his interest only. If a dor-
mant partner agrees to assume the old debts, he stands in much
the same position as a known partner who agrees with his partners
to assume them, but makes no promise to the creditors, since they
could not have contracted the debts on his credit before he came
in. And, if this assumption on the part of the latter binds him to
the creditors, a similar assumption on the part of a dormant part-
ner should bind him. (/)
§ 340. Partnership dated back. — Where the bargain between
the partners is, that the new-comer shall be a partner as of a ])rc-
ceding day, here it is held, that he is not bound to the creditor,
nor a party to the agreement, for a debt contracted between that
previous day and the actual making of the contract, {g) although
he is bound to the partners for his share of the debt, if they pay
it.
§ 341. Infant Partner after Coming of Age. — An infant partner,
when he comes of age, may, as we have seen, at once escape from
one man, having debts, takes another into and sold. And in Saville v. Robertson,
partnership with him, a very little matter 4 T. E. 720, it was held that, if no part-
respecting those debts will make both nership existed at the time of a contract
liable." In Beale v. Mouls, 10 A. & E. made bj' one who was afterwards a member
976, members of a provisional committee of a firm formed subsequently, no subse-
of a company had entered into a written tjuent act, by a person who afterwards
contract for certain machinery. M. then became a member, — not even an acknowl-
joined the committee, and several pay- edgment of his liabilit}', or his accepting
ments were made on account of the work, a bill of exchange drawn on the firm as
and alterations suggested and adopted partners for the very goods, — would make
with his sanction ; and he also took an him liable in an action for goods sold and
active part in superintending the work delivered.
and making experiments with it. It was (e) Vere v, Ashby, 10 B. & C. 288.
held that he was not liable on the con- (f) Vere v. Ashby, 10 B. & C. 288.
tract, or on account for goods bargained {g) Saltoun v. Houston, 1 Bing. 433-
§ 342.] OF A CHANGE IN THE PARTNERSHIP. 431
all the obligations of the firm, under shelter of his minority. But,
if he remains in the lirm after full age, he is in a position, in re-
spect to the old debts, somewhat analogous to that of an incoming
partner, who assumes the old debts. It is not the same ; because
he does not adopt or assume the debts of others, but only confirms
or leaves valid those debts of his own which he might have
avoided. We should say, that this continuance in the firm, and
in the business, after full age, would amount to such confirmation
by presumption of law. But it seems to be a presumption which
may be rebutted. At least, there is no very obvious reason why
the partner may not, when he comes of age, distinctly repiidiate and
annul all obligation or liability for any existing debts, and yet go
on with the firm and its business, and so become liable for its
future debts. But the general principles of the law of infancy
would not permit him to claim his share of the joint funds of the
old partnership, and forbid an application of it to the debts of tbe
partnershij). Personally, he may escape all liability ; but when
he comes to demand his share of the funds, and would apply a
principle which permits him to take his share before his majority,
undiminished by payment of debt, and his share afterwards on tbe
footing of another partner, we are quite sure that he can take no
such advantage from his minority, and must lose his share of the
profits if he repudiates his liability, {h)
SECTION IV.
OF THE DEATH OF A PARTNER.
§ 342. Dissolution by Death. — What was said of the necessary
dissolution of a partnership, when any change is made in it, is
true of the change caused by the death of a partner. Dissolution
follows immediately and inevitably, (j) ^ This rule has been
{k) See mttc, § 16, note (k). one copartner could not appoint a repre-
{j) This question first came up in God- sentative to carry on the trade, after his
frey v. Browning, 7 March, 1742 (cited in decease ; otherwise, it might fall to the
2 Ves. Sen. 33), where it was held, that lot of an infant or person not at all fit to
1 The dissolution takes place as to the survivors as well as the deceased. Hoard v.
Clum, 31 Minn. 186, 17 N. W. 275. Where it was agreed that a partnership should
occupy a building of one of the partners without rent, this agreement came to an end
upon the death of one partner, and the survivors thereafter occupying the building
must pay rent. Li re Beck's Estate, 19 Ore. 503, 24 Pac. 1038. See ante, § 309,
432
THE LAW OF PARTNERSHIP.
[CH. XIII.
distinctly declared only of late years ; for it was in 1808, or
about that time, that Lord Eldon declared, in several cases, that
the death of any one in any number of partners dissolves the
partnership. And even then that chancellor put in the qualifica-
tion, as we mentioned in a former section, that the dea h of a
partner operates a dissolution of the partnership, unless provision
is expressly made to the contrary. (^)
§ 343. Dissolution necessarily takes place. — This qualification
seemg neither necessary, nor accurate. For no provisions made
beforehand, in reference to the death of a partner, nor any agree-
ments or arrangements made subsequently to his death, can
prevent this dissolution. ^ We have, perhaps, sufficiently indi-
carry it on. In Pearcc v. Chamberlain, 2
Ves. Sen. 33, a bill was brought by the
widow and representative of Pearce, against
the representatives of Plummer, for liberty
to carry on trade with the defendants.
Pearce, the plaintiff's intestate, who had
been a servant and brewer for Pliunmer,
was taken into partnership by the latter.
A provision was made for the continuance
of Pearce in the business in event of Plura-
mer's death. Plummer and Pearce having
both died, this bill was brought. The
court held, that articles of partnership do
not survive for the benefit of executors,
&c., without an express provision for such
purpose. See Crawshay v. Maule, 1 Swanst.
509, 1 Wils. Ch. 181 ; Canfield v. Hard, 6
Conn. 184 ; Kna])p y. McBride& Norman,
7 Ala. 28 ; Williamson v. Wilson, 1 Bland,
425 ; Thornton v. Dixon, 3 Bro. Ch. 200 ;
Gillespie v. Hamilton, 3 Madd. 251 ;
Crosbie v. Guion, 23 Beav. 518. Lord
Eldon, in VuUiamy v. Noble, 3 Meriv.
614, says : " I conceive that the death of
a partner, of itself, works a dissolution of
the partnership." And see Dyer v. Clark,
5 Met. 575 ; Washburn v. Goodman, 17
Pick. 519 ; Griswold v. Waddington, 15
Johns. 82 ; Jones v. McMichael, 12 Rich.
L. (S. C.) 176. In Jlarlett v. Jackman,
3 Allen, 290, the general propositions in
the text are supported. And it was held,
that, in an action on a promissory note
given in the name of a firm by a surviving
partner, the other surviving partners, un-
der an answer which avers that the firm
had expired and was dissolved before the
note was given, may prove that the part-
nership had been dissolved by the death of
one of its members. See Bank of N. Y. v.
Vanderhorst, 32 N, Y. 553, for the effect
of the death of one partner on an agent of
the firm.
(k) There are numerous authorities
wdiich Iiold to this rule ; the limitation or
proper meaning of which is considered in
the text, and in the preceding note. Schole-
field V. Eichelberger, 7 Pet. 586 ; Burwell
V. Maudeville, 2 How. 560 ; Kershaw v.
Matthews, 2 Russ. 62 ; Gratz v. Bayard,
11 S. & R. 41 ; Warner v. Cunningham,
3 Dow, 76 ; Balmain v. Shore, 9 Ves. 506.
In mining copartnerships, there being
usually no delectus personce, dissolution
does not necessarily supervene either upon
the death of a partner, or upon one part-
ner's selling out his interest. Taylor v.
Castle, 42 Cal. 367.
1 The tendency of the modern decisions seems, however, to be that if there is an
agreement to that effect in the articles the partnership will not come to an end upon
the death of a partner, but will continue in existence. Supra, note (k) ; Shaw, appel-
lant, 81 Me. 207, 16 Atl. 662 ; Edwards v. Thomas, 66 Mo. 468 ; Lewis v. Alexander,
51 Tex. 578 ; Davis v. Christian, 15 Gratt. 11. Contra, Vincent v. Martin, 79 Ala.
540 {semble). See Exchange Bank v. Tracy, 77 Mo. 594. Such for instance is the
case where a joint-stock company is formed, with transferable shares, and it is provided
§ 344.] OP A CHANGE IN THE PARTNERSHIP. 433
cated our reasons for this view, in another place. Here, we need
only add, that, as the partner who has died cannot by possi-
bility continue a member of the firm, so any firm of which he is
not a member, wiiethcr it contain his executors or his children,
cannot be the same firm as that of which he was a member. (^)
What is inaccurately called provision against the dissolution of
the partnership, is an agreement that, if eitlier party dies, his
property shall remain in the firm and in the business, or that his
executors shall carry on the business, for the benefit of his chil-
dren ; or that his children, or some one of them, or some other
person, shall, immediately on his death, take his place in the firm,
and become partner in his stead. All these agreements and
arrangements, and all that can be made for a similar purpose,
are, in fact, only bargains for the creation of a new partnership
wlicn the old one ceases to exist. And so, too, all arrangements
or contracts which may be made between the surviving partners
and the representatives or appointee of the deceased have for
their effect only the formation of a new pai'tnership, which, upon
some terms or other, takes the stock, and carries on the business
of the old one. And, in the consideration of the questions which
arise under such provisions and arrangements, we shall reach
more accurate conclusions if we keep this principle in mind.
§ 344. Interests of the Surviving Partners. — There is not in
partnership the same survivorship as in joint tenancy ; but there
is a survivorship which is peculiar to partnership. The death of
a partner invests the surviving partners with the exclusive right
of possession and management of the whole partnership property
and business ; ^ but only for the purpose of selling and closing
(/) Marlett v. Jackman, 3 Allen, 290, nership is ended. The connection has
cited in note {j ), supra. And see the au- been dissolved, and the future relations of
tht)vities cited in preceding note. And see the surviving parties to each other must
[Vincent v. Martin, 79 Ala. 540;] Hum- be determined by some new agreement be-
phries v. McCraw, 5 Ark. 65: "The tween them, or by the results which the
death or withdrawal of one member of the law pronounces upon their acts and pro-
firm is always a dissolution of the entire ceedings when no new agreement is in fact
partnership," And Savage v. Putnam, 32 made." See also Bank of Mobile *'. An-
Barb. 425 : " The ordinary effect of the drews, 2 Sneed, 535 ; Knowlton v. Reed,
death of one of the members of a partner- 38 Me. 246; Laughlin v. Loreng, 48 Pa.
ship is to work its dissolution. The part- 275.
that the decease of a member shall not work a dissolution. Post, ch. xviii ; Phillips
V. Blatchford, 137 Mass. 510 ; Troy I. & N. Factory v. Corning, 45 Barli. 231 ;
Walker v. Wait, 50 Vt. 668 ; McNeish v. Hulless Oat Co., 57 Vt. 316.
1 Clay y. Freeman, 118 U. S. 97 ; Sellers v. Shore, 89 Ga. 416, 15 S. E. 494 ; W^ill-
son V. Nicholson, 61 Ind. 241 ; Anderson v. Ackerman, 88 Ind. 481 ; Grim's Appeal,
28
434
THE LAW OF PARTNERSHIP.
[CH. XIII.
the same, (w) It is not uncommon for articles of copartnership
to provide how the surviving partner or partners shall conduct
{m) Loeschigk v. Addison, 19 Abl). Pr.
169 ; Ciawshay v. Maule, 1 Swanst. 495 ;
Ex parte Williams, 11 Ves. 5; Peters v.
Davis, 7 Jlass. 256 ; Evans v. Evans, 9
Paige, 178 ; Dyer v. Clark, 5 Met. 56-2 ;
Gleason v. White, 34 Cal. 258 ; Miller v.
Jones, 39 111. 54 ; Reniick v. Eniiz, 41 111.
343 ; in tliis case, rules for the settlement
of the partnership funds and accounts aie
given ; Loeschigk i'. Hatfield, 5 Robt. 26 ;
Crawshay v. Collins, 15 Ves. 226. In this
last case, Lord Eldon says : " There may
be a partnership where, whether the parties
have agreed for the determination of it at
a particular period or not, engagements
must, from the nature of it, be contracted,
which cannot be fulfilled during the exist-
ence of the partnership ; and the conse-
quence is, that, for the purpose of making
good those engagements with third per-
sons, it must continue ; and then, instead
of being, as it was, a general partnership,
it is a general partnership determined ex-
cept as it subsists for the purpose only of
winding up the concerns. Another mode
of determination is, not by effluxion of
time, but by the death of one partner ; in
which case, the law says that the property
survives to the others. It survives, as to
the legal title, in many cases ; but not as
to the beneficial interest. The question
then is, whether the surviving partneis,
instead of settling the account, and agree-
ing wit!) the executor as to the terms upon
wliich his beneficial interest in the stock
is still to be continued, subject still to the
possible loss, can take the whole property,
do what they please, and compel the ex-
ecutor to take the calculated value. That
cannot be without a contract for it with
the testator. The executor has a right to
have the value ascertained, in the way in
which it is best ascertained, by sale." If
this authority of a partner, which con-
tinues after a dissolution, for all ]nirposes
of winding up, be unduly exercised, the
remedy is by applying to the court foi' the
appointment of a receiver. Butchait v.
Dresser, 4 De G. M. & G. 542. See Allen
V. Hill, 16 Cal. 113; McKowen i;. McGuire,
15 La. Ann. 637 ; Roys v. Vilas, 18 Wis.
169. But see Skipvvorth v. Lea, 16 La.
Ann. 247. The personal note of the sur-
vivor, for the fii'm's debt, is not a satisfac-
tion of the debt, except by special agree-
ment of the parties. Leach v. Church, 15
Ohio, 169.
105 Pa. 375 ; Kutz v. Dreibelbis, 126 Pa. 335, 17 Atl. 609 ; Hawkins v. Capron, (R. I.)
24 Atl. 466.
If the deceased had possession of partnership property at the time of his death, the
survivor is entitled to possession at once, and may maintain trover against the executor
of the deceased if possession is refused. Hawkins v. Capron, (K. I.) 24 Atl. 466. If
the property was money, the surviving partner may bring an action against the execu-
tor to recover it. Kutz v. Dreibelbi.s, 126 Pa. 335, 17 Atl. 609. In the last case plain-
tiff and deceased were pmrtners in building a bridge, and payment was to be made,
according to the contract, to the deceased or his executor. Payment having been made
to the executor, the survivor was allowed an action ; but since there were no debts,
and the whole business could be settled in a single action, he was allowed to recover
only half the payment.
Choses in action as well as choses in possession pass to the surviving partner ; he
has the sole ownership of partnership contracts. Bassett v. Miller, 39 Mich. 133 ;
Nehrboss v. Bliss, 88 N. Y. 600. He alone therefore can sue ; ante, § 249.
Since the surviving partner has the comidete legal title, he has no right to file a bill
in equity to wind up the affairs. McKay v. Joy, 70 Cal. 581, 11 Pae. 832.
The representative of the deceased partner has no right to interfere in the business,
as by insisting iii)on a continuance or a sale of it. His only right is a right in pa-.ionam
against the survivors to call for an account. Grim's Appeal, 105 Pa. 375. See Haynes
V. Short, 88 Ala. 562, 7 So. 157. This it is his duty to do as soon as may be. Gwynue
§ 345.] OP A CHANGE IN THE PARTNERSHIP. 435
or close up the business ; and these provisions must be re-
garded, {mvi)
§ 345. Fiduciary Position of Surviving Partner. — Until a set-
tlement, the representatives of the deceased cannot claim or take
any one chattel, or any portion of the merchandise, (p) The
(mm) Suydain v. Owcii, 14 Gray, 195. for tliat purpose, of assigning any chose in.
(■p) A s\u-viving partner has a right to action belonging to the estate. Pinckney
collect all debts due to the Hriu, and to v. Wallace, 1 Abb. Pr. 82. And see Koys
sell the i)ro{>erty. His responsiliility to v. Vilas, 18 Wis. 169.
the reprcjsentatives of the deceased partner Real estate, purchased by i)artner.s, for
exists only after the partnership affairs are the partnership business and with the
setthid. Having the right to collect and iiartnershii) funds, though conveyed • to
dispose of the property, he has the power, theiu by sucli a deed as, in case of other
V. Estes, 14 Lea, 662. This riglit to call for an account goes of course to the executor
or administrator ; the heir or next of kin cannot exercise it. In case, however, of
refusal of the personal rejiresentative to exercise the right, by collusion or otherwise,
the next of kin may hie a bill, making the personal representative a party. Valentine
V. Wysor, 123 Ind. 47, 23 N. E. 1076.
Tlie representative of the deceased partner cannot sue on a partnership claim, even
iu e([uity, without alleging a wrongful refusal to sue on the part of the survivor. Kirby
V. L. S. & M. S. R. R., 8 F. R. 462. But he may maintain a bill, alleging such
wrongful refusal, and nmking the survivor a party. Kirby v. L. S. & M. S. R. 1!., 14
F. R. 261.
The duty of the surviving partner or partners to the estate of the deceased is to close
up the business by paying the debts, and to render an account and pay over the share
of the deceased as soon as may be. Clay v. Freeman, 118 TJ. S. 97 ; Sellers v. Shore,
89 Ga. 416, 15 S. E. 494 ; Oliver v. Forrester, 96 111. 315 ; Gable v. Williams, 59 Md.
46 ; Heath v. Waters, 40 Mich. 457. Since the duty of settling the business is upon
the surviving partner, he cannot shift it to the estate. Thus where the surviving ])art-
ner was ill, and the executors of tlie deceased settled up the business, they could get no
compensation from the estate of the deceased ; they must be paid out of the assets of
the business, or by the survivor. Miller's Appeal, (Pa.) 7 Atl. 190. Where the sur-
vivor dies before the business is settled, the duty of closing it up passes to his personal
representative. Dayton v. Bartlett, 38 Oh. St. 357.
We have already seen (ante, § 155) that a surviving partner has no right to compen-
sation for his services in closing up the business. If, however, it is necessary for
another to do the work, as in the two cases just cited, the stranger is of course entitled
to compensar.ion. We shall see later (post, § 415) that all the reasonable expenses of
settling tlie business may be defrayed out of the assets.
All executory contracts of the firm which do not call for the personal service of the
decensed continue in effect and bind the firm ; the survivors must therefore fulfil such
contracts, at the expense of the partnership and for its benefit. Davis v. Sowell, 77
Ala. 262 ; Ayres v. C. R. I. & P. R. R., 52 la. 478, 3 N. W. 522 ; Rust v. Chisolm,
57 Md. 376 ; Dowd v. Troup, 57 Miss. 204 ; King v. Leighton, 100 N. Y.386, 3 N. E.
594 ; Tompkins v. Tompkins, 18 S. C. 1. If the contract called for personal service
on the part of the ileceased jiartner, the survivor of course cannot complete it. Oliver
V. Forrester, 96 111. 315. The surviving partner, though he cannot continue in busi-
ness on behalf of the old firm, may find it advisable not to stop business at once. If
necessary for the proper closing up of the business the survivor may make purchases or
even enter into contracts at the expense of the firtn. Thus, he may in a proper case
finish up unfinished work. Calvert v. Miller, 94 N. C. 600. Or he may buy merchan-
dise if necessary for closing up the business. Oliver v. Forrester, 96 111. 315.
436
THE LAW OF PARTNERSHIP.
[CH
XII r.
survivors arc, from the death, trustees for all concerned in the
partnershii) ; for the rei)rosont;itiv(^s of the deceased, for the cred-
itors of tlie firm, and for themselves, (^) ^ 'J'heir trust is to
Avind up the concern in the best numner for all interested, and,
therefore, without unnecessary delay ; and their powers are such
as enable them most effectually to execute that trust. Nor do we
know any difference, in this respect, as to the choses m possession
and those in action.^
The surviving- partners are held strictly as trustees ; and their
conduct, in discharging their trust, is carefully looked after by
courts of equity, (r) Thus, like other trustees, they cannot sell
the property of the firm and buy it themselves ; nor, as the con-
verse of this, can they buy from themselves property for the
parties, would make them tenants in com-
mon, is considered, in equity, as part of
the partnership stock ; and is to be applied,
it' necessary, towards i)aytneut of the part-
nership debts. Though such estate is con-
sidered at law as the several property of
the partners, yet it is held subject to a
trust arising by implication of law, by
wliich it is liable to be sold, and the pro-
ceeds brought into the partnership fund,
so far as is necessary to pay the debts of
the hrm ; and neither the widow nor the
' heirs of a deceased partner can claim any
beneficial interest in such estate, until the
claims of the creditors of the iirm are first
satisfied. Burnside v. Merrick, 4 Met.
537. And upon the dissolution of the
partnership, by the death of one of the
partners, the survivor has an equitable
lien on such real estate for his indemnity
against the delits of the firm, and for secur-
ing the balance that may be due to him
from the deceased partner on settlement of
the partnership accounts between them ;
and the widow and heirs of such deceased
partner have no beneficial interest in such
real estate, nor in the rent received there-
from after his death, until the surviving
partner is so indemnified. Dyer v. Clark,
5 Met. 562. See ante, § 272, note.
(q) Case v. Abeel, 1 Paige, 393 ; Lake
V. Gib.son, 1 Eq. Ca. Ab. 290, affirmed in
3 P. Wms. 158 ; Jefferys v. Small, 1 Vern.
217 ; Elliot v. Brown, cited in Jackson v.
Jackson, 9 Ves. 597 ; Lyster v. Dolland, 1
Ves. Jr. 434, 435, per Lord Thurlow ;
York V. Eaton, 2 Freem. 23 ; Booth v.
Parks, 1 Molloy, 465 ; Sigourney v. Munn,
7 Conn. 11 ; [Farley v. Moog, 79 Ala.
148]. And see Egberts v. Wood, 3 Paige,
517 ; Ketchum v. Durkee, 1 Barb. Cli.
480 ; Whiteright v. Siimpson, 2 Barb.
379 ; Innes v. Lansing, 1 Paige, 583 ;
Campbell v. Mullet, 2 Swanst. 574 ; West
r. Skip, 1 Ves. 237, 445 ; Ex parte Ruffin,
6 Ves. 126, 128 ; Wood v. Dummer, 3
Mason, 312; Murry v. Murry, 5 Johns.
Ch. 60 ; Tajdor v. Fields, 4 Ves. 396 ;
Young V. Keighle}% 15 Ves. 557. And see
Marlett v. Jackman, 3 Allen, 287.
(r) Phillips i;. Ackerson, 2 Bio. Ch.
272 ; Hartz v. Schrader, 8 Ves. 317 ; Est-
wick V. Conningsby, 1 Vem. 118 ; Burden
V. Burden, 1 Ves. & B. 170 ; Ames v.
Downing, 1 Bradf. 321 ; Washburn v.
Goodman, 17 Pick. 519 ; Case v. Abeel, 1
Paige, 398, per Walworth, Chancellor :
"The surviving partner has the legal right
to the partnership effects ; but in equity
he is considered merely as a trustee to pay
the partnership debts and dispose of the
effects of the concern for the benefit of
himself and the estate of his deceased part-
ner. He cannot, therefore, be permitted
to make anj- gain or profit by the use of
the partnership funds and effects for his
own exclusive benefit." And see Ogden
V. Astor, 4 Sandf. 311.
1 Grim's Appeal, 105 Pa. 375.
3 This language was approved in Davis v. Sovvell, 77 Ala. 262.
§ 345.] OF A CHANGE IN THE PARTNERSHIP. 437
firm, (s) Their trust being to wind up the concern, their powers
are commensurate with the trust. Hence, they may collect, com-
promise, or otherwise arrange all the debts of the firm ; and
their receipts, payments, and doings generally, in this behalf, are
valid, if honest, and within the fair scope and purpose of the
trust. And if there be negligence, delay, misconduct, or gross
mistake, equity will interfere, and give the proper relief.^
(.«) But equity will not interfere and gence. Evans v. Evans, 9 Paige, 178;
deprive the surviving partner of the right Jacquin v. Buisson, 11 How. Pr. 385.
of closing up the concern, by appointing a Nor, in closing up the affairs of the firm, is
receiver, if he is responsil)le and acts in there any such principle in equity, that
good faith. So held where the survivor surviving partners cannot become pur-
resided in England, but was engaged in chasers, from the representatives, of the
closing up the affairs of the firm, by a share of deceased partner. Chambers v.
competent agent, with all reasonable dili- Howell, 11 Beav. 6, 12 Jur. 905.
1 The anomalous position of the surviving partner, who is in a fiduciary position,
yet acts in his own right, has given rise to nmch conflict in the cases. A consideration
of his precise position may perhaps be useful. The partnership no doubt comes to au
end as a going concern upon the death of one partner ; in the common phrase, it is dis-
solved. Yet it still remains as a body which owns property and owes debts. Its
existence is not terminated until the business is wound up and final distribution made.
This is perfectly well recognized in the business world, where the firm name is still
used in liquidation, and the accounts are continued. By the death of a partner, how-
ever, the partnership can act only through the survivors ; not througli the representa-
tive of the deceased, since he was not a partner. The position of a survivor toward
the assets and liabilities of the partnership is unchanged by his copartner's death. He
continues to own the assets in trust for the firm ; and the firm continues to be indebted
to its creditors. The rights of the creditors in the partnership property are therefore
unchanged. The surviving partners hold in trust, not for the creditors or the estate of
the deceased, but for the firm. But as in the case of an active partnership, either the
representative of the deceased partner or the firm creditors may enforce the obligation.
It has been urged that the survivor takes the property in trust for the creditois, and
that it must therefore be distributed on equitable principles ; but that is evidently
inexact. The property continues to belong to the firm, and firm creditors may sue the
survivor and attach the firm property. Roach v. Brannon, 57 Miss. 490 ; Krueger v,
Speith, 8 Mont. 482, 20 Pae. 664. The survivor has no more right after dissolution
than before to transfer the property in payment of his individual debts ; and the indi-
vidual creditor who takes it with notice cannot hold it. Hill v. Draper, 54 Ark. 395,
15 S. W. 1025 ; Strauss v. Frederick, 91 N. C. 121. Since, however, he has the entire
legal title, it might be held that a transferee without notice that it was partnership
property would hold it ; sed query. We have seen that an individual creditor of one
partner could not hold partnership property given during the continuance of the part-
nership, though he had no notice that it was firm property. Anfe, § 90,
This seems, however, to be opposed to the rule in cases of set-off. If the surviving
partner is sued on a separate del)t after the death of a copartner he may set off a firm
credit. Slipper v. Stidstone, 1 Esp. 47, 5 T. R. 493 ; Johnson v. Kaiser, 40 N. J. L.
286 ; Nehrboss v. Bliss, 88 N. Y. 600 {scmhle). Contra, Weil v. Jones, 70 Mo. 560.
If he is sued as surviving partner, he may set off an individual debt. Lewis v. Culbert-
son, 11 S. & R. 48. On the other hand, if he sues as surviving partner, the defendant
may set off a debt due to him individuallj', Holhrook v. Lackey, 13 Met. 132 (but
see Ross v. Pearson, 21 Ala. 473 ; Wain v. Hewes, 5 S. & R. 468) ; and if he sues on
438 THE LAW OF PARTNERSHIP. [CH, XIII,
It is said that the surviving partners are trustees, in part, for
themselves. But while, as trustees they have all power and
possession, they stand as cestuis que trustent on the same footing as
the others ; or, rather, must postpone themselves to the creditors
of the firm ; and only as to what is left after the creditors are
paid do they come in on equal terms with the representatives of
the deceased, and with each other. And, if there is not enough to
pay the debts in full, then, all being equally liable, they must do
nothing to disturb or prevent this equality. (^)
§ 346. Survivors continuing Business. — The SUrvivors are not
bound to continue the business at all ; and would probably be
permitted to wind it up quite abruptly, if they chose not to en-
gage in new transactions for the firm, or even continue old ones,
although the new or the old seemed to promise a much better
winding up at the close. And, moreover, if the trustees choose
to continue the property in trade, or to go on in business under
the credit and risking the effects of the firm, not only will equity
restrain them doing so, if injunction be desired by the represent-
atives of the deceased, but if, by such new business, profit is
made, the survivors will be bound to account for this profit as
belonging to the firm (m) ^ And if no profit, or even a loss, is
(t) See cases cited in previous notes to Booth v. Parks, 1 Jlolloy, 465 ; Crawshay
this section. See Saving and Loan Society c. Collins, 15 Ves. 218, 2 Huss. 325 ;
V. Gibb, 21 CaL 595, limiting the liability Brown v. Litton, 1 P. Wni.s. 224 ; Ilam-
of the surviving partner, 21 Cal. 496. mond u. Douglas, 5 Yes. 539; Brown v.
(u) Waring v. Cram, 1 Pars. Sel. Cas. Dc Tastet, Jacob, 284, 292; Heathcote v.
522 ; Washburn v. Goodman, 17 Pick. Hulme, 1 Jac. & W. 122.
519 ; Ogden v. Astor, 4 Sandf. 311 ;
an individual claim, the defendant may set off a debt due from him as surviving part-
ner. French v. Andrade, 6 T. R. 582 ; Ferris v. Burrows, 34 Hun, 104.
Since the survivor is a trustee, not for the estate of the deceased but for the firm, he
may buy the interest of the deceased from his representative. Valentine v. Wysor,
123 Ind. 47, 23 X. E. 1076 ; supra, note (s).
In Bush?;. Clark, 127 Mass. Ill, it was held that the interest of the survivor in
the assets w^as such that his widow might have an allowance from them, though the
partnership was insolvent. Query. The widow of the partner first deceased can cer-
tainly have no allowance ; ante, § 252.
In disposing of the assets the survivor must be faithful to the interests of the firm.
If he disposes of them fraudulently at too low a price, he is accountable to the repre-
sentative of the deceased for the real value. Dewey v. Chapin, 156 Mass. 35, 30 N. E.
223. If there are two survivors who act fraudulently, as by dividing the assets among
themselves, they are liable jointly. Bundy v. Youmans, 44 Mich. 376, 6 N. W. 851.
1 Where the surviving partner makes use of firm assets in order to continue the
business, whether with or without the consent of the representative of the deceased, he
is of course accountable. If he converts the assets to his own use he is liable for their
value at the time of the death of his copartner. Theller v. Such, 57 Cal. 447 ;
Brown's Appeal, 89 Pa. 139. If the taking was at a subsequent time, the value of the
§ 346.] OF A CHANGE IN THE PARTNERSHIP 439
made, they must be cliarged with interest on the funds they use,
and the whulc loss will be theirs, (y) It seems, however, that, if
the survivors carry the business on, and make a profit which is
credited to the firm, they may be allowed some compensation for
their services, unless the articles of agreement provide other-
wise, (w) And a surviving partner may be allowed for liis time
and expenses, under especial circumstances justifying such a
claim, (ww^ The survivors do not, however, bear more than
(?') Simpson v. Fcltz, 1 McCord Ch. the debts. His legal duty was to collect
213 ; Goddard v. Hulow, 1 Nott & McC. tiie assets and wind up the business of the
45 ; Honore v. Colmesnil, 7 Dana, 201 ; firm ; a duty the law imposes on him as
Moon V. Story, 8 Dana, 233 ; and cases an incident to the contract of partnership,
in previous note. and for the performance of which no re-
{w) See Collyer on Part. § 328; and muneration is promised or implied. Such
see Cook v. (Jollingridge, Jac. 607 ; a claim is new to me, and I am not aware
Burden v. Burden, 1 Ves. & B. 170 ; that it is supported by precedent or au-
Stocken 1-. Da\v.son, 6 Beav. 371. l>ut thoiity." i'.catty v. Wray, 19 Pa. 51*5;
see also, contra, Ames v. Downing, 1 Brown v. McFarlaiul's Ex. 41 Pa. 129.
Bradt'. 321, in which tlie Suriogate says : (ww) Newell v, Humphrey, 37 Vt.
" Nor can Mr. Hicks charge conmiissifins, 265.
as surviving partner, for the collection of
assets is then to be taken. KJotz v. Macready, 39 La. Ann. 638, 2 So. 203 ; Parker v.
Broadbent, 134 Pa. 322, 19 Atl. 631. He is therefore responsilile for all losses. In
Clay V. Field, 138 U. S. 464, however, it was held that under the exceptional cir-
cumstances this general rule wouhl not aj)ply. In that case the surviving partner of
a southern plantation, before the war, continued to operate it as he thougnt best for
the interests of all concerned. The slaves belonging to the plantation were freed by
the war. It was held that the surviving partner was not responsible for their value.
In accordance with the general rule, if a surviving partner occupies real estate belong-
ing to the firm he must charge himself with the rent. Beale v. Beale, (111.) 2
N. E. 65.
For the corresponding rule in case of dissolutiou inter vivos see ante, § 236.
If the act of the partner in continuing the busine.ss was wrongful, the represen-
tative of the deceased would have the option of taking advantage of the dealings or
repudiating them ; that is, he might demand interest on the sum due, or a share of
the profits. Theller v. Such, 57 Cal. 447 ; Biown's Appeal, 89 Pa. 139.
In arriving at a proper division of the profits, each case would seem to depend upon
its own circumstances. "There is no inflexible rule governing all cases." Robinson
V. Simmons, 146 Mass. 167, 15 X. E. 558. The true rule, in the ab.sence of excep-
tional circumstances, is to deduct from the net profits such an amount as is attribut-
able to the skill and services of the survivors in managing the business, and to divide
the balance according to the actual shares of capital of the various partners at the
time of the dissolution. Yates v. Finn, 13 Ch. D. 839 ; Robinson v. Simmons, 146
Mass. 167, 15 N. E. 558.
One surviving partner is not liable to the representative of the deceased because
his surviving copartner continued the business, if he himself took no part in it.
Matteson v. Xathanson, 38 Mich. 377.
Where the articles give a surviving partner the option of taking the whole business
at a valuation, the profits belong to him exclusively and no interest in them to the
estate from the time the option is exercised. Harbster's Appeal, 125 Pa. 1, 17 Atl.
204.
440 THE LAW OF PARTNERSHIP. [CH. XIII.
their share of losses resulting after the death of the deceased,
from t ransactions entered upon before, and only carried to com-
pletion by the survivors.
S 347. Survivor vyhether Responsible for Value of Good-will. —
If the survivor or survivors carry on the business, they may
sometimes realize great advantages and large profits from the
fact that the business was so well established during the lifetime
of the deceased. And then the question may come, whether the
court will require them to make an allowance to the represent-
atives of the deceased, for their profit. The question, in fact,
amounts to this : Is the good-will of the concern so far partner-
ship property that, if the survivors retain it, they must allow for
it ? There is but little adjudication on this subject ; but that
little leads to the conclusion, that the good-will goes to the sur-
vivors, without payment or allowance on their part. There are
some difficulties, however, attending this view. The stock of
goods, the lease, or the right or expectancy of remaining on the
premises, all belong to the firm. If the merchandise, if sold in
connection with the lease and right, will bring much more money
than if sold otherwise, should it not be sold in this way ; and if
the survivors buy it, or take it, or keep it, should they not, in
some form, allow for it the price it would bring if others bought
it as they buy it? So mucli of the good-will — the meaning of
which word is not very exactly defined — as attaches merely
to the goods and the place, and the existing contracts, belongs,
we should say, to all alike ; but so much of it as is personal, and
originates in the way of carrying on the business, and might go
with the survivors wherever they engage in the same business,
this belongs to them exclusively, (z)
(x) An examination of the authorities sisting of the subscription list, &c. ) of a
will show considerable conflict on these newspaper is partuership property ; and
questions. Crawshay i>. Collins, 15 Ves. when One of the partners dies, it does not
218, 227 ; Crutwell v. Lye, 17 Ves. 336 ; survive to the surviving partner, but is to
Farr v. Pearce, 3 Madd. 74 ; Lewis v. be sold, with the presses, types, and me-
Langdon, 7 Sim. 421 ; Willett v. Blan- chanical appliances of the establishment,
ford, 1 Hare, 253, 271. It was held in In tlie case of Wedderburn v. Wedder-
Williams v. Wilson, 4 Sandf. Ch. 379, burn, 22 Beav. 104, the Jklaster of the
that the good-will of a business, built up Rolls, in delivering judgment, says: "The
by a copartnership, is an important and good-ivill of a trade, although inseparable
valuable interest, which the law recog- from the business, is an appreciable part
nizes and will protect ; and in Dougherty of the assets of a concern, both in fact
r. Van Nostrand, 1 HofE. Ch. 68, that, and in the estimation of a court of equity,
upon a dissolution, it must be sold, and Accordingly, in reported cases. Lord Eldon
that it does not survive. In Holden's held, that a share of it properly and as
Admr. v. McMakin, 1 Pars. Sel. Cas. of right belonged to the estate of the
270, it was held, that the good- will (con- deceased partner. It does not survive to
348.]
OP A CHANGE IN THE PARTNERSHIP.
441
§ 348. Right of Survivors to take at Valuation. — It haS some-
times been supposed that the surviving partners have a right to
the remaining partners, unless by express
agreement ; but it may by agreement, as
it may be agreed that any particular por-
tion of the partnership assets shall so
survive. Good-will manifestly forms a
portion of the subject-matter which pro-
duces the profits (which constitutes part-
nership property) ; and which is to be
divided between the surviving partners
and the estate of the deceased partner,
according to the terms of the contract,
and, when that is silent, according to
their shares in the concern. There is
considerable difficulty in defining, accur-
ately, what is included under this term
good-will: it seems to be that species of
connection in trade which induces cus-
tomers to deal with a y)articular firm. It
varies almost in every case ; but it is a
matter distinctly appreciable, which may
be preserved (at least to some extent), if
the business be sold as a going concern,
but which is wholly lost if the concern is
wound up, its liabilities discharged, and
its assets got in and distributed. I am
of opinion, then, that both on principle,
on the authority of the decided cases, and
on the ordinary rules of common sense, I
must, whenever there is a reputation and
connection in business, constituting good-
will, treat that as part of the assets of
the concern." See further, on this rpies-
tion, Hammond v. Douglas, 5 Ves. 539 ;
Farr v. Piiurce, 3 Madd. 74 ; Chipj)endale
V. Tomlinson, Cooke's Baukr. L. 431 ;
Silk V. Osborn, 1 Esp. 140 ; Coslake v.
Till, 1 Russ. 876 ; Kennedy v. Lee, 3
Meriv. 441, 452 ; Webster v. "Webster, 3
Swanst. 490, n. ; Harrison v. Gardner,
2 Madd. 198 ; Butler v. Burleson, 16 Vt.
176. In Lewis v. Langdon, 7 Sim. 421,
it was contended that the right to use the
designation of a partnership ranges itself
under the head of good-will, and that
good-will survives, — the personal repre-
sentatives of the deceased partner having
nothing to do with it. The Vice-Chan-
cellor. Sir L. Shadwell, in sustaining this
position, said : " The question in this
case depends on the right, in the surviv-
ing partner, to carry on the business
under the name of the partnership. Lord
Eldon, certainly, has expressed a doubt,
in the case of Crawshay v. Collins (15
Ves. 227), upon what has been under-
stood as the proposition laid down by
Lord Rosslyn, in the case of Hammond
V. Douglas (5 Ves. 539). It is true, that,
the (juestion might have been, to a certain
degree, whether, having regard to what
had taken place, the money should be
considered to belong to one ])arty rather
than to another : and it is, also, observ-
able, that Lord Eldon might have been
throwing out his observations with refer-
ence to a supposed connection between
the place where the business was carried
on and the good-will. But it occurs to
me, that, if the good-will is to be consid-
ered as a salable article which belongs to
the partnershi}), then this consequence
must follow ; namely, that the surviving
partner must be under an obligation to
carry on the trade for some time after his
partner's death, in order that the thing
wliich is said to be salable may be pre-
served until it can be sold. If a part-
nership were carried on between A. and
B., under the name of Smith & Co., and
the surviving partner chose to discontinue
the business, and to write to the cus-
tomers, and say that his partner was
dead, and that the business was at an
end, — the effect would be, that that
which is said to be salable would cease to
exist. Now, what power is there in a
court of equity to compel a partner to
carry on a trade after the death of his
copartner, merely that, at a future time,
the good-will (as it i§ called) may he
sold ? It is plain that, unless there is
such a power in this court, it must be in
the discretion of the surviving partner to
determine what shall be done with the
good-will ; and, if that is the case, it
must be his property. I cannot but think,
when two partners carry on a business in
partnership together, under a given name,
that, during the partnership, it is the
joint right of them both to carry on busi-
ness under that name ; and that, upon
the death of one of them, the right which
they before had jointly becomes the sepa-
rate riirht of the survivor." It was ac-
442 THE LAW OF PARTNERSHIP. [CH. XIII,
take all the effects and merchandise (after the debts are paid or
secured) at a vahiation. And, undoubtedly, there may be cases
in which this would be a just and beneficial mode of settlement,
and the court would therefore permit or order it. But it must be
clear that they have no such right.^ Indeed, the right on this
point is on the other side; for it would seem, both from the
reason of the case and on the authorities, that the representatives
corJingly held, that, as the plaintiff in the good-will he must account for it ; hnt
this case had never abandoned the right the value of the good-will is mateiinlly
which accrued to him on the death of his affected by the fact that the surviving
]iartner, an injunction would be granted partner, like any one else, may start the
to restrain the defendant, who was ex- same business in the same place, without
ecutor of the deceased partner, from using appropriating the good-will if he refrains
the partnership name in carrying on his from securing any advantage from his
business. See Wade v. Jenkins, 2 Giffard, direct connection with the old business.
509. [The rule laid down in Wedder- See the subject fully discussed and the
burn V. Wedderburn has finally prevailed, authorities collected ante, § 181, note 1.]
and if the surviving partner appropriates
1 When the surviving partner continues the business, whether with or without the
consent of the representative of the deceased, the equitable title of the old fiini to its
assets is not changed. The firm still owns them, and the creditors of the old firm can
subject them to the payment of debts. The survivor will in the regular course of
things sell part of the assets, buy other merchandise, and contract new debts. In
selling the assets, the survivor acts within his rights ; he passes title, and is personally
accountable for the proceeds. A creditor of the old firm has no right therefore to the
assets thus sold. And he can establish no'claim to the merchandise bought by the
survivor, since the latter bought it as an individual trader. The old creditors there-
fore are entitled to priority on all the assets of the old firm which remain «i specie ;
the merchandise bought sin(;e dissolution is the separate ]n'operty of the survivor. Ex
parte Morley, L. E. 8 Ch. 1026 ; Ex parte Manchester Bank, 12 Ch. D. 917 ; Ex parte
Butcher, is" Ch. D. 465 (C. A.); Citizens' Ins. Co. v. Ligon, 59 Miss. 305 ; Tiemann
V. Molliter, 71 Mo. 512 ; Allen v. Second Nat. Bank, 6 Lea, 558 ; Cowan v. Gill, 11
Lea, 674. If the partnership is continued after death (see ante, § 343, note 1) all
creditors are firm creditors and all assets firm assets ; and all the creditors, whether
their debts accrued before or after the death of a partner, share alike. In re Simpson,
L. K. 9 Ch. 572.
It is always to be borne in mind that creditors of the firm may be estopped from
setting up their claims. They have the right to call for immediate payment out of the
assets. If knowing of the dissolution they allow the assets to remain in the hands of
the surviving partner in such a way as to lead the public to believe him the sole owner,
and to credit him as such, they may be postjioned. That is the case when the rejire-
sentative of the deceased partner allows the assets to be used for a long time' in the
business of the surviving partner. Hoyt v. Sprague, 103 U. S. 613. But it must be
an unusual state of circumstances which would estop the creditoi's.
In Fitzpatrick v. Flannagan, 106 U. S. 648, it was held that the creditors of the
old firm would be postponed to an assignee of the surviving partner in consideration
of an individual debt, even as to assets remaining in specie, on the authority of Case v.
Beauregard, 99 U. S. 119 {ante, § 248, note 1). That case has already been criticised,
and the same objection would apply to the present case. An opposite conclusion was
reached, in the case of an assignment by the surviving partner, iu Allen v. Second
Nat. Bank, 6 Lee, 558, supra.
§ SJ9.]
OF A CHANGE IN THE PARTNERSHIP.
443
of the deceased have a right to require a sale of the effects, as
the only certain way of ascertaining their vahie and making a
fair division. But this again, although a rule, cannot be deemed
a universal rule ; for equity may find in particular circumstances
good reason for not decreeing a sale, although it must be admitted
that it strongly inclines to that mode of settlement, as, on the
whole, the fairest and the safest, (y) That the representatives
of the deceased may have an account taken — or, rather, that
their right in this respect is as complete as the right of the de-
ceased while he lived and was a partner — seems to be certain. (2)
§ 349. Survivorship in Actions. — At law, the creditors of the
firm must bring their actions against the surviving partners only;
who, of course, charge what payments they are obliged to make,
in account with the estate of the deceased. On the other hand,
the survivors alone bring any action to collect a partnership debt,
in their own names. At common law, the executor or adminis-
trator of the deceased cannot be joined ; and the executors or
administrators of the last survivor sue alone, without joining the
representatives of the first or of any later deceased, (a)
{y) Crawshay v. Maule, 1 Swanst. 495,
523; Featherstonliaugh v. Fenwick, 17
Ves. 298 ; Cook v. Collingridge, Jac. 607 ;
Simmons v. Leonard, 3 Hare, 581. In
winding up the concerns of a partnership,
after a dissolution, one partner cannot
take the partnersliip stock at a vahiation ;
but its vahie must be ascertained by the
conversion of it into money. Sigourney
V. Munn, 7 Conn. 11 ; Evans v. Evans, 9
Paige, 178 ; Dougherty v. Van Nostrand,
1 Hotf. Ch. 68 ; Conwell v. Sandidge, 8
Dana, 278. See also, on this subject,
Mifflin V. Smith, 17 S. & R. 165 ; Bradley
V. Chaniberlin, 16 Vt. 613 ; U. S. Bank
V. Binney, 5 Mason, 185 ; Dickinson v.
Bold, 3 Desaus. 501 ; Wilson v. Green-
wood, 1 Swanst. 471 ; Leach v. Leach, 18
Pick. 75 ; Fereday v. Wightwick, 1 Tam-
lyn, 261 ; Rigden v. Pierce, 6 Madd. 353 ;
Pierce v. Trigg, 10 Leigh, 406.
(z) Waring v. Cram, 1 Pars. Sel. Cas.
622 ; Washburn v. Goodman, 17 Pick.
519 ; Ogden v. Astor, 4 Sandf. 311. In
Scott V. Milne, 5 Beav. 215, the court re-
lused to open accounts, though of a gen-
eral and summary nature, not containing
the items, and which had been indorsed
by a surviving partner to the representa-
tives of a deceased partner, and had re-
mained unquestioned for twenty-two years;
but it decreed an account limited to the
subsequent receipts of the surviving part-
ner, which, it was admitted, had taken
place. In Wedderbnrn v. Wedderburn,
22 Beav. 84, it is said, that the liability
to account for profits derived from trade,
carried on after the death of the testator,
must depend, in the absence of contract,
upon the nature of the trade, the mode of
carrying it on, the capital employed, the
state of the account between the partner-
ship and the deceased partner, and the
conduct of the parties after his death.
And see Stoughton v. Lynch, 1 Johns.
Ch. 469 ; Brown v. Litton, 1 P. Wins.
140 ; Hammond v. Douglas, 5 Ves. 539 ;
Brown v. Vidler, 15 Ves. 223 ; Brown v.
De Tastet, Jac. 284 ; Fearns (-•. Young, 9
Ves. 549.
(a) Barney v. Smith, 4 H. & J. 485 ;
Murray v. Mumford, 6 Cow. 441 ; Davis
V. Church, 1 W. & S. 240 ; Clark v.
House, 23 Me. 560 ; Peters v. Davis, 7
Mass. 257 ; Wallace v. Fitzsimmons, 1
Dall. 248 ; McCarty v. Nixon, 2 Dall. 65,
note ; Smyth v. Hawthorn, 3 Rawle, 355 ;
Yale V. Eames, 1 Met. 487 ; Beach v. Hay-
444
THE LAW OF PARTNERSHIP,
[CH. XIII.
S 350. Settlement of Estate of Deceased Partner. — The estate
of the partnership would he settled, in a case of dissolution by
death, entirely on equitable principles ; and no doubt it would
be required that the claims of the several creditors and those of
the joint creditors should be kept entirely distinct, each having
its separate fund, and passing over to the other only in case of
a surplus. Indeed, as we have already intimated, the decided
tendency of common-law adjudication seems to be in that direc-
tion, {b) But the question seems not to be so fully settled by
authority as we think it to be on principle. In the whole matter
ward, 10 Ohio, 455 ; Pfeffer v. Steiner, 27
Mich. 537. In Louisiana, the .surviving
partner does not possess the right, until he
is authorized by the Court of Probate, to
sue alone for, or to receive, partnership
debts. Flower v. O'Connor, 7 La. 194;
Connelly v. Cheevers, 16 La. 130 ; Hyde
V. Brashear, 19 La. 402 ; Babcock v.
Brashear, 19 La. 404, On actions against
surviving partners, and actions against
executors, see Richards v. Heather, 1 B.
& Aid. 29 ; Given i;. Albert, 1 W. & S.
333 ; Osgood v. Spenser, 2 H. & G. 133 ;
Grace v. Shurter, 1 Wend. 148 ; Lang v.
Keppell, 1 Binn. 123; Calder v. Ruther-
ford, 1 Br. & B. 302, 7 Moore, 158. In
Thorpe v. Jackson, 2 Younge & C. Exch.
553, it was held, that joint contractors,
whether partners or not, are in equity
jointly and severally liable ; and, if one
die, his assets are liable, but other con-
tractors should be joined. See also Schole-
field V. Heaficld, 7 Sim. 607 [See ante,
§ 249.]
{b) W^ilder V. Keeler, 3 Paige, 167;
Morgan r. His Creditors, 20 Martin (La.)
599 ; M'Culloh v. Dashiell, 1 H. & G. 96 ;
Payne v. Matthews, 6 Paige, 19 ; Hall v.
Hall, 2 McCord Ch. 32 ; Bowden v.
Sehatzell, 1 Bail. Eq. 360; Cammack v.
Johnson, 1 Green Ch. 163 ; Ex parte
Moult, 1 Deac. & Ch. 44, 73, 1 Mont,
292. A deceased partner's estate, after
payment of his separate debts, is applied
in payment of such partnership debts as
remain ixnsatisfied after applying the
whole partnership assets in liquidation
thereof ; and, if his personal estate is in-
sufficient, the real estate of the deceased
partner is to taken. Addis v. Knight, 2
Meriv. 117, 119. As to the power of
survivors to make a new contract to keep
alive a debt against the estate of a de-
ceased partner, see Braithwaite v. Britain,
1 Keen, 221. By j)artnership articles, D.
was to be a partner with A. and B. in
profits, but not in the capital stock ; and he
was not required to find any capital. D.'s
partner.ship was to continue for twelve
years, at the expiration of which term his
interest in the concern was to cease. If
D. died during such term, his represen-
tatives were to receive a proportionate
part of his share of the profits of the cur-
rent half-year, for the period up to his
decease, to be ascertained according to
the average of the last two preceding
half-yearly stock-takings. D. died : after
which the business was carried on by A.
and B. until A.'s death, and then by B.
alone. A creditor of the firm, in respect
of a debt contracted while the firm con-
sisted of A., B., and D., claimed to have
the whole of B.'s estate ajiplied in pay-
ment of all the creditors of A., B., and
D., without regard to whether their debts
were contracted before or after the death
of D., or before or after the death of A,
There were in existence specific assets
which had belonged to the firm while it
consisted of A., B., and D. It was held,
that under the partnership articles, D.'s
executors had a right to have the debts
existing at D.'s death paid out of the then
existing assets ; that the assets then on
hand, and now existing in specie, must
therefore be applied in payment of the
creditors of the original firm of A., B., and
D, ; and that, therefore, such creditors
could not take B.'s separate assets until his
separate creditors had been paid in full. Ex
parte Dear, In re White, 1 Ch. D. 514.
§ 360.] OP A CHANGE IN THE PARTNERSHIP. 445
of the settlement of such an estate, there are yet questions wliich
cannot be considered as positively determined. Thus, after some
conflict and uncertainty, it seems now to be settled in England,
that, on the death of a partner, a creditor of the firm may pro-
ceed at once in equity against the estate of the deceased, whether
the firm or the surviving partners be solvent or otherwise; the
court re(piiring, however, that the surviving partners should be
made parties, because they are interested in the account, (c) It
may be said, however, that if the firm, or the surviving partner,
is solvent, nothing is gained by this : the estate which pays the
debt charges it in account with the firm, or against the surviving
partner ; and there seems to be little more reason why a joint
creditor should have this power after the death of a partner
than during his life, (c?) It is derived, however, from the prin-
ciple, that in equity all the conti'acts of a partnership are con-
sidered to be joint and several. In tiiis country this rule has
been a good deal questioned; and, although some acknowledged
princi})les would lead to it, it may perhaps be doubted whether
the result of a final adjudication of equity on this point will not
protect the estate of the deceased against such process, unless
special circumstances lead to the conclusion that justice to the
creditor, in that particular case, requires it.^
The authorities lead also very strongly to the rule, that where
there is no joint fund, and no surviving partner who is solvent,
the joint creditor shall have the benefit of the separate estate of
a deceased partner, pari passu, with the separate creditors of
(c) Wilkinson v. Henderson, 1 Mylne waite v. Britain, 1 Keen, 219. See Kim-
& K. 582 ; Devaynes v. Noble, 2 Russ. & ball v. Whitney, 15 Ind. 280.
M. 495 ; Thorpe v. Jackson, 2 Y. & C. (d) See Ridgway v. Clare, 19 Beav.
553 ; Sleech's Case, 1 Meriv. 539 ; Braith- 111.
1 In accordance with the English doctrine, it is held in some jurisdictions in this
country that on the death of a partner a creditor of the firm may at once proceed in
equity against the estate. Nelson v. Hill, 5 How. 127 ; Fiske v. Gould, 12 F, R.
372; Silverman v. Chase, 90 111. 37; Ralston v. Moore, 105 Ind. 243 (by statute);
Rice, appellant, 7 All. 112 (by statute); Irl)y v. Graham, 46 Miss. 425 {xcviblc); Blair
r. Wood, 108 Pa. 278 (by statute) ; Higgins v. Rector, 47 Tex. 361. In other juris-
dictions it is held that the firm creditor cannot proceed against the deceased unless the
liim and the survivor are insolvent. Troy Iron & Nail Factory v. Winslow, 11 Blatch.
513 ; Alsop V. Mather, 8 Conn. 584 ; Filley v. Phelps, 18 Conn. 294 (scmb/c) ; Pullen
V. Whitfield, 55 Ga. 174 ; Anderson v. Pollard, 62 Ga. 46 ; Buckingham v. Ludlum,
37 N. J. E(i. 137 ; Pope v. Cole, 55 N. Y. 124 ; First Nat. Bank v. Morgan, 73 N. Y.
593 ; Horsey v. Heath, 5 Ohio, 353 ; Pearce v. Cooke, 13 R. I. 184 ; Sherman v.
Krenl, 42 Wis. 33. The partnership creditors may of course prove their claims against
the estate, and secure payment of their claims, if necessary, out of any balance left
after paying the separate creditors of the deceased. Greene v. Butterworth, 45 N. J.
Eq. 738, 17 Atl. 949.
446 THE LAW OF PARTNERSHIP, [CH. XTII.
that partner, (g) We see no more justice in this rule, and no
more reason for it, than for saying that the separate creditor, if
there be no separate estate, may come in upon the joint property
equally with the joint creditors ; and this has never been per-
mitted. And the strong disapproval of the rule sometimes met
with, (/) connected with the general tendency of the law at this
day to complete its recognition of a partnership as a body by
itself, with its own means appropriated to its own debts, lead us
to doubt of the propriety and of the permanency of the rule.
§ 351. Notice of Death. — The estate of a deceased partner
may be discharged by payment of the debt, involving, however,
the question of appropriation of payment or, by a transfer of the
account, involving the question of novation, much in the same
way in which a retiring partner may be discharged ; and the
view taken of these questions, when considering the discharge
of a retiring partner, leads to the conclusion, that notice of a
dissolution by death is not necessary to prevent the estate of the
deceased from becoming liable for new debts of any kind.
The Supreme Court of Massachusetts has considered very fully
the question, whether the surviving partners are bound to give
notice of the death of a partner, and a dissolution by his death.
It is decided, for reasons which seem unanswerable, that there is
no such necessity to avoid a liability caused by the subsequent
misuse of the copartnership name by one of tlie firm. The court
say, Bigelow, C. J., giving the opinion, that, by a well-settled rule,
no notice need be given by the representatives of the deceased, to
avoid liability on future contracts ; and they see no reason for
imposing a duty of giving notice of the dissolution of the firm on
surviving partners. (^)
(c) Sparhawk v. Russell, 10 Met. 305 ; Stauffer, 1 Pen. & W. 198. That the
Emanuel v. Bird, 19 Ala. 596. And see separate property of each member of the
Smith V. Mallory, 24 Ala. 628 ; Wilby v. firm is liable at law to be taken in execu-
Phinney, 15 Mass. 116 ; Busby v. Chen- tion by any creditor of the firm, see Allen
ault, 13 Ij. Mod. 554 ; Bell v. Newman, 5 v. Wells, ubi sup. ; Newman v. Bagley,
S. & R. 78. 16 Pick. 570 ; M'CuUoh v. Dashiell, 1 H.
(/) M'Culloh V. Dashiell, 1 H. & G. & G. 96 ; Tucker v. Oxley, 5 Cranch, 35.
96 ; Irby v. Gi-ahani, 46 Miss. 425. See See this question fully discussed in Silk v.
also Pierce v. Jackson, 6 Mass. 242 ; Eddie Prime, 2 Lend. Cas. in Etj. 313, Hare &
V. David.son, 1 Doug. 650 ; Field v. Clark, Wallace's notes.
4 Ves. 396 ; Fisk v. Herrick, 6 Mass. 271 ; (g) Marlett v. Jackman, 3 Allen, 287.
Allen V. Wells, 22 Pick. 450 ; Melville v. And see Webster v. Web.ster, 3 Swanst.
Brown, 15 Mass. 82 ; Tappan v. Blaisdell, 490, n. ; VuUiamy v. Noble, 3 Meriv. 614 ;
6 N. H. 190. But see Lord v. Baldwin, 6 Washburn v. Goodman, 17 Pick. 519. Aa
Pick. 348 ; French v. Chase, 6 Me. 166 ; exception as to the necessity of .such a
Church V. Knox, 2 Conn. 514 ; Barber v. notice has been made, when the surviving
Hartford Bank, 9 Conn. 407 ; Donner v. partners, or one of them, are executors ol
§ 352.] OF A CHANGE IN THE PARTNERSHIP. 447
The surviving partners, if they hold claims or a balance
against the deceased partners, are treated like other creditors.
And if as creditors they have any advantage, — as, for example,
by being specialty creditors, — this advantage is preserved to
them, (h) This advantage is greater in England than here.
There, an administrator was not permitted to retain his own
simple contract debts, against a surviving partner, with whom
the deceased partner had covenanted to pay certain debts, and
had not {)aid them.
§ 352. Survivor made Executor of Deceased. — If a deceased
partner has made liis partner his executor, certain consequences
still result in England which would not take place here ; as tlie
rules that an executor should have all property undisposed of, and
that the appointment of hira as executor discharges any debt due
from him, which have lost much of their force and influence there,
have none whatever here. It is very common in this country
for a partner to appoint a co{)artner iiis executor : this adds to
his power as surviving partner that of executor ; but the combi-
nation of these two characters gives him no new rights or powers
in either of them. It has been said that the duties of these two
characters are inconsistent, and, therefore, the practice objection-
able ; but they are not found to be so in fact in this country.
Doubtless, the executor would be watched very carefully, to guard
against his using his executorship as a means of securing undue
personal advantage to himself as a partner. The watchfulness
of a court of equity on this point is well illustrated by an Englisli
case, in which the court opened accounts and arrangements be-
tween executor partners and legatees, after they had been con-
firmed by being acted upon for some thirty years. (2)
How the acts of a person who is both executor and surviving
partner are distinguished, so that what he does in one capacity
shall not affect rights or interests in his hands in another, may
be illustrated by the rule, that payments by a firm, after the
death of a partner, even under its old name, vrhere one of the
firm is executor of the deceased, shall not be considered pay-
the deceased partner : for then, in order to general question, Murray v. Muniford, 6
exonerate his estate from future liability. Cow. 441 ; Canfield v. Hard, 6 Conn. 184 ;
it is said that due Tiotice ought to be given Burwell v. Mandeville, 2 How. 560;
of his death, to the creditors of the firm ; Downs i\ Collins, 6 Hare, 418.
because, in the absence of sueh notice, the (h) Musson v. May, 3 Ves. & B. 194 ;
e.xccutor partner, in his character of per- Kerr v. Hawthorne, 4 Yeates, 170. See
sonal representative of the deceased, has Newell v. Humphrey, 37 Vt. 265.
power to bind his estate. V\illianiy r. (/) Weddeiburn v. Wedderburn, 2
Noble, 3 Meriv. 714. See also, on the Keen, 722, 4 Mylne & Cr. 41.
448 THE LAW OF PARTNERSHIP. [CH XIII.
nients by that partner as executor of the deceased, if such pay-
ments would have the effect of preventing the operation of the
statute of limitations as against debts due from his estate. (./ )
§ 353. Power of Appointment given by the Articles. — We have
already remarked that the articles forming the partnership, or an
agreement between the partners subsequent to the articles, may
provide either that certain representatives of a partner shall, at
ills death, become partners, or a partner in his place, or that the
partner may make provision to this effect in his will. If no such
agreement is made between the partners, no one of them has
any power, in this respect, excepting over his own estate. He
may leave this to whom he will, and on what condition he will.
And if he says therein that such a person, whether devisee or
legatee, shall become a partner in the firm, the person so pointed
out must submit to the conditions, and offer himself as partner.
'J'his is equally true whether the deceased has a power of ap-
])ointment or not; for it is merely an application of the rule
that he who would take the benefit of a testamentary provision
must comply with its requirements. And doubtless, if, by an
agreement, a partner bound his estate to the continuance of a
partnership, it would be regarded by the law as so bound, unless
the provision were obviously foolish or inequitable ; and all the
rights of the representatives would be subject to this obliga-
tion, {k)
(j) Way V. Bassett, 5 Hare, 55. In executorof the deceased partner, and which
this case, A. deposited moneys with B., the surviving partners were in that charac-
C, & D., who were bankers in partnership ; ter bound to do, cannot prima facie be
and received from them notes, in which considered to have been done in the charac-
they promised to pay him tlie amount three ter of executor. For authority that the
months after sight, with interest. B. died acts of the surviving or continuing part-
in March, 1837, having appointed C. and ners cannot keep alive a debt or obligation,
another his executors. C. & D. continued or otlierwise augment or prolong any lia-
the banking business in the same name bility of the estate of the deceased partner,
until 1842 ; and interest was regularly see Atkins v. Tredgold, 2 B. & C. 23 ;
paid on the notes by the firm until that Slater v. Lawson, 1 B. & Ad. 396 ; Ault
time, the payment being indorsed ujion v. Goodrich, 4 Euss. 431 ; Scholey w. Wal-
the notes, and signed by one of the part- ton, 12 M. & W. 510 ; Barker v. Buttress,
ners or their clerk. In December, 1843, 7 Beav. 134 ; Ex imrte. Woodward, 3
the executors of A. filed their bill against Mont. & A. 232. A surviving partner,
the executors of B., and the devisees under being the executor of his deceased partner,
his will, for payment of the amount of is not entitled to an allowance for carrying
the notes out of the personal or real estate on the business, after his partner's decease,
of B. It was held tliat the acts of the for the benefit of the estate. Burden v.
surviving partners of B. had not the effect Burden, 1 Ves. & B. 170; Stocken v. Daw-
of taking the debt upon the notes out of son, 6 Beav. 371.
the operation of the statute of limitations, {Jc) Pemberton v. Oakes, 4 Russ. 154 ;
as against the real or personal estate of the Ponton v. Dunn, 1 Russ. & M. 402 ; Craw-
deceased partner ; and also, that acts done shay v. Maule, 1 Swanst. 512.
by one of the surviving partners, who was
§ 354.] OF A CHANGE IN THE PARTNERSHIP. 449
Whether, however, this continuance be provided for by the
articles, irrespective of the will of one who should die, or by the
will of a deceased partner under the authority of the articles, we
have already stated our opinion that it is called a continuance of
the partnership inaccurately ; it being, in fact and in law, only a
provision for the formation of a new partnership which shall
stand in a certain relation to the old one.
§ 354. Appointee becomes Partner only by his Consent. — It is
admitted that any such appointment or direction by will shall be
construed very liberally towards the appointee, whether executor
or not, so as to give him an election whether he will become a
partner or not. (Z) But it must be obvious that if there be.no
room for this construction, — that is, if the requirement be in
terms the most perem})tory and absolute, — it cannot, of itself,
make the appointee a partner. He does not become one until
he assumes that relation by his own act. The deceased may have
bound his estate effectually ; but, if the appointee chooses to
renounce the estate, he is certainly no ))artner. And this proves
that it is not a mei'e continuance of the same partnership with a
new member. So it is said, that, if such appointees, executors,
or others are silent, even if the right of choice be given to the
executors, their consent will be assumed, and they will be re-
garded as partners. (7?i) But, in the first place, their consent
would hardly be assumed from their mere silence; and not unless
they acted in some way to show that they were partners, or un-
less the being partners was productive of some direct benefit to
them, as by a legacy which they indicated their purpose of taking.
And, in the next place, the very presumption of their consent
shows that it was necessary, and was really that which made
them partners, and made the new partnership. It is even held as a
rule in equity, that such appointee has not only the right of elec-
tion, but a right to inspect the books and accounts of the partner-
ship, that he may know how to exercise this right, (w)
(Z) Pigottv. Bagley, McClel. &Y. 569; sentative of the partner so dying, should
Wainwright v. Waterman, 1 Ves. 311 ; be let into the partnership, and become a
Crawsliay v. Maule, 1 Swanst. 512, per partner therein, in the same manner, and
Lord Eldon ; Kershaw v. Matthews, 2 upon the same terms and conditions. It
Russ. 62. was held that this was not an absolute or
(m) Morris v. Harrison, Colles, P. C. imperative obligation on the widow or per-
157. sonal representative to become a partner ;
(n) By partnership articles, it wasstipu- but only an option so to do, with a stipu-
lated, that the partnership should con- lation by the surviving partner to admit
tinue for nineteen years ; and that, if either them. It was also held that the widow,
of the partners should die, during the term, or personal representative, was entitled to
the widow, or other legal personal repre- a reasonable time to inspect and examine
29
450 THE LAW OF PARTNERSHIP. [CH. XIII.
Whether an appointee becomes partner on his own account, or
an executor or trustee becomes partner for the benefit of the
representatives of the deceased, or there is no new member,
although the estate of the deceased, or some part of it, remains
in the partnership and in the business, for the benefit of his
representatives or appointees, — we consider that the former part-
nership came to its end by his death, and that the firm now going
on, however composed as to persons or estate or business, is a
new one. Nor is it in law any less a new one because it stands
in very close relations with the former, and may be considered its
immediate successor or substitute or representative, (o)
§ 355. Estate Liable only so far as Expressly Provided. — What-
ever powers of this kind are given to an executor, eitlier to
become partner, or, being partner, to carry on the business for
the benefit of the representatives of the deceased, or to leave the
estate of the deceased in the partnership and in the business, on
any terms and for any purpose, these powers would probably
be strictly construed ; at least, they would never be enlarged by
implication. Thus, it is clear that the deceased may limit the
amount or proportion of his estate which shall remain in the
partnership or go into it, at his own pleasure ; and the executors
or aftpointees can no more enlarge this than they can violate any
other of his directions. Nor will such a disposition or limitation
in any way affect the rights of the creditors of the partnership.
But it seems to be regarded in equity somewhat as a proposition
made to them, to which they may assent if they please. They
have the power of having all his estate brought forth and made
answerable for the debts. But they need not execute this power,
unless they see fit to do so ; and delay and silence on their part
will be considered as a confirmation of the provision of a deceased
partner, (jo )
So, the creditors of the new partnership have no claim what-
ever upon, and no interest in, the general assets of the deceased,
or any part of them, but that which he expressly places in the
new partnership ; which is also another illustration of the prin-
the partnership accounts, but not to have titled to know the precise value of the
the accounts taken, before they elected benefit intended, before election. Pigott
whether they would become partners. The v. Bagley, 1 McClel. & Y. 569.
usual case of election is, where a person (o) See cases cited infra.
has a right, independent of a testator, and (j>) Downs v. Collins, ti Hare, 418;
the testator gives such person some other Ex parte Garland, 10 Ves. 119. On the
right or benefit, on condition of the former question of silence being a confirmation of
being relinquished, as the dower of a the provision, see Monis v. Harrison,
widow ; and, in such case, the party is eu- Colles, P. C. 157.
§ 356.] OF A CHANGE IN THE PARTNERSHIP. 451
ciple, that this continued partnership, so called, is a new one.^
If a part of the property goes into the new partnership, but no
person is added to it, the creditors of the new firm have only the
security of this part. ((/)
§ 356. Trustee or Other Appointee may be liable Personally. — If
a person goes with the business and takes part in it, either as
executor, or as trustee, the creditors generally have his personal
liability as partner, in the same way as that of the other partners ;
for it seems to be laid down as a positive rule, that an executor
who carries on the business of his testator pledges his own respon-
(q) Harwell /;. Mandeville, 2 How. 560 ; sible to hold that the trade is to be carried
Cutbush V. Cutbush, 1 Heav. 184 ; Wil- on, perhaps for a century ; and at the end
lianison v Naylor, 3 Y. & C. 208 ; Ex of that time the creditors, dealing with
parte Garland, 10 Ves. 110, by Lord Eldon, that trade, are, merely because it is directed
that under the bankruptcy of an executor by the will to be carried on, to pursue the
and trustee directed by the will to carry general assets, distributed perhaps to fifty
on a trade, and a limited sum to be paid families." See also Pitkin v. Pitkin, 7
to him by the trustees for that purpose, Conn. 307 ; Ex parte Richardson, 3 JIadd.
the genera! assets beyond that fund are not 138, 157 ; Thompson v. Andrews, 1 Mylne
liable. The Lord Chancellor says : '* My & K. 116.
opinion upon this case is, that it is impos-
1 Where the articles provide or the deceased partner directed that his interest
should remain in the business, that does not, without a special provision to that effect,
render the general estate of the deceased liable for the debts later contracted. An
estate cannot be a partner. Siibseiiuent creditors have the personal security of such
persons as actually take part in the business, and may levy upon all the property of
the partnership , the interest of the deceased in the property being, of course, post-
poned to the claim of the creditors. But the risk of the estate is confined to the
money actually invested in the business at the time of the death. Smith v. Ayer, 101
U. S. 320 ; Cook v. Rogers, 3 F. R. 69 ; Vincent v. Martin, 79 Ala. 540 ; Brasfield v.
French, 59 Miss. 632 ; Wild v, Davenport, 48 N. J. L. 129, 7 Atl. 295 ; Nat. Bank
of Newburgh v. Bigler, 83 N. Y. 51 ; Stewart v. Robinson, 115 N. Y. 328, 22 N. E.
160 ; Lucht v. Behrens, 28 Oh. St. 231. And the estate is not even liable for divi-
dends of profits received by it if they were bona Jide ordered by the partners, and did
not when made diminish the capital or hinder the payment of debts. Jones v. Walker,
103 U. S. 444.
The curious analogy between the position of the estate in this case and that of a
special partner under limited partnership acts is to be noted. It is perhaps worthy of
consideration whether some method might not be found, apart from the statute, of
investing money in a partnership without becoming liable for more than the amount
invested. Compare, for example, cases of loan to a partnership to be compensated by
a share in the profits, ante, § 70.
The deceased can, it would seem, render his general estate liable by explicit direc-
tions to that effect ; but it must appear unequivocally that he so intended. Brasfield
V. French, 59 Miss. 632 ; Exchange Bank i\ Tracy, 77 Mo. 594 ; Willis v. Sharp, 113
N. Y. 586, 21 N. E. 705. But see Blodgett v. American Nat. Bank, 49 Conn. 1.
Though a signature in the firm name by the surviving partner would not bind the
estate, a transfer of property by the survivor, such as an assignment for the benefit of
creditors, passes, of course, all interest of the estate in the property so transferred.
Shaw, Appellant, 81 Me. 207, 16 Atl. 662 ; Bell v. Hepworth, 134 N. Y. 442, 31 N. E.
918.
452
THE LAW OF PARTNERSHIP.
[CH. XITI.
sibility to the creditors ; and this although it is certain that he
continues the business in no degree for his own benefit, but for
that of the infant children of the deceased. (r) ^ In this country,
a person may be appointed by equity to carry on a business for the
benefit of an infant partner ; (s) and, doubtless, an English court
of equity has this power; and, although we know of no case in
which it has been exercised, there are cases in which reference is
made to this power, (t) But we do not think that a person so
appointed by the court would be held, unless a liberal compensa-
tion were made to him, subject to the stringent liabilities which,
according to the authorities, would seem to attach to an executor
(r) Wightman i'. Townroe, 1 M. & S.
412, per Bayley, J. : "The executors in
this case are mere volunteers. At law,
they became the legal {iroprietors in re-
spect of everything belonging to the
trade ; and consequently are liable for the
legal debts." Lord Ellenborough, C. J. :
"The fund subsisting at the death of the
testator, under a due administration of
the will, should have been disposed of by
the executors, and converted into money,
and distributed as assets. Instead of this,
it is embarked dc novo in the trade in the
purchase of other barley, and a variety
of other contracts, to which the infant is
not privy, nor bound by them, but may
renounce when she comes of age as dam-
nosa hcereditas. If, then, the infant has
such an option, who but the executors
can be liable ?" See the remarks of Lord
Mansfield in Barker r. Parker, 1 T. R.
295. See also Ex parte Richardson, 1
Buck. 209; Owen v. Body, 5 A. & E.
28 ; Alsop D. Mather, 8 Conn. 587. If
an executor, without any authority from
the will, take upon himself to trade with
the assets, the testator's estate will not be
liable in case of his bankruptcy ; the
testator's creditors and legatees will have
a right to prove demands for such of the
assets as have been wasted by the executor
in the trade, in projiortion to their re-
spective interests ; and with respect to
such of the assets as can be specifically
distinguished to be a part of the testator's
estate, they will not pass to the as-
signees ; the executor holding them alieno
jure, they will not be liable to his bank-
ruptcy. Ex parte Garland, 10 Ves. 110;
Toller on Executors, 487 ; Ex parte Rich-
ardson, 1 Buck, 202.
(s) Thompson v. Brown, 4 Johns. Ch.
619 ; Powell v. North, 3 Ind. 392.
(t) In Sayer v. Bennett, cited 1 Mon-
tagu on Partnership, Appendix, 20, 1
Cox, 107, Lord Kenyon, in a case where
there was an application for the exercise
of this power by chancery for the benefit
of a lunatic, observed : " It is said that
equity should appoint some person to
carry on the business for the benefit of
the lunatic, as they would have done for an
infant; but I say, God forbid." And in
Barker v. Parker, 1 T. R. 295, Lord
Mansfield said : "If executors carry on
a trade, they must do it as individuals,
for their own advantage. I remember
many instances of trade being carried on
under the direction of the court of chan-
cery."
1 Where the executor, according to directions in the articles or otherwise, takes
part in the business he becomes personally liable as a partner. Ante, § 74 ; Mattison
V. Farnham, 44 Minn. 95, 46 N. W. 347 (semb/e) , Citizens' Ins. Co. v. Ligon, 59
Miss. 305 ; Wild v. Davenport, 48 N. J. L. 129, 7 Atl. 295 ; Willis v. Sharp, 113 N. Y.
586, 21 N. E. 705. But the executor is not liable personally if he merely leaves the
share of the deceased in the business, without taking part in it. Avery v. Myers, 60
Miss. 367 ; Wild v. Davenport, 48 N. J. L. 129, 7 Atl 295. If the executor becomes a
partner it is in a new firm, and he is not liable personally for an old debt. Mattison
V. Farnham, 44 Minn. 95, 46 N. W. 347.
§ 356.]
OF A CHANGE IN THE PARTNERSHIP.
453
who carries on the business in this way. It would seem that
administrators are not chargeable personally with a loss to the
assets of tiieir intestate, which were in good faith and for good
reason left for a time in the business, unless some negligence or
other fault imputable to them can be considered as a cause of the
loss, (w)
{ji) In Rowtli V. Howell, 3 Ves. 565,
it was held, tiiat executors were not liable
for a loss by the insolvency of a banker
whom the testator had trusted, and with
whom they suffered stock, deposited by
the testator, to remain altliough they
were directed to pay debts, and lay out
the residue in mortgages with all conven-
ient speed. They had not been guilty of
laches. In Thompson v. Brown, 4 Johns.
