Page images
PDF
EPUB

sale one partner only was known and the credit was given to him. And therefore where A., at the suggestion of B., by letter, ordered a cargo of timber of C., and the invoice was made in the name of A., and a bill of exchange was drawn by B. on A. for the amount of the freight, and paid by the latter; it was held, in an action brought by C. against A. and B. for the price of the goods, that it was competent to C. to show that A. and B. were jointly interested in the purchase (c). So in Gardiner v. Childs (d), where it appeared that the plaintiffs, carrying on business as stationers, supplied paper to the defendants by order of A., a printer, to whom credit was given. A. afterwards became bankrupt, when it was discovered that defendants and 1. were jointly interested in the publication of the work for which the paper was used. And the jury having found that a partnership existed between the defendants and A. at the time the was ordered, it was held that the defendants were liable.

paper

If the proprietors of a stage-coach from London to a distant place divide the road into different quarters; and the various proprietors are severally the owners of the horses and harness which draw the coach through their respective districts; and severally provide their stabling, food, and horse-keepers in their districts, and the profits are divided in proportion to the number of miles; and it is notorious on the road that the proprietors separately horse the different stages, and that the tradesmen on the road give credit to the separate proprietors for goods furnished to them; and there is no evidence that purchases made by the separate proprietors are, upon the general adjustment of accounts between all the proprietors, computed as part of the general outgoings; and if goods are delivered to one of the proprietors, for the use of his horses by a vendor who is the owner of the stable where such horses are kept, and who receives part of the price of the goods by a bill drawn on such proprietor only, and who expresses his fears, upon the failure of such proprietor, that he shall lose the residue; such vendor can recover only from the proprietor with whom he immediately dealt (e); though such facts might constitute a partnership as between the parties themselves ( f ).

(c) Ruppell v, Roberts, 4 Nev. & M. 31; and see Paterson v. Gandasequi, 15 East, 62; and ante, 224.

(d) Gardiner v. Childs, 8 Car. & P. 345; 2 Jurist, 233.

(e) Barton v. Hanson, 2 Taunt. 49, overruling C. B. M'Donald's decision in 2 Camp. 97, S. C. See Fromont v. Coupland, ante, 234. () Ante, 234.

There are also various transactions, by virtue whereof a party may receive a portion of the profits of an adventure without becoming liable as a partner, he not being one in reality, or acting in that character. As in the case of remuneration made to a traveller, or other clerk or agent, by a portion of the sums received by or for his master or principal, in lieu of a fixed salary, which is only a mode of payment adopted to increase or secure exertion (g). So in the case of a factor receiving for his commission a per centage on the amount of the price of the goods sold him, instead of a certain sum proportioned to the quantity of goods sold (h): or of a person receiving from a trader an agreed sum in respect of goods sold by his recommendation, as one shilling per chaldron on coals, or the like, for there is no mutuality; and such a case resembles a payment made to an agent for procuring orders, and has no distinct reference, in the terms of the agreement, to any particular coals purchased by the coal-merchant for re-sale, upon which a third person may become a creditor of the coal-merchant, and probably could not, in any instance, be shown to apply in its execution to any such particular purchase (i). But an agreement between a merchant and broker that the latter should purchase goods for the former, and should receive for his trouble, in lieu of brokerage, a certain proportion of the profits arising from the sale, and should bear a proportion of the losses, may render the broker liable as a partner to persons who become creditors in respect of the particular adventure or transaction, although it does not vest in the broker any share in the property so purchased or in the proceeds thereof: the parties having treated the broker as acting merely in that character (k). So where a plaintiff agreed with the defendant to convey by horse and cart the mail between two named places at 91. a mile per annum, and to pay his proportion of the cart, &c., and it was agreed that all money received for the carriage of parcels should be divided between the parties, and that they should bear in equal portions any damage occasioned by the loss of or injury to such parcels; it was held that this agreement

(g) Benjamin v. Porteus, 2 Hen. Bla. 590; Meyer v. Sharp, 5 Taunt. 74; Ex parte Hamper, 17 Ves. 404; Cheap v. Cramond, 4 B. & Ald. 670.

