transaction and understanding between the parties themselves, but is founded on principles of general policy and expediency, to prevent the frauds and inconveniences to which creditors would be exposed, were parties allowed with impunity to afford others the means of assuming an appearance of credit and responsibility; and on this ground, a mere representation by one person that he is a partner with another, will render him responsible as a partner, to a creditor who furnished goods to both on the faith of such representation (n). And if an infant partner do not, on coming of age, repudiate the partnership, he will be liable on the subsequent contracts of the firm (o).

If it be agreed between two persons, who appear to the world as partners, that one of them shall not participate in the profits and losses, and shall not be liable as a partner, such person, it has been ruled, is not liable to those who have notice of this stipulation (p).

There are several modern decisions in regard to the liability of the subscribers to, or members of, unincorporated companies, to the creditors of such companies. We have already noticed some instances in which the mere subscribing, &c., has been held not to amount to a partnership, as between the parties (q). If the company be complete, and the subscriber or member has actually acquired a right to a share of the profits, he is clearly responsible, as a partner, to the public. In respect to the liability of subscribers to creditors, where no regular company has been actually and definitively formed, according to the prospectus, &c., so that no partnership exists in reality, it seems that a subscriber is not responsible; unless he has either actually authorised the making the particular contract upon which he is charged, or has interfered and held himself out to the public as a partner (r).

If a subscriber or member interfere, and appear to the world to be interested as a partner, by attending meetings (s); becoming

5th ed. 48, 49. Nor need he be joined as a co-plaintiff, if not expressly a party to the contract. Id.; Kell v. Nainby, 10 B. & C. 20.

(n) De Berkom v. Smith, 1 Esp. R. 29. Admission in