Ch. 628, the distinction which exists in
the two classes of cases is very clearly
stated by Chancellor Kent. See also
Knight I'. The Earl of Plymouth, 3 Atk.
480, Dickens, 120 ; Wilkinson v. Stafford,
1 Ves. Jr. 41 ; Vez v. Emery, 5 Ves. 144.
To authorize executors to carry on a trade,
or to permit it to be carried on with the
property of a testator held by them in
trust, there ought to be the most distinct
and positive authority and direction given
by the will itself for that purpose. Kirk-
nian v. Booth, 11 Beav. 273, 280. By
partnership articles, testator's capital was
to remain in the concern for eighteen
months after his death. By his will, he
conveyed his property to his executois, in
trust to paj' the rent, issues, and profits,
dividends, interests, and income of his
real and personal estate to his wife, for
life. It was held that the wife was en-
titled to the profits of the capital in the
partnership until it was separated. Skir-
ving V. Williams, 24 Beav. 275.
454 THE LAW OF PARTNERSHIP. [CH. XIV.
CHAPTER XIV.
OF DISSOLUTION BY DECREE.
§ 357. Method of Dissolving Partnership. — The COUrts of com-
mon law have no power whatever of decreeing or causing a dis-
sokition of a partnership, (a) In some cases, in which equity
would make such a decree, as where a partnership was formed
through fraud, courts of law might apply the principle that a con-
tract so vitiated never had force, and on this ground declare it
null, and avoid the partnership. But courts of equity have full
power over this matter ; and upon a bill filed by any partner, alle-
ging a sufficient cause, and upon proper evidence, if the facts are
not admitted, the court decrees a dissolution of tlie partn'^r-
ship. (6) A decree or judgment for winding up the affairs of a
partnership may divide the stock and property, after the debts are
paid, among the partners , or order it sold, and divide the proceeds
in a certain way, which is the more common case. (56) Whichever
is done, the decree should, it is said, not be in the alternative, but
positive and definite, (hhh')
The decree may declare that the partnership never existed.^ If
fraud, or oppressive or wrongful or illegal purpose, or extreme and
certain folly, in the inception and formation of the contract, be
alleged and proved, the court would declare that the original for-
mation of a partnership so tainted had no validity in law, and
that the partnership never existed, (c) This procedure is, how-
la) Story on Part. § 284 ; 1 Storj' on (bh) Watney v. Wells, L. R. 2 C'h,
Eq. Jur. § 673 ; Stone v. Fouse, 3 Cal. 250.
294 ; Nugent v. Locke, 4 Cal. 320 , (hhb) Harper v. Lami)ing, 33 Cal. 641.
"Wilson V. Lassen, 5 Cal. 116 ; Barnstead (c) Lord Eldon, in Tattersliall r.
V. Km]. ire Mining Co., 5 Cal. 299. Groote, 2 B. & P. 135, said : " Courts
(h) See eases cited in the following of equity interfere in cases where fraud
notes. And see Baxter v. West, 1 Drewry has been practised, and onier the con-
& Srn. 173 ; and Dumont v. Ruepprecht, sideration to be returned ; and then they
38 Ala. 175 ; Meaher i*. Cox, 37 Ala. 201. treat the articles as a nullity, in conse-
^ Such a decree will not be entered for misconduct of a partner merely, in the
absence of fraud. Oteri v. Scalzo, 145 U. S. 578.
§ 358.]
OF DISSOLUTION BY DECREE.
455
ever, rare. The far more common way is to decree a dissolution
of the partnership for causes occurrin^^ after its formation.^
§ 358. Dissolution for Misconduct of Partner. — Causes for disso-
hition are divisible into two classes : those which imply misconduct
on the part uf one or more partners, and those which do not. Of
the first it is always said, that any misconduct of any kind, pro-
vided it be such in its character and intensity as to expose the
other partners to important injury of any kind, will be considered
a sufficient ground for dissolution. (J) But it is also frequently
remarked, that this is a grave exercise of power, and will not be
made for slight reasons, (^e} Bad temper, overbearing and oi>
qnence of the fraud." Howell v. Harvey,
5 Ark. 278. " The jurisdiction of a court
of eijuity, in cases of eopartuership, flow-
ing from the peculiar trusts and duties
growing out of that connection, is of the
most extensive and beneficial character.
It often declares partnerships utterly void,
in eases of fraud, imposition, and oppres-
sion in the original agreement." And
see Ex parte Broome, 1 Rose, 69 ; Ham-
ilton V. Stokes, 4 Price, 161, Daniel, 20 ;
Oldaker v. Lavender, 6 Sim, 239 ; Green
V. Barrett, 1 Sim. 45 ; Jones v. Yates,
9 B. & C. .532 ; Colt v. Wollaston, 2 P.
Wms. 154 ; Fogg & Vanderslice v. John-
ston, 27 Ala. 432. Fraud of one partner
against the firm is a good ground for dis-
solution before the expiration of the term.
Cottle i;. Leitch, 35 Cal. 434.
(d) In Howell v. Harvej-, 5 Ark. 278,
the court said : " Habitual drunkenness,
great extravagance, or unwarrantable neg-
ligence in conducting the business of the
partnership, justifies a dissolution ; bnt
then it must be a strong and clear case of
positive or meditated abuse, to authorize
such a decree. For minor misconduct
and grievances, if they require redress,
the court will interfere by way of injunc-
tion to prevent the mischief.'' Baring
V. Dix, 1 Cox, 213; Goodman v. Whit-
comb, I Jac. & W. 574 note ; Waters v.
Taylor, 2 Ves. & B. 299 ; Loscombe v.
Russell, 4 Sim. 8; Gratz v. Bavard, 11
S. & R. 41, 48 ; Littlewood v. Caldwell,
11 Price, 97, 99 ; Marshall v. Coleman, 2
Jac. & \V. 266 ; Chapman v. Beach, 1 Jac.
& W. 594; Xorway v. Rowe, 19 Ves.
148. But misconduct will not justify a
partner in treating the partnership as
ended without a decree and proceeding to
take exclusive control of the partnershi[)
affairs. Ambler v. Whipple, 20 Wall.
546.
{() Acting on this principle, it was
held, where articles of partnership pro-
vided, that, if either of the partners
should give guaranties without consent,
the other might dissolve on giving notice,
and one of the partners, in the course of
eight years, gave a guaranty for 52/., and
the other gave notice to dissolve, that this
alone was not, in equity, a sufficient
ground for a dissolution. Anderson v.
Anderson, 25 Beav. 190. And in Wray
V. Hutchinson, 2 Mylne & K. 238, the
Master of the Rolls observed, that, upon
the opening of the pleadings, he had
doubted whether the jilaintiff had stated
a case which entitled him to a dissolution
of the partnership ; for although a part-
nership would be dissolved in equity, if a
defendant had substantially failed in the
jierformance of his part of the agreement,
yet it was not the office of a court of
eipiity to enter into a consideration of
mere partnership squabbles. And see
Lord Eldon, in Goodman v. Whitcomb. 1
Jac. & W. 592 ; Hem v. Walsh, 2 Edw.
Cli. 129. Rut only little more is needed ;
and dissolution will be granted, where
dissension ])revents all hope of advantage.
Bi.>liop V. Rreckle.s, 1 Hoff. Ch. 534 ;
Seighortner v. Weissenborn, 20 N- J. Eq.
1 Fraud in inducing one to enter into a partnership, is a ground for dissolution.
Kosensteiu v. Burns, 41 F. R. 841.
456
THE LAW OF PARTNERSHIP.
[CH. XIV.
prcssivo conduct, quarrelling, indolence, and inattention, intem-
perance, or bad habits, and disgraceful conduct, wild speculation,
gross extravagance, absenting himself from his business, or enter-
ing into other business engagements inconsistent with his duty to
his partners, or any conduct which brings disgrace upon the firm
or impairs their credit, (/) — are all causes which may be suffi-
cient, if their degree be sufficient ; and otherwise not. For one
instance of the kind, or two, or three, the court may not interfere,
but will leave the parties to themselves, and hope for their reform
and reconciliation. Nor will the decree of dissolution be pro-
nounced merely because one of these, or similar modes of miscon-
duct, goes so far as to expose the other partners to some inconve-
nience, or to bring discomfort upon them. And if the mischief
complained of is specific, and a habit, and persisted in, the court
172. A decree for a dissolution will be
warranted, if it is impossible that the
partnership should be beneficially contin-
ued : namely, if the piinciples on which
the scheme is based are found, on exam-
ination, to be erroneous and im])ractica-
able, Beaumont v. Meredith, 3 Ves. &
B. 180; Clough v. Radclille, 1 De G. &
S. 164 ; or where the partnership is formed
to effect a particular object, which is
found to be impracticable, and wholly
fails, Nockells v. Crosby, 3 B. & C. 814,
5 Dow. & E. 751 ; Seighortner v. Weis-
senborn, 20 N. J. Eq. 172 ; or where the
circumstances have so changed as to
render it impossible to carry on the part-
nership without injury to all the partners,
Harrison v. Tennant, 21 Reav. 482 ; or
where the object of a partnership is de-
stro}'ed, as a steamboat, Claiborne v.
Creditors, 18 La. 501 ; or if one partner
excludes or claims to exclude the other
from his jiroper share of control in the
business ; or if, though not in terms
excluding him, he is .so conducting him-
self, as to render it impossible that the
business should be conducted on the stip-
nlated terms. Goodman v "Whitcomb, 1
Jac. & W. 569 ; Hale v. Hale, 4 Beav,
369 ; Smith v. Jeyes, 4 Beav. 503 ;
England v. Cowling, 8 Beav. 129 ; Chap-
man V. Beach, 1 Jac. & W. 594 ; JIarshall
V. Colman, 2 Jac. & W. 266 ; Richards v.
Davies, 2 Russ. & M. 347. See also Ken-
nedy V. Kennedy, 3 Dana, 239 ; Gowan v.
Jefifries, 2 Ashm. 296 j Maude v. Rodes,
4 Dana, 144 ; Story v. Moon, 8 Dana,
331 ; Garretson v. Weaver, 3 Edw. Ch.
385. In determining whether the court
will decree a dissolution, it will consider
the state of the partnership business and
the probable effect of a decree thereon.
Richards i: Baurman, 65 N. C. 162. See
also Popper v. Scheider, 7 Abb. Pr. N. s.
56. And, on a decree for dissolution,
equity will make such an order as to
render the decree effective ; namely, by
ordering a defendant, in England, to sign
a notice of dissolution in "The London
Gazette." Troughton v. Hunter, 18 Beav.
470.
(/) Norway v. Rowe, 19 Ves. 148;
Waters v. Taylor, 2 Ves. & B. 304 ;
Howell V. Harvey, 5 Ark. 278 ; Master
V. Kirton, 3 Ves. 74 ; De Berenger v.
Hammell, 7 Jarm. Conv. 26 ; Gow on
Part. (3d edit.) 227 ; Wilson v. Green-
wood, 1 Swanst. 481 ; Blakeney v. Dufaur,
15 Beav. 40 ; Hall v. Hall, 12 Beav. 414,
and note to 419 ; Williamson v. Wilson,
1 Bland, 418 ; Fogg & Vanderslice v.
Johnson, 27 Ala. 432 ; Durbin v. Barber,
14 Ohio, 311 ; Loomis v. McKennie, 31
Iowa, 425. Excluding one elected trustee
in an unincorporated company may be good
ground for a decree dissolving the part-
nership. Berry v. Cross, 3 Sandf. Ch. 1.
Or excluding a joint stockholder from his
right to participate in the management
of the partnership concerns. Werner v.
Leisen, 31 Wis. 169.
§ 359.] OF DISSOLUTION BY DECREE. 457
may see that injunction will answer as well as dissolution ; and
this is to be preferred, because it is a less violent remedy, {g) ^
§ 359. Dissolution where Continuance Injurious. — Such is the
general language of courts and text-writers. But behind all this
lies the general question, whether a court of equity would insist
upon binding together, in this relation, two or more parties, one
of whom distinctly desired a separation, and this for grounds ori-
ginating in any kind of misconduct of the others. No application
for dissolution by a court is, of course, made where either partner
may dissolve it at his pleasure : none, therefore, is made, unless
there is a valid contract of partnership to last for a time certain.
And, in any such case, we cannot but think the practical rule in
this country would be to permit the parties to separate, provided
it were obvious that harmonious and profitable co-operation was
not to be expected ; and especially if this were made impossible
by the fault of one partner, and the other desired the dissolution.
The cases cited in our notes will show that carelessness and waste
in the business of the partnership, the non-entry in the books of
money received, the exclusion of the partners plaintiff from an
inspection of the books and accounts, or from their due share of
influence and power in the concerns of the firm, and permission
of a partner in a banking-house to a customer to overdraw, coupled
with the taking security therefor to himself personally, — have
all been declared sufficient causes for dissolution, {h) And it has
been said, that where the affairs of a partnership are rightly before
the court, and it appears that these causes for dissolution exist,
(g) Howell v. Harvey, 5 Ark. 279 ; tnge, 4 Madd. 143 ; Goodman v. Whit-
Taylor v. Davis, 3 Beav. 388, note (e) ; comb, 1 Jac. & W. 689 ; Marshall v.
Baring v. Dix, 1 Cox, 213 ; Hall v. Colman, 2 Jac. & W. 266 ; Richards v.
Hall, 12 Beav. 414. In the matter of Davies, 2 Russ. & M. 347 ; Smith t'. Jeyes,
dissolution, courts will exercise a wide 4 Beav. 503 ; Wallworth v. Holt, 4 Mylne
discretion, and will not act upon slight & C. 635 ; Fairthorne v. Weston, 3 Hare,
grounds ; dissension may in some cases be 387 ; Richardson r. Hastings, 7 Beav. 325 ;
a suthcient ground. Slemmer's Appeal, Bailey v. Ford, 13 Sim. 495 ; Carlen v.
58 Pa. 168. Bat see note to Hall v. Hall, Drury, 1 Ves. & B. 158. Equity will
12 Beav. 414, at p. 419, in which the not interfere to decree the specific execu-
decision was reversed, on the ground that tion of an agreement for a partnership, as
the bill did not seek a dissolution of the it might be dissolved immediately after-
partnership. See also, as to this, Oliver wards. Henry v. Birch, 9 Ves. 357.
V, Hamilton, 2 Anst. 453 ; Waters v. [h) See cases cited in preceding notes.
Taylor, 15 Ves. 10 ; Harrison v. Armi-
1 Equity will decree a dissolution for the misconduct of a partner. Oteri v. Scalzo,
145 U. S. 578. As where a partner persistently violates the articles. Rosenstein v.
Burns, 41 F. R. 841. So where he excludes his copartner from participation in the
business. Groth v. Payment, 79 Mich. 290, 44 N. W. 611.
458 THE LAW OF PARTNERSHIP. [CH. XIV.
and in a degree to make the partnership injurious to innocent per-
sons, the court will decree dissolution, even although that relief
has not been specifically prayed for. (^)
§ 3G0. Inability to perform Agreements. — So, pecuniary inability
to fulfil material cngageinonts with the other partners, whether it
were the fault or the misfortune of the partner, would be deemed
a sufficient cause. As, if the partnership rested either expressly
or by implication, and substantially, upon the agreemeut of one of
the partners to contribute at any certain time, or under certain
circumstances, a certain amount to the funds of the partnership,
or to pay certain debts, or make certain purchases for the firm,
and he fails to perform this promise, through pecuniary inability,
it would be a sufficient cause for dissolution, (m) So, if he werj
unable to do his duty to the firm, by disease, not in its nature
temporary, but likely to continue for a long time, if it be not incur-
able,— as by palsy, for example ; or if he permanently loses health
or strength in any way, or his skill, or makes it apparent that he
does not possess the skill which is needed for the proper execution
of the work he undertakes to do, — any cause of this kind would
be sufficient, (o)
§ 361. Insanity. — Insanity, of course, would be among the
strongest grounds for decreeing dissolution, especially as the in-
sane partner could not of himself agree to the dissolution, how-
(i) Loscombe v. Russell, 4 Sim. 11. has been contracted between two persons.
But see Hall v. Hall, 12 Beav. 414, 419 n. founded on the contribution of capital by
(») Turnipseed v. Goodwin, 9 Ala. the one, and of personal labor and skill by
372. This case holds that, a partnership the other, and the latter should become
being formed for the purpose of buying disabled by the palsy to afford either the
and selling lands, each partner to furnish labor or skill, the partnership would be
an equal share of money, if one should dissolved, because the object of it could
refuse to make the necessary advances, it not be fulfilled. Traite du Con. de Soc,
•would be good cause for putting an end to Kos. 142, 152 ; 2 Bell's Comm. 634, 635 ;
the partnership ; but, as long as the part- 3 Kent's Comm. (9th ed.) 71; Story on
nership subsisted, a larger advance by one Part. §§ 291-294. In Sayer v. Bennet, 1
partner than it was his duty to make Cox, 107, 109, Lord Kenyon said: "I
would be compensated by allowing him think, indeed, it may be laid down as a
interest on such excess, or it might fur- general rule (without considering the par-
nish a cause of action for a breach of the ticular circumstances of the case), that
articles of copartnership. See also, on where partners are to contribute skill and
this point, Boyd v. Mynatt, 4 Ala. 79. industry, as well as capital, if one ]>artner
The same result would arise if one of the becomes unable to contribute that .skill, a
partners had lost his capacity to act sui court of equity ought to interfere for both
juris, by conviction and attainder of trea- their sakes." Jones v. Noy, 2 Mylne &
son, or by ab.sconding for debt or crime or K. 125, 129, 130 ; Wrexham v. Hudlestou,
felony, or any state-prison offence. Whit- 1 Swanst. 514, note ; Waters v. Taylor, 2
man v. Leonard, 3 Pick. 117. See Hunt Ves. & B. 299 ; Wray v. Hutchinson, 2
t;. Clark, 6 De G. M. & G. 232. Mylne & K. 235, 238.
(oj Pothier says, that if a partnership
§ 362.] OF DISSOLUTION BY DECREE. 459
ever desirable for himself. And here, undoubtedly, a decree of
dissolution would be granted upon the petition of those having
charge of the insane person and his property, even, perhaps,
without any cause additional to tlie fact of insanity, (jt?) One
qualification belongs to this cause, as it does to most of those
which have been mentioned : it is that of degree. Of course,
delirium from fever, or from a blow on the head, lasting a short
time and passing entirely away, would not be sufficient cause.
But, while there can be no specific rule as to the measure of in-
sanity which will determine its sufficiency as a cause for the dis-
solution of partnership, equity would decide such a question by a
reference to the universal standard which determines all ques-
tions of this kind: Is the insanity such, in cause, character, and
degree, as to incapacitate the partner from a reasonable perform-
ance of his duty now, and to take away all reasonable hope of his
so performing it within a reasonable time ? {q) ^
§ 362. Insanity does not Operate of itself to Dissolve. — There
is one other question, which, although it bears somewhat on tlie
other causes enumerated, is far more important in its reference to
insanity; and that is, whether the insanity — supposing it to be
certain, complete, and incurable — of itself terminates the partner-
ship, or is only good cause for a decree of dissolution, (r) The
(p) A leading case on this point is Langdale, Ld. Ch., in giving judgment in
Sayer v. Bennet, 1 Cox, 108. Lord this last case. See also Crawshay v.
Eldon refers to this case in deciding that Maule, 1 Swaust. 514, note,
a dissolution of partnership, on the lunacy (r) This is the precise question decided
of a partner, is to be obtained only by in Jones );. Xoy, 2 Mylne & K. 125. The
decree, and not by the act of the surviv- Master of the Rolls said : " It is clear,
ors, nor as long as they carry on business upon principle, that the complete incapa-
with his capital. He says : " It was city of a party to an agreement to perform
supposed that I had contradicted Lord that which was a condition of the agree-
Kenyou's doctrine in Sayer v. Bennet. ment is a ground for determining the con-
Certainly I did not contradict that doc- tract. The insanity of a partner is a
trine ; nor did I make any decree which, ground for the dissolution of the partner-
duly considered, was an assent to it." ship, because it is immediate incapacity;
Waters v. Taylor, 2 Ves & B. 303. See but it may not, in the result, prove to be
also Kirby v. Carr, 3 Y. & C. 184 ; The a gi'ound of dissolution, for the partner
Cape Sable Co.'s Case, 3 Bland, 606-674 ; may recover from his malady. When a
Griswold v. Waddington, 15 Johns. 57 ; partner, therefore, is affected with insan-
Leaf V. Coles, 1 De G. M. & G. 171 ; ity, the continuing partner may, if he
Sadler v. Lee, 6 Beav. 324 ; Jones v. Noy, think fit, make it a ground of dissolution ;
2 Mylne & K. 125 ; Wrexham v. Hudle- but, in that case, I consider with Lord
ston, 1 Swanst. 514, note. Kenyon, that, in order to make it a ground
(q) Pearce v. Chamberlain, 2 Ves. 33 ; of dissolution, he must obtain a decree of
Sayer v. Bennet, 1 Cox, 107 ; Sadler v. the court. If he does not apjtly to the
Lee, 6 Beav. 324. See the remarks of court for a decree of dissolution, it is to be
1 Raymond c. Vauglin, 128 111. 256, 21 N. E. 566.
460
THE LAW OF PARTNERSHIP.
[CH. XIV.
question might come up iu this form : A partner is taken to-day
with an insanity, which is soon found to be hopeless and entire.
Next week, or month, before lawfully appointed guardians have
obtained, or could have obtained, a decree of dissolution, his
partners, because they arc deprived of his sagacity or relieved
from his control, rush into mad or even fraudulent speculations,
and not only lose all the property of the firm, but bring upon it
an insolvency which it will require all the insane man's private
property to pay. He is not liable for these debts, if his insanity
terminated the partnership ; and, we should say, he would not
then be liable even, without notice, (s) on the same grounds on
which notice is not needed where the dissolution is by death.
But, if his insanity did not terminate his partnership, he and his
property are liable to all innocent parties for all debts contracted
before the decree.
This question has been somewhat considered. There are not
wanting strong reasons and high authority for the conclusion,
that insanity, certain, complete and hopeless, of itself and at
once dissolves the partnership. (^) But, we think, the decided
weight of authority, in England and in this country, opposes this
considered tliat he is willing to wait to
see whether the incapacity of his partner
may not prove merely temporary. If he
carry on the partnership business in the
expectation that his partner may recover
from his insanity, so long as he continues
the business with that expectation or hope
tliere can be no dissolution." See also
Kirby v. Carr, 3 Y. & C. 184 ; Besch v.
Frolich, 1 Phillips Ch. 172, 7 Jur. 73 ;
Sander v. Sander, 2 Collyer, 276. Besch
V. Frolich holds that, on a bill to dissolve
a partnership on the ground of the lunacy
of a partner, the court will not make its
decree retrospective even to the filing of
the bill ; still less to the time when the
defendant first became incapable of attend-
ing to business.
(s) In reference to the effect of a notice
of dissolution to an insane partner, it has
been held, that such a notice is sufficient
to put an end to a partnership. Mellersh
V. Keen, 27 Beav. 236 ; Robertson v.
Lockie, 10 Jur. 533 ; Bagshaw v. Parker,
10 Beav. 532.
(t) C. J. Parker, in Davis v. Lane, 10
N. H. 161, says: "It has been held, in
England, that the insanity of one partner
does not operate as a dissolution of the
])artnershlp ; but that object must be at-
tained through a court of ecjuity. But
the soundness of this princi[ile may, per-
haps, be doubted. It certainly could not
have been applied here prior to 1832, as
we had before that time no court through
whose decree in equity a dissolution could
have been effected. Admitting it to be
correct in its fullest extent, however, it
would not affect this case (a question of
the agency of a wife during the senseless
state of her husband); for each partner
has an interest, by the partnership con-
tract, and the interest of one partner
would not be terminated by the insanity of
another. In making a sale or contract, he
does not act as agent, but in his own riglit;
and the partnership name mny be used by
one, without any supposition that another
acts individually, or has any knowledge
or volition in relation to the matter. But,
so long as the partneishi[) continues, tiie
act of one binds the others ; and as it is,
in its effect, the act of all the jjartners, it
may deserve great consideration, whether
the insanity of one, in the absence of any
stipulation to the contrary, does not opei-
ate ipso facto as a dissolution of the part-
nership itself."
§ 364.] OF DISSOLUTION BY DECREE. 461
conclusion, and holds that the partnership continues until it is
dissolved by decree, (m)
§ 363. Judicial Determination of Insanity. — There is one ex-
ception which the courts might allow. If the insanity were
determined by due inquest, under process of law, and due public
notice were given, this might be held to operate a dissolution as
effectually as death, and with many of the incidents of a dissolu-
tion by death. It is true that, in such case, in this country, a
guardian would probably be at once appointed ; and this appoint-
ment would, as we have seen, effect a dissolution. We think,
however, that a legal finding and declaration of insanity might
have this effect. It may be well, also, to remark, that, in a case
of insanity, when the appointment of guardians would cause
much delay, we have no doubt a court of equity would receive a
petition from any proper person acting as the next friend of the
insane, and, upon cause shown, issue summarily a decree of dis-
solution. A verdict of an inquisition of lunacy should not, how-
ever, have any retrospective influence by relation, and affect any
honest transaction which took place previous to the verdict, (v)
§ 364. Business Success becoming Impracticable. — Besides
these causes, it is possible that the continuance of a partnership
may become impracticable for any honest purpose, by something
in the nature or the condition of the business for which it was
formed. As if to carry on a cotton manufactory, and the build-
ings are burned down, and the partners have no means to build
others ; or to carry on mining, and it can be shown that the busi-
ness is disastrous and wasteful, and that only reckless and
improvident persons could pursue it. We have seen that such
circumstances might, at once, dissolve the partnership. If they
had not this effect, equity would certainly give the proper relief
(u) See cases cited in preceding notes. and so it was held by the circuit judge, and,
(f) In Isler v. Baker, 6 Humph. 85, as- we think, correctly ; for, both upon
the court held that an inquisition of lun- principle and authority, the inquisition of
acy found against a member of a partner- lunacy, as found, did dissolve the partner-
ship dissolves ipso facto the partnership, ship, t/jso fado, and H. H. Bryan, at the
Turley, J., in delivering the opinion of time he executed the note, could only
the court, said: "Upon the trial, it was bind himself thereby." In Milne v. Bart-
contended for Isler, the administrator of let, 3 Jur. 358, it was held, that a com-
Joseph H. Bryan, that the partnership pre- mission of lunacy finding the fact of
viously existing between him and Henry insanity was sufficient evidence to justify
H. Bryan was dissolved by the commis- a decree for dissolution, without a refer-
sion of lunacy found against Joseph H. encetothe master for an inquiry. As to
Bryan ; and that, therefore, Henry H. the retrospective effect of a decree of dis-
Bryan had no power or authority to bind solution for insanity, see Besch v. f rolich
him by the note executed as before stated, cited ante, note (r).
462 THE LAW OF PARTNERSHIP. [CH. XIV.
to any partners who would otherwise be bound by their contract
to continue in a business which could only destroy their remain-
ing means, or had become an entirely different thing from that
whicli they had contemplated, (w) ^
§ 365. Arbitration. — We doubt whether a dissolution can be
said to be made by an award of arbitrators to that effect, even
where the award is wholly unobjectionable. Perhaps partners
would seldom refuse, except on grounds which would justify
setting aside any other award. And, if they did so refuse,
equity would probably deem such an award as a cause for decree
of dissolution which was entitled to much consideration. But
still it must be the acceptance of the award by the parties, and
carrying it into effect, or a decree carrying it into effect, which
operates the dissolution, and not the award itself. We have seen
that equity, as well as law, would be reluctant to enforce an
agreement to refer this or any other question to arbitrators ; and
for the reason that it dislikes to oust itself of its proper jurisdic-
tion. " This court," said Lord Eldon, " is as likely to decide aright
as any arbitrators." But as the law holds parties to any award
made upon questions actually and properly submitted, and open
to no objection from insufficiency of power, or erroneous exercise
of power on the part of the arbitrators, so would equity ; and,
therefore, we think it would compel a dissolution so awarded, {x)
{w) Baring v. Dix, 1 Cox, 213; Clai- Street v. Rigby, 6 Ves. 815 ; Heath v.
borne v. Creditors, 18 La. 501 ; Beau- Sansoin, 4 B. & Ad. 172 ; Maley v. New-
mont i;. Meredith, 3 Ves. & B. 180 ; man, 5 Dow. & R. 317 ; Byers v. Van
Clough V. Radcliffe, 1 De G. & S. 164 ; Deusen, 5 Wend. 268 ; Rolle Arbitr. b. 2 ;
Nockels V. Crosby, 3 B. & C. 814, 5 Dow. 3 Vin. Abr. 42. If an arbitrator be ap-
& R. 751 ; Harrison v. Tennant, 21 Beav. pointed to arbitrate a certain measure
182. contemplated between two parties as a
(x) The leading case on the power of dissolution of partnership, he is not ne-
ftrbitrators to dissolve a pai'tnership when cessarily bound to direct that the partner-
til matters in difference are referred, is ship shall be dissolved. Simmons v.
fireen v. Waring, 1 W. Bl. 475. See also Swaine, 1 Taunt. 549.
1 Where it has become evident that the partnership cannot be continued without
great loss, equity will decree a dissolution. Rosenstein v. Burns, 41 F. R. 841 ; Hol-
laday v. Elliott, 8 Ore. 84.
3673
OP BANKRUPTCY AND INSOLVENCY.
463
CHAPTER XY.
OP BANKRUPTCY AND INSOLVENCY.
SECTION I.
WHEN AND HOW A BANKRUPTCY DISSOLVES A PARTNERSHIP.
§ 366. Dissolution upon Bankruptcy. — It is a wcll-established
rule of law and of equity, that Bankruptcy or Insolvency, mean-
ing hereby legal and technical bankruptcy or insolvency, whether
of one partner or of the Wrm per se, operates a dissolution of the
partnership, (a)
§ 867. Time of Dissolution. — A question exists, however, as
to the time when a dissolution from this cause takes place. In
England, it seems now well settled, that the dissolution does not
take place until it is formally declared by competent authority ;
but then it goes back in its effect, by relation, to the time when
an act of bankruptcy was committed, (b) We should say, that
the dissolution took place as soon as the assets were vested in
{a) Fox V. Hanbury, Cowp. 445 ; Ex
parte Smith, 5 Ves. 295 ; Wilson v.
Greenwood, 1 Swanst. 471 ; Ciavvshay v.
Collins, 15 Ves. 217 ; Marquand v. New
York Manuf. Co., 17 Jolius. 525 ; Gris-
wold f. Waddington, 16 Johns. 436, 491 ;
Williamson v. Wilson, 1 Bland, 418 ;
Gowan v. JeH'iies, 2 Ashm. 296 ; Smith v.
De Silva, Cowp. 471 ; Ex parte Ruffin, 6
Ves. 126 ; Crawshay v. Maule, 1 Swanst.
507, note ; Wilkins v. Davis, 15 N. B. R.
460, Lowell, J. ; Halsey v. Norton, 45
Miss. 703. One who permits himself to
be held out as a partner may be made a
bankrupt, as a member of the firm, at the
suit of a creditor. Re Krueger, 2 Low.
66; Re Disideri, L. R. 11 Eq. 242; Ee
Rowland, L. R. 1 Ch. 421 ; Campbell v.
Hastings, 29 Ark. 512 ; Carmichael o.
Greer, 55 Ga. 116. An insolvent member
of a dissolved firm, who had given a bond
with a solvent surety to his former copart-
ners to pay the debts of the firm, cannot
petition his late copartners (the latter
being solvent) into bankruptcy. Re Beu»
nett, 2 Low. 400. A person who is part-
ner in two firms may be adjudged bankrupt
with each firm. /?ire Jewett, 15 N B. R.
126. A petition of one member of a firm
to have the firm declared bankrupt is no
bar, before adjudication, to a suit by one
of the partners on a claim due him indi-
vidually. Booth V. Meyer, 14 N. B. R.
575. When all the members of one firm
are partners in another firm, they cannot
prove its debt against the latter. In re
Savage, 16 N. B. R. 368.
(h) Fox V. Hanbury, Cowp. 445 ;
Hague V. Rolleston, 4 Burr. 2174 ; Ec
parte Smith, 5 Ves. 295 ; Harvey n. Crick-
ett, 5 M. & S. 336 ; Dutton v. Morrison,
17 Ves. 194 ; Barker v. Goodair, 11 Ves.
78 ; Thomason v. Frere, 10 East, 418 ;
Siegel V. Chidsey, 28 Pa. 287 ; Smith v.
Stokes, 1 East, 364.
464 THE LAW OF PARTNERSHIP. [CH. XV.
the assignee, with perhaps a retrospective effect, carrying back the
dissolution to the time of the filing of the petition of bankruptcy,
or possibly only to the issuing of the warrant, (c)
§ 868. Reason of Dissolution upon Bankruptcy. — That the cause
why bankruptcy operates dissolution, is its taking all interest and
property in the partnership stock out of the bankrupt's hands,
seems to be clear. Whatever has this effect causes a dissolution.
Thus, if there be a prayer for an account and a receiver, the
appointment of a receiver operates a dissolution, if he takes all
the property into his own hands and possession ; so that, after
such appointment, the power of giving preferences among the
creditors is gone, ((i) But if he is appointed rather as a man-
ager or overseer, leaving the property where it stood before, we
should doubt whether it would have the effect of a dissolution.
How far it would control or restrain the power of disposing of
the effects would probably depend upon the terms of the decree.
Moreover, it was distinctly held, where there were no statutes of
insolvency, properly so called, that actual insolvency, or inability
and refusal to pay debts, does not operate a dissolution ; and the
reas(m assigned is, that it does not of itself transfer the property
of the insolvent to assignees. And, even in England, absconding
is held not to operate a dissolution, although a very strong act of
bankruptcy, on which a sequestration may be founded, which
shall go back by relation to the absconding, (e)
(c) Morton, J., in Arnold v. Brown, 24 (d) Egberts v. Wood, 3 Paige, 517.
Pick. 93, held that " the insolvency of one The receiver is entitled to the possession of
or both partners, we think, would not pro- the books of the firm. Succession of An-
duce this effect. The insolvency of one drew, 16 La. Ann. 197.
might furnish to the other sufficient ground (c) Morton, J., in Arnold y. Brown, 24
for declaring a dissolution. But, in this Pick. 94, said : " In England, the abscond-
State, the inability to pay the company or ing would be an act of bankruptcy; and the
the private debts of the partners would not bankruptcy, when determined by regular
per se operate as a dissolution." In Eng- adjudication, would create a dissolution,
land, bankruptcy, and in some of our But the absconding is never relied on as a
States where insolvent laws exist, legal dissolution." And it was held, in accordance
insolvency may produce a dissolution, with the above, that the absconding of one
Wherever the one or the other operates to of the partners of a firm will not produce
vest the bankrupt's or insolvent's property a dissolution in this country ; overruling
in assignees or other ministers of the law, Whitman v. Leonard, 3 Pick. 179, on this
it would produce that effect. Probably a point. And see Ex parte Smith, 5 Ves.
voluntary assignment by a partner, of all 295 ; Hilliard on Bankruptcy, § 17 ; Fox
his property, would do the same. In Penu- v. Hanbury, Cowp. 445 ; Crispe r. Perritt,
sylvania, it is held, that simple insolvency, Willes, 467, 1 Atk. 133 ; Hague i'. Rolles-
without an assignment or any judicial pro- ton, 4 Burr. 2174; Smith v. Stokes, 1
cess, does not work a dissolution of the East, 363 ; Smith v, Oriell, 1 East, 368 ;
partnership, nor divest the partners of ^j: ^ja/Ye Williams, 11 Ves 5; Wilson v.
their dominion over the partnership prop- Greenwood, 1 Swanst. 482 ; Harvey v.
erty. Siegel t;. Chidsey, 28 Pa. 237. Crickett, 5 M. & S. 336 ; Barker v Good-
§ 370.] OF BxXNKRUPTCY AND INSOLVENCY. 465
§ 3G9. Analogy between Bankruptcy and Death. — Formal and
complete bankruptcy acts upon a partnership in many respects
like death. (/) If it be the bankruptcy of the firm, it is like
the death of all the partners. If the bankruptcy of one partner,
it is like his death. And we should expect this result upon a
mercantile partnership, because bankruptcy is the death of the
bankrupt as a merchant. If discharged, he may begin again, free
from his old debts, and without his old means, and he begins as a
new man. ^
Some of the consequences which illustrate the analogy between
bankruptcy and death are these : The bankrupt loses all posses-
sion of his property, and all power over it, and all interest in it.
There is always a legal possibility that the assets may pay his
debts and leave a surplus ; and when this happens in fact, the
interest and right of the party revive, because he is no longer a
bankrupt ; but, while he is one, his property is taken wholly from
his hands. (^)
SECTION II.
OF THE EFFECT OF THE BANKRUPTCY OF A PARTNER UPON SOLVENT
PARTNERS.
§ 370. Rights of Assignee. — His property, rights, and interests
pass from the bankrupt to his assignees. They do not become
partners in his stead, because the d'dectus personarum, and other
principles of the law of partnership, prevent this. But they
become tenants in common with the partners, and have the rights
and obligations of tenants in common, with some qualifications,
and, perhaps, some additions, which arise from the peculiar
origin of the tenancy, (h) Thus, the assignees may claim an
air, 11 Ves. 78; Button y. Morrison, 17 Ves. 11 Ves. 5. See Rothwell v. Devvees, 2
193; Marquand V. N. York Manuf. Co., 17 Black, 613.
Johns. 529. If a partner absconds, liis co- (g) Barstow v. Adams, 2 Day, 70 ; Kit-
partner may take exclusive possession of clien w. Bartsch, 7 East, 53; Cohen ?;. Gibbs,
the property of the firm for the benefit of 1 Hill (S.C.), 206 ; Stouffer v. Coleman,
the firm; and it has been held, that the ap- 1 Yeates, 399. The assignment of an in-
pointment of a receiver to take charge of the solvent debtor has the same effect. Cooper
property of the absconding partner does v. Henderson, 6 Binn. 189 ; Shirley v.
not divest the partner remaiiung of his Long, 6 Rand. 735 ; Bank v. Horn, 17
right to the partnershi[) property. Hamil How. 157.
V. Hamil, 27 Md. 679. (/t) Fox v. Hanbury, Cowp. 449; West
(/) Lord Eldon in Ex parte Wlliams, v. Skip, 1 Ves. 239 ; Smith v. Stokes, 1
30
466
THE LAW OF PARTNERSHIP.
[CH. XV.
account, and require a prompt and complete settlement of the
concern. (0 They cannot take the property and business into
tiieir own hands, and settle it themselves, because the solvent
partners, at least in equity, hold, in somewhat the same way that
surviving partners do, all tlie effects and property, and for the
same purpose, — that of winding up the concern. For this they
have the same power and duty, and are under the same obliga-
tions, and may be reached by the same process, and compelled to
discharge their dutv as surviving partners. And the assignees
have the same rights and remedies as the representatives of a
deceased partner. (^ ) It has, however, been held, that the
assignees become at once tenants in common with the solvent
partners, their representatives or assigns : they can neitlier bring
trover against the partners for the partnership effects, nor can
the solvent partners get their effects out of the hands of the
assignees when they have taicen possession ; for it is said, that
at law, they are equally entitled to tiie possession. (Jc)
East, 363 ; Smith v. Oriell, 1 East, 368 ;
Wilkins v. Davis, 15 N. B. R. 66. In
Barker v. (ioodair, 11 Ves. 85, Lord Eldon
says : " When one partner becomes a
bankrupt, his interest in the partnership
property is vested in his assignees ; and,
according to the doctrine of this court,
jjerhaps with equities in them, vastly
beyond what tenants in common have,
where no bankruptcy has occurred." And
Chancellor Kent, in Murray v. Murray, 5
Johns. Ch. 78 : " The solvent partner,
upon the dissolution of the partnership by
bankruptcy, being a tenant in common,
may retain and distribute the funds in his
possession ; and may, as was held in Fox
V. Hanbury, .sell those partnership effects
for a valuable consideration, and without
fraud. They cannot be called out of his
possession by his co-tenants, the assignees,
unless under the direction of this court, on
a bill filed by them for contribution ; or,
perhaps, where an account of the joint
fund is directed to be taken in bankruptcy.
But, on the other hand, there is no founda-
tion, in law or equity, for the solvent
partner to call to account either the part-
nership debtors who have bond fide settled
with the assignees, or the assignees them-
selves, for the funds in their possession.
They hold those funds by an equal title in
law with him, as tenants in common ; and
by a superior equitable title, as trustees,
charged with the payment of both the joint
aud separate debts." Anon., 12 Mod. 446;
Wilson V. Greenwood, 1 Swanst. 482 ;
]\Lirquand v. N. Y. Man. Co., 17 Johns.
525. See Richardson v. Tobey, 3 Allen,
81.
(/) Hilliard on Bankr. and Ins. 60 ;
Crawshay v. Collins, 15 Ves. 218.
U) Crawshay v. Collins, 15 Ves. 218 ;
Brown v. De Tastet, Jac. 284. In Hub-
bard V. Guild, 1 Duer, 662, it was held,
that a solvent partner is not entitled by
law to the sole administration of the assets
of the partnership, which is dissolved by
the separate insolvency of one or more of
the partners. The court added, that they
saw no reason why the solvent partner
should not himself be appointed the re-
ceiver, if he would give the necessary
security. It seemed to them that in all
cases where the dissolution of a partnership
is occasioned solely by the insolvency of
one of the partners, the solvent partner
ought to be appointed receiver, when his
capacity and integrity are unque.stioned.
The appointment was made accordingly.
See also Freeland v. Stansfield, 2 Sni. & G.
479.
(k) Murray v. Murray, 5 Johns. Ch. 70;
Smith V. Stokes, 1 East, 363; Salomons v.
Nissen, 2 T. R. 674 ; Fox v. Hanbury,
Cowp. 445 ; Smith v. Oriell, 1 East, 368 ;
Binford v. Dommett, 4 Ves. 756.
§ 373.] OF BANKRUPTCY AND INSOLVENCY. 467
§ 371. Dissolution results necessarily. — Whether the partner-
ship be deterniinaljle at will, or established for a time certain, it
is equally and immediately dissolved. And even if there were a
provision in the articles, that in case of bankruptcy of one part-
ner, the other partner should take all his share and interest, at
a certain valuation, and continue the business, and this provision
were carried into full effect, there is, nevertheless, a dissolution
of the i)artnership. (?) For the loss of his property and interest
takes out the bankrupt partner, and the loss of this partner dis-
solves the partnership. There is much doubt, however, whether
a provision of this kind is not avoided by bankruptcy, because it
gives to the ]>ankrupt a power over the disposition of his property
w^hich all the principles of the bankrupt laws deny to him ; but
the question can hardly be considered as settled. (???)
§ 372. Notice not required. — So, too, no notice or knowledge
of the bankruptcy or of the dissolution is requisite, any more
than in the case of dissolution by death, to prevent the partner
or his assets from being bound for new contracts or debts, and
to prevent the solvent partners from acting for him, except to
liquidate and realize the balance due to him. The rule arises,
in part, from the notoriousness of the fact of legal bankruptcy,
and, in part, from the taking from him, by the law, of all his
means of satisfying a liability, (w)
§ 373. Solvent Partners continuing Business. — If the solvent
partners, instead of winding up the concern, continue the busi-
ness, without stay or interruption, they do so at their own peril,
{!) Comyn on Cont. (4th Am. ed.) 528. Madd. 124 ; Ex jiartc Hodgson, 19 Ves.
(m) See Featherstonhaugh v. Fenwick, 206. And see Brandon v. Robinson, 18
17 Ves. 298; Rigden v. Pierce, 6 Madd. Ves. 429. The general distinction seems
353 ; Cook v. Collingridge, Jac. 607, 620. to be that the owner of the property may,
In Cookson i'. Cookson, 8 Sim. 543, the on alienation, qualify the interest of his
case of Cook v. Collingridge is criticised, alienee by a condition to take effect on
The following are some of the principal bankruptcy ; but cannot, by contract or
authorities applicable to the main point : otherwise, qualify his own interest by a
Lockyer v. Savage, 2 Strange, 947; Hunter like condition, determining or controlling
V. Galliers, 2 T. R. 133 ; Ex parte Hill, it in the event of his own bankruptcy, to
Cooke's B. L. 228, 1 Cox, 300 ; Ex parte the disappointment or delay of his credit-
Bennet, Cooke's B. L. 229 ; In re Murphy, ors ; the jus disponendi, which for the first
1 Sch. & L. 44 ; Ex parte Henecy, cited purpose is absolute, being, in the latter
id.; In re JMeaghan, 1 Sch. & L. 179; instance, subject to the disposition pre-
Dommett v. Bedford, 6 T. R. 684, 3 Ves. viously prescribed by law. Note to 1
149; Ex parte Cook, 8 Ves. 353; Ex parte Swanst. 481.
Hinton, 14 Ves. 598 ; Ex parte Oxley, 1 [n) Vulliamy v. Noble, 3 Meriv. 614 ;
Ball & B. 257 ; Higinbotham v. Holme, 19 Lacy v. Woolcot, 2 Dow. & R. 458 ;
Ves. 88; Ex parte N ere, 19 Ves. 93, 1 Thomason r. Frere, 10 East, 418; Franklin
Rose, 281 ; Ex parte Young, Buck, 179, 3 v. Brownlow, 14 Ves. 550, 557.
468 THE LAW OF PARTNERSHIP. [CH. XV.
and upon precisely the same terms and responsibility which have
already been stated in reference to surviving partners, (o)
§ 374. Effect of Bankruptcy on Attachment. — It may be stated,
as another instance of the analogy between the actual death of a
partner and that bankruptcy which is a commercial death, that
the latter suspends, or, rather, annuls, any attachment or execu-
tion of his property or his interest in the firm, (p) ^ We should
say, however, that the American rule of bankruptcy would be
applied to this case, if it were a foreign bankruptcy. That is, if
there were a foreign firm, which went into bankruptcy abroad,
and a creditor of one of the partners, in this State, attached or
was levying upon his interest in property within this State,
belonging to the firm, the foreign bankruptcy would not suspend
this attachment or levy. But, if the foreign assignee had taken
possession of the property, his possession would have completed
his title, and would prevent the attachment or levy. And, in this
respect, our States are foreign to each other, (q)
§ 375. Actions by or against Firm. — All actions for recovery
of debts due to the firm may be brought in the name of the
(o) Crawshay v. Collins, 15 Ves. 218 ; support the text, which is the American,
Brown V. De Tastet, Jac. 392; West y. in opposition to the English, doctrine. We
Skip, 1 Ves. 239, 456. furnish a number of tne authorities, both
(p) Barker i'. Goodair, 11 Ves. 78 ; early and recent. Proctor v. Moore, 1
Dutton V. Morrison, 17 Ves. 193 ; In re Mass. 198 ; Baker v. Wheaton, 5 Mass.
Wait, 1 Jac. & W. 605. The interest of 509 ; Watson v. Bourne, 10 Mass. 337 ;
each partner being his share of the surplus, Ogden v. Saunders, 12 Wheat. 213; Pren-
subject to all the partnership accounts, tiss v. Savage, 13 Mass. 20 ; Tappan v.
that interest only is liable to the execution Poor, 15 Mass. 419,422; Blake r. Wil-
of a creditor ; and, by the bankruptcy of liams, 6 Pick. 286, 306 ; Agnew v. Piatt,
one, his interest is divested, and vests in 15 Pick. 417 ; Betts v. Bagley, 12 Pick,
the assignees, by relation to the act of 572, 579 ; Savage v. Marsh, 10 Met. 594 ;
bankru]rtcy. Brickwood v. Miller, 3 Meriv. Fiske v. Foster, 10 Met. 597 ; Springer v.
279 ; Ex parte Farlow, 1 Rose, 421 ; Cald- Foster, 2 Story, 383 ; Shaw v. Bobbins,
well V. Gregory, 1 Price, 119-130; Ex 12 Wheat. 369, note; Milne y. Moreton,
parte Peake, 1 Madd. 358; Ex parte Ruffin, 6 Binn. 353; Harrison v. Sterry, 5 Cranch,
6 Ves. 126 ; Ex parte liowlandson, 1 Rose, 289, 302 ; The Watchman, 1 Ware, 232,
419 ; Campbell?;. MuUett, 2 Swanst. 551- 237 ; Dawes v. Head, 3 Pick. 128 ; Rich-
575 ; Egberts v. Wood, 3 Paige, 517. See ards v. Dutch, 8 Mass. 506 ; Burk v. Mc-
"Willis V. Freeman, 35 Vt. 44. The sub- Clain, 1 H. & McH. 236 ; Wallace i;.-
ject of the attachment of a partner's inter- Patterson, 2 H. & McH. 463 ; Ward v.
est is discussed in Day v. McQuillan, 13 Morris, 4 H. & McH. 330 ; Smith v. Smith,
Minn. 205. 2 Johns. 235 ; Bird v. Caritat, 2 Johns.
(q) The authorities on these points are 342. See Nicholson v. Ricketts, 2 E. &
very numerous, and at one time were very E. 497.
conflicting. The later authorities generally
1 The reason of this is that the bankruptcy and assignment pass the title to the
assignee ; and the creditors of the partners cannot attach property belonging to the
assignee and the solvent partner. See however Fern v. Gushing, 4 Gush. 357, contra;
see also Forsaith v. Merritt, 1 Low. 336 (semble).
376.]
OF BANKRUPTCY AND INSOLVENCY.
469
solvent partners and the assignees of the bankrupt partners ; (r) ^
and all actions against the firm should be brought against all
the partners by name, (s) including the bankrupt, (i) unless he
has been discharged, (w) If he has been discharged, and is still
made defendant, it would seem that he may have judgment
against the plaintiff; and the plaintiff may have judgment against
the other partners, (y) In suits in equity, different rules prevail
from those which govern suits at law. The general principle
there may be said to be, that the parties actually interested must
always be joined, whether as plaintiffs or defendants. Qw')
§ 376. Effect of Discharge of one Partner. — If one partner be
bankrupt, his discharge does not discharge the other partners,
nor affect their indebtedness, excepting as to the sum which the
creditor takes by way of dividend ; which is, of course, deducted
from the debt due to him. If all the partners, or the firm as
such, become bankrupt, it is still true that the discharge of one
or more affects only those discharged, {x}^ If other partners
(r) Thomason v. Frere, 10 East, 418 ;
Murray v. Murray, 5 Johns. Ch. 70 ;
Hacker i'. Shepherd, 2 Chitty, 652 ; Gra-
ham V. Robertson, 2 T. R. 282. An action
does not abate by the bankruptcy of the
plaintiff. The assignees can continue the
action in his name. Waugh v. Austen,
3 T. R. 437.
(s) Bristow V. James, 7 T. R. 2.^7 ;
Byers v. Dobie, 1 H. Bl. 236 ; Ditchburn
V. Spracklin, 5 Esp. 31 ; Dodge v. Dicas,
3 B. & Aid. 611 ; Eice v. Shute, 5 Burr.
2611 ; Vernon v. Jefferys, 2 Strange,
1146. But see, under a peculiar state of
facts, Colwell v. Lawrence, 38 Barb. 643.
(0 1 Chit. PI. (10th Am ed.) o3.
(ti) Tuttle V. Cooper, 10 Pick. 291.
(v) " Where a defence can be made by
one or more of the defendants, either by
plea or by proof on the trial which admits
the making of the original joint contract,
but shows matter of personal exemption
or discharge, whether such exemption
arises from an incapacity to contract (as
in case of coverture or infancy) or
by matter of subsequent discharge (as
in case of bankru{)tcy), but which leaves
the other contracting parties liable to the
performance of the contract, such party
may have a separate judgment against the
plaintiff, and the plaintiff may have a
valid judgment against the other contract-
ing parties." Per Shaw, C. J., in Tuttle
V. Cooper, 10 Pick. 291. A discharge in
bankruptcy granted to one member of a
partnership, after he alone had been
adjudged bankrupt, in a proceeding affect-
ing him alone, to which his copartner was
not a party, is not a bar to an action,
against him and his copartners, by a part-
nership creditor, when the creditor shows
affirmatively, that, at the time of the
petition, there were partnership assets as
well as partnership debts. Crompton v.
Conkling, 15 N. B. R. 417. But see Wilkins
V. Davis, 15 N. B. R. 60 ; In re Jewett
15 N. B. R. 126, 139.
{w) Mechanics' Bank v. Seton, 1 Pet.
299 ; Story v. Livingstone, 13 Pet. 359 ;
Hussey v. Dole, 24 Me. 20 ; McConnell v.
McConnell, 11 Vt. 290 ; Noyes v. Sawyer,
3 Vt. 160 ; Crocker v. Higgins, 7 Conn.
342 ; Hawley v. Cramer, 4 Cow. 717 ;
Oliver v. Palmer, 11 G. & J. 426 ; Park v.
Ballentine, 6 Blackf. 223 ; West v. Ran-
dall, 2 Mass. 181.
(x) A partner who, after getting his
certificate, has taken up the notes of the
1 McNutt V. King, 59 Ala. 597 ; Halsey v. Norton, 45 Miss. 703 ; Browning v.
Mai-vin, 22 Hun, 547. But see contra, Cunningham i'. Munroe, 15 Gray, 471.
a Where a partner becomes bankrupt individually and is discharged, the firm assets
470 THE LAW OF PARTNERSHIP. [CH. XV.
are not discharged, each of them mav be sued for the whole of
the bahince of the debt which remains unpaid, (v/) The bank-
ruptcy itself operates a discharge of an execution against the
partnership, because it supersedes all remedies which any cred-
itor resorts to, in favor of all the creditors, for whose equal benefit
it takes possession of all the property. (2)
§ 377. Power of Solvent Partner. — There are many cases in
England turning upon the right of the solvent partner to pay
debts, or otherwise dispose of the common property, after an act
of bankruptcy by a partner, but before a declared bankruptcy.
There, as soon as the decree of bankruptcy is made, it goes back
by relation, as we have before remarked, and makes the bank-
ruptcy effectual from the first act of bankruptcy. And, with us,
all transfers or payments before the bankruptcy, made in con-
templation of it, or within a certain period before it, are avoided
as against the general creditors, (a) We apprehend this rule, on
principle, must apply here to the acts of the solvent partner. In
general, these acts cannot affect the creditors of the firm, because
the solvent partner is bound in solido to pay them. What he does,
however, may waste his means, so that he ceases to be solvent,
or it may indirectly affect the several debtors, by lessening a sur-
plus of his interest in the joint fund to which they might look.
But, to any questions of this kind, there is but one principle
applicable in practice. It is, that the solvent partner has pos-
session of, and full power over, all tlie effects of the partnership ;
after the bankruptcy is declared, that partnership is dissolved ;
firm is permitted to prove against the ton v. Morrison, 17 Ves. 19S ; /ji-reWait,
joint estate. Atkins v. Atkins, Buck, 1 Jac. & W. 605.
479. (a) Everett v. Stone, 3 Story, 446 ; Has-
(?/) ^x par/f Bolton, Buck, 13 ; Heath sels r. Simpson, Doug. 92; McKenzie r.
V. Hall, 4 Taunt. 326; Sleeeh's Case, 1 Garrison, 10 Rich. 234; Atkinson v.
Meriv. 570 ; Browne v. Carr, 7 Bing. 508. Farmers' Bank, Crabbe, 529 ; Fidgeon v.
{£) Barker v. Goodair, 11 Ves. 78 ; Dut- Sharp, 1 Marsh. 198.
not being conveyed nor the firm creditors included in the schedule, the bankrupt is
not discharged from his firm debts. Glenn v. Arnold, 56 Cal. 631 ; Corey v. Perry, 67 Me.
140 ; Poillon V. Lawrence, 77 N. Y. 207 (semble). Consequently where A. was a member
of two firms, and A. himself and one of the firms became bankrupt and obtained a dis-
charge, A. was not discharged from the debts of the other firm. Perkins v. Fisher, 80 Ky.
11. But it has been held that a discharge of a bankrupt from all his debts ojjcrates
necessarily to discharge him from the debts of a firm to which he belongs ; Hawley v,
Campbell, 62 Cal. 442 ; and it has been held in some jurisdictions that since the part-
nership debts are provable against the individual partner, any discharge of the part-
ner necessarily protects him against the partnership obligations. Ex parte Hammond,
L. R. 16 Eq. 614 ; In re Webb, 4 Sawy. 326 ; Willson' v. Gomparts, 11 Johns. 193.
See Barclay v. Phelps, 4 Met. 397.
§ 378.] OF BANKRUPTCY AND INSOLVENCY, 471
and now this solvent partner holds and disposes of the effects, as
tnistec, for all interested, (i) ^ And if, in the exercise of his
undouhtcd power, either before or after the declaration of bank-
ruptcy, he commits a fraud, actual or constructive, all those whom
it would injui'c may avoid it, or have their remedy against him
for the damatres it causes, (e)
§ 378. Proof by Partner against Copartner. — A rule has been
laid down in England, and referred to a special provision in what
is there called Sir Samuel Romilly's act, which rests also on gen-
eral ])rinciples and sound reason, and has, we consider, been
adopted in the jurisi)rudence of this country. It is tliis : Each
partner is liable for all the debts of the firm ; but each partner is
liable, as a principal debtor, for his own share, and as a surety
for the other partners for the remainder. Hence, a solvent part-
ner who pays all the debts of the concern may prove, against
assignees of the insolvent partner, that proportion of what the
solvent partner has paid which the insolvent would have paid if
also solvent. (cZ) Thus, if a firm consist of three persons, and
owes large debts, two of the three become insolvent, and the third
pays all the joint debts. He has paid one-third as his own debt,
and two-thirds as the debts of the other partners, one-third each.
But it seems that the solvent partner cannot consider the other
two as sureties for each other to him. If, therefore, one of the
two has a large separate estate, and the other little or nothing,
all he can do is to prove his third against the one, and the other
third against the other, although he may get no dividend on this
latter third. This, at least, would seem to be the prevailing
doctrine in the decided cases, (e) But Lord Eldon expressed a
different opinion, and remarked, that he thought the equity whicli
(b) Fox V. Hanhury, Cowp. 445 ; (c) Ramsbottom v. Duck, 1 Jlont. on
Harvey v. Crickett, 5 M. & S. 336 ; Part. 135, appendix ; Bicrgs v. Fellows,
Parker y. Muggridge, 2 Story, 346; Wood- 8 B. & C. 402. See Ransom t: Van
bridge v. Swann, 4 B. & Ad. 633 ; In re Deventcr, 41 Barb. 307 ; Walsh v. Kelly,
Robinson, 1 Mont. & A. 18 ; Smith v. 42 Barb. 98.
Oriel), 1 East, 368 ; De Tastet v. Carroll, (d) Watson v. Sheath, 4 IMadd. 477 :
1 Stark. 88 ; In re Wait, 1 Jac. & W. 605. Butcher v. Forman, 6 Hill, 585, per Nel-
See Westcott v. Tyson, 38 Pa. 389, on the son, C. J.
question of one of the insolvent partners (c) Ex parte Yonge, 2 Ves. &B.Zd called
assisting a third party in the purchase of Ex parte Young in 2 Rose, 40 ; Ex parte
the creditors' claim. Ogilby, 3 Ves. & B. 133, called Ex parte
1 So where two firms entered into an adventure in partnership, and one of the firms
became insolvent, the other firm had a right to take all the assets of the joint
adventure for the purpose of settling the accounts. Meador v. Hughes, 14 Bush, 652.
472
THE LAW OF PARTNERSHIP.
[CH. XV.
made them sureties to each other for each other continued after
the bankruptcy. (/) And this rule seems to have been applied
in one case. (//) ^
§ 379. Acceptance 'of Assignee as Debtor. — The assignees and
the creditors may lose their claim against a retiring partner for
debts due from the pai-tnership, by the assignees making them-
selves responsible. Thus, if after the retirement, and an agree-
ment between the partners that the remaining partner shall
continue the business and pay all the debts, and a part of that
business was to act for the assignees in settlement of a bankrupt
estate; and the assignees, knowing the retirement and agi-eement,
continued to employ the remaining partner alone, and he became
insolvent, and it turned out that the partnership owed a large
balance to the estate or to the assignees, — the creditors have no
power to hold the retiring partner, because the assignees have dis-
charged him by their acts ; but they will hold the assignees as
Ogilv}' in 2 Rose, 177 ; Wood v. Dotlgson,
2 M. & S. 195 ; Ex parte Watson, Buck,
449. In Ex parte Taylor, 2 Rose, 175, a
solvent partner was holden entitled to
prove against the estate of a bankrupt
copartner the anionnt of the balance due
to him upon the jiartnership account,
first satisfying the partnership debts, or
indemnifying the bankrupt against them.
And in Ex parte King, 17 Ves. 115, under
a joint commission, the separate estate of
one was determined to have a lien on the
other's share of a surplus of the joint
estate, in respect of a debt proved upon
bills drawn by the one in the name of the
firm for a seyiarate debt ; and that the joint
creditors might come in with the separate
creditors for the deficiency. See also Ex
parte Reid, 2 Rose, 84.
(/) Ex parte Hunter, Buck, 552 ; Ex
parte Smith, Buck, 492.
((/) Ex parte Plowden, 3 Mont. & A.
402, 2 Deac. 456. A., B., & C. being part-
ners, A. and B. borrowed 10,000^. for the
firm on mortgages of their separate estates.
The firm became bankrupt ; C. was wholly
insolvent ; and A.'s mortgaged estate j)ays
more than his share of the debt. It was
held that A.'s estate has a claim to contri-
bution from B.'s for the difference between
what B.'s estate sells for and half the debt
of 10,OOOZ. Sir John Cross observed :
"The rights of the parties are not altered
by bankruptcy. The facts, therefore,
are simply these : two codebtors give mort-
gages as security on their several estates.
As one failed to make good the sum
secured, the other has made up the dif-
ference, whereas the amount should
be charged equally on the two estates.
I am of opinion that, as the assignees
have 2,771/. in their hands, the sepa-
rate creditors of Jellicorse are entitled
to that sum, after which his estate will
have paid 1,000/. more than Kempson's ;
therefore the whole 2,771/., subject to the
claim for 159/., should be fiaid over to the
separate estate of Jellicorse."
1 It has been held that a partner cannot prove a claim for contribution against his
copartner, who is bankrupt, in competition with the separate creditors. In re Hamil-
ton, 1 F. R. 800. It was intimated in the same case that if a partner fraudulently
appropriated firm assets, the joint estate might prove the amount against the separate
estate in competition with firtn creditors ; but could not do so if the appropriation was
not fraudulent. Ace, Cowan v. (Jill, 11 Lea, 674. In Bird v. Bird, 77 Me. 499, 1 Atl-
455, however, it was held that the joint estate might prove against the separate estate,
in competition with the separate creditors, even for a mere debt due the firm by the
partner.
§ 380.]
OF BANKRUPTCY AND INSOLVENCY,
473
personally responsible, (h) The court has gone so far as to per-
mit a retiring partner to prove his claim against the bankrupt
partner, although the debts of the firm were not paid, when the
joint creditors have discharged the retiring partner, by directly
or indirectly accepting the remaining jjartner as their only cred-
itor, as by sanctioning by their conduct and acquiescence an
arrangement to that effect between the partners, (i) Such a case
must be rare, however.
§ 380. Exception in case of Fraud. — This distinction seems
also to be taken. If one is defrauded into advancing money to
become a partner, and the fraudulent party becomes bankrupt,
the defrauded party may prove against his estate for the amount
he so advanced, unless he had held himself out as a partner. By
so doing, even for a very short time, he had incurred the liabilities
of a partner, and cannot prove in competition with joint cred-
itors, (y) If a retiring partner has a covenant of the remaining
partner to pay all the debts, but the remaining partner becomes
bankrupt, leaving them or any of them unpaid, and the retiring
partner is held to pay them, and does pay them, — for the amount
he so pays he may prove against the several estate of the bankrupt
partner, {k)
(h) If an assignee under a commission
of bankruptcy employs an agent to receive
money, and he embezzles it, the assignee
will be liable to make it good to the
creditors, unless he consulted the body of
the creditors in the appointment of the
agent. In re Litchfield, 1 Atk. 87.
(i) Ex parte Grazebrook, In re Naylor,
2 Deac. & Ch. 186. lu this case, A., being
a dormant partner with B., dissolves the
partnership, and B. is declared indebted
to A. on balance. A. sues B. for balance,
and receives cognovit for debt and costs.
B. become? bankrupt. It was held that
A. is entitled to prove his debts against
the estate, although some partnership
debts are unpaid. See also Parker i\
Ramsbottom, 3 B. & C. 257. And see
contra, in case of ostensible partners. Ex
parte Ellis, 2 Glyn & J. 312 ; Ex parte
Carter, 2 Glyn & J. 233. And see Ex
parte Moore, 2 Glyn & J. 166.
(j) In Ex parte Broome, 1 Rose, 69,
A., induced by the fraudulent representa-
tions of B. as to the profits of his busi-
ness, gives him a certain sum of money
for a share of it. On the discovery of the
fraud, A. files a bill in equity for an
account, to have the partnership declared
void, and for a receiver. The receiver was
ordered. B. becomes bankrupt. Petition
by A. to be admitted to prove his commis-
sion refused, with liberty to make a claim.
It was held that although A., as against
B., might have an equity to say he never
was a partner, it would be difficult to say
so as against third persons. Lord Eldon
expressed himself at first inclined to grant
the prayer of the petition, provided the
petitioner would abandon the suit in
equity and the receiver, but took time to
consider ; and afterwards (observing that
although the petitioner might have an
equity to be considered as never having
been a partner, yet that it was extremely
difficult to say that, as to third persons,
he was not a partner), made an order that
the petitioner should be at liberty to enter
a claim only for the amount of his de-
mand, but not to prove with the separate
creditors.
{k) Wood V. Dodgson, 1 Rose, 47. In
this case, a partner continuing the busi-
ness took an assignment of all the stock,
474
THE LAW OF PARTNERSHIP.
[CH. XV.
§ 381. Proof between Firms with Common Member. — We have
already referred to the case, not unfrequently occurring, where
there are two firms, with some persons who are partners in both.
We have seen that no suit at law can be maintained between
them ; but a suit in equity may be. And whether one firm can
prove against the other firm seems to be determined by the ques
tion, whether the one firm is liable for the joint debts of the
other. That is, if the solvent firm must pay the debts of a bank-
ruj)t firm, it cannot prove against tlie estate of that firm in com-
petition with the creditors whom the solvent firm must itself
satisfy. (?) ^
It has been held that an agreement between one partner and a
third person, that the latter shall share in the profits of the
former, as profits, renders him liable as a partner to the cred-
itors of the firm, although, as regards the other members of the
firm, he is not their copartner. (U)
&c., and covenanted to indemnify the retir-
ing partner from the debts then owing from
the partnership. The continuing partner
became bankrupt, and obtained his certi-
cate ; and subsequently an action was
commenced against the retiring partner,
upon an acceptance of the partnership.
It was held that no action would lie
against the bankrupt upon the covenant,
since, under 49 Geo. 3, ch. 121, § 8, the
retiring partner might, on his liability,
have resorted to and proved his debt,
under the commission, and was therefore
barred by the certificate. See also Ex
parte Young, 2 Rose, 40 ; Ex parte
Hesham, 1 Rose, 146. So, one partner
may agree to give a retiring partner a sum
for the concern, though they knew the
partnership to be insolvent (provided no
fraud was intended), and the estate will be
liable. Ex parte Peake, In re Lightoller,
a bankrupt, 1 Madd. 346, 354. See also
Perring v. Hare, 2 C. & P. 401 ; Whiting
V. Furanet, 1 Conn. 60.
(/) Ex parte Adams, 1 Rose, 305. See
also Cooke's Bankr. Laws, 538 ; Ex parte
Hesham, 1 Rose, 146 ; Ex parte Cook,
Mont. 228 ; Cases of Shakeshaft, Stirrup
& Salisbury, 6 Ves. 123, 743, 747 ; Ex
parte Hargreaves, 1 Cox, 440 ; Ex parte
St. Barbe, 11 Ves. 413 ; Ex parte St.
Johns, Cooke's B. L. 510; Ex parte Cas-
tell, Ex parte Stroud, 2 Glyn & J. 124,
127 ; Ex parte Sillitoe, 1 Glyn & J. 374 ;
Ex parte Williams, 3 Mont. D. & D. 433 ;
McCormick's Appeal, 55 Pa. 252.
(11) Fitch V. Harrington, 13 Gray,
468. See, on the relative rights of credit-
ors of the Jirm and creditors of the indi-
vidual partners, Reeves v. Ayres, 38 Dl.
418 ; Lewis i\ Conrad, 11 la. 153 ; Levally
V. Ellis, 13 la. 544 ; Jones v. Jones, 13
la. 276. A person who lends the entire
capital to an individual partner, for the
purpose of commencing business, has an
equity equal to that of the cieditors of
the firm. Reeves v. Ayres, 38 111. 418.
1 If both firms are bankrupt, it is clear that there can be no proof by one against
the other. See In re Wakeham, 13 Q. B. D. 43.
§ 382. J OF BANKRUPTCY AND INSOLVENCY. 475
SECTION III.
HOW THE FUNDS ARE APPROPRIATED TO THE DEBTS.
§ 382. Distribution of the Joint Estate. — We have seen that
the great majority of interesting questions concerning partner-
ship fall within the jurisdiction of equity. This is still more the
case with questions of bankruptcy, which go into equity almost
exclusively. We might expect that questions which connect part-
nership with bankruptcy would be, more than most others, deter-
mined on equitable principles. Hence the rule is distinctly
established in equity, that, in bankruptcy of a partnership, the
joint property forms a fund appropriated to the joint creditors,
and the several property of each creditor a several fund appro-
priated to the several creditors of each partner.' And the joint
creditors cannot go to the several property until the several cred-
itors are paid in full, and there is a surplus over, by which the
joint creditors may benefit. On the other hand, the several
creditors cannot look to the joint fund until all the joint debts
are paid, and there is a surplus ; and then the several creditors
of a partner may resort to that partner's interest in that sur-
plus. On') It has, however, been held that, if one partner pays
(m) In re Smith, 16 Johns. 102; Fox B. & P. 288; Croft v. Pyke, 3 P. Wms.
V. HanbuiT, Cowp. 445 ; Moody v. Payne, 182 ; Ex psirte Ruff, 6Ve 126 ; Ex parte
2 Johns. Ch. 548 ; Eddie v. Davidson, Williams, 11 Ves. 5 ; West w. Skip, 1 Ves.
Doug. 650 ; Smith v. Stokes, 1 East, 367 ; Sen. 239, 242 ; note to Young v. Keighly,
"Wilson V. Gibbs, 2 Johns. 282 ; Taylor v. 15 Ves. 559 ; Dutton v. Jlorrison, 17 A^es.
Fields, 4 Yes. 396 ; Chapman v. Koops, 193-205 ; Watson ■;;, Taylor, 2 Yes. & B.
3 B. & P. 289 ; Parker v. Pistor, 3 299 ; King v. Sanderson, 1 Wightw. 50 ;
1 Y'hen a partnership is insolvent, the partnership creditors have the priority with
regard to the partnership assets. They are to be paid in full, before the separate credit-
ors can come upon the assets. Peters v. Bain, 133 U. S. 670 ; Evans v. AVinston, 74
Ala. 349 ; T^nion Nat. Bank v. Bank of Commerce, 94 111. 271 ; Moody v. Downs, 63
N. H. 50 ; Colwell v. Weybosset Nat. Bank, 16 R. I. 288, 15 Atl. 80."
It is held in England that where a person is represented as partner in a business,
which really belongs to a sole trader, (that is, where there is only a partnersliip by
holding out), the assets of the business are to be treated, for the purpose of distribution
in bankruptcy, as partnership assets, and the creditors of the business are to be con-
fined to them, hi re Rowland, L. R. 1 Ch. 421 ; Ex parte Hayman, 8 Ch. D. 11
(C. A. ), Ace. In re Krueger, 2 Low. 66. In Texas, however, it has been held that since
there is no partnership, only an estoppel as to certain persons to deny one, the credi-
tors of the business will be given no priority over the individual creditors in distribut-
ins the assets of the business. Grabenheimer v. Rindskoff, 64 Tex. 49.
476 THE LAW OF PARTNERSHIP. [CH. XV.
more than his share of the partnership debts, he has in equity a
claim on the ])artnership property, superior to the claims of the
separate creditors of the copartners, {yiwi)
It has been held that the separate creditors of a person who is
a member of two partnerships have a preference as to his interest
in property in one of the firms, as against creditors of the other
firm, (rnvini)
§ 383. Distribution of Partner's Separate Estate. — So far as the
inability of the several creditors to look to the joint fund until
the payment of the debts leaves a surplus, the law also is quite
settled. But it is not settled that the partnership creditors may
not at law look to the several funds at once, in common with the
several creditors.^ So far as the present weight of authority
King V. Rock, 2 Price Exch. 198; 18 Ind. 270 ; Tenney t'. Johnson, 43 N. H.
Barken'. Goodair, 11 Ves. 78-85 ; Church 144 ; Nixon v. Nash, 12 Ohio, 647. See
V. Knox, 2 Day, 514 ; Peirce v. Jackson, Backus v. Murphy, 39 Pa. 397 ; Cope's
6 Mass. 242 ; Wilson v. Conine, 2 Johns. Appeal, 39 Pa. 284 ; Houseal's Appeal,
280 ; Knox v. Simmons, 4 Yeates, 477 ; 45 Pa. 484 ; Crawford v. Baum, 12 Rich.
Wallace r. Patterson, 2 H. & M<,-H. 463 ; L. 75 ; Willis v. Freeman, 35 Vt. 44 :
Harrison v. Sterry, 5 Cranch, 289 ; Mc- Lewis v. Conrad, 11 la. 481.
Coombe v. Dunch, 2 Dall. 73 ; Sanderson {mm) Crooker v. Crooker. 52 Me. 267.
V. Stockdale, 11 Md. 563 ; Linford v. Lin- (minm) Weaver v. Weaver, 4Q N. H.
ford, 4 Dutch. 113; Dunham v. Hanna, 188.
1 Since the partners are liable for all firm debts, it would seem that the partnership
creditors might also prove against the estates of the individual partners, and share
with the other individual creditors. That they may make proof of their claims against
the individual estates is everywhere admitted. In re Johnston, 17 F. R. 71 ; Barclay v.
Phelps, 4 Met. 397. But the rule has become established in the majority of jurisdictions
that the partnership creditors cannot usually share with the individual creditors in the
individual assets. Peters v. Bain, 133 U. S. 670 ; In re HolUster, 3 F. R. 452 ; In re
Johnston, 17 F. R. 71; In re Lloyd, 22 F. R. 90 ; Claflin v. Behr, 89 Ala. 503, 8 So. 45 ;
Union Nat. Bank v. Bank of Commerce, 94 111. 271 ; Bond v. Nave, 62 hid. 505 ;
Bake v. Smiley, 84 Ind. 212 ; New Market Nat. Bank v. Locke, 89 Ind. 428 ; Riley
V. Carter, (Md.) 25 Atl. 667 ; Hundley v. Farris, 103 Mo. 78, 15 S. W. 312 (over-
ruling a dictum in Shackelford v. Clark, 78 Mo. 491) ; Moody v. Downs, 63 N. H.
50 ; Davis v. Howell, 33 N. J. Eq. 72 ; Morgan v. Skidmore, 55 Barb. 263 [scmhh) ;
Rodgers v. Meranda, 7 Oh. St. 179 ; Black's Appeal, 44 Pa. 503 ; Col well i;. Weybosset
Nat. Bank, 16 R. L 288, 15 Atl. 80 ; Fowlkes v. Bowers, 11 Lea, 144. See McCor-
mick's Appeal, 55 Pa. 252.
In some jurisdictions, however, another rule is adopted. Thus the rule prevails in
certain States that the partnershif) creditors have priority in the partnership assets, and
sliare the separate assets with the separate creditors. Camp v. Grant, 21 Conn. 41 ;
Gueringeri;. His Creditors, 33 La. Ann. 1279. Or, more common!}', it is held that
where the firm assets are insufficient the partnership creditors may prove the balance
against the separate estates in competition with the separate creditors. Hutzler v.