(h) Dixon v. Cooper, 3 Wils. 40; Cheap v. Cramond, 4 B. & Ald. 670.

(i) Per Abbott, C. J., in Cheap v. Cramond, 4 B. & Ald. 670.

(k) Smith v. Watson, 2 B. & C. 401; 3 D. & R. 751, S. C.; see Reid v. Hollingshead, 7 D. & R. 444; 4 B. & C. 867, S. C.; cited ante, 233.

constituted a partnership, and was not a mere measure of the wages to be paid to the plaintiff (1).

If the proprietor of a lighter agree with the person who works it, that, in consideration of his labour, he shall receive half the gross earnings, there is no joint liability (m). Nor does a partnership arise on an agreement between the owner of cattle and the occupier of land, that the cattle shall be pastured upon the land, and that the profit, after they are fatted, above a certain sum, at which the cattle are estimated, shall be equally divided between the proprietor of the cattle and the land-owner; such transaction being merely a mode of paying for the pasture (n). Nor does any partnership exist between the captain and crew of a ship engaged in the whale fishery, where it is provided that the produce of the voyage shall be divided in certain proportions between them (0).

II. What Contracts by one Partner bind the Firm.

The general rule is, that the act or agreement of one partner, with reference to, and in the course of, the partnership business and affairs, and the management thereof, is, in point of law, the act or contract of the whole firm, and binding on them, although it violate any private arrangement between the partners (p). In the case of Fox v. Clifton (q), Tindal, C. J., observed, "The question, therefore, must be considered whether, upon the facts of the case, the defendants were partners in the Imperial Distillery Company with the directors and other shareholders at the time this contract was made; for by the general rule of law relating to the partnerships in trade, each would then be liable to the debts of the whole company contracted in the course of the trade. This is a consequence not confined to the law of this country, but extending generally throughout Europe; and it is founded partly on the desire to favour commerce, that merchants in partnership may obtain credit in the world; and more especially on the principle that the members of trading partnerships are constituted agents the one for the other for entering into

(1) Green v. Beesly, 2 Scott, 164; 2 Bing. N. C. 108; 1 Hodges, 199, S. C.

(m) Dry v. Boswell, 1 Camp. 329.
(n) Id. 331, in notes.
(0) Ante, 234.

(p) Anon. 12 Mod. 446; 11 Mod. 40; Kemble v. Atkins, Holt, 434;

v. Layfield, 1 Salk. 292; Shirreff v. Wilks, 1 East, 48, cited in Montagu on Partnership, 20, ch. 2,

sec. 1.

(q) 6 Bing. 795, cited ante, 234, 235; S. C. after third trial, 9 Bing. 115; 2 Moo. & Sc. 146.

contracts connected with the business and concerns of the partnership; so that by the contracts of the agent all his principals are bound."

With respect to dormant partners, they are bound by the acts of their co-partners as to all implied contracts, but are not liable on express contracts with the known and acting partners (r).

Although in a matter wholly unconnected with the partnership, one party cannot bind the others, yet the act and assurance of one partner, made with reference to business transacted by the firm, will bind all the partners. If two horse dealers (partners) should agree between themselves never to warrant any horse, yet, though this be their course of business, there is no doubt that if, upon the sale of a horse, the property of the partnership, one of them should give a warranty, the other would be thereby bound (s).

So one partner alone may in general bind his copartners by accepting, drawing, or indorsing a bill of exchange, or making or indorsing a promissory note in the name and on the behalf of the firm(t); by selling (u), or insuring (v), the partnership effects; by receiving money for the firm (x); by releasing the debts due to it (y); or by bringing actions in the name of the firm to recover debts due to it (z); by borrowing money to defray the expenses of travelling on partnership concerns, and other partnership purposes (a); and by other acts and contracts of a similar nature, necessary or incidental to the carrying on of the business of the firm, and whereby the credit of the firm is pledged. For though

(r) Beckham v. Knight, 4 Bing. N. C. 243; 5 Scott, 336.

