The

tled than that the law will not imply a contract in such cases. reason is that the partner is but attending to his own affairs. This rule is inexorable; as much so as that between parent and child. Were it otherwise, we might have a contract between the partners upon the settlement of every partnership account as to the value of their respective services. It is true this principle may work hardship in particular cases,-almost every general rule does; but that is a weak argument against the soundness of the rule. When the copartnership agreement contemplates that one partner shall manage the business, or do more than his share of the work, it is easy to provide for his compensation in the agreement itself; and if no such stipulation is then made, as before said, the law will not imply one. Even where a liquidating or surviving partner settles up the business, it has been repeatedly held that he is not entitled to compensation for doing so, although, in such case, he performs all the services.

Judgment affirmed.

B.& B.BUS.LAW-82

Section

1.

2.

3.

CHAPTER III

RELATIONS OF PARTNERS TO THIRD PERSONS

Scope of a Partner's Power in General.

Particular Powers.

Powers with Respect to Partnership Realty.

4. Powers Arising by Estoppel.

5. Liability of Partners, When Joint, or Joint and Several.

6. Right of a Creditor of a Partner in the Partner's Individual Capacity with Respect to Partnership Property.

SECTION 1.-SCOPE OF A PARTNER'S POWER IN
GENERAL

Uniform Partnership Act, Section 9. (1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.1

(2) An act of a partner which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.

WINSHIP et al. v. BANK OF THE UNITED STATES.

(Supreme Court of the United States, 1831. 5 Pet. 529, 8 L. Ed. 216.) MARSHALL, C. J. * * * This was an action brought in the court for the first circuit and district for Massachusetts, against John Winship, Amos Binney and John Binney, merchants and partners, trading under the name and firm of John Winship, as indorser of several promissory notes, made by Samuel Jacques, Jun. * A verdict was found for the plaintiffs, and judgment entered thereon; which is brought before this court by writ of error.

*

The third instruction asked in the Circuit Court, goes to the construction of the articles of co-partnership. The plaintiff in error contends that those articles gave Winship no authority to raise money on the credit of the firm, or to bind it by his signature, for the purpose of borrowing money.

The instruction given was, that if the particular terms of the ar

1 Lewis' Note to Section 9 (1).-The words "including the execution in the partnership name of any instrument" avoid any possible doubt as to whether a partner has the authority, in the ordinary course of business, to enter into formal contracts for his partnership., or to convey partnership property when the conveyance is the result of a sale in the ordinary course of partnership

business.

ticles were unknown to the public, they had a right to deal with the firm in respect to the business thereof, upon the general principles and presumptions of limited partnerships of a like nature, and that any special restrictions did not affect them; that in such partnerships, it was within the general authority of the partners to make and indorse notes, and to obtain advances and credits for the business and benefit of the firm, and if such was the general usage of trade, the authority must be presumed to exist, but that it did not extend to transactions beyond the scope and object of the co-partnership; that in the present articles, Winship was in effect constituted the active partner, and has general authority to transact the business of the firm, and a right to bind the firm in transacting its ordinary business with persons ignorant of any private restriction, to the same extent that partners in such limited partnerships usually possess.

The amount of the charge is, that if Winship and the two Binneys composed a joint company for carrying on the soap and candle business on the credit of the company, in the manner usually practiced in such partnerships, notwithstanding any secret restriction on his powers, in any agreement between the parties; provided such restriction. was unknown to the lender.

The counsel for the plaintiff in error has objected to this instruction with great force of reasoning. He contends very truly, that in fact scarcely any unlimited partnerships exist. They are more or less extensive; they may extend to many or to few objects; but all are in some degree limited.

That the liability of a partner arises from pledging his name, if his name is introduced into the firm, or from receiving profits if he is a secret partner.

No man can be pledged but by himself. If he is to be bound by another, that other must derive authority from him. The power of an agent is limited by the authority given him; and if he transcends that authority, the act cannot affect his principal, he acts no longer as an agent. The same principle applies to partners. One binds the others, so far only as he is the agent of the others.