Phillips, 26 S. C. 136, 1 S. E. 502 (see Adickes v. Lowry, 15 S. C. 128) ; Bardwell v.
Perry, 19 Vt. 292 ; Pettyjohn v. Woodroof, 86 Va. 478, 10 S. E. 715. In Kentucky
the peculiar rule prevails that when the partnership creditors have exhausted the firm
assets they can get nothing more till the individual creditors have been paid the same
proportion of their claims ; and they then share the separate assets remaining with the
§ 383.J
OF BANKRUPTCY AND INSOLVENCY.
477
goes, it might seem that the joint creditors have this power. But
of late the law, as we have said, seems distinctly tending to
adopt this rule of equity, or rather this half of the equitable
rule ; (n) the reason given being that the other half without this
half would be inequitable, and that there is no good reason for
confining the several creditors to the several fund, which does
not equally require that the joint creditors should be confined to
the joint fund. This whole rule in equity has not been estab-
lished without conflict and fluctuation ; and is not free now from
doubt, in some minds, as to its justice, reasonableness, and ex-
pediency. It seems to be a simple rule, eminently practical, and
founded upon principles of policy so obvious that they upon whom
the rule presses heavily are seldom disposed to question its
general propriety, (o)
(n) Separate creditors catinot, in bank-
ruptci/, take a dividend ratably with the
joint creditors : each estate is applicable to
its own debts. The iisnal directions are
to apply the funds respectively ; the joint
to the joint debts, the separate to the sepa-
rate debts, the surplus of each to the credi-
tors reniaining on the other. Ex parte
Elton, 3 Ves. 238 ; Eainey i'. Nunse, 54 111.
29. In a New York case, Terry v. Butler,
43 Barb, 395, the court, in reversing a
judgment, on appeal, observed : " But
there is another branch of the case, in
respect to which a serious difficulty exists,
which does not seem to have been adverted
to before the referees, and which requires
a reversal of tlie judgment. The order
appointing the plaintiff receiver was
founded on a demand owing by Putnam
& Butler as copartners. The property in
the hands of the assignees, and which they
are directed by the judgment herein to
transfer to the plaintiff, is the separate
property of Butler. The judgment, also,
directs the plaintiff, as receiver, to apply
the avails of said separate property to the
payment of the said copartnership demand.
In this respect, I think it is erroneous. In
equity, the separate estate is not liable for
partnership demands, until the partner-
ship effects are exhausted and the separate
debts are paid. In the case at bar, it
appears sufficiently, perhaps, that the
remedy at law against the partnership
property has been exhausted by the pro-
ceedings had in the legal action against
Putnam & Butler, set forth in the com-
plaint and admitted on the trial. But
there is no evidence that the separate
debts of Butler have been paid. As the
judgment makes no provision for the pay-
ment of the separate debts, but, in effect,
postpones them until the plaintifl's claim
against the firm is satisfied out of the sepa-
rate estate, instead of directing payment of
the plaintiffs demand out of the swyhis,
if any remains, after payment of the sepa-
rate debts, it is, therefore, erroneous and
must be set aside, and a new trial nmst be
had." See also the authorities cited in
the next preceding and succeeding notes.
And see Moline Co. v. "Webster, 26 111.
233 ; Pahlman v. Graves, 26 111. 405 ;
Weyer i'. Thomburgh, 15 Ind. 124 ; Jack-
son V. Clymer, 43 Pa. 79 ; Black's Appeal,
44 Pa. 503 ; Heckman v. Messinger, 49 Pa.
465 ; Northern Bank of Kentucky v.
Keizer, 2 Duv. 169 ; Whitehead v. Chad-
well, 2 Duv. 432.
[o] The cases on these questions are
separate creditors, jmri passu. Fayette Nat. Bank v. Kenney, 79 Ky. 133. What-
ever rule is adopted, for the benefit of sejiarate creditors, it cannot undo the previous
voluntary act of the iwrtner. If the partner has paid a firm debt with his individual
property, or conveyed such property to the firm, individual creditors cannot comydain.
AVinslow V. Wallace, 116 Ind. 317, 17 N. E. 923; Indianapolis Board of Trade v.
Wallace, 117 Ind. 599, 18 N. E. 48.
478
THE LAW OF PARTNERSHIP.
[CH, XV.
§ 384. Distribution Tvhere no Joint Estate. — This rule can
apply only where there ai-e matters to which it can apply ; as
where there are joint debts and joint funds, and also several
debts and several funds. It is, therefore, not properly an excep-
tion to the rule where there is no joint estate or no living- solvent
partner, or where there are no separate debts. ^ These cases,
which are sometimes called exceptions to the rule, should ratlier
be thought to fall without the rule. (/») There is, however, one
technical exception recognized in England, — when a creditor of
very numerous. The questions are con-
sidered quite fully in Murray v. Murray,
5 Johns. Ch. 60 ; Bell v. Newman, 5 S.
6 R. 78 ; Allen v. Wells, 22 Pick. 450,
where many of the conflicting cases are
examined. In Jarvis v. Brooks, 23 N. H.
136, Perley, J., in delivering the opinion of
the court, says : " The right of the partner-
shi]) creditors to a preference in the ai)pli-
cation of the partnersliip funds having
been admitted in this State, tlie question
raised in this case is, whether the corre-
sponding and correlative rule, gi^ang a
preference to the individual creditor over
his debtor's separate estate, is also to be
considered as having been adopted as a
branch and member of the same equitable
doctrine. If the preference is admitted in
favor of the joint creditor, but denied to
the separate creditor, the principle of
equality and reciprocity, upon which the
interference of equity with the legal rule
has been vindicated in England, wholly
fails. "We have admitted the equitable
rule, which takes away the sej)arate credi-
tor's legal right to satisfy his debt upon an
undivided moiety of the partnership prop-
erty. Principle, consistency, and equal
justice to the separate creditors, would
seem to requii'e that we should also adopt
the other branch of the same equitable
doctrine, and there is no greater difficulty
in administering one branch of the doc-
trine than the other ; both may be directly
asserted at law with equal convenience."
See Sniffer v. Sass, 14 Rich. L. 20.
{p) Ex parte Sadler, 15 Ves. 52 ; Ex
parte Machell, 2 Ves. & B. 216 ; Ex parte
Abel, 4 Ves. 837 ; Ex parte Clay, 6 Ves.
813 ; Ex parte Chandler, 9 Ves. 35 ; Ex
parte Hall, 9 Ves. 349 ; Ex parte Elton, 3
Ves. 238 and note (Sumner's ed.) ; Ex
parte Hubbard, 13 Ves. 424. The prin-
ciple that there should be no joint estate
has been carried to such an extremely
rigorous extent, that, in one case where
the joint projierty was but 51., and in an-
other only \l. lis. and &d., the joint
creditors were refused permission to take
dividends under the separate estate, so fine
has the distinction been drawn. Ex parte
Peake, 2 Rose, 54 ; In re Lee, id. note.
^ If there are no net assets of the joint estate, that is, nothing remaining after pay-
ing the expenses of properly settling the escate, the firm creditors may prove against
the separate estates of tlie partners pan ^lassu with the individual creditors ; and since
the firm has a claim against the partners, it cannot be said to have no assets unless
there are no solvent partners. In order to come on the separate estate the joint credi-
tors must therefore prove that there are no joint assets and no solvent partner ; and
may then do so. Ex parte Kensington, 14 Ves. 447 ; In re Lloyd, 22 F. R. 88 ; //; re
AVe"st, 39 F. R. 203 ; Hairis v. Peabody, 73 Me. 262 ; Shackelford v. Clark, 78 Mo. 491 ;
Ruth V. Lowrey, 10 Neb. 260, 264 {semhle) ; Brock v. Bateman, 25 Oh. St. 609 ; Scull's
Api^eal, (Pa.) 7 Atl. 588 ; Alexander v. Gonnan, 15 R. I. 421, 7 Atl. 243 ; Curtis v.
Woodward, 58 Wis. 499, 17 N. W. 328. But ^ee contra, (that even then the joint
creditors cannot come on the separate assets). Warren v. Farmer, 100 Ind. 593 ; Howe
V. Lawrence, 9 Cush. 553 : In re Gray, 111 N. Y. 404, 18 N. E. 719 (semble). When
any assets are left after paying the expenses of settling the estate, but are expended in
the vain hope of recovering more, it seems that the firm creditors cannot come on the
separate estates in competition with the separate creditors. In re Blumer, 12 F. R. 489.
§ 385.J OF BANKRUPTCY AND INSOLVENCY. 479
the partnership is a petitioner for a separate commission against
a bankrupt partner, — which rests there on the technical reason,
that a commission of bankruptcy is at once an action and an exe-
cution. This rule has not been recognized in practice in this
country, so far as we know; nor does it seem tons to be sup-
ported by any substantial reasons or principles derivable from the
law of bankruptcy in relation to partnership, (^rf)
§ 385. Effect of Insolvency of Firm on Separate Property. — If a
partner becomes bankrupt, his assignees take only his interest in
the joint property, (r) But it seems that, if a firm is bankrupt,
all the property of the firm, and also all the several property of
the partners, goes to the assignees, (s) Practically, and in this
country, this can be tlie case only where the partners are also
insolvent, or suppose themselves insolvent, or in danger of becom-
ing so ; that is, have not enough to pay all the debts of the firm,
and all their several debts also. For as the solvent partners
would all be held, finally, for the debts of the firm, they would pay
them without its insolvency. Indeed, while the insolvency of a
partner when the firm is solvent is no uncommon circumstance,
the legal insolvency of a firm of which the partners are solvent and
able to pay all the joint as well as several debts is unknown in
practice. It has been held, that an assignment of a firm for the
benefit of creditors would be regarded as a fraudulent convey-
ance, unless it included all the individual estate of the partners
as well as the partnership property, (ss) ^
{q) Ex parte Crisp, 1 Atk. 133 ; Zr 1 P. Wms. 458, and Mr. Cox's note ; Bur-
parte Hall, 9 Ves. 349 ; Ex parte Acker- don v. Dean, 2 Ves. Jr. 607 ; Mumford v.
man, 14 Ves. 604 ; Ex parte De Tastet, 1 Murray, 1 Paige, 620 ; Smith v. Kane, 2
Rose, 10, 17 Ves. 247. And see Miirrill Paige, 303 ; Van Epps v. Van Deusen, 4
V. Neill, 8 How. 414, 427 ; M'CuUoh v. Paige, 64. See Lothrop v. Wightman, 41
Dashiell, 1 H. & G. 99 ; Ex parte Taitt, Pa. 297.
16 Ves. 193 ; Ex parte Dewdney, 15 Ves. (s) Judd v. Gibbs, cited Hilliard on
499 ; Ex parte Chandler, 9 Ves. 35 ; Ex Bankr. 114 ; Ex parte Cook, 2 P. Wms.
parte Crisp, Ccoke's B. L. 17 Willes, 467. 500 ; Ex parte Bandier, 1 Atk. 98 ; Hague
(?•) Parker v. Muggridge, 2 Story, 334. v. Rolleston, 4 Burr. 2174 ; Harrison v.
And subject to the same equities which Sterry, 5 Cranch, 239 ; Wharton r. Fisher,
atfect the bankrupt or insolvent. Jewson 2 S. & R. 178.
V. Moulson, 2 Atk. 420 ; Jacobson v. Wil- (ss) Citizens' Ins. Co. v. Wallis, 23
liams. 1 P. Wms. 382; Bosvil v. Brander, Md. 182. [See note 1.]
1 In the absence of a bankruptcy law, the common method of securing the distribu-
tion of a debtor's assets among his creditors is by a voluntary assignment for benefit of
creditor?. In many States such assignments are regulated by statute : in all, they are
valid at common law unless fraudulent. A question of some difficulty is jiresented
when it becomes advisable to make an assignment of partnerr-liip property ; namely,
whether it is necessary to include the separate property of the partners. If a general
assignment is made by the partners of all their property, both partnership ani>^ >idivi.
480 THE LAW OF PARTNERSHIP. [CH. XV.
In England, by statute, joint creditors arc entitled to prove
under a separate commission for the purpose of voting in the
choice of assignees, and assenting to, or dissenting from, the cer-
tificate. (0 But there is no provision enabling separate creditors
to prove for this purpose under a joint commission. The law as
to them, therefore, stands as it was before, which prevents them
from voting in the choice of assignees under a joint commis-
sion, (u) When there is no statutory enactment in this country,
making other provisions, we should consider the law to be as it
was in England before the passage of the statute, (uu)
§ 386. Rights of Secured Creditors. — [A secured creditor cannot
usually prove his entire claim in bankruptcy unless he surrenders
his security. But where a partnership creditor has security which
belongs to the estate of a separate partner, or an individual cred-
{t) Before the statute they were not so creditors requires it, an order will be made,
entitled {Ex parte Simi)son, 2 Rose, 338 ; that an inspector shall be appointed for
Ex parte Taitt, 16 Ves. 193, note [Sum- the separate estates, as a check upon the
ner's ed.] ; Ex parte Wilson, 18 Ves. 439), proceedings of the assignees. Ex parte
unless there were no separate creditors to Batson, 1 Glyn & J. 269.
vote. Ex parte Jones, 18 Ves. 283 ; Ex {uu) The weight of authority favors
parte Taylor, 18 Ves. 284 ; Ex parte Lay- the rule that a partnership creditor may
cock, 1 Rose, 32. prove his claim against the estate of an
(w) Ex parte Parr, 18 Ves. 65, 1 Rose, individual partner, and, of course, that
76 ; Ex parte Hamer, 1 Ro.se, 321 ; Ex such provable claim will be barred by the
parte Jepson, 19 Ves. 224. Upon some discharge. I?i re Jewett, 15 N. B. R.
occasions, if the interest of the separate 126.
dual, it is good, and the assets will be distributed as they would be in case of bank-
ruptcy. Peters v. Bain, 133 U. S. 670 ; Cohvell v. Weybosset Nat. Bank, 16 R. L
288, 15 Atl. 80. But see Gable v. Williams, 59 Md. 46.
If the separate property of all the partners is not included in the assignment, it is
sometimes held that the assignment is void. Collier v. Hanna, 71 Md. 253, 17 Atl.
390; Cleveland v. Battle, 68 Tex. Ill, 3 S. W. 681. Li other States, however, it is
held that an assignment of the partnership assets for the benefit of firm creditors is good,
though the individual property of all the partners is not included. Drucker v. Well-
house, 82 Ga. 129, 8 S. E. 40 "; Ex parte Hoi)kins, 104 Ind. 157, 2 N. E. 587 ; McFar-
land V. Bate, 45 Kas. 1, 25 Pac. 238 ; Trumbo v. Hamel, 29 S. C. 520, 8 S. E. 83 ;
Auley V. Osterman, 65 Wis. 118, 25 N. W. 657. See also Wells r. Ellis, 68 Cal. 243,
9 Pac. 80.
If a statute requires all the propert}' of a debtor to be conveyed, a conveyance of
partnership property alone may perhaps be bad (McFarland v. Bate, 45 Kas. 1, 25 Pac.
238, semble) ; and it is no doubt in the power of the legislature to require an assign-
ment of all property, both joint and individual. But in the absence of such a statute,
that rule would seem more in accordance with principle which allows an assignment of
the partnership assets alone. That rule recognizes the separate existence of the firm,
and its position as the real owner of its property. Drucker %i. Wellhouse, 82 Ga. 129,
8 S. E. 40 ; Trumbo v. Hamel, 29 S. C. 520, 8 S. E. 83. Nor is the opposite view
consistent with the universally recognized power of a single partner to make an assign-
ment of the firm property in the absence of his copartner (ante, § 110), for of course
the individual property of the latter could not be included.
§ 387.] OP BANKRUPTCY AND INSOLVENCY. 481
itor is secured out of the partnership assets, he may prove his
entire claim against the estate wliich is indebted to him without
surrendering his security ; since it would not inure to the benefit
of the debtor estate.^]
SECTION IV.
WHAT DEBTS OR FUNDS ARE JOINT, AND WHAT ARE SEVERAL.
§ 387. Debt whether or not owed by Partnership. — It is impor-
tant to determine what creditors belong to the one class or the
other, and what funds belong to the one or the other, that they
may be duly appropriated.
The question, whether a party is a joint creditor or a several
creditor, resolves itself into two. One question is, Was the debt,
as originally contracted, the debt of the partnership, or the debt
of some one partner ? (v) This must depend altogether upon the
considerations which have already been presented, as to the lia-
bility of partners and of partnerships. They determine whether
a certain debt, claimed to be that of a firm, was contracted by the
firm, or by one person, partner or other, having authority to bind
the firm in that way to that debt. Or whether a debt, claimed to
be the several debt of a partner, and, as such, entitled to prior-
ity upon the several fund, was contracted by him alone, or by
him for the firm, so as to make it legally the debt of the firm.
In other words, these questions depend almost wholly upon the
considerations which determine the authority of one who acts for
a firm, or the liability of the members of the firm. And it does
({■) A., as a trader, being indebted to want of assent on the part of the creditors,
several persons, enters into partnership Lord Ehlon observed : " But 1 agree to the
with B., and brings his stock in trade ])roposition, that a very little will do to
into the partnership. By the partnershiji make out an assent to the agreement. If
articles, it was agreed tliat the joint trade any of the creditors named in the schedule
should pay the creditors of A., named in a think they can make out such a case, they
schedule. It was held that a separate may apply, on that giound, to prove their
creditor of A., named in the schedule, did debts against the joint estate." Ex parte
not, by the articles, become a joint creditor Williams, Buck, 13.
of A. and B. This was on the ground of
1 In re Plummer, 1 Phil. 56 ; Rolfe v. Flower, L. R. 1 P. C. 27 ; Ex parte Man-
chester Co., L. Ft. 18 Eip 249 ; Iti re Holbrook, 2 Low, 259 ; In re Thomas, 17 N. B.
R. 54. But see contra, Harmon v. Clark, 13 Gray, 114 {semble) ; White v. Dougherty,
Mart. & Y. 309.
81
482 TEE LAW OF PARTNERSHIP. [CH. XV.
not seem necessary to add here anything to what has been already
said on these subjects, (w)
§ 388. Change of Nature of Debt. — But the second of the two
questions referred to is more difficult. It is whether a debt,
which was originally a joint debt, has become a several debt, or
whetlier a debt originally several has become joint. A part of
this difficulty springs from the principle, that a firm is so far dis-
tinct from the members who compose it that a creditor of the
firm may have the partnership and also the several security of
the partners, or some of them, as sureties for the debt ; and a cred-
itor of one or more partners may have the liability of the firm as
security for his debt. Hence, if a debt was originally of one kind,
and the creditor can show indebtedness of the other kind f jr the
same cause, the question may arise, whether the new indeljtedncss
is in discharge and extinguishment of the old, or only by way of
collateral security to the old. (x) For if after a dissolution the
payee of a note of a firm gives it up, and takes the several notes
of the partners for their several shares, he has no rights as a
partnership creditor, (xx)
§ 389. Consent and Consideration necessary. — If the one indebt-
edness discharges the other, there must be, first, a consent of the
creditor, and a consideration of some kind for the new indebted-
ness, and a consideration of some kind for the discharge of the
old. (?/ ) Thus, if a partner makes a purchase, on his own ac-
count, and pays for it by the note of the firm, which is all the
creditor has, his possession of this note does not necessarily prove
his discharge of the several partner. If he gives up the note of
{w) See cases cited in following note, Ex parte Kendall, 17 Ves. .514, 527;
for such further consideration of these Cowell v. Sikes, 2 Russ. 191 ; "Wilkinson
points as may be thought necessary. v. Henderson, 1 Mylne & K. 582, 588 ;
(x) Exparte Whitmore, 3 Mont. & A. Braithwaite v. Britain, 1 Keen, 206, 220 ;
627. This case is a leading and illustra- Hart v. Alexander, 2 M. & \V. 484 ; Lyth
tive case ; but, as <|uestions arising under v. Ault & Wood, 7 Exch. 669 ; Hariis v.
this branch of the law are largely governed Farwell, 15 Beav. 31 ; Yarnell v. Anderson,
by the special facts in the case, we give 14 ]Mo. 619 ; Smith v. Rogers, 17 Johns,
the principal authorities. Ex parte "Solte, 340.
2 Glyn & J. 295 ; Thompson ;;. Percival, 5 (rx) Crooker v. Ciooker, 52 JTe. 267.
B. & Ad. 925 ; Evans v. Drummond, 4 (y) But there must be an extinguisli-
Esp. 89; Read v. White, 5 Esp. 122; ment of the original indebtedness. Cuxon
Bedford v. Deakin, 2 Stark. 178, 2 B. & v. Chadley, 3 B. & C. 591 ; Butterfield
Aid. 210 ; Lodge v. Dicas, 3 B. & Aid. v. Hartshorn, 7 N. H. 345 ; Warren v.
611 ; David v. Ellice, 5 B. & C. 196 ; Kir- Batchelder, 15 N. H. 129 ; Wharton v.
wan V. Kirwan, 4 Tyrw. 491, 2 Cr. & M. Walker, 4 B. & C. 163 ; Owen v. Bowen,
617 ; Winter v. Innes, 4 Mylne & C. 101 ; 4 C. & P. 93 ; Gibson v. Minet, 1 C. & P.
Vulliamy v. Noble, 3 Merivl 619 ; Sleech's 247 j McKinney v. Alvis, 14 111. 34.
Case in Devaynes v. Noble, 1 Meriv. 565 ;
§ 389.] OF BANKRUPTCY AND INSOLVENCY. 483
the partner, that would prove it; but if there was only a simple
debt of that partner, as for a purchase, tlie note of tlie firm
would not be a payment of this debt. In Maine and Massa-
chusetts, there would be a presumption of payment, to be
overcome only by i)roof of a different intention between the par-
tics. (2) In other States, and in the federal courts, the general
presumption, that a negotiable note is not payment, would applv,
and could be rebutted only by proof that it was otherwise
intended, (a) That is, we should say in such a case the creditor
might consider the old debt as still existing, and claim as several
creditor, if that would be for his advantage, giving up the com-
pany's note. If the intention of discharging the old debt by the
new was made out by proof, or by presumption, the question would
still occur as to the consideration ; and we should say, that the
getting all the partners, instead of a part, would be a considera-
tion enough for the discharge by the creditor of the old debt ;
and, at the same time, if no especial consideration to the firm
were proved, we should say that the discharge of the several
indebtedness of the one partner would be a sufficient giving up
of value by the creditor to make a consideration on which the
firm would be held (6)
If the debt was originally joint, and had apparently become
several instead of joint, we apprehend that a distinct consent of
the creditor to this arrangement, — by which he gives up all, and
retains only one, — and a distinct consideration for his consent,
must be proved. And this, of course, may be any benefit to him,
actual or prospective ; or any loss or injury to the firm, suffered at
the instance of the creditor. A consideration to the several ]iart-
ner must, perhaps, also be proved ; for, although he was held
(j) Butts V. Dean, 2 Met. 76 ; Watkins Johns. 247 ; Hughes v. Wheeler, 8 Cowen,
V. Hill, 8 Pick. 522; Reed v. Upton, 10 77 ; Booth v. Smith, 3 Wend. 66 ; Bill v.
Pick. 525 ; Maneely v. McGee, 6 JIass. Porter, 9 Conn. 23 ; Davidson v. Bridge-
143; Wood v. Bodwell, 12 Pick. 268; Ilsley port, 8 Conn. 472 ; Elliott v. Sleeper, 2
V. Jewett, 2 Met. 168 ; Varner v. Noble- N. H. 525 ; Frisbie v. Larned, 21 Wend,
borough, 2 Me. 121 and note (a) ; Desca- 450 ; Cole v. Sackett, 1 Hill, 516 ; Way-
dillas V. Harris, 8 Me, 298 ; Newall v. dell v. Luer. 5 Hill, 448. For the English
Hussey, 18 Me. 249; Bangor v. Warren, law upon this point, see Crowe v. Clay, 9
34 Me. 324 ; Fowler v. Ludwig, 34 Me. Exch. 604 ; Maxwell v. Deare, 8 Mome,
455 ; Shuniway v. Reed, 34 Me. 560 ; P. C. 363.
Comstock V. Smith, 23 Me. 302 ; Gooding (b) Ex parte Williams, Buck, 16 ; Ex
V. Morgan, 37 Me. 419. parte S,eddon, 2 Cox, 49 ; Ex parte Lobli,
(a) Peter i-. Beverl.y, 10 Pet. 567 ; 7 Ves. 592 ; Scaife v. Jackson, 5 Dow &
Sheehy v. Mandeville, 6 Cranch, 253 ; R. 290, 3 B. & C. 421 ; Ex parte Kedie, 2
Wallace v. Agry, 4 Mason, 336 ; Smith Deac. & Ch. 321 ; Ex parte Jackson, 1
V. Smith, 27 N. H. 244 ; Van Ostrand t\ Ves. Jr. 131. And see cases in previous
Reed, 1 Wend. 424 ; Biirdick i: Green, 15 notes.
484
THE LAW OP PARTNERSHIP.
[CH. XV.
before, he had before, on payment, a right to charge his payment
to the firm, which he has not now. (c)
In general, it would seem from the cases that, while a distinct
intention, or consent and agreement, of all the partners must be
proved, in order to give validity to an arrangement by which a
new indebtedness has discharged an old one, or a joint debt been
extinguished by conversion into a several debt, or vice versa, —
if such consent and agreement be proved, the court apply quite
liberally the principle of novation, and consider the discharge of
the one debt a sufficient consideration to sustain the assumption
of the new debt, (d)
"Whether or no such consent and discharge have taken place,
must depend upon considerations quite analogous to those which
have been presented in the inquiry when a retired partner was dis-
charged from the liability of the firm, by change of charge, or
credit, or account. The cases are rather numerous on this point ;
but it is not easy to draw from them any general principles other
than those which have been already stated, (e)
(c) Lytb V. Ault & Wood, 7 Exch. 669.
Parke, B.: "The plaintiff agrees to take
the security of one partner, instead of that
of both. She is at liberty to enter into
that arrangement ; for the court cannot in-
quire into the value of the consideration.
If there be any consideration whatever, it
•will support an agreement. Now, although
lOZ. would be no satisfaction for a debt of
100/., yet an article of much less value
than 10/. may be given and received in
satisfaction of such a debt. It may, at
first, appear paradoxical ; but the sole re-
sponsibility of one of many partners may
be of greater value than that of all, for you
may thereby obtain the secuiity of his real
and personal estate." Pollock, C. B. :
"The exchange may be of great advantage
to the creditor ; for it may be much more
desirable to have the sole security of a rich
old man, than the joint security of the old
man, and of a young man without any
property." Thompson v. Percival, 5 B. &
Ad. 925 ; Hart v. Alexander, 2 M. & W.
484 ; Kirwan v. Kirwan, 2 Cr. & M. 617,
4 Tyrw. 491. The authority of David v.
Ellice, 5 B. & C. 196, 7 Dow & R. 690,
and Lodge v. Dicas, 3 B. & Aid. 611, is
considered as greatly shaken by the later
authorities. See Hart v. Alexander, 2 M.
& W. 493 ; Sheehy v. Mandeville, 6 Cranch,
264; Harris v. Lindsay, 4 Wash. C. C.
271. But see Wildes v. Fessenden, 4 Met.
12, reviewing the authorities. Robb v.
Mu^ge, 14 Gray, 534; Wild v. Dean, 3
Allen, 579 : Ex parte Appleby, 2 Deac.
482 ; Ex parte Liddiard, 4 Deac. & Ch.
603 ; Ex parte Kedie, 2 Deac. & Ch. 312 ;
Ex 27arfe Lane, De Gex, 300 ; Ex parte
Bradbury, 4 Deac. 202.
id) Lyth V. Ault, 7 Exch. 669, siipra,
note (c) ; and the opinion of Alderson, B.,
p. 674. And see Andrew v. Boughey,
Dyer, 75 n ; Thompson v. Percival, 5 B.
& Ad. 925 ; Mills v. Boyd, 6 Jur. 943 and
cases there cited.
(e) Wild V. Dean, 5 Allen, 579. In
this case, Bigelow, C. J., fully considers
the conflicting authorities and holds that
a partnership debt is not provable against
the private estate of one of the partners,
who has received an assignment of all the
partnership property, and executed a bond
to his retiring partner to assume and pay
the partnership debts, without evidence of
an express or implied assent by him to i)ay
the same to the creditor as his private
debt ; and that notice by the creditor of
his election to treat it as a private debt is
not sufficient. Robb v. Mudge, 14 Gray,
534 ; Ex parte Whitmore, 3 Mont. & A.
627 ; Evans v. Drummond, 4 Esp. 89 j
§ 389.]
OF BANKRUPTCY AND INSOLVENCY.
485
If there be an old indebtedness, and a new one for the same
cause, and it is not proved or presumed that the new has paid
the old, then both co-exist ; and, generally, in such case the old
is the principal debt, and the new is collateral to and security
for the old. The cases show that the question whether the old
debt is extinguished is sometimes one of much difficulty in prac-
tice. But, if it be not extinguished, then it is certain that the
creditor may give up the new debt, and found his claim only on
the old. (/) Jn this country, it is a universal principle, recog-
nized in all our systems of insolvency and in the national
bankrupt law, that a creditor having a debt with security may give
up his security, and |)rove his whole debt ; or may obtain what he
can from his security, and prove for the balance. (,^) This prin-
Read V. White, 5 Esp. 122; Bedford v.
Denkiu, 2 Stark. 178, 2 13. & Aid. 210;
Lodge V. Dicas, 3 H. & Aid. 611 ; Thomp-
son V. Purcival, 5 B. & A(L 925 ; Hart w.
Ale.xander, 2 M. & W. 484.
(/) Jix parte Roxby, 1 Mont, on Pari.
198. The petitioner, a joint creditor, took
a draft of the solvent partners upon a third
person. The petitioner applied to prove.
The proof was refused, unless upon deliver-
ing up the draft. Petition to jn'ove. Lord
Chancellor : " The question is, whether
the bill was given as a collateral secuiity,
or in discharge of the debt ; as to which
an athdavit must be made." Ex. parte
Hoilgkinson, 1 Cooi)er, 101 ; Ex pirte
Kendall, 17 Ves. 527. Lord Eldon : " In
many cases, the representative may be en-
titled to say to a creditor, who chooses to
make the demand, that justice requires
the surviving partners to pay the debt :
they are to be considered the principals ;
he is merely a surety ; and therefore a
court of equity would not permit them to
call upon him for payment, except upon
an equitable arrangement and modification
rec^uiring them to assign the dividend."
Ex parte Seddon, 2 Cox, 49 ; Ex parte
Lobb, 7 Ves. 592 ; Ex parte Hay, 15 Ves.
4 ; Ex parte Slater, 6 Ves. 146 ; Evans v.
Drummond, 1 B. & C. 113; Reed v. White,
5 Esp. 122; Thompson v. Percival. 5 B. &
Ad. 925 ; Ex parte Whitmore, 3 Mont. &
A. 627 ; Oakeley v. Pasheller, 10 Bligh,
548, 4 CI. & F. 207.
{g) Richardson r. Wyman, 4 Gray, 553.
The question was before the court in this
case, where the respondent held a joint
and several note of three persons, tenants
in common, and held also a mortgage
security. The petitioners claimed that the
security should first be made available, and
the resj)ondent be permitted then to prove
against the insolvent estate of one of the
debtors. The court said : " The projierty
of the insolvent debtor, which is pledged
for the payment of the debt, should either
be applied to its extinguishment, or sur-
rendered to the assignees and made part
of the estate to be distributed among the
general creditors ; and whatever other
property the creditor holds as security
ought also to be appropriated to the pay-
ment of the debt. This is an equitable
rule; which will do justice to all parties.
It has the sanction, in its spirit, of the
courts of chancerv in England, and has
been recognized and enforced in our own."
Lanckton v. Wolcott, 6 Met. 305 ; Amory
x\ Francis, 16 Mass. 308 ; In re Grant, 5
Law Rep. 303 ; Ex parte Baker, 8 Law
Rep. 461 ; Eastman v. Foster, 8 Met. 19.
For English cases, see Ex parte Goodman,
3 Madd. 373 ; Ex parte Parr, 1 Rose, 76,
18 Ves. 65 ; Ex parte Bennet, 2 Atk. 527;
Ex parte Wildman, 1 Atk. 109 ; Ex parte
De Tastet, 1 Rose, 323 ; Ex parte Hedder-
ley, 2 Mont., D. & D. 487 ; Ex parte
Shepherd, 2 Mont., D. & D. 204 ; Ex parte
Prescott, 4 Deac. & Ch. 23 ; Ex parte Dick-
son, 2 Mont. & A. 99 ; Ex parte Ruffoni,
1 Glyn & J. 41 ; Ward v. Dalton, 7 C. B.
643 ; Ex parte Bloxham, 6 Ves. 449, 600 ;
Ex parte Barclay, 1 Glyn & J. 272 ; Ex
parte Smith, 3 Bro. C. G. 46.
486
THE LAW OP PARTNERSHIP.
[CH. XV.
ciple has not been applied to the case of a creditor of a ))artiier,
holding the liability of the firm as collateral security.^ The sim-
plest course would be, that the creditor should prove against the
firm, and, deducting his dividend, then prove for the balance
against the partner ; but a difficulty in the way of such procedure
leads to a doubt whether it would be permitted. (//)
§ 390. Proof upon Joint and Several Claim. — We have supposed
the indebtedness to be such that the liability of tiie firm and that
of the partner cannot be called concurrent. Perhaps they would be
so deemed ; and if they were, in fact or by construction, such
that the creditor need not consider the one as principal, and be
limited in his claim in the other, as he would be in a case of
strict guaranty, — then it seems to be settled in England, although
not without some doubt and objection of great weight, that the
creditor can only elect to proceed against one, (t) and abandon
his claim against the other party. In fewer words, if a creditor
(A) Agawam Bank v. Morris, 4 Cush.
99. A partnership note having been in-
dorsed by the paj-ee to a third person, and
by him indorsed to and discounted at a
bank of which he was president, and one
of the promisors having afterwards become
insolvent, the bank proved the note as a
claim against his estate. The solvent prom-
isor afterwards, at the request of the second
indorser, and for the purpose of securing
him and the bank, but without the knowl-
edge of the bank, gave him security ap-
plicable to the note in question, and also
to another note held by the bank ; such
indorser promising to account to the prom-
isor for the surplus of the security, if any.
It was held, that the security was not given
to the bank, but was a personal one to the
second indorsee, and to indemnify 'him as
such ; and that a subsequent order of the
commissioner, on the motion of the as-
signee, directing the note to be struck out
of the list of claims ])roved, and disallow-
ing the same, on the ground that the bank
held collateral security therefor which had
not been surrendered or applied, was er-
roneous. See also Barclay v. Phelps, 4
Met. 397.
(i) Ex parte Bevan, 9 Ves. 222. Lord
EldoD : " It is not necessary to decide the
other question as to the joint and several
proof. If it was, I am not perfectly sat-
isfied with the authority that has been
stated. The reasoning goes upon this :
that a joint and separate action could not
be brought at law. But surely the dis-
tinction IS this, that, where a joint and
separate bond is given, and another secur-
ity, several from each, there, as two actions
might be brought, the rule in bankruptcy
should be ditferent. I think I have heard,
that, in the case cited iu Pearce v. Wil-
liams, the only separate creditor was he
who took out the commission ; and it ap-
pears, by the book, that the joint creditors
prayed that he might deliver over to them
the effects ; which was refused ; and it
was said that he should have the effects
applied to his separate bond : and, if that
is the case, the rule is quite right ; for he
would have a right to take the separate
effects, if not to the detriment of other
separate creditors." And in the same case,
10 Ves. 107, Lord Eldon again says: " The
principle seems obvious ; yet in bank-
rujitcy, for some reason not very intelli-
gible, it has been said the creditor should
not have the benefit of the caution which
he has used. I never could see why a
creditor, having both a joint and a several
security, should not go against both estates.
But it is settled that he must elect."
Ante, § 386.
§390] OF BANKRUPTCY AND INSOLVENCY. 487
can elect, he must elect. The supposed analogy to a rule of law-
is surely insullicient for this doctrine, and it has not been estab-
lished in this country.^ Lord Eldon appears to think that,
aside from authority, if a creditor gets the security of a partner,
and also the security of a firm for the same debt, by a valid con-
tract, there is no reason why lie may not prcjve against both, in
the same way as if they were different and distinct persons, (y)
(/ ) The case alluded to by Lord Eldon, then he would have received more than his
as (juoted in the pnivious note, is Ex parte share." And, notwithstanding the doubts
Rowlaiidson, 3 1'. Wins. 405. " The Lord of Lord Eldon and other high authorities,
Chancellor (Talbot) at first inclined to the rule is now firmly established in Eng-
tliink tiiat the |)etitionfr, being a joint and land, that, where there is a joint and several
a separate creditor, ought to be at liberty creditor, he must make his election whether
to come in under each of the commissioners, he will come in upon the joint or the
provided he i-eceived but a single satisfac- separate estate ; that is, which he will
tion ; but the next day his lordship held, come in ujion, in preference ; for, which-
that, as at law, when A. and B. are bound ever he may elect, he will be entitled to
jointly and severally to J. S., if J. S. sues come in upon the surplus of the other, if
A. and B. severally, he cannot sue them there should be any. £x parte Hlaiikenha-
jointly ; and, on the contrary, if he sues gen, Cooke's B. L. 257; Ex parte Butlin,
them jointly, he cannot sue them severally, id. ; Ex parte Banks, 1 .-Ytk. 106 ; Ex pmrte
but the one action may lie {)leaded in abate- Bond, 1 Atk. 98; Ex parte Smith, 1 P.
nient of the other. (But, as to this, see Wms. 237 ; .£x /jarte Masson, 1 Rose, 159;
Lechmere v. Fletcher, 1 Cr. & M. 636.) Ex parte Liddel, 2 Rose, 34; Ex parte
So, by the same reason, the petitioner in Bank of England, 2 Rose, 82; E- parte
the present case ought to be put to his Husband, 2 Glyn & J. 4, 5 Madd. 419; Ex
election under which of the two commis- parte Moult, Mont. 337; Ex parte Cheva-
sious he would come ; and that he should lier, 1 Mont. & A. 345 ; Ex parte Hinton,
not be permitted to come under both, for 1 De Gex, 550 ; Ex parte Ladbroke, 2
1 Upon a joint and several note of the firm and the partners, that is, a note signed
with the firm name and by each partner individually, proof may in this country be
made against the separate estates of the [lartners, as well as against the joint estate.
/((. re Bigelow, 3 Ben. 146; Ex parte Nason, 70 Me. 363; In re Gray's Estate, 111
N. Y. 404, 18 N. E. 719 ; Fowlkes v. Bowers, 11 Lea, 144. But see Fayette Nat.
l^ank V. Kenney, 79 Ky. 133, where it was said that the holder of the note must elect
between the joint estate and the separate estates.
In the same way where the firm and a partner are parties successively liable on
commercial paper (as, for instance, maker and indorser of a note), proof ma}' be made
against both estates. In re Farnum, 6 Law Rep. 21 ; Mead v. Nat. Bank, 6 Blatch.
189 ; Claflin v. Behr, 89 Ala. 503, 8 So. 45 ; Union Nat. Bank v. Bank of Commerce,
94 111. 271 ; Borden v. Cuyler, 10 Cush. 476 (acmble). Compare however. In re
Blunier, 13 F. R. 622, where it was held tiiat a guaranty of a firm debt by a |)artner,
being a guaranty of his own debt, had no meaning, and gave the other creditor no
right against his sejiarate estate.
The rule in England at common law was different, as has been stated in the text,
There the holder of a joint and several obligation must elect whether to proceed
against the firm or the individual partners. Supra, note (i) ; Ex parte Bevan, 10
Ves. 107 ; Ex parte Barnewall, 6 De G. M. & G. 795. See Ex parte Adamson, 8 Ch.
D. 807 (C. A.) And the same was true as to successive parties on commercial paper,
Goldsmid v, Cazeuove, 7 H. L. Cas. 785. See Ames, Cas. on Part., p 348, note.
488 THE LAW OF PARTNERSHIP. [CH. XV.
§ 391. Joint but not Partnership Creditors. — [It has bceil secn ^
that joint but not partnership creditors of the partners may attach
the partnership [)roperty and hold it even against partnership
creditors. It would be natural to suppose that the same rule
would apply in bankruptcy : and that the joint creditors of the
partners would share in the partnership assets. Such api)ears
to be the rule in England.^ But in this country joint but not
partnership creditors of the partners come, with the individual
creditors, on the separate assets of the partners.^]
§392. What Property is joint and what several. — It is also
important to determine what constitutes the fund appropriated
to one class of creditors, and what that of the other class ; or,
to ascertain what is joint property and what is several property.
Questions of fact, or even of law, as to the ownership of certain
goods, or effects, or lands, are usually to be determined by the gen-
eral principles of the law of contracts, or the law of property. But
those which are peculiar to the law of partnership, or arise out of
its relations, are also of much importance.
It seems to be held that if a partner takes property from the
firm, even in good faith, and bankruptcy ensues, and the ques-
tion arises, which class of creditors has the benefit of this
property, it will be held to satisfy any balance due from that part-
ner to the firm, and thus to increase the fund of the joint creditors,
and the several creditors have only the surplus.'* As a general
principle, this may rest upon sufficient reasons ; for a partner
should not be permitted to withdraw his share from the capital
stock, and in this way assist his several creditors at the expense
of the joint creditors. But the principle, or the rule, should not
be extended to cases in which chattels were appropriated long
ago to one partner, or bought by him with money taken from the
Glyn & J. 81 ; Ex parte Bate, 3 Deac. 358 ; 778. But where the contract is for
Ex parte Smith, 1 Deac. 385 ; Ex parte double security against distinct firms.
Hill, 3 Mont. & A. 175 ; Ex parte Clarke, though consisting of the same indivi-
1 De Gex, 153 ; Ex parte Wood, 1 DeGex, duals, the creditors, if ignorant of their
134 ; Ex parte Banks, 2 Jones & La T. connection, may prove against both. Ex
212; Ex parte Lane, 1 De Gex, 300; Ex parte Bevan, 10 Ves. 109, note to Sum-
parte Arbonin, 1 De Gex, 359 ; Ex parte ner's ed. And see Ex parte Adam, 1 Ves.
Hay, 15 Ves. 4 ; Ex parte Adam, 1 Ves. & & B. 493, 2 Eose, 36 ; Ex parte Bigg, 2
B. 493, 2 Rose, 36; Ex parte Bigg, 2 Rose, 37 ; ^x jaarte La Foret, Cooke's B. L.
Rose, 37; Ex parte Gray, 4 Deac. & Ch. 251; Ex parte Walker, 1 Rose, 441.
i Ante, § 248, note 1.
2 Hoare v. Oriental Bank, 2 App. Cas. 589.
3 Forsyth v. Woods, 11 Wall. 484; In re Nims, 16 Blatch. 439 ; In re Holbrook, 2
Low. 259 ; Ex parte Weston, 12 Met. 1 ; Dnnnica v. Clinkscales, 73 Mo. 500 ; Second
Nat. Bank v. Burt, 93 N. Y. 233 ; Wall v. Fife, 37 Pa. 394.
* See ante, § 248, note 1.
§ 393.] OP BANKRUPTCY AND INSOLVENCY. 489
firm, when the goods or money were duly charged to and allowed
by liira. If tlie rule were applied to such cases, a partner could
have no several property, or it would be so mixed up with that
which would be restored to the joint fund that no line of separa-
tion could be found. Indeed, it seems to be limited to those cases
in which certain specific property has been taken out, which has
been identified, and may be specifically restored. Even here,
however, the rule must be qualified, or rather another rule
substituted, which may be drawn from the true principles of the
case, {k}
§ 393. Effect of Appropriation of Property. — It cannot be
doubted that partners may agree in their original articles as to
what property shall l)elong to one or another in case of dissolu-
tion ; or tliat they may so agree subsequently to the formation of
the partnership ; or that they may so agree in reference to the
present and immediate several ownershij) of articles of joint prop-
erty, at any time or in any way they please; with tiiis limitation
only, that the agreement must be made in good faith, and there-
fore must not be made in contemplation of bani<ruptcy. The
same power and right exist in relation to choses in action ; any
division or appropriation of these, by indorsement of negotiable
paper, or assignment of debt, or otherwise, must be lawful and
effectual, with only the same limitation. (0 And if a partner
owns in this way, or in any other way, land or personalty, his
right and interest cannot be affected by permitting the partner-
ship to use or emijloy his proj)erty, upon any terms satisfactory
to them, always within the limitation that the whole transaction
was in perfect good faith. And the converse of all this must be
equally true ; that is, partners may transfer to the firm, either
realty or personalty, choses in possession or choses in action, and
the use or employment by a partner of the thing so owned by the
(k) In Ex parte Smith, 1 Glyn & J. 74, (0 Ex parte Lodge, 1 Ves. Jr. 166 ; Ex
it was held, that if one partner be intrusted parte Harris, 2 Ves. & B. 213; Ex parte.
with the entire management of .the part- Yonge, 3 A^es. & B. 34; Ex parte Reeve,
nership concern, and he withdraw moneys 9 Ves. 589 ; Ex parte Smith, 6 Madd. 2
for his separate use, which he duly and s. c, semble, 1 Glyn & J. 74. See also
openly enters in the partnership books, notes 3 and 4 to Hankay v. Garratt, 1
this is not a fraud which will entitle the Ves. Jr. 241 (Sumner's ed.) ; Anderson v.
joint estate to prove against the separate ; Maltby, 4 Bro. C. C. 423, 2 Ves. Jr. 244 ;
otherwise, if by the entries in the books Parker v. Ramsbottom, 3 B. & C. 257 ;
he disguises the transaction, or wholly Ex parte Carpenter, 1 Mont. & McA. 1 ;
omits and conceals it. Ex parte Lodge, 1 Ex parte Peake, 1 Madd. 346 ; Lingen v.
Ves. Jr. 166; M'Cauley v. M'Farlane, 2 Simpson, 1 Sim. & St. 600; Ex parte
Desaus. Ch. 239 ; Ex parte Gust, 1 Cooke's Turner, 4 Deac. & Ch. 169, 177.
B. L. 548,
490 THE LAW OF PARTNERSHIP. [CH. XV.
firm cannot affect the interest or diminisli the rights of the firm,
— always, we repeat, within the limitation of the entire honesty
of this transfer and this use, and its complete independence of all
bankruptcy, or expectation of bankruptcy, (w)
§ 394. Claim of one Estate on the other because of Fraud. — If,
after such apj)ropriatious have taken place, bankruj)tcy ensues, it
will raise the question of their effect. We think the true answer
must be, that the question of their original validity comes first.
To determine this, we must inquire whether anything of fraud,
actual or constructive, entered into the transaction ; was bank-
ruj)tcy contemplated ; or was it so near that it ought to have
been contemplated ; (w) or are there any other circumstances to
indicate that the transaction was something else than an honest
transfer of property, by those who had a right to transfer, to
those who had a right to receive it. If the original transaction
was wholly free from any taint of this kind, we cannot see any
sound principle in the law of partnership, or in the law of bank-
ruptcy, which should interfere with the consequences of the
transfer. And therefore the property would remain within the
joint fund, or in the several fund, accordingly as it had been
placed by the transfer in one or in the other. We should exjjress
the general rule thus: If the firm and all the partners are bank-
rupt, no separate estate of a partner can claim against the joint
estate, nor the joint estate against any sej)arate estate, until all
the creditors to whom the fund is primarily appropriated are paid
(//?) Ex -parte Ruffin, 6 Ves. 119; Ex [n) It is the prevaiUiig rule, conforni-
■parte Freeman, Buck, 471 ; Ex parte ably to the usual ])hiaseology of hank-
Peake, 1 Madd. 346, 589; Ex -parte Fry, rujit and insolvent laws, that a convey-
1 Glyn & J. 96 ; Campbell v. Mullett, 2 ance, in order to constitute preference,
Swanst. 575; Ex parte Williams, 11 Ves. must be in actual contemplation of legal
3; Ex parte Rowlandson, 1 Rose, 416; bankruptcy or insolvency. Thus, in Eng-
Ex parte Fell, 10 Ves. 347 ; Ex parte land, it is said, that the law does not
Hare, 2 Mont. & A. 478 ; Ex parte avoid a conveyance, made under ciicum-
Hunter, 2 Rose, 382; Ex parte Jaclsson, stances in which the party may "hojie
1 Ves. 131; Ex parte Burn, 1 Jae. & W. that his affairs would rally and come
378; Ex parte Jones, 4 M. & S. 450; round again." Green v. Bradfield, 1 C.
Ex parte Yallop, 15 Ves. 60; Ex parte & K. 454, per Tindal, C. J. It must be
Houghton, 17 Ves. 252; Horn %■>. Baker, an act that not only in effect contravenes
9 East, 215 ; Ex parte Perry, 5 Ves. 575 ; the bankrupt laws, but it must be done
Ex parte Watkins, 1 Mont. & McA. 57. with intent to contravene them, and in
But all the partners of an insolvent part- contemyilation of bankruptcy. Hilliard
lu^rship cannot assign the property of the on Bankr. 329 ; Fidgeon v. Sharp, 1
firm to pay the debts of one individual Marsh. 198, per Gibbs, C. J. ; Phcenix ;■.
partner. Wilson v. Robertson, 21 N. Y. lugraham, 5 Johns. 412. And see Pear-
587; Keith v. Fink, 47 111. 272. See sail v. McCartney, 28 Ala. 110; Cole v.
also Nat. Bank v. Sprague, 20 N. J. Eq. Albers, 1 Gill, 412 ; Jones v. Howland,
13. [See § 248, note 1.] 8 Met. 377.
§ 395.]
OF BANKRUPTCY AND INSOLVENCY.
491
in fuil with interest, (o) But if any property appears in eitlier
of these estates, wliich has been framhilently abstracted from any
other, it must be restored ; and tliis fraud may be constructive
only, and any act wouhl be so which violated the articles or agree-
ment of the partners, or abstracted or appropriated property or
funds by the act of one partner only, without the authority, con-
sent, or knowledge of the others, (jt?) Whether partnership
assets are subject to the exemption or homestead rights of a
partner is not certain on authority. We should say, on general
principles, they are not. But it might depend somewhat on the
language of the statutes creating those rights. ( pp)
§ 395. " Statute of Reputed Ownership." — The English " statute
of reputed ownership," as it is commonly called, contains provi-
sions which bear upon this question. Qf) It enacts that goods
which at the time of the bankruptcy are in the possession, order,
and disposition of the bankru[)t, as reputed owner thereof, by
consent of the true owner, shall be distributable as the property
(o) Per Lord Lough bo rongli, Ex jiarte
Elton, 3 Ves. 242 ; Twiss v. Massey, 1
Atk. 67 ; Ex jmrte Cook, 2 P. Wms. 500 ;
Ex parte Abfll, 4 Ves. 837 ; Ex parte
Clay, 6 Ves. 833; Bolton v. Puller, 1 B.
& P. 539-545. And see //(. re Rowland,
L. R. 1 ( 'h. 421 ; Rolte v. Flower, L. R. 1
J'. C. 27.
(p) In re Lodge, 1 Ves. Jr. 165; Ex
parte Harris, 1 Rose, 129, 437, Lord
Eldon : " I take it now to be neces-sary,
attending to the result of Lord Thurlow's
decisions, In re Lodge, and the other
cases, that, in order to establish a right
of proof for the joint estate against the
separate estate or for the separate estate
against the joint estate, it must be
made out that the money was taken im-
properly and fraudulently. In this sense,
improperly and fraudulently, that it was
taken against the contract between the
parties, express or implied • or as against
an individual partner, to increase his pri-
vate estate. I have oftener than once
expressed my confirmation of that opin-
ion, that those circumstances would, in a
legal sense, constitute fraud. Cases of
this kind, however, must be decided upon
their particular circumstances; and the
conclusion of law as to fraud must depend
upon the nature of those circumstances."
Ex parte Smith, 1 Glyn & J. 74 ; Ex parte
VVatkins, 1 Mont. & McA. 57.
( VP ) Whether a partner can claim
homestead and exemption rights out of
partnership assets, is a much debated and
quite unsettled question. That he can,
see Stewart v. Brown, 37 N. Y. 350;
Servant v. Rusk, 43 Gal. 235 ; In re Rich-
ardson, 11 N. B>. R. 114; Bonsall v.
Comly, 44 Pa. 442. That he cannot, see
Pond V. Kimball, 101 Mass. 105 ; Amph-
lett V. Hubbard, 29 Mich. 298; Clegg v.
Houston, 1 Phila. 352 ; Wright v. Pratt,
31 Wis. 99; Burns v. Harris, 67 N. C.
140; In re Blodgett, 10 N. B. K. 145;
Till's Case, 3 jSTeb. 261 ; Gaylord v.
Imhoff, 26 Oh. St. 317; In re Brothroyd,
14 N. B. R. 323; In re Croft, 8 Biss. 188.
A retiring partner from an insolvent firm
cannot take any money with him ; and if
he do, and place it in a homestead, equity
will take it for the benefit of the firm's
creditors. In re Santhotf, 16 N. B. R.
181. [See ante, § 252.]
iq) This statute, 6 Geo. 4, c. 16, § 3,
provides that a fraudulent conveyance,
" within this country or elsewhere,"
should constitute an act of bankruptcy.
This language was used to meet a decision
under previous statutes (Ingliss v. Grant,
5 T. R. 530), that a conveyance made in
India by one residing there, though trad-
ing with England, could not constitute au
act of bankruptcy.
492 THE LAW OF PARTNERSHIP. [CH. XV.
of the bankrupt among his creditors. This statute was first
enacted in the reign of James I., and has been confirmed by
6 Geo. 4. The statute of James was never adopted in this
country, as we had no bankrupt law here until after our inde-
pendence. Nor is there a similar provision in our bankrupt law.
It is ))lain, however, that the principle of this statute is, to a con-
siderable extent, one of common law ; and its pui-pose is one
which might in many cases be asserted by a coui't of equity,
without any special statute, (r) Indeed, this principle is the
same with that which holds a person as a partner who has been,
with his own consent, held out as one. For such a person is so
held because the creditors of the firm trusted the firm on the
credit of his membership, or, in other words, trusted him ; and
did this by his permission and authority. («) If, therefore, this
person, instead of permitting himself to be held out as a part-
ner, permits his property to be held out as the property of the
firm, and as forming a part of the foundation on which its credit
rests, the very same reason which held him personally in the first
case, with all his property, would now hold that part of his prop-
erty so permitted to appear as the property of the firm. We
cannot, therefore, doubt that equity would decide such a case very
much in accordance with the general purpose of this law, although
we doubt whether any court would, in this country, without the
direction or authorization of a statute, carry this principle so
far as it has been applied in some cases, under the statute, in
England. (0
§ 396. Actual Fraud not requisite. — In the cases under this
statute, (m) it has been repeatedly held that property passed in this
(r) Storrs v. Barker, 6 Johns. Ch. 166 ; v. Crosby, 5 Esp. 199 ; Mrlver v. Ilumhle,
Wendell v. Van Rensselaer, 1 Johns. Ch. 16 East, 174 ; Smith v. Watson, 2 B. &
344 ; East India Co. v. Vincent, 2 Atk. 83; C. 411 ; Waugh v. Carver, 2 H. Bl. 235 ;
Hanning v. Ferrers, 1 E(i|. Cas. Abr. 356, De Berkom v. Smith, per Lord Kenyon,
pi. 10; Gilbert's Eq. Cas. 83; Raw v. 1 Esp. 29.
Potts, Free, in Ch. 35; Hunsden v. (<) The cases in equity collected in our
Cheyney, 2 Vern. 150 ; Styles v. Cowper, notes may perhaps go no further than to
3 Atk. 692 ; Jackson v. Cator, 5 Ves. 688 ; hold, that, where the real owner of the
Dann v. Spurrier, 7 Ves. 231 ; Raw v. property stands by and virtually assents
Pole, 2 Vern. 239. In the application of to its sale by the reputed owners, it is a
this principle, at common law, see Pickard fraud on the purchaser, and the real owner
V. Sears, 6 A. & E. 469, 474 ; Heane v. is estopped from subsecjuently setting up
Rogers, 9 B. & C. 586 ; Graves v. Key, 3 title. This would be the rule here. The
B. & Ad. 318, a. principle is well stated by Chancellor
(s) Spencer v. Billing, 3 Camp. 310; Kent, in Storrs v. Barker, 6 Johns. Ch.
Parker v. Barker, 1 Br. & B. 9, 3 Moore, 168.
226; Ex parte Langdale, 18 Ves. 301; {u) By Stat. 6 Geo. 4, ch. 16, § 72, it
Guidon v. Robson, 2 Camp. 302; Parsons is enacted, "that if any bankrupt, at the
§ 397.] OF BANKRUPTCY AND INSOLVENCY. 493
way to tlic credit(jrs of the firm, although there was no imputa-
tion of fraud upon the actual owner. He may have had excellent
reasons for placing his property in the possession or at the dis-
posal of the firm: the only inipiiry was, Has he done so? for, if
he has, he has placed it within reach of the creditors of the
firm, (v) We do not, however, see that at common law, or in
equity, there needs to he actual fraud, any more than in the
analogous case of one held personally a partner because he per-
mits himself to be so held out. If, for any reason whatever, he
permits his property to enlarge the credit of the firm, either he
intends that it shall be liable for the debts contracted on that
credit, or he does not. If he so intends, there is no fraud of any
kind ; and the law accepts his intention and will carry it into
effect. If he does not so intend, then he commits a constructive
fraud upon the creditors ; and the law, or, if law cannot, equity,
will give to those creditors the benefit of that property. (?6')
§ 397. Effect of statute on Retiring Partners. — The important
consequences of the statute in England fall upon retiring part-
ners, and especially upon retiring dormant partners, who leave
their property in the possession or at the disposal of the firm.
And it is obvious that these are the parties, of all others, upon
time he becomes bankrupt, shall, by con- Storer v. Hunter, 3 B. & C. 368 ; Ex
sent and permission of the true owner parte Arbonin, 1 De Gex, 359 ; Ex ])arte
thereof, have in his possession, order, or Lawrence, 1 De Gex, 269 ; Ex parte Castle,
disposition, any goods or chattels whereof 3 Mont. D. & D. 117 ; Ex parte Burn, I
he was reputed owner, or whereof he had Jac. & W. 378 ; Ex parte Jones, 4 M. &
taken upon him the sale, alteration, or S. 450, overruling Ex jmrte Yallop, 15
disposition, as owner, the commissioners Ves. 60, and Ex parte Houghton, 17 Ves.
shall have power to sell and dispose of the 252. See also Robinson v. McDonnell, 5
same, for the benefit of the creditors, M. & S. 228 ; Hay v. Fairbairn, 2 B. &
under the commission ; provided that Aid. 193 ; Monkhouse v. Hay, 2 Br. & B.
nothing herein contained shall invalidate 114 ; Kirkley v. Hodgson, 1 B. & C. 580.
or affect any transfer or assignment of any By the statute 6 Geo. 4, exception is now
ship or vessel," &c. By section 1st of this made in case of ships,
statute, the statute 21 Jac. 1, ch. 19, is (;/•) Independently of any consideration
repealed ; but the 11th section of the stat- of bankruptcy, it is a general rule of law
. ute of James is re-enacted by the 72d sec- that all secret sales and transfers of per-
tion of the rejiealing statute, almost in sonal chattels, unaccompanied by posses-
totidein verbis. The adjudged cases, there- sion, are at least primd facie fraudulent
fore, which were decided with reference to and void as against creditors ; since the
the statute of James, are equally applicable effect of them is to enable a party to gain
to the statute of Geo. IV. a false credit from the world. 1 Deacon
(«) Horn V. Baker, 9 East, 218 ; Ex B. L. 406 ; Hoffman v. Pitt, 5 Esp. 25 ;
parte Fell, 10 Yes. 348 ; Ex parte Row- Eastwood v. Brown, 1 Ryan & M. 312 ;
landson, 1 Rose, 419 ; Ex parte Williams, per BuUer, J., in Hodsden v. Sta])le, 2 T.
n Ves. 7 ; Ex parte Enderby, 2 B. & C. R. 697 ; Bamford v. Baron, 2 T. R. 594,
389 ; Jones v. Dwyer, 15 Jlast, 21 ; Ex note ; and see Worsley v. De Mattos, 1
parte Smith, 3 Madd. 63, Buck, 149; Burr. 467.
494 THE LAW OF PARTNERSHIP. [CH. XV.
wliom these consequences should fall. If a known partner retires
and carries his personal credit out of the firm, but chooses to
leave the credit of his property in the firm, certainly he cannot
complain if they who accept this credit and act upon it are held
in law to be entitled to the advantage of it. (x) He should, there-
fore, not only give such notice of his retirement as will prevent
his personal liability from attaching to future contracts, but he
should withdraw all his property, and thus prevent the credit of
this property from so attaching. Or, if he cannot or will not so
withdraw his property at once, perhaps a sufficient notice that the
]>ro))erty so left is his, and is not left with the firm for them to
trade on the credit of it, might save his property from creditors
who come in after the retirement. Tliis may be difficult; and the
case of the dormant or unknown partner is still more difficult.
He, it seems, may by his retirement alone, without notice, cut off
his liability for future debts. He has never contributed to the
firm any credit but that of his property ostensibly in their pos-
session as their own. If he now leaves this property in their
hands, he leaves with it all this credit, and it is bound to make
this credit good. In such case, if he undertakes to protect his
property against this risk, it would seem that he must give notice
of his past relations and liabilities, and that he has terminated
them by retirement, and leaves his property there for certain
reasons, but not to be liable as the property of the firm. It may
be doubted whether even this would save his property as against
the statute, although it might be enough at common law or in
equity if there were no statute. (?/)
(x) Ex parte Chuck, 8 Ring. 469 ; Ex firm. The plant and stock in trade was
parte Wood, 1 De Gex, 134; Ex parte taken possession of by the same partner,
Gurnej', 3 Mont. D. & D. 541 ; Ex parte and used in his separate trade after the
Thomas, 3 Mont. D. & D. 40, affirming s. dissolution. It was held, that it was in
c. 2 ilont. D. & D. 294 ; Ex parte Hal- his separate reputed ownership. Ex parte
lifax, 2 ilont. D. & D. 544 ; Bannatyne Sprague, 4 De G. M. & G. 866. And see
V. Leader, 10 Sim. 850 ; Ex jmrte Heath, Hunter v. Rice, 15 East, 100 ; Ex parte
4 Jur. 28 ; Ex parte Simpson, Mont. & Wheeler, Buck, 25 ; Ex parte Clarkson,
Ch. 662 ; Ex parte Taylor, ilont. 240 ; Ex 4 Deac. & Ch. 56 ; Ex parte Enderhy, 2
parte Dyster, 2 Rose, 256 ; but see Cald- B. & C. 389 ; Ex parte Arbonin, 1 De Gex,
well t). Gregory, 2 Rose, 149 ; Curtis u. Per- 359; Ex parte Ruffin, 6 Ves. 119; Ex
ry, 6 Ves. 747 ; Ex parte Fell, 10 Yes. 347. parte Fell, 10 Ves. 347 ; Ex parte Wil-
(y) Ex parte Woodgate, 2 Mont. D. & liams, 11 Ves. 3 ; Joy v. Campbell, 1 Sch.
D. 394. A dissolution of partnership was & L. 328 ; Ex parte Burton, ] Glyn & J.
advertised in the Gazette, and a circular 207 ; Ex parte Usborne, 1 Glyn & J. 358 ;
sent in the name of the dissolved firm, Ex parte Coniier. 1 Mont. D. & D. 358.
requesting debtors of the firm to pay their And see further, on the effect of notice or
debts to one partner. It was held, that want of notice bearing on reputed owner-
the notice was insufficient to take the .ship. Ex parte Barnett, 1 De Gex, 194 ;
debts out of the reputed ownership of the Ex parte Wood, 3 Mont. D. & D. 314 ;
§ 398.]
OF BANKRUPTCY AND INSOLVENCY.
495
§ 398. Negotiable Paper signed by Partners. — It not Ullfreqiientlv
hai)i)Ciis that persons wlio actually are in partnersliip, and in one
firm, appear to the world as distinct traders, or as distinct firms,
for the convenience and advantage of using the names separately
upon negotiable paper. Thus, if there are three partners who
call themselves so, they could use only the name of A., 11, & Co.
But, if not known as partners, A. may draw on B. in favor of
C, and B. may accept and C. indoi'se, and the paper have appar-
ently three distinct liabilities. The question then may arise. May
the holder proceed against the several estates of all these persons,
or only against the joint fund of their firm ? (z) The authorities
on this point are conflicting ; nor do they cover the whole ground.
We would state the result, however, thus : If the holder took the
paper on the credit of the several names, and in ignorance of
their joint interest, he certainly may prove against all the parties
severally. But he may elect to proceed against the firm, or
the joint fund, because what he held was in fact partnership
paper, (r/) If he took the paper knowing that these names were
Hz parte Arkwright, 3 Mont. D. & D.
129 ; Ex parte Wilkinson, 13 Sim. 475 ;
Ex parte Pott, 2 Sim. 2.^7, recognizing the
rule in Williams v. Thorp, 2 Sim. 263 ; and
overruling Ex parte Smith, 2 Sim. 357 ;
Ex parte Nutting, 2 Mont. D. & D. 302 ;
Ex parte Ushorne, 1 Glyn & J. 358 ; Ex
parte Burton, 1 Glyn. k J. 207.
{z) B. & G. carry on business at Man-
chester as commission agents, under the
firm of B. & Co., G. being also a trader
on his own se])arate account at Stockport,
under the firm of J. & Co., and being
likewise a partner with J. in London,
trading under the firm of J. & Co., and
with S. R. at Stockport, trading under
the firm of S. R. B. & Co., drew two bills
upon J. & Co., payable to the order of B.
& Co., which J. & Co. accept, and which
are afterwards indorsed by B. & Co., G. &
Co., and S. R. ; and of which W. & Co.
became the holders for a valuable consid-
eration, without any knowledge that G.
was a partner in the house of B. & Co., or
in that of J. & Co. B. & G. and J. sev-
erally became bankrupt. The judges were
equally divided on the question, whether
W. & Co. could prove the amount of the
bills both against the joint estate of B. &
G. and the separate estate of G., or whe-
ther they must elect. But it was held, by
all the judges, that the amount of divi-
dends, which had been previously declared,
though not receiveil by W. & Co., under
the commission against J., must be de-
ducted from such proof. Ex parte Moult,
1 Deac. & Ch. 44, Mont. 321. The (jues-
tion is very elaboratel}'^ argued by Enskine,
C. J., and Sir George Rose, that "W. & Co.
must elect ; and, on a rehearing before
the Lord Chancellor, it was so decided.
2 Deac. & Ch. 419, Mont. & B. 28.
(a) A. & B. were in partnership, B.
being a secret partner; and A., ou the
paitnership account, drew bills in his own
name on B., which were accepted by him.
It was held, on the bankruptcy of A. & B.,
that the holder of tliese bills, viho was
ignorant of the partnership, was not en-
titled to prove them against the joint es-
tate of A. & B. and the separate estate of
B., but that he was entitled to prove them
against the separate estates of A. & B., it
was also held, that the holder, having
proved against the joint estate, might,
after a declaration of the dividend of the
joint estate, retire from that proof, and
prove against the separate estate. Ex
parte Husband, 2 Glyn & J. 4, reversing
s. c. 5 Madd. 410. The Lord Chancellor
said : "The circumstances of this case are
peculiar, aud create some embarrassment
496
THE LAW OF PARTNERSHIP.
[CH. XV.
the names of partners, it is much more doubtful whether lie can
now proceed against the parties severally. There are dicta of
great weight (6) in favor of his right, but little or no adjudica-
tion. We think the test would be the actual character of the paper.
If this was in fact partnership paper, and the holder knew
that the names were those of partners, we think he has only the
right which attaches to partnership paper ; and if the holder knew
also that it was partnership paper, as well as that it bore the
names of partners, we should be quite certain of this. If, how-
ever, the paper was not partnership paper, but the paper of one
of the persons, or of one of the firms placing their names on it,
then we should say that the holder could proceed against them
severally, although they were partners otherwise, and he knew
that they were so. (c)
§ 399. Competition between Partner and Firm Creditors. — If a
firm be indebted to one of the partners it has l)een supposed (t^)
that this debt formed a part of the several assets of that partner,
and that his several creditors miglit, therefore, prove against the
joint fund, for that debt, in competition with the joint creditors.
But that partner, if solvent, could not himself prove against the
in the application of well-known princi-
ples of the bankrupt law. It is clear, that
where a party takes a bill, drawn bj' some
members of a firm, carrying on a distinct
trade, on the firm, in ignorance that the
drawers constitute part of the firm of the
acceptors, proof is admitted against both
the drawers and acceptors ; and it is
equally clear, that a person holding a
joint and separate security for the same
debt is in bankruptcy bound to elect. In
this case, however, the bills are accepted
ty the dormant partner of the partnership
of Isaac and Peter Blackburn, carrying
on business in the name of Isaac Black-
burn, and are drawn by Isaac Blackburn,
in his individual name indeed, but, as I
must take it on the evidence, in his name
as representing the firm of the two bank-
rupts. It does not appear to me that this
case ranges itself within that class of
cases in which, contrary to the ordinary
rule in bankrui>tcy, the holder has been
allowed to pursue the contract appearing
on the face of the bills, and to have double
proof. But I do not think that the peti-
tioners are concluded by anything that has
passed, so as to be prevented now from
withdrawing the proof against the joint
estate, and being admitted as creditors on
the two separate estates." See the cases
cited in the following notes, for a full con-
sideration of these questions.
(?/) These are collected and commented
on in Ex parte Moult, 2 Deac. & Ch. 419.
(c) Ex jKirtc Moult, 1 Deac. & Ch. 44 ;
Mont. 321, and s. c. 2 Deac. & Ch. 419,
Mont. & B. 28 ; Ex parte Sillitoe, 1 Glyn
& J. 383 ; Li re Shakeshaft, Stirrup, &~
Salisbury, cited in Cuitis v. Perry, 6 Ves.
743, 747 ; Ex parte Adam, 2 Rose, 36, 1
Ves. & B. 493 ; Ex parte Bigg, 2 Rose,
37 ; Ex parte Walker, 1 Rose, 441 ; Ex
parte Liddel, 2 Rose, 34 ; Ex parte Hus-
band, 5 Madd. 419, .s. c. on appeal, 2
Glyn & J. 4 ; Ex parte La Forest, 1 Cooke
B. L. 276 ; Ex parte Benson, 1 Cooke,
278; Ex parte The Bank of England, 2
Rose, 82 ; Ex parte Rowlandson, 3 P.
Wms. 405 ; Ex parte Bonbonus, 3 Ves.
.'>46 ; Ex parte Blackburn, 10 Ves. 204 ;
Ex parte. Bond, 1 Atk. 98 ; Ex parte Cob-
ham, 1 Bro. Ch. 576 ; Ex parte Heyden,
1 Cooke, B. L. 254 ; Ex parte Chevalier,
1 Mont. & A. 345.
(d) Ex parte Hunter, 1 Atk. 223, per
Lord Hardwicke ; Ex parte Blake, Cooke
B. L. 503.
§ 399,] OF BANKRUPTCY AND INSOLVENCY. 497
joint fund, to the injury of the joint creditors, because he is him-
self liable to those creditors ; and the several creditors of that
partner take on his insolvency only his rights ; and therefore it
seems now to be settled, that they cannot prove against the joint
fund, in such a case. («) ^ If, on the other hand, a partner owes a
balance to the firm, the joint creditors cannot, on that account,
(e) Ex parte Reeve, 9 Ves. 588 ; Ex by Fendal to be admitted a creditor for
parte Lodge & Feudal, 1 Ves. 166 ; Ex the amount of his advances as against the
parte King, 1 Hose, 212. In Ex parte partnership. Lord Thurlow, after full
Keeve, Lord Eldon, in holding that, under consideration, was of opinion, that all the
a joint commission of bankruptcy, the authorities establish this ; that those who,
right of the creditors to interest .subse- being in partnership, are themselves, or
quent to the date of the commission, in some of them, debtors to the creditors of
tlie case of a surplus, is preferred to a every class, cannot come in competition
debt from the separate to the joint estate ; with the creditors. After their demands
upon the principle, that neither the part- are liquidated finally, the partners may be
nership nor the individual del)tor can creditors upon each other, but not before."
claim in competition with the creditors, M'Cauly v. M'Farlane, 2 Desaus. 239 ; Ex
said: "All these eases were very fully parte Burrell, Cooke B. L. 503; Ex parte
discussed by Lord Thurlow, in the case Parker, id.; Ex parte VxxiQ, id.; Ex parte
of Lodge & Fendal. Mr. Fendal was a Adams, 1 Rose, 305 ; Ex parte Harris, 1
cieditor of the partnership, of himself Rose, 438 ; Ex parte Sillitoe, 1 Glyn & J.
and Lodge, for large sums advanced. 382 ; Ex parte Ogle, Mont. 350 ; Ex parte
They became bankrupts immediately Yonge, 3 Ves. & B. 34, 2 Rose, 44 ; Ex
after the formation of the partnership ; parte Batson, Cooke B. L. 503 ; Ex parte
and those advam^es formed tiie joint es- Grill, id,
tate to be divided. There was a struggle
1 It is a general rule that by no form of claim can one partner compete with the
partnership creditors in the division of the joint assets. Edison Electric Illuminating
Co. V. De Mott, (N. J.) 25 Atl. 952. Hence where a bankrupt firm is indebted to a
bankrupt partner the assignee of the latter cannot prove against the joint estate. In
re Rieser, 19 Hun, 202. And where a partner dies his representative cannot prove
against the firm, if it is bankrupt, a sum which was due to the deceased from the firm,
so as to compete with the firm creditors. Ex parte Blythe, 16 Ch. D. 620; Banks v.
Steele, 27 Neb. 138, 42 N". W. 883. So if upon the partner's death the survivors
continued business and became bankrupt, the representative of the deceased could not
prove if creditors of the old firm had proved. Ex parte Blythe, 16 Ch. D. 620. If
no creditors of the old firm had proved, the representative of the deceased partner
might do so ; but his proof would be postyioned if a creditor of the old firm afterwards
proved. Ex parte Andrews, 25 Ch. D. 505 (C. A.). And if all the debts of creditors
of the old firm are barred by the statute of limitations, the former partner or his rep-
resentative may prove. In re Hepburn, 14 Q. B. D. 394.
Where the former partner took a note of the new firm for his claim, and while the
firm was solvent surrendered the note and had a new one made to his daughter, who in
good faith indorsed to A, the latter Gould prove ; though it seems that he could not
have done so if he had been an indorsee of the original note to the partner. Parsons
V. Tillman, 95 Ind. 452. A statute which provided that a married woman should not
prove against her husband in bankruptcy in competition with his creditors, was held
not to apply in a case where a woman lent money to a partnership of which her hus-
band was a member , and she was allowed to prove with the other creditors. In re
Tuff, 19 Q. B. D. 88.
32
498
THE LAW OF PARTNERSHIP.
[CH. XV.
prove against his several fund, provided the balance or debt
against the partner arose from lawful transactions ; but it seems
that, if tliis balance was caused by a fraudulent or surreptitious
withdrawal by the partner of something from the joint fund, this
should be restored to that fund, for the benefit of the joint cred-
itors.^ So, if the joint estate is larger at the time of bankruptcy,
by any fraudulent act against one partner, liis several credi-
tors may, it is said, proceed against the joint estate, for that
amount. (/)
§ 400. Dormant Partners. — If there be dormant partners, cred-
itors who dealt in partnership business with the ostensible
partners, without any knowledge of the dormant partners, may,
upon discovery, elect wiiether to proceed against tlie ostensible
partners alone, or against the joint fund of the actual partner-
sliip. (^) But it would seem that the rule in equity, above
referred to, that one who may choose between two funds shall
not, by such choice, injure one who has no choice, here comes in ;
and that, if such creditors elect to prove against the separate
estate of the ostensible partners, several creditors of the osten-
sible partners, wlio could not proceed against the joint fund, may
now proceed against it for an equivalent amount, (h)
{/) Ex parte Smith, 1 Glyn & J. 74 ;
6 Madd. 2 ; Ex parte Cust, Cooke B. L.
506 ; Ex parte Harris, 2 Ves. & B. 214, 1
Rose, 129, 437 ; Ex parte Watkins, 1
Mont. & McA. 57 ; Ex parte Yonge, 3
Ves. & B. 31, 2 Kose, 40 ; Ex parte Reid,
2 Rose, 84.
((/) Ex parte Reid, 2 Rose, 84 ; Ex
parte Norfolk, 19 Ves. 458 ; Ex parte
Watson, 19 Ves. 459 ; Ex parte Hamper,
17 Ves. 403 ; Binford v. Dormnett, 4 Ves.
434 ; Ex parte Matthews, 3 Ves. & B.