(s) Per Abbott, C. J., Sandilands v. Marsh, 2 B. & Ald. 678, 679.

(t) See the cases cited, Montagu on Partnership, 21, note (a); Chitty on Bills, 8th ed. 45 to 58; South Carolina Bank v. Case, 8 B. & C. 427; see Greenslade v. Dower, 7 B. & C. 638, per Bayley, J. When a bill is to be considered to be the acceptance of the whole firm, though the name of one partner be omitted, &c., Lloyd v. Ashby, 2 B. & Ad. 23. One partner may sign a note for the weekly payment, under the Lords' act, Meux v. Humphrey, 8 T. R. 25; Burton v. Issitt, 5 B. & Ald. 267.

(u) Lambert's case, Godbold, 244; Fox v. Hanbury, Cowp. 445;

v. Layfield, 1 Salk. 292, note.

(v) Hooper v. Lusby, 4 Camp. 66. (x) 8 Ann, Kemble v. Atkins, Holt, 434; Willet v. Chambers, Cowp. 814. But if two persons, not partners, pay money on their joint account into a bank, a payment by the bankers to one only is not a payment which binds the other; Innes v. Stephenson, 1 M. & R. 145.

(y) 2 Co. 68; Bac. Ab. tit. Release (D); Stead v. Salt, 3 Bing. 103; 10 Moo. 389.

(≈) Whitehead v. Hughes, 2 C. & M. 318; 4 Tyr. 92; 2 Dowl. 258, S. C. But the partners who object have a right to be indemnified against the costs, id.

(a) Rothwell v. Humphreys, 1 Esp. R. 406; 2 C. & P. 325, $33.

there may be cases in which all the partners will not be liable for all that is done by such individual partner, yet in such cases there must be something exclusive in the nature of the transaction; not only the other should not be known in the transaction, but the ordering of the goods should be the exclusive act of the particular partner (b). And it is in general immaterial that some of the partners were secret partners, or not known or named at the time (c). But if the individual dealing with one partner is guilty of any fraud, or has reason to suppose the latter is acting on his own account, there is no claim against the firm (d). Nor has one partner any implied authority to bind the firm by drawing or accepting bills, if (as in the case of a mining or joint stock company) it be neither usual in a business of that sort to use such instruments, nor necessary so to do to carry on the particular concern, and no express authority has been given (e).

A partnership cannot acquire any property in goods obtained by the fraud of one of the partners, to which the others are not privy (ƒ).

Where one of two partners, with the intention of cheating the other, goes to a shop and purchases articles, such as might be used in the partnership business (g), which he instantly by pawning converts to his own use; if there were no collusion between him and the seller, this is to be considered a partnership transaction, and the innocent partner is liable for the price of the goods, without proof of any previous dealings between the parties (h). So where one Fauntleroy, a partner in the defendant's house, transferred certain stock out of the plaintiff's name in the books of the Bank of England, under a forged power of attorney, and

(b) Per Lord Denman, C. J., Gardiner v. Childs, 8 C. & P. 351; 2 Jurist, 233, S. C.; per Gibbs, J., Young v. Hunter, 4 Taunt. 583.

(c) Wintle v. Crowther, 1 C. & J. 316; Gardiner v. Childs, 8 Car. & P. 345; 2 Jurist, 233, S. C.; Ruppell v. Roberts, 4 Nev. & M. 31.

(d) Sutton v. Gregory, Peake's Addl. Cases, 150; in this case the partners resided in different countries. And see South Carolina Bank v. Case, 8 B. & C. 427; post,

(e) Bramah v. Roberts, 3 Bing. N. C. 963; 5 Scott, 172, S. C.; Dickin

[blocks in formation]
« PreviousContinue »