If the truth of these propositions be admitted, yet their influence on the case may be questioned. Partnerships for commercial purposes, for trading with the world, 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 society is concerned in sustaining. One of these is, that a man who shares in the profit, although his name may not be in the firm, is responsible for all its debts. Another, more applicable to the subject under consideration, is, that a partner, certainly 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 partnership is formed for a particular purpose, it is understood to be in itself a grant of power to the acting members of the company 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 be so, the partner who purchases on credit in the name of the firm must bind the firm. This is a general authority held out to the world, to which the world has a right to trust. The articles of co-partnership are perhaps never published. They are rarely if ever seen, except by the partners themselves. The stipulations they may contain are to regulate the conduct and rights of the parties, as between themselves. The trading world, with whom the company is in perpetual intercourse, cannot individually examine these articles, but must trust to the general powers contained in all partnerships. The acting partners are identified with the company, and have power 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 I made known. These stipulations may bind the partners; but ought not to affect those to whom they are unknown, and who trust to the general and well established commercial law. * *

*

The counsel for the plaintiff in error supposes, that though these principles may be applicable to an open avowed partnership, they are inapplicable to one that is secret.

Can this distinction be maintained? If it could, there would be a difference between the responsibility of a dormant partner, and one whose name was to the articles. But their responsibility, in all partnership transactions, is admitted to be the same. Those who trade with a firm on the credit of individuals whom they believe to be members of it, take upon themselves the hazard that their belief 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 distinction 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 inserted in the articles. But this certainly is not correct. The responsibility of unavowed partners depends on the general principles of commercial law, not on the particular stipulation of the articles. * * *

We think there is no error in the opinions given by the judge to the jury. * The judgment is affirmed.

GORDON v. AUMILLER.

(Supreme Court of Washington, 1920. 109 Wash. 496, 187 Pac. 354,

9 A. L. R. 369.)

Action by J. H. Gordon against W. C. Marburger and another, wherein W. J. Aumiller intervened. The plaintiff, Gordon, commenced this action against the defendant Marburger, seeking an accounting of their partnership affairs and the appointment of a receiver to take charge of their partnership property, pending the settlement of their differences. The partnership had been for the growing of potatoes. Marburger had borrowed money from Aumiller, giving his notes therefor, secured by a chattel mortgage on the potatoes of the firm. From a judgment for the plaintiff, Gordon, the intervener. Aumiller, appeals.

PARKER, J. It is conceded that the business relation between them was that of a nontrading partnership, and that Marburger's power to contract debts and incumber the partnership property was limited accordingly. In Snively v. Matheson, 12 Wash. 88, 40 Pac. 628, 50 Am. St. Rep. 877, Judge Dunbar, reviewing the law touching the power of one partner of a nontrading partnership to bind the other partners, or the partnership property to the detriment of the other partners, speaking for the court, said: "The presumption is that one partner has no power to bind the other partners. Hence, before recovery can be obtained upon a contract entered into by one partner in a nontrading partnership against the other partners, it must be affirmatively shown by the party attempting to bind the noncontracting partners, either that the authority to bind was conferred by the articles of incorporation, or that authority had been specially conferred, or that it had been the custom of such partnership to recognize this right to such an extent as would give innocent dealers a right to rely upon the custom."

It was also recognized as the law in that decision that, in the doing of acts ordinarily necessary to be done by one partner in the performance of partnership duties assigned to such partner, he can bind the other partners and their interest in the partnership property. It is plain, however, that in this partnership Marburger had no duties to perform in the partnership business rendering it at all necessary for him to borrow money to further the partnership interests, nor was there any custom of dealing by either of the partners touching the partnership business in the least suggesting that Marburger was authorized to borrow money for the partnership or incumber its property. The contentions of counsel for Marburger are rested upon the theory that Gordon was a silent or dormant partner, and that Aumiller was warranted in dealing with Marburger upon the assumption that he was the sole owner of the potatoes. It is true that Aumiller testified in substance that he had no notice of Gordon's interest in the potatoes until after he had made all of the three loans to Marburger. It is hard to believe that Aumiller was wholly ignorant of Gordon's interest in the potatoes, in view of the fact that Aumiller prepared the rent receipt evidencing the leasing of the land to both Marburger and Gordon for the raising of these potatoes. The chattel mortgage given by Marburger to Aumiller to secure the first loan of $150 described the crop of potatoes as being then growing upon the same land, describing it, and referring to it as belonging to Henry Pagel, which mortgage was executed on June 12th, only 1 month and 12 days after Aumiller had prepared the rent receipt for Marburger. Surely this ought to be held to be sufficient to at least put Aumiller upon inquiry as to the probability of Gordon being interested in the potatoes. This significant fact; together with the fact that Gordon made no effort to conceal, and did no act tending to conceal, the existence of the partnership relation between him and Marburger and the fact that this was purely a nontrading partnership, we think, compels the conclusion that in no event can Aumiller at this time be heard to say, as against the rights of Gordon, that he was led to believe that Marburger was the sole owner of the potatoes, with absolute right to borrow money and secure the payment of the same by incumbering them. * * *

The judgment is affirmed.