125 ; Ex parte Hodgkinson, Cooper, 101.
As to the conflicting rights of joint and
separate creditors, in eases of partnerships
having a dormant partner, see French v.
Chase, 6 Me. 166 ; Lord v. Baldwin, 6
Pick. 348 ; Cammack v. .Johnson, 1 Green
Ch. 164 ; Witter r. Richards, 10 Conn.
37. Tt is in the option of a firm, sning as
plaintiffs, either to join the dormant part-
ner in the suit or omit him ; as, in the
corresponding case of the firm being sued
as defendants, it is at the option of the
plaintiff to join the dormant partner or
not ; and the joinder or nonjoinder will
not constitute an}' objection to the main-
tenance of the suit. Skinner v. Stocks,
4 B. & Aid. 437 ; Lloyd v. Archbowle, 2
Taunt. 324 ; Brassington r. Ault, 2 Bing.
177 ; Wilson v. Wallace, 8 S. & R. 55 ;
Clarkson v. Carter, 3 Cowen, 85 ; Board-
man V. Keeler, 2 Vt. 65 ; Lord v. Baldwin,
6 Pick. 348 ; Alexander v. Barker, 2 Cr. &
J. 133 ; Cothay v. Fennell, 10 B. & C.
671.
(h) B. & S. were in partnership to-
gether ; the latter being a dormant partner.
A joint commission issued against them.
B.'s separate estate was very considerable ;
the joint creditors, therefore, availing
themselves of their right to resort either
to the visible and the dormant partner, or
to the visible partner only, adopted the
latter alternative, and proved their debt
against B.'s separate estate. The conse-
quence of this was, that B.'s separate
estate, which would have sufficed for the
payment of all the separate creditors in
full, was, by the access of the joint credit*
^ Ante, § 378, note 1.
§ ^02.1
OF BANKRUPTCY AND INSOLVENCY.
499
§ 401. Distinct Firms with Common Partners. — We have before
considered the case of parties who are actually partners, hut do
not appear as such. If, however, they do not seem to constitute
two distinct firms, but do so actually, — ^ as, for exami)le, if, out
of four who are j»artners for one kind of business, two are part-
ners in anotiier entirely distinct business, and these two firms
deal with each other, — there may be proof by one against the
other, or by the creditors of either against its own fund, in
the same way as if the two firms were formed of different
persons, (e)
§ 402. Partners' Priority in Firm Assets over Separate Creditors,
— While solvent partners cannot prove against the joint fund to
the prejudice of joint creditors, because they are liable to those
creditors, (/) they may prove against the joint fund, in comi)eti-
tion with the several creditors, to whom they are not liable, (/c)
ors, apportioned in a dividend of seven
shillings, in the pound ; while the joint
estate of B. & S., exonerated of its
proper claimants, prodm-ed a surplus. On
applicatiiin of B.'s separate creditors, it
was held, that they had a lien upon that
surplus to the extent which their fumls
had been diminished hy the resort of the
joint creditors. Ex parte Reid, 2 Rose, 84
(i) In re Richardson, 5 L. J. Ch. 129 ;
Ex parte St. Barbe, 11 Ves. 413 ; Ex
parte Sillitoe, 1 Glyn & J. 374 ; Ex parte
King, Cooke B. L. 534 ; Ex parte Johns,
Cooke B. L. 534 ; Ex parte Hesham, 1 Rose,
146 ; Ex parte Adams, 1 Rose, 305. In
re Shakeshaft, cited in 6 Ves. 123, 747,
and in 11 Ves. 413. In this last case,
Lord Kldon said : " In the case of Shake-
shaft, Stii'rup & Salisbury, Lord Thurlow
went upon this distinction : that where
there is only one partnership arranging
different concerns belonging to them all,
in (liH'erent ways, for the benefit of differ-
ent parts of that joint concern, as in that
instance, the three persons carrying on
the business of cotton manufacturers in
Lancashire, and two of them in London,
there could not be proof by the three
ag:iinst the two ; but if the trades be
perfectly distinct, then the three as cot-
ton manufacturers in Lancashire might be
creditors upon the separate concern of the
two as ironmongers in London." Ex parte
Freeman, Cooke B L. 534 ; Ex parte Cas-
tell, 2 Glyn & J. 124 ; & parte Brenchle}-,
2 Glyn & J. 127 ; Ex parte Stroud, 2
Glyn & J. 127 ; Ex parte Cook, Mont. 228.
For the limitations on this doctrine, see Ex
parte Hargreaves, 1 Cox, 440.
(j) Ex parte Adams, 1 Rose, 305. A.
lends a sum of money to one jiartner, on
his own securit}', who lends the same to
the partnership trade. A joint commis-
sion is taken out. A. shall not come in
as a creditor upon tlie joint estate of the
bankrupts directly, with the rest of the
partnership creditors ; but by way of
circuit}-, he is entitled, as standing in the
place of that partner who has paid the
money to the use of the partnership trade.
Ex parte Hunter, 1 Atk. 223. And see
Ex parti Ellis, 2 Glyn & J. 312 ; Ex
parte Carter, 2 Glyn & J. 233 ; Ex parte
Reeve, 9 Ves. 589 ; Ex parte Ogle, Mont.
351 ; Ex parte Burrell, Cooke B. L. 505 ;
Ex parte Broome, 1 Rose, 69 ; Ex parte
Rawson, Jac. 277 ; Ex parte Robinson, 4
Deac. & Ch. 499.
(h) Ex parte Adams, 1 Rose, 305 ; Ex
parte King, 17 Ves. 115 ; Ex parte Tor-
rell. Buck, 345 ; Goss v. Dufresnoy,
Davies B. L. 371 ; Ex parte Hunter, 1
Atk. 225 ; Ex parte Batson, 2 Ca. ( h.
139, 166; Craven v. Knight, 2 Chan.
226 : Ex parte Taylor, 2 Rose, 175 ; Ex
parte Ogilvy, 2 Rose, 177, 3 Ves. & B. 133 ;
Ex parte Watson, 4 Madd. 477, Buck,
449, 492 ; Ex parte Willock, 2 Rose, 392 ;
Wood V. Dodgson, 2 M. & S. 195 ; Aflalo
V. Fourdrinier, 6 Ring. 309 ; Butcher v.
Forman, 6 Hill, 583.
600
THE LAW OF PARTNERSHIP.
[CH. XV.
Indeed, their rijrhts are prior to thuse of the several creditors ;
for tliose creditors can have the right of their debtor to the joint
fund only after all claims upon it are satisfied, and, among these,
the claims of the other ))artners. On this point, it must be the
general rule, a])i)licabie to all partnerships, whether they be gen-
eral or confined to a particular business or a particular trans-
action, and, indeed, to all joint adventures and enterprises of
every kind, that they must be first settled, and the mutual claims
and balances of the coi)artners or coadventurers be adjusted,
before the divisible surplus is ascertained ; and then the right of
each one is only to his share of this surplus, and the creditors of
each one can reach and' acquire only his right. It follows,
therefore, that the several creditors of each one will be post-
poned, so far as the joint assets go, not only to the joint creditors,
but to the claims of the coadventurers for balances due from their
companions, arising out of the adventure. (Z)
If any such adventures, contracts, or enterprises are outstand-
ing at the time of the bankruptcy, the assignees must wait until
they are concluded and adjusted, and then take the share or inter-
est of their bankrupt in the result, (wi) The assignees are also
(/) West V. Skip, 1 Ves. 142; Ex
parte Ruffin, 6 Ves. 119 (Sumner's ed.)
note (a). Upon a dissolution of the part-
nership, each partner has a lien upon the
partnershi{> effects, as \^ell for his indem-
nity as for his propoition of the surplus.
But creditors have no lien upon the part-
nership effects for their debts. Their
equity is the equity of the partnership
assenting to the i)aynient of tlie partner-
ship debts. 3 Kent, Comm. (.oth ed.) 65 ;
C;impbell V. Mullett, 2 Swanst. 608, 610 ;
Ex parte Harris, 1 Madd. 583 ; MuiTay v.
Murray, 5 Johns. Ch. 60 ; Woddrop v.
"Ward, 3 Desaus. 203 ; Bell v. Newman, 5
S. & R. 78; Doner v. Stauffer, 1 Pen. &
W. 198; White v. Union Ins. Co., 1 N.
& McC. 557; Ridglev v. Carey, 4 H.
k McH. 167 ; M Culloh v. Dashiell, 1 H.
& G. 96; Hoxie v. Carr, 1 Sunin. 181;
Conwell V. Sandidge, 8 Dana, 278 ; Ex
parte Williams, 11 Ves. 5 ; Holderness v.
Shackels, 8 B. & C. 612; Hodges v. Hol-
man, 1 Dana, 53; Pierce v. Tiernan, 10
G. & J. 253 ; Sumner r. Hampson, 8
Ohio, 328; Bradford v. Kimberley, 3
Johns. Ch. 431 ; Parker v. Muggridge, 2
Story, 347 ; Payne v. Matthews, 6 Paige,
19. The lien of partners upon the whole
funds of the partnership, for the balance
finally due to them resjiectively, seems
inca})able of being enforced in any other
manner than by a court of e(iuity, through
the instrumentality of a sale. The cred-
itors of the partnership have a preference
to have their debts inxid out of the part-
nershi]! funds before the private creditors
of either of the partners. But this pre-
ference is, at law, generally disregarded ;
in e(iuity, it is worked out through the
equity of the- partners over the whole
funds. 1 Story, Eq. Jur. § 675 ; Com-
mercial Bank v. Wilkins, 9 Me. 28 ; Free-
man V. Stewart, 41 Miss. 138. [See aiite,
§ 246 et scq.] .
Ui)on the same principle the debt of a
firm, which has advanced money to an
individual member beyond his share of
the capital, is a separate debt of tlie firm as
against the ])artner receiving the same ;
and the assignee of the fii'ni may prove
the debt against the separate debtor part-
ner, and be paid after the other separate
copartnership creditors are paid, but not
before. In re McLean, 15 N. B. R. 333.
(m) French i-. Fenn, 1 Cooke B. L.
536 ; 3 Dong. 257 ; Jack.son v. Sedgwick,
1 Swanst. 468 ; Brown v. Litton, 1 P.
§ 40G.]
OF BANKRUPTCY AND INSOLVENCY.
501
entitled to claim unpaid instalments due from a solvent partner,
for his admission into the partnership, because these form a part
of the joint fund, {n)
§ 403. Foreign Bankruptcy. — Nor is the interest of partners in
a foreign enterprise lost by seizure of the goods there, provided
they, or any part of them, be restored. Tims, if there be three
partners, two citizens of one country, and one of another, — and
between these countries war breaks out, and property of the part-
nership is seized in the country of the one as property of aliens,
but the share therein of that one is restored to him, the other
partners are entitled, on settlement, to a share of the property
restored, in the same way as if it were restored to the partner-
ship; and, if insolvent, their assignees take that share, (c) A
foreign government may, however, make a gift to their own citi-
zen ; and it has been said, that if the government choose to make,
or cause to be made, a compensation in money to their citizen,
instead of a restitution m aoUdo^ this will be held to be a gift, in
which the copartners hav^e no interest. And this would be espe-
cially true if there were an express exclusion of the aliens. Of
course, the joint creditors could not prove against funds thus
made several, {p)
Wms. 140; Smith v. De Silva, Cowp.
469. The assignees under a separate com-
mission talce only sneh iindivideii interest
or share as the bankrupt himself had, and
in the same manner as he held it. Holder-
ness V. Shackels, 8 B. & C. 618. See also
"Wilson V. Greenwood, 1 Swanst. 471, 481,
n. ; Hammond v. Douglas, 5 Ves. 539 ;
Crawshay v. Collins, 15 Ves. 218 ; Hill
V. Burnham, cited id. ; Brown v. Vider,
15 Ves. 223, 2 Russ. 340 ; Brown v. De
Tastet, Jac. 284 ; Fearns i'. Young, 9
Ves. 549 ; Wedderburn v. Wedderburn, 4
Mylne & C. 53.
{n) Akhurst v. Jackson, 1 Swanst. 85,
1 Wilson, 47.
(o) Thompson v. Ryan, cited in Camp-
bell V. MuUett, 2 Swanst. 565, n., 577,
And see, as to the effect of war upon part-
nership, Griswold v. Waddington, 16
Johns. 438, and authorities there cited.
(p) Campbell v. MuUett, 2 Swanst.
551. Two American citizens residing at
Baltimore, and a French subject residing
at St. Domingo, being in partnership, and
owners of certain ships captured by British
cruisers, and the commissioners ajipointed
under the seventh article of the treaty of
commerce, concluded in 1794, between
England and America, for awarding com-
pensations to American subjects who bad
suffered losses by capture, for which they
could obtain no redress in the ordinary
tribunals, having awarded, in compen-
sation of the ships of the partnership
captured, certain sums to the two Ameri-
cans, with express exclusion of the French
citizen as an alien enemy, the sums so
awarded are not partnership property, and
the creditors of the partnership have no
claim on them, as against the separate
creditors of the Americans. In this case,
the following distinction is made by Sir
Thomas Phimer, Master of the Rolls, in
delivering judgment: "If the very joint
stock, or a part of it, as in Thompson ?'.
Rj'an, had been restored, there would
have been nothing to alter the property :
the goods are returned in statu quo, the
property of the partners. But here the
ships are gone, and never restored, and the
question concerns a new property come to
the two in the way of compensation. That
is far removed from a case of restitution,
502
THE LAW OP PARTNERSHIP.
[CH. XV.
The English Court of Admiralty has refused to assist the
assignees of a bankrupt in obtaining liis share of property re-
stored in so/ido. But we think this arose from a limitation of
the admiralty ])ovver in England, which does not exist here, (q)
§ 404. Right of Assignee to continue Business. — It has been
repeatedly said, that, if a partner becomes insolvent, the accounts
of a firm should be closed, and the assignees should not continue
the trade and business, nor permit a continuance of it without
settlement, (r) But that may not be a positive and universal
rule ; nor can the solvent partners resist a bill by the assignees
for a share in the profits of a subsequent trading, on the ground
that the assignees did not require an immediate settlement, be-
cause it is no more the duty of the assignees to require this than
it is the duty of the solvent partners to make it. (s) Where a
Restitution might have been made, if it
were still joint propert)' ; compensation
considers only the individual shares, and
gives in the proportion of their interests
iudividuall}- to the two. There is no moi-e
ground for admitting the joint creditors
than the French partner." During the
argument, the Master of the Rolls put the
query, " If a partnership sustained an
accidental loss, as by fire, and an individual
made a donation to two of the partners,
in compensation of their loss, would that
be i>artnership property ? " And see Laraz-
zabel V. Gorbea, cited 2 Swaust. 572.
(q) The Jefferson, 1 C. Rob. 325. Sir
W. Scott, indeed, in his judgment,
expressly sa}'s, after the decree for restitu-
tion had been passed : " The question is,
whether the court shall proceed again to
make a severance between these parties ?
I cannot think that I have the power to do
that. All the severance that was neces-
sary in this case to determine the national
character of the parties has been already
made : restitution stands decreed to this
house. I am functus officio, and I shall
not begin again at the prayer of the
assignees, who now suggest that one of the
partners is likewise an English merchant
and a bankrupt. Tliey must resort to
some other authority to make the discrim-
ination between this American partner-
ship stock, for the purpose of subjecting a
particular share to a British bankruptcy.
It is no part of the duty of the Court of
Admiralty to do this, and I dismiss the
petition." See 2 Pars. Mar. Law. b. 3,
on the law and jurisdiction of admiralty in
America.
(r) Crawshay v. Collins, 15 Ves. 218,
227 ; Kegden v. Pierce, 6 Madd. 353 ;
Fereday v. Wightwick, 1 Tamlyn, 261 ;
3 Kent Comm. 64 ; 2 Bell Comm. 632 ;
Story on Part. § 350 ; Gow on Part. 234 ;
CoUyer on Part. b. 2, ch. 2, § 2, pp. 146,
147.
(s) Crawshay v. Collins, 15 Ves. 228,
per Lord Eldon : "It is said a duty was
im[iosed upon the assignees to call for the
account. That is true. It is farther
urged that they could not be traders in
new adventures. This also is, in a sense,
true ; but the proposition would be rash,
that there can be no case in which they
could trade with consent of the creditors,
or of the creditors and the bankrupt
together. If they had the consent of all
persons interested, I do not know that
other persons with whom they might deal
could make the objection. The duty is
not as between them and the other per-
sons, who are not properly to be termed
remaining or surviving partners ; the
destruction of one being, unless it is
otherwise provided, a dissolution of the
whole partnenship, — as if by effluxion of
time, or by death, — except as it may be
reasoned upon the effect in bankruptcy of
the substitution of assignees. It is, how-
ever, no more the dutj^ of the assignees to
settle with the others, than it is their duty
to settle with the assignees."
§ 405. OF BANKRUPTCY AND INSOLVENCY. 603
deceased partner's estate was insolvent, and the administrators
had permitted the surviving partners to sell the stock in the usual
course of trade for the business benefit, and a loss occurred, they
were not held responsible therefor, (f) But, on the other hand,
if administrators ]jut assets, which they have in their own hands,
into the hands and possession of the surviving partners to trade
with, and a loss occurs, for this they will l)e held responsible, (m)
§ 405. Sale of the Effects in Bankruptcy. — If there be a bank-
ru{)tcy of the whole firm, it is very seldom that any other mode of
settlement is resorted to, but a sale of the property, (v) And
this is so usual, and recommended by so many obvious considera-
tions, that assignees must not only have an unquestionable power
to take this course, but would, perhaj)s, find it diiiticult to cxf)lain
and justify any other course, (w) In one case, where credit-
ors called upon the English court of chancery to restrain the
assignees from a proj)osed sale of the bankrupt's effects, alleging
suspicious cii'cumstances as to the manner of the sale. Lord
Eldon refused to interfere, on the ground that the assignees were
acting in a matter peculiarly within their power and at their dis-
cretion, and the court must recognize them as the best judges of
the propriety and expediency and manner of a sale ; and that the
assignees must abide their own res()onsibility for what they did
in this matter, (a;)
The question comes up in a different form when a part only of
the partners are bankrupt, and the residue solvent. There the
assignees take all the interest and rights of the bankrupt, but
take them subject to the solvent partner's rights, {y) We should
say, therefore, that they had no right, as a matter of course, to
require a sale, (z) Usually, there is no sale ; but the solvent
partners settle up the concern so far as to ascertain the value of
{t) Thompson t'. Brown, 4 Johns. Ch. discretion, a court of equity is satisfied
619. And see Shepherd v. Towgood, Tur- that a postponement of a sale is for the
ner & R. 379 ; Keed v. Norris, 2 Mylne & general benefit of the creditors, it will be
C. 361 ; Jennison v. Hapgood, 7 Pick. 1 ; so ordered. Ex parte Kendall, 17 Ves.
Sweet V. Jacocks, 6 Paige, 355. 519 ; Ex parte Giosvenor, 14 Yes. 589.
(7<) Thompson v. Brown, 4 Johns. Ch. (x) Ex parte Montgomerj', 1 Glyn & .1.
619. And see Barker v. Parker, 1 T. R. 341. Ordinarily, on a dissolution, from
295; Ex parte Garland, 10 Ves. 119; Ex whatever cause, there must be a sale.
parte Richard.son, Buck, 209; Wightraan Dickinson v. Dickinson, 29 Conn. 601.
V. TowTiroe, 1 M. & S. 412 ; Viner v. (y) Taylor v. Fields, 4 Ves. 396, 15
Cadell, 3 Esp. 90. Ves. 559, n. ; Barker v. Goodair, 11 Ves.
(v) Eden B. L. 215 ; Ex parte Gerihg, 85; Dutton v. Morrison, 17 Ves. 209;
1 Ves. Jr. 168 ; Ex parte Hughes, 6 Ves. Holderness v. Shackels, 8 B. & C. 618.
617, 622 ; Regden v. Pierce, 6 Madd.353 ; (c) Allen v. Kilbre, 4 Madd. 464 ; Ex
Fereday v. Wightwick, 1 Tamlyn, 261. parte Fige.s, 1 Glyn & J. 122. But see Ex
{w) But if, in the exercise of a sound parte Montgomery, 1 Glyii & J. 338.
504 THE LAW OF PARTNERSHIP. [CH. XV.
the bankrupt's interest, and this they pay to tlie assignees. And
sometimes they give security to the assignees tliat they will, with-
out delay, settle the concern, and ascertain and pay over the
bankrupt's share, (a) That the assignees may have an account,
is certain ; and the court would always decree a sale where the
assignees requested it for good cause, and perhaps it may be said
that any decided advantage to the estate of the bankrupt would
be deemed good and sufficient cause. (^)
(a) In Nerot v. Burnand, 2 Russ. 56, {h) Crawshay v. Maule, 15 Ves. 218 ;
pending an appeal against a decree declar- Gow on Part. 234 ; Lingen v. Simpson, 1
ing a partnership dissolved and directing Sim. & St. 600 ; Featherstonhaugh i;.
the property to be sold, and an account, Fenwick, 17 Ves. 309 ; Fereday v. Wight-
the court upon motion suspended the sale wick, 1 Tamlyn, 261 ; Regden v. Pierce,
upon the terms of bringing title-deeds 6 Madd. 353 ; Cook v. Collingridge, 1
into the master's office, and giving seciuity Jacob, 607 ; Evans v, Evans, 9 Paige,
for the value of the effects. 178.
§ 406.] OP AN ACCOUNT. 505
CHAPTER XVI.
OF AN ACCOUNT.
SECTION I.
WHEN AN ACCOUNT WILL BE ORDERED.
§ 406. Right to an Accouut. — We have been obliged to antici-
pate many remarks about the taking of an account, when treating
other topics; especially the various modes of dissolution, and its
consequences. The right to demand an account is almost, but not
quite, peculiar to partners and their representatives.^ In decid-
ing one case, (a) Lord Eldon seemed to thinlv that the having a
(rt) Ex parte Hamper, 17 Ves. 412. a partner ; and there is a failure of evi-
And see Katsch v. Shenck, 13 Jur. 668. dence to show that, notwithstanding the
By a memorandum in writing, the defend- words of the agreement, there was sub-
ant, a general merchant, agreed with the joined any stipulation that the plain litf
plaintiff, in consideration of the general should not be taken as a partner ; without
services in business of the latter, to allow further entering into the question, as be-
him, in addition to a fixed salary, one- tween the plaintiff and defendant, there is
fifth of the net profits on all new business an interest created in the plaintiff to know
entered into through him ; scmble, a part- what is the amount of profits, and there-
nership was thereby constituted between fore an interest to see that those things out
the parties ; and held , that, at any rate, of which the profits arise are properly dis-
the plaintiff thereby acquired a right, as posed of, which is, in itself, very like a
against the defendant, to an account of partnership interest. I think, on prin-
profits, and the appointment of a receiver, ciple, a receiver ought to be appointed."
The Vice-Chancellor : " It strikes me, that See Salter v. Ham, 31 N. Y. 321 ; Coll}'er
by the agreement the plaintiff has become v. CoUyer, 38 Pa. 257.
1 It is clear that the right of a partner to an account is a legal, not an equitable
right ; and that the jurisdiction of equity depends upon the fact that the legal action of
account is obsolete and useless. Equitable relief is not discretionary. This seems to
have been overlooked by the court in the case of Kinney v. Robinson, 66 Mich. 113,
33 N. W. 172. This was a bill for an account. An order had been entered that either
partner might dispose of the assets at cost upon filing a bond. The plaintiff took the
assets without filing a bond, and disposed of them below cost ; but the accounting
showed him to be a creditor of the firm to the amount of §2000. The court held
(Sherwood, J., dissenting) that haviug refused to do equity, he could not call upon
equity to help him ; and declined to grant a decree that he should be paid the amount.
Perhaps they would have allowed him an action at law against his copartner ; yet equity
would seem better able to adjust the rights of the parties.
506
THE LAW OF PARTNERSHIP.
[CH. XVI.
right to nu account was a good test of the relation of partner ;
tliat is, it one hy agreement acquires a right to an account, this
will make him a partner. We should prefer saying that partner-
shi]) is a good test for the right to an account ; and that the first
in(juiry must be, whether a man is a partner; for though one
may have a right to an account who is not a j)artncr, (aa) if he
is a partner, the conclusion follows, that he has a right to an
account. This right he may transfer ; for not only do all jiart-
ncrs possess this right, but it is one among those rights which
originates in or arises out of a partnership, and yet which a part-
ner transfers to his representatives, whether they be executors or
administrators, assignees in bankruptcy, execution creditors, or
transferees, although they do not therel)y become partners. Every
one of these, and every other party who has acquired the part-
ner's interest in the joint fund, may call for an account, in oi-der
to settle and determine what that interest is. (6) ^
{nn) One compensateii by a share of
the profits may have an account, though
not a partner. The right to an account is
not a conckisive test of partnership. Ante,
§ 53, note.
{b) In Crawshay i\ Collins, 2 Euss.
342, Lord Eldon says : " A partnership
may expire by death, or by effluxion of
time, or by notice, or by the bankruptcy
of a partner ; but, in all thes.; cases,
though, in a certain sense of the word
expiration, a partnership does so expire in
each and every one of them, yet, in most
instances, a partnership does not and can-
not then expire as to all purposes. In
some, it may not exjiire for years after the
period in which, in one sense of the word,
we say it does expire ; and it must depend
upon the nature of the partnership, in
what way it is to be carried on during the
period in which it is to be wound np. If
it expires by bankrujitcy, there are intro-
duced into it, as persons interested in the
manner of winding it up, the assignees of
the bankrupt. If it expires by death,
there are introduced, in like manner, the
executors of the deceased partner ; who
may be stated, though certainly not in a
very correct use of the term, to be a sort of
assignees of the deceased partner. When
it expires by notice, it mny happen that in
many cases the party who gave the notice
may die long before the time arrives when
it may be said to be quite dissolved, and
his executors may become partners in the
concern. In short, in everj' s[»ecies of dis-
solution which may take place, in different
events ])ersons in the course of time may
be introduced into the partnership, with
reference to whom accounts must be settled
much in the same manner as it would
have been necessary to have settled them
with the original partners." See Bailey v.
Moore, 25 111. 347. See, as to what inter-
est gives a riglit to an account, Moffat v.
Mofl'at, 10 Bosw. 468. Even a member of
a firm organized for the purpose of hinder-
ing and delaying creditors of a prior firm
may have an account. Harvey v. Varney,
98 Mass. 118.
Where after dissolution the respective
partners continue in settlement of the
affairs of the partnership, the statute of
limitation begins to run against the right
of either to an account from the others,
from the date of the last transaction, re-
ceipt, or payment by either, and no
demand is necessary before suit. McClung
V. Capehart, 24 Minn. 17, 1 N. W. 123.
^ Thus, a sub-partner, so-called, has a right to an account. Nirdlinger v. Bern-
heimer, 133 N. Y. 45, 30 N. E. 561. As to the right of an employee paid by a share
of the profits, see ante, § 53, note.
§ 407.]
OF AN ACCOUNT.
507
§ 407. Duty to keep Accounts. — Tt is partly as a consequence
of this universal and inii)i>rtaut ritj:lit, that all partners, having
any charge of the business of the (irm, are bound to keep con-
stantly, regular, intelligible, and accurate accounts of all the
business, and to give all the partners at all times access to them,
and to the means of verifying them. And if they, for any con-
siderable time, disregard and refuse to r)erform this duty, a court
of equity will coerce them to its fidl discharge, (c)
It is possible that for a breach of this duty, especially where
there was an express contract to perform it, an injured party
might have redress at law ; but he can compel the performance,
and, generally, find a remedy for the ill consequence of a non-
performance, only in equity. But this court has full power in the
premises, and usually acknowledges the right to an account of any
partner, or rei)resentatives of a partner, unless it is obviously
unnecessary, and requested for frivolous reasons, or with malicious
mtent. (t?)
{c) Rowe V. Wood, 2 Jac. & W. 358,
per Lord Eldon : " One partner cannot
exclude another from an equal manage-
ment of the concern ; and it is the duty of
each to keep precise accounts, and to have
them always ready for inspection, and, in
short, to keep good faith towards each
other. I think that the plaintiff, subject
to the equities which may he ultimately
declared between the parties, has a clear
right to insist that regular accounts shall
be kept of all receipts, payments, trans-
actions, and so on, relative to the mine,
and to have constant access for the pur-
pose of inspecting the accounts ; and also,
that, subject to those equities, he has a
clear right to control the working of the
mines, and if he is impelled in the exercise
of any of these rights, let him come to the
court again. The application, after the
other parties have been apprised of what
the court expects them to do, will be dif-
ferently treated." Beacham v. Eckford,
2 Sandf. Ch, 116. See Tyng v. Thayer, 8
Allen, 391.
(d) Smith's Merc. Law (5th ed.), 35 ;
JLarshall v. Colman, 2 Jac. & W. 266.
Where [ilaintiff has an adequate 7-emedy at
law by action of account, it is held, in
Connecticut, that chancery has no juris-
diction. Stannard v. Whittlesey, 9 Conn.
556. It has also been held in Connecticut,
that no action at law will lie for the settle-
ment of a partnership account, where the
number of partners exceeds two ; the
remedy is in equity. Beach v. Hotchkiss,
2 Conn. 425. But it is otherwise in Penn-
sylvania. Whelen V. Watniough, 15 S. &
R. 153 ; Griffith v. Wilbing, 3 Binn. 317 ;
Brightly Eq. .Jur. §§ 121, 122, 123 ;
Adams Eq. 225 ; 1 Story Eq. § 449. And
see Bracken v. Kennedy, 4 111. 558 ; Gil-
lett V. Hall, 13 Conn. 426 ; Cunningham
V. Littlefield, 1 Edw. Ch. 104. Partners
cannot sue one another at law for any of
the business or undertakings of the part-
nership. This can only be done in chan-
cery, by asking a dissolution and an
account. Stone v. Fonse, 3 Cal. 294 ;
Nugent V. Locke, 4 Cal. 320 ; Wilson r.
Lassen, 5 Cal. 116 ; Bamstead v. Empire
Min. Co., 5 Cal. 299. On the action of
account at law, .see 3 Steph. Bl. 532 ;
Foster v. Allanson, 2 T. R. 479; Jackson
V. Stopherd, 4 Tyrw. 330 ; Elgie v. Web-
ster, 5 M. & W. 518 ; Brown v. Tapscott,
6 M. & W. 119. It has been held, that
partners may sue each other at law for a
breach of any distinct engagement in the
partnership agreement, and that generally
adequate relief can in such case be obtained.
Wheie this can be done, equity will not
interfere. Kinloch v. Hamlin, 2 Hill Ch.
19 ; Duncan v. Lyon, 3 Johns. Ch. 360 ;
Hunt V. Gookin, 6 Vt. 462. But where
two persons enter into a partnership as to
508
THE LAW OF PARTNERSHIP.
[CH. XVI.
§ 408. Account necessary upon Dissolution. — Whenever there
is a dissolution of a partnership, for any cause, it would seem that
there must be an account, if it be demanded by any party in
interest, (e) ^ But it is always possible for partners or their
certain })ropos('d contnicts, and, after the
completion of one, one partner notifies the
other that as to the other contracts he
shall proceed on his sole account, the
remedy is by suit for a breach of the con-
tract, and not by a bill to account for
profits. Doyle v. Bailey, 75 111. 418. See
Cross V. Cheshire, 7 Exch. 43. Where
there is a distinct promise to jiay an ascer-
tained sum, as where a balance of accounts
is struck, assumpsit will lie between part-
ners. Hall V. Stewart, 12 Pa. 213 ; Hamil-
ton V. Hamilton, 18 Pa. 20. See Morrow
V. Riley, 15 Ala. 710; Gridley v. Dole, 4
N. Y. 486 ; Miller v. Andress, 13 Ga. 366.
And where an account stated resulting in
such balance is retained by a partner with-
out objection, a promise will be implied,
as in other cases. Van Amringe v. Ell-
maker, 4 Barr, 281- But in matters of
difficulty or controversy between partners,
it is now most usual to resort to a court of
equity for their final adjudication and
settlement. Bracken v. Kennedy, 4 111.
558. It will entertain jurisdiction, al-
though account or other action would lie
between the parties. Gillett v. Hall, 13
Conn. 426 ; Cunningham v. Littlefield, 1
Edw. Ch. 104. And although one partner
cannot bind the firm by deed, Donaldson
V. Kendall, 2 Ga. Dec. 227 ; Napier v.
Catron, 2 Humph. 534 ; Dickinson v.
Legare, 1 Desaus.537 ; Skinner v. Dayton,
19 Johns. 513 ; Fisher v. Tucker, 1 Mc-
Cord Ch. 170 ; Williams v. Hodgson, 1 H.
& J. 474 ; yet, in some cases, a court of
equity will regard a debt secured by the
specialty of one partner as a simple con-
tract debt, and hold all the partners bound
by it. See Gait v. Calland, 7 Leigh, 594 ;
McNaughten v. Partridge, 11 Ohio, 123;
Christian v. Ellis, 1 Gratt. 396 ; Anderson
V. Tompkins, 1 Brock. 456 ; Kyle v.
Roberts, 6 Leigh, 495 ; James v. Bost-
wick, Wright, 142. As to pleadings and
practice in taking an account, see Auld v.
Butcher, 2 Kas. 135.
(c) Adams Eq. ch. 3, p. 239 et seq. ;
CoUyer on Part. (3d Am. ed.) § 298 ; 1
Story E(i. Jur. § 671 ; Forman v. Hanfray,
2 Ves. & B. 329 ; Harrison v. Armitage, 4
Madd. 143; Russell v. Loscombe, 4 Sim.
8; Knowles v. Haughton, 11 Ves. 168;
Waters v. Taylor, 15 Ves. 15; Er jiarte
Broadbent, 1 Mont. & A. 635. Sec Hayes
V. Beese, 34 Barb. 151 ; Vermillion v.
Bailey, 27 111. 230; Pope v. Salsman, 35
Mo. 362. A partner may have an account,
although he has failed to pay in the capital
he agreed to contribute. Palmer v. Tyler,
15 Minn. 106. But see Stevenson v. Ma-
thers, 67 111. 123. An account will not
be decreed, if it appears that the party
jiraying for it has no real cause of com-
plaint, and that no good purpose can be
served by directing an account to be taken.
McKacy v. Hebb, 42 Md. 227. Nor when
one partner has received, by agreement
with his copartners, all he could in any
event be entitled to, so that he has no in-
terest in the accounts. Wagner v. Wag-
ner, 50 Cal. 70.
1 A partner may, upon dissolution, maintain a bill for an account. Sharp v.
Hibbins, 42 N. J. Eq. 543, 9 Atl. 113 ; Watts v. Adler, 130 N. Y. 646, 29 N. E. 131;
Love V. Pvhyne, 86 N. C. 576 ; Tillar v. Cook, 77 Va. 477. The bill lies even if the
defendant partner, being the licjuidating partner, alleges that lie has paid firm debts to
a greater amount than the assets. Sharp v. Hibbins, 42 N, J. Eq. 543, 9 Atl. 113.
All the partners nnist be parties to the bill. Young v. Hoglan, 52 Cal. 466. This
right to an account can generally be exercised by a partner only upon dissolution,
Nisbet V. Nash, 52 Cal. 540. But it is not always necessary to wait for a dissolution.
Davis V. Davis, 60 Miss. 615 ; ante § 207.
Where the accounts are in such confusion that nothing can be proved, the bill must
be dismissed, and the parties left as they were. Clement r. Ditterline, (Ky.) US.
W. 658 ; Succession of Gassie, 42 La, Ann. 239, 7 So. 454 ; Ashley v. Williams, 17
Ore. 441, 21 Pnc. 556 ; Slater v. Arnett, 81 Va. 432.
i08.J
OP AN ACCOUNT.
509
rc[)resentativcs to agree together upon some arrangements which
render an account unnecessary. Nur is this very unfrequent in
fact. The parties interested value the property, good-will, &c.,
and found their arrangements upon this estimate ; one paying to
the other a sum of money, without any account being taken. (/)
I'ut such an arrangement can arise only from an agreement ; for
if the pai'ties differ as to the value of the property, or of their
respective interests therein, an account must be taken, as the
only means of determining this, (j) Indeed, the taking of an
account is a fre(iuent preliminary to any further action by a court
of equity ; because by this means alone can the court ascer-
tain the true relation of the parties as to their rights and obliga-
tions. (A) An account and a dissolution seem to be so clearly
connected, that Lord Eldon, as we have seen, was unwilling to
grant an account, unless the i)ctitioncr })raycd also for a dissolu-
{/) 7 Jarman Convey. 31 ; Cooksoii v.
C'ooksoii, 8 Sim. 529. But see Cook v.
Colliiigriilge, Jac. 607, 620. Where one
partner sells out his interest to another,
the presunijjtion is that the price paid is
based upon a settlement of accounts. Wig-
gin V. Goodwin, 63 Me. 389; Noonan v.
Huddleston, 64 111. 11.
(r/) Featherstonhaugh v. Fenwick, 17
Ves. 293, 309, per Sir William Grant:
"The next consideration is, whether the
terms upon which the defendants jjroposed
to adjust the partnership concern were
those to which the plaintiff was bound to
accede. The proposition was, that a value
should be set upon the partnership stock ;
and that they should take his proportion
of it at that valuation, or that he should
take away his share of the property fiom
the premises. My opinion is clearly, that
these are not terms to which he was bound
to accede. They had no more right to turn
him out than he had to turn them out,
upon those terms. Their rights were pre-
cisely equal: to have the whole concern
wound up by a sale, and a division of the
produce. As, therefore, they never pro-
posed to him any terms which he was
bound to accept, the consequence is, that,
continuing to trade with his stock, and at
his risk, they come under a liability for
whatever might be produced by that stock.
In the case of Crawshay v. Collins, 15 Ves.
218, there was no circumstance, except,
merely, that there had been no adjustment
of accounts with the assignees of the bank-
rupt. Here, the defendants proposed ad-
justing the accounts on certain terms, but
terms which the other party was not bound
to accept. Though he, thinking they had
no right to dissolve the partnership, might
not have gone into any detail of the prin-
ciples on which the dissolution should take
place, yet I conceive it to have been their
duty, in the first place, to put themselves
right by offering to hira those terms upon
which the law gave him a right to insist;
and, not having done so, but continuing
to trade with his stock under the liability
to answer for the profits, the same inquiry
should be directed as in Crawshay v. Col-
lins, to ascertain what that stock was at
the period of the dissolution, what use was
afterwards made of it, and what ]>rofits
were produced by the trade." Wilson v.
Greenwood, 1 Swanst. 471, 482; Rigden
V. Pierce, 6 Madd. 353 ; Cook v. Colling.
ridge, Jac. 607.
(/;) It has often been held that there
can be no division of partnership pro[ierty
until all the accounts of the partnership
have been taken, and the clear interest of
each partner ascertained ; that the chan-
cellor may, in a ))roper case, dissolve the
partnership, but cannot aid in carrying it
on. Baird v. Baird, 1 Dev. & B. 524;
McRae v. Midvenzie, 2 Dev. & B. 232 ;
Camblat v. Tupery, 2 La. Ann. 10 ; Ken-
nedy i\ Kennedy, 3 Dana, 240. But see
Hudson V. Barrett, 1 Furs. Sel. Cas. 414.
510
THE LAW OF PARTNERSHIP.
[CH. XVI.
tioii; («) but this cannot be deemed a rule of equity, (/) although
in the great majority of cases, where the relations between the
partners are sucii that one of them can obtain an account only
through the interposition of a court, a dissolution is and should
be asked, {k) ^
(t) Fonnan v. Hanfray, 2 Ves. & B.
329.
{j) In Harrison v. Arniitage, 4 Madd.
143, it is said that the rule laid down by
Lord Eldon applies only to the case of an
injunction, or to a case of interim man-
agement. The following cases bear on the
question ; Loscombe v. Russell, 4 Sim. 8 ;
Knowles v. Ilaughton, 11 Ves. 168 ; Waters
V. Taylor, 15 Ves. 15; Walworth v. Holt,
4 Mylne & C. 619, 635. In this last case,
Lord Cottenhani made a very full review
of the authoiities ; deciding that a relief
of this limited kind could be given without
a prayer for dissolution, and a final wind-
ing up of the affairs of the company. This
rule, although not without great conflict,
seems now to be decided. Richardson v.
Hastings, 7 Beav. 301 ; Fairtliorne i:
\Veston, 3 Hare, 387; Miles v. Thomas, 9
Sim. 609 ; Goodman v. Whitcomb, 1 Jac.
& W. 593 ; Richards v. Davies, 2 Russ. &
M. 347 ; Richardson v. Hastings, cited in
3 Hare, 391; Chappie v. Cadell, Jac. 537.
(k) Loscombe v. Ru.ssell, 4 Sim. 8 ;
Waters v. Taylor, 15 Ves. 10 ; Forman v.
Hanfray, 2 Ves. & B. 329 ; Goodman v.
Whitcomb, 1 Jac. & W. 589 ; Chapman v.
Beach, Jan. & W. 594 ; Marshall v. Col-
man, 2 Jac. & W. 266 ; Vansandau v.
Moore, 1 Russ. 441 ; Pigott v. Bagley,
McClel. & Y. 569 ; Krebell v. White, 2 Y.
& C. 15. In an action by one partner for
a dissolution of the jiartnership, and an
account, &c., alleging that dividends of
jirofits were to be made at stated periods,
the court may decree the ])ayment of tha
sum due for such dividends, before final
distribution of the assets. O'Conner v.
Stark, 2 Cal. 155. The ordinary course is
to pray that the partnership may be dis-
solveil, and the surjilus assets distributed ;
but this practice has been relaxed in favor
of joint-stock comi)anies, and of other
numerous partnershi[)s, and bills have been
sustained which asked more limited lelief ;
namely, that the assets of an abandoned
or insolvent partnership might be collected
and apjilied in discharge of the debts, leav-
ing the questions of dissolution and con-
tribution as between the partners entirely
open for future settlement. Adams Eq.
241 • Goodman v. Whitcomb, 1 Jac. & W.
572; Marshall v. Colman, 2 Jac. & W.
266; Glassington v. Thwaites, 1 Sim. &
St. 124 ; Loscombe v. Russell, 4 Sim. 8 ;
W^al worth v. Holt, 4 Mylne & C. 619;
Richardson v. Hastings, 7 Beav. 301, 323 ;
Apperly v. Page, 1 Phillips, 779 ; Fair-
thorue v. Weston, 3 Hare. 387.
A creditor cannot file a bill to stop a
partnership, and wind up its concerns. It
is only at the instance of a partner that
this can be done. Clement v. Foster, 3
Ired. Eq. 213.
1 We have already seen {ante, § 206 etseq.) that ancillary relief may be given to a
partner during the pendency of a bill for an account. Thus a partner maybe enjoined
from selling partnership property if the injury would be irreparalde. Wilkinson v.
Tilden, 9 F. R. 683. So a partner may secure protection against a partnership claim
wrongfully created by his copartner. Johnson v. Battler, 31 N. J. Eq. 35. In some
cases the partnership creditors may intervene, as to secure the benefit of a fund in the
hands of a partner resulting from the fiau lulent sale of partnership property. Grossini
V. Perazzo, 66 Cal. 545.
§ 409.1
OF AN ACCOUNT.
511
SECTION XL
OF OPENING AN ACCOUNT FOR ERROR.
§ 409. Account not opened after Lapse of Time. — Mere errors
alone will not always lead to the opening and restating of accounts.
If the parties agree, as they sometimes do, that closed accounts
shall not be opened for error, after the death of the parties, or
after a fixed period, a court of equity will always respect such an
agreement, (^) unless gross mistake, fraud, or great danger of
fraud, be shown, [ni)^ And the same reasons which cause part-
(Z) Gainsborough v. Stork, Barnard.
312. See Heath v. Corning, 3 Paige,
566 ; Stoughton v. Lynrh, 2 Jolins. Ch.
218. In Mackellar v. Wallace, 8 Moore
P. C. 378, the following distinction is
drawn : " Parties having accoiuits be-
tween them may meet and agree to settle
those accounts by the ascertainment of
the exact bahmce ; it may be neeessaiy
for that case, and probably it is necessary
in most cases, that vouchers should be
jiroduced, and that all the information
possessed on one side and the other should
be furnished in the settlement of that
account ; and, if it afterwards turn out
that there were errors in that account, it
is a sufficient ground for opening such
account, and setting it right in a court of
equit}^ If, on the other hand, persons
meet and agree, not to ascertain the exact
balance, but a sum which one is willing to
pay, and the other is content to receive as
the result of those a(!eounts, — in a case
of that sort, it is obvious that the produc-
tion of vouchers is entirely unnecessary,
and errors in the account are entirely out
of the question ; for the very object of the
parties is to avoid the necessity for pro-
ducing those vouchers, upon the assump-
tion that there are or may be errors in the
account so settled. Therefore, it is either
an account stated and settled, in the for-
mal sense of the expression, or it is the
case of a settlement by compromise."
(«i) Oldaker v. Lavender, 7 Sim. 239.
In Mackellar v. Wallace, cited supra, the
court, after laying down the doctrine as
above, go on to say : "In either case, the
transaction might be vitiated by fraud.
In either case, it is, good for nothing if,
either from the collusion of the parties, or
from the circumstances under which the
settlement takes place, it is proved in a
court of equity that the transaction was
not so fairly and so fully understood be-
tween the parties, either from the confu-
sion in which it was involved, or from
nnsrepresentation made on the one side or
the other, as it ought to have been, and
that injustice has been done on either
side." Slee v. Bloom, 20 Johns. 669, 5
Johns. Ch. 366 ; Lee's Admr. v. Keed, 4
Dana, 112 : Botifeur v. Weynian, 1 Mc-
Cord Ch.l56; Barrow v. Hhinelander, 1
Johns. Ch. 550 ; Johnson's Executors r.
Ketchum, 3 Green Ch. 364 ; Bloodgood
V. Zeily, 2 Cai. Cas. 124 ; Gray v. Wash-
ington, Cooke, 321 ; Chappedelaine v.
Dechenaux, 4 Cranch, 309 ; Stoughton v.
Lynch, 2 Johns. Ch. 218, 219, 1 Madd.
Ch. Pr. (2d ed.) 103, 262, 280 ; Henick
V. Ames, 8 Bosw. 115 ; Cann v. Cann, 1
P. Wms. 727 ; Stapilton v. Stapilton, 1
Atk. 10 ; PuUen v. Keady, 2 Atk. 592 ;
Lewis ?'. Pead, 1 Ves. Jr. 19 ; Vernon v.
Vawdry, 2 Atk. 119, 2 Eq. Cas. Abr. 8;
Gordon v. Gordon, 3 Swanst. 476; Halhed
V. Marke, 3 Swanst. 444, note, 1 Hoven-
1 Where a partnership account has been settled, it will not generally be disturbed.
This is especially true where the partners have acquiesced in the account for a number
512
THE LAW OF PARTNERSHIP.
[CH. xvr.
ners to make such an agTccmcnt would induce a court to open
an account only for im])ortant error, after the death of parties or
long acquiescence, (m) But it has been held that where a partner-
ship had existed for eight years, and during this time accounts
den on Frauds, 160 ; Osmond v. Fitzroy,
3 P. Wuis. 130 ; Willis v. Jeniegan, 2
Atk. 251 ; Milnes v. Cowley, 8 Price, 620 ;
Ijloyd V. Passingliam, Cooper, 156 ; Beau-
mont I'. Biamley, 1 Turner, 51 ; Evans v.
Bicknell, 6 Ves. 183, 189 ; Pomeroy v.
Benton, 57 Mo. 531.
(n) A suit to impeacdi an account
ought to be brought within a reasonable
time, or at farthest, within the statutory
period for commencing an action at law
uiiou matters of account. Lupton v. Jan-
ney, 13 Pet. 381. And where the bar
of the statute is inapplicable, — namely,
where the demand is purely equitable, —
the court is reluctant to interfere after a
considerable lapse of time ; particularly
after the death of parties whose transac-
tions are involved in the inquiiy. Adams
Eq. 227; Baker v. Biddle, Bald. 418;
Ellison V. Moffat, 1 Jolins. Ch. 46 ; Ray
V. Bogart, 2 Johns. Cas. 432 ; liayner v.
Pearsall, 3 Johns. Ch. 578, 586 ; Mooers
V. White, 6 Johns. Ch. 360, 370 ; Boiling
V. Boiling, 5 Munf. 334 ; Randolph v.
Randolph, 2 Call, 537 ; Dexter v. Arnold,
2 Sumn. 108 ; Wilde v. Jenkins, 4 Paige,
481 ; Dakin v. Demming, 6 Paige, 95 ;
Bloodgood V. Zeily, 2 Cai. Cas. 124 ;
Gregory v. Forrester, 1 McCord Ch. 318,
382 ; Radcliffe v. Wightman, 1 McCord
Ch. 408 ; Hiitchins v. Hope, 7 Gill, 119 ;
Chesson v. Chesson, 8 Ired. Eq. 141.
But, where there has been fraud, the
court will open and examine accounts
after any length of time, even though the
person who committed the fraud be dead.
Botifeur v. Weyman, 1 McCord Ch. 156.
But it must be shown that the fraud was
not, and could not with reasonable dili-
gence be discovered, until within six years
before the commencement of suit. Ogdea
V. Astor, 4 Sandf, 311.
of years. Claflin v. Bennett, 51 F. R. 693 ; Bell v. Hudson, 73 Cal. 285, 14 Pac. 791 ;
Valentine v. Wysor, 123 Ind. 47, 23 N. E. 1076 ; Todd v. Rafferty, 30 N. J. Eq. 254 ;
King V. White, 63 Vt. 158, 21 Atl. 535. After the statute of limitations has run, it
would probably be reopened only in case of fraud. Todd v. Rafferty, 30 N. J. Eq.
254. But an account may be reopened in equity within a reasonable time for fi-au(l,
omission, or mistake ; and an injured party may be allowed to " surcharge and
falsify." Harrison v. Dewey, 46 Mich. 173, 9 N. W. 152; Cobb v. Cole, 44 Minn.
278, 46 N. W. 364 ; s. c. 52 N. W. 985; Silver v. St. Louis, 1. M. & S. Ry., 72 Mo.
194, 5- Mo. App. 381 ; Farrington v. Harrison, 44 N. J. E(i. 232, 10 Atl. 105 : King
V. Leighton, 100 N. Y. 386, 3 N. E. 594 ; Powell v. Heisler, 16 Ore. 412, 19 Pac.
109 ; Varner's Appeal, (Pa ) 16 Atl. 98, 2 Monaghan, 228 ; Henry v. Chaj.man, (Tex.)
16 S. W. 543; Mahnke v. Neale, 23 W. Va. 57 ; Hoyt v. McLaughlin, 52 Wis. 280, 8
N. W. 889.
The mistake or fraud which is relied upon must be clearly stated in the bill.
!Merriwether v. Hardeman, 51 Tex. 436. And it must be clearly and certainly proved.
Powell V. Heisler, 16 Ore. 412, 19 Pac. 109; Varner's Appeal, (Pa.) 16 Atl. 98, 2
Monaghan, 228; Mahnke v. Neale, 23 W. Va. 57; Hoyt t». McLaughlin, 52 Wis. 280,
8 N. W. 889. Where the facts upon which the application for reopening an account
is based were known to the applicant at the time of settlement, equity will refuse to
act. Quinlan v. Reiser, 66 Mo. 603.
A former partial settlen)ent is no bar to a bill for an account. Thompson v.
Walker, 40 La. Ann. 676, 4 So. 881 ; Gleason v. Van Aernam, 9 Ore. 343. But if it
was a fair settlement, the account will be limited to the unsettled part of the business.
Stretch v. Talmadge, 65 Cal. 510, 4 Pac. 513 ; Burke v. Fuller, 41 La. Ann. 740, 6
So. 557 ; Dobbins v. Tatem, (N. J.) 25 Atl. 544.
§ 410.]
OF AN ACCOUNT.
613
had been taken, witliont cancellation of books, releases, or dis-
charges in full, an account might be called for. (nn^
§ 410. Accouuts opened for Fraud. — Where there is danger of
fraud, or where the accounts were made up by parties having
unrestricted power, and acting under strong personal interest, as
in the case of accounts between an executor partner and the
legatees of the deceased partner, a long acquiescence will not
establish them beyond the reach of inquiry ; (o) and in one case,
{?i?() Lynch V. Bitting, 6 Jones Eq.
238. And see Stephens v. Orinan, 10
Fia. 9.
(o) A., B., & C, in 1796, became part-
ners, as nieiuliants, under articles tor
seven years, and it was provided, that, if
either pai-ty died in the mean time, the
partnerslup should be determined, as to his
share, from the first of May following his
death ; and that thereupon an account
should be taken, and, after payment of
debts, "payment, appropriation, and de-
livery " should be made, between the sur-
viving partners and the executors of the
deceased partner, of the residue of the
moneys, goods, &c., of the partnership.
In 1801, B. died, and appointed his wife
and surviving partners, A. and C, his
executors and guardians of his infant
children, who were his residuary legatees.
A. and C, only, proved the will, and
having caused a valuation and account of
the partnership assets to be made, a bal-
ance sheet was settled up to the first of
May, 1801, showing what amount was
due to the testator's estate (which in-
cluded outstanding credits to a large
amount), and his estate was credited ac-
cordingly in the partnership books, and
the partnership continued by the surviv-
ing partners, but no severance of the
assets was made. In May, 1809, the
eldest son came of age, and an account
was stated, by the executors, of the tes-
tator's residuary personal estate, but which
assumed, as its basis, the valuation and
account made on the testa+nr's death.
Another account was stated of the debts,
and credits remaining unpaid and uncol-
lected, showing what was then divisible ;
and another of the moneys expended for
the eldest son's maintenance. A deed,
dated September, 1809, between A. and
the eldest son, was executed, on which
these accounts were indorsed, and A. cov-
enanted for the payment, by instalments,
of the share due to the eldest son, so far
as the same had lieen realized ; and tlie
eldest son declared he was "content and
satisfied with the disclosures thus far made
and accounts thus far given," &c. ; and
it was proviiled that he should not be
prevented from claiming any further share
"not as yet received, or fallen in, or
accounted for." In 1810, 1815, 1821,
1826, and 1830, changes took place in
the partnership firm. There were three
younger children, who attained twenty-
one, respectively, in 1812, 1813, and 1820,
when similar accounts, founded on the
same basis, were stated in each of them
by the executors ; and a similar deed of
settlement executed by the two former,
and a release by the latter, and further
divisions of the testator's assets made ac-
cordingly. In 1816, the only other child
died an infant, and then also a division of
assets was made; and, in 1822, a deed of
release was executed by the trustees of the
settlement of one of the daughters, in
respect of a balance not included in the
deed executed by her. The bill was filed
in 1831, by the several children and their
representatives. It was held that A. and
C, being executors and guardians as well
as surviving partners, and the release
being partial only, and founded on in-
sufficient knowledge by the cestuis que
trustent of the partnership affairs and ac-
counts, the plaintiffs were not precluded
by their deeds or by lapse of time, from
inquiring into the mode in which the
assets of the old firm had been dealt
with, and claiming a share iii the profiti
arising from the testator's assets having
been used in the business of the success-
ive partnerships. Wedderburn v. Wedder-
burn, 2 Keen, 722, 4 Mylne & C 41
33
514
THE LAW OF PAETNERSHIP.
[CH. XVI.
elsewhere referred to, they were opened after some thirty years
of acquiescence. (^) Where fraud had been committed, an
account was opened after nearly as long a tin^ie, although the
fraudulent partner had long been dead. (^) And if the bill
praying for the opening of a settled account do not allege fraud,
but, in the o|)inion of the court, the facts stated imply fraud, the
prayer will be granted, (r)
§ 411. Accounts opened for Error. — A party seeking to open
an account for error must specify the errors so particularly that
each may be judged of by itself. For the court may be unwilling
to open an account if, when it is opened, it may be examined and
unravelled from end to end. (s) But they may be willing to per-
And see Cook v. CoUingridge, 1 Jac. 607 ;
Walker v. Synionds, 3 Swanst. 64, 69 ;
Gregory v. Gregory, Cooper, 201, Jac.
631 ; Champion v. Rigby, 1 Russ. & M.
539 ; Chalmers v. Bradley, 1 Jac. & W.
51 ; Downs v. Gazebrooke, 3 Meriv. 200 ;
Ex parte Lacey, 6 Ves. 628 ; Cockerell
V. Cholmeley, 1 Russ. & M. 425, on the
strictness of equity in similar cases of
trust. See also Smith v. Clay, 3 Bro. C.
C. 639, note ; Townsend v. Townsend, 1
Cox, 28 ; Bonney f. Ridgard, 1 Cox, 145 ;
Beckford v. Wade, 17 Ves. 87, 97;
Hickes v. Cook, 4 Dow, 16, on the ques-
tion of the length of time that had
elapsed. Dickenson v. Lord Holland, 2
Beav. 310 ; Purcell v. Cole, 1 Longf. &
T. 449 ; Edwards v. Meyrick, 2 Hare, 60,
6 Jur. 924.
(p) Wedderburn v. Wedderbum, 2
Keen, 722, 4 Mylne & C, 41. And see
Hoe V. Richards, 2 Beav. 305. Under
particular circumstances of fraud, impo-
sition, and delay, a court of equity will
decree an account of rents and profits of
an estate after an adverse possession of
fifty years. Stackpole v. Davoren, 1 Bro.
P. C. 9. And, in another case, where an
entry in an administrator's account, which
had been settled, was shown to be fraud-
ulently made, the whole account was
opened, notwithstanding the lapse of forty
years since the death of the intestate,
seventeen since the settlement of the ac-
count, and more than two since the dis-
covery of the entry complained of. Special
directions were inserted in a decree for
the protection of the accounting party.
Allfrey v. Allfrey, 1 Macn. & G. 87, 1
Hall & Twells, 179, 13 Jur. 269.
iq) Vernon v. Vawdry, 2 Atk. 119 ;
Botifeur v. Weyman, 1 McCord Cli. 161 ;
Lowe V. Farlie, 2 Madd. Ch. 102 ; Beame's
Pleas in Eq. 232.
(r) Farnham v. Brooks, 9 Pick. 212.
And see Worndey v. Wormley, 8 Wheat.
421 ; FuUagar v. Clark, 18 Ves. 481.
Courts of equity feel themselves at liberty
to infer, juilicially, a fraudulent purpose,
from suspicious circumstances, well cor-
roborated and in no way rebutted, though
such circumstances fall short of legal proof.
Earl of Chesterfield v. Janssen, 2 Ves. Sen.
155 ; Walker v. Symonds, 9 Swanst. 71 ;
Taylor v. Jones, 2 Atk. 602 ; Stileman v.
Ashdown, 2 Atk. 480. A party who has
once admitted an account to be correct
cannot afterwards tile a bill to have the
account taken in equity, upon the mere
allegation that he had no means of ascer-
taining that the account so delivered was
correct, without charging specific acts of
fraud against the defendant ; and it is not
necessarily an allegation of fraud to say
that the accounting jiarty agreed to deliver
up certain chattels demanded by the other,
upon condition of having his alleged bal-
ance admitted and paid. Darthery v. Lee,
2 Y. & C. 5 ; President, &c. of Orphan
Board r. Van Reenen, 1 Knapp, 100.
(s) Union Bank v. Knapp, 3 Pick. 113 ;
Kinsman v. Barker, 14 -Ves. 579 ; Shep-
herd V. Morris, 4 Beav. 252 ; Chambers v.
Goldwin, 9 Ves. 254 ; Calvit v. Markham,
3 How. (Miss.) 343 ; Mebane v. Mebane,
1 Ired. Eq. 403 ; De Montmorency v.
§ 411-]
OF AN ACCOUNT.
515
mit the plaintiff to surcharge and falsify, (f)' If an omission
has been made of a credit due, the plaintiff, by showing the same,
will be permitted to add it ; and this is a surcharge. If a wrong
Deverenx, 1 Drii. k W. 119 ; Leaycraft v.
Dempsey, 15 Wend. 83 ; Baker v. Bidille,
1 Bald. 394, 418 ; Baiiibrid<,'e v. Wilcoeks,
1 Bald. 536, 540 ; Coiise(jua v. Fanning,
3 Johns. Ch. 587, 17 Johns. 511, 1 Madd.
Ch. Pr. (4th Am. ed.) 103; Taylor v.
Hamlin, 2 Bro. C. C. 310 ; Wilde v. Jen-
kins, 4 Paige, 481 ; Weed v. Small,
7 Paige, 573 ; Hobart v. Andrews, '21
Pick. 526 ; Chapjjedelaine v. Dechenaux,
4 Cranch, 306 ; Bullock v. Boyd, 2 Edw.
Ch. 293 ; Philips v. Iklden, 2 Eilw. Ch.
1 ; Stoughton v. Lynch, 2 Johns. Ch. 209 ;
Hickson v. Aylward, 3 Moll. 1. Where an
account stated is open a long time, as six-
teen years after it has been rendered, it
will not generally be opened. It will be
opened as to fraud or mistakes cliarged in
the bill, and so far proved that the court
is satisfied they ought to be corrected ;
and, when some such errors are proved,
then as to other errors charged, which the
court is satisfied ought to be made the
subjects of further examination. Ogden r.
Astor, 4 Sandf. 311. And see Clarke v.
Tipping, 9 Beav. 282 ; Holland v. Holland,
6 Ired. Eq. 407 ; Pritt v. Clay, 6 Beav.
503 ; Scott V. Milne, 5 Beav. 215, affirmed
12 L. J. N. s. Ch. 233, 7 Jur. 709 ; Jones
t'. Latimer, 1 Jur. 980 ; Johnson v. Curtis,
3 Bro. C. C. 226 ; Taylor v. Hayling, 1
Cox, 435 ; Dunbar v. Lane, 1 Bro. P. C.
3 ; Maund v. Allies, 5 Jur. 860 ; Milliken
V. Gardner, 37 Pa. 456. The court will
not open a settled account where it has
been signed, or a security taken on the
foot of it, unless the whole transaction
appears fraudulent, upon errors specified
in the bill, and sujiported by evidence.
Drew V. Power, 1 Sch. & l" 182. See
Parker v. Jonte, 15 La. Ann. 290, as to
alleged errors in tiooks.
(t) Consequa v. Fanning, 3 Johns. Ch.
587 ; Tioup v. Haight, Hopk. 239 ; Chap-
pedelaine v. Dechenaux, 4 Cranch, 306 ;
Kedman v. Green, 3 Ired. Ei]. 54 ; Bullock
V. Boyd, 1 Hoff. Ch. 294; Nourse v.
Prime, 7 Johns. Ch. 69; Philips v. Belden,
2 Edw. Ch. 1 ; Grover *;. Hall, 3 H. & J.
43; Freeland v. Cocke, 2 Munf. 352;
Compton V. Greer, 2 Dev. Ch. 93 ; Jliller
V. Wornack, Freem. Ch. 486 , Lilly v.
Kroesen, 3 Md. Ch. 83 ; Williams v.
Savage Manuf. Co., 1 Md. Ch. 306; Kins-
man V. Barker, 14 Ves. 579 ; Vernon v.
Vawdry, 2 Atk. 119, Barn. Ch. 280, 305;
Sewel V. Bridge, 1 Ves. Sen. 297 ; Earl
Pomfret v. Lord Windsor, 2 Ves. Sen.
482 ; Pitt 17. Cholmondeley, 2 Ves. Sen.
565 ; Brownel v. Brovvnel, 2 Bro. Ch. 62 ;
Chambers v. Goldwin, 9 Ve.s. 254 ; Anon.,
2 E(i. Abr. 12. Plaintiff, in his bill, hav-
ing assigned 150 eirors in five .stated
accounts, an. order was made on him to
pick out those he would insist on, and, if
the court should be of opinion they were
not errors, to con.sent to waive the rest.
If the court thought them errors, there
would be good cause either to decree an open
account, or give plaintiff leave to surcharge
and falsify. Rodney v. Hare, Mos. 296.
See further, on the question of surcharging
and falsifying, Roberts v. Kuffin, 2 Atk.
112 ; Chambers v. Goldwin, 5 Ves. 837 ;
Ex parte Townshend, 2 Moll. 242 : Hick-
sou V. Aylward, 3 Moll. 14 ; Davies v.
Spurling, 1 Tamlyn, 199, 1 Russ. & M.
64 ; Millar v. Craig, 6 Beav. 433. The
party complaining of errors in a settled
account should make the errors appear by
proof. Bry v. Cook, 15 La. Ann. 493.
^ "Surcharge" means to add an omitted item in the account ; '* falsify," to correct
a wrong item. " Upon a liberty to the plaintiff to surcharge and falsify, the onus pro-
bandi is always on the party having that liberty ; for the court takes it as a stated
account, and establishes it. But if any of the parties can show an omission, for which
credit ought to be, that is a surcharge ; or if anything is inserted that is a wrong
charge, he is at liberty to show it, and that is a falsification. But that must be by
proof on his side. And that makes a great difference between the general cases of an
open account, and where only to surcharge and falsify ; for such must V)e made out."
Lord Hardwicke, L. C, in Pitt v. Cholmondeley, 2 Ves. Sen. 565, 566.
516
THE LAW OF PARTNERSHIP.
[CH. XVI.
charge is stated in the account, the plaintiff may be permitted to
remove it ; and this is falsification, {u} It may be added, as a
general remark, that whenever accounts are stated by persons
having great trust reposed in them, and great ))Ower, a court of
equity allows a latitude in opening and examining such accounts,
bearing some proportion to that trust and power, (v)
§ 412. Plaintiff must pay in a Debt due from Him. — In Eng-
land, the practice is quite uniform of requiring a partner who
petitions for an account, and either admits expressly or by impli-
cation that he is, or is shown to be, owing to the partnership a
private debt or balance, to pay that debt or balance into court
before a decree will issue, (w) This is not true of a debt on
partnership account ; for if a partner avers that he has taken
money from the firm, but avers also that a balance is still due to
him, he is not required to pay into court the money thus taken,
unless special reasons exist for the requirement. (2;) The rule
(m) In reference to these ternifi, see 1
Story Eq. Jur. § 525 ; Pitt v. Cholmon-
deley, 2 Ves. Sen. 565, 566 ; Perkins v.
Hart, 11 Wheat. 237, 256.
(v) Matthews v. Wallyn, 4 Ves. 118 ;
Newman v. Payne, 2 Ves. Jr. 199 ; Pitt v.
Chohnondeley, 2 Ves. Sen. 565 ; Stough-
ton V. Lynch, 2 Johns. Ch. 217 ; Higgin-
son V. Fabre, 3 Desans. 93. Thus, in
ordinary cases, the rule is, that the estab-
lishment of a material mistake is necessary
to induce the court to give a decree enti-
tling the party to surcharge and falsify
an account. But, where the relation of
attorney and client subsists, the ordinary
rule does not prevail ; for there, though
the party only alleges generally that the
accounts, as settled, are erroneous, the
court will, if sufficient cause be shown,
make a decree opening those accounts.
Lawless v. Mansfield, 1 Dru. & W. 557.
(?/)) Vin. Abr. Partners (E), 5 ; Melio-
ruclii V. Royal Ex. Ass. Co., 1 Eq. Abr.
8 ; Gold I'.Canhain, 2 Swanst. 325, 1 Ch.
Ca. 311. See Mulhollan v. Eaton, 11 La.
291. Payment of money into court is
directed where the defendant admits money
to be in his hands which he does not claim
as his own, and in which he admits that
the applicant is interested. Adams Eq.
350. See, on this subject, Hosack v.
Rogers, 9 Paige, 468 ; Clagett v. Hall, 9
G. & J. 81 ; Contee v. Dawson, 2 Bland,
293 ; Nokes v. Leppings, 2 Phillips, 19 ;
Maddox v. Dent, 4 Md. Ch. 543.
{x} Foster v. Donald, 1 Jac. & W. 252.
In this case, the plaintiffs and the defend-
ant carried on business together in the
north of England. It had been proposed
to dissolve the partnership ; and the terms
of dissolution had been nearly arranged,
when the defendant represented that,
before finally acceding to thein, he thought
it proper to go to London, for the pur-
pose of consulting a friend residing there.
In the course of his journey, he went
round to several customers of the firm, in
different parts of the country, and collected
of them debts due to the partnership to
the amount of about 2,318?. In one in-
stance, a debt due by himself had been set
off against a debt due to the firm, and he
received the difference. The bill was filed
for an account of the partnership trans-
actions. The defendant, in his answer
disclosing these facts, .stated that he
believed the balance of the account would
be in his favor. Lord Eldon : " If a part-
ner, as partner, receives money belonging
to the firm, and, admitting that he has
received it, insists that there is a balance
in his favor, there is no pretence for mak-
ing him pay it in. But if he has received
it under circumstances from which you
can infer that he had agreed not to receive
it, and that his receiving it was contrary
§ 413.]
OF AN ACCOUNT.
517
is, therefore, applicable only to a private and personal debt. It
would hardly be applied here, merely on the authority of the
English practice ; but it rests in that country on the general
principle, that he who asks equity must be ready to do equity;
and it may be expected that a similar rule will be provided for here,
by the rules of practice of the courts of equity, (^y)
SECTION III.
HOW AN ACCOUNT SHOULD BE TAKEN.
§413. Accounting by the Parties. — As to the manner of tak-
ing an account, the first remark to be made is, that the parties
themselves may regulate this, and the court will respect their
agreement, (z") This may be contained in the original articles,
or in subsequent agreements. Or it may be derived from their
practice. Where partners have, for a considerable time, settled
their accounts in a certain way and upon certain terms, it is
obviously reasonable to infer that this was their agreement and
understanding. Equity will draw this inference, and direct the
to good faith, then he ma}' be ordered to
bring it into court. Cases may haiijien
where 10,000/. may be due to him, and
yet he may have received l.OOOZ. under
such circunistances that he will not be
allowed to retain it. . . . Though it is
very true that a partner may receive part-
nership effects, and insist on not paying in
the amount, unless all the other partners
will pay in what they have in their hands,
yet I think the defendant has admitted
himself to have received these sums in a
manner in which he ought not to have
received them. He must, therefore, pay
them in." See Richardson v. The Bank
(y) Under section 244 of the New York
Code of Procedure, as amended in July,
1851, a [lartner, who by his answer admits
that he has in his hands partnership funds,
which on his statement ajjpear to belong
to the administrators of his deceased part-
ner, will be ordered to pay over such funds
to them, although there are outstanding
contested claims against the firm, and it
has claims to enforce which will require
time and disbursements. The order for
such payment will, however, require the
administrators to give security to the sur-
viving jiartner to contribute to the out-
standing claims, if established, and to pay
of England, 4 Mylne & C. 165, in which their sliare of the expenses that may be
the question is fully considered. See also incurred in prosecuting the demands of
Mills V. Hanson, 8 Ves. 68, 91 ; Domville the firm. The surviving partner will also
V. Solly, 2 Russ. 372 ; Toulmin v. Cop- be permitted to retain sufficient to cover
land, 3 Y. & C. 643. In Jervis v. White, such claims against the deceased partner
6 Ves. 738, the defendant was ordered to
pay money into court befoi'e answer in a
case of gross fraud, appearing irpon affi-
davit by the plaintiff, and by a correspond-
ing affidavit by the defendant. Daniel's
Ch. Pr. (Perkins* ed.) 2024; Vann v.
Barnett, 2 Bro. C. C. 158 ; Costeker v.
Horrox, 3 Y. & C. 530.
as are contested in the suit in which the
order is made. Roberts i;. Law, 4 Sandf.
642. If a defendant by his answer acknowl-
edges any particular sum due, though he
swears those sums were discharged, yet it
is still a ground for directing an account '■
Brace V. Taylor, 2 Atk. 253.
(z) See ante, § 208.
518
THE LAW OF PARTNERSHIP.
[CH. XVI.
account to be taken in a similar manner, (a) Indeed, this evi-
dence from custom, or from conduct and acquiescence, is even
stronger than that of expressed agreement. For if there be cer-
tain terms agreed upon, and the accounts have been kept in
disregard of them for a considerable time, and without objection,
we have seen that the court will treat it as a waiver of the terms
by the party whom they bcneiit, or as a subsequent agreement
cancelling them, {b) And the accounts need not be signed by
the parties, if there be other evidence of acquie'scence. The pos-
session of the account and vouchers for a long time, without
objection, will be deemed evidence of acquiescence ; not only
from its intrinsic probability, but because the other parties have
a right to know and meet, at an early period, any ol>jections
which exist, or else to go on upon the assumption that none
exist, (c) Hence in a leading American case, it was held that a
(a) Jackson v. Sedj^wick, 1 Swanst.
460, 469, per Lord Eldon : "Partnership
accounts may be taken in various ways.
The distinction is, that, in the absence of
a sj'ecial agieenient, the accounts nmst be
taken in tlie usual way; but where a sjiecial
agreement has been made, it must be abided
by, provided that the parties have acted on
it ; if not, I always understood that the
articles are read in this court as not con-
taining the clauses on which the parties
have not acted."
(b) Geddes V. Wallace, 2 Bligh, 270 ;
Petty i'. Janeson, 6 Madd. 146 ; Const v.
Harris, Turn. & Russ. 496, 523 ; Jackson
V. Sedgwick, 1 Swanst. 460, 469.
(c) Willis i;. Jernegan, 2 Atk. 25L The
plaintiffs counsel objected to the defend-
ant's plea of a slated account, on the ground
that it was not signed by the parties. Lord
Hardwicke : " There is no absolute ne-
cessity that it should be signed by the
parties who have mutual dealings, to make
it a stated account ; for even where there
are transactions supposed between a mer-
chant in England and a merchant beyond
sea, and an account is transmitted here
from the person who is abroad, it is not
the signing which will make it a stated
account, but the person to whom it is sent,
keeping it by him any length of time,
without making any objection which shall
ibind him, and prevent his entering into
an open account afterwards." Id. 252.
Tickel V. Short, 2 Ves. Sen. 239 ; Morris
V. Harrison, Colles P. C. 157 ; 1 Story,
Eq. Jur. § 526 ; 2 Dan. Ch. Pr. 762 ;
Jessup V. Cook, 1 Halst. (5 N. J. L.) 436;
Lamalere v. Gaze, 1 Wash. C. C. 436, 2
P. A. Browne, 128 ; Murray v. Toland, 3
Johns. Ch. 569; Wilde r. Jenkins, 4 Paige,
481 ; Freeland v. Heron, 7 Cranch, 147 ;
Codman v. Rodgers, 10 Pick. 112. But
in Claucarty v. Latouche, 1 Ball & B. 428,
it was held, by Lord Chancellor Manner-s,
that acquiescence alone, in accounts fur-
nished, does not fimount to a settlement,
although it must have considerable effect.
This, however, was in reference to an ac-
count which was usurious ; and which,
even if expressly concurred in, would have
been set aside. Where an account relied
on as a stated account has not been signed,
it is not enough to prove the delivery of
it. The accjuiescence of the other party
in it must also be proved. Irving v. Young,
1 L. J. Ch. 108. In the Attorney-General
V. Brooksbank, 2 Y. & J. 42, the chief
baron of the exchequer expressed an opinion
that an account stated must be actually
signed by the parties, to enable the defend-
ant to plead it in bar to a suit for an ac-
count ; although he seemed to sup])Ose an
account not signed might be a good defence,
if set up in the answer and proved at the
hearing. Commenting on this. Chancellor
Walworth says : "That opinion is clearly
not law ; and it is directly opposed to that
of Lord Hardwicke, in Willis v. Jernegan,
2 Atk. 252, where he says, in express
§ -il^]
OF AN ACCOUNT.
il9
partner would be deemed to acquiesce in any statement of account
to which he did not object within a reasonable time.(t?)
But the terms of an account, whether proved expressly or by
implication, are not conclusive. Even if the articles, or subse-
quent agreements, or practice with acquiescence, or all together,
would lead to the conclusion that certain terms had been agreed
upon, still, if fraud, opprcssiou, or uncom[)ensated and extreme
injury, can be shown, the court will direct the account to be stated
upon ])remises more consistent with justice, (t;) It may be said,
in general, that whenever on a diss(jlution questions arise among
the partners as to the division of the property or profits, these
questions fall within the jurisdiction and practice of equity, (ee)-
§ -414. Accounting before a Master. — If a decree for an account
issues, and the case is referred to a master to take an account,
his method of proceeding will be governed very much by the rules
and custom of his own court. In general, the parties must pro-
duce before him all books, vouchers, and evidence, bearing upon
the general account or any special items ; ^ and he may examine
ttTins, that it is not necessary that the ac-
count should be signed by the parties."
Ileal tt ('. Corning, 3 Paige, 5t56.
{d) Heartt i-. Corning, 3 Paige, .566.
And see 1 Stor}', Eij. Jur. § 526 ; Com.
Dig. Ch. 2 A. 3 ; Lamalere v. Caze, 1
Wash. C. C. 436 ; Killani v. Preston, 4 W.
& S. 14. In Lamalere v. Caze, the court
says : "To constitute a settled account,
all the parties must consent to it ; all must
be bound by it, or none are. This consent
must be either expressed or implied. I am
inclined to think, that if, after dissolution,
one partner were to state the account, and
send it to the other, who should by his
conduct show his acquiescence, by retain-
ing it for a considerable time, without
objections, that he might be bound by that
statement, as well as the other, and that
this action for the balance might then be
maintained." But in Killam v. Preston,
Kennedy, J., delivering the opinion of the
court, and deciding that a partnership ac-
count stated by one partner after the dis-
solution, and presented to the other, who
retains it in his possession for more than a
year without objecting to it, is not sufficient
evidence, upon which a recovery of the
bahince appearing to be due upon it may
be had, said : "It would seem, from the
weight of authority, that there must not
only be a final settlement and balance
struck, but an express promise to pay,
otherwise the action cannot be maintained.
Foster V. Allanson, 2 T. R. 479 ; Fromont
V. Coupland, 2 Ring. 170. The only au-
thority to the contrary that I am aware of
is a niii prius decision of Gibbs, C. J. , in
Rackstraw v. Imber, Holt, N. P. Cas. 368,
where he says he considers an imj)lied un-
dertaking sufficient." And see Irving v.
Young, 1 Sim. & St. 333. And see further,
on this question, Attwater v. Fowler, 1
Edw. 417 ; Story Eq. PL § 801 ; Cooper
Eq. PI. 278, 279 ; Moravia v. Levy, 2 T.
R. 483, note ; Casey v. Brush, 2 Caines,
296 ; Ozeas v. Johnson, 1 Binn. 191, and
cases in previous note.
{c) Oldaker y. Lavender, 7 Sim. 239;
Story on Part. § 206; Collyer on Part.
(Perkins' ed.) b. 2, ch. 2, § 225.
{ee) See, for cases in which the English
court of chancery took jurisdiction of such
questions. Wood v. Scoles, L. R. 1 Ch.
369; Ibbotsam v. Elam, L. R. 1 Eq. 183 ;
Homfray v. Fothergill, L. R. 1 £([. 567.
1 Partnership books are of course receivable in evidence in taking an account, though
either partner has a right to show their incorrectness. Carpenters. Camp, 39 La. Ann.
1024, 3 So. 269 ; TopUff v. Jackson, 12 Gray, 565 ; Boire . McGinn, 8 Ore. 466.
520
THE LAW OF PARTNERSHIP.
[CH.
XVI.
not only witnesses, but all the parties, and should examine any
party at the suggestion or desire of any opposite party, unless
this be obviously and certainly unreasonable. (/)
Generally, the master should begin from the last account which
was closed and settled, taking the balance thereof as his basis ;
unless, by order of court, or for reasons shown, he goes behind
this account. If there be no settled account, he must supply the
(/) Ferry v. Henry, 4 Pick. 75; Glyn
V. Caulfield, 15 Jur. 807 ; Toulniin v. Cop-
land, 3 Y. & C. 655; Beckford i;. Wikhuan,
16 Yes. 438. In one case, where a surviv-
ing partner, who had possession of the
partnership books, wilfully and fraud-
ulently refused to produce them, to have
tlie accounts taken under a decree for that
])urpose, the master, in the absence of
other evidence, charged ten per cent per
annum on the capital stock, as the net
gains made during the partnership, and
debited the surviving partner with a moiety
thereof. The court held that the master
was justified in so doing, and made a decree
accordingly. Walnisley v. Walnisley, 3
J. & La T. 556. And in another case,
where the defendant denied charges in the
bill of fraud and misconduct, and explained
others away, alleging his inability to put
in a full answer, by reason that plaintiff
withheld improperly the partnership books,
the court refused (but without prejudice to
future application) the injunction prayed
by the bill. Littlewood r. Caldwell, 11
Price, 97. In 1811, A. & B. entered into
a partnership, which continued till 1818,
when it was dissolved, and the affairs
wound up, except as to some outstanding
debts. In 1820, a deed of release was
executed, from which these debts were ex-
cluded. Partnership books relating gen-
erally to these and other debts were all
along suffered to remain in A.'s hands.
All the outstanding debts were subse-
quently settled. In 1830, B. was declared
bankrupt, till which time the books were
never called for by B. It was held, that
A. & B., nevertheless, continued tenants
in common in respect of them, and that
the length of time did not affect tiiat rela-
tionship ; and, therefore, although there
was no charge of fraud in the settled ac-
count, yet the comynissioner had jurisdic-
tion to call A. before him, and examine
him and the books relative to the former
dealings of the bankrupt. Ex parte True-
man, 1 Deac. &Ch. 464 ; Ex parte lii'vett,
1 Glyn & .1. 185. So, the solicitor of the
purchaser of an estate from a bankrupt has
beeu ordered to attend (but without pre-
judice to privilege) for the purpose of being
examined. Ex parte Hodgson, 2 Glyn &
J. 21. But where a partnership has ex-
pired by efflux of time, and, in a suit for
account, &c., a receiver has been appointed
before decree, the court will not compel
defendant (the former managing partner)
to deliver up to receiver, for the ])urpose
of making out bills of costs, partnership
books and accounts which have remained
in his hands, and title-deeds belonging to
a third person, which came into the pos-
session of the copartners as solicitors; such
defendant offering the receiver free access
thereto, and to assist in making out such
bills. Dacie v. John, McClel. 206, 13 Price,
446. Partnership accounts having been
directed to be taken by the masters in a
case in which some of the books have been
lost, the court directed the master, if it
should appear in taking the account that
any necessary books, &c., should be want-
ing, to report the same specially, and
whether in consequence of the want of such
books he was unable to proceed satisfac-
torily in taking the account. Millar v,
Craig, 6 Beav. 433. See further, in refer-
ence to accounts in partnership books,
Heartt v. Corning, 3 Paige, 566 ; (Jaldwell
V. Leiber, 7 Paige, 483 ; Simms v. Kirtley,
1 T. B. Monroe, 80 ; Stoughton v. Lynch,
2 Johns. Oh. 217, 218 ; Allen v. Coit, 6
Hill, 318 ; Withers v. Withers, 8 Peters,
359 ; United States Bank v. Binnev, 5
Mason, 188 ; Phillips v. Turner, 2 Dev. &
B. Eq. 123 ; Fletcher v. Pollard, 2 Hen.
& Munf. 544 ; Brickhouse v. Hunter, 4
Hen. & JIunf. 363 ; Kyle v. Kyle, 1 Gratt
526 ; Hallett v. Hallett, 2 Paige, 432.
§ ^1^.]
OF AN ACCOUNT.
521
want of one, bj beginning with the partnership, and stating the
account according to ordinary rules and usage, unless they are
controlled by some agreement of the parties, or some peculiar
circumstances, which he will be careful to report, {g) And he
must continue the account to the day on which he makes it,
unless there has been a previous dissolution.^ In that case, he
will continue it to the dissolution, and either stop there, or from
that day begin a new account ; for the dissolution has terminated
the partnership, and the account thereafter is not an account
between partners. (/<) And if there be outstanding items to be
(fj) Beak v. Beak, Cas. temp. Finch,
190. In this very early case on the ques-
tion, a bill was brought to have an account
of the estate of Elias Beak, deceasetl, and
of a stock of money by him brou<(ht into
trade with the defendant, Arnold Beak,
his brother, in the year 1648. The bill
set forth that in April, 1662, a balance
was made ; that from the year 1648 a joint
trade was carried on Ijetween the brothers,
till February, 1673 ; that several balances
were made in loose papers, and "a partic-
ular balance in February, 1673," when all
the particulars were agreed between them,
excepting only an error of a small amount.
It appears, however, from the further re-
port of the case, that Elias made his will
in March, 1667, and soon after died. It
was admitted on all sides, that an account
ought to be had of the estate in partner-
ship ; but the question was about the time
it .should begin, and how long it should
contintie. The counsel for the plaintiffs
insisted on an account stateil in the vear
1662, and that it ought to proceed from
that time without any retrospect ; and
that the stock of Elias might not be car-
ried on in a pretended partnership after
his death, but that it might be accounted
us his separate estate from that time. The
counsel for the defendant argued that the
account of the joint trade ought to be car-
ried on till all the accounts relating to the
partnership could be settled and made
even. The court decreed an account, and
that if the master should find a balance
conceining the joint trade, either in 1662i
or in 1673, or at any other time, then he
was to take it from such time ; otherwise,
it must take its rise from the year 1648,
when the ])artnership first began, and must
be carried on to the death of Elias, but
not afterwards. For the plaintiff ought
not to be concluded by any new or grow-
ing account in trade, but only is to have
an account of what was then in partner-
ship, and the proceeds thereof till got in.
(A) Booth V. Parks, 1 Molloy, 465, per
Sir A. Hart, Lord Chancellor: "There
can be no paitneiship without existing
partners. It is not correct to say, that
the survivor, carrying on the business for
the purpose of winding it up, carries on a
partnership-trade : he only deals with the
effects finally ex necessitate, and rather in
the character of a trustee. If he con-
tinues it as a trade, it is at his own lisk,
liable to tl.e option of accounting for pro-
fits, or being charged with interest upon
the deceased partner's share of the surjilus,
as taken at his death." In Dyer v. Clark,
5 Met. 575, Shaw, C. J., says : "The time
of the dissolution fixes the time at which
the account is to be taken, in order to as-
certain the relative lights of the partners,
and their respective shares in the joint
fund. The debts may be numerous, and
the funds widely dispersed and difficult of
collection ; and, therefore, much time may
elapse before the affairs can be wound up,
1 Roberts v. Eldred, 73 Cal. 394, 15 Pac. 16. Where an account was taken on a
bill filed by the mortgagee of a partner, and it appeared there had been a dissolution,
the account was ordered to be taken at the date of dissolution ; otherwise, the court
said, it should have been taken at the date of the bill. Whetham v. Davey, 30 Ch.
D. 574.
522 THE LAW OF PARTNERSHIP. [CH. XVI.
settled afterwards, when they are settled they must be referred
back to that period, (i) The same principles of appropriation of
])ayment which have already been spoken of will be applied to
the account ; the most general one being that the earliest payment
shall be applied to the earliest debt, and the first sum paid in
by a customer who deposits and draws is the first sum drawn
out. (j )
§ 415. Terms of Account — In regard to the terms of the
account and settlement, and the charges, credits, or allowances to
be made, it has been conceded, by the highest authority, that
specific rules are of little use, because the justice of every case
requires that its peculiar facts and merits, the nature of the trade,
the conduct of the parties, and all the various circumstances
which affect the rights of the parties, must be taken into consid-
eration in determining what they are or should be.^ In our note
the debts paid, and the surpUis put in a to apply as well between the partners
condition to be divided. But whatever themselves as between the partners and
time ma}' elapse before tlie final settlement third persons; and there njust be strong
can be practically made, that settlement, evidence to rebut the presumption as to
wlien ma<le, must relate back to the time that mode of taking the partneisliip ac-
when tlie partnership was dissolved, to de- counts. Therefore, where A. and B. wei'e
termine the relative interests of the part- partners as navy agents, and A. becoming
ncrs in the funds." a lunatic, that partnership was dissolved,
(/) Stoughton V. Lynch, 2 Johns. Ch. and the business was carried on upon the
209 ; Dyer v. Clark, 5 Met. 575. And same terms by B. and C, and B. died,
see Tyng v. Thayer, 8 Allen, 391 ; Brinley and the accounts of both partnerships
V. Kupfer, 6 Pick. 179 ; Williams i\ Hen- were unsettled, it was held that the ac-
shaw, 11 Pick. 79, 12 Pick. 378 ; Dickin- counts of A. and B. must be taken on the
son V. C4rangei-, 18 Pick. 315, 317. foundation of the rule in Clayton's Case,
{./) Clayton's Case, in Devaynes v. although C, in order to establish an agree-
Koble, 1 Meriv. 572 ; Bodenham v. Pur- ment to the contrary, set up ceitain affi-
chas, 2 B. & Aid. 39 ; Pemberton v. davits made by B., in a suit bVought
Oakes, 4 Russ. 154 ; Toulmin v. Copland, against him by the committee of the lun-
3 Y. & C. 625. In this last case, it was atie, in which he alluded to an under-
decided that where persons carry on busi- standing between B. & C. (which, in some
ness in the nature of a banking business, instances, had been acted upon), that the
— as, for instance, that of navy agents, — advances made to the customers of their
and a change takes i)lace in the house by firm should be repaid before any portion
tlie death or retirement of a partner, on of the moneys paid in by tiiose customers
taking the partnership accounts, the rule was applied in liquidation of their debts
in Clayton's Case will be held 2^1'ima facie due to the original firm.
1 Reasonable expenses of closing up the business are proper items in the account,
and are chargeable against the firm, in favor of a surviving or liquidating ])artner.
Burke v. Fuller, 41 La. Ann. 740, 6 So. 557 ; Tompkins v. Tompkins, 18 S. C. 1.
Such expenses are the cost of taking care of the partnership property and keeping the
books, Holloway w. Turner, 61 Md. 217 ; or fulfilling contracts which bound the firm.
Tomjikins v. Tompkins, 18 S. C. 1. And of reasonably litigating suits brought on
claims against the partnership. Brownell v. Steere, 128 ill. 209, 21 N. E. 3 ; Lee v.
Dolan, 39 N. J. Eq. 193 ; Leiserman v. Bernheimer, 113 N. Y. 39, 20 N. E. 869.
§ 415.]
OP AN ACCOUNT.
523
will \)ii found many cases in which special circumstances were con-
sidered by English and American courts, (k) One rule, already
(k) Willett V. Blanford, 1 Hare, 253,
269, per Sir James Wigram, V. C: "I
have again consiJeied the sulijeut, and
read the cases to which I was referreci ;
and I remain of tlie opinion I expressed
at the close of tlie aigunient, that there is
no rule of this court applicable alike to
all cases ; and that there is no rule which is
.so estahlished or general in its apjilication,
that it is to be taken to be the general rule,
until circumstances are shown which dis-
place it. The fai!ts of each case must be
fully brought under the view of the court,
before it can be in a position to state what
justice to the party seeking its protection
may require, with due regard to the in-
terest of other parties. No one can attend
to the elaborate judgments of Lord Eldon
in Crawshay v. Collins, Brown v. De
Tastet, and even in Cook v. Collingridge,
without being satisfied that his mind saw
the ini[)ossil)ility of subjecting cases so
various as those of trading partnerships to
any universal rule. Tiie decrees in these
cases, that of Sir William Grant in
Featherstonhaugh v. Fen wick, and the
judgment and decree of Lord Cottenham
in Wedderburn v. Wedderburn, confirming
Lord Landgdale's decree in the same case,
all concur to establish the soundness of
Lord Eldon's opinions ; anil I think it is
impossible to consider the subject, abstract-
edly from authority, without feeling satis-
fied that justice would be endangered by
an attempt to subject all cases of this de-
scription to any uniform rule." Where
one firm enters into copartnership with a
third person as a distinct firm, the}' are
all in the new firm as individuals, and the
profits must be divided equally amongst
all. Warren v. Smith, 9 Jur. N. s. 168.
If no valuation of the services of the re-
.spective partners is agreed upon, none can
be made in settling the account, however
much they may differ in value. Kaiser v.
Wilhelm, 2 Mo. App. 596. A., the part-
ner of B., having charge of the firm busi- '
ness at a certain place, employs a firm, of
which he is also a member, to conduct it
on commission. Accounts are rendered to
B., who makes no objection. A. also sells
goods of one firm to the other firm, with
notice to B., and at full market value.
B. cannot, after ilissolutiou and settle-
ment, demand an account of A.'s share of
the commission ; nor is A. to account for
profits received by him as partner in the
purchasing firm, although said firm takes
the goods to fill contracts for delivery at a
larger j>rice than they l>ay for it. Fuch v.
P>lakiston, (Pa.), IS^Alb. L. J. 288. An
attorney at law, who is a partner in a
commercial firm, cannot charge against
his firm commissions for collecting ac-
counts due it. Vandiizer v. McMillan, 37
Ga. 299. In making up accounts between
partners, ]iresumptions are against those
wiio by fraud or negligence emljarrass the
settlement ; and it will be the duty of the
master, in such case, to protect the firm.
Harvey v. Varney, 104 Mass. 436. Where
partners are to share equally, and on dis-
solution, after a losing business, one is
found to have contributed more than the
other to the capital, the loss must be
shared equally, notwithstanding the in-
equality of contribution. Nowell v. No-
well. L. R. 7 Eq. 538. Articles between
C, W., B., & S. provided that C. and AV.
should contribute the whole capital in un-
e(pial proportions ; that C. should contrib-
ute "such terms as he may be able to
give;" that W., B., & S. should each
contribute all their time to the business ;
that each partner should receive one- fourth
of the net profits ; and that C. and W.
should receive interest on the capital con-
tributed by them. The business resulted
The expense of taking the account and the costs of tlie bill for account should also be
jiaid out of the assets. In re Beck's Estate, 19 Ore. 503, 24 Pac. 1038 ; Moore's
Appeal, (Pa.) 19 Atl. 753. But an expense due entirely to the fault of the settling or
managing partner, as where he committed a tort in the course of the business and was
obliged to i)ay compensation for it, cannot be included in the account. Thomas v
Atherton, 10 Ch. D. 185 (C. A.).
624
THE LAW OF PARTNERSHIP.
[CH. XVI.
stated, is of so much practical importance, that we repeat it
licre ; it is, that a partner settling the business, as a surviving
or remaining partner, is looked ujwn as a trustee, and the rules
of equity devised to secure the faithful discharge of a trust are all
of them a{)plicable to him. (l) ^ In a case m Louisiana, it is said
in loss, and the firm was dissolved. It
was held, that the capital constituted a
debt of the firm, to which all the partners
were obliged to contribute eiiually ; and
that, one of them being insolvent, the loss
was to be borne equally by the other three.
Whitcomb v. Converse, 119 Mass. 38.
A., the owner of an established business,
agrees with B. that the latter shall receive
a certain percentage of the profits, annu-
ally, up to $5,000. In accounting, A.
cannot charge profit and loss, with interest
on capital, or on old business debts, or
with B.'s salary. But he may charge de-
preciation of plant ; and, if the business
is sold at an advance above the estimated
value at the time of the agreement, B. has
no right to a percentage on the difl'erence.
Rishton v. Grissell, L. R. 5 Eq. 326.
Where A. and B. enter into a copaitner-
ship for tlie purpose of a commission and
warehouse business, A. to furnish the
buildings and fixtures, and B. to keep the
books and to give his time and talents to
the business, B. may, on his own account,
procure other houses for storage, if A. re-
fuses, and the firm business is not neg-
lected. And, if in such case the managing
partner dies, his estate will be entitled to
share in the profits upon storage earned in
his lifetime, but not collected till after his
death, deducting the actual expenses ac-
cruing after the decease. And, if the
proceeds of sales are not called for for
twelve years, the estate of the deceased
partner will be entitled to a decree for his
proportion thereof. Parnell v. Robinson,
53 Ga. 26. When, after a ilissolution, the
continuing partner carries on the business
with the pai'tnership stock pending settle-
ment, he will not be required to account
for profits made subsequent to dissolution,
if at that time the retiring partner had no
interest in, but was in debt to, the firm.
Taylor v. Hutchinson, 25 Gratt. 536. On
a bill against surviving partners for an
account, they should be charged with the
value of the assets as likely to be realized
on reasonable diligence in the disposition
thereof, and not with their value as of the
date of the decease. Moore v. Hunting-
ton, 17 Wall. 417. The surviving part-
ner may be allowed for expenditure not
stiictly on partnership account, if made
in accordance with the previous practice of
the firui, and the business has been con-
tinued at request of the deceased partner.
Tillotson V. Tillotson, 34 Conn. 355.
(0 Cook V. Collingridge, Jac. 607, 622,
2 Fonb. Eq. 186 ; Simpson v. Feltz, 1
McCord Ch. 213, 220 ; Honore v. Colmes-
nil, 7 Dana, 201 ; Beacham v. Eckford's
Exec, 2 Sandf. Ch. 116; W'est v. Skip,
2 Ves. Sen. 242. Where, after dissolution
by death, cotton held on commission was
sold by the surviving partner, and the
proceeds were not claimed within twelve
years, it was held that the estate of the
deceased partner was entitled to its pro-
portion of such unclaimed proceeds. Par-
nell V. Robinson, 53 Ga. 2. See also
Keyes's Appeal, 65 Pa. 196.
1 Where a bill for an account is brought by a partner who has been wrongfully
excluded from the business, he is ordinarily granted a decree for his share of the profits;
and if two or more partners combine to exclude him, he may have a decree cliarging
them jointly. Bloomfield v. Buchanan, 14 Ore. 181, 12 Pac. 238. Where the share
of one ])artner in the business is purchased by a copartner by fraud, he would usually
have the option to claim either profits, as if he had be(>n wrongfully excluded, or his
damages with interest. In a case where in spite of the fraud he had received the full
value of his share, he was held not to be entitled to a share of the profits, since neither
his exertions nor his ca]iital had helped in any degree to earn them. W^hite v. Reed,
124 N. Y. 468, 26 N. E. 1037.
§ 41G.] OF AN ACCOUNT. 525
that the correct rule in taking an aceoiint between partners is to
ascertain what each has contributed, and first to make them equal,
and then devide the Ijalance of the proceeds. (11)
§ 416. Method of stating Accounts. — [The method of stating
partnershij) accounts is not to state an account between the part-
ners directly. Each partner is primarily the debtor or creditor
of the firm, not of his co-partners. The account of each partner
with the firm is therefore first to be stated. This process deter-
mines the amount which each partner is to pay or to receive.
Upon the basis of the individual accounts the court may decree a
payment from one partner to another ; not because the former is
indebted to the latter, but because the former is indebted to the
firm, and the firm to the latter.^ This account is of course to be
taken after all the debts of the firm have been paid, since the
item of profit or loss cannot be adjusted until that time. After
the payment of all liabilities there can be no distribution between
the partners till an account is taken.^ Yet it is not necessary to
wait till all transactions are completed before filing a bill for an
account ; on the contrary, such a bill is usually brought to secure
the settlement of the partnership affairs.^
Upon a final accounting, the advances of both partners stand
upon the same footing as contributions of capital ; that is, both
enter into the account between the partner and the firm. If there
has been a loss, so that capital and advances cannot be repaid in
full, the loss is divided ; the partner to whom least is owed by
the firm paying over to the partner who is more in advance his
proper share of the loss. Thus if one partner has put in all the
capital, which has been lost, and the profits are equally divided
between the two partners, his co-partner must pay over to him
half the amount of the loss.^]
(Jl) Frigerio v. Crottes, 20 La. Ann. 351.
1 Garrett u. EoWnson, 80 Ala. 192. See Lindl. Part. 396, et seq.
2 Gaie v. SuUoway, 62 N. H. 57.
8 Walsh v. MeKeen, 75 C:il. 519, 17 Pac. 673.
* See ante, § 173 ; Binney v. Mutrie, 12 App. Cas. 160 ; Xowell v. Nowell, L. P. 7
Eq. 538; Sangston v. Hark, 52 Md. 173 ; Whitcomb v. Converse, 119 Mass. 38. But in
Killefer v. McLain, 70 :\Iich. 503, 38 N. W. 455, it was held that after the debts were
paid the individual creditors of one partner could secure payment of all debts which
were contracted before the beginning of the partnership out of the capita] contributed
by their debtor before the copartner could come on it for his advances to the firm.
One partner has no lien on the share of the other for a private debt due from the
latter. Therefore after the partnership accounts have been stated and a balance found
due to a partner, he may claim his statutory exemption out of it before his copartuei
can seize it for a private debt. Evans v. Bryan, 95 N. C. 174.
526 THE LAW OF PARTNERSHIP. [CH XVI.
§ 417. Interest.. — [When the accounts of the partnership have
been settled and a bahince found due to one partner, or against
the other, interest is often claimed upon the balance ; and the
courts are not agreed in the view they take of the mj'tter. If a
partner is indebted to the partnership, it is ordinarily because he
has overdrawn his account ; if the partnership is indebted to a
partner, it is usually because of advances made by the partner.
But the balance in favor of a partner may consist entirely of
accrued ))rofits ; the balance against a partner may result from a
breach of his agreement to advance a certain amount as capital.
Whether or not interest will be allowed should depend upon the
cause of the balance. Interest upon a sum of money is given
either because of an express or implied contract to pay it, or as
damages for failure to pay over a certain amount of money at a
definite time.^ It is evident that the partner's share of undivided
profits was never payable, and therefore that no interest should
be given by way of damages for not paying it. Agreed capital
not paid in, however, should bear interest, since an obligation to
pay a certain amount of money at a certain time has been broken.
As to advances and overdrafts of a partner the case is more dif-
ficult ; yet it seems impossible to distinguish such items from
the item of undivided profits. The partner in advancing or with-
drawing money is not doing an isolated act, as to which the
obligations are at once to be settled. He is simply adding one
item to a long account between himself and the firm. Until the
account comes to be settled, he is not called upon to repay what
he withdraws, nor can he complain if he is not reimbursed the
exact amount of his advances. A simple running account does
not bear interest, in the absence of an agreement that it shall
do S0.2 The better view, then, would seem to be that interest
shall be allowed upon a partnership account, in the ab.sence of
agreement, only when a partner has failed to pay in the agreed
amount of capital. The great weight of authority is to this
effect. Thus, it is held that no interest will be allowed upon the
balance of a partnership account.^ The case of advances by a
1 1 Sedg. Dam. (8th ed.) §§ 282, 301.
2 1 Sedg. Dam. (8th ed.) § 310.
8 See ante, § 156 ; Dexter v. Arnold, 3 Mass. 284 ; Gage v. Parmalee, 87 111. 329 ;
Kemmerer I'. Kennnerer, (la.) 52 N. W. 194; Wendling i;. Jeniiisch, (la.) 52 N. W.
341 ; Sweeney v. Neeley, 53 Mich. 421, 19 N. W. 127 ; Brown's Appeal. 89 Pa. 139 ;
MoKay i'. Overton, 65 Tex. 82 ; Oilman v. Vanghan, 44 Wis. 646 ; Carroll v. Little,
73 Wis. 52, 40 N. W. 582. Contra, Masonic Savings Bank v. Bangs, (Ky.) 10 S. W. 633.
It has been said in some cases that the allowance of interest on partnership accounts
cannot be determined on any rule of law, but depends solely upon the facts. Bucking-
ham V. Ludlum, 29 N. J. Eq. 345 ; Johnson v. Hartshorne, 52 N. Y. 173 ; Gyger's
§ 417.] OF AN ACCOUNT. 527
partner would seem not to differ from any other circumstance of
the account ; and it is usually held that in the absence of agree-
ment a partner is not entitled to interest on advances.^ Where
a partner fails to pay in the capital which he has agreed to pay,
he is liable for interest on the balance.^ And when there is an
agreement, either express or implied, to pay interest, it will of
course be allowed.^ But the payment will cease upon dissolu
tion, unless a contrary intention is evident, since the firm then
ceases to earn profits.*
A surviving or settling partner may, however, be bound to pay
interest upon a balance left in his hands. Either unreasonable
delay in paying over a balance, or misconduct in the use of the
assets will render such a partner liable for interest. Thus where
he fails to pay over a balance at the proper time he is liable for
interest.^ So where he mingles the funds with bis own, or other-
wise uses them for his own purjjoses;^ but if there is no im-
proper delay or misuse such a partner is not liable for interest."
Where a surviving partner is obliged to pay out money in advance
of getting in the assets, he has been held entitled to interest.^
Compound interest will not usually be allowed, without agree-
ment;^ but in case of bad faith, as where there has been per-
sistent and wrongful failure to account, it may be allowed. ^*^]
Appeal, 62 Pa. 73. This means no more than that the facts may show an agreement
to pay interest, or some such fraud or misconduct as will give a claim for interest in a
particular case.
1 Prentice r. Elliott, 72 Ga. 154; Leer. Lashbrooke, 8 Dana, 214; Clark r. Worden,
10 Neb. 87 ; Morris v. Allen, 14 N. J. Ei^. (1 ML-Carter) 44 (semhlc); Jones v. Jones,
1 Ired. E([. 332 ; Holden v. Peace, 4 Ired. Ei|. 223. But see contra, Reynolds t'.
Mardis, 17 Ala. 32 ; Ligare v. Peacock, 109 111. 94 ; Baker o. Mayo, 129 Mass. 517;
Berry v. Folkes, 60 Miss. 576 ; Hodges v. Parker, 17 Vt. 242.
2 Krapp V. Aderholt, 42 Kas. 247, 21 Pac. 1063.
3 Montague v. Hayes, 10 Gray, 609 ; Payne v. Freer, 91 N. Y. 43 ; McKay v.
Overton, 65 Tex. 82. It was pointed out in Payne v. Freer, 91 N. Y. 43, that though
called interest, the payment by a partner of a percentage on overdrafts was not prop-
erly so called, for he could not be said to borrow the monej'. It was a mere method of
adjusting the profits, and was not to be repaid to any one unless upon final accounting
a balance was due to the copartner. For this reason it was decided that though the
amount to be paid exceeded the legal rate of interest, the agreement for the ])ayment
(or rather for the charge in the accounts) of this percentage was not usurious. Ace.
Campbell v. Coquard, 16 Mo. App. 552 ; Cunningham v. Green, 23 Oh. St. 296.
* Watney v. Wells, L. R. 2 Ch. 250; Bradley v. Brigham, 137 Mass. 545; Johnson
V. Hartshorne, 52 N. Y. 173.
5 Beale v. Beale, (111.) 2 N. E. 65: Crabtree v. Randall, 133 Mass. 552.
6 Dunlap V. Watson, 124 Mass. 305 ; Coddington v. Idell, 30 N. J. Eq. 540.
T Brownell v Steere, 128 111. 209, 21 N. E. 3.
8 Collender v. Phelan, 79 N. Y. 366.
9 McCall V. Moss, 112 111. 493; Sangston v. Hack, 52 Md. 173, 201.
1° Heath v. Waters, 40 Mich. 457 , Pomeroy v. Benton, 77 Mo. 64 ; Johnson v
Hartshorne, 52 N. Y. 173.
528 THE LAW OF PARTNERSHIP. [CH. XVI.
§ 418. Return of Premium. — [A premium, or as it is some-
times called in this country a bonus, is the consideration paid
by an incoming partner for admission into the business.
It goes, of course, to the prior owner of the business (whether
sole trader or partnership) and not into the assets of the new
firm.
Where a premium has been paid for admission into a firm, and
the firm has afterwards been dissolved, the English courts fre-
quently award a return of part of the premium. The ground
for such a decision is rather obscure. The premium was paid for
an interest in the business ; and just what was paid for has been
obtained. That interest each partner continues to have notwith-
standing the dissolution. The remedy of the partner would
seem not to be an action or bill for a return of part of the pre-
mium, but a claim for including in the account the value of the
good-will. The business, of which he bought a share, was made
up of two elements; the corporeal chattels, and the good-will. >
Since his share of the former must be secured to him upon disso-
lution, all that remains for complete justice is to secure him a
share of the latter, and to this he is entitled.^ If the partner
secures his share of the chattels and good-will, and also a return
of part of the premium, he is keeping what he bought and recover-
ing what he paid for it.^
The theory upon which the English doctrine rests is probal)ly
that the purchaser bought not only an interest in the business,
but the valuable services of the seller as his partner. The objec-
tion to this theory is, that the purchaser could not have a right
to the services of his copartner unless he secured that right by a
contract. If he entered into a partnership without contracting
for the services of the other for a certain time (as, for instance,
into a partnership at will), he has no ground for complaint if the
other withdrew his services, as he had a right to do. If, on the
other hand, the selling partner obliged himself by contract to
remain in the firm, and dissolved the partnership wrongfully, an
action of contract would be the proper action. If the seller con-
cealed any fact which rendered him incapable of doing what he
agreed to do (as that he was on the verge of bankruptcy, or that
he had a mortal disease) he procured the partnership fraudu-
1 This view seems to have been held by Sir Thomas Plumer, M, R. In Akhurst v.
Jackson, 1 Swanst. 85, he refused to order the return of any part of the premium, upon
dissolution by the -bankruptcy of the partner who had received it, on the ground that
the paying partner had obtained for the premium what he paid it for : the right
of becoming a partner.
a Ante, § 181.
§ 419.] OF AN ACCOUNT. 529
kMitly, and mialit be sued in tort. It has however become
estiiblished in Eng-hvnd in the last fifty years that, upon a prema-
ture dissolution of a business, the court will ordinarily order a
i'(>tni'n of an equitable part of the premium ;^ the court of equity
having full discretion both as to awarding any return ^ and as to
the amount.-'^ It would clearly be unjust for the new partner to
gt^t both a share of the good-will and a return of part of the pre-
mium ; and though it has never been expressly decided, it seems
clear that a return of premium can be had only when no disposi-
tion can be made of the good-will. In fact, most cases involving
the return of premiums are cases of the taking into a jjrofessional
business, as that of a solicitor or a surgeon, a junior partner,
and in such cases not only could no disposition be made of the
good-will upon dissolution, but the business would naturally go
to the senior partner.^
It is very doubtful whether a return of premium would ever be
ordered in this country. The few cases in which the point was
raised have, with a single exception, refused to order a return.^
Ill a case in Kentucky the English doctrine was stated witiiout
disapproval ; but a return was not ordered.**
It is well settled, both in England and in this country, that
where one is induced by fraud to buy an interest in a business he
may get back what he paid for it.'^ This, however, is clearly a
different case from the one under discussion.]
§ 419. English Doctrine. — [The English doctrine as to return
of premium seems to be, that where the dissolution is by decree,
there must be a return of premium unless the dissolution was
solely caused by the fault of the purchasing partner. Thus, if
dissolution was decreed because of mutual incompatibility, with
1 Wilson V. Johnstone, L. R. 16 Eq. 606.
2 Lyon V. Tweddell, 17 Ch. D. 529 (C. A.)
^ It is to be such [iioportion of the premium as is just and equitable, not necessarily
in [)roportioa to the elapsed time. Bullock v. Crockett, 3 Gitf. 507.
■* An instructive case in that connection is Bond v. Milbourn, 20 W. R. 197. In
tliat case the articles provided for_a valuation of the good-will upon dissolution : and
tlie Court refused to order a return of pi'emium. See Rooke v. Nisbet, 50 L. J. >;. s.
Ch. 588.
i' Durham v. Hartlett, 3f Ga. 22 ; Carlton v. Cummins, 51 Ind. 478 ; Swift v.
Ward, 80 la. 700, 45 N. W. 1044. *
•> Boughner v. Black, 83 Ky. 521. Tlie defendant had bought a share in a certain
business, giving in payment his promissory note. In an action on the note he was
allowed to recoup damages to the business resulting from the misconduct of plaintiff,
the selling partner.
T Jauncey v. Knowles, 29 L. J. N. s. Ch. 95 ; Mycock v. Beatson, 13 Ch. D. 384 ;
Bichards v. Todd, 127 Mass. 167.
34
530 THE LAW OF PARTNERSHIP. [CH. XVI.
out fault of either, a return will be ordered.^ So where the
dissolution was because of the fault or misconduct of the partner
who received the premium.^ So where the dissolution was
because of the bankruptcy of the latter.^ And when a physician
received a premium for accepting a partner and promised to intro-
duce the latter to his patients, but, before he could do it, died of
a mortal disease from which at the time of sale he knew he was
suffering, a return of part of the premium was decreed.* On the
other hand, where the partner who paid the premium refused to
go on with the partnership, he was held not entitled to a return of
premium ;^ and it has been said that where the partners dissolved
partnership by a written agreement there could be no return of
premium unless it was provided for in the agreement.^
It has even been held that where a partnership may be dis-
solved at the will of either partner, the partner who received a
premium must return part of it if he soon dissolves it.' The
general rule was well stated by Lord Cairns, L. C, in At wood v.
Maude : ^ —
" If the partner who has received the premium should after-
wards commit a breach of the partnership articles, and himself
dissolve the partnership, or render its continuance impossible, the
court will not allow him to take advantage of his own wrongful
act, but decrees the restitution of a proportion of the premium
paid, having regard to the terms of the contract and to the length
of time during which the partnership has continued. But, on the
other hand, if the partner who has paid the premium is guilty of
a like breach of the partnership articles, and is himself the author
of the dissolution, the court will not allow him to found a claim
to the restitution of the premium upon his own wrongful act."]
§ 420. Sale of Assets. — A sale is sometimes decreed as a
preliminary proceeding, or a means for making an account ; and,
1 Airey v. Borham, 29 Beav. 620 ; Pease v. Hewitt, 31 Beav. 22 ; Brewer v. Yoike,
46 L. T. N. s. 289 (C. A.). But see Wilson v. Johnstone, L. R. 16 Eq. 606.
2 Haniil v. Stokes, 4 Price, 161 ; Bury v. Allen, 1 Coll. 589 ; Astle v. Wright, 23
Beav. 77: Atwood v. Maude, L. R. 3 Ch. 369 (criticised in Wilson v. Johnstone.
L. R. 16 Eq. 606).
3 Freeland i;. Stansfeld, 2 Sm. & Giff. 479 (but see contra, Akhurst v. Jackson, 1
Swanst. 85).
* Mackenna v. Parkes, 36 L. J. x. s. Ch. 366.
5 B]uck V. Capstick, 12 Ch. D. 863.
6 Lee V. Page, 30 L. J. N. s. Ch. 857, 7 Jur. N. s. 768.
" Featherstonhaugh v. Turner, 25 Beav. 382 ; Rooke v. Nisbet, 50 L. J. N. s.
Ch. 588. Contra, Carlton v. Cummins, 51 Ind. 478 ; Swift v. W^ard, 80 la. 700, 45
N. W. 1044.
8 L. R. 3 Ch. 369, 372
420.]
OP AN ACCOUNT.
531
in some instances, a sale will be ordered on mere motion, (wi)
We have already adverted to the fact, that a sale is, generally
speaking, that method of disposing of the property, or facilitating
its division, which is least ojjen to the danger of fraud or mistake,
and is, therefore, much favored. Perhaps the rule may be stated
thus : The presumption is always in favor of a sale ; the parties
may agree to substitute something else, and the court will sanc-
tion such an agreement, unless it is open to obvious and decided
objection, as tainted with fraud or oppression, or leading to
injustice, (n) But no party has a right to insist on taking the
property at a valuation, without the consent of the other ; nor
may he insist as a matter of course upon the division of the prop-
erty in specie^ although this would be more favored than the
taking at a valuation without consent, (o) Still, it must always
be possible, that the peculiar circumstances of the case may make
a sale injurious, and that the true interests of all parties may be
better preserved and protected without it ; and then a court is
under no obligation to require a sale. (^)
(m) Crawshay v. Maule, 1 Swanst.
523.
{ii} Ex parte Montgomery, 1 Glyn &
J. 341 ; Featherstouhaugh v. Fenwick, 17
Ves. 298 ; Fox v. Hanbury, Covvp. 445 ;
Crawshay v. Collins, 15 Ves. 218 ; Reg-
den V. Pierce, 6 Madd. 353 ; Fereday v.
Wightwick, 1 Tamlyn, 261 ; 3 Kent
Comni. 64 ; 2 Bell Conira. 632, 633 ;
Evans v. Evans, 9 Paige, 178 ; Cook v.
Oollingridge, Jac. 607 ; Leach v. Leach,
IS Pick. 75.
(o) Featherstonhaugh v. Fenwick, 17
Ves. 298 ; ('ook v. Collingridge, Jac. 607 ;
Regden v. Pierce, 6 Madd. 353 ; Sigourney
V. Munii, 7 Conn. 11 ; Evans v. Evans, 9
Paige, 178 ; Dougherty v. Van Nostrand,
1 Hoff. Ch. 68 ; Conwell v. Sandidge, 8
Dana, 278 ; Crawshay ?;. Maule, 1 Swanst.
495, 523 ; Simmons v. Leonard, 3 Hare,
581.
{p) See cases cited ante, in the two
preceding notes. A partner's interest in a
trade-mark or brand is too unsubstantial to
justify a court in ordering a sale. Taylor
V. Beniis, 4 Biss. 406.
632 THE LAW OF PARTNERSHIP. [CH. XVII.
CHAPTER XYII.
OF LIMITED PARTNERSHIPS.
§421. Origin of Limited Partnerships. — Formerly the name of
limited partnership was given to one formed for a special or par-
ticular business or enterprise, (a) The meaning of this phrase was
not well defined, and it was of no importance in the law. Now,
however, in this country, it is applied to a new thing. A lim-
ited partnership, in the present sense of the phrase, is one in
which one or more of the partners are so in the usual way, in
respect to power, property, and obligation; and one or more of
them have placed a certain sum in the business, and may lose that,
but are not liable further.
The purpose of the law in permitting such a partnership is
obvious. It is to encourage and facilitate trade and commerce,
and induce capitalists to embark their capital therein, or a cer-
tain part of their capital, by relieving them from the peril, hanging
over all partnership by the common-law merchant, of losing not
only all they have in the trade, but all they have beside. On the
continent of Europe, it has long been known, (^) and found to be
useful and safe. And almost forty years ago it was permitted in
the great commercial State of New York, by a statute copied sub-
stantially from the French Code of Commerce ; this being, says
Chancellor Kent, the first instance in the history of the legisla-
tion of that State, in which the statute law of any other country
than Great Britain has been closely imitated and adopted, (c) Not
(a) Willett V. Chambers, Cowp. 814, Eiiropp, limited partnership.s are admitted,
816; 2 Bell Comm., b. 7, eh. 2, p. 26], provided they be entered on a register;
5th ed. See also Robey v. Howard, 2 but the law of England is otherwise, the
Stark. N. P. C. 557. For illustrative rule being, that, if a partner shares in
cases, see Carrick v. Viekery, Doug. 652, advantages, he also shares in all disadvan-
n. ; Holmes v. Higgins, 1 B. & C. 74 ; tages." Limited partnerships (la Societe
Livingston v. Roo.sevelt, 4 Johns. 251; e??. co?nw«nr/?7e) were established in France
Dubois V. Roosevelt, 4 Johns. 262 ; Liv- by the ordinance of 1673, and have been
ingston v. Hastie, 2 Caines, 246 ; Lansing continued and regulated by the new code
V. Gaine, 2 Johns. 300 ; Ensign v. Wands, of commerce. Repertoire de Jurisprvdevce
1 Johns. Cas. 171 ; Schollenberger v. Sel- par Merlin, tit. Societe, art. 2 ; Code de
donridge, 49 Pa. 83. Commerce, b. 1, tit. 3, § 1.
(b) Coope V. Eyre, 1 H. Bl. 48. per (r) 3 Kent's Comm. 36, 7th ed.
Lord Loughborough : " In many parts of
§ -121.]
OF LIMITED PARTNERSHIPS.
533
long afterwards, the example was followed by other States ; and
now there are similar provisions in upwards of twenty States, (c?)
In England, this law is not yet adopted, excepting as to joint-
stock companies, (f) ^
Limited partnership is an innovation upon mercantile law which
has stood the severe test of American practice for a whole genera-
tion, and has never been recalled or importantly modified, (/) nor
found dangerous or injurious to the public, nor seriously objected
to in any point of its working; and it may therefore be regarded
as resting upon good authority. (^)2
(d) JIaine, Massachusetts, Rhode
Island, Connecticut, Vermont, New York,
New Jersey, Pennsylvania, Maryland, In-
diana, Michigan, South Carolina, Georgia,
Mississij)pi, Alabama, Florida, Louisiana,
Illinois, Virginia, Kentucky, Delaware,
Tennessee, Ohio, and California, and prob-
ably in other States, of which the infor-
mation has not yet reached us. Banking
and insurance are excepted in New York,
New Jersey, Pennsylvania, Maryland,
South Carolina, Alabama, Georgia, Flor-
ida, Maine, Massachusetts, Jlississippi,
Connecticut, Vermont, Rhode Island,
Delaware, Tennessee, Ohio, and Cali-
fornia.
(c) The principle has been applied in
England to joint-stock companies ; and a
great number of statutes have been passed
in relation thereto. The most important
are the following ; viz., 1 Vict. ch. 73 ; 7
& 8 Vict. ch. 110 ; 18 & 19 Vict. ch. 13-3 ;
19 & 20 Vict. ch. 47 ; 25 & 26 Vict. ch.
89. By 21 & 22 Vict. ch. 91, joint-stock
banking companies are allowed to be
formed on the principle of limited liabil-
ity. In the British province of New
Brunswick (ch. 121, Rev. Stat, of N. B.),
the principle has been adopted for general
business, with the usual exceptions of
banking and insurance. And also in
Nova Scotia, with like exceptions. Rev.
Stat. ch. 79, §§ 12-25.
(/) Troubat (Limited Partnership,
§ 89) says : " That the statutes on limited
partnership in the various States should
be, in substance, identical, is perfectly
natural ; inasmuch as the common source,
the commercial code of France, the work
of the jurists of the empire, has been
largely borrowed from by them all."
(g) " Every one," says an able French
writer, " may have an interest in com-
merce and trade, under such a system,
for amounts small or large. The facility,
too, of realization has thrown round this
form of investment considerable attrac-
tion. We have seen large capitals thus
drawn, in the prom[)test and easiest way,
into the general industrial and commercial
movement ; and the adjunction of bailors
of funds to responsible general partners
constitutes not a union of persons, but an
association of capitals analogous to that
of incorporated companies. In this man-
ner has it come to pass that limited part-
nerships have become in reality so many
incorporation.s, wherein the liability of the
general partners stands in lieu of the
authorization of government. ... To con-
vej' an idea of the immense service rend-
ered by limited partnerships, with cajiitals
divided into shares thus transferable, it
will suffice to say that calculations, un-
tinged with exaggeration, carry to above
a thousand millions the capital engaged
in this form of social business. A few
year-s, too, have sufficed to bring about
this truly colossal result, in sjiite of the
cases of gross swindling and signal frauds
that have marked the progress of the new
combination of interests. But by these
1 An approach to a limited partnership was made by Bovill^s Act, 28 & 29 Vict. ch.
86 ; ante, § 45.
2 It is said that the tendency now is to regard limited partnerships with increasing
favor, and to construe the statutes more liberally than at first. White v. Eiseman, 134
N. Y. 101, 31 N. E. 276.
534
THE LAW OF PARTNERSHIP.
fCH. XVII.
§ 422. General Principles of the System. — No one doubts that
the oenenil liabilities of partners, however severely they may ])ress
upon individuals in some cases, are, on the whole, wise and neces-
sary. And if the limited partnership, which is free from these
stringent liabilities, is useful and safe, both for those who engage
in it and for the community, it must be from the excellence of
that system of precaution by which the community is protected.
The general principles of this system are, first, ascertaining the
actual placing of the sum proposed within the joint funds, where
it may be liable for the joint debts ; secondly, giving adequate
public notice of the amount, and of the parties, and of the busi-
ness, so that the public may estimate correctly the credit to be
given to the firm, and providing, also, that notice should be given
of any important change ; thirdly, securing this joint fund from
undue diminution, and thus preventing the original notice from
being deceptive and injurious. The statutes of no two States are
verbally alike; but they all imitate the statute of New York in
these essentials, which that statute borrowed from the Code of
Commerce of France, (h) They differ more or less in the exact
frands it, was not creditors who suffered ;
it was the shareholders themselves."
Wolowsky, Des Socie/es par Actions, 7, 9,
13. In reference to the same matter,
Watson on Part. 2, citing Pothier on Obli-
gations, says : " Society in commcndam,
&c., was that between two persons, one of
whom only put his money into stock,
without doing any other office of a co-
partner ; the other, who was called the
complementary of the society, dispatching
all the business in his own name. This
society was very useful to the State ; in-
asmuch as all kinds of persons, even
nobles and professional men, might con-
tract it, and thus make their money of
service to the public : and those who had
no fortune of their own to trade withal,
hereby found means of establishing them-
selves in the world, and of making their
industry and address serviceable."
(h) In Ames v. Downing, 1 Bradf.
321, 329, the' court, in holding that a
special partnership, formed under the pro-
visions of the Revised Statutes of New
York, is dissolved by the death of the
special partner, and that it is, like a
general partnership, a personal contract,
expiring with the death of any of the
parties, make an elaborate examination
of the origin, history, and nature of
limited partnerships. We quote at some
length. "The system of limited part-
nerships," say the court, " which was in-
troduced by statute into this State, and
subsequently very generally adopted in
many other States of the Union, was
borrowed from the French code. 3 Kent
Comm. 36 ; Code de Commerce, 19, 23, 24.
Under the name of la SocUte en commandite
it has existed in France from the time of the
Middle Ages ; mention being made of it in
the most ancient commercial records, and
in the early mercantile legulations of Mar-
seilles and Montpelier. In the vulgar Lat-
inity of the Middle Ages, it was styled
commenda and in Italy accowncnda. In
the statutes of Pisa and Florence, it is
recognized as far back as the year 1160 ;
also, in the ordinance of Louis-le-Hutin, of
131.5 ; the statutes of Marseilles, 1253 ; of
Geneva, of 1.588. In the Middle Ages, it
was one of the most frequent combinations
of trade, and was the basis of the active
and widely-extended commerce of the opu-
lent maritime cities of Italy. It con-
tiibuted largely to the support of the
great and prosperous trade carried on
along the shores of the Mediterranean ;
was known in Languedoc, Provence, and
§ 422.]
OF LIMITED PARTNERSHIPS.
53')
provisions by which these essential precautions are taken ; but
they resemble each other so much in these that they may be
stated generally as follows.
Lomharily ; entered into most of the in-
(lustriiil occupations and pursuits of the
age ; and even travelled, under the pro-
tection of tlie arms of the Crusaders, to
tlie city of Jerusalem. At a period wiien
capital was in the hands of nobles and
clergy, who, from pride of caste, or can-
onical regidations, could not engage di-
rectly in trade, it affordeil the means of
secretly embaiking in commercial enter-
l)rises, and reaping the i)rofits of such
lucrative f)ursuits, without personal risk ;
and thus the vast wealth, which other-
wise would have lain dormant in the cof-
fers of the rich, became tlie foundation,
by means of this ingenious idea, of tiiat
great commerce which made princes of
the merchants, elevated the trading
classes, and brought the commons into
position as an influential estate in the
commonwealth. Independent of the in-
terest naturally attaching to the history
of a mercantile contract of such ancient
origin, but so recently introduced, where
the general partnership, known to the
common law, has hitherto existed alone,
1 have been led to refer to tiie facts just
stflted, for the purpose of showing that
the special partnership is, in fat:t, no
novelty, but an institution of considerable
antii|uity, well known, understood, and
regulated. Ducange defines it to be,
'SociETAS Mercatorum q^M uni socio-
rum Mm neciotiationis cura commendatur,
certis conditioiiibus.' It was always con-
sidered a proper j)artnership (socie(ns),
with certain reserves and restrictions ; and
in the ordinance of Louis XIV., of 1673,
it is ranked as a regular partnership. In
the Code of Commerce, it is classed in
the same manner. I may add, as an
imjiortant fact, for the explanation of a
distinction to which I shall shortly advert,
that the French code permits a special
partnership, of whi('h the ca]iital may lie
divided into shares or stock, transmissible
from hand to hand. In such a case, the
death of the special partner does not
dissolve the firm, the creation of trans-
missible shares being a proof that the
association is formed respedu negolii,
and not respedu personarum ; but, even
in such a partnership, the death of the
general partner effects a dissolution, unless
It is expressly stipulated otherwise. But
says M. Tioploiig, it would be wrong to
extend the rule that a partnership, of
which the capital is divided into trans-
missible shares, is not dissolved by the
death of a shareholder, to a special ])art-
nership, the capital of which is not. so
divided. The statute of New York recog-
nizes only the latter kind of partnershij) ;
the names of the parties being required
to be registered, and any change in the
name working a dissolution, and turning
the firm into a general partnership. Such
a partnership has always been held to be
dissolved by the death of the special
partner. This partnership remains undi^r
the dominion of the common law. It
has created between the special and the
general partner a tie which is not sub-
jected to the caprice of unforeseen changes ;
it has produced mutual relations of confi-
dence, which the general partner cannot
be forced to extend to strangers. M.
Troplong, Comm. ; die Contrat de Societe
Civile, Src, T. 1 preface, 57, § 377, &c.,
T, 2, § 888, p. 368. The French jurists
generally take the same position ; defin-
ing the special partnership as a proper
{lartnership, and applying the law of dis-
solution by death to all. Pothier, Traite
du Contrat de Societe, ch. 2, § 2, ch. 8,
§ 3 ; Merlin, Repertoire de Jurisjn-udciice,
art, Societe, § 7 ; Duranton, Droit Fraii'
(;ais, tom. 17, 1. 3, tit. 9, § 470. Pardessus
discusses the question somewhat at length.
Droit Commercial , torn. 4, pt. 5, tit. 3,
ch. 1, § 4. It might be thought, he
says, with some ayipearance of jdausibil-
ity, that the rule of a dissolution by death
should be limited to general partnerships,
in forming which the probity and intel-
ligence of each member have been recip-
rocally taken into consideration. Indeed,
the special partner does not suppose, on
the part of the general partners, any per-
sonal confidence in the special partners ;
and, as the interests and the rights of the
latter are exclusively limited to their
536
THE LAW OF PARTNERSHIP.
[CH. XVII.
§423. General Partners. — There must be some persons who
are general partners, all of whose names are used in the firm,
without the addition of " company," or any other phrase indicat-
ing that tlierc are other general partners.^
All of those general partners are liable to creditors in precisely
the same \\ay as if there were no special partners.
The general partners alone conduct and control the business of
shares, it would seena that they were not
uiodilied by their decease, and their heirs
called to take their place could have no
right to insist that death has dissolved
the firm, nor the geneial partners insist
upon that result. These reasons, to ques-
tion the general rule, ajipear, neverthe-
less, to yield to others more decisive. Tiie
persons, and the character of the special
partners have been regarded by the gen-
eral partners when they formed this kind
of association. The special partners are,
in effect, to a greater or less extent, called
to the annual accountings, to meetings
for the settlement of the profits and losses,
and to an examination of the state of the
affairs. This scrutiny, and a right to in-
sist upon a dissolution in consequence of
a breach of the contract, or to urge their
claims when the affairs are liquidated, are
more or less rigorously exercised. The
difficulty of acting harmoniously with
different persons, substituted in the jjlace
of those with whom the original contract
was made, the distrust of heirs, who have
not the grounds of esteem and confidence
which influenced the deceased, and the
impossibility of treating easily with min-
ors, — are some of the reasons w-hich
will not permit special partnerships to he
excepted from the general rule. It may
be objected that these reasons appl}^ only
in favor of the general partners, and that
it is for tliem to judge as to the continua-
tion of the business with the heirs. But
the heirs of the deceased ought to enjoy
the same privilege. Reciprocal rights
ought to result from a mutual agreement.
There is no solid reason why the special
partnership should not be dissolved by
the death of one of the partners, except
w^hen the capital is divided into trans-
missible shares ; in which case, the as-
sociates having consented that each may
substitute another in his place, as he may
desire, without the authority of the other.s,
it is natural to conclude that the heirs of
a deceased member fill his place in the
same manner as if he had assigned his
share. 1 have given the substance of the
reasoning of Pardessus ; and the result
he attains has not only the authority of
M. Troplong in its favor, but also that
of other conmientators {MM. Mnlpcyrc
et Jourdain, No. 474 ; M. Pcrsil, Fill,
p. 344), while it does not appear to have
been questioned or doubted. (But as to
this, see Troubat on Limited Part. ( Phila. )
1853, § 430, citing Fierli, vol. 1, 46, 47 ;
Casctreijis dc Commer., Disc. 29, No. 10;
Zanch de Societe, No. 19, 20). It thus
appears that, in the jurisprudence of that
nation whence the peculiar contract of a
special partnersliii) has heen adopted b}'
us, and grafted into our law, — where
the system has long existed, is familiarly
known, and its nature, qualities, and
practical relations to various events and
circumstances have been well considered
under the light ot no brief experience, —
the effect of the death of the special
partner is to dissolve the firm. This
agrees with the conclusion 1 had attained
upon independent reasoning, before con-
sulting those authorities ; and I am, con-
sequently, led to pronounce the firm in
which the testator was a special partner,
dissolved at his death ; and to hold the
executor, who was his general partner,
responsible for the testator's interest in the
firm at that time, upon a liquidation of
the affairs, as if ma(le then." pp. 329-
333. For a similar resume, see Jac-
quin V. Buisson, 11 How. (N. Y.) Prac.
385, et scq., in which the above opinion
is concurred in.
1 A minor naay be a general partner.
N. E. 1066.
Continental Nat. Bank v. Strauss, (N. Y.) 32
§ 424.] OF LIMITED PARTNERSHIPS. 537
the partnership. But, in some States, the statute permits the
special partner to examine at his pleasure into the accounts and
business of the firm, and give advice in relation to it ; and, where
this is not expressly permitted, it would doubtless be allowed
from its inherent propriety and necessity.^
§ 424. Certificate. — There must be a certificate, signed by all
the parties, setting forth sundry particulars, verified by the oath
or affirmation of the parties before a magistrate ; and, before the
business commences, this certificate must be properly advertised,
and also recorded with some public records, (a) intiie place where
the parties reside, or where the firm is to do business, or in both,
and in every other place where the firm is to do business.
The particulars which this certificate must state are generally
these : —
The names of all the partners, distinguishing between .those
who are to be general partnei's and those who are to be only spe-
cial partners ; and the residences of all.
The name which the firm is to bear. The amount of money
actually paid in, in cash, by the special partners.^
(a) The articles do not take effect till partners. Levy v. Look, 5 Daly, 46
they are recorded. As to transactions be- [Smith v. Warden, 86 Mo. 382].
fore that time, the partners are general
^ There is nothing in tlie statutes to prevent a special partner from agreeing with
the others to share part of tlie losses. Metropolitan Nat. Bank v. Sirret, 97 N. Y,
320.
2 Where the capital appears to have been paid in cash, this must have been done or
the certitieate is invalid. But if the cash was paid in bona fide by the special partner,
and was at once paid out by the general partners for purposes of the firm, before the
certificate was filed, the certitieate was good. Vernon v. Brunson, (N. J.) 25 Atl. 511.
If the special partner contributes cash in good faith, and the general partners after-
wards buy from him the assets of the business to which it is intended that the limited
partnership shall succeed, though all his cash contribution is repaid to him the trans-
action is valid, provided it was bon fide ; but if it was a mere device to cover a contri-
bution of goods iTistead of cash, the transaction is not valid. Metropolitan Nat. Bank
V. Sirret, 97 N. Y. 320. See Lineweaver v. Slagle, 64 Md. 465, 2 Atl. 693. In some
States, the contribution of the special partner must be in cash. In that case nothing
but cash is enough. A contribution of goods is invalid. In re Allen, 41 Minn. 430,
43 N. W. 382. So of credits, or the assets of another firm, or even of government
bonds. Lineweaver v. Slagle, 64 Md. 465, 2 Atl. 693. In Pennsylvania the contribu-
tion ma}' be made in goods at a valuation. An excessive valuation does not render the
certificate invalid, if it was bond fide. Rehfuss v. Moore, 134 Pa. 462, 19 Atl. 756.
Full information must be given as to the nature of the goods ; and the value itemized.
Maloney v. Bruce, 94 Pa. 249. Therefore a certificate that a certain amount was con-
tributed " in merchandise, lumber, and bills receivable," is invalid. It cannot even be
told how much each item was worth. Van Horn v. Corcoran, 127 Pa. 255, 18 Atl. 16. See
further, as to the particularity required in filing a .statement of the capital contributed,
538 THE LAW OF PARTNERSHIP. [CH. XVII.
The nature of the business in which the firm proposes to engage,
or for which it is formed.
The time for which the partnership is formed ; that is, the daj
on which it is to begin and the day on which it is to end, or the
period for which it is to endure.
All of these are preliminary measures of notice and precaution.
And the special partner must look to it that all are complied with ;
for a substantial mistake, or an intended omission or error, by
himself or by a general partner, or by any other special partner,
destroys the limitation of the partnership, and all the partners
stand at once on the common liabilities of partners. (z) This is
(i) Richardson r. Hogg, 38 Pa. 153 ; who has not strictly comyilied with the
Vaiidike v. Kosskane, 67 Pa. 330 ; Boweu requisitions of the statutes respecting
V. Argall, 24 Wend. 496 ; JMadisou County limited partnerships cannot claim exenip-
Bauk V. Gould, 5 Hill, 309 ; Smith v. tion, as a special partner, from liability
Argall, 6 Hill, 479 ; 3 Denio, 435. A for the debts of the firm of which he is
contribution "in cash and goods "is not a member. Thu.s, the provision in the
a contribution "in cash," Van Ingen v. Pub. Stats., ch. 75, § 2, of Massachusetts,
Whitman, 62 N. Y. 513 ; He Merrill, 13 requiring an actual cash ])ayment, as
K. B. R. 91 ; nor is a permission to use capital, to be made by one who enters a
certain United States bonds, the bailee firm as a special partner, in order to ex-
not harino- notice of this permission, ouerate him from lialnlity for the debts of
Haggerty v. Foster, 103 Mass. 17. One the firm, is not complied with by the
Laflin & Rand Powder Co. v. Steytler, 146 Pa. 434, 23 Atl. 215 ; Cock v. Bailey, 146
Pa. 328, 23 Atl. 370.
It was formerly held that a cash contribution cannot be made by giving a check
payable to the order of the partnership, though the special partner had funds in the
bank to meet it. McGinnis v. Farrelly, 27 F. R. 33. But a check that is certified by
the bank has been held good as a contribution of cash. Liiieweaver v. Slagle, 64 Md.
465, 2 Atl. 693 ; White v. Eiseman, 134 N. Y. 101, 31 N. E. 276. Yet the certifica-
tion is only the acceptance of the bank, instead of the special partner, as debtor ; so
that it seems hard to draw a line between the cases. It would perhaps be better to
make the question turn on the facts ; if the drawer of the check was in good credit at a
sound bank, his check might well be regarded as cash. The only alternative would
seem to be to require an actual payment of cash by the special to the general partner.
In Rothchild r. Hoge, 43 F. R. 97, it was held that where the special partner, being in
good credit, contributed a check on a neighboring bank, payable immediately, and the
bank, as soon as the check was presented, placed the amount to the credit of the firm,
there was a good contribution of cash. It did not appear that the check was presented
before the certificate was filed. Under the Pennsylvania Acts, the whole capital need
not be contriKuted at once, provided it is so stated in the certificate ; but some jtart at
least must be paid in before the certificate is filed. Hill i-. Stetler, 127 Pa. 14p, 17
Atl. 887. Where it was certified that three-fourths of the capital was paid in, and it
a]ipeared that some had paid more and some less than that portion of their contribu-
tions, but three-fourths of the whole amount had been paid in, the certificate was valid.
Lauder v. Logan, 123 Pa. 34, 16 Atl. 44. The certificate speaks from the time of filing ;
it is therefore enough that the capital is paid in then. White v. Eiseman, 134 N. Y.
101, 31 X. E. 276. If the certificate is false, the special partner is liable as a general
partner even to a creditor who knew of the falsity. Sheble v. Strong, 128 Pa. 315, 18
Atl. 397.
§ 425.]
OF LIMITED PARTNERSHIPS.
539
certainly so as to creditors, without exception or qualification. As
between the partners, their agreements might still be valid, and
would then affect their mutual rights and obligations.^
§ 425. Capital. — Besides these preliminary precautions, there
are otlicrs, which come into force after the partnership is estab-
lished, and remain in force so long as it is in operation, which are
not less important. The capital is not to be reduced during the
partnership. If a special partner withdraws any part of the cap-
ital, and the firm becomes insolvent, he is liable to the creditors
for the amount so withdrawn, with interest. (^') A withdrawal
delivery to the firm of promissory notes,
which are received and treated as cash.
And it was further held, that the actual
cash payment, as capital, required by the
statute, of one who enters a firm as special
partner, must be made prior to the publi-
cation of the certificate ot the formation of
the firm. Pierce v. Bryant, 5 Alien, 91.
In New York, wliere the certificate was
made, dated, and filed, Dec. 23, 1870,
which by its terms was to take effect Jan.
1st, 1871, and the special partner at the
same time gave his check for the amount
of his capital, dated Dec. 31, 1870, to his
copartners, this was held not a cash pay-
ment. Durant v. Abendroth, 69 N. Y.
148. A statement in the certificate of the
formation of a limited partnership, that
the special partner has contributed a cer-
tain sum, when, in fact, a portion of that
sum has been contributed by another per-
son, with the design of securing the rights
and benefits of a special partner without
becoming one, renders all the parties liable
as general partners. Bulkley v: Marks,
15 Abb. Pr. 454. And see Haviland v.
Chace, 39 Barb. 283 ; Ward v. Newell, 42
Barb. 482.
(j) La ( 'homette t). Thomas,! La. Ann.
120 , Bulkley v. Marks, 15 Abb. Pr. 454.
Where, during the continuance of a special
partnership, the special partner sold out
his interest in the concern to the general
partner, for a sum exceeding the amount
of the capital he had placed in the busi-
ness, and for the price of his interest so
sold received a security, pledging to him
all the personal property of the partner-
ship, it was held that this, in effect,
amounted to a withdrawal by him of the
capital he originally contributed to the
cojiartnership ; that he had secured to
him that which, by the copartnership, he
had contributed in cash, and without se-
curity, to be employed in the business,
and to stand as indemnity to those who
should deal with the partnership ; and
that the transaction was, in effect, an
alteration of the capital of the partner-
ship ; and the consequence prescribed by
the statute ensued ; viz., if the business
was carried on, he was thereafter liable as
general partner. Beers v. Reynolds, 12
Barb. 288, 11 N. Y. 97. But in Lachaise
!,•. Marks, 4 E. D. Smith, 610, where there
bad be«i an agreement of dissolution, it
1 A member of a limited partnership cannot take advantage of a defect in organiza-
tion to increase the liability of other members, as between themselves. Egbert v.
Kimberly, (Pa.) 23 Atl. 437 ; Allegheny Nat. Bank v. Bailey, 147 Pa. Ill ; 23 Atl.
439.
Though the organization is invalid, the body is nevertheless a partnership ; and
though the liability of the members is altered, all contracts with the firm remain in
full force. Thus the validity of a mortgage given by a limited partnership is unaffected
by defects in the organization. Briar Hill Coal & Iron Co. v. Atlas Works, 146 Pa.
290 ; 23 Atl. 326. Nor can an in.surance company take advantage of a defect in the
certificate to avoid a policy on the partnership goods. Clement v. British America
Assur. Co., 141 Mass. 298 ; 5 N. E. 847.
540
THE LAW OF PARTNERSHIP.
[CH. XVII.
or a diminution of the capital by a general partner, without the
consent, or knowledge, or witli ignorance through negligence, of
the special partner, would not make him liable. (A;)
§ 426. Position of Special Partner. — If the name of the special
partner be used in any contract with his consent, and, still more,
if he take an active part in the formation of any contract, he is
liable upon it as a general partner. (Z)^
In New York, it is provided that, if the firm make an arrange-
ment for tiie payment of their debts, and therein make any
preference among their creditors, or provide for the special partner
as a creditor, the arrangement would be void, (wi)
was held that the mere giving of notes,
payable, at a future time, by the general
partners, to the special partner, in the
same name as that of the partnership,
upon the making of such agi-eement, with
a view of purchasing his interest, is not a
withdrawal of capital. The receipt, by
the special partner, of dividends, as a
device to withdraw capital, will render
him liable as a general partner; but divi-
dends may be paid to him in good faith,
with only the effect to require him to
restore in case the capital shall thereby be
unintentionally reduced. Id. In Robin-
son V. Mcintosh, 3 E. D. Smith, 221, in
a case of limited partnership, it was held,
that a court of equity has ]iower, at the
suit of one partner, to compel another to
contribute a sum stipulated as capital, or
to restore it to the common fund, if he
have withdrawn it before the debts are
paid.
ik) See Singer v. Kelly, 44 Pa. 145;
[Seibert v. Bakewell, 87 Pa. 506].
(/) Jonau V. Blanchard, 2 Rob. (La.)
513 ; ^ladison County Bank v. Gould, 5
Hill, 309. In this last case, the court say :
" If the defendant, Gould, went beyond
advising with his partners, and was
actively concerned in negotiating and
making the purchase of the mill, he has
already rendered him.«elf liable to answer
as a general partner, so far as relates to
any liability of the partnershiji growing
out of that particular transaction And
we think he must also be deemed a general
partner as to all the debts and liabilities
ot the firm. The legislature has plainly
manifested the intention of excluding the
si)ecial partner from all active participa-
tion in the business of the firm; and his
interference is forbidden upon the pain of
losing his character and protection as a
special partner. The moment he engages
in the business of the firm, he violates one
of the conditions on which his exeni])tion
from liability dei)ends, and he becomes a
general partner by his own voluntary act."
So if he represents himself to be a general
partner. Barrows v. Downs, 9 R. I. 446.
If a special partner buys out the entire
property of the firm before the limitation
expires, and continues the business of the
firm, he is liable as a general partner from
the beginning. First Nat. Bk. v. Whitney,
4 Lans 34. See Richardson v. Hogg, 38
Pa. 153 ; McKnight v. Ratcliff'e, 44 Pa.
156. If the special terms of the jiartner-
ship are violated to the advantage of the
firm, the firm is liable. Johnson v. Bern-
heim, 76 X. C. 130.
(m) Hayes v. Bement, 3 Sandf. 394;
Innes v. Lansing, 7 Paige, 583 ; Mills v.
Argall, 6 Paige, 577 ; Whitewright v.
Stimpson, 2 Barb. 379 ; Jackson v. Shel-
don, 9 Abb. Pr. 127. But in The Artisans'
Bank v. Treadwell, 34 Barb. 553, it was
held, that, when a limited partnership be-
comes insolvent, its assets do not, from
that time, irrespective of the condition of
1 Where a special partner files a bill for dissolution during the term because of mis-
conduct of the general partner, and is appointed receiver, it is not such an interference
or interruption of the business as to make him a general, partner. Continental Nat.
Bankv. Strauss, (X. Y.) 32 X. E. 1066.
§ -i^^'-J
OF LIMITED PARTNERSHIPS.
541
§ 427. Incidents of Limited Partnerships. — All suits must be
brougiit by and against the general partners, unless tlie special
any creditor's demand, become trust funds endeavoring to do this, lie becomes a cred-
for the benefit of all the creditors of the itor, and still the partnersliip fails and
j)artnership ; so as to prevent a cieditor, becomes insolvent, he loses his ca[)ital, and
either by sui)erior diligence or by the favor his debt is ])ostponed ; at the same time,
of the partners, from acquiring or jmssess-
iiig a valid lien thereon in preference to
other creditors. The assets of the partner-
ship are trust funds for the benefit of the
creditors e(iually, except such as, by su-
perior vigilance, have obtained a lien on
he has not directed or managed its atlairs.
In cases of corporations, a fixed sum may
be paid in as cai)ital ; that sum is all that
is put at hazard. The ]iarties contiibuting
it may be, and generally are, the chief
managers. If the stockholders loan to the
the property of the partnership. And they corporation, they are put, in case of insol-
bcconie trust funds for such mode of dis- vency, upon the same footing as other
tribution, so far as any action of the part- creditors : their debt is not postponed. In
ners is concerned, at the time of insolvency; limited partnerships, which are a kind of
and, so far as the action of creditors is quasi corporations, the special partner, who
concerneil, at the time the court takes pos- contributes his ca[)ita!, can have no voice
session of the fund, either by decree or by in the management of the business ; and,
tiie appointment of a receiver. Until that if he loans to the firm, his debt must be
time, it is the right of every creditor to ))osti)oned to those of all the other cred-
seek a preference, and to obtain one, if he itors : and we are now asked to say, that,
can, by superior vigilance. In Hayes v. if any other firm of which he happens to
B>'ment, cited ante,, in holding that, where be a member shall loan to such copart-
a limited partnership becomes insolvent, nership, even though it be without his
and the special partner is a general partner knowledge, or shall, in the usual course of
in another firm to which the limited part- business or dealings, become creditors of
nership is indebted, neither the debt due such copartnership, and such copartnership
to such firm, nor such general partner's shall become insolvent, that then the debt
interest therein, is postponed under the of the creditor firm, or, at all events, his
provisions of the statute directing that a interest in such debt, must be postponed,
special partner shall not claim as a creditor We confess that we do not belie^'e the
against the limited partnership, of which legislature so intended, and we do not
he is a member, until the claims of all the think it has so said. Had the statute pro-
other creditors are satisfied, — the court vided that the sjiecial partner should not,
say: " The statute authorizing and regulat- directly or indirectly, neither individually
ing limited partnerships is strict and severe; nor jointly, become a creditor, and, if he
and though, perhaps, not unnecessarily so, did, that then any debt due to him indi-
we are not disposed to put such a construe- vidually, or his portion of a debt due
tion upon its language as would, in a great jointly, or his interest in any debt due to
measure, impair the usefulness, if not de- any other })erson or persons, corporation or
feat the objects intended to be accomplished corporations, or to any partnership, whether
by its passage. The special partner is un- general or limited, should be post|ioned,
der disabilities which are not imposed upon the case wouM be different. As it now is,
general partners, and, in consideration, he we consider that the legislature, simply
is relieved from liability, except to the intended to put the special partner, so fixr
extent of the capital which he may con- as lie is a creditor, upon pi'ecisely the same
tribute ; but as in many, if not most, of footing as if he were a general partner."
such limited copartnerships, the bulk of It was further held, in this case, that
the cash capital is contributed by the spe- where the same person is a general partner
cial partner, it must generally be for his in two different firms, one of which be-
interest to sustain, as far as possible, and comes insolvent, indebted to the other, the
save the partnership when organized, and latter may recover its debt or dividend
to prevent its failure or insolvency. If, from the insolvent or bankrupt firm.
542
THE LAW OP PARTNERSHIP.
[CH. XVII.
partners have become general partners by some non-compliance
with the requirements of law ; in which case, they may be joined ;
and, if the plaintiff seeks to hold them beyond their limited
liability, he must join them, (w) As the statute is itself excep-
tional, it must not be enlarged by construction ; and the sjjecial
partners are general partners in ail things, excepting those as to
which the statute expressly limits their liability, (o) ^ If the
Where one general partner in a limited
jjurtnership made an assignment, with the
consent of the special partner, but without
the consent of tiie remaining general part-
ner, the assignment was set aside. Hayes
V. Heyer, 3 Sandf. 293 ; White v. Hackett,
24 Barb. 290. It was held that, prior to
the amendment in the New York statutes
(ch. 414 of 1857, § 3), when a special
partnership becomes insolvent, and appli-
cation is made by creditors for an injunc-
tion and receiver, a special partner is
entitled to come in and claim as a creditor
of the partnership, and to receive a divi-
dend, out of the assets thereof, pro rata
with the other creditors, and that the
amendment in the statute was not declara-
tory of the law as it previously existed.
But, reversing this, it was held, in s. c. 20
N. Y 178, on appeal, that, irrespective of
the amendment to the act authorizing the
formation of limited partnerships, a special
partner could not, in case of the firm's
insolvency, claim to share in the distribu-
tion of its assets for the reimbursement of
loans or advances made by him over and
above the capital he contributed, until
after all others were satisfied ; and that
the amendment was not declaratory of the
existing law, but introduced a new rule.
See Fanshawe v. Lane, 16 Abb. Pr. 71 ;
Van Alstyne v. Cook, 25 N. Y. 489; Ward
V. Newell, 42 Barb. 482 ; Singer v. Kelly,
44 Pa. 145. See, as to the effect of the
attachment of the interest of the special
partner, Harris v. Murray, 28 N. Y. 574.
The special partner cannot claim as a
creditor of an insolvent firm of which he is
a member. Dunning's Appeal, 44 Pa. 150.
[Jaffe V. Krum, 88 Mo. 669. See Sherwood
V. His Creditors, 42 La. Ann. 103, 7 So.
79 ; Coffin's Appeal, 106 Pa. 280.] He
may in Connecticut, as to loans imlepen-
dent of his special capital contributed,
Capp V. Lacey, 35 C'onn. 463.
(«) The Artisans' Bank v. Treadwell,
34 Barb. 553, 560 ; Schulten v. Lord, 4
E. D. Smith, 206 ; [Sharp v. Hutchin-
son, 100 N. Y. 533, 3 N. E. 500]. It was
held, in Louisiana, that the fact of
there having existed a partnership in com-
mcndam between the parties does not
prevent the plaintiff from recovering of
the defendant sums of money paid for the
use of the latter, and which were not
taken from or connected with the partner-
ship. Battaille v. Battaille, 6 La. Ann.
682.
(o) Lachaise v. Marks, 4 E. D. Smith,
610; Hayes v. Bement, 3 Sandf. 397;
[Sherwood v. His Creditors, 42 La. Ann.
103, 7 So. 79 ; Jaffe v. Krum, 88 Mo.
669]. In Hogg v. Ellis, 8 How. Pr. 473,
Mitchell, J., says : "The limited partner is
a ])artner as much as the general partner ;
and there is nothing to prevent him, even
during the continuance of the partner-
ship, from taking an active part in its
concerns, if he chooses to bring on him-
self the statutory consequences of a liabil-
ity as a general partner. The statute is
for his protection, if he will conform to it ;
it is not any i)art of its policy to prevent
him from acting as a geneial partner, if he
is willing to assume the liabilities that
follow ; and, if he is willing, his partners
have no ground of complaint, nor the
creditors of the firm, if he leave their
rights unimpaired. It would be different
if the general partners by their articles
1 So they must join in an assignment of the firm property for benefit of creditors.
In re Allen, 41 Minn. 430, 43 N. W. 382. And the location and nature of the busi-
ness cannot be changed without the consent of the special partner. First Nat. Bank
V. Clark, (111.) 32 N. E. 255. But a special partner cannot transact firm business, or
§ 428.]
OF LIMITED PARTNERSHIPS.
543
partnership is renewed after its expiration by its oi'itiiinal limits,
there must be a renewal of the certificate, publication and
record. (p) ^
§ 428. Dissolution and Notice. — The partnership may be dis-
solved by its own limitation, by the death of a partner, (5) by
decree of court, by bankruptcy of the firm or of a partner, in the
excluded the limited partner from a con-
trol ; but then this restriction might cease
at the expiration of the partnership. The
statute, as to the special partner, is, that
' if he shall interfere, contrary to these
j)rovisions, he shall be deemed a general
partner ' (I R. S. 766, § 17), and that is
the only penalty."
{p) Andrews v. Schott, 10 Barr
(Pcnn. ), 47, 53. And, if this is not
done, the partnership, being continued,
becomes a general one. Lachaise v. Marks,
4 E. D. Smith, 610, 620. If any altera-
tion be made in the capital or shares, and
the partnership be in any manner
thereafter carried on, before the publi-
cation of the notice of tlissolution is
coni[ileted, where the limited partnership
is dissolved by the agreement of the parties
before the period fixed for its termination
by the oiiginal certificate, the special
partner becomes liable as a general part-
ner. Beers v. Reynolds, 12 Barb. (S. C),
288, and s. c. on appeal, 11 N. Y. 97.
See La Chomette v. Thomas, 5 Rob. (La. )
172, and Gray v. Gibson, 6 Mich. 300, as
to the effect of not recording an agree-
ment for the formation of a limited
partnershij). The parties designated in
articles or a will to continue a partnership,
or to be interested in it, after a death,
should be obliged to renew the formalities
of the statute, if they would remain
special partners, with the fund alone
responsible ; and if they continue the
business without this form, then they
become general partners, liable in like
manner as all other dormant [)artners.
Jacquin v. Buisson, 11 How. Pr. 336.
(q) Tronbat on Lim. Part. § 430 (Phila.
1853) makes a distinction as to the death
of a special partner, citing Fierli, &c.
But this distinction is not sustained in this
country. See Ames v. Downing, 1 Brad.
321 (which esca])ed Mr. Troubat's notice),
citing seveial French authorities. And
see also Jacquin v. Buisson, 11 How. Pr.
385, 395, in which is the following :
" Since the decision of this motion, I
have noticed the case of Ames v. Down-
ing. The Surrogate of New York, in a
very able and learned opinion, has arrived
at the conclusion herein stated, that the
death of a special partner dissolves the
firm ; and has gone over much of the
interesting ground of the French law
which I have exjdored. I find, also, that,
in Pennsjivania, there is an express pro-
vision in the statute on the siibject, for
the continuance of the capital of the
special partner through his representa-
tives, for the unexpired term, or a sale of
the interest, in their discretion. Purdon's
Digest Laws, Penn 544, § 28." See ante,
§ 422, note (h).
bind the finn by attempting so to do. Columbia Land & Cattle Co. v. Daly, 46 Kas.
504, 26 Pac. 1042.
1 It has been held that when a limited partnership is renewed, the new certificate
need not disclose the state of the capital at the time, but only state the original con-
tribution. Arnold v. Danziger, 30 F. R. 898 ; Fifth Ave. Bank r. Colgate, 120 N.
Y. 381, 24 N. E. 799. But see Haddock v. Grinnell Mfg. Co., 109 Pa. 372, 1 Atl. 174.
If there is an interval between the expiration of the partnership and its renewal, the
partnership would seem to be an entirely new one, and toreipiire the same sort of certi-
ficate as a new partnership ; and during the interval between expiration and renewal
the firm would be a general one. Haddock v. Grinnell Mfg. Co., 109 Pa. 372, 1 Atl.
174. If the amount of capital is increased, it has been held to make the paitnership a
new one. Liueweaver v. Slagle, 64 Md. 465, 2 Atl. 693.
5U
THE LAW OF PARTNERSHIP.
[CH. XVII.
same manner as a general partnership. And the special part-
ners will be bound after a dissolution, unless notice is given;
excepting where the dissolution comes by limitation of time (and
then the certificate is notice), or by an act of the law. (r')^
Whether dissolution, by death, or by bankruptcy, requires notice,
is not so certain, and therefore the notice would be expedient.
If, however, after a dissolution with notice, oi- a dissolution by the
original limitation or by act of the law witliout notice, the gen-
eral partners go on and issue notes bearing the old name, without
the consent or permission, actual or constructive, of the special
partners, these partners are not liable thereon, even to innocent
and ignorant holders, for value. And, even if the special })art-
ners had made themselves liable, the holders of these notes cannot
come in and claim against the joint assets equally with the pre-
vious creditors of the firm, (s) If, however, the special partners
have made themselves liable on such notes, by permitting their
()•) Hiitjserty v. Taylor, 10 Paige, 261 ;
Hogg V Ellis, 8 How. Pr. 473, per Mit-
chell, J. : " The partnership was a limited
one, and it has expired by its own limita-
tion. In ordinary partnerships, it is a
matter of course, on a bill to close the
concern, after the dissolution, to appoint a
receiver ; and the same rule prevails if
the pi'oofs show that, at the hearing a dis-
solution will be granted, although the
partnership has not yet expired." In
Beer.- V. Reynolds, 12 Barb. 291, 11 N. Y.
97, King, J., says : "The statute relative to
limited partneiships (2 R. S. 3d ed. p. 52,
§ 24) is in these words: 'No dissolu-
tion of such partnership, by the acts of
the parties, shall take ])lace previous to
the time specified in the certihcate of its
formation, or in the certificate of its
renewal, until a notice of such dissolution
shall have been tiled and recorded in the
clerk's office in which the original certifi-
cate was recorded, and published, once in
each week for four weeks, in a newspaper
printed in each of the counties where the
partnership may have places of busines.s,
and in the State paper.' It seems to me
that this statute will admit of but one
construction, — that, in the case proposed,
of a dissolution, by act of the parties,
before the expiration of the term for which
the partnership was formed, the notice
must not only have been filed and recorded
but the full period of publication must
also have elapsed, before the ])aitnership
can be considered to be dissolved ; that
the partnership continues until the notice
has been published for four weeks. The
notice thus prescrilied is similar in its
nature to that by which the special jjart-
nership may be created. The period for
which the j)artnershi|i was to continue has
been made known to the public by the
filing of the original certificate and its
publication in the newspajiers. The notice
thus given, the statute allows the pai'ties
to retract by another notice made pulilic
in a similar manner ; and, until the pro-
visions of the statute respecting this
second notice have been complied with,
the public are authorized to rely upon the
terms of the first notice." See Marshall v.
Lambeth, 7 Rob. (La.) 471 ; Pmlkley v.
Marks, 15 Abb. Pr. 454, 463 ; Lachaise v.
Marks, 4 E. D. Smith, 610. Where a
certificate and notice of dissolution is
required by statute, it mu.st be strictly
complied with. Ee Terry, 5 Biss. 110.
(.s) "Haggerty v. Taylor, 10 Paige, 261 ;
Lachaise v. Marks, 4 E. D. Smith, 610.
1 But see Tilge v. Brooks, 124 Pa. 178, 16 Atl. 746.
429.
OF LIMITED PARTNERSHIPS.
545
§ 429. Publication of Certificate. — Defects ill the Certificate, or
issue in that way, the remedy of the holders is by suit, against all
the partners, to charge them personally, (i)
§
pul)lication or record, or in any compliance with the require-
ments of the law, do not vitiate, if these defects are merely
foi-mal, and such as cannot injuriously mislead any party. But
if tliey are substantial, — that is, if they can be injurious, — they
leave all the partners liable as general partners, although none of
them were in fault, (u) ^
{f.) Hag<,n'rty v. Taylor, 10 Pain;e, 261 ;
Scluilteii V. Lord, 4 E. D. Smith, 206,
210. In Bradbury v. Smith, 21 Me. 117,
where a partnersliip was formed between
A. & B., wherein it was stipulated that
the partnership should be special, that B.
should be the special partner, and should
contribute a certain sum "as cajiital to
the common stock for carrying on the
business," whii'h was to be conducted in the
name of A. & Co. ; and the sum was paid
ill and invested in goods, and the goods
wei-e sold, and other goods purchased in
their place with the proceeds of the sales,
— it was held, that whether the partner-
ship was to be considered as a special one,
under the statute, or as a general one, the
goods became partnership property ; the
]>artiiership becoming debtor to the part-
ner advancing the capital, to the amount
advanced. In Louisiana, the court held,
that a partner in commcndam is respon-
sible to the creditors of the partnership for
the amount of the capital he was bound to
contribute ; and, where his portion of the
capital has beezi withdrawn, the creditors
may proceed against him by a direct
action. La Chomette v. Thomas, 1 La.
Ann. 120. Eustis, C. J., in pronouncing
the judgment of the court, said : " We
have recently recognized the rights of
creditors to hold partners in commcndam
responsible for the amount of the capital
which they were bound to put into the
partnership of which they were members.
Civil Code, art. 2813. We will prevent
the creditors from obtaining any undue
preference over each other, and, in all
cases, carry into effect the principle of law
which makes the commendam fund a
common pledge for tlie creditors of the
partnership; but we will permit- no
obstacle of mere form to prevent the
direct recourse of the creditor against the
partner in commendam, whenever his
obligation to contribute to the partnership
debts is made out. In the present case
the partner in commendam has not only
withdrawn his capital on the dissolution
of the partnership, but his share of the
profits ; and why should he not pay his
share of the debts ? " See further, as to
the liability of the special ])artner, Pierce
V. Bryant, 5 Allen, 91 ; Marshall v. Lam-
beth, 7 Rob. (La.) 471 ; De Lizardi v.
Gosset, 1 La. Ann. 138 ; Beers v. Rey-
nolds, 11 N. Y. 97. For a debt owing by
all the partners, general and special, in a
limited partnership, a suit is well brought
against the general partners alone. And
a judgment and execution in such suit,
levied upon the property of the partner-
ship, will bind the entire interest of all
the partners. The provision of the statute,
that suits in relation to the business of a
limited partnership " may be brought and
conducted by and against the general
partners, in the same manner, as if there
were no special partners," must be con-
strued to mean, not only that they may be
thus brought "in the same manner," but
" with the same effect." The Artisans'
Bank v. Treadwell, 34 Barb. 553. And,
see Bulkley v. Marks, 15 Abb. Pr. 454,
R. c. now. Buckley v. Bramhall, 24 How.
Pr. 455 ; Robinson v. Mcintosh, "3 E. D.
Smith, 221 ; Hastings v. Hopkinson, 28
Vt. 108, 117.
(m) Andrews v. Schott, 10 Barr, 47 ;
Bowen v. Argall, 24 Wend. 496 ; Smith v.
1 Failure of the proper official to record the certificate does not make tlie special
partners liable as general partners, if they took it to the proper officer for record.
35
546 THE LAW OF PARTNERSHIP, [CH. XVII.
Thus, a publication that the partnership would begin on the
16th of November, when it actually began on the 16th of October,
was held not to bind the special partners as general partners.
But it was said that it would have bound them if the error had
been intentional, or if the debt sued had been contracted before the
16th of November, (y)
So, a publication of the certificate was held to have been made
" immediately " within the terms of the statute, when it was made
within three days after the recording. And it was held sufficient,
if made once in each of the succeeding six weeks, (w)
Where real estate was purchased by the general partners for
the firm, and paid for by the firm, the circumstance that the title
to the land was taken in the names of all the partners did not
make the special partners liable as general partners. Stress was
laid upon the fact that the special partners did not know that the
land was so granted to them. But, if they did know this and
consent to it, it does not seem clear, on general principles, why
they should be held as general partners, provided they had com-
plied in all things with the requirements of the law. Perliaps
they should be so held, however, to the vendors, for the price of
the land, (a;)
Argall, 6 Hill, 479, 3 Denio, 435 ; La- they become general partners till the cer-
chaise v. Marks, 4 E. D. Smith, 610. In tificate is newly recorded. Eiper v. Pop-
this last case, where the certificate of the penhausen, 43 N. Y. 68.
formation of a limited partnership declared {v) The Madison County Bank v.
"that all the general partners interested Gould, 5 Hill, 309. And see Bradbury v.
therein are A. and B., both of Brooklyn, Smith, 21 Me. 117.
in t!ie State of New York, and that the (w) Bowen v. Argall, 24 Wend. 496.
special partner interested therein is C, of An affidavit to accompany a certificate of
Jersey City, in the State of New Jerse}'," a limited partnership, under N. Y. Rev.
— it was held, that this was a compliance Sts. (4th ed.) p. 174, § 7, need not follow
with the statute (2 N. Y. K. S. 4th ed. the exact words of the statute. If it
p. 174, § 4, subd. 3), requiring the certifi- clearly establishes the facts required by
cate to contain the respective places of resi- the statute, it is sufficient. Thus, an affi-
dence of the general and special partners, davit that the special partner has " actually
and that no more distinct averment of paid in " the capital contributed by him,
their being residents of those places was is held equivalent to an affidavit that he
necessary. See also Bulkley v. Marks, 15 has paid it " in cash." Johnson v. Mc-
Abb. Pr. 454, s. C. no7n. Buckley v. Bram- Donald, 2 Abb. Pr. 290.
hall, 24 How, Pr. 455. If the firm moves (x) The Madison County Bank v.
its business into another county than that Gould, 5 Hill, 309.
where the certificate has been recorded,
Manhattan Co. v. Laimbeer, 108 N. Y. 578, 15 N. E. 712. But in Henkel v. Hey-
man, 91 111. 96, where the certificate was left a sufficient time to be recorded and then
taken away without having in fact been recorded, the special partner was held liable
as general partner ; and it was said that the special partner must see at his peril that
the requirements of the statute were carried out.
§ 430.]
OF LIMITED PARTNERSHIPS.
547
But where the certificate was published in two newspapers, and
in one of them tiie sum contributed was said to be five thousand
dollars, when in fact it was but two thousand, and the mistake
was made by tiie printer, it was held that the special partners
were liable as general partners, without proof that the creditors
were misled by the mistake. (?/)
The certificate, being duly sworn to, acknowledged, and recorded,
is prima facie evidence of its own truth, and may be offered as
such ; but has no force to rebut positive testimony of its false-
hood. Thus the certificate cannot contradict, as evidence, tes-
timony going to show that the sum actually paid in was less than
that stated, {z)
§ 430. Purposes for w^hich Limited Partnerships may be formed. —
In some of the States, there seems to be no restriction as to the
purposes for which these special partnerships may be formed. In
others, certain objects or kinds of business are enumerated, which
they may carry on. In others, some are excepted ; as banking and
insurance. In many of the States in which limited partnerships
are permitted, banking is prohibited, except by corporations
expressly authorized. But the business of insurance is generally
open ; and we see no reason, derivable from its nature, why a
(y) Argall v. Smith, in the Court of
Errors, 3 Denio, 435, per Spencer, Senator:
" The ' terms ' must be truly published in
two papers. Not to publish at all would
be clearly fatal ; and it would be equally
so to publish in but one paper, or in pa-
pers in any other senate district. That
the amount of the capital actually jtaid in
by the special partner would be a substan-
tial and material portion of the terras,
cannot be doubted. It is the fouudation
of the credit to be cjlven. The duty of
making such publication is by the statute
devolved upon the partners ; and it is one
that tbey must see to at their peril. If
they (ail in this, the consequence is de-
clared in plain terms : ' the partnership
shall be. deemed general.' In this the
courts have no discretiou. They have
only to declare the will of the legislature.
The publication of different ' t<^rms ' in
two papers, in one of which they are un-
truly stated, can be no better than to omit
a publication altogether." See the same
case in the Supreme Court, nom. Smith v.
Argall, 6 Hill, 479. And see Bowen v.
Argall, 24 Wend, 496.
(z) The Madison County Bank v.
Gould, 5 Hill, 309, 315. It has been
held, in Michigan, that an agreement for
the formation of a limited partnership,
executed under the laws of New York,
but not recorded so as to become effectual
for the purpose designed, has no tendency
to prove an actual general ])artuership be-
tween the parties named in it, in the ab-
sence of extrinsic evidence to show that
they had actually entered into business as
partners. Gray v. Gibson, 6 Mich. 300.
A special partner of a firm in one State is
exempt from general liability on account
of transactions of his firrn with the citi-
zens of another State. King v. Sarria, 7
Hun, 167. See also Barrows v. Downs, 9
R. I. 446. Where one who has given
credit to a partnership which he believes
to be a limited partnership, and which is
known to the public as such, afterwards
seeks to charge all the partners as general
partners, the burden of proof to show a
general partnership is on him. Whilldin
V. Bullock, 4 W. N. G. 234.
548 THE LAW OF PARTNERSHIP. [CH. XVII.
limited partnership might not engage in it. In this country, the
whole business of insurance is now so entirely in the hands of
corporations, — mutual, or stock companies, or those which unite
both characters, — that there is no probability of its being done
or attempted by individuals or mere partnerships, (a)
(a) See ante, § 421, note [d).
§ 431.] OF JOINT-STOCK COMPANIES. 649
CHAPTER XVIIL
OF JOINT-STOCK COMPANIES.
§ 431. Nature and Legality of Joint-stock Companies. — In
England, where incorporation is difficult and costly, joint-stock
companies arc very common, and are regulated by statute, (a)
In this country, where incorporation is in fact, though not in
form, almost at the pleasure of the parties, and limited partner-
ships protect from indefinite loss, joint-stock companies are less
frequently found. They exist, however, in many of our States,
and have given rise to interesting questions.^ In general, they
are copartnerships, and are subject to the whole law of part-
nership, (b) They are, however, partnerships of a very peculiar
kind.^
(a) The Joint-Stock Companies' Acts banking, companies which are mere part-
are, 7 Wm. 4 and 1 Vict. ch. 73 ; 7 & 8 nerships, as to everj' person except their
Vict. ch. 110, 111; Companies' Clauses own stockholders ; they never having been
Consolidation Act, 8 & 9 Vict. ch. 16; legally incorporated. Whatever name such
Joint-Stock Banks' Acts, 7 Geo. 4, ch. 46, a company may assume and use in the
and 1 & 2 Vict. ch. 96 ; 5 & 6 Vict. ch. transaction of its business, it is a partner-
85 ; 7 & 8 Vict. ch. 113. The later acts ship, and not a corporate, designation ;
are, 9 & 10 Vict. ch. 28, 75 ; 10 & 11 Vict, and every suit, upon a contract with the
ch. 78 ; 11 & 12 Vict. ch. 45 ; 12 & 13 company, must be brought in the names
Vict. ch. 108 ; 17 & 18 Vict. ch. 73 ; 18 of the several persons composing the
& 19 Vict. ch. 133 ; 19 & 20 Vict. ch. 3, firm." See The King v. Dodd, 9 East,
47, 100 ; 20 & 21 Vict. ch. 14, 49, 78 ; 21 516 ; Holmes v. Higgins, 1 B. & C. 74 ;
& 22 Vict. ch. 60, 91. Hess v. Werts, 4 S. & R. 356; Carlen v.
(b) In Williams v. The Bank of Mich- Drury, 1 Ves. & B. 157 ; Keesley v. Cadd,
igan, 7 Wend. 542, Walworth, Ch., .says : cited in Perring v. Hone, 2 C. & P. 401 ;
"It is well-known, that there are and Vigers v. Sainet, 13 La. 300 ; Walburn v.
have been many joiut-stock, and even Ingilby, 1 Mylne & K. 61 ; Gorman v.
1 In Pennsylvania no distinction is made between limited partnerships and joint-
stock companies. See Briar Hill Coal & Iron Co. v. Atlas Works, 146 Pa. 290, 23
Atl. 326.
2 Joint-stock companies, though authorized by statute, are partnerships, not cor-
porations ; there is no intermediate class. Davison v. Holden, 55 Conn. 103, 10 Atl.
515 ; Ricker v. American L. & T. Co., 140 Mass. 346, 5 N. E. 284 ; McFadden .
Leeka, 48 Oh. St. 513, 28 N. E. 874. Therefore it is not an artificial citizen of the
State in which it is formed, and cannot sue as such in the United States courts. Im-
perial Refining Co. v. Wyman, 38 F. R. 574.
650
THE LAW OF PARTNERSHIP.
[CH. XVIII.
The question has been raised, whether they were not illegal on
the ground that they usurp the privileges of corporations. (6*) It
never came to a decision ; and we can see no ground for raising
such a question, or for denying to copartners the power of regu-
lating their own business, form, name, and rules of proceeding,
at their own pleasure. C^) ^
Sometimes, in our joint-stock companies, all the property is in
trustees, who alone have the legal title ; and the copartners, as
shareholders, under an indenture which declares the trust, have
the equitable or beneficial estate. In law, this might make some
important differences ; but much less in equity (e)
Russell, 18 Cal. 688 ; Robbins v. Butler,
24 111. 387 ; Teniiey i;. The N. E. Protect-
ive Union, 37 Vt. 64. Where such asso-
ciations fail to become legally constituted
joint-stock companies, from some infor-
mality or other, they constitute partner-
ships. Whipple V. Parker, 29 Mich. 370.
They are partnerships, except as otherwise
jirovided l)y statute. Moore v. Brink,
6 Th. & C. 227 ; Manning v. Gasharie, 27
Ind. 399. Stockholders in a business cor-
poration, who, after expiration of their
charter, continue business, and authorize
contracts to be made in the name of the
copartners, are partners. National Bank
V Landon, 45 N. Y. 419. As to when the
jiartnership of the associates in a joint-
stock company, unincorporated, begins,
see Hedge's Appeal, 63 Pa. 273. Mem-
bers of a corporation, to whom a certifi-
cate of organization has been duly issued,
are not responsible as ]iartners, as to lia-
bilities contracted before they had com-
plied with the provision ot the statutes.
First Nat. Bank v. Almy, 119 Mass. 476.
The statutes of one State having no
extra-territorial efficacy, joint stockholders
in that State become partners in another.
Taft V. Ward, 106 Mass. 518. See also
Gott V. Dinsmore, 111 Mass. 45. As to
what facts would authorize a jury to find
a partnership in such a case, see Taft v.
Ward, 111 Mass. 518.
•(c) Story on Part. § 164; Collyer on
Part. 615-624, 1st ed. And see cases
cited in the following note.
{d) In England, the Stat. 6 Geo. 1, ch.
18, enacted the year after the infamous
South Sea project had beggared many per-
sons, made it highly penal for subscribers
to public undertakings to ' ' presume to act
as if they were corporate bodies, by mak-
ing their shares in stock transferable,"
&c., 4 Bl. Com. 117 ; Duvergier v. Fel-
lows, 5 Bing. 248, 10 B. & C. 826 ;
Josephs V. Pebrer, 3 B. & C. 639 ; Blun-
dell V. Winsor, 8 Sim. 601 ; Garrard v.
Hardey, 5 M. & G. 471 ; Harrison v.
Heathorn, 6 M. & G. 81. The Stat. 6
Geo. 1, ch. 18, was in part repealed by 1
Vict. ch. 73. The Act of 7 & 8 Vict. ch.
110, came into force on the first of Novem-
ber, 1844. A railway company was incor-
porated by an act before that date. Sub-
sequently thereto, the company obtained
an act for an extension line : it was held
that the latter undertaking was not a
partnershij), the formation of which was
commenced after the first of November,
1844, within the meaning of the act.
Shaw V. Holland, 15 M. & W. 136, 4
Railw. Cas. 150. And see Baker v. Plas-
kitt, 5 C. B. 262.
(e) An act under which the property
of a manufacturing company, including
its right to call assessments and the liabil-
ity of stockholders for its debts, is vested
in trustees for distribution among the
creditors, is a bar to a suit by a creditor
against a stockholder, under an act mak-
ing members of manufacturing companies
liable for their debts. Walker v. Grain,
17 Barb. 119.
1 A joint-stock company has been held legal at common law. Phillips v. Blatch-
ford, 137 Mass. 510.
§ 432 ]
OF JOL\T-STOCK COMPANIES.
551
§ 432. Characteristics of Joint-Stock Companies. — Universally
they imitate, mure or less, the form and appearance of corpora-
tions. They have a common name, whicli is usually descriptive
of their business, like that of a corporation ; and does not con-
tain or consist of the names of persons, like the name of a
firm. (/) They have their officers, their by-laws, (^) and their
rules of proceeding : and by these they regulate the election of
officers, the transaction of business, the transfer of shares, and
the like; and, generally, in the mode of transfer, forms are used
like those of incorporated companies, — as, for example, certi-
ficates (or " scrip ") are issued, transfers are recorded, &g} They
do not, so far as we know, attempt to use a common seal, and cer-
tainly have no power to do this ; that is, in law, they have no
common seal, and therefore cannot make a deed of any kind, {h)
(/) In Ref,'iua t'. Registrar of Joint-
stock Companies, 10 Q. B. 839, Lord
Denman held, that a joint-stock company
completely registered under Stat. 7 & 8
Vict. ch. 110, and thereby " incori)orated,"
has no power thereafter to change its
name. He said: "The identity of name
is the principal means for effecting that
perpetuity of succession, with members
fre([ueutly changing, which is an import-
ant purpose of incorporation. The statute
does not express any intention of changing
this general principle, but, by section 25,
incorporates the company by the name set
ftirth in the deed, and declares that it
shall continue so incorporated until it shall
be dissolved." It was contended, that as
partnerships were at liberty to change their
style, that joint-stock com[>anies were in
the nature of trading partnerships ; and
that, as there was no express prohibition
in the statute, they might continue to do
so. But it was held, that, when the com-
pany became incorporated, its power to
change its name ceased. See 2 Bac. Abr.
tit. "Corporations" (C), 1, 7th ed. A
joint-stock company has no right, between
the time of provisional and complete re-
gistration, to change its name ; nor has a
provisionally registered company a right
to assume the name of a corporation.
Regina v. Whitmarsh, 19 L. J. Q. B.
185.
{'j) For the power of companies to
make by-laws, and the limitations on this
power, see Calder and Hebble Nav. Co. v.
Pilling, 14 M. & W. 209 ; Chilton v. Lon-
don and Croyden R. Co., 16 M. & W.
212; Child v. Hudson's Bay Co., 2 P.
Wms. 309 ; Smith v. Goldsworthy, 4
Q. B. 430 ; Ward v. Society of Attorneys,
1 Collyer, 379.
(h) Gow on Part. 3. In England, it
has been held, that, notwithstanding their
statutes, joint-stock companies completely
registered are bound by contracts made by
a competent board of directors, though
not under seal, or made in compliance
with the statute, and though they cannot
enforce such contracts. But persons seek-
ing to render those companies liable on
contracts made with the directors, must
show their authority to bind the company,
either by the provision of the registered
deed of settlement, or by proof that the
body of shareholders authorized particular
individuals to make contracts binding on
the company. A ratification by a com-
petent board of directors will bind the
company. Ridley v. Plymouth, &c.
Grinding and Baking Co., 2 Exch. 711;
Forrester v. Bell, 10 Irish L. 555. See
Smith V. The Hull Glass Co., 19 L. J., C.
P. 123.
1 Where a body having these characteristics is formed it is a joint-stock company,
though no reference is made in the articles to the statute authorizing such a company.
People V. Wemple, 117 N. Y. 136, 22 N. E. 1046.
552 THE LAW OF PARTNERSHIP. [CH. XVIII.
§ 433. EfiFect of Agreements and Rules. — We repeat, that we
see no reason why thoy may not legally and innocently do all the
things they usually undertake to do; nor why the courts, of law
and of equity, must not apply to them the common principles,
which, in the first place, permit all partners to agree upon what
terms of partnership they will ; and, in the second place, hold
these terms to be binding upon all who agree to them, expressly
or impliedly ; and, in the third place, hold them to be binding
upon no other ])ersons. (0 It may be said, however, that the
rule already repeatedly mentioned — that special agreements
between partners affect third parties to whom they are known,
and who deal with the partnership with that knowledge — would
apply to joint-stock partnerships.
It seems to be intimated in England, that a partner in a joint-
stock company, which had formed certain rules, would not in any
case be liable, beyond them, to a third party who had traded with
the company with a knowledge of these rules. Tliis impression
(for it can hardly be called more) seems to be derived, in some
measure, from the statutory existence and regulation of joint-
stock companies in England, (j/') In this country, we know
neither reason nor authority for qualifying, in reference to these
companies, the general principles of partnership on this point.
That is, we do not believe that a joint-stock company, or any
other partnership, can limit its own liabilities, and become a cor-
poration or limited partnership by its own act, and without any
regard to the formalities or requirements of the law ; but we see
no reason why a joint-stock company may not go as far as a common
partnership in this direction, (k^
(i) See Hess v. Werts, 4 S. & R. 361 ; tlie articles of association, Duncan, J., ob-
Skinner ?.'. Dayton, 19 Johns. 537 ; Blun- served : "Nor would I have any difficulty
dell i: AVinsor, 8 Sim. 601 ; Walhurn v. were the articles of association more ex-
Ingilby, 1 Mylne & K. 61, 76 ; In re Sea, plicit than they are, and excluded from
F. & L. Ass. Soc, 5 De G. M. & G. 465, responsibility the associators, other than
In re Worcester Corn Ex. Co., 3 De G. out of their joint funds ; for though they
M. & G. 180; Hallett V. Dowdall, 18 Q. B. might, as between themselves, stipulate
2 ; Penn.Ins. Co. v. Murphy, 5 Minn. 56 ; with each other for this contracted respon-
Henry v. Jackson, 37 Vt. 431. sibility, yet as to the rest of the world, it
(,/) Blundell v. Winsor, 8 Sim. 601; is clear that each partner is liable to the
Walburn v. Ingilby, 1 Mylne & K. 51, 76. whole amount of the debts contracted. For
(k) In Hess v. Werts, 4 S. & R. 366, partners in a stock divided into shares,
which is a highly instructive case on this and transferable ( but who are not in-
question, where an association gave notes corporated), are responsible beyond the
promising to pay certain amounts out of amount of the shares to which they sub-
their joint funds, it was held, that all the scribe, though it is one of the terms of the
shareholders were personally liable. After association they shall not be." In the
considering the special facts relating to same case, Gibson, J., said : "By tlie
§ 434.]
OF JOINT-STOCK COMPANIES.
553
§ 434, Position of a Member. — Excepting SO far as the liability
of a partner in one of tliese companies is so qualified, he is —
although he may call himself not a partner, but a stockholder —
liable precisely as a partner. (/) ^
terms of their notes, the defendants en-
gaged to pay "out of their joint funds,
according to their articles of association,'
and it is made part of the case that they
have no joint funds. Shall they be com-
pelled to pay out of their separate estates ?
It is a general principle, that partners are
liable to third persons as for a personal
debt. It is not merely the stock they
bring into the partnership that is hazarded;
but they are responsible to the extent of
their individual fortunes ; and such re-
sponsibility cannot be limited by any
proviso in the articles of partnership, or
agreement between themselves. But I see
no reason to doubt but they may limit their
responsibility by an explicit stipulation
made with the party with whom they con-
tract, and clearly understood by him at the
time." King i'. Dodd, 9 East, 527. And
see Skinner v. Dayton, 19 Johns. 537. The
directors of a joint-stock company, unless
restrained by act of Parliament or the deed
of settlement, would seem to have all the
authority given to partners at common law;
and, therefore, where parties contract with
the directors in matters relating to the co-
partnership business, they are not bound,
when seeking to enforce such contracts, to
show that the directors were authorized by
the deed or bj'-laws to enter into them.
Smith V. The Hull Glass Co., 19 L. J., C.
P. 123. See Thompson v. Wesleyan News-
paper Association, 19 L. J., C. P. 114 ;
Tyrrell i'. Washburn, 6 Allen, 466.
(I) See ante, § 431, note (h) ; Pipe v.
Bateman, 1 Iowa, 369 ; Babb v. Read, 5
Rawle, 151 ; Attorney-General v. Heelis,
2 Sim. & St. 67 ; McGill v. Brown, Bald-
win, C. C, 66 ; Thomas v. Elmaker, 1 Pars.
Cas. 108 ; Lloyd v. Loaring, 6 Ves. 773 ;
Cullen I'. The Duke of Queensbury, 1 Bro.
Ch. Cas. 103 ; Pearce v. Piper, 17 Ves. 1 ;
Cock burn v. Thompson, 16 Ves. 321 ;
Beaumont v. Meredith, 2 Ves. & B. 180 ;
Keasley v. Codd, 2 C. & P. 408, note ;
Carlen v. Drury, 1 Ves. & B. 154, 157 ;
Tappan v. Bailey, 4 Met. 535. But see,
for a limitation on the law of partnership,
as ai)plied to joint-stock companies. Cox v.
Bodfish, 35 Me. 302; Livingston v. Lynch,
4 Johns. Ch. 573; Irvine v. Forbes, 11
Barb. 588. Where, by an act of Parlia-
ment, a company was to apply the fir.st
moneys received under the act in discharge
of the expenses incurred in obtaining the
act, it was held, that the plaintitt', though
a member of the company, might sue them
for his time and trouble and money ex-
pended in obtaining the act. Garden v.
The General Cemetery Co., 5 Bing. N. C.
253. See Tilson v. Warwick Gas Light
Co., 4 B. & C. 962. A member of a joint-
stock company, like a member of an
ordinary partnership, may recover com-
pensation for service rendered to the com-
pany previous to his having become a
member of it. Lucas v. Beach, 1 M. & G.
417. In general, however, an action cannot
be maintained by a member against the
compan}', or by the company against a
member, on a contract between him and
the company. Neale v. Turton, 4 Bing.
149 ; Wilson v. Curzon, 15 M. & W. 532 ;
Holmes v. Higgins, 1 B. & C. 74 ; God-
dard V. Hodges, 1 Cr. & M. 33, 3 Tyrw.
209 ; Teague v. Hubbard, 1 JVIan. & R.
369, 8 B. & C, 345 ; Chadwick v. Clarke,
1 C. B. 700 ; Moneypenuy v. Hartland, 1
C. & P. 352, 2 C' & P. 378 ; Parkin v.
Fry, 2 C. & P. 311 ; Milburn v. Codd, 1
Man. & R. 238, 7 B. & C. 419 ; Perring
^ Xo member of a joint-stock company has such power as a general partner. All
business must be done or authorized by vote of the board of directors. Pittsburg
Melting Co. v. Reese, 118 Pa. 355, 12 AtL 362. The business cannot be altered or
extended without the consent of all the members ; though in ordinary affairs of business
a majoritv of the directors may bind the company. McFadden v. Leeka, 48 Oh. St.
513, 28 N. E. 874.
654
THE LAW OF PARTNERSHIP.
[CH. XVIII.
§ 435. Transfer of Membership. — There 18 one difference which
we incline to think the law would make between a common part-
nership and a joint-stock company. It is as to dissolution by
change. We have already remarked that it is very possible, that,
where a stockholder sold and transferred his share or interest in
all respects as the rules required, giving up his certificate, and a
new one was made to his transferee, the law would hold that this
change operated no dissolution, but that the new partner or stock-
holder came into the place of the old one, and the partnership or
company went on. (m) And the same thing might occur in a
case of a change by death. We should say, however, with much
confidence, that the company were still a partnership, and like a
partnership in the following respects : —
First. Any stockholder might transfer his interest in any way
which would operate a transfer at common law, and pay no
regard to the rules of the company, and yet give good title to
the transferee, so far as the property was concerned, (n)
V. Hare, 4 Bing. 28. But see Davies v.
Hawkins, 3 M, & S. 488. [It has been
held that a member of a joint-stock
company may bring suit against it on
a note, not being given for dividends.
MacGeorge v. Harrison Chemical Mfg. Co.,
141 Pa. 575, 21 Atl. 671.] The stock-
holders of a banking association doing
business under ordinary copartnership arti-
cles are not dormant partners, although
only tlie name of the bank is disclosed to
the public. They are responsible till notice
of retirement ; and a new stockholder is
not liable for debts contracted before he
became a member of the firm. Shamburg
V. Ruggles, 83 Pa. 148.
(m) Adams' Eq. (3d Am. ed.) 544 ;
Young V. Keighly, 15 Ves. 577 ; Duver-
gier I'. Fellows, 5 Bing. 248 ; Blundell v.
Winsor, 8 Sim. 605; Harrison v. Heathorn,
6 Scott N. R. 735, 12 L. J. C. P. 282 ;
Pinkett v. Wright, 2 Hare, 120, 130. If
several persons subscribe an agreement,
inter se, to promote a joint undertaking,
one of them cannot withdraw his name,
and discliarge liimself from the engage-
ment, without the consent of the rest. And
if an act of Parliament pass for effectuat-
ing the purjiose of the undertaking, by
which certain obligations are created, such
original subscriber is not exonerated from
the liabilities imposed by the act, by
having, during the progress of the bill,
renounced before the committee all further
connection with the undertaking, and de-
sired that his name might be, in conse-
quence, omitted in the act ; nor can the
circumstance of his name being so omitted
have the effect of disengaging him. Kid-
welly Canal Co. v. Raby, 2 Price, 93. See
Scott V. Berkeley, 3 C. B. 925 ; Stimson
V. Lewis, 36 Vt. 91.
(n) See Pratt v. Hutchinson, 15 East,
511 ; Rex v. Webb, 14 East, 406 ; Josephs
V. Pebrer, 3 B. & C. 639 ; Fox v. Clifton,
9 Bing. 115, 6 Bing. 776. Where a com-
pany was formed, by act of Parliament, for
the purchase of lands to make & canal,
and the act declared that the shares shall
be deemed personal estate, and shall be
transmissible as such, " it was held, that,
though the profits arose out of the land,
the shares were personal property, passing,
as such, to the assignees on the bankruptcy
of a proprietor." Ex pari'- Lancaster Canal
Co., 1 Deac. & Ch. 411, Mont. 116. See
Bradley v. Holdsworth, 3 M. & W. 422 ;
Bligh V. Brent, 2 Y. & C. 268. Where
an act prescribes certain forms in the
transfer of shares, unless they are strictly
complied with the shares remain in the
order and disposition of the proprietor ;
the ordinary mode of transferring not con-
stituting an equitable mortgage. Ex parte
Lancaster Canal Co., ante.
§ 435.] OF JOINT-STOCK COMPANIES. 555
Secondly. That this transferee would neither be a partner by
such irregular transfer, nor have any claim against the company
to be a partner, {o)
Thirdly. This transferee, or an execution creditor of a copart-
ner, member, or stockholder, might require an account and set-
tlement, so far as to ascertain his rights and the value of his
share ; but would have no right to any particular thing in
specie, nor to a division of the effects ; and a court of equity
would probably deny him a sale of the whole, if a fair equivalent
for his ascertained share were offered him in money, (p)
Fourthly. If a stockholder transferred his share agreeably to
all the rules of the company, the company might, nevertheless,
with or without reason, refuse to acce])t the transferee as a part-
ner, and withhold his certificate. That is, they might do so, so
far as to prevent his becoming a copartner ; for we should say
that the company was still so far a partnership and not a corpora-
tion, that without the assent of the members no person could
become a partner. If the new certificate were issued, and no
objection made, their assent would be implied ; but, if it were
expressly withheld, we should say the transferee did not become
a partner. He was still a transferee of the property, and this he
might realize without joining the company. So, too, if the com-
pany were willing to receive him, and the transferee were not
willing to join them, we should say he was no partner, although
he held the transferred interest, (q)
It would always be possible that the articles of agreement
might be such as to give to the transferrer, or possibly to the
transferee, a suit at law for damages, or at equity for perform-
(o) Bray v. Fromont, 6 Madd. 5 ; Jef- lities as attached to his assignor. James
ferys v. Smith, 3 Riiss. 158 ; Kingman v. v. Woodruff, 2 Denio, 574. And see Weald
Spurr, 7 Pick. 235, 238 ; Gilmore v. Black, of Kent Canal Co. v. Robinson, 5 Taunt.
11 Me. 488; Putnam v. Wise, 1 Hill, 234; 801 ; Blount v. Hipkins, 7 Sim. 51. As
Murray v. Bogart, 14 Johns. 318; Mar- to the power of a bond creditor of a com-
quand v. New York Manuf. Co., 17 Johns, pany to inspect their books, see Pontet v.
535 ; Griswold v. Waddington, 15 Johns. Basingstoke Canal Co., 2 Scott, 543 ; Hill
82 ; Moddewell v. Keever, 8 W. & S. 63. v. Manchester and Salford Water Works
See Hare v. Waring, 3 M. & W. 362 ; Co., 5 B. & Ad. 866 ; Clarke v. The Ini-
Harper v. Raymond, 3 Bosw. 29, 7 Abb. perial Gas Co., 7 Bing. 95, 4 B. & Ad. 315.
Pr. 142; Pratt 2». Hutchinson, 15 East, (q) See Jefferys y. Smith, 3 Russ. 158 ;
511. Harper v. Raymond, 3 Bosw. 29 ; Tatam
(p) Kingman v. Spurr, 7 Pick. 235 ; v. Williams, 3 Hare, 347; Nicoll v. Mum-
Mason V. McConnell, 1 Whart. 381 ; Put- ford, 4 Johns. Ch. 522 ; Rodriguez v.
nam v. Wise, 1 Hill, 234. See Burnes v. Heffernan, 5 Johns. Ch. 417 ; Marquand
Pennell, 2 H. L. Cas. 497. The assignee v. Tho New York Manuf. Co. 17 Johns,
of a stockholder in an insolvent corpora- 525.
tion succeeds to the same rights aud liabi-
556 THE LAW OF PARTNERSHIP. [CH. XVIII.
ance, if the company refused to receive him. But still their
refusal would prevent Jiis being a partner. So, too, the articles
might be such as greatly to qualify the transferee's right to hold
or realize the interest consigned to him, if he refused to become
a stockholder. But still he would not become one, by the mere
transfer, without consent on his part. Possibly the rules might
be such, that accepting the transfer accepted the partnership;
but, even then, an execution creditor of the partner, or one
buying the share on a sale by the officer, would take the inter-
est, we think, and not be a partner without his own consent and'
act. (r)
§ 436. Partnerships analogous to Joint-stock Companies. — In
some parts of this country, there are partnerships which, without
being strictly joint-stock companies, are more like them in their
articles and regulations and manner of conducting business than
common mercantile copartnerships ; as, for example, the mining
partnerships of California, (^rr^
{)■) 1 Pars, on Con. (5th ed.) 144; Pratt partnerships, when there are no partner-
V. Hutchinson, 15 East, 511; Rex u. Webb, ship articles, are subject to the ordinary
14 East, 406 ; Josephs v. Pebrer, 3 B. & law of partnership, except so far as general
C. 639 ; Fox v. Clifton, 9 Ring. 115, 6 usages of persons engaged in similar i)ur-
Bincf. 776; Young i'. Keighly, 15 Ves. suits, or the known practice of the particular
557 ; Duvergier v. Fellows, 5 Bing. 248 ; company, has established a different rule ;
Blundell v. Winsor, 8 Sim. 601 ; Harrison the only ditferences generally existing being
V. Heathom, 6 Scott N. R. 725, 12 L. J. such as flow from the fact that in such
C. P. 282 ; Pinkett v. Wright, 2 Hare, 120, partnerships there is no delectus pcrsonce.
130; Mathewson w. Clarke, 6 How. 122. Jones v. Clark, 42 Cal. 180; Taylor v.
{rf) A leading case on this subject is Castle, 42 Cal. 367. See also, McCouuell
Settembre v. Putnam, 30 Cal. 490. Such v. Denvers, 35 Cal, 365.
§ 438.J BUSINESS COMBINATIONS AND " TRUSTS." 557
CHAPTER XIX.
BUSINESS COMBINATIONS AND "TRUSTS."
§ 437. Business Associations other than Partnerships. — Having
completed the study of partnerships, properly so called, we may
now find it useful to study a new sort of association of capital and
skill which has recently come into prominence. There may well
be such associations which are not partnerships. As was said by
Brett, L. J., in Smith v. Anderson :i " I confess I have some diffi-
culty in seeing how there could be an association for the purpose
of carrying on a business which would be neither a company nor
a partnership ; but 1 should hesitate to say that, by the ingenuity
of men of business, there might not some day be formed a relation
among twenty persons which, without being strictly either a com-
pany or a partnership, might yet be an association."
The last few years have been years of experiment as well in the
domain of trade as in that of science. New forms of combination
for the purposes of trade and commerce have been invented and
tried, and many of them already discarded as useless. Meanwhile
a few of these novel instruments of trade have attained permanent
importance, and are well worth more or less careful study.
The most important and recent of these associations is known
as the " trust." It will be best to examine at some length the
different sorts of combination, varieties of the " trust," by means
of which the trading trust has been gradually evolved.
§ 438. Functions of a Trust. — What may be called the legiti-
mate functions of a trust, in the modern commercial sense, are
three. In the first place, a trust, like a corporation or a joint-stock
association, secures the collection of a large amount of capital into
the control of a single body, and thus enables that body to secure
all the advantages of large wholesale dealings with a small pro-
portional cost of management. In the second place, like a corpo-
ration, it secures (or is believed to secure) personal immunity from
liability for the individual contributors. In the third place, it
permanently secures the services about the business of the ablest
men in that line of business.
1 15 Ch. D. 247, 277.
558 THE LAW OP PARTNERSHIP. [CH. XIX.
§ 439. Corporate Trusts. — The earliest sort of combination
which was to result in the trust seems to have taken the form
of a corporation. Perhaps the latest conspicuous example of this
sort was " The Cr(idit Mobilier of America," a corporation bv
means of which much of the Union Pacific Railroad was built. ^
The capitalists who furnished the lunds for building the road did
so through this corporation, to which was transferred the contract
for building the road. The corporation, however, acted as a mere
trustee, the work not apparently being done under its direction.
The object of this arrangement was clearly to secure for the capi-
talists the profits of the contract without subjecting them to any
liability.
§ 440. Trusts for Investment. — Of a somewliat similar nature,
though without the intervention of a corporation, was a sort of
trust soon after invented in order to secure a large capital for
investment in commercial securities. The money contributed was
put into the hands of trustees who (under the direction of the
contributors) bought and held certain stocks and bonds. Certifi-
cates were issued to the contributors for the amount of their
respective contributions, and after principal and interest had been
repaid from the income or sale of the stocks and bonds, the profits,
if any, were divided among the certificate holders. The word
" trust," in the modern commercial sense, was perhaps first used
in connection with this form of dealing.^ The same device was
used for the purchase and improvement, in the. name of trustees,
of large tracts of land, afterwards divided among the certificate
holders.^
§441. Car Trusts. — Another of the earlier sorts of trust
was the so-called " Car Trust." This, like the Credit Mobilier,
was a method of securing to certain capitalists (whether stock-
holders in the contracting railroad or not) the benefit of a con-
tract with a railroad company without the liability to loss. If a
railroad company needed rolling-stock, but was unable to pay cash
for it, an association of capitalists was formed called a " Car
Trust," which bought the cars, and sold them to the railroad
company under a contract by which the company should pay for
them in annual instalments, and the title should be retained until
full payment was made. The title to the cars and the right to
1 See Credit-Mobilier v. Com., 67 Pa. 233 ; U. S. v. Union Pacific R. R. 98 U. S.
569.
2 See Smith v. Anderson, 15 Ch. D. 247 (C. A.), "Submarine Cables' Trust;"
Johnson v. Lewis, 6 F. R. 27, " Municipal Trust."
3 Wigfield V. Potter, 45 L. T. Rep. 612 ; Crowther v. Thorley, 32 W. R. 330 ; Inre
Siddall, 29 Ch. D. 1 (C. A.).
§ 444.] BUSINESS COMBINATIONS AND " TRUSTS." 559
receive the instalments of payment was often given to still a third
body, such as a bank.^
§442. Voting Trusts. — A voting trust is formed when part
(usually at least a majority) of the stockholders in a corporation
place their shares in the hands of trustees, receiving therefor
receipts. The object and result of this transaction is that the trus-
tees are enabled to cast a majority or other large proportion of the
votes of the corporation, and thus to direct its policy.
§ 443. Trusts for carrying on Business. — The recently invented
commercial " trust " attempts to accomplish much more than the
combinations already described, though it would seem to have
grown out of such combinations as the "Cables' Trust." '-^ The
earliest example was the Standard Oil Trust, said to have been
invented by S. C. T. Dodd, Esq.^ This was a combination of
most of the producers of mineral oil in the eastern United States.
These, if individuals, conveyed their property to certain trustees ;
in the case of corporations, the stockholders conveyed their stock
to the same trustees. In return for the property conveyed, they
received certificates showing their interest in the concern. The
whole business was thereupon carried on by the trustees, who
divided the profits among the certificate holders.* The immediate
business success of this venture induced the formation of a great
quantity of such trusts, of which the most important is, perhaps,
the Sugar Trust.^
§ 444. " Pooling " and other Agreements betvreen Carriers. —
Other forms of combination have been found efficient, of which the
most important is perhaps " pooling," so called. The usual
object of pooling is to maintain rates, that is, to prevent such
competition among competing railroads as should result in a ruin-
ous lowering of rates by one or all of the roads. Pooling of
earnings was forbidden by the Interstate Commerce Act.^ But
that act did not affect other kinds of pooling. An important
agreement of this sort was formed by the railroads in the Western
1 Ricker v, American Loan & Trust Co., 140 Mass. 346 ; and see Mills v. Hard,
29 F. R. 410. For a case where the transaction was held to be a colorable device to
evade a mortgage, and the mortgagees were preferred, see Central Trust Co. v. Ohio
Central R. R., 36 F. R. 520.
2 A7ite, § 440.
2 See Cook on Stock (2nd ed.), § 503 a.
* See State v. Standard Oil Co. (Ohio), 30 N. E. 279.
6 People V. North River Sugar Refining Co., 121 N. Y. 582, 24 N. E. 834. See, for
instances of other such trusts, Gould v. Head, 38 F. R. 886 ; American Biscuit & Mfg.
Co. V. Klotz, 44 F. R. 721 ; People v. Chicago Gas Trust, 130 III. 263, 22 N. E. 798 ;
State V. Nebraska Distilling Co., 29 Neb. 700, 46 N. W. 155.
6 Act of Feb. 4, 1887.
5G0 THE LAW OF PARTNERSHIP. [CH. XIX.
United States in the year 1889.^ It provided that eacli raih-oad
party to it should appoint an agent, to represent it in an Associ-
ation, and that this Association should have power to fix rates
and make rules as to competitive traffic, and to fine any member
which should " cut" rates.
Carriers by sea, as well as railroads, have found it useful to
make similar agreements. An instance is an agreement by which
the owners of vessels formed an association to determine the
number of vessels to be sent to certain loading ports, and the
division of cargo and freight between them ; and to prevent
tiie agents of members of the association from acting in the inter-
est of competing owners.^
§ 445. Legal Nature of Trusts to hold Property. — Upon the
invention of these forms of association, it became a question what
was the legal nature of the transaction. Such combinations as
railroad pools and voting trusts are merely ephemeral, and have
no legal individuality ; but the property-holding and commercial
trusts are more or less permanent, and might well be held to
possess a distinct legal character.
The Car Trusts have been held to be joint-stock partnerships.^
In England, on the other hand, it has been decided that the
property-holding trusts are not partnerships or joint-stock associa-
tions for carrying on business, and are therefore not illegal under
the Companies Act.* And this would seem to be the better view.
In the first place, as is pointed out in the English cases, the cer-
tificate holders cannot be said to carry on any business either per-
sonally or by an agent. The business is done exclusively by the
board of trustees, not by the certificate holders. The trustees,
being legal owners, act as principals and in their own names,
and in no sense as agents of the certificate holders. This reason
applies, no doubt, with more force to the English property-holding
trusts than to the Car Trusts. But the reason now to be stated is
equally applicable to both. These trusts should not be held to be
partnerships, because the object of them is not to carry on business
for a profit.^ The object of the Car Trusts is to repay the loans
of the certificate holders, with interest, and when that has been
done the trust ceases to exist.^ The object of the trusts to hold
1 U. S. I'. Trans-Missouri Freight Association, 53 F. R. 440.
2 Mogul S. S. Co. V. McGregor, [1892] A. C. 25.
3 Mills V. Hurd, 29 F. R. 410 ; Kicker v. American Loan & Trust Co., 140 Mass.
346,
* Smith V. Anderson, 15 Ch. D. 247 (C. A.) ; In re Siddall, 29 Ch. D. 1 (C. A.).
6 A7ite, § 61,
6 But see the language of C. Allen, J., in Packer v. American Loan & Trust Co.,
§ 446.] BUSINESS COMBINATIONS AND "TRUSTS." 561
mercantile securities is to purchase and hold a single article of
property, and at last either to divide this property among the bene-
ficiaries or to sell it and divide the proceeds. The object of the
trustees is to invest, not to trade.^ And the trusts for the pur-
pose of buying, im{)roving, and dividing real estate are clearly
not partnerships, since the only object is to divide among the
beneficiaries the property purchased.^ These associations, there-
fore, are more properly regarded as agreements between the
co-owners of property.^
§ 446. Nature of Trusts to carry on Business. — The nature of
the commercial trusts is different. They are formed for the
express purpose of carrying on business and making and dividing
a profit. They possess therefore all the requisites of partner-
ships.* But such a partnership is in many respects peculiar.
The legal owners of the property are the trustees, who carry on
the business. Neither the corporations which may have been
absorbed in the trust nor the individual certificate holders have
title to the property of the association or control over the business.
The certificate holders, therefore, are not the partners.^ The
140 Mass. 346, 349. "Since this association is not a corporation, its members must
be partners, unless, indeed, as the defendant contends, they are simply co-owners.
But we cannot look upon them as simply co-owners. Whitman v. Porter, 107 Mass.
522 ; Hoadley v. County Commissioners, 105 Jlass. 519 ; Gleason v. McKay, 134
Mass. 419, 425."
1 Smith V. Anderson, 15 Ch. D. 247 (C. A.).
2 Wigfield 17. Potter, 45 L. T. Rep. 612 ; Crowther v. Tborley, 32 W. R. 330 ; In re
Siddall, 29 Ch. D. 1 (C. A.).
3 Johnson v. Lewis, 6 F. R. 27, per Caldwell, D. J. "The trust was not a cor-
poration or joint-stock company or partnership, but a trust formed by deed of settle-
ment for the purpose of securing investments. The trustees were the legal owners of
the trust property, and the business of the trust w-as managed by them and ' the
committee' created by the deed for the benefit of the certificate holders, who were
strangers to each other, and who entered into no contract between themselves, nor
with any trustee on behalf of each other, and were not therefore partners."
* "It [the Refining Co. which had become a member of the Sugar Trust] has
helped to create an anomalous trust, which is, in substance and effect, a partnership of
twenty separate corporations." Finch, J., in People v. North River Sugar Refining Co.,
121 N. Y. 582, 24 N. E. 834.
^ This will explain the language used by the court in Rice v. Rockefeller, 134 N. Y.
174, 31 N. E. 907, whicli shouhl be compared with the language of Finch, J., quoted
in the last note. In Rice v. Rockefeller, Bradley, J., said: "The Standard Oil Trust
represents a voluntary association. It was created by agreement of the stockholders
of various corporations and others engaged or interested in a certain enterprise, and
the several branches of business connected with and incidental to it. The effect of
its creation is the concentration of supervisory power in nine trustees, whose certifi-
cates of the trust are taken in place of the stock and bonds of the several corpora-
tions. The characteristic feature of it is in tlie voluntary surrender of the control and
management of the business of those corporations, aad in the fact that for its contin-
S6
562 THE LAW OF PARTNERSHIP. [CH. XIX.
position of the parties is the same as tliat occupied by the trustee
and beneficiaries under the will of a pai'tner in which the trustee
is empowered to continue the business for the benefit of the tes-
tator's family. We have seen that the trustee becomes personally
liable, and that the beneficiaries are not liable as ])artners.^ So,
in the case of the trust now under consideration, the trustees are
partners, and are liable as such to all those who have dealings with
the business. The certificate holders are under no individual
liability as partners.
§ 447. Legal Status of a Certificate Holder. — The holder of a
trust certificate is therefore not a partner ; nor is he in the same
position as a stockholder in a corporation, though the analogy is
close. He has no claim at law upon any person or property.
The certificate is a mere declaration of trust by the trustee in his
favor. If a certificate is transferred, it is the transfer of equitable
property ; in other words, a transfer of the claim of a cestui que
trust against his trustee. The form requisite for such a transfer
may of course be regulated by the declaration of trust. Conse-
quently when the original agreement, to which each certificate
refers, provides for a sale of the certificates and a transfer on
the books, such a sale passes a valid title in equity, and the
purchaser may compel a transfer according to the original trust
agreement^
But though the certificate holders are therefore under no legal
liability to one dealing with the trust, it is conceivable that they
might nevertheless be forced to contribute in case of an unsuccess-
ful business. It is a general principle of the law of trusts that a
trustee is entitled to reimbursement from the cestui ; ^ and there-
fore if the business were not successful, and the trustees were
obliged to pay debts, they would be entitled to contribution from
the certificate holders. And under some circumstances, such as
loss of all the trust property and insolvency of all the trustees,
creditors of the trust might proceed in equity directly against the
uance it has the capacity of succession. The agreement constituted not a yiartnership,
but a trust in behalf of the beneficiaries. And while it is not a corporation, it, by the
agreement, took some of the attributes of a corporation in so far that, through its
trustees, certificates of shares in the equity to the property held by them were issued,
and were transferable in like manner, apparently, as are those of corporations." The
language of these extracts, taken literally, seems contradictory; but taking them in
connection with the issues in the respective cases, it is submitted that the meaning of
the court is as stated in the text.
1 Ante, § 356 ; Connally v. Lyons, 82 Tex. 664.
2 Rice V. Rockefeller, 134 N. Y. 174, 31 N. E. 907.
3 2 Perry on Trusts, §§ 910, 913.
§449.] BUSINESS COMBINATIONS AND '"TRUSTS." 563
certificate holders.^ It is not therefore strictly correct to say that
the certificate holders are as free from liability as the stock-
holders of a corporation : it is true at law, but not in equity.
§ 448. Advantages and Disadvantages of Trusts. — The eco-
nomic advantages ot a properly administered trust are obvious.
The economy in administration, the saving of all the expenses
and waste of competition, and the gain from having all the busi-
ness done under a single management, and that the best attain-
able, render the trust an invention of great possible value. The
success of a few trusts shows what may be accomplished by this
form of business. But the difficulties in the way of successful
administration are so great that few trusts are able to overcome
them. In the first place, the trustees must be men of the highest
business al)ility ; and such men will usually prefer to work for
their own interests, rather than to enter into the service of a
great combination. The temptation to make use of questionable
methods, such as " stock-watering," is also great ; indeed, the
trust itself must usually be formed upon a vastly inflated estimate
of the value of its constituent parts. And the individual liability
of the trustees is such as few men would be willing to undergo.
As a result of these difficulties, successful trusts are likely to
be few.
§ 449. Legality of Trusts. — So far as the combination itself is
concerned, a pool or trust is perfectly legal. It is of the same
general nature as a partnership ; differing chiefly in the fact that
a larger amount of capital can be collected than is possible in
the case of an ordinary partnership. If the trust attempted to
act as a corporation it would of course be ilh^gal ; but it arrogates
no corporate function. There is no attempt, for instance, to limit
liability. Joint stock is issued, to be sure, as in the case of cor-
porations ; but the issue and transfer of the certificates has even
less effect than in the case of joint-stock companies. The issue
or transfer of a share in a joint-stock company makes the new
shareholder a partner, and a party therefore to all contracts made
by the company. In the case of a trust, the certificate holder, as
•we have seen, is not a partner or a party to any contract of the
trustees. Legally the trust is a partnership between the trustees,
and if it may be lawfully formed it would seem to present no legal
difficulties or peculiarities. If the combination is illegal, it must
be for one of the reasons now to be set forth.
1 See Fairlantl v. Percy, L. R. 3 P. & D. 217 ; In re Johnson, 15 Ch. D. 548 ;
Norton V. Phelps, 54 Miss. 467 ; Ferris v. Myrick, 44 X. Y. 315, 325 ; Cater v. Ever-
leigh, 4 Des. 19 ; Manderson's Appeal, 113 Pa. 631.
564 THE LAW OF PARTNERSHIP. [CH. XIX.
§450. Illegality of Combinations of Corporations. — We have
seen ^ that corporations have no right to enter into a partnership;
the principal reason being, that it is a breach of their charter to
come under any direction except tliat of their stockholders and
the directors elected by them. It is true, as we have just seen,
that in entering into a trust a corporation does not become a
member of a partnership ; but the result is quite as much a breach
of the charter. The method pursued has been to convey to the
trustees all the stock in the corporation, who thereupon issue
trust certificates to the stockholders. Although the corporation
is nominally not a partner, the result is that the trustees, a body
of strangers, secure control of the corporation and use it, not for
the benefit of its stockholders, but of the whole body of holders
of trust certificates. This is in effect contrary to the spirit of the
charter, and is illegal.^ If there were no other objection to the
1 Ante, § 24.
2 Gould V. Head, 38 F. R. 886 ; People v. North River Sugar Refining Co., 121
N. Y. 582, 24 N. E. 834 ; State v. Standard Oil Co. (Ohio), 30 N. E. 279 ; Mallory
V. Hauauer Oil Works, 86 Tenn. 598, 8 S. W. 396. In People v. North River Sugar
Retining Co., Finch, J. said " It is quite clear that the effect of the defendant's action
was to divest itself of the essential and vital elements of its franchise by placing them
in trust ; to accept from the State the gift of corporate life only to disregard the condi-
tions upon which it was given ; to receive its powers and pi-ivileges merely to put them
in pawn ; and to give away to an irresponsible board its entire independence and self-
control.
" When it had passed into the hands of the trust, only a shell of a corporation was
left standing, as a seeming obedience to the law, but with its internal structure
destroyed or removed. Its stockholders, retaining their beneficial interest, have sepa-
rated from it their voting power, and so parted with the control which the charter gave
them and the State re([uired them to exercise. It has a board of directors nominally
and formally in office, but qualified by shares which they do not own, and owing their
official life to the board which can end their power at any moment of disobedience.
It can make no dividends, whatever may be its net earnings, and must encumber its
property at the command of its master, and for purposes wliolly foreign to its own
corporate interests and duties. At the command of that master it has ceased to refine
sugar, and without any doubt for the purpose of so far lessening the market supply as
to prevent what is termed ' overproduction.' In all these resjiects it has wasted and
perverted the privileges conferred by its charter, abused its powers and proved unfaith-
ful to its duties. But graver still is the illegal action substituted for the conduct
which the State had a right to expect and require. It has helped to create an anoma-
lous tru.st, which is, in substance and effect, a partnership of twenty separate corpoi-a-
tions. The State permits in many ways an aggregation of capital, but, mindful of the
possilde dangers to the people, overbalancing the benefits, keeps upon it a restraining
hand, and maintains over it a prudent supervision, where such aggregation depends
upon its permission and grows out of its corporate grants. . . .
" As corporate grants are always assumed to have been made for the public benefit,
any conduct which destroys their normal functions, and maims and cripples their
separate activity, and takes away their free and independent action, must so far disap-
point the purpose of their creation as to affect unfavorably the public interest ; and
that to a much greater extent when beyond their own several aggregations of capital
§ 451.] BUSINESS COMBINATIONS AND " TRUSTS." 565
course, it would seem to be illegal, because by adopting it the trus-
tees would be enabled to do all tiieir business through the corpor-
ations parties to the trust, and thus altogether escape the individual
liability to which we have seen they are subjected.
It is, however, perfectly feasible to create a trust, Into which
may be absorbed the property and business of corporations, which
may yet be legal in spite of that fact. Each corporation has
power to cIo.se up its business and sell out all its assets. This
might be done in such a way that the trustees should acquire
title to the assets, giving in payment to the corporation either
trust certificates or cash realized from tbe sale of certificates.
The corporation, upon paying its debts and dividing the balaiice
of its assets among the stockholders, might then be wound up.
§ 451. Illegality of Combinations in Restraint of Trade. —
Another ground u|)()n which trusts are often held illegal is that
the agreement by which they are formed operates in restraint of
trade, by fostering monopoly.^ It seems to be well settled that a
monopoly is illegal, being in restraint of trade ; but there seems
to be some difficulty in deciding what combination is sufficiently
a monopoly to be held illegal. AVhere it is not in the power of
they compact them all into one combination which stands outside of the ward of the
State, which dominates the range of an entire industry, and puts upon the market a
capital stock proudly defiant of actual values, and capable of an unlimited expansion.
It is not a sufficient answer to say that similar results may be lawfully accomplished ;
that an individual having the necessary wealth might have bought all these refineries,
manned them with his own chosen agents, and managed them as a group at his
sovereign will ; for it is one thing for the State to respect the rights of ownership and
protect them out of regard to the business freedom of the citizen, and quite another
thing to add to that possibility a further extension of those consequences by creating
artificial persons to aid in producing such aggregations. The individuals are few who
hold in possession such enormous wealth, and fewer still who peril it all in a manu-
facturing enterprise ; but if corporations can combine, and mass their forces in a solid
trust or partnership, with little added risk to the capital already embarked, without
limit to the magnitude of the aggregation, a tempting and easy road is opened to
enormous combinations, vastly exceeding in number and in strength, and in their
power over industry, any possibilities of individual ownership ; and the State, by the
creation of the artificial persons con.stituting the elements of the coTubination, and
fai ing to limit and restrain their powers, becomes itself the responsible creator, the
voluntary cause of an aggregation of capital which it simply endures in the individual
as the product of his free agency. What it may bear is one thing, what it sliould cause
and create is quite another - . .
"We are enabled to decide that in this State there can be no partnerships of
separate and independent corporations, whether directly or indirectly through the
medium of a trust ; no substantial consolidations which avoid and disregard the statu-
tory permissions and restraints ; but that manufacturing corporations must be and
remain several as they were created, or one under the statute."
1 State V. Nebra-ska Distilling Co., 29 Neb. 700, 46 N. W. 155; State v. Standard
Oil Co. (Ohio), 30 N. E. 279.
566 THE LAW OF PARTNERSHIP. [CH. XIX.
the parties to an agreement to gain exclusive control of a busi-
ness, the agreement cannot be said to establish a monopoly.
Thus it has been held legal for ship-owners to comljine to regu-
late prices.! g^ ^here the two prhicipal maimfacturers of wash-
ing machines agreed to combine, this was lield legal, for it was
not in their power to establish a monopoly ^ On the other hand,
a combination of all coal miners in a certain region has been held
illegal, as creating a monopoly,^ and the same has been held as to
a combination of all the grain dealers in a certain place, which
was found to be a monopoly in fact, and to have been so intended.*
It has been decided that a combination of all distillers in a cer-
tain region is an illegal monopoly,^ and the same has been held
in Ohio of the Standard Oil Co.^ So a combination of all salt
manufacturers has been held illegal.^ Perhaps the strongest case
is that of an agreement of a number of firms in New Orleans,
who imported and sold India bagging, not to sell any except by
consent of a majority of the firms. This was held illegal.^ The
question whether or not a certain association creates a monopoly
would seem to be best treated as a question of fact, to be decided
in each case as the facts might appear.^
§ 452. Illegality of Combinations affecting Necessaries of Life. —
Certain combinations may however be illegal, although not com-
})lete monopolies, if they tend to limit the supply or increase the
price of the necessaries of life.^*^ This principle is very broadly
1 Mogul S. S. Co. V. McGregor [1892] A. C. 25. See U. S. v Trans-Missouri
Freight Association, 53 F. R. 440.
2 Dolph V. Troy Laundry Machinery Co., 28 F R. 553.
3 Morris Run Coal Co. v. Barclay Coal Co. 68 Pa. 173.
4 Craft V. McConoughy, 79 111. 346.
5 State V. Nebraska Distilling Co., 29 Neb. 700, 46 N W. 155.
6 State V. Standard Oil Co. (Ohio), 30 N. E. 279.
f Ohio Salt Co. v. Guthrie, 35 Oh. St. 666.
8 India Bagging Association v. Kock, 14 La. Ann. 168.
^ " Public welfare is first considered, and if it be not involved, and the restraint upon
one party is not greater than protection to the other party requires, the contract may
be sustained. The question is, whether, under the particular circumstances of the
case and the nature of the particular contract involved in it, the contract is, or is not,
unreasonable. Rousillon v. Rousillon, 14 Ch. D. 351 ; Leather Cloth Co. v. Lorsont,
L. R. 9 Eq. 345. ' Cases must be judged according to their circumstances,' remarked
Mr. Justice Bradley, in Oregon Steam Navigation Co. v. Winsor, 20 Wall. 64, 68,
' and can only be rightly judged when the reason and grounds of the rule are carefully
considered.' '"' Fuller, C. J., in Gibbs v. Baltimore Gas Co., 130 U. S. 396, 409.
"The combination is wide in scope, general in its influence, and injurious in effects.
These being its features, the contract is against jiublic policy, illegal, and therefore
void." Agnew, J., in Morris Run Coal Co. «;. Barclay Coal Co., 68 Pa. 173.
1" "The ordinary rule, that contracts in partial restraint of trade are not invalid,
does not apply to corporations like appellant and appellee [gas light companiesl,
§ 454.] BUSINESS COMBINATIONS AND "' TRUSTS." 567
and generally stated, and appears to be of great importance in
connection with this subject. Several decisions holding trusts or
combinations illegal have been rested upon it. Thus a combina-
tion of gas companies has been held illegal ; ^ and the same has
been lield of a combination of manufacturers of matches.^
§ -153. Effect of declaring Trusts Illegal. — The effect of declar-
ing a trust illegal is not, of course, to forfeit the property held by
the trustees. These continue to hold the property in trust ; but
instead of holding it according to the trusts of the agreement, they
hold it on a constructive trust, created by operation of law for the
beneficial owners.^
§ 454. statutes forbidding Trusts and Combinations. — Owing
to tiie rapid rise into prominence of trusts, a feeling (perhaps not
well founded) has come to prevail that tiiey are dangerous to the
]>ublic welfare. Iji consequence of this feeling, a large number of
States have passed acts forbidding the formation of trusts or
other similar combinations. A type of these acts, and an example
of their sweeping character is this :
" If any corporation, partnership, association, or individual shall
create, enter into, become a member of or a party to any pool,
trust, agreement, combination, understanding, or confederation
with any other corporation, partnership, or individual to regulate
or fix the price of [specified commodities or all commodities] or
shall create, enter into, become a member of or a party to any
pool, arrangement, combination, or confederation to fix or limit the
amount or quantity of any commodity or article to be manufac-
tured, mined, produced, or sold in this State, he or it shall be deemed
guilty of a conspiracy to defraud, and be subject to penalties." *
because they were engaged in a public business, and in furnishing that which was a
matter of public concern to all the inhabitants of the city. In West Virginia Trans-
portation Co. V. Ohio River Pipe Line Co., 22 W. Va. 617, it was said- 'If there be
any sort of business which from its peculiar character can be restrained to no extent
whatever without prejudice to the public interest, then the courts would be compelled
to hold void any contract imposiug any restraint, however partial, on this peculiar
business, provided, of course, it be .shown clearly that the peculiar bu.siness thus
attempted to be restrained is of .such a character that any restraint upon it, however
partial, must be regarded by the court as prejudicial to the public interest.' " Magru-
der, J., in Chicago Gas Light & Coke Co. v. People's Gas Light & Coke Co. 121 111.
530, 13 N. E. 169.
1 Gibbs V. Baltimore Gas Co., 130 U. S. 396 ; Chicago Gas Light & Coke Co. v.
People's Gas Light & Coke Co., 121 111. 530, 13 N. K 169 ; People v. Chicago Gas
Tru.st, 130 111. 268, 22 N. E. 798.
2 Richardson v. Buhl, 77 Mich. 632, 43 X. W. 1102.
s Cameron v. Havemeyer, 25 Abb. N. C. 438.
* This 0-: similar statutes have been passed in the following states : Ala. Acts 1891,
c. 202, § 1 ; Cal. Stat. 1893, c. 19, § 4 (as to live stock); 111. Laws 1891, p. 206;
568 THE LAW OF PARTNERSHIP. [CH. XIX.
And by Act of July 2, 1890, the Congress of the United States
passed a similar Act, providing that "every contract or combina-
tion in the form of trust or otherwise, or conspiracy in restraint
of trade or commerce among the several States, or with foreign
nations," shall be illegal ; and that " every person who shall mon-
opolize, or combine or conspire witli another person or persons to
monopolize, any part of the trade or commerce among the several
States or with foreign nations, shall be guilty of a misdemeanor."
These specific statutes were preceded by a more general form of
enactment, like the New York Act, which declared that " If two
or more parties shall conspire to do any act injurious to trade or
commerce, they shall be deemed guilty of a misdemeanor." ^
§ 455. Effect and Interpretation of such Statutes. — These
statutes considerably extend the common law. Where at common
law all trusts are legal unless they are formed for certain illegal
purposes, or in an illegal manner, under the statutes most forms
of combination are illegal.^ The Act of Congress of July 2, 1890,
has however been held not to apply to combinations between rail-
roads, since the regulation of railroads was accomplished by
tlie Interstate Commerce Act.^
Iowa Laws 1890, c. 28 ; Kas. Laws 1889, c. 257 ; Ky. Acts 1890, c. 1621 ; La. Acts
1890, c. 86 ; Maine Laws 1889, c. 266, § 1 ; Mich. Acts 1889, c. 225 ; Minn. Laws
1891, c. 10 ; Miss. Laws 1890, c. 36, § 1 , Mo. Laws 1891, p. 186 ; Neb. Laws 1889,
c. 69; Laws 1891, c. 46, § 5 (school books) ; N. Mex. Laws 1891, c. 10, § 1 ; N. Car.
Laws 1889, c. 374 ; N. Dak. Const. Art. 7, § 146 ; Acts 1890, c. 174, § 1 ; S. Dak.
Acts 1890, c. 154, § 1 ; Tenn. Acts 1889, c. 250 ; Acts 1891, c. 218.
1 2 R. S. 691, § 8. For a statute aimed directly at combinations in a single line of
business, the production of salt, see Laws of 1841, c. 183, § 16 ; Clancey v. Onondaga
Fine Salt Mfg. Co., 62 Barb. 395.
2 See American Biscuit & Mfg. Co. v. Klotz, 44 F. R. 721 ; U. S. v. Jellico Mt.
Coal & Coke Co., 46 F. R. 432.
3 U. S. j;. Trans-Missouri Freight Association, 53 F. R. 440.
APPENDIX OF FORMS.
Introductory Clauses.
Articles of Copartnership made and entered into this first day
of July, A. D. 1893, by and between John Doe of Boston in the
county of Suffolk and Commonwealth of IVfassachusetts, and Richard
Roe, of the city of New York, in the county and State of New York.
1. The name and style of the firm shall be John Doe & Co.
2. The business of tlie firm shall be the brass-finishing business
[heretofore carried on by the said Doe at number 1001 Atlantic
Avenue in said city of Boston].
3. Said business shall be carried on at number 1001 Atlantic
Avenue in said Boston, or at such other place or places as said
parties shall mutually agree upon,
4. This copartnership, unless sooner terminated as hereinafter
provided, shall continue in force for twenty years from the said first
day of July, A. D. 1893.
\_A Simple Form of Introduction is the following.']
The undersigned, John Doe of, &c., and Richard Roe of, &c., hav-
ing formed a copartnership under the name and style of John Doe
& Co., for the purpose of manufacturing and selling clothing in the
city of New York, to continue for the term of three years from the
first day of July, A. D. 1893, it is understood and agreed between
them as follows, viz. — i
Capital.
The capital shall consist of the sum of twenty thousand dollars, to
be contributed by the partners in cash, in equal sums of ten thousand
dollars each, on or before the first day of August, A. D. 1893. Said
partners shall be interested in the business and capital of the part-
nership in equal shares.
1 The following forms may be found useful as suggestions in the drawing of Articles
of Copartnership. These forms are not original with the editor, but have been made
up from reported cases, accredited treatises, and unpublished Articles. Other clauses
may be found in the Appendix to Bates on Partnership, from which one or two of
these forms have been taken. Many clauses of an elaborate agreement are given in
Steuart v. Gladstone, 10 Ch. D. 628.
570 THE LAW OF PARTNERSHIP.
[Ott Continuance of old Busmess.'^
The property, stock in trade, assets and accounts now comprised
in the business heretofore carried on by tlie said Doe shall become
the property of this copartnership ; and each partner shall own a
half interest in the copartnership. The debts due from said Doe in
respect of said business, and which are set forth in a schedule annexed
to this instrument, amounting in all to five thousand dollars, shall be
assumed and paid by this copartnership; but all other debts of said
Doe not comprised in said schedule shall not be taken as liabilities of
this copartnership, but shall be paid by said Doe.
[On Taking Former Assets at a Valuation.]
The lease, plant, fixtures, merchandise, credits, patents, good-will,
and all the other effects of said Doe, heretofore employed and used
by him in connection with the brass-finishing business at said premises,
number 1001 Atlantic Avenue in said Boston, shall be brought into
said copartnership, and be taken by it at an agreed valuation of ten
thousand dollars, which sum shall be considered as the amount of
capital brought by said Doe into said copartnership.
Withdrawal of Capital by Partners Compensation, &c.
The capital is to be employed in the business of the concern, and
no part thereof is to be drawn out by any of the partners for the time
being except as hereinafter provided.
If any of said partners at any time draw any moneys out of said
copartnership except as hereinafter provided, the partner so over-
drawing shall be charged interest on the amount at the rate of six
per cent, per annum.
Said partners shall be at liberty to draw out of the funds of the firm
each month, for their private expenses, the following sums, to wit:
John Doe one hundred dollars, Richard Roe fifty dollars. The sums
so drawn shall be charged against the partners respectively ; and if
at the annual settlement hereinafter provided for the profits of any
partner do not amount to the sums so drawn out in that year, he
shall be charged interest on the deficiency at the rate of six per cent.
per annum from that time until such excess shall be repaid to said
firm [or, he shall at once repay such deficiency to the firm]. If at
such settlement the profits of any partner exceed the amount so
drawn out in that year, the excess shall be placed to the credit of
said partner on the books of the firm [and he shall be at liberty
immediately to withdraw it].
Neither partner shall withdraw from the business of the concern
any money until the expiration of six months from this date, and
then no more than his share of the profits.
APPENDIX OF FORMS. 571
ACCOUXT.S.
All the transactions of the said copartnership shall be entered in
regular books of account, and on the first day of January and the
first day of July in each year during the continuance of this copart-
nership, account of stock shall be taken, and an account of the
expenses and profits adjusted and exhibited on said books; said pro-
fits shall then be divided, and a moiety carried to the separate account
of each partner [or, in the following proportions, viz. to A., 40 per
cent. ; to B., 30 per cent. ; and to C, 30 per cent]. Either partner
shall be at liberty to withdraw from the firm at any time the whole
or any part of his share of the accrued profits, thus ascertained and
carried to his separate account.
Each partner shall have open and free access to the books and
accounts of the copartnership at all times, and no material or impor-
tant changes shall at any time be made in the general business of the
firm, either in the buying of stock or in any other respect, by either
partner without the knowledge of the other.
Allowance of Ixterest, Rent, &c.
Each partner is to be allowed interest at the rate of six per cent,
per annum upon the amount of capital [accrued profits] standing to
his credit from time to time on the books of the firm.
The premises number 1001 Atlantic Avenue in said Boston, belong-
ing to said Doe, shall be used by the copartnership ; said Doe shall be
credited upon the books of the copartnership with two thousand
dollars per annum as rent for the use of said premises, and the
copartnership shall pay all taxes, premiums for fire insurance, and
repairs on said premises during its occupancy thereof.
Said Doe shall be allowed the salary of one thousand dollars per
annum before division of profits, as extra compensation for the
management and superintendence of the business ; and shall also
receive a commission of ten per cent, upon all sales effected by him
on behalf of the firm.
Division of Profit and Loss.
The profits of the business, after deducting all expenses [and the
sum of one thousand dollars per annum, which shall remain in the
firm as additional capital], shall be [equally] divided between the
partners [in the following proportion, viz. — ] on the first day of
January in every year. All expenses and losses of the copartnership
shall be borne by the partners in the same proportion.
572 THE LAW OF PARTNERSHIP.
Duties of Partners.
The partners shall be bound to give only such personal attention
to the business as they may find convenient; but neither partner
shall engage in any speculation, or in any other business, to the detri-
ment of the said copartnership.
The said partners shall give their entire personal attention to the
business, so far as necessary, and shall use their best skill, judgment,
and discretion to promote the profits of the concern , and during the
continuance of the copartnership neither of said partners shall engage
in any speculation on his own separate account, or be in any way
interested in any other business than that of the copartnership hereby
established.
During the continuance of this copartnership neither of the partners
shall assume any pecuniary liability, either in his own name or in
that of the firm, for the accommodation of any other person, nor
become surety for any other person, without the written consent of
the other partner previously obtained.
None of the partners shall draw, accept, indorse, or negotiate any
bill of exchange, promissory note, or other negotiable instrument, in
the name of any or either of the firms under which the partnership
may for the time being be carried on, for his own private use, or for
any purpose other than the immediate use of the partnership, or shall
suffer the partnership effects, or his share or interest therein, to be
attached for any private engagement or debt.
It shall not be in the power of any of the partners to assign all or any
part of his share or interest in the capital, stock, or profits of the con-
cern to any person or persons, or to give them a right to inspect the
firm books, or to interfere in any way with the business of the firm ;
and should any such assignation or other conveyance be granted or
right given contrary to this stipulation, the same is hereby declared
to be null and void and of no force, strength, or effect, so far as
regards the copartnership or other individual partners, who shall not
be obliged to pay any attention thereto.
Powers of Majority.
In all questions, differences, or disputes, between the partners, aris-
ing in said business and the management and regulation thereof, or
any act, transaction, matter, or thing, relating thereto, the determina-
tion of the majority in number of said partners shall be final and
conclusive on the others, unless the others shall be desirous of sub-
mitting the determination of the matter in controversy to arbitration,
pursuant to the proviso hereinafter contained, and shall require the
reference to arbitration within three days after the determination by
the majority shall have been communicated to them, and m case of
APPENDIX OF FORMS. 673
such arbitration the award shall be final and conclusive upon the
parties.
The majority of said partners may at any time forbid the signing
of the firm name by either partner, or all dealings with a specified
individual upon partnership account. No partner having notice of
such decision by a majority of the partners shall act in disobedience
to it ; and any partner who brings loss upon the partnership by acting
in disobedience to the decision of a majority of the partners, shall
repay such loss to the partnership.
Dissolution.
Upon the retirement of any partner, or other dissolution of the
firm, it shall be lawful for any partner to sign the names of the firm
and of the individual partners to all necessary notices of dissolution,
in order to the publication of the same.
Upon dissolution of this copartnership by any cause, no living
partner shall refuse to sign a written notice of dissolution ; and each
partner hereby authorizes the other partners to sign in his name any
notice of dissolution necessary for publication.
On the termination and final settlement of this copartnership, each
partner, respectively, shall take a share of the cash and clothing then
on hand, in proportion to his interest in the same, in discharge of his
claim upon said copartnership.
In case of the decease of either member of said firm during the
terra of this copartnership, it shall be the duty of the survivor or
survivors, and they are hereby fully authorized, forthwith to take an
inventory of the copartnership property, both personal and real, and
with the least possible interruption continue the business until the
legal and duly authorized representative of said deceased member or
members shall appear and assume his or their direction in the dispo-
sition of said copartnership property in accordance with the foregoing
provisions.
In the event of the death of either party to this agreement, the
copartnership shall not on that account be dissolved ; but the interest
of such deceased partner shall be continued and represented by the
legal personal representative of such deceased partner.
If a majority of the partners for the time being in the partnership,
,shall at any time be desirous that any of the partners shall retire
from the partnership, and shall, six calendar months at the least,
previously to the time at which they shall be desirous that such
partner shall retire, give a notice in writing of such their desire to
such partner ; then and in such case the partnership shall, as regards
the partner to whom such notice shall be given, be dissolved at and
from the time in such notice mentioned.
574 THE LAW OF PARTNERSHIP.
On the dissolution of this copartnership, if the said parties or their
legal representatives cannot agree in the division of the stock then on
hand, the whole copartnership effects, including the good-will, and
excepting the debts due the firm, shall be sold at public auction, at
which both parties shall be at liberty to bid and purchase like other
individuals, and the proceeds shall be divided after paying the debts
of the firm.
On the insanity or insolvency of either partner, his interest in the
copartnership shall cease ; but the business may be continued by the
other partner. The retiring partner's share of the assets of the busi-
ness, as determined by the last semi-annual stock-taking (or by the
next stock-taking, if it is to occur within two months) shall m such
case be paid over to his legal representative in three equal semi-
annual instalments, the first instalment to be paid within seven days
after the next regular stock-taking has been completed. In case of a
wilful infraction of the foregoing agreements, or either of them, by
one partner, the other partner may, at his option, declare the copart-
nership terminated, and proceed as if the partner in fault had become
insolvent ; except that the retiring partner's share of the assets shall
in such case be paid to him personally.
This copartnership shall terminate upon either partner giving to
the other three months' notice in writing of his desire to terminate
the same. By agreement of the partners, one of them may in such
case continue the business on such terms as form part of said agree-
ment. If no such agreement is made, all the partnership assets,
inoluding the firm-name and good-will, shall be sold at a public auc-
tion, at wdiich each partner shall be at liberty to bid and purchase,
like other individuals. The proceeds of this sale, and all other assets
of the partnership remaining after all debts have been paid, shall
then be equally divided between the partners.
In case of the death of the said Doe during the continuance of this
copartnership, the business may be closed up by the said Roe, and
the said Doe's share of the assets shall be paid over to his executor
or administrator, or the said Roe may, at his option, continue the
business. If the business is continued, the said Doe's share of the
assets, as determined by the last semi-annual stock-taking, shall be
held by the said Roe as a loan until the time hereinbefore set for the
termination of the copartnership ; and one-half of the profits of
the business shall be paid over to the said Doe's heirs or represent-
atives at each semi-annual stock-taking, in lieu of interest upon the
aforesaid loan. At the expiration of said time, the said Roe shall
pay to the heirs or representatives of the said Doe, as payment in
full of the aforesaid loan, one-half of the assets of the business
(exclusive of accrued profits) which remain after all debts have been
paid. The heirs or representatives of the said Doe shall have all
such rights in the business as are secured to the said Doe by the
APPENDIX OF FORMS. 575
articles above written ; but they shall have no right to interfere in
the management of the business.
In case of the death of said Roe during the continuance of this
copartnership, the copartnership shall not be terminated; but all the
interest of said Roe in the copartnership shall pass to his son James
Roe. The business shall thereafter be continued, for the benefit of
the cojjartnership, by said John Doe, in accordance with these ar-
ticles of copartnership; except that no notice given by James Roe
shall be sufficient to terminate the copartnership, without the consent
of said John Doe.
If any of the partners for the time being in the partnership shall
die or cease to be a partner under any of the aforesaid provisions,
there shall be placed to the credit of the account of such partner, in
lieu of his share of all profits accruing since the 1st of May next pre-
ceding his death or ceasing to be a partner as aforesaid, and as cash,
twelve months from the 1st of May next after his death or ceasing to
be a partner as aforesaid, a sum of money equal to a proportionate
part of his share of one year's profit, calculated upon the average
profits of the three preceding years of the partnership, and such pro-
portionate part shall be calculated upon or in respect of the number
of days which shall have elapsed at the time of his death or ceasing
to be a partner as aforesaid since the 1st of May then last.
If any of the partners for the time being in the partnership shall
die or cease to be a partner in the concern by any means whatsoever,
the concern shall not be thereby or thereupon wholly dissolved,
except so far as regards the party so dying or ceasing to be a partner
as aforesaid, but the account between such partner or his represent-
atives and the house shall be adjusted as follows: The surviving or
continuing partners shall pay to the representatives of such deceased
partner, or to the party who shall so cease to be a partner as afore-
said, the sum which shall appear at the credit of the party so dying
or ceasing to be a partner as aforesaid, after the same shall have been
adjusted under the provisions hereinbefore contained, by three equal
instalments, one at the end of the first year, one at the end of the
second year, and one at the end of the third year after such partner
shall have died or ceased to be a partner as aforesaid, such sum bear-
ing interest at the rate of five per cent, per annum, and in case, on
taking the accounts hereinbefore directed, the balance shall appear to
be against the partner so dying or ceasing to be a partner as afore-
said, the balance shall be forthwith paid by the personal representa-
tives of such deceased partner or by the party so ceasing to be a partner
as aforesaid (as the case may be) to the surviving or continuing
partners.
676 THE LAW OP PARTNERSHIP.
Abbitratiox.
In case any dispute arises between the partners, either with regard
to these articles or with regard to any other partnership transaction,
it shall be settled by arbitration ; each partner to appoint one arbi-
trator, and those arbitrators, if necessary, to choose a third.
Conclusion.
In witness whereof the said parties have hereunto set their hando
and seals this [day and year first above written] first day of July,
A. D. 1893.
Admission of New Member : Extensio:: of Term : Dissolu-
tion BY Consent. [To be indorsed on the articles.]
In consideration of the premium of ten thousand dollars to be paid
to the firm of John Doe & Co. by John Smith of the city of Phila-
delphia, said Smith is admitted as a full and equal partner in said
firm ; the within Articles of Copartnership of said firm remaining in
force in the new firm, except that the firm name shall be Doe & Roe ;
the term of the partnership shall be ten years from the date hereof,
and the capital shall be fifty thousand dollars, and the partners shall
be interested therein in the following proportions, viz. : John Doe,
two-fifths; Richard Roe, two-fifths; John Smith, one-fifth.
Said premium shall be paid as follows : Six thousand dollars in
cash upon the execution of this agreement, and the remaining four
thousand dollars in three months from this date. Said premium
shall become the property of the firm of Doe & Roe [or, of John Doe
& Co.], and shall be taken to be capital of said Smith ; and the firm
of Doe & Roe shall pay interest thereon, the same as to the other
partners.
It is agreed that the partnership within mentioned shall be con-
tinued on the same conditions, limitations, and restrictions for the
further term of five years from and after the first day of January,
A. D. 1890.
By mutual consent of the within named parties the within partner-
ship is hereby dissolved, and either one of the partners is authorized
to receive money and compound the claims due the partnership, and
give full receipts and acquittances for the same.
INDEX.
INDEX.
A.
Section
ABROAD,
right of partner to assets seized and restored to copartner residing . 403
ACCEPTANCE,
by partner of bill of exchange on firm, good though by parol . . 97 n.
ACCOMMODATIOX PAPER,
of partnership not binding unless authorized by all partners . . . 143
ACCOUXT,
bill for, will not lie in case of illegal partnership 8 n.
right to, not a test of partnership 53
not confined to partners 53 n.
between paitners cannot be taken at law 185 n.
action at law by partner for balance of 193,194
what is settlement of 195
when opened for mistake 196
contract to render 197
a decree foi', and reasons 206
cannot be demanded by one partner in respect of particular items . 206
without dissolution 207
how settled 208
right of purchaser of partner's interest on execution to demand 259, 259 n.
surviving partner must render, to estate of deceased partner . . 344 n.
assignee in bankruptcy of partner may claim from copartners . . 370
when an, will be ordered 406
right to demand, peculiar to partners and their representatives in
interest 406
every partner has a right to an 406
right to an, may be transferred by a partner to his representatives . 406
every person who has acquired a partner's interest in the joint fund
may call for an ^106
courts of equity have power to grant any partner or his representa-
tives an. for cause 406
rulings on this subject in the different States 406 n.
duty of partners to keep "^0"
when too confused to be proved, no relief will be given .... 408 n.
may be rendered unnecessary by agreement between partners or
their representatives 408
in case of dissolution must be an, if demanded by a party in in
terest 408
580 INDEX.
Section
ACCOUNT— Continued.
may be decreed without a prayer for dissolution 408
in a suit in equity for a dissolution and an, alleging that dividends
of profits were to be made at stated periods, the court may decree
the payment of the sum due before the distribution of assets 408 n.
when it may be opened for error 409,411
a suit to impeach an account must be brought within a reasonable
time 409
but if fraud be shown, courts will open the account after any length
of time 409, 409 n., 410
where tlie bill praying for the opening of an account does not allege
fraud, but in the opinion of the courts the facts stated imply
fraud, it will be granted 410
courts of equity may infer, judicially, a fraudulent purpose from
suspicious circumstances 410 n.
having been once admitted by a party to be correct, he cannot after-
wards file a bill to have one taken in equity without charging
specific acts of fraud against the defendant 410 n.
a party seeking to open, must specify the errors particularly . . . 411
will be opened at any time for fraud or mistakes so far proved that
the court is satisfied they ought to be corrected 411 n.
will not be opened where it has been signed or security taken on the
foot of, unless the whole transaction appear fraudulent . . 411 n.
if the plaintiff show an omission has been made of a credit due, he
■ will be permitted to add it 411
the plaintiff may be permitted to remove a wrong charge stated in
the account 411
the practice in England, when a partner owing a private debt to the
partnership petitions for an 412
whether plaintiff in bill for, must tender or pay money 412
how it should be taken 413
parties may regulate their manner of taking account by their agree-
ment 413
an agreement may be inferred from their having settled their ac-
counts for a length of time in a certain way 413
need not be signed by the parties if there be other evidence of acqui-
escence 413
a party not objecting to an account for a long time will be deemed
to acquiesce in it 413
the terms of an account are not conclusive, where fraud or extreme
injury can be shown 413
manner of proceeding when a decree for an account issues . . . . 414
prior settlement by parties to be taken as starting-point .... 414
must be continued until the day on which it is made, or until a pre-
vious dissolution 414
a rule prescribing the method of making up an account 415
method of stating 416
interest when allowed in 417
return of premium when oi-dered 418, 419
sale of assets when decreed in suit for 4i?0
ACCOUNT STATED,
demand of partner against partner founded upon a balance of . . 193
INDEX. 581
_ Section
ACCOUNT STATED — Continued.
general rule as to 193
agreed upon between a surviving partner and the representative of a
deceased one, effect of 193 »
as a final balance 194
an express promise to pay balance of one is not necessary .... 194
not necessarily a final balance 194
all the partners must be bound by 194
not necessarily a general balance 194
law as to, in V'ermont 194 n.
law as to, in Illinois 194 n.
effect of, whether settlement obtained by consent, by law, or by
arbitration 195
where it did not embrace all the debts, effect of 195
declared on, action not sustained by a balance struck by one partner
williout the consent of his copartner 195
outstanding debts of themselves will not necessarily defeat an action
upon 195
where there is a mistake in one 196
where expenses are incurred by some of the partners on account of
the old firm, subsequently to declaring an 196 n.
where after settlement and dissolution, one partner is obliged to pay
a claim not included in settlement, he may recover in assumpsit
against copartner . . 196 n.
where one partner covenants with another that he will account . . 197
assumpsit will lie between partners for an 197, 407 n.
retained by a partner without objection, assent and promise will be
implied - 413 n.
ACCOUNTANTS,
notion of partnership held by 3
ACCOUNTS,
books of, when evidence against the firm 129
of the firm should be kept, how 154
may be examined at the pleasure of each partner 154
balance of, presumed to be adverse to partner whose duty it is to
keep them 154 n.
provisions as to 167
where contained in articles = 167
when the articles may provide a method of closing 167
when reopened after settlement 167
ACT OF BANKRUPTCY. (See Bankruptcy.)
ACTION,
cannot be brought by that partner alone in whose name the partner-
ship business is transacted 98
all actual partners must be made co-plaintiffs 98
ACTIONS,
against a firm must he brought against all the partners, by name
including the bankrupt, unless he has been discharged . . . 375
effect of death of partner upon 249
against dormant partner, whether barred by former recovery against
co-partner ^1
682 INDEX.
Section
ACTIOl^S— Continued.
for the recovery of debts due to the firm in case of bankruptcy of
a partner, are brought by solvent partners and the assignees of
the bankrupt 375
do not abate by the bankruptcy of the plaintiff 375 n.
ACTIONS AGAINST PARTNERS,
non-joinder of a dormant partner 202
(See Of the Rkmkdies of Third Persons against the Part-
nership AND against Partners, Ch. X.)
(See Of Remedies by Partners against Third Parties,
Ch. IX.)
ACTIONS BETWEEN FIRMS HAVING A COMMON MEMBER,
cannot be maintained at law 200
an indorsee of one of the firms may maintain an action against
the other 231
after the death of the common member 201, 231
in case of a dormant or secret partner 202
ACTIONS BETWEEN PARTNERS,
may be brought, when 185 et seq.
on contracts arising before the partnership 187
on contracts arising after the termination of the partnership . . . 188
may be brought for causes originating in the relations of partners
to third parties after dissolution 188 n.
• "where transactions are separated from partnership affairs . . . . 190
where the transaction is entered upon the partnership books . . . 190
■where there has been a breach of an express stipulation between
partners ...191
where a partner gives his copartner a sum of money for a specific
purpose 192
for contribution 198
for contribution in a transaction separate from tbe accounts of the
firm 198 «.
contribution cannot be claimed by one partner for payment for a
tort 198 n.
(See Of the Rights and Duties of Partners between them-
selves, Ch. VII.)
ACTIONS BY PARTNERS,
names of all the partners must be set forth 200
non-joinder of a dormant partner 202
wheie both ostensible and secret sue on a partnership contract . 202 n.
all who were partners at the time a debt was contracted must join
to recover it 235
as to partners who leave the firm 235
as to new partners 235
where one member of the firm is an alien 232
where the cause of action arises during war 232 n.
where one of the partners resided in the enemy's country during
the war 232
where by the law of a foreign country a husband and wife may be
members of a firm 233
effect of death of partner upon 249
INDEX. 583
Section
ADMINISTRATORS,
of a deceased partner putting assets they have in their own hai)ds
into the liands of the surviving partners to trade with, are re-
sponsible for any loss occurring 356
ADMISSIONS. (See Keprksextations.)
ADOPTION. {See Partners, Representation's and Admissions,
Joint Debt, Incoming Partner.)
ADVANCES BY A PARTNER,
provisions for, in articles, effect of 166
right to interest on 156
rate of interest on 157
ADVENTURE. (See Partnership.)
AFFAIRS OF PARTNERSHIP,
partners may sue each otiier on affairs not connected with the part-
nersliip 186
AFFIDAVIT. (See Limited Partnership.)
AGENCY,
distinction between, and partnership 46
(See Agent, and Authority of Partners.)
AGENT,
for whom a partner acts as 5
not partner because of sharing profits 69
power of partner to appoint 119
authority of one partner to act upon appointment of firm as . . . 119
AGREEMENT BETWEEN PARTNERS,
to admit new partner 9
that one shall not engage in the same business on his own account . 168
where a partner violates such agreement 168
under seal 191
to exempt a retiring partner from liabilitv', effect of 324
where creditors become parties to, for consideration 324
as to what property shall belong to one or another, in case of dis-
solution, will be valid 324
(See Articles.)
AGREEMENT TO ENTER INTO PARTNERSHIP,
requisites of 6
construction of 6
not necessarily express 7
executory 12
specific performance of, may be decreed in equity . . 163, 205, 205 n.
' action at law upon 191 n.
ALIEN,
can be a partner if a friend 22
when the property is real estate 22
cases in which equity interferes, in a country where an alien could
not hold land 22
if one of many partners hold the title and there were no aliens . . 22
otherwise as to alien enemies 22
war suspends a partnership with an alien friend ....... 22
in what cases peace revives the partnership 22
584 INDEX.
Section
ALIEN — Continued.
cannot bring an action in a court of a hostile country .... 22, 232
citizens resident in a foreign country, when considered aliens . . 22
a firm consisting wholly of aliens may bring personal actions in this
country by means of an agent 22
partnership formed by husband and wife in a foreign country in
which it could exist, effect of here 22, 233
ALLOWANCE. {See Rights of Partnp:rs, Surviving Partners,
AND Compensation.)
ALTERATIONS. {See Articles of Partnership, and Change in
THE Partnership.)
ANNUITANT,
not partner because of sharing profits 72
APPEARANCE,
may be entered in an action by one partner 118
APPOINTEE,
of a partner under a power of appointment must assume that rela-
tion by his own act 354
and consent will not, generally, be assumed from mere silence . . 354
a rule in equity that he has a right to inspect the books and
accounts of the partnership before making his election . . . 354
APPROPRIATION OF PAYMENT,
when the right of debtors 330
when the right of creditors 330, 332
when the act of law 330
by the creditor is not conclusively exercised by entries in his book,
if not communicated to the other party 330
a retiring partner not bound by a fraudulent 331
fraudulent exercise of 331
when it becomes a matter of law 333
when the new firm for adequate business causes appropriate the
funds of the old firm to the payment of new debts 333
when the paying party makes no appropriation 332
where made by the creditor in expectation of the insolvency of the
new firm 332
where not made by the creditor until he had heard of the insol-
vency of the new firm, and then made so as to hold the retiring
partner 332
no person allowed to change, for his own benefit, an appropriation
once made by him 332
when, may be implied from the payments themselves 333
when the right of election as to, applies 334
when a person has an account with a banking firm which is dis-
solved, and his account continues as before 334
the doctrine of appropriation applies only where the debts and
accounts are distinct in themselves and so regarded by the
parties 334
effect upon, of the ownership of the money paid 334
■when debtors commit a breacli of trust in respect to certain property,
and afterwards make payment generally on account of their
creditor, who is ignorant of the breach of trust 335
must be to legal and not illegal demands 335
INDEX. 585
Section
APPROPRIATION OF PROPERTY TO A PART^'ER,
provisions for 175
where agreed that certain property used by the firm shall belong to
one partner 175
with reference to the creditors of the firm , . 175
of property held forth as partnership property 175
ARBITRATIOX,
one partner cannot bind the partnership by an agreement to refer . 121
where all the partners agreed to submit a question, and after-
wards refused, there might be a remedy either in equity or
at law 121
submission by unsealed agreement of one partner held in some
States to be valid 121
provisions in articles for , . . . . 170
ARBITRATORS,
have no power to award a dissolution 365
ARTICLES OF COPARTNERSHIP,
provision of, as to admission of partners ......... 9
are usually entered into 41
power of partner when limited by provisions of 84 n.
provision in, for transfer of share by partner . . . . o . . . 107
usually exist in writing 159
where the partners have none 159
not any difference, whether spoken or written, in their effect and
operation 159
third parties not affected by them until notice 160
bind only partners and others having notice 160
principles of construction of 161
to be interpreted in connection with rules of Law of Partnership . 161
when courts of equity will refuse to carry into effect minor stip-
ulations in ... . 161 71.
when bill for specific performance of, lies 162
where the act required is a legal obligation created by law . . . 16ii
provisions in, that have never been acted upon 164
waiver of provisions in 1^"1
construed strictly in relation to any material change in the business 164
may be modified by consent 164
modification of, may be proved by long course of dealing ... 164 n.
renewal of . ^^'^
provisions in, for advances 1''^
for payment of capital l*^''
as to accounts l*j'
for giving time and skill by partner 168
excluding some specific business . « 168
for dissolution .... = ...• 1^9
for expulsion of a partner 169 ;*.
for arbitration ^'^
for power of majority 1'^
for division of profits 1 ' -
for sharing of loss ^'^
for liquidated damages for misconduct of partner .... 174
5186 INDEX.
Section
ARTICLES OF COPARTNERSHIP— Con/mwer/.
provisions in, for appropriations of property to a partner . 175, 179
respecting firm-name 176
when sealed, covenant may be brought upon them 191
bill for specific performance of . 205, 205 n.
provisions in, for continuing busuiess after decease of partner . 313 n.
form of Appendix
{See Partnership.)
ARTISTS,
partnerships of 37
ASSIGNEE OF A FOREIGN FIRM,
possession by, v^-ould prevent an attachment or levy on the property
of the firm in this country 371
ASSIGNEES,
for benefit of creditors, not partners ... 73
may lose their claim against a retiring partner for debts due froin
the tlrm. by making themselves responsible 379
under a commission of bankruptcy, employing an agent to receive
money, if he embezzle it, may be liable to make it good, unless
he consulted the body of the creditors in the appointment . 379 n-
of a bankrupt partner take only his interest in the joint property . 385
of a firm take both the firm property and the several property of the
partners 385
of a bankrupt partner may claim unpaid instalments due from a
solvent partner for his admission into the firm 402
under a separate commission take only such undivided interest as
the bankrupt himself had, and in the same manner as he held it 402
of a stockholder in an insolvent corporation succeed to the rights of
their assignor 435 n.
ASSIGNEES OF A BANKRUPT PARTNER,
do not become partners in his stead 9, 370
become tenants in common with the other partners 370
may claim an account, and require a settlement of the concern . . 370
cannot take the business in their own hands and settle it ... . 370
have much the same rights and remedies as the representatives of a
deceased partner 370
cannot bring trover against the partners for the partnership effects . 370
may hold the partnership effects as well as the solvent partners, all
being equally entitled to possession 370
ASSIGNING PROPERTY,
must be done in the regular business of the firm 108
that a partner has not power to assign property of the firm in any
unusual way 109
the firm being insolvent, may a partner assign all the property in
trust to pay creditors 110
ASSIGNMENT,
effect of, by a partner of his interest in a copartnership .... 106
gives the assignee a right to insist on an account 106 n.
(See. DiLECTUS Persoxarum.)
by one partner of all his interest, effect of ........ . 305
does not operate as a dissolution of copartnership . . 304, 305, 306 n.
INDEX. 587
Section
ASSIGNMENT FOR BENEFIT OF CREDITORS,
power of partner to make 110, 110 n.
power of surviving partner to make \\\ n.
whether separate estates of partners must be included in . 385, 385 n.
how to be made 385 n.
ASSIGNMENT OF PROPERTY OF FIRM,
right of 108
right of every partner to assign in the regular business of the part-
nership absolute . 108
ASSOCIATIONS,
other than partnerships 437
ASSUMPSIT,
action of, will lie between partners where a balance of accounts is
struck 407 n.
ATTACHMENT,
exemption of partnership property from . . . . o . . . 252, 265 n.
by a creditor of a partner of his interest in the firm property 258, 258 n.
of pai-tner's interest does not operate as dissolution 304, 305
of a partner's interest suspended by bankruptcy 374
■would not be suspended wliere a foreign firm went into bankruptcy
abroad, and a creditor of one of the partners attached his inter-
est in this country 374
would be prevented if the foreign assignee had taken possession of
the property . 374
ATTORNEYS,
firm of, is non-trading 85 n.
AUTHORITY. {See Power of Partner.)
of partner to bind firm, how limited 83 e< seq.
AVOIDANCE,
of partnership by infant, effect of « 17
AWARD OF ARBITRATORS,
cannot of itself effect a dissolution « . 365
B.
BALANCE OF ACCOUNT. {See Account.)
BANKERS. {See Joint-stock Companies.)
BANKRUPT PARTNER,
assignee of, not a partner 9
discharge of, does not affect indebtedness of other partners ex-
cepting as to the sura which the creditor takes by way of
dividend 376
where made defendant in an action against the firm after his dis-
charge, may have judgment against the plaintiff 376
taking up the notes of the firm after getting his certificate is per-
mitted to prove against the joint estate 376 n
588 INDEX.
Section
BANKRUPTCY,
assignees of, take only his interest in the joint property .... 385
fiat of, against infant void 17
power of one partner to act for firm in proceedings in . . . 118, 123
when and how it dissolves a partnership . . 301 n., 304, 366, 367, 371
in England, dissolution does not take place until bankruptcy has
been declared by competent authority 367
in this country dissolution takes place when the assets are vested
in the hands of the assignee 367
reason of dissolution because of 368
where there are no statutes of insolvency, inability and refusal
to pay debts does not of itself operate a dissolution .... 368
acts upon a partnership in many respects like death of the
partners ..... = ...<. 369
assignee of bankrupt partner does not become partner 370
may claim account 370
cannot take charge of business 370
becomes tenant in common with other partners 370
of one partner where other partners are solvent, effect of, on the
solvent partners 370
property rights and interests of a bankrupt partner pass to his
assignees
370
effect of a provision in the articles that, in case of, the others shall
take his share at a valuation and continue the business . . . 371
notice of, not necessary to prevent the partner from being bound
by new debts 372
annuls any attachment or execution of his interest in the firm . . 374
foreign, would not suspend the attachment or levy on the inter-
est of the partnership property, found and attached here,
before possession taken by foreign assignee 374
parties to suit by or against firm after one partner becomes bank-
rupt 375
where all the partners of a firm become bankrupt, the discharge of
one affects only himself 376
of a plaintiff, his assignees may continue an action in his name . . 376
where actions for the recovery of debts due to the firm are
brought by the solvent partners and the assignees of the
bankrupt 375
operates a discharge of an execution against the partnership . . . 376
a decree of, in England, goes back by relation and makes the
bankruptcy effectual from the first act of ....... . 377
power over assets of solvent partner 377
copartner cannot prove debt 378, 379
except in case of fraud 380
no proof in, between firms having a common member 381
of a partnership in case of, joint property forms a fund for joint
creditors, and separate property of each partner, a several fund
for the private creditors of each 382, 382 n., 383, 383 ?r., 385, 384 n.
of a partnership, all the firm property and all the several property
of the partners goes to the assignees 385
proof in, by secured creditors 386
distinction between joint and separate creditors 387
INDEX. 589
Section
BANKRUPTCY — Continued.
a creditor of the firm taking several notes from the partners has
no rights as a partnership creditor 388
whether joint and separate creditors of partners must elect 390, 390 n.
on what assets holder of note signed by all partners is entitled
to come 398
right of joint but not partnership creditors in assets 391
what are joint and what separate assets in 392
whether assets are joint or separate may be determined by appro-
priation of property 393
where a partner takes property from the firm, and bankruptcy
ensues, the property so taken will be held to satisfy any
balance due from the partner to the firm 392
rule of appropriation of funds where the firm and all the partners
are bankrupt 394
in case of, where property appears either in the separate estate of a
partner or the joint estate of the firm to have been abstracted
from the otlier, it must be restored 394
partner cannot compete with firm creditors in 399, 399 n.
nor can creditors of partner, with regard to partnership assets . . 399
where the joint estate is larger at time of, on account of any
fraudulent act against one of the partners, his several cred-
itors may proceed against it for that amount 399
proof against what estates, in case of dormant partner ..... 400
of two firms with common members, one set of creditors may com-
pete with the other 401
partner has precedence in distribution of firm assets in, over cred-
itors of copartner 402
if any contracts or enterprises are outstanding at the time of,
the assignees must wait until they are adjusted, and take
the share of the bankrupt in the result 402
right of assignee in, to continue business 404
sale of the effects in, usual course adopted by assignees .... 405
BEGINNING,
of partnership, time for 12
of partnership formed without express agreement 12
of liability 92
BEQUEST,
of interest, in firm does not make legatee partner 106
BILL FOR ACCOUNT. {See Accouxt.)
BILL OF EXCHANGE,
parol acceptance by partner good 97 n.
{See Nkgotiable Paper )
BONDS,
" trusts " to invest in 440, 445
BOOKS OF PARTNERSHIP,
whether admissible as evidence of partnership 78
received in evidence of account 414
not conclusive 414 n.
590 INDEX.
Section
BOVILL'S ACT,
effect of > 45
BROKER,
not pai tner, because of sharing profits 69
BURDEN OF PROOF OF PARTNERSHIP 78
BUSINESS,
" tiusts '' to carry on 443,446
BUSINESS OF FIRM,
cannot be varied by one partner 130
c.
"CABLES' TRUST" , 440
CAPITAL,
contributions of 63
may consist of right to use property 63
agreement to contribute 166
collection of , by means of " trust " 438
(See Partnership and Property of Partnership.)
CAR TRUSTS » 441, 445
CARE AND SKILL AND TIME,
provisions for giving, to the partnership 168
(See Partnership.)
CARRIERS,
association of, whether partnership 75
liability of one of firm of , for tort of copartner 105
agreements between 444
CERTIFICATE OF LIMITED PARTNERSHIP,
contents of 424
publication of . » 429, 429 n.
defects in 429
CERTIFICATE HOLDERS,
of a trust, position of 445, 446, 447
CESTUI QUE TRUST,
of partner, liability of 447
(See Trustee.)
CHANGE OF BUSINESS,
can be only by consent of all partners 164
CHANGE IN THE PARTNERSHIP, Ch. XIII. (See Partnership.)
effect of (Sec. I) „ 311
by the retirement of a partner 311
causes dissolution , 312
by the death of a partner 342
discharges bonds and other contracts , 236
CHARITABLE ASSOCIATIONS,
not partnerships . . ^ 60
CHOICE OF COPARTNER,
right of partner to 106
INDEX. 591
Section
CIRCUMSTANTIAL EVIDENCE,
may prove partnership 78
CLERGYMAN,
may not be partner in England 14 n.
CLUBS,
not partnerships 37n. ,60
COL\,
partnership to make false, illegal 8
COMBINATIONS,
between carriers 444
of corporations, illegal 450
in restraint of trade, illegal 451
to affect necessaries of life, illegal -451^
statutes forbidding 454, 455
COMMERCIAL PARTNERSHIPS 37
COMMERCIAL SECURITIES,
"trusts " to invest in 440,445
COMMERCIAL "TRUSTS" 443,446
COMMISSION,
obtained by partner in partnership transaction inures to benefit of
firm 152
COMMON MEMBER,
note issued by one of two firms having 140
no action at law between firms having 200, 381
bill in equity lies between liims having 200, 381
effect of death of, in suit between firms having 201,231
action between firms having, when the common member in one is
dormant or nominal 202
action on mercantile paper given by one firm to another having . . 231
no proof in bankruptcy between firms having 381
COMMUNITY OF INTEREST. {See Pahtxers, Partnership.)
must exist in the property or proceeds resulting from joint-doing, to
make that partnership property 58
may be in profits only, and not in property 63
COMPANY. (See Joint-stock Companies.)
COMPENSATION,
of a partners right to extra 155
after dissolution, partners who close up the affairs of the concern,
in general, not entitled to 155 n.
where provided for by the articles 155
where one partner is exempted by the articles from rendering his
services to the joint business 155 n.
COMPETENCY,
of persons to form partnership 11, 14
CONDITIONAL AGREEMENT FOR PARTNERSHIP,
effect of 12
CONDUCT,
which partners may require of each other 150
CONFLICT OF LAWS,
rule of, as to allowing su<t by partnership of man and wife . . . 233
592 INDEX.
Section
CONSENT OF PARTNERS,
necessary to partnership 9
CONSIDERATION,
debt of one partner sufficient to sustain a promise of partnership
to pay it 142
where a creditor agrees with a firm to discharge a retiring partner,
the mere inadequacy of the, cannot be inquired into .... 325
a new partner is not liable for old debts of the firm, unless he
assumes them for 336
admission into the firm sufficient, to bind a new partner for the
old debts of the firm, to those from whom the consideration
comes 336
must be shown for a creditor giving up a claim on the firm and
accepting a claim on one partner 389
CONSTRUCTION OF CONTRACT OF PARTNERSHIP ... 6
CONTINUATION OF PARTNERSHIP. (See Articles of Part-
nership.)
CONTRACT OF PARTNERSHIP (See Partnership, Articles )
CONTRACTS,
power of one partner to bind the firm by 115
between partners arising before the partnership 187
between partners arising after the partnership 188
of partners under seal ... 237
where a deed is substituted for a simple contract 237
made with one partner for the benefit of the firm 238
when the partner entering into the contract may sue alone . . . 238
by a partnership for insurance 239
with a firm may be exchanged for another, only by consent of all
parties 240
between the new partner and the old firm that the new partner shall
become responsible for the old debts of the firm, valid between
the partners, but not valid as to the creditors 336, 337
CONTRIBUTION,
demand for 198, 198 n.
professional jjartnership not distinguished here from trading part-
nership 198 n.
when claimed for some transactions separate from the partnership
accounts 198 n.
can be claimed only for an actual payment of a joint debt . . . 198 n.
whether it may be maintained by one partner against his copartner
for payment of judgment founded on a tort 105, 198 n
CONVERSION. (See Trover.)
COPARTNERS. (See Partners.)
COPARTNERSHIP,
form of articles of Appendix
(See Partnership.)
COPYRIGHTS,
may be held by partnership 182
INDEX. 593
Section
CORPORATION,
cannot be partner 24, 450
may be empowered by charter to form partnership ...... 24
defective liability of stockholders in , . . . 56, 57
used for purposes of " trust " ..."....„.,., 439
may sell assets to " trust " 450
COSURETY. (See Surety.)
COUNTERFEIT BILLS,
partnership to make, illegal , • . . . ..,,.... 8
COURTS OF EQUITY,
will interfere in case of dissolution, when and how . . . » . . 295
(See Equity )
COVENANT,
with one partner not to sue him will not discharge his copartners 116 Ji.
CO V' EN ANT, ACTION OF,
when it will lie between partners . . » . , „ 191 n.
CREDIT,
when given to one partner only ,...., 88
where partners agree that one shall purchase goods, and then let the
others into an interest in them 88 n.
where there is no evidence to show to whom credit was given . . 88
where, for money borrowed, a partner gives his own bill or note . 88 n.
where the creditor sold goods or loaned money to the several part-
ners on their several credit ............ 88
to exonerate other partnei's, must be given knowingly and voluntarily
to one or more exclusively ......... . . 88
where given to one partner only, same rule applies to all simjile con-
tracts, whether oral or written 88
question as to whom given, one of fact for a jury . . . . c . 88 n.
where a creditor accepts the individual security of a partner instead
of the debt of the firm , 89
where a partner uses the credit of the firm for his personal advantage,
without anthority 90
CREDIT-MOBILIER . ' 439
CREDITOR OF A FIRM,
not partner because of sharing profits 70
may sue all the firm, notwithstanding stipulations between the part-
ners exempting some 87
who became one without knowledge of agreement to exempt, may
levy execution on goods of partner exempted ...... 87
taking from one partner of a firm security of a higher nature than
the debts, when it discharges the firm 89
whether intended to accept the sole liability of a partner in discharge
of a joint debt of the firm, for a jiiiy to decide . . . . o . 89
where security of same class with joint security is accepted by . . 89
power of partner to assign for benefit of > 110, 110 n.
how far entitled to assets of firm until debts are paid 175
lien of, on property of firm 246
right of, to proceed against partner . . . , 253
right of, in real estate of partnership 276, 276 n.
agreement of, to discharge some members of the firm 298
38
594 INDEX.
Section
CREDITOR OF A FHXM — Continued.
rights of, as to retiring partner 324
(^'ee Retiring Pautner.)
not affected by private arrangements upon dissolution .... 297, 325
effect of consent of, to receive partner as debtor 325, 32(j
what amounts to consent 326, 327, 328
transfer by one, of an account against a firm, to the private account
of one partner, without the knowledge of the firm . . . 326
accepting paper of tiie new firm for a debt of the old, witli knowl-
edge of the retirement of a partner 326
what consideration necessary for a release to a retiring partner . . 326
taking new security and retaining the old 327
where he gives the evidence of his debt to one of the partners, that
he may collect it from the others 327
retaining expressly all his rights against the retiring partner . . . 327
effect of silence on part of ... 328
appropriation of payments by, upon change in firm 332
right of, to assets after decease of a partner 348 n.
must bring actions only against surviving partners 349
right of, to proceed against estate of deceased partner .... 350 n.
rights of, not affected by any disposition of his property by a deceased
partner 3.35
when delay on the part of, will be considered as a confirmation of
the provisions of a deceased partner . 355
have no claim on the assets of a deceased partner for any debts con-
tracted after his death, except what lie expressly places in the
new partnership . 355
dealing with the firm after the death of a partner, have only security
on the property of the deceased partner for the amount lie places
in the new firm 355
may lose his claim against a retiring partner for firm debts by the
assignees making themselves responsible . 379
has priority in distribution of joint estate in bankruptcy . . 382, 382 n.
whether postponed to separate creditors in distribution of separate
estate 383, 383 n.
rights in separate estate where no joint estate 384, 384 ti.
effect of assignment for benefit of creditors 385
what proof in bankruptcy may be made by secured 386
in case of insolvency of his debtor may give up his security and
prove his whole debt, or obtain what he can from his security
and prove the balance 386, 389
who are, as distinguished from creditors of partner ...... 387
may have tlie partnership security, and also several securities of the
partners, as sureties for the debt 388
where the liabilit}^ of the firm and that of the partners is concurrent,
the creditor is bound to elect which he will take 390
has precedence in distribution of firm assets over partner and over
creditors of partner 399
has no direct lien on the partnership funds for his debts . . . 402 n.
cannot file a bill to stop a partnership and wind up its concerns . 408 n.
right of, as to real estate. (See Rkal Estate of Partnership.)
to proceed against partnership property 254
INDEX. 595
Sectiox
CREDITOR OF PARTNER,
right of, to attach partner's interest in partnership property . 256, 257,
25S, 258 n.
to sell on execution partner's interest 259, 259 n.
effect of insolvency of partnership upon 201
garnishment of partnersliip debtor by 259 n.
garnishment of oilier partners by ... . 200
cannot compete with firm creditors in distribution of partnership
assets 399
CREDITOR OF PARTNERS JOINTLY, BUT NOT OF FIRM,
interest of, in firm property » . . . 248 n.
right of, to partnership assets 391
upon notes signed by partners jointly ■398
CREDITORS OF FIRM A>JD OF SEPARATE PARTNERS,
how funds are distributed among . . . 248, 259 n., 261, 382, 383, 384
division of assets among, upon death of partner .... 350, 350 n.
joint!}' and severally, must in England elect which estate to hold . 390
but the rule is different in this country 390 n.
CREDITORS OF FIRMS WITH COMMON MEMBER,
may prove against each other 401
CROP,
agreement to raise and divide, not partnership 61 n.
CUSTOM OF LONDON,
married women as traders under 19
CUSTOM OF MERCHANTS,
law of partnership based on 2
CUSTOM-HOUSE BONDS,
Act of Congress, March 1, 1823, Stat. 2, ch. 21, § 25 . . . . 122 n.
D.
DAMAGES,
may be recovered for a breach of contract to enter into partnership . 163
from misconduct of a partner, provisions for, in articles .... 174
liquidated 174
where in fact a penalty 174
{See Liquidated Damages and Penalty.)
measure of, in action by partner against copartner for fraudulently
inducing entrance into firm 227
in action for tort by partnership against third per-
sons 241,242
exemplary, when recoverable by firm 242
DEATH OF A PARTNER,
disposal of good-will upon . . » 181, 181 n.
who was a member of two firms ; whether the bar to an action
between them is removed 231
effect of, upon action by or against a partnership 249
distribution of partnership real estate upon .... 272 ?i., 274, 275
necessarily dissolves ordinary partnership . . . . . . 299, 342, 343
696 INDEX.
Section
DEATH OF A PARTNER — Continued.
except where otherwise provided in articles 343 n.
does not dissolve mining partnership 342 n.
nor joint-stock company 343 n.
effect of, upon rights of survivors 344
upon contracts of firm 344 n
upon right of creditors in the assets 348 n.
upon actions by or against firm 349
settlement of partnership upon 350
notice of, not necessary 351
liability of estate where business is continued .... 346, 346 n., 355
of trustee or appointee of deceased 356
analogy between, and bankruptcy of partner 369
DEBT OF A FIRM,
when discharged by release of one partner 116
may become barred as to partners in the State, and not as to those
out of it ... « 126 n.
(See Limitations, Statute of.)
DEBT OF ONE PARTNER,
incurred for the partnership, but before its formation, is not the
debt of the partnership 142
is sufficient consideration to sustain a promise of the partnership to
pay it 142
DEBT OF SEPARATE PARTNER,
the property of the firm cannot be taken for 244
DEBTS,
power of one partner to contract and pay on behalf of firm . . . 116
power of partner to receive payment of ... o ...... l]|i
appropriation of partnership pi-operty to payment of . . . 244 el seq.
how the funds are appropriated to « 382
what are joint and what are several 387
when originally joint or only several, and the creditor can show
indebtedness of the other kind for the same cause, whether it
discharges the old debt or is only collateral security .... 388
whether, originally joint, have become several 388
whether, originally several, have become joint 388
originally joint, afterwards becoming several, and consent of the
creditor to give up all and retain only one, a consideration
for the consent must be proved 389
where there is a new and old for the same cause, and it is not pre-
sumed that the new has paid the old, both co-exist, and the
new is considered security for the old 389
secured by the specialty of one partner, when regarded as simple
contract debts and all the partners bound by it 407 n.
DEBTS DUE BY THE PARTNERSHIP,
appropriation of the property to 244
DECEASED PARTNER,
representative of, not a partner 9
right of the representatives of, to have an account taken .... 348
settlement of the estate of a 350
estate of, settled entirely on equitable principles 350
INDEX. 697
Sectiox
DECEASED PARTNER — Continued
whether a creditor may proceed at once against the estate of the . 350
the claims of the several creditors of, and joint creditors of the firm,
are kept distinct 350
where there is no joint fund and the surviving partner is insolvent,
the joint creditors of the firm take of the estate of the deceased
partner pari j/assu with his separate creditors 350
when the estate of a, is discharged by payment of the debt . . . 351
or by a transfer of the account 351
notice of a dissolution by death never necessary to protect the
estate of the deceased partner from the future debts of the
firm 351
may hmit the amount or proportion of his estate that shall remain
in the partnership 355
where insolvent, and the administrators permitted to sell the stock
in the usual course of trade for business benefit, and a loss
occurred, they w'ere not responsible 404
{See Death.)
DECLARATION. (See Partners, Admissions and Representa-
tions OF.)
DECREE,
for dissolution of partnership may declare that the partnership
never existed 357
(See Equity.)
DECREE OF DISSOLUTION FOR MISCONDUCT OF A
PARTNER . 357
■will be granted when the conduct is of such a nature as to expose
the other partners to important injury 358
will not be made for slight reasons 358
cases in which it would be granted 358 n.
where the mischief complained of is specific and a habit, the court
may grant an injunction instead of a dissolution 358
cases of 359 n.
DECREE OF DISSOLUTION WHERE MISCONDUCT IS NOT
CHARGED 359
for bankruptcy or insolvency 360
for any cause which takes from a partner all his ownership . . . 368
DEEDS,
where made to the partnership by the name of the firm .... 237
where substituted for a simple contract with the same parties . . 237
DETERMINATION OF DIFFERENCES BY ARBITRATION,
provisions for 170
DEVISEE,
of a partner, where it is a condition that he is to become a partner
in the firm, he must submit to the condition and offer liimself
as partner 354
DILECTUS PERSONARUM,
requisite for partnership 9, 9 «.
must always exist, both as to original partnership and reception of
a new partner 106
598 INDEX.
Section
DILECTIJS PERSONA R UM — Continned.
a partner cannot transfer his relation of partner 106
if a partner bequeaths his interest in a firm, legatee not a part-
ner 106
assignees of a bankrupt partner not partners with the other members
of the firm 106 n.
not a right of the old partners only, but of the proposed new
one 106
where the interest of one partner was sold on execution .... 257
none in mining partnership . 306 n.
DIRECTORS, (See Joint-stock Companies, and Notice.)
DISCHARGE IN BANKRUPTCY,
of partner, effect on partnership liability 376
(See Bankruptcy, Bankrupt Partner, and Covenant.)
DISHONOR,
of negotiable paper of firm, notice of, may be given to one part-
ner 101, 146
(See Notice.)
DISSENT,
of partner from partner's act, whether effectual 84 n.
(See Partners, Rights and Duties of.)
DISSOLUTION OF PARTNERSHIP,
by war 22
by marriage 20, 301 ?i., 302
effect of acknowledgment by partner after 128
waiver of Statute of Limitations by partner after 127 n.
admissions of partner after 128
issue of negotiable paper after 131 n.
may sometimes be inhibited in equity 163 n.
provisions in articles for 169
disposal of good-will upon 181 n.
right to enjoin use of firm name upon 182 n.
bill for 206
power of equity to grant 206
account ordered without 207
injunction decreed without 209 n., 210
injunction in case of 209 n., 212
appointment of receiver upon 219
by a sale of goods under execution 258 n.
by a provision in the articles 280
power of equity to decree dissolution 280
time of, fixed by articles 280, 281
fixed by implication 282
where the articles omit all reference to 282
where the agreements are only oral, or they simply agree to be
partners 282
where the partnership entered into long contracts of business . . 282
where one of several partners agrees with a stranger for a sub-
partnership 282
where formed for a single adventure 283
INDEX. 599
Section
DISSOLUTION OF PARTNERSHIP — Con/Z/iweJ.
where formed for dealing in a subject-matter certain to expire
at a certain time 283
by the will of all the partners 284, 284 n.
where contract of copartnership is under seal 284
consent to dissolution may be inferred , . 284
where there is an incorporation of the partners for the same
business , 285
general effects of 286
effects of, on the interests and rights of partners , 28G
no effect on property of partners . . 2s6
each partner, in absence of a special agreement, may compel a
final settlement 286
each partner is still liable for the debt , . . . 286
power of each partner to demand and receive payment of debts . . 287
(See Nkw Yokk Statute, April 18, 1838, ch. 257.) 287 n.
without a special agreement leaves all the partners equal iu
rights and obligations 287
winding up the concern 288
powers of each partner in case of a dissolution . . . 288, 293, 294
where power of a partner passes to his administrator 288
where there is an agreement that one shall wind up the business . 289
settlement by a partner in fraud of the firm valid as to innocent
stranger 288
duty and power of settling partners .... 290,291,292,293,294
rule as to, in Pennsylvania 291
operation of, as limiting partner's powers 291
authority given to continuing partners 293
where equity will interfere 295
power of equity over settlement 295
no partner may claim payment for his services in case of ... . 295
effect of, upon third parties . . 296
agreements between partners upon 297
where the interest in the partnership has been transferred to an
assignee 297
where the creditors consent to an agreement between partners
after 298
notice of 299
by death of a partner 299
actions and remedies after 300
effect of, on an interest held on condition that the partnership
exists 300
effect of, on a lease held by the partnership from one of the part-
ners 300
what acts dissolve a partnership 301
for outlawry 301
by a conviction for felony .301
caused by a partner passing under guardianship 303
by sale on execution of partner's interest . . 301 n., 304, 305, 306 n.
not caused by attachment or assignment of partner's interest . 304, 305
for any cause which takes from a partner all his ownership . . . 304
by a sale by one partner of all his interest to his copartner . . 304 n.
600 INDEX.
Section
DISSOLUTION OF PARTNERSHIP — Con^mwefZ.
not caused until actual transfer, if the partner retains posses-
sion 304
by a partner by his own will 306, SOfi n.
at what time and in what manner a partner may cause a . . . . '6W)
by one partner, notice of, must be given to the other partners . . 3U6
by exclusion of partners 306 n.
by transfer of partner's interest 306 n.
power of partner to dissolve, whether restricted . . 306 «., 307, 308
power of equity to prevent 308
may be made prospectively 309
method of effecting 309
notice of, at will of a partner, need not be in writing 310
by I'etiremeiit of a partner 311
by any change in the partnership 311
after, one partner dealing with a person having no. notice of,
can bind his copartner, but only in transactions in the usual
course of the firm's business 323
necessarily happens on death of partner 342, 343
unless otherwise provided in the articles 313 n.
by death, settlement of estate upon 344 et seq.
notice of, not necessary 351
where one of the surviving partners is executor to the deceased
partner, notice of dissolution should be given 351 n.
of a dissolution by decree , 357
what such a decree may provide 357
for misconduct of a partner 358
courts of common law unable to grant 3.57
cases in which courts of law might dissolve a partnership .... 357
courts of equity have full power to grant a 357
(^'ee Decrek, and Equity.)
usually for causes occurring after formation of partnership . . . 357
excluding one elected trustee in an unincorporated company may be
good ground for a 358 n.
where miscouduct is not charged 359
because continuance of business is injurious 3:)9
pecuniary inabihty of one partner to fulfil material engagements
with the other partners sufficient cause for 360
inability of a partner to do his duty to the firm, caused by a per-
manent loss of health ' . . 3fio
would be granted for insanity 361, 362, 363
insanity itself does not operate a 361 362
but if insanity were determined by due inquest, and pu])lic notice
given, it niiglit be held to operate a .... " 363
where the appointment of guardians would cause much delay, a
court of equity would receive a petition from the next friend of
the insane, and, upon cause shown, grant 363
where the contiimance of the partnership has become impracticable,
will be gr mted in equity 364
because of award of arbitrators 365
upon bankruptcy 301 n, 304, 366, 369
INDEX. GOl
Section
DISSOLUTION OF PARTNERSHIP— Con//nueJ.
takes effect by relation of time at committing act of bankruptcy 3G7
reason of . 368
results necessarily , . 371
no notice required of „ , . 372
where there are no statutes of insolvency, inability and refusal to
pay debts do not operate a . , : , 368
absconding does not operate a 368, 3G8 n.
simple insolvency, without an assignment or any judicial process,
does not work a . . 368
appointment of a receiver, in certain cases, operates a 368
in case of, must be an account if demanded by a partner or a party
in interest . 408
in a suit in equity for, and an account, alleging an agreement that
dividends of profits were to be made at certain periods, the
court may decree the payment of the sums due thereon before
the final distribution of assets 408 n.
of a limited partnership, notice should be given, unless it comes by
original limitation of time, or by some act of law 428
of a joint-stock company, a change in the members would not
operate a, as in a common partnership 435
DISTRIBUTION,
of joint estate of firm in bankruptcy 382, 382 n.
of separate estate of partner . . . . o . . 383, 383 n., 384, 384 ti,
DIVISION OF PROFITS,
provision for 172
{See Articles.)
DORMANT PARTNER,
usually understood as one both secret and inactive ..'..., 31
difference between a dormant and an open partnership .... 31 ?i.
{See Partners.)
dealing with land . . . ,. 81
liable when discovered 80 n., 81
unless they plead in abatement, an action may be maintained against
them alone 80 n.
bound by contracts of a single copartner ........ 115 n.
bound by issue of firm paper 132
non-rejoinder of, in an action by or against a firm 202
where the goods of the ostt-nsible partner are attached and another
creditor discovers a, and makes him defendant 261
where the ostensible partners were not dealt with on partnership
account „ 261
rights and obligations of, as to the real estate of a partnership . . 269
rights of, when retiring 320
necessity of notice of retirement by 320, 320 n.
(See Notice of Retirement.)
liable for debts contracted during the partnership 320
who is a new partner 339
(.S'ee Incoming Partner.)
assuming debts of old firm, whether liable to creditors 339
liability of, under Statute of Reputed Ownership 397
602 INDEX.
Section
DORMANT PARTXER— Continued.
need not give notice to cut off his personal liability for future debts;
but, qucere, how is it as to property left by him in the firm after
his retirement 397
proof in bankruptcy against partnership assets in case of ... . 4UU
on the discovery of, creditors may elect whether to proceed against
the ostensible partners alone, or against the actual firm prop-
erty 400
where non-rejoinder of, either in an action by or against a firm, is
not an objection to the maintenance of the suit 400 /(.
DOWER IN REAL ESTATE OF PARTNERSHIP,
where land is conveyed to partners as tenants in common .... 273
{See Real Estate of Paktnehship.)
DUTIES. {See Partners, Rights and Duties of,)
E.
EMBEZZLEMENT,
of partner, firm bound by 103
ENEMY,
cannot be partner 22
ENTITY,
partnership is 1, 3, 4, 46
EQUITY,
recognition of partnership as an entity by 4
will not give relief in case of illegal partnership 8 ?i.
may order "account of part of business of which the rest is illegal . 8 n.
ordinarily has jurisdiction of partnership suits 13
whether equity will give relief where security is taken of a higher
nature than the debt, determined by the intention of the
parties 89
where a partner attemf)ts to bind the firm by a specialty, but, for
want of authority, binds himself only 89
may give relief where individual obligation of partner has been
taken and firm thereby discharged 89
how it will treat the transferee of one partner's interest in the firm 112
may refuse to execute inconsistent stipulations 161 n.
will compel a specific perforiuance of articles 162
may decree a specific performance of agreement to enter into part-
nership 163
may prohibit a partner from dissolving the firm 163 n.
may decree a partnership as of a past day ■ .... 163
will not permit settled accounts to be opened without good reason . 167
(^ee Accounts.)
where one partner, in violation of his agreement, engages in busi-
ness on his own account 168
has full power to decree dissolution 169, 206
has power to remove a copartner 169
when would sustain conduct of majority not authorized by articles . 171
INDEX. 603
Section
EQUITY — Continued.
will not relieve against liquidated damages, if legally due . . . . 174
will not enforce a sale of good-will 181
questions between partners cognizable only in 199
instances of a resort to 204
when will declare the partnership void ab initio ....... 204 n.
methods and processes of, applicable in cases of partnership . • . 205
what is necessary to give jurisdiction to, in cases of partnership . . 209
will grant relief to a partnership as against third persons .... 243
power of, over settlement after dissolution 295
power of, in case of dissolution of partnership 308
power of, to prevent dissolution of partnership at will 308
how real estate of partnership is treated in 315 n.
will give relief in cases of negligence or gross mistake by surviving
partners 345
surviving partner treated as trustee to pay debts Mo n.
will not prevent surviving partners from becoming purchasers from
the representatives of the share of the deceased partner . . 345 ii.
will restrain the surviving partners from continuing in business
under the credit and risking the effects of the old firm . . . 346
in case of insanity, where the appointment of guardians would cause
mischievous delay, would receive petition from next friend, and,
upon cause shown, decree dissolution 363
will not usually interfere to decree the specific execution of an
agreement for a partnership 358 n.
where the continuance of the partnership has become impracticable,
will decree dissolution 364
will not generally enforce an agreement to refer any question to
arbitrators 364
might decree a dissolution on the award of arbitrators 364
all parties interested must be joined in suits in, whether as plain-
tiffs or defendants 375
rule in, that in bankruptcy of a firm, joint property forms a joint
fund appropriated to the joint creditors, and the several property
of each partner a several fund for private creditors .... 382
two firms having a common member may maintain an action
between themselves in 200 381
when and how, will enforce the lien of partners on the partnership
property for their claims 402 n.
may postpone a sale in bankruptcy for the general benefit of
creditors 405 n.
will compel partners to keep a correct account of all the business of
the firm in their charge 407
has full power to grant a partner or his representatives an account
407, 408
will not interfere for a breach of the partnership agreement where
law can give relief 407 n.
when, will entertain jurisdiction, although account or other action
will lie between tlie parties 407 n.
sometimes infers judicially fraudulent purposes in the settlement of
an account, from circumstances indicating it 410 n.
604 INDEX.
Section
EQUITY — Continued.
may sometimes infer an agreement between partners to settle their
accounts in a certain way, and direct the account to be taken
in a similar manner 413
(See Account, Dissolution, Injunction, Receiver, Partnership,
Bankruptcy.)
ERROR,
opening an account for 167,409,411
(See Account.)
ESTATE OF DECEASED PARTNER,
right of, to an account 345, 34.5 n., 346 n.
liability of, upon continuance of business 346, 346 n., 355
ESTOPPEL,
partner by 93
passing of property by, when entrusted to ostensible sole trader or
partner 99
EVIDENCE,
admissions of partner are, against partnership .... 126,128,129
. books of account are 129, 414, 414 n.
where the signature of the firm has been attached to a paper by a
partner when the burden is on them to show that it was
fraudulent 134
that a bill has been accepted by one partner in fraud of the firm
did not oblige the plaintiff, being indorsee, to prove under what
circumstances it was indorsed to him 137 n.
by a partnership that the note or bill on which it is sued was in
fraud of their rights 137 n.
burden of proof on creditors of the partnership to shpw that prop-
erty is partnership property 177
EVIDENCE OF PARTNERSHIP,
joint signature of note not 55 n.
circumstantial 78
general reputation 78
admissions 78
acts, declarations, and conduct of parties 78
books of account . . . ■ 78
declaration of one not competent to prove another his partner . . 78
EXECUTION,
against a partnership discharged by bankruptcy of the firm . . . 374
(See Attachment.)
sale of partner's interest in partnership on 259, 259 n.
injunction against 259 n.
dissolves partnership 301 n., 304, 305
EXECUTOR,
office of, cannot be held in partnership 39
carrying on business is a partner 74,356
not partner because of sharing profits 74
when the deceased has made his partner his executor 352
where a svn-viving partner is, he is not entitled to an allowance for
carrying on the business after his partner's decease . . . 352 n.
INDEX. 605
Section
EXECUTOR— Continued.
or trustee carrying on the business of a deceased partner pledges
his own responsibility to the creditors 356
where an, without any authority from the will, trades with the
assets, the testator's estate will not be liable in case of his
bankruptcy 355 n.
to autliorize an, to carry on a trade with the testator's property,
the most distinct authority must be given by the will itself . 356 n.
EXECUTORY AGREEMENT,
for partnership, effect of 12
EXEMPTION FROM ATTACHMENT,
of partnership property 252, 265 n.
EXISTENCE OF PARTNERSHIP,
a question of fact 6
EXPULSION OF PARTNER,
provisions in articles for 169 n.
F.
FACTOR,
not partner because of sharing profits 69
FALSE REPRESENTATION
of partner to copartner, effect of 151
FALSIFY.
meaning of 411 n.
FARM,
agreement to cultivate on shares not partnership 61 7i.
partnership to carry on, is non-trading 85, 85 n.
FARMING,
partnership for 37
FELONY,
effect on partnership of conviction of a partner for 301
{See Dissolution of Partnership.)
FEME COVERT. {See Married Women.)
FERRY,
partnership in 37 n.
FINAL BALANCE. {See Account Stated.)
FIRM,
definition of 1
may enter into partnership with firm or individual 25
FIRM-NAME,
partner binds firm in writing only by using 83, 97, 97 n.
any name may be adopted as 97
change in, does not change the partnership 97
every partnership should have one 97
need not be prescribed in the articles, or determined by agreement 97
may grow out of the custom of the firm; instances of 97
where it avoids having one 97
where there is an adopted and recognized style 97
where a partnership style has been agreed on, and another name is
also employed ; instances of 97
606 INDEX.
Section
FIRM-NAME — Continued.
coiiunon to two sepai'ate firms 97 n.
may be that of one partner 98, 98 n,
note signed by name of partner so used, whether firm note ... 98
use of name, apparently firm name, gives rise to presumption of
partnership 98
where tlie name of one partner alone is the proper name of tlie firm,
this name, with the addition of Co., will not operate as a signa-
ture of partnership 98 n.
power of partner to affix, to negotiable paper presumed .... 132
name of partner used as 1-39
provisions respecting 176
where another name is used by a partner 176
the sanction of the firm to a change in the name may be implied . 176
a firm cannot be bound by any name but its own 176
a firm may have two names 176
fictitious names prohibited by statute in New York 176
where not agreed upon in the articles .... 176
if fictitious, true names of partners to be published in Cal. . . 176 n.
if not determined by articles, depends upon usage of firm . . . 176
where attempted to be used by an executor of a deceased partner . 181
right to use, whether property 182, 182 n.
stranger may be restrained from using 182 n.
use of, after dissolution 182 n.
injunction to restrain wrongful use of, by partner 214
action allowed by or against firm in, by statute 250
of limited partnership must be stated in certificate 424
FIRMS HAVING A COMMON MEMBER,
can be no action at law between 200
may be in equity 381
in an action against one, the other cannot be summoned as a
trustee 200 n.
demands between them 200
FISHING,
partnerships for 37
FORM,
of articles of copartnership Appendix
FRAUD,
vitiates agreement for partnership 10
prevented by rule that partner acting within apparent scope of
authority binds firm 87
of partner no defence in action against firm 87
discharges firm as to one with notice 90
fraudulent use by a partner of the name or property of the firm, 87, 90, 90 n.
presumption of, never absolute 91
but not rebutted by knowledge of the other partners that the obli-
gation of the firm had been applied by one partner to pay his
own debt 91 n.
of partner, copartner when held for 100 n., 102, 105 n.
partner committing, by transfer of property, effect on title . . . 108
of partner, effect of, on firm paper issued by him 133
INDEX. 607
Section
FRAUD — Continued.
effect of, on title to property given in payment of individual debt . 13G
does not bind the firm unless ratified 136
in release of firm debt makes release void 136
effect of, on distribution of firm and separate estates in bankruptcy, 394-397
FRAUDS, STATUTE OF. (See Statute of Fkauds.)
FREIGHT,
combinations to maintain rates of 444
FUNCTIONS OF A TRUST 438
FUNDS, JOINT OR SEVERAL. (See Debts.) 387
G.
GAMBLING,
partnership for, illegal 8
GARNISHMENT,
of debt due to firm cannot be made by creditor of individual
partner 259 n.
of copartners by creditor of individual partner 260
GENERAL PARTNER,
what is 34
in limited partnership, liability of- 423
rights and duties of 423
infant may be 423 ti.
name of, must be included in certificate 424
GENERAL PARTNERSHIP 40
GOOD-WILL,
is a species of partnership property 181, 181 n.
nature of 181 n.
how transferred 181 n.
how disposed of on dissolution 181 n.
obligation of partner selling, as to establishment of new business . 314
sale of, will not be enforced in equity 181
when realized by the executor of a deceased partner 181
as to professional ])artnerships 181
when a retiring partner " sells out " 314
goes to the survivors of a firm, without payment therefor on their
part 347
GROSS EARNINGS. (See Partner.)
GUARANTY. (See Suhety.)
to one partner inures to benefit of firm, when 119
partner has no authority to enter into, on behalf of firm .... 144
unless required by nature of business 144
to firm, effect of change of firm upon 236
where transferred from the firm to a partner, or from a partner to
the firm 240
GUARANTY AND BOND OF INDEMNITY,
change in the firm discharges the surety 236, 236 n^
608 INDEX.
Section
GUARDIAN,
office of, cannot be held by partnership 39
when a partner is put under guardianship, his guardian becomes
tenant in common with the other partners 303
GUARDIANSHIP,
of partner causes dissolution • • • 303
(See Persons under Guardianship.)
H.
HEIR,
of partner, interest of, in real estate of partnership 274, 275
{See Real Estate.)
HOLDING OUT,
liability as partner because of 82, 93
what constitutes 94
must be with consent of him held 95
HUNTING,
partnerships for 37
HUSBAND,
liability of, as partner in business owned by wife 21, 55
partner with wife, in foreign country where allowed, suit by . . . 233
of female partner cannot claim right of admission to firm .... 302
I.
ILLEGAL OBJECTS,
which make a partnership void, instances of 8
whether our courts would take notice of a breach of foreign law . . 8
ILLEGAL PARTNERSHIP 8
whether account will be taken in case of 8 n.
cannot sue 243
IMPOSSIBILITY. (See Dissolution.)
INCAPACITY OF PARTNERS. (-See Dissolution.)
INCOMING PARTNER,
definition of 38
addition of a partner in law terminates the former copartnership . 33
where one is received and treated as incoming partner 106
liable for all subsequent debts of the firm 336
not liable for the old debts, unless he assumes them for considera-
tion 336, 336 ?j.
may assume debts of old firm 33?, 337 n.
not liable for goods ordered before but not delivered until after he
enters the firm 336 n.
where goods are sold to a firm, and it is dissolved, and one of the old
partners unites with a new one and forms a new firm . . . 336 n.
admission into the firm is consideration enough to bind him to those
from whom the consideration comes 336
INDEX. G09
Section
INCOMING PARTNER— Con/mued
a contract between, and the old members of the firm, that the incom-
ing partner shall be liable for the old debts, like the other mem-
bers of the film, valid as between the partners 330
not bound to creditors of the old firm by a contract with the old
members to become responsible for them 337
not bound to the old creditors, unless on a promise for consideration,
which may be express or implied 337
circumstances that would warrant a jury in finding an assumption
of the old debts by an 338
no difference in regard to an, who is a dormant partner, except that
a known ])artner is liable on the credit he gives as well as his
interest, and a dormant partner on his interest only .... 339
if he is a dormant partner, and agrees to assume the debts, he stands
in the same position as a known partner who assumes them . . 339
not liable for the rent on a lease of real estate taken by the old firm 337
but if he joins with the old partners to pay an increase of rent, he
will thereafter be liable for such an increase 337
where the bargain between the partners is that he shall be a partner
as of a preceding day 340
creditors of old firm may in some jurisdictions hold, when he has as-
sumed debts 337 n.
not when partnership merely dated back 340
INDORSEMENT,
of firm, power of partner to affix, to paper owned by firm .... 145
firm when bound by 145
INFANCY,
effect of plea of 18
INFANT,
incapacity of, to enter into partnership 15
may be a partner in a mercantile house, his father supplying the
capital \b n.
promise of, voidable and not void 15
may be ratified by him after full age 16
ratification may be express, or implied by his acts, or inferi*ed by
law 16
statutes respecting 16
a mere acknowledgment that the debt exists is not always a ratifica-
tion of the promise to pay 16
where an infant enters a partnership as an adult, and does not with-
draw after he comes of age 16
right of, to avoid his contract gives no right of avoidance to the
other contracting party 17
privilege of avoiding extends to his legal representatives .... 17
a decree of bankruptcy against an infant void at law 17
where a contract is made with a firm, and one of the members, who
is an infant, repudiates his liability 18
may be general partner 423 n.
INFANT PARTNER,
assumption of debts by. after coming of age 341
39
610 INDEX.
Section
IXFAXT TARTSER— Continued.
if, on corning of age, he repudiates his liability for debts of a part-
nership, must repudiate as to the profits 341
when he comes of age, may escape the obligations of the firm, under
plea of minority 341
uhen, by remaining in the firm after full age, he confirms the debts
contracted during his minority 341
may not claim a share of the joint funds of the old partnership and
forbid an application of it to the firm debts 341
INHERITANCE OF REAL ESTATE OF PARTXERSHIP.
(See Real Estate of Paktnership.)
INJUNCTION,
a decree for, when and how granted 209
power of equity to decree an injunction 209
when equity will grant injunction 209
upon dissolution 209 n., 212
may issue without a dissolution 209 n., 210
to restrain a partner from using the partnership property im-
properly 211
form of the order for 211 n.
where, the partnership having been dissolved, one of the partners
attempts to carry on the former business in a way injurious to
the former partners 212
where an account has been settled between the partners 212
where, on settlement, it is agreed that a partner shall not carry on
a certain trade within certain limits 213
where one partner carries on a business injurious to the partner-
ship 213
where a partner makes use of the name of the firm in any wrongful
way 214
where one of the partners has deceased 215
will not be granted at the instance of one partner after judgment at
law against the firm 216 «.
against third persons 216
preliminary, when granted 217
against sale of partner's interest in firm property on execution . 259 n.
how obtained. {See Equity.)
INQUISITION OF LUNACY. (See Insane, and Insanity.)
INSANE,
incapacity to enter into a partnership . 23
a verdict of inquisition of lunacy has no retrospective influence so
as to affect any honest transaction which took place previous
to it 3G3
INSANITY,
a ground for a dissolution of a partnership 361
whether it does of itself dissolve the partnership 362
when determined by due inquest and public notice given, it might
per se operate a dissolution 363
INSOLVENCY OF PARTNER,
causes dissolution 301 n , 304
INDEX. 611
Section
INSOLVENCY OF TAUT^ER — Continued.
does not of itself operate as dissolution 368
declared by law. (See Bankkuptcy.)
INSOLVENCY OF rAKTNERSHIP,
effect of, upon remedy of creditor of individual partner .... 262
INSURANCE,
of partnership property 180
when made void by change in firm 180
may be effected by a single partner 119
enures to whose benefit 239
action by firm on policy of 239
by one partner in his own name 239
INTENTION,
true test of partnership 54, 56
INTEREST,
on advances, when partner may claim 156
rate of 157
when allowed on account 417
INTERSTATE COMMERCE ACT 444
INTOXICATION,
agreement for partnership avoided by temporary 23 n.
INVESTMENT,
"trusts," for o . . . 440,445
J.
JOINDER OF PARTIES. (See Actions.)
JOINT CREDITORS,
in England, are entitled to prove under a separate commission, for
the purpose of voting in the choice of assignees 385
in this country, they may not 385
who are 387
where a partner owes a balance to the firm, cannot prove it against
his several fund, unless the balance is caused by a fraudulent
abstraction from the joint funds 399
where they elect to proceed against the several estate of a partner,
the several creditors of the latter may proceed against the joint
fund for an equal amount 400
who are not partnership creditors may attach firm assets and sell
the whole 248 n.
may not come on firm assets in bankruptcy 391 n.
JOINT ESTATE,
where larger at the time of bankruptcy on account of any fraudu-
lent act against one partner, his several creditors may proceed
against it for that amount 399
JOINT LEGATEES,
whether partners 77
JOINT PROPERTY,
what is 392
612 INDEX.
Section
JOINT AND SEVERAL NOTE,
of firm and partners HI
JOINT-STOCK COMPANIES, Ch. XVIII 431
married women as shareholders in L'l
what is 40
transfer of share in 107
validity of 107 n., 431
not dissolved by death of member 343 ?«., 435
regulated by statute in England 431
are subject to the law of partnership 431
where all the property is in the hands of trustees, and the share-
liolders under an indenture which declares the trust liave an
equitable estate 431
characteristics of 432
usually have a common name 432
what right they have to change their name 432 n.
may have their by-laws and rules of proceeding by which they regu-
late the election of officers and the transaction of business . . 432
cannot have any common seal, and therefore cannot make a deed of
any kind 432
in England, they are bound by contracts made by a competent board
of directors 432 n.
cannot limit their liabilities and become a corporation or a limited
partnership by their own act, without compliance wiih the re-
quirements of the law 433
effect on creditors of agreement between stockholders 433
of rules of company 433
the directors, unless restrained by statute or the deed of settlement,
have all the authority given to partners at common law . . 433 n.
a member of, liable precisely as a partner 434
a member of, may recover compensation for services rendered the
company previous to his having become a member of it . . 434 n.
an action cannot be maintained between a joint-stock company and
one of its members 434 n.
change in the members would not operate a dissolution .... 435
respects in which they are like a partnership 435
right of stockholder in, to transfer his interest 435
position of transferee of stockholder's interest 435
analogy of, to mining partnership 436
JOINT TENANTS,
whether partners 76
JUDGMENTS,
an unsatisfied judgment against ostensible partner may be pleaded
in bar to a suit for the same cause against both ostensible and
secret 81
where obtained against one partner 89
where confessed by one partner against his firm 125
JURISDICTION,
of partnership suits .... 13
INDEX. 613
L.
Section
LABOR,
may be the only contribution of a partner 63
{See Partneusuip Property.)
LABORERS,
partnerships of 37
LAND,
partnership to deal in 38, 67
contract for partnership to deal in, need not be written . . 6, 12, 38
dormant partner in speculations in 81
partnerships to deal in, are non-trading 85 n.
" trust " to purchase and improve " 440
belonging to partnership. {See Real Estate of Partnership.^
LAW,
presumption that all persons dealing with a partnership know the
law of partnership 160
(See Action at LAW^)
LAW MERCHANT 131
(See Custom of Merchants.)
LAWYERS,
partnerships of 37, 62
are non-trading 85 n.
good-will of firm of 181
LEASE,
belonging to firm, renewal of, by partner inures to benefit of
firm 152, 158 n.
made to partners, effect of, on the retirement of one partner . . . 300
of real estate held by a firm, a new partner coming in after the lease
would not be liable for the rent 337
LEGACY. (See Legatee.)
LEGATEE,
where property is left to two or more persons by will, and they take
hold and use it as partners . 77
where the will contained expressions which would give the property
the quality of a joint-tenancy 77
of interest in firm not a partner 106, 354
(See Devisee.)
LESSOR,
not partner because of sharing profits 71
LEVY. (See Attachment.)
LIABILITIES,
arising fi'om annuities. (See Statute of Vict.)
where it arises from loans 70
where money is lent to a firm for more than legal interest .... 70
arising from loans where money is lent to a firm and the lender is to
receive a certain share of the profits 70
arising from loans ; what is the test of partnership in such cases . 70
arising from leases 71
where an owner of a farm lets it out on half profits ; this does not
constitute a partnership 71
614 INDEX.
Section
LIABILITY,
as partner, grounds of 80
for all acts of copartner within scope of business 81
because of interest 81
because of holding out 82, 93
beginning of 9-
where sought to be put upon one who is only a nominal partner . 82, 93
where persons have the same firm name, and do the same business,
liable to inference of identity of partnership 94
where one is a partner in a house for a particular business and the
other partners carry on another business 94
declarations or acts tending to show that the parties are partners
may make them Uable as such to third parties 94, 95
must be shown to be consented to by nominal partner 95
where a person not publicly declared to be a partner is held out as
such, with his consent, to one customer 82
LIE^^,
power of partner to claim, on behalf of firm 119
of partner on partnership property 183, 402 n.
of creditors on partnership property 246
LIMIT AT lOX,
of partner's authority by agreement 84
by trade usage 85, 85 n., 120
by nature of transaction 86
statute of, 9 Geo. 4, ch. 14 126 n.
{See Statute of Limitations.)
LIMITED PARTNERSHIP 40,421
special partner in, need not give notice of withdrawal .... 320 n.
purpose of allowing, to be formed 421
definition of 421
general principles of 422
principles of the statutes of the several States in regard to . . . 423
general partners in 423
certificate of 424
unless all the requirements of the statutes respecting, are complied
with, the partners will all be liable as general partners . . . 424
capital of 425
must not be reduced during the partnership 425
position of special partner in 426
in New York, an arrangement of the firm for preference among
their creditors, or to provide for a special partner as a creditor,
is void 426
all suits must be brought by and against the general partners, un-
less the special partner has become a general partner by a viola-
tion of law or otherwise 427, 428 n.
but if the plaintiff seeks to hold the special partners beyond their
limited liability, he must join them 427
if renewed after its expiration by its original limitation, there must
be a renewal of the certificate, publication, and record . 427, 427 n.
different ways in which it may be dissolved 428
notice of dissolution of 428
INDEX. 615
Section
LIMITED PARTXERSrnP— Continued.
when defects in tlie certificate, or in publication of record, or in any
compliance with the requirements of law, if merely formal, do
not vitiate 429
if substantial, they leave all liable as general partners 429
affidavit -to accompany the certificate of, need not follow the exact
words of the statute 429 n.
certificate of, prbaa fuck evidence of its own truth, but cannot rebut
positive testimony of its falsehood, on any matei-ial point . . 429
may be funned f(n' what purposes 430
LIQUIDAl'ED DAMAGES,
when courts will disregard agreement for 174
when courts will sustain agreement for 174
must be agreed upon for one distinct breach only 174
{See Damagks.)
LIQUIDATING PARTNER 289, 289 u.
power of, to contract 290
miscellaneous powers of , .... 291
power of, to deal with negotiable paper 292
having express authority may act upon it 293
power of, to do acts necessary for winding up 294
cannot claim compensation for services 295
LOAN,
share of profits as interest on 70
LONDON. {See Custom of London.)
LOSS,
community of, whether essential to partnership 59
how shaied by partners 173
caused by breach of duty by one partner, effect of 151
LUMBERING,
partnerships for 37
LUNATIC. {See Insanity.)
M.
MAJORITY OF THE PARTNERS,
power of 147
in dealing with third persons 148
in reference to the partners themselves 149
may do all things within scope of business 149 n.
may not change location of business 149 «., 161
provision in articles for power of 171
as to excluding partner 281
MALICE,
of one partner, firm when bound by 102
MANAGING PARTNER,
must act in good faith toward his co-partners . . .... 150 n.
MANUFACTURING,
partnerships for 37
616 INDEX.
Section
MARRIAGE,
of female partner causes dissolution , . • . . 302
MARRIAGE BROKERAGE,
partnership for, illegal 8
MARRIED WOMEN,
cauuot be partners 19
powers of, by custom of London 19
where a man never lived in that State of the Union in which his
wife resides 19 n.
when wife of alien 19 w.
statutory powers of .... 20
where a single woman is a member of a firm, her marriage dissolves
the partnership 20
ownership of share in business by 21
where a wife holds shares in a joint-stock company ...... 21
where a man's wife inherits an interest in a partnership .... 21
where the property was given to trustees for the sole benefit of the
wife 21
in partnership with husband in foreign country where allowed, suit
by 233
MECHANICS,
partnerships of 37
MERCHANTS,
notion of partnership held by 3
custom of. (See Custom of Mekchants.)
MILL,
partnership to carry on, non-trading 85 n.
MINE,
partnership to work, is non-trading 85, 85 n.
MINING PARTNERSHIP,
nature of 37 n.
no fiduciary relation between partners in 158 n.
no illlectus per.sonarum in 306 n.
not dissolved by transfer of partner's interest 306 n.
not dissolved by death of partner 342 n.
analogy of, to joint stock company 436
MISAPPROPRIATION,
of borrowed money by partner no defence for firm 87 h.
MISCONDUCT OF A PARTNER,
provisions for, and damages for 174
MODIFICATION,
of articles by consent 164
MONEY,
contribution of, as capital 63
MONOPOLY,
illegality of 451, 452
MORTGAGE,
power of partner to 109, 110 n.
of surviving partner to Ill n.
"MUNICIPAL TRUST" 440
INDEX 617
N.
Section
NAME OF FIRM. {See Firm-Name.)
NECESSARIES OF LIFE,
illegality of combinations to affect 452
NEGLIGENCE,
of partner, loss caused by, must be borne by him 151
NEGOTIABLE PAPER,
law of, devised from law merchant 131
power of one partner to hind firm by issue of 131
authority of partner to issue, presumed 132
after dissolution 131 n.
issue of, by partner in fraud of firm 133
waiver of notice by one partner where the note is made for his own
benefit 133
defences of partners to 132
presumed to be valid in hands of third person 134, 135
given in payment of individual debt of partner does not bind firm
134, 1.34
unless ratified by firm 134 ?i.
when taken with knowledge that it was given for the debt of one
partner only, presumed in this country to have been taken
fraudulently 133, 134
with the firm name, where the transaction is fraudulent, effect
of 134 n.
given by one partner, when consent of the others may be im-
plied, without a new consideration 134 n.
bearing the signature of the firm given by a partner to a third
party for his own debt, effect of 133, 134
doctrine of the English courts in reference to this 135
where given by one partner in payment of his separate debt, and
for a larger amount than the debt, effect of 135
issued in fraud of firm does not bind it to holder not for value, or
with notice 137
of one partner, firm when liable on 138, 139
■where received bearing only the signature of one partner, effect
of 138
credit given on, only to those whose name it bears 138
where usage of the firm is to sign by only one partner 139
where signed in a fictitious name, if authorized or adopted by the
firm, effect of 139
may be signed by one partner, so as to hold all jointly and himself
severally 141
of one of two firms connected in business and using the same name,
effect of 140
indorsing of paper which does not belong to the firm, by one who is
a partner: presumption against authority so to indorse it . . 143
given by partner for accommodation, firm not bound by ... . 143
power of partner to indorse 145
notice of dishonor of. may be given to one partner for the firm . . 146
given by one firm to another having common member, action on . 231
618 INDEX.
Section
NEGOTIABLE T AVER— Continued.
indorsed by the firm to one partner 23i
action on, against firm by indorsee of partner 234
necessary parties in action on 237
who must sue on 237
promissory note indorsed in blank 237
power of licjui dating partner to deal with 2D2
signed by all partners, whether debt of firm 398
a person taking, on the credit of several i^ersons, in ignorance of the
fact that they are partners, may prove against the parties
severally, or against the firm 398
where taken wuth knowledge that the names were the names of
partners 398
NET PROFITS. (See Partners.)
NOMINAL PARTNER,
ostensible partner a nominal one also 29
usual meaning of this designation 29, 93
may be called by his partner as a witness 29 ?i.
how different from dormant 29 n.
converse of the secret partner 29
liability of 82
as party to suit 96
where obliged to pay the debts of the firm, may recover from the
firm 189 n.
NON-TRADING PARTNERSHIP 85
NOTE,
signed by single partner, his name being firm name, whether binds
firm 98
of firm given by partner for private debt unenforceable . . 91 n., 134
partner may waive demand and notice on 119
to partner, how far valid 184 n.
of partner, copartner may sue at law upon 190
{See Nkgotiable Paper; Promissory Note.)
NOTICE,
of limitation of partner's authority, whether effectual . . . 84, 84 n.
of a stipulation to one member of a firm is notice to all . . . . 84 n.
where a partner gives notice to a particular person, or the public
generally, that he is not responsible for the acts of the others . 84 n.
where the fact that a partnership is engaged only in a particular
trade is known, this is a limitation of the authority of a
partner; instances of 8r>
to one partner, firm when bound by 101,129
of dishonor to one partner is valid 146
to one partner after dissolution, valid, if there was no
notice of the dissolution 129
to one of the joint indorsers of a note who are not
partners, not sufficient 129 n.
to one of joint lessees, sufficient if they are partners; otherwise,
not 129 n.
NOTICE OF RETIREMENT OR DISSOLUTION,
must be given by retiring partner 299.315
not necessary in case of dissolution by act of law 315 n.
INDEX. 619
Section
NOTICE OF RETIREMENT OR DISSOLUTION — Con^mue^/.
as in case of death or bankruptcy 351, 372
manner of giving 316
as to former customers and new customers 317, 317 n.
rule as to 317
by public advertisement enougVi for all but customers . . . 317, 317 n.
personal notice necessary to customers 317, 317 n.
actual knowledge on part of customer enough 318
when unnecessary 318
whether a person has, a question of fact 318
there must be dealing with the firm directly, in order to entitle a
person to, as a customer 319
what dealing would entitle a person to 319
as to a dormant partner 320, 320 n.
as to a dormant partner, when known to any customer 320
governed by rules applicable to notice in other cases 321
in what manner it should be given 321
must be such as the usage of merchants requires 321
must be reasonable 321
what circumstances will dispense with 322
by the notoriety of the act 322
cases in which a jury might infer 322
when given in a newspaper 322
given to one of a partnership, binds the firm 323
to an agent, binds the principal 323
where given to a stockholder in a corporation 323
where casually given by advertisement to a director of a bank . . 323
where given to a director expressly for the bank 323
in case of the death of a partner not necessary 351
not necessary in case of bankruptcy 372
of limited partnership 428
NOVATION,
in case of partnership debt 240
by consent of firm creditor to accept partner as debtor . . . 325, 326
o.
OBLIGATIONS,
of the partnership. (See Contracts; Partners; Partnership.)
OFFICES,
no partnership in ^9
if held by two persons, governed by rules distinct from part-
nership ^^
(See Partnership.)
OSTENSIBLE PARTNERS,
who they are '^'
■when held out as partner with his consent 27
620 INDEX.
Section
OSTENSIBLE PARTNERS— Continued.
no especial way of holding such partner forth 27
where a partner generally unknown is made known to any one
man 27
power of, to pass property 99
when contract with, does not survive to a dormant partner . . . 23G
{See Nominal Partner.)
OUTLAWRY,
of partner operates as dissolution 301
OWNERSHIP,
questions as to the, of goods, effects, or lands, determined by the
general principles of the law of contracts 392
P.
PAROL,
whether contract of partnership may be proved by 6
PARTIES,
in actions by or against firm 235, 237, 238, 239, 249
nominal partners as 96
dormant partners need not be, in suit by or against a partnership . 202
in actions by or against firm after dissolution 3U0
after death of a partner 349
after bankruptcy of partner 375
in actions by or against limited partnerships 427
(See Actions.)
PARTNERS,
legal position of 4
relation between partnership and 5
must consent to formation of partnership 9
purchaser of partner's interest does not become partner .... 9
effect of provision of articles as to 9
representative of deceased or bankrupt, not a partner 9
must be competent to contract II
any persons competent in law and fact to transact business on their
own account may become partners 14
competency of, in law and in fact 14
limited in number by statute in England 14 n.
clergymen as, in England 14 n.
infants as 15
ratification by 16
effect of avoidance of partnership by 17
married women as 19
statutory powers of 20
in joint-stock companies 21
husbands as, in business owned by wife 21
aliens as 22,232
alien enemies as 22
insane persons cannot be 23
INDEX. 621
Section
PARTNERS — Continued.
corporations as 24
firms as 25
kinds of 26
ostensible 27
secret 28
nominal 29
silent 30
dormant 31
sleeping 31
retiring 32
incoming 33
general 34
special 35
who are (Ch. V.) 41
an agieement to participate in profits raises a strong presumption
of partnership 51, 65
but is not decisive 51, 52
one or more may be guaranteed by the otheis against loss .... 59
if one does not participate in profits, but is liable for losses, may
still be a partnership 59
must be a community of interest for business purposes 42
clubs for social and charitable purposes not partnerships .... 60
there must be a comumnity of interest resulting from the work
done 61
may be as to the buying of goods and the sending of them abroad,
and not in the return cargo 61
when physicians or lawyers are 62
effect of the bargain where it was provided that one should find all
the money, and the other do all the work, and the profits be
divided 63
each need not bring into the common stock labor and property . . 63
difference between an undertaking by a number of persons jointly
with intent to diminish a loss, and one for the sake of profit . 64
if a known partnership enter into a bargain for purchase, sale, and
joint profit, with a third party, for a single transaction, all" are
partners, but only as to that transaction 66
a person receiving a specific proportion of profits as wages or com-
pensation for sei-vices, is not made thereby a partner .... 69
so of a person working land, sailing a ship, hiring an inn, for a
share of the profits 71
same person may be a partner in distinct firms 79
who are, as to third parties (Ch. VI.) 80
persons may be held as partners as to third parties who are not so
between themselves 80
general grounds of liability 80
an absolute liability for the whole of every debt due from the firm
rests upon each partner 80
a person may be charged either because he is a partner, or because
he has been held forth as such with his knowledge and assent 80, 82
but only to those who have trusted the firm on his credit .... 82
secret and known partners equally liable 80
622 INDEX.
Section
PARTNERS — Continued.
wheu a partner is liable as actual partner 81
authority of, to bind partnership 83
how far stipulations between, affect third parties 84
where parties enter into a contract of partnership, and also stipula-
tions which in whole or in part deny or qualify the liability of
some of them 84
•where stipulations between partners are made known to third parties
they, generally, are affected by them 84
where there is a provision in articles that the partners would not
come under liabilities, nor confer on each other rights and pow-
ers belonging to partnership 84
stipulations unknown to third persons inoperative as to them . . 84
in relation to the business of the firm, every partner has full power
to bind all the members of it 83
but he binds the firm only when he acts in and uses the name of the
firm 83
authority of each partner, usually only an implied one 84
inference of authority of each partner cannot be made when dis-
claimed by act and word 84
it is a question of fact, whether an alleged partner has disproved the
evidence of authority on the part of his partners 84
a person may not at the same time secure the gains of partnership
and guard against its losses 84
custom in Continental Europe to designate one of a firm, in a circu-
lar, as the partner having power to sign their name to negotiable
paper 84
limitation of authority of, by trade usage 85
by nature of transaction 85n.,86
in non-trading firm, authority of 85, 85 n.
scope of authority of 85 ?i., 86
acting beyond scope of authority binds himself So n.
reason why all are bound by acts of one 87
firm may permit a partner to act for the firm, in his own name . . 87
if a partner exempted by agreement is made to pay any loss, he can
recover it from his copartners 87
where a partner, in violation of his stipulations as partner, enters
into a contract with a third person, effect of 87
where a person deals with a fraudulent partner, in an ignorance
which implies gross negligence on his part, effect of ... . 87
partner binds firm by declaring a transaction within scope of busi-
ness to be for partnership 87 n.
effect of giving credit to a single partner 88
firm whether bound by sale to a single partner 88
by loan to a single partner 88
effect of taking note of individual partner 88 n., 89, 89 n.
where a creditor of a firm takes a judgment or bond against an osten-
sible partner 89
attempting to bind the firm by a specialty, but failing 89
(See Equity.)
where using the credit of the firm for personal advantage, without
authority 90
INDEX. 623
Section
PARTNERS — Continued.
partner does not bind firm by giving firm property in payment of
individual debt 90, 136
unless authorized by firm 91
where propeity is purchased by one partner in his own name with
funds of the firm 90 n.
a fraudulent use of the firm's name should be at once repudiated . 91
partner cannot give note of firm in payment of private debt unless
authorized Ql n., 134
rights of seller who discovers that the orderer of goods and the
receiver to whom he sent them wei-e partners in the transaction 92
where the orderer and receiver were not to enter into partner-
ship until the products which had been ordered were manu-
factured 92
where a person liable because he is held out as such .... 93, 94
where conversations and acts are insufficient to prove a partnership
as between the partners, if third parties are not interested . 94, 95
every one authorizing another to believe him a partner, is liable as
a partner as to such person 95
in assumpsit by a firm, plaintiffs must prove who constitute the firm 98
of the eifect of using such a name as usually indicates a partnership
98, 98 n.
a partner with authority to act for the firm, whose name is used as
the name of the firm, may by his representations bind the firm
to an innocent party, however fraudulently he may act towai'ds
the firm 100
liable for tort of copartner in course of business 100, 102
notice to one, firm when bound by 101
when liable in sali'lo for the frauds of other partners, want of evi-
dence that money raised by the fraud of one of the partners
was applied to the use of the firm will not relieve the others
from liability 102
where a partner steals money and deposits it to partnership account,
and innocent partners not liable 103
assumpsit for money had and received might lie 103
wheie it was the business of the firm to receive goods on deposit,
and one of the partners stole some of the goods so deposited,
firm liable 103
embezzlement or breach of trust by. charges firm 103, 104
where one of the firm, a trustee, applies the trust fund to the use of
the partnership, firm liable if other partners knew and assented;
whether liable if they did not know and assent, not settled . . 104
to whom goods were consigned for sale, liable for the pledge thereof
by a fraudulent jiartner 105
where, from the nature of the tort committed by one partner, it is
shown to be only a several act, firm not liable 105
when liable in soVulo for tort, may be sued either jointly or severally 105
charged for tort of copartner may have contribution 105
a release to one operates as a release to all 105 n.
case, the proper action against partners for injuries by their servants
105 n.
a person must become such by his own act 108
624 INDEX.
Sfxtion
PARTNERS — Continued.
rights and powers of 106, et seq.
right of choice of copartner 106
assignment of interest in business by 106, 107
bequeathing interest in firm does not make legatee partner . . . 106
consent to assignment of interest by, given in advance .... 107
right of, to transfer property 108
power of, to sell firm property 108, 108 n.
to pledge or mortgage firm property 109, 110 n.
to convey property in payment of debts 110
to assign property in trust for creditors .... 110, 110 n.
one has no exclusive right to any one particular portion of the stock
of the partnership 112
how partnership property owned by 112
may sell his interest in the firm 112
right of, to purchase for firm 113, 113 n.
foundation of powers of 114
general extent of powers of 114
power of, to make contracts 115
to borrow, lend, and pay debts 116
to receive payment of debts 117
to conduct legal proceedings 118
to insure 119
to accept guaranty 119
to waive demand and notice on firm note 119
to vote on corporate stock owned by firm 119
when a transaction by a partner with a stranger is foreign to the
business of the firm, what duty of inquiry is on the stranger . 120
tepresentationx and admissions of,
to bind the firm, must be in the business of it and during
its existence 126
if the partnership is in existence, a partner may revive a debt
barred by the Statute of Limitations 126, 126 n., 127, 127 n.
but aliter if partnership is dissolved 127, 127 n
after a dissolution, how far may affect former copartners . 128
after dissolution, as to balance of account 128 n.
relating to the business of the firm bind it 129
admissions of one not competent evidence of partnership
to all 95, 129 n.
but binding on him 95, 129 n.
if a partner has not received his certificate, his admissions,
though made after bankruptcy, may bind the firm . . 129 n.
where some of the firm are dormant 129 n.
of one who is not a party to the suit in which they are offered
in evidence 129 n.
binding on firm, if relating to the transaction of its business 129
effect on firm of notice to, or knowledge of 129
authority of, to vary business of firm 130
to issue negotiable paper (see Negotiable Paper) 131, et seq.
effect of fraudulent is 5ue of firm paper by 133, 134, loo
effect of fraudulent transfer of firm property by 136
release of firm debtor by, in fraud of firm 136
INDEX. 625
Section
PARTNERS — Continued.
agreement by, for payment of private debt by firm credit . . . 136 n.
firm when bound on individual note of partner 138
name of partner, when used as firm name 139
becoming party to negotiable paper jointly and severally with
copartners 141
debt of, before beginning of partnership, not a firm debt .... 142
have no authority to sign firm note for accommodation .... 143
to issue guaranty in name of firm . . 144
power of, to indorse firm paper 145
to indorse name of firm on private negotiable paper . . . 145
notice of dishonor of negotiable paper of firm may be given to 146
duty of, toward copartners 150
must exercise good faith toward copartners .... ... 150
partner must make good loss caused by his fault, when .... 151 "
must not deceive copartner 151
must not make secret advantage 152
partner obtaining goods for the partnership by barter of his own
goods, effect of 152
may not transact independent business in competition with firm 150 n., 1 53
may examine accounts of firm 1.54
whose duty it is, must keep proper accounts 154
must communicate important transactions to copartner .... 154
right of. to extra compensation 155, 155 n.
when liable for interest on advances 156, 157
how far trustees for the firm 158
with the concurrence of all. may alter the terms in which they carry
on business, at pleasure 164 n.
where one may refuse to pay to the firm money he owes . . . . 166
where money is advanced by the firm to one 166
provision in articles for advances by . . " 166
premium paid by 166
provisions in articles as to giving time and skill by 168
provisions in articles for expulsion of 169 ?i.
division of profits by 172
sharing of loss by 173
liquidated damages for misconduct of 174
provisions in articles for appropriation of property to 175
right of. to carry on business after sale of good- will .... 181 n.
after death of copartner 181 n.
lien of, on firm property 183
remedies of, against copartners 184. et nfifj.
cannot sue or be sued by the partnership Ib4
cannot sue copartner at law on partnership claim . . . 185, 185 n.
one partner may not maintain an action against the partnership, for
his expenditures for the firm 185 n.
no account between, can be taken at law 18") ;/.
may sue each other on affairs not connected with partnership . . 186
but not for money received on partnership account, unless all the
accounts are adjusted 185
may sue each other at law on a claim arising before the partnership,
although referring to it 187
40
626 INDEX.
Section
PARTNERS— Co/!?t?nierf.
on personal loan 186, 187, 188
on demand arising before partnership is launched .... 187
on demand arising after termination of partnership . . . 188
on contract to assume and pay debts of firm 188 ?i.
on affairs separated by agreement from partnership affairs . 190
on his individual note 190
on certain clauses of the agreement for the partnership . . 191
on agreement to enter into partnership or make advances 191, 191 n.
on agreement to pay a salary or commission 191
for money had and received for specific purpose .... 192
for balance of an account stated 193, 194, 195
for over-payment of balance 196
on contract to render account 197
for contribution, when 198, 198 n.
in trover or detinue 226
for fraud in securing entrance into partnership 227
may sue copartner in equity usually 199, 204
on demand between firms having common member 200, 201, 202
for specific performance of articles 20.5
for dissolution 206
for account 206, 207, 208
for injunction to restrain misconduct of copartner . . 209,211
for injunction before dissolution 209 ?«., 210
for injunction after dissolution 209 n., 212
for injunction to restrain wrongful carrying on of business . 213
for injunction to restrain wrongful use of trade-name . . . 214
for receiver (see Receiver) 218, et seij.
issue and trial at law may be ordered 225
for tort of partner 225
to rescind partnership agi-eement for fraud 227
tort of, may give partnership a cause of action against stranger . . 203
taking exclusive possession of property ground for dissolution and
receiver 219
suing copartner, statute of limitations in case of 228
effect of discharge of third person by, upon action by firm . . . 230
may indorse note of firm running to himself to a stranger so as to
give right of action 234
must join in action by firm, though he has transferred his
interest 235
agreement between, cannot affect the liability of their debtor . . 235
remedies against 244
separate property of a partner liable first to separate creditors of
the partner 248
effect of death of. upon action by or against a partnership .... 249
whether liable personally on judgment (by statute) against partner-
ship in the firm name 250
right of partnership creditor to proceed against 253
each partner liable in soli'lo for the whole partnership debts . . . 2.53
right of creditor of, to proceed against partnership 254
right of, in the partnership property defined 255
right of, to disencumber his interest from the rights of the others . 255
INDEX. 627
PARTNERS — Continued.
may sell out his interest to a stranger 255
such sale and transfer will not liberate his share from the debts of
the firm 255
right of creditor to attach interest of partner 256
to take advantage of private agreements between part-
ners 257
method of attaching interest of 258, 258 n.
of selling interest of, on execution 259, 259 n.
garnishment of, by creditor of copartner 260
effect of death of, upon real estate of partnership . . 272 n., 274, 275
right of widow of, in partnership real estate 273
right of heir of , in partnership real estate 274,275
power of, over real estate of partnership 277
cannot convey real estate by deed 277, 277 n.
except by consent of copartners « . . 277 n.
deed of partnership land by, binds himself 277 n.
deed by, passing legal title to land of partnership to purchaser for
value without notice of rights of firm, bars the firm , . . . 278
effect of dissolution of copartnership on rights of 286, 291
on power of, over firm debts 287
empowered on dissolution to wind up the concern 287
authority of, in winding up the concern 288
settling or liquidating 289, 289 n.
cannot claim compensation for services in settling affairs of partner-
ship 295
dealing with, by third party after dissolution protected .... 297
dissolution by outlawry of 301
by marriage of female 301 n., 302
where a single woman is a, and marries, her husband cannot
claim to be admitted as a partner 302
by death of 301 n.
by bankruptcy of 301 n., 304
by sale on execution of interest of 301 «.. 304
by insanity of 301 n.
by guardianship of 303
not caused by attachment of interest of 304, 305
by pledge or assignment of interest of . . 304, 305, 306 n.
exclusion of, from business operates as dissolution 306 /*.
embezzlement or absconding of, operates as dissolution . . . 306 n.
power of, to dissolve partnership for a term 306 //
to dissolve partnership at will .... 306, 306 «., 307, 306
effect of agreement by, to pay debts of firm . . 324, 325, 326, 327, 328
right of creditors of firm against estate of 350 n.
notice of death of, not necessary 351
surviving copartner created executor of 352
power to, of appointing successor in firm 353
appointee of, becomes partner only by his own consent 354
liability of estate of 355
of executor or trustee of 356
fraud of, in inducing partnership is cause of dissolution . . . 357 n.
dissolution for misconduct of 358
628 INDEX.
Section
PARTNERS— Continued.
dissolution for inability of, to fulfil agreements 360
for insanity of 361, 362, 363
effect upon, of bankruptcy of copartner 370, et seq.
continuing business on bankruptcy of copartner 373
effect of discharge in bankruptcy of copartner upon liability of . . 376
power of, over assets upon bankruptcy of copartner 377
cannot prove against estate of bankrupt copartner .... 378, 379
except in case of fraud 380
each partner is liable for all the debts of the firm ; but as a principal
debtor for his own share, and as surety for the other partners
for the remainder 378
where one is defrauded into advancing money to become a, and the
fraudulent party becomes a bankrupt 380
effect of bankruptcy of firm on separate estate of 385
distribution of estate of, between firm and private creditors 383, 383 n.,
384, 384 n.
■who are creditors of, and who of partnership 387
assumption by firm of debt of 388, 389
distinction between assets of, and of firm 392-397
rights of, to property owned in his own right cannot be affected by
allowing the firm to employ it on terms satisfactory to them
and in perfect good faith 393
a transfer of property from the partnership to a partner in good
faith, and without any expectation of bankruptcy, will be valid 393
where the several, in a firm, appear before the world as distinct
traders 398, 401
cannot compete in bankruptcy with creditors of firm . . . 399, 399 n.
creditors of, cannot compete in bankruptcy with firm creditors with
regard to firm assets 399
have precedence in distribution of firm assets over creditors of co-
partner 402
lien of, on the partnership effects, for the balance due them, enforced
by a court of equity 402 n.
Interest of, in a foreign enterprise not lost by the seizure of the goods,
provided any part of them be restored 403
where resident in different countries between which w^ar breaks out
and the firm property seized by one country and compensation
made to the partner resident there 403
right of, to an account 406
right to an account is a legal one 406, 406 n.
may transfer his right to an account to his representatives . . . 406
duty of, to keep accurate accounts of all the business of the firm
under their charge 407
an action will lie between, where a balance of accounts is struck 407 n.
cannot sue each other at law for any business or undertaking of the
partnership 407 n.
but may sue each other at law for a breach of any distinct engage-
ment in the partnership agreement 407 n.
trustees in a commercial " trust " are 446
effect of death of. {See Death of Partner, Survivixg Part-
ner.)
INDEX. 629
Section
VART'SERS— Continued.
general. (See General Partner.)
incoming. (See Incoming Partner.)
power of. (See Power of Partner.)
retiring. (See Retiring Partner.)
special. (See Special Partner.)
PARTNERSHIP,
definition of ' 1
law of, a system by itself 2
origin of law of 2
known to Romans 2
Roman law of, how far similar to common law 2
mercantile idea of ■ 3
how far recognized as an entity 4
relation between partners and 5
agreement to form 6
to begin in futuro Q n.
may be made by agent 6
none, until some joint transaction has been undertaken .... 6
sealed agreement, whether necessary 6
written agreement, whether necessary 6
maj' be proved by parol, when 6
existence of, a question of fact; what it is, a question of law ... 0
agreement for, whether within Statute of Frauds 6
to deal in land, whether written agreement necessary for .... 6
to continue for more than a year, whether written agreement neces-
sary for 6 n.
effect and construction of agreement for 6
may grow out of transactions or relations between parties, without
express agreement 8
must be formed for a legal purpose 8
distinction between a partnership for objects mala in se, and one for
objects only 7?(a/« /)ro^«6j7a . . . . ' 8 n.
contract of, must be voluntary 9
no person can be introduced into a firm without the consent of all
the members of it 9
consent may be implied, or inferred from acts 9
where articles of copartnership provide that a copartner may transfer
his interest in the firm to a third person, who by force of the
transfer becomes a copartner 9
an agreement to admit a new member into a partnership does not in-
vest him with the character of a partner 9
contract of, avoided and annulled by fraud or coercion 10
contract of, must be made by competent parties 11
■when it begins, usually determined by contract of 12
presumption of law that it began when the written articles were
executed 12
express stipulation, in contract of partnership, that it should have a
retrospective effect, could not make th- m partners as to third
persons, except from date 12
not created until all the conditions of the agreement are fulfilled . 12
when it begins, where implied by law from certain transactions . . 12
630 INDEX.
Section
PARTNERSHIP — Continued.
jurisdiction of actions concerning 13
may be formed by whom 14
is dissolved by marriage, when 20
by war, when 22
may itself enter into another partnership 24
purposes and kinds of 37
may be for buying and selling land 38, 67
for buying and selling land, affected by the Statute of Frauds . . 38
(See Statute of Frauds.)
to exercise an office 39
general and special 40
limited 40
an instance can seldom if ever occur of universal partnership . . 40
the rights and obligations of partnership exist only so far as the
partnership extends 40
no distinct dividing line between general and special 40
test of 41, e< seq.
sharing profits once regarded as test of 42, 43, 44, 49-52
is an entity 1, 46, 184, 247
and agency, difference between 46
inter se and as to third persons, distinction between 48
right to account as test of 53
intention true test of 46, 54, 56
inferred from control of business 55
joint signature of note no evidence of 55 n.
requisites of 58, 59
must be for purpose of realizing profit 60, 61
may exist for other purposes than buying and selling; as professional
partnerships 62
where a product arises from a contribution to the common stock of
different things by the different partners 63
where such a product is to be divided between them and not for sale,
there is no partnership in the product 64
relations held not to constitute 64
typical form of 65
in a single transaction 66
proof of 78
in several distinct firms 79
non-trading 85
whether bound, where credit given to single partner 88
beginning of liability 92
when it begins with the effect of casting upon the members the
liability of partners 92
where a person purchases goods upon his own credit, and it is after-
wards discovered that they have been applied to the use of a
partnership 92
where no partnership is in contemplation when the goods are
obtained 92
may have whatever name the partners choose . . 97
bound by admission of partner, when 126, 128, 129
by waiver of Statute of Limitations by partner, when . 126, 127
INDEX. 631
•Sectiox
PARTNERSHIP— Con^muet/.
bound by notice to partner or knowledge of partner 129
of the power to vary the business of 130
where a partner enters into a new branch of business in the name of '
the firm 130
bound on note by signature in usual form 139
not liable for debt incurred before it comes into existence .... 142
every person dealing with, is presumed to know the law of . . . 160
agreement to form, sometimes enforced in equity 1G3
renewal of 1G5
where limited to a certain time continues after that time without
new articles, or a formal renewal of the old ones, presumption
that old articles continued in force, except as to limitation of
time 165
continued on old articles is dissolvable at the will of either
partner 165
how far recognized as quasi corporation 184
cannot sue or be sned by a partner 184
action at law upon agreement to enter into 191 ?i.
may sue third party though the demand is founded on tort of part-
ner 203
bill for specific performance of agreement to enter into . . 205, 205 7i.
where the fact of, is disputed 225
has same legal remedy as person 229
how affected by discharge of debtor by one partner 230
effect on right of action of membership of alien in 232
of partnership between man and wife 233
of transfer of interest by one partner to another 234
suit against, by partner's indorsee, on firm note 234
necessary parties in action by 235
all partners must join, though their interests are transferred to
copartners 235
effect of change in, upon guaranty to firm 236
upon contract with firm . 236
necessary parties in actions on covenants 237
on negotiable paper 237
on simple contracts 238
on contracts of insurance 239
effect of novation on obligation of 240
remedy of, for tort 241
damages recoverable by, for tort 242
right of, to equitable relief 243
illegal, cannot maintain action 243
appropriation of property of, to payment of debts 244
nature of interest of, in property 245
lien of creditors on property of 246
is owner of property 247
how far recognized as owner of property at law 248
property of. (See Phoperty.)
suit by or against 249
may not sue or be sued by name 249
except when allowed by statute 250
G32 INDEX.
Section
PARTNERSHIP — Continued.
place uf residence of 251
exemption from attachment of property of 252
right of creditor of, to proceed against partner 253
of creditor of partner to proceed against 254
where a partner's interest in the firm property has been attached
for a private debt 258
effect of insolvency of, upon proceedings by creditor of partner . . 261
cannot hold the legal title of real estate, but may the equitable
title 267
extent and duration of 279
once formed presumed to continue 279
dissolution of, how it may take place 279
for term of years 280
for a term conditioned as to length 281
time of dissolution fixed by implication 282
for temporary purpose 283
for single adventure 283
may continue by express or implied agreenient 283
dissolution of, by mutual consent 284, 284 n.
by incorporation 285
effect of dissolution of, on rights of partners 286
on power of partners over firm debts 287
winding up 288
power of equity to settle affairs upon dissolution of 295
causes for dissolution of, by act of law 301, et seq.
dissolved by marriage of partner who is a single woman .... 302
at will . 306, 306 n.
continued beyond original term is at will 306
dissolution of 306, et xeq.
(See Dissolution.)
effect of change in 311, et fseq.
change of membership puts an end to 311, 312
effect of dating back 340
dissolved by death 342, 343
unless otherwise provided in the articles 343 n.
dissolution of, by suit 357, et aeq.
may be declared void from beginning because of fraud 357
whether dissolved by insanity of partner 361, 362
where one person is a member of two firms, whether and when one
firm can prove in bankruptcy against the other 381
where one firm is liable for the joint debts of another, it cannot
prove against the estate of that firm, in competition with the
creditors 381
who are creditors of 387
assumption by, of debt of partner 388, 389
distinction between property of, and of partners 392, 393
where any person holds his property out as partnership property . 395
whether debtor on note signed by all partners 398
upon dissolution of, each partner has a lien on the partnership
effects for his indemnity, and for his proportion of the
surplus 402 n.
INDEX. 633
Section
PARTNERSHIP — Continued.
where some of the lueiubers of a firm carry on an entirely distinct
business, and the two firms deal witii each other, in case of
bankruptcy one may prove against the other 401
or the creditors of either may prove against its own fund .... 401
joint-stock company is 431
" trust " for investment is not 445
for carrying on business is 446
agreement. (6'ee Articles of Copartnership.)
limited. (5ee Limited Pautneuship.)
real estate of. (6'ee Real Estate.)
PART-OWNERS OF SHIPS,
more than ordinary tenants in common, but not so much as partners, 76
PATENT,
joint owners of, whether partners 76
obtained by partner for invention made in business hours does not
inure to benefit of firm 153 n.
held by partnersliip is its property 182
term of partnership to deal with 283
PAYMENT,
effect of, to a partner after dissolution 297
payment to partner who is insolvent, effect of 297
to the executor of a deceased partner 297
PAYiMENTS BY A FIRM,
after the death of a partner, when one of the firm is executor of the
deceased, shall not be considered as payments by that partner
as executor, if they have the effect of barring the Statute of
Limitations 352
PENALTY,
for wrong-doing, cut down to a compensation 174
PERSONAL PROPERTY OF A PARTNERSHIP.
{See Property. OF Firm.)
PERSONAL REPRESENTATIVE. {See Executors.)
PERSONS UNDER GUARDIANSHIP,
spendthrifts 23
drunkards 23
when agreement for partnership avoided by temporary intoxication, 28 n.
cannot continue partners 303
PHYSICIANS,
partnerships of 37, (52
firm of, is non-trading 85/1.
good-will of firm of 181
PLACE OF BUSINESS,
may not be changed by majority of partners 149 n.
PLAINTIFF,
making a bankrupt partner who has been discharged a defendant
will have judgment against all the partners but him .... 375
PLEA OF INFANCY,
effect of 18
PLEDGE,
power of partner to 109, 110 n.
634 INDEX.
Section
FLFA)GE — Continued.
of suiviviiig partner Ill n.
of partner's interest does not operate as dissolution 304
POLICY OF INSURANCE. (See Insuranck.)
POLITICAL COMMITTEE,
not partnership 60 n.
POOLING 444
statutes forbidding 454, 455
POSTMASTER,
office of, cannot be held in partnership 39
POWER OF A PARTNER,
to transfer share in business 106, 107
to transfer property 108
to sell property of firm 108, 108 n.
to pledge or mortgage property of firm 109, 110 n.
to transfer property in payment of debts 110
to assign in trust for creditors 110, 110 n.
to purchase for firm 113, 113 n.
foundation of 114
to bind the firm in the regular course of the business . 114 n., 116, 120
rests on property as well as agency 114
general extent of 115
how qualified 115
to make contracts 115
to borrow and lend 116
to pay debts 116
to receive payment of debts 117
to compromise debts 117
to release a debt 117
to represent the firm in legal proceedings 118
to release an action 118
to release the acceptor of a bill from an action on it by the firm 118 n.
to give time to a debtor 118 n.
under the bankrupt laws 118
to insure 119
to accept guaranty « .... 119
to waive demand and notice on firm note 119
to represent firm or stock owned by it at meeting of corporation . . 119
to claim statutory lien 119
to appoint agent 119
to act as agent for firm 119
limitation of, by usage 120
to submit to arbitration 121
where such submission would be held obligatory 121
to affix Sfal must usually be under seal 122, 122 n.
exists in bankruptcy 123
to make sealed release 123
to authorize an agent to bind the firm by the discharge of a debt
due it 123 n.
effect of seal where contract valid without it 123 n., 125
to confess judgment 125
INDEX. 635
POWER OF A FART-SER — Continued. Section
to bind firm by represeutatious or admissions 126, 128 129
to waive bar of Statute of Limitations 126, 126 n. 127
after dissolution 127 n.
to vary business of partnership 130
exceeding his authority binds himself, though not the firm . . . 124
in submitting to arbitration 121 n.
in affixing seal 124;
in confessing judgment 125
to issue negotiable paper (see Negotiable Paper) . .131, et seq.
POWER OE APPOINTMENT,
when given by the articles 353
if no agreement is made between the partners to that effect, no one
has any 353
POWERS OF A MAJORITY,
provisions for 171
where given by articles 171
■will not be extended by implication 171
confined to matters in the conduct of partnership business . . . 171
acting under articles, in case of difficulties between partners . . . 171
(See Ma.iokitv.)
PRELIMINARY INJUNCTION,
may be obtained by partner against copartner, when 217
PREMIUIM,
agreement to pay, on entering firm 166, 166 n.
for admission into partnership, what is 418
return of, when ordered 418, 419
PRESUMPTION,
of fraud, never absolute 91
(See Fraud )
PRESUMPTIONS OF LAW,
where a partner gives an obligation of the firm for a debt due by himself 90
where a partner releases a debt due to his firm, in consideration of
the release of a debt due by him 90
that a person who is charged as partner, because held out' as such,
was so held out with his own consent 95
in favor of an equality of interest in case of partnership property . . 179
(See Partnership Property.)
may be rebutted by evidence of modes of dealing from which a con-
tract may be implied 179
that an infant remaining in a firm after full age confirms the debts
contracted during his minority 341
PRINCIPAL. (See SurV.ty.)
PRINTING,
partnership in business of, non-trading 85 n.
PRIVATE CREDITOR,
suit, attachment, and levy of, against a partner personally indebted
to him 254
can secure the right his debtor has, and only that 254
may attach the interest of the debtor partner in the partnership
property 255, 256
636 INDEX.
Section
PRIVATE CREDITOR — Continued.
attachment of interest of a partner by his private creditor, when
avoided in favor of joint debtor . 256
where he attaches a definite portion of the partnership goods . • . 256
how far affected by a private agreement between partners .... 257
when he may attach a partner's separate interest 258
when and how he may levy on the partner's interest in the copart-
nership property 258
manner of enforcement of his right 258
purchaser at a sale by execution of a partner's interest would not be
a partner 259
attachment of a partner's interest by his separate creditor avoided
by insolvency of the partnership 261
in case of a dormant partner 261
may not prove in bankruptcy, under a joint commission for the pur-
pose of voting in the choice of assignees 385
where a firm is indebted to one of the partners, his private creditor
may not prove his debt against the joint fund 399
of a partner may proceed against the joint estate at bankruptcy, if
it is larger on account of any fraudulent act against that partner 399
where joint creditors elect to proceed against the several estate of
an ostensible partner, and not against the joint fund, private
creditors of tliat partner may proceed against the joint estate
for an equal amount 400
PROFESSIONAL PARTNERSHIPS 62, 132 «.
good-will of firm 181
PROFITS,
sharing of, whether test of partnership 42, 43, 44
distinction between gross and net as test of partnership .... 50
purpose of realizing, essential to partnership 60, 61
and loss, agreement to share, the typical form of partnership ... 65
receipt of share of, not necessarily proof of partnership .... 69
provisions in articles for division of 172
what are 172 n.
in absence of provision, to be equally divided 172, 172 n.
right of partner to sue copartner for share of 184 n.
PROMISE,
where new, and no new consideration 89
PROMISE OF INFANTS. (See Infants.)
PROMISSORY NOTE,
where given in the partnership name partly for a partnership debt
and partly for a separate debt of one of the partners . . . . 90 n.
where the language of, is, "I promise to pay," but it is signed by
the partnership name 97 n.
where on its face it purports to be the act of one partner, and made
to secure his individual debt 97 n.
when made or indorsed fraudulently 133, 137
joint and several by all the members of the firm, not a partnership
note . . . .' 141
in case of insolvency signed by some of the partners only, effect of . 141
if indorsed in blank may be sued by any holder, in his own name . 237
indorsed by a firm before dissolution, but negotiated afterwards . 292
INDEX. 637
Sectiov
rROMISSORY l^OTE— Continued.
eifect of parol autliority to continuing partners to sell note made to
the tirm before dissolution 293
(See Nkgotiable Papeu; Note.)
PROOF,
of partnership 78
PROPERTY OF PARTNERSHIP,
given in payment of individual debt of partner cannot be
beld 90, 90«.,136
unless authorized by firm 90 n., 91
or ratified 91
may be passed by ostensible partner or sole trader 99
right of partner to transfer 108
transferred fraudulently by partner 108
power of partner to sell 108, 108 n.
to pledge or mortgage 109, 110 n.
to transfer in payment of firm debt 110, 110 n.
to assign in trust for creditors 110, 110 n.
power of surviving partner to transfer Ill
interest of individual partner in 112
each partner owns the whole, subject to the rights of the others ; and
no one can commit burglary or larceny on the property of the firm 112
power of partner to transfer individual interest in 112
proportional interest of partners in 112, 179
may be insured by one partner 119
partner cannot buy for his own benefit 158 n.
provisions of articles for division of, between partners 175
what is 177
in general, whatever belongs to firm 177
personal . . . . i 177
how distinguished from individual property of partners . . . . 177
when property becomes 177
consists of 177
property given or devised to a partner does not thereby become . . 177
seized in time of w^ar, and afterwards one partner's share restored
to him ; the goods restored held never to have lost their charac-
ter of 177 n.
where a personal office is purchased with partnership funds, for the
benefit of the partnership 177 n.
title to, how held ' 1^8
interest of partner in, what 178
division of. between partners 178
proportional interests of partners in '- • • 179
insurance of 180
the good-will of the business is partnership property . . . 181, 181 n.
trade-name, whether partnership property 182, 182 n.
trade-marks are so 182
lien of partner on 183
appropriation of, to payment of debts 244
interest of partnership in, is true ownership 245, 247
theory of lien of partnership creditors on 24()
638 INDEX.
Section
PROPERTY OF PARTNERSHIP— Con^mMe(7.
how far ownership of partnership in, is recognized at law .... 248
interest of assignee of partner in 248 n.
division of, between creditors of firm and of partners 248
effect of transfer of, to one partner 248 n.
exemption from attachment of 2o2
division of, among the partners 252
right of creditor of partner against 254
partners' interest in 254
possession of, whether delivered upon sale on execution of partner's
interest in 259 n.
surviving partner lias right to possession of 344, 344 n.
interest of surviving partner in 345 n.
of partnership creditors in 348
and of partners distinguished 392
may be distinguished by appropriation 393
fraud in such appropriation 394-397
can be no division of, until all the accounts of the partnership have
been taken 408 n.
{See Real Estate.)
PROVISIONAL COMMITTEE,
a new member of a, not liable for services performed after he joins,
if the order had been given previously to his joining . . . 336 n.
PROVISIONS OF ARTICLES.
{See Articles.)
PUBLIC PARTNERS,
how different from ostensible 27
PUBLICATION OF RECORD OF LIMITED PARTNERSHIPS.
{See Limited Partnership.)
PURCHASE,
by one partner in the course of their regular business binds the
firm 113
PURCHASER,
of partner's interest does not become a partner 9
provision of articles concerning 9
of a partner's interest in a firm, under execution, not made a partner
thereby 259
right of, to call for an account 259
Q.
QUASI PARTNER ; 93
R.
RATES OF FREIGHT,
combinations to maintain 444
RATIFICATION,
by adult of acts done while an infant 16
of act of partner in affixing seal for firm 122 n., 123
INDEX. 639
Section
REAL ESTATE OF PARTNERSHIP,
power of partner to transfer 108
may be dealt with by partnership 053
Atuericaii law less conservative than English 264
becomes partnership property, when and how 265
firm may deal in 265 n.
nature of interest of partnership iu 265 n.
of partner in 265 n., 272 n.
exemption of, from attachment 265 n.
legal title to, in partners 265 n.
form of deed conveying 265 n.
if title to, held by partner, it is for firm 265, 265 n.
what necessary to prove interest of partnership in . . 265 n., 269, 267
not always material how bought, or how conveyed to the partner-
ship 265
■will not be presumed to belong to one partner 266
ownership of, determined by intention of the partners 267
title of, in law, cannot be held by a partnership 267
interest of partnership in, how regarded at law 268
legal title to, a question of record 269
no partner can convey real estate not held of record in his name . 269
where devLsed by the legal holder 269
as to dormant partners 269
who must convey 269
interest of partneiship in, regarded as personalty in equity . . . 270
how far converted into personalty 271, 272, 272 n.
rule in England 271
to whom it descends in England 271
American rule 272
distribution of, upon death of partner 272 n.
dower in 273
English rule, as to dower 273
American rule 273, 273 n.
■where the property passes out of the partnership to a stranger . 273 n.
inheritance of 27rl, 275
the heir holds as trustee for the firm of their creditors 274
when it cannot be sold to pay debts until the personal property is
exhausted 272 ?i., 274
no survivorship in 274 n.
power of surviving partner over 274 n.
conveyed to partners as tenants in common, and one of them
dies 274
lands conveyed to partners as joint tenants 274
land devised to partners for partnership purposes 275
right of creditors of the firm to its real estate 276, 276 n.
personal estate first applied to the payment of the debts .... 276
death of a partner holding the firm's real estate 276 n.
right and power of the partners as to the real estate of the part-
nership 277
one partner may not transfer the real estate of the firm .... 277
where a partner sells his interest in, to a stranger 277
effect of deed of, by one partner 108, 277 n.
640 INDEX.
Section
REAL ESTATE OF PARTNERSHIP— Con^muerf.
conveyance of, to a stranger 278
conveyed by the partner holding the legal title, to a purchaser without
notice, for value 278
is considered in equity as part of the partnership stock, and subject
to partnership debts 345 n.
may not be claimed either by the widovp or heirs of a deceased part-
ner until the claims of the firm creditors are satisfied . . . 3i5 n.
surviving partners have an equitable lien on, for the debts of the
firm 345 n.
where purchased by the general partners of a limited partnership . 429
RECEIVER,
may be had by partner, when 218, 218 n.
a decree for, its effect 218
appointment of, ousts a partner from all control . 218
appointment of, when and why made 218
exclusive possession by one partner is not of itself sufficient cause for
appointment of 218
■who will be appointed 218 n.
after dissolution 219
where the party applying for, has the property in his own pos-
session 219 n.
appointment of, temporary 220
where appointed to wind up a business 220
application for, addressed to the discretion of the court 221
may be appointed, although there is only one acting partner . . . 221
who may be appointed 222
appointment of partner as 222
may earn interest on the money, if not prevented by the terms of
the appointment 222
practice on appointment of 223
powers and duties of 224
takes possession of property 224
whether authorized to sue 224
the property which a receiver takes into his possession .... 224 n.
trustee of all the assets for the firm creditors 224
rule governing a receiver 224
will not be appointed on death of partner, where survivor is re-
sponsible and acts in good faith 345 n.
appointment of, in certain cases, operates a dissolution 368
RELEASE,
of debt to one partner discharges the partnership, when . . . . 116
where two are arrested on a joint ca. sa., and the plaintiff's discharge
of one of them is a discharge of the other 116 n.
of one partner of a joint debt, to have the effect of discharging the
firm, musi. be under seal 116
to one partner may be accompanied with such conditions as to pre-
vent its discharging the firm 116 n.
partner may make, under seal 123
by partner in fraud of firm, void 136
where given by one partner for a consideration which is known to
inure only to his own benefit 136
INDEX. 641
Section
RELEASE — Continued.
of a debt of the firm by one partner 230
where an assignment of property has been made 234 n.
RELIGIOUS SOCIETY,
not a partnership 60 n.
REMAINING PARTNER. (See Retiring Partner.)
REMEDIES BY PARTNERS AGAINST THIRD PARTIES,
Ch. IX 229
for breach of contract 229
two firms having a common partner 231
where a party has a defence against one of the partners .... 230
where a partner releasing a debt is a dormant partner 230
REMEDIES OF THIRD PERSONS AGAINST THE PART-
NERSHIP AND AGAINST PARTNERS, Ch. X ... 244
RENEWAL OF PARTNERSHIP 165
by tacit continuation of business 165
when a tacit renewal, it is dissolvable at will of either partner . . 165
(See Partnership.)
renewal of limitation of time seldom presumed from acts .... 165
of limited partnership 427, 427 n.
RENT,
share of profits in lieu of 71
REPRESENTATIONS OF PARTNER,
competent to prove him such 78
not competent to prove another his copartner 78
effect of 126, 129
after dissolution 128
REPUTATION,
whether admissible to prove partnership 78
REPUTED OWNERSHIP,
statute of 395
REQUISITES,
of partnership 58, 59
RESIDENCE,
of firm, what is 251
RESTRAINT OF TRADE,
illegality of combinations for 451, 452
RETIRING PARTNER,
one leaving an existing firm 32
in law, retirement of any partner terminates a partnership ... 32
how retirement affects the liability of 313
neither loses property nor relieves himself from liability .... 313
if he pays more than his share of the old debts, may have contribu-
tion from his partners 313
where he " sells out " 314
may set up the some business in the immediate vicinity, in the
absence of any agreement 181, 182, 314
effect of promise of, not to carry on the same business 314
how he may terminate his liability for the partnership debts . . . 315
notice of retirement must be given by 315
manner of giving notice of retirement 316, 321
41
642 INDEX.
Section
RETIRING PARTNER — Continued.
difference in liability of, as to old and new customers . . . 317, 317 n.
rule as to notice of retirement 317
^vhere knowledge is equivalent to notice 318
consenting to a use of his name by the old partners 318
where a dormant partner 320
notice of retirement by, must be reasonable 321
what circumstances dispense with 322
must be given to whom 323
by notoriety 322
sufficient lapse of time may supply want of notice 322
cases in which a jury might infer knowledge of the retirement . . 322
whether discharged from liability by co-partner's agreement to pay
debts 324
right of action against remaining partners for breach of contract to
pay the debts 324
when discharged by creditors 325, 326
agreement between him and those who remain, of no effect as to
creditors 324
should be included in any action against the firm, for a debt con-
tracted while he was a partner 324
execution against the firm may be satisfied from property of . . . 324
where held only as surety for the firm debt 327
where a creditor retains the old securities against the firm . . . 327
where a creditor expressly retains his rights against 327
the creditors receiving interest from the new firm will not neces-
sarily discharge , 328
facts from which a jury might find an implied assent to discharge of 328
liability of, for trust money used in the partnership by one partner,
with the knowledge of all 329
when discharged by appropriation of payment 330
when a partner puts into the firm the money of a stranger, this does
not make the stranger a partner 329
liability of, for existing debts 331
not liable for debts created after his retirement 331
when money is paid after his retirement, right of the new firm to
appropriate it 331
not bound by an appropriation of payment, fraudulent or injurious
as to him = 331
where the new firm, for adequate business causes, appropriated the
funds of the old firm to the payment of new debts 331
when permitted to prove his claim against a bankrupt partner . . 379
where he has a covenant with the remaining partner to pay all the
debts, and the remaining partner becoming bankrupt, he pays
them, may prove them against the bankrupt's estate .... 380
who leaves his property in the possession or at the disposal of the
firm, liability of 397
must give notice of his retirement, and of the purposes and limita-
tions under which he leaves his property in the firm .... 397
leaving some of his property with the firm, and giving notice that
the property so left is his, and not left for the firm to obtain
credit on, may protect it from future creditors 397
INDEX. 643
Section
RIGHTS OF PARTNER,
to choice of copartner 106
to property I77
ROMAN LAW OF PARTNERSHIP o
partnership recognized as entity by 4
power of partner to dissolve partnership by 307
S.
SAILOR,
not partner because of sharing profits of voyage ^ 69
SALARY,
partner may sue copartner at law on agreement to pay 191
SALE,
of partner's interest, effect of 9
provision of articles concerning 9
on execution of one partner's interest 304
secret, unaccompanied by possession, is prima facie fraudulent and
void as to creditors of the firm 395, 396 n.
of the effect, in a bankruptcy 405
where only a part of the partners are bankrupt, the assignees have
no right to sell 405
but the court will decree a, if the assignees request it for a good
cause 405
may be decreed as a preliminary proceeding, or means of making
account 420
(See Assigning and Transferring Property.)
SALE OF PARTNERSHIP PROPERTY.
(See Dissolution.)
SCOPE OF BUSINESS,
partner acting within, binds firm 85, 85 n.
apparent 85 n.
act beyond, does not bind firm 86
SEAL,
whether necessary on partnership agreement 6
power of partner to affix 122, 123, 124, 125
belongs to the common law, while partnership belongs to the law-
merchant 123
when regarded by courts as surplusage 123
liability of partner who affixes 124
SECRET PARTNERS,
who are 28
the word " Co." not necessary to bind all the partners 28
why liable 28
where announced to a customer, without his own consent .... 28
where he permits himself to be made known 28
liable upon all the acting partner's contracts, made within the scope
of the partnership business 80, 81
(See Dormant Partner.)
644 INDEX.
Section
SECURED CREDITORS,
proof in bankruptcy by 386
SECURITIES,
" trusts " to invest in 440, 445
SECURITY,
several security of one partner, accepted by a creditor holding the
joint security of the firm, does not discharge the firm . ... 89
where a partner disposes of security belonging to the firm, for his
own debt 136
SELL,
power of partner to 108
SELLER,
of goods to one who orders them sent to another, who is in fact his
partner 88
{See Partners.)
SEPARATE CREDITOR. {See Private Creditor.)
SERVANT,
not partner because of sharing profits 69
SERVICE OF PROCESS,
against firm, how made 118
SET-OFF,
of partner's debt against claim of partnership not allowed .... 262
except by assent of partners 262
of partnership debt against claim of partner 262
except when reduced to judgment 262
SETTLED ACCOUNT. {See Account Stated.)
SETTLEMENT BETWEEN PARTNERS.
{See Account Stated.)
SETTLING PARTNER,
power or 289, 289 n.
{See Liquidating Partner.)
SEVERAL CREDITORS. {See Creditors of Partner.)
SEVERAL PROPERTY. {See Property of Partnership.)
SHARE,
in partnership, transfer of " . . . . 107
in joint stock company 107
{See Joint Stock Company.)
SHAREHOLDER. {See Joint Stock Company.)
SHARES,
agreement to cultivate farm on, not partnership 61 n.
SHERIFF,
office of, cannot be held in partnership 39 n.
SHIPBROKERS,
partnership of 37 w.
SHIPS,
partnership of owners of 37 n.
joint owners of, whether partners 76
SIGNATURE. {See Partners, and Power of Partners.)
SILENT PARTNER,
is one who takes no active part in the business of the firm ... 30
whether his name be made known as a partner or not 30
INDEX. . 645
Section
SKILL. {See Partkkrship and Partnership Property.)
SLEEPING PARTNER,
what is 31
SMUGGLING,
partnership for, illegal 8
SOCIAL CLUBS,
not partnerships 60
SOLVENT PARTNERS,
effect of bankruptcy of a partner upon 370
hold the effects and property in somewhat the same way that surviv-
ing partners do 370
cannot get the firm property out of the hands and possession of the
assignees of the bankrupt, the right to possession being the
same 370
continuing the business without winding up the concern, do so at
their own peril 373
have possession of, and full power over, the partnership effects . . 377
hold the effects of the firm as trustees for all interested .... 377
committing actual or constructive fraud, liable in damages, or it may
be avoided by those whom it injures 377
rights of, against the estate of a bankrupt partner 378
cannot prove against the joint-fund in competition with joint-credi-
tors, but ma}' with several creditors 399, .399 n., 402
when rights of, against their insolvent partners are prior to the sev-
eral creditors of the insolvent 402
cannot resist a bill by the assignees of the bankrupt for a share in
the profits of a subsequent trading, on the ground that the as-
signees did not require an immediate settlement 404
SPECIAL PARTNER,
definition of 35
need not give notice of withdrawal 320 n.
may examine accounts 423
name of, must be included in certificate 424
liability of, if certificate is defective 424
must see that all the requirements of the statutes respecting limited
partnerships are complied with 424
if he withdraw any part of the capital, and the firm becomes in-
solvent, he is liable to the creditors for the amount so with-
drawn, with interest 425
where the general partner withdraws some of the capital, without the
consent or knowledge of the 425
if his name is used in any contract with his consent, or if he take an
active part in the formation of any contract, he is liable as a
general partner 426
when and in what manner he becomes liable as a general partner 427 n.
liable as general partner in all things, except those in which the
statute expressly limits his liability 427
bound, after dissolution, for the future debts of the firm, unless
notice is given, or it ceases by limitation of time or act of the
law 428
notice should be given, in case of death or bankruptcy 428
646 INDEX.
Section
SPECIAL PARTNER— Conf/nuec?.
if he make himself generally liable, after dissolution, to the holders
of notes, the holders cannot come in and claim the joint assets
equally with the j)revious creditors of the firm 428
holders of such notes should join all the partners in a suit .... 428
not liable as general partner because real estate had been purchased
by the general partners, and paid for by the firm, and the title
taken in the names of all the partners 429
liable as general partner, where there was a mistake made in the
publication of a certificate 429
(See Limited Partnership.)
SPECIAL PARTNERSHIP,
relates only to a single transaction, or the use of one thing ... 40
where a note or bill is signed or indorsed by two or more persons . 40
SPECIFIC PERFORMANCE,
of articles of co-partnership 162, 205
of agreement to form partnership 163, 205 n.
(See Equity.)
STAGE-DRIVING,
partnerships for 37
STANDARD OIL TRUST 443, 446
STATES,
are foreign to each other in respect to bankrupt laws 374
STATUTE,
28th & 29th Vic. ch.86, provides that lending money to a firm, the
lender to receive a certain share in the profits, does not make him
liable as a partner 45
of Kentucky, promissory notes have all the legal effect of bonds under
seal 123 n.
9 Geo. 4, ch. 14, on limitations 126 n.
of New Hampshire, concerning actions between copartners . . . 196
of Pennsylvania, April 14, 1838, concerning abatement of actions
against partners 200 n.
of reputed ownership 395
STATUTE OF FRAUDS,
whether partnersliip agreement is within 6
STATUTE OF LLMITATIONS,
power of partner to waive 126, 127
in actions between partners 228, 228 n.
STATUTES,
forbidding certain partnerships 8 n.
allowing married women to do business 20
allowing actions in firm name 250
permitting limited partnerships 421, 422
foi'bidding " trusts " 454, 455
STEALING,
partnership for, illegal 8
STIPULATIONS,
as to retrospective effect of contract of partnership . . , . . 12
between partners, how far they affect third parties 84
{See Partner.)
INDEX. 647
Section
STIPULATIONS — Continued.
between partners exempting some of the firm from liability of, no
effect as to creditors 87
between partners, violation by one, effect of 87
STOCK. {See Partnership Property.)
STOCKHOLDER,
in defective corporation, whether partner 56, 57
in joint stock company is liable as partner 434
has not as great power as general partner 434 n.
may transfer his interest 435
STOCKS,
" trusts " to invest in 440,445
STRANGER. {See Dilectus Personarum, and Partners.)
STYLE OF FIRM. {See Firm-Name.)
SUBMISSION. {See Arbitration.)
SUB-PARTNER,
what is 36, 106 71.
right of, to demand account 406
SUB-PARTNERSHIP,
duration and eifect of 282
SUCCESSOR,
power of deceased partner to appoint 353
liability of one appointed by deceased partner as 354, 356
SUCxAR TRUST, 443
SUIT,
arising out of partnership, jurisdiction of 13
nominal partner as party to 96
against partners for tort is joint and several 105
{See Action; Equity.)
SURCHARGE,
what it is 411 n.
SURETY,
no partner may become surety for a debt, and thereby bind the
firm 144
SURVIVING PARTNER,
power of, to transfer property in payment of debts Ill
injunction against or for 215
power of, over partnership real estate 274 n.
powers and interests of 344, 344 n.
at the death of a partner, has an exclusive right of possession and
management of the firm property and business for closing the
same 344, 344 n.
if the authority of, for winding up the concern, be unduly exer-
cised, the remedy is by applying to a court of equity for the
appointment of a receiver 344 n.
where the articles provide what shall be done if a partner dies . . 344
has a right to collect all debts due to the firm, and to sell the
property of the firm 345, 345 n.
rights of, to possession of the partnership property 344 n.
has a lien on the real estate of the firm for indemnity against firm
debts 345 n.
648 INDEX.
Section
SURVIVING PARTNER — Continued.
is from the death of a partner, trustee for all concerned in the
partnership 345
may not sell to nor buy the property of the firm himself .... 345
power of, to arrange and settle all the debts of the firm .... 345
equity will interfere, in cases of negligence or gross mistake by . . 345
interest of, in partnership property 345 n.
set-off of individual debt in action by 345 n.
of firm debt in action by 345 n.
accountable to estate of deceased partner for fraud 345 n.
for using assets 346 n.
may only claim his share of the firm property, after the creditors
have all been satisfied 345
is not bound to continue the business 346
equity will restrain the, from continuing busiueos under the ci'edit,
and risking the effects of the old firm 346
liability of, to estate of deceased when business is continued 346,
346 n., 355
where the surviving partners continue business under the credit and
risk the effects of the old firm, they will be bound to account
for the profit as belonging to the firm 346
if they incur a loss, they are charged with interest on the funds
they use 346
but if they make a profit, which is credited to the firm, they may
be allowed some compensation for their services 346
do not bear more than their share of the losses resulting after
the death of the deceased from transactions entered into
before 346
may be allowed for their time and expenses under certain cir-
cumstances 346
may retain the good-will of the firm, without payment on their
part 181 n, 341
have no right to take the effects of the firm at a valuation .... 348
creditors of the firm can bring their actions only against .... 349
actions to collect a partnership debt must be brought in the name
of the 349
holding claims against the deceased partner is treated like other
partners 351
when the deceased has made the surviving partner his executor . . 352
(See Equity.)
SURVIVORSHIP,
of title upon death of partner 344, 345
of actions 349
T.
TAVERN-KEEPERS,
firm of, is non-trading 85 n.
TENANTS IN COMMON,
whether partners 76
INDEX. 649
Section
TENANTS IN COMMON ~ Continued.
liability of tenant in common to his co-tenant for the destruction
of the common property 226
land conveyed to partners as 274
TERM OF PARTNERSHIP 280, 281, 282, 283
TEST OF PARTNERSHIP il, et secj.
right to account is not 53
intention to form partnership is 54
THEATRE,
partnership to manage, non-trading 85 n.
THIRD PERSONS,
partners as to 80
TIME,
when partnership begins 12
TORT,
partners liable for tort of one partner in course of business
100, et se<]., 105
in order to render partners liable for the torts of each other, they
must have been committed in the partnership business . . . 100
where money, procured by fraud, becomes partnership stock, the
firm not liable, without their consent to the fraud 102
no contribution for payment of judgment founded on ... o 198 7i.
demand of the firm grounded on the tort of a member thereof . . 203
between partners 225
where the torts are personal 225
trover will not lie by one partner against his copartner 226
remedies of partners against third persons for 241
instances of, in which all the partners must join 241
against only a part of the members of a firm 241
damages recoverable for, by firm 242
TRADE,
restraint of, illegal 451, 452
TRADE-MARK,
is firm property 182
when right to use, passes on sale of business 182 n.
TRADE NAME,
of the use and right of 182, 182 n.
false or injurious use of 182
(See Firm Name.)
TRANSFER,
of interest in partnership 106, 107
of property by partner 108
of shares of joint-stock company 107, 432, 435
where a statute prescribes certain forms for, they must be com-
plied with 435 n.
when transferee would not be a partner, nor have any claim against
the company to become such 435
a transferee may require an account and settlement so far as to
ascertain his rights and the value of his share 435
transferee has no right to any particular thing in special, nor a
division of the effects 435
650 INDEX.
Section
TRANSFER — Continued.
when the company might refuse to accept transferee, as a partner,
although the stockholders transferred his share agreeably to the
rules of the company 435
transferee not bound to become a partner, although the company
were willing to receive him 435
{See Assignment.)
TRANSFEREE,
of interest of one partner does not become a partner, without the
consent of the other partners lOO, 112
may require an account and settlement lOG n., 112
TRANSFERRING PROPERTY,
right of, extends to choses in action 108 n.
one partner may bind his firm by assenting to the transfer of a
debt due on account 108 n.
right of, not affected by a secret act of bankruptcy previously
committed by another partner 108 n.
nor by the fact that the jiroceeds of transfer have not come to use
of the firm 105 ?i.
no difference as to right of, between partnership for general pur-
poses and one for special purposes 108 n.
right of, does not extend to real estate of the firm 108
where done in fraud of other partners, still valid as to innocent
transferee 108
qualifications of a partner's right to transfer his interest in the
property of the partnership 112
where one partner transfers his interest in a chose in action to his
copartner 231
TRUST,
breach of, by partner, firm liable for 104
where implied as to holder of legal title to real estate, in favor of a
partnership 265, 265 n.
TRUST CERTIFICATES,
position of holders of 445, 446, 447
transfer of „ 447
TRUSTS, COMMERCIAL 437
function of 438
in form of corporation 439
for investment 440
to purchase and improve land 440
car trusts 441
voting trusts 442
to carry on business 443
legal nature of 445
advantages and disadvantages of 448
legality of 449
whether corporations can form 450
affecting necessaries of life 452
effect of declaring, illegal 453
statutes affecting 454, 455
TRUSTEE,
office of, cannot be held in partnership 39
INDEX. 651
Section
TRUSTEE — Continued. ^
where a partner is, and uses the trust money, with the consent of
the firm, in the business 104
where one trustee forged the names of his co-trustees to a power
authorizing his copartners to sell, firm liable 103
where one of a firm, a trustee, with the knowledge of the other
partners, applies the trust fund to the use of the partnership,
firm liable 104
if trust money be put into trade without authority, the cestui que trust
may either take a share of the profits or the interest . . . 104 n.
how far partners are 158
surviving partners are, for all parties in any way interested in the
partnership 345
surviving partners as, cannot sell to, nor buy property of, the firm
themselves 345
of deceased partner, when liable personally as partner 356
of commercial " trust " is partner 446
(See Executors.)
TRUSTEE PROCESS. (See Garxishmext.)
U.
UNIVERSAL PARTNERSHIP,
what is 40, 40 n.
strictly, can be none 153
USAGE OF TRADE,
partner's authority limited by 85, 85 n.
USURY,
receipt of, does not make creditor partner 70
when principal is at hazard, there can be none 70, n.
receipt of, by one partner, binds firm, when 105
V.
VALUATION,
taking share at 348
(^ee Bankruptcy and Surviving Partner.)
VESSELS. (See Ships.)
VOLUNTARY ASSIGNMENT. {See Assignment for Benefit
OF Creditors.)
VOLUNTARY ASSOCIATIONS,
are not partnerships 60
VOTING TRUSTS 442
W.
WAGES. (See Partners.)
WAIVER,
courts of equity sometimes imply from the facts 164
of provisions in the articles 164
652 INDEX.
Section
WAR,
effect of 22
dissolves partnership between citizens of hostile countries .... 22
effect of, on right of partnership containing alien enemy to sue . . 232
{See Dissolution and Alien.)
WARRANTY,
by a partner, effect of 144
WIDOW. (See Real Estate.)
WINDING UP,
the concern by one partner 287
in absence of agreement 288
power of liquidating partner to do all acts necessary for . . 294
WITNESS. (See Evidence.)
WRITING,
not necessary to constitute a partnership 6
(See Partnership and Articles.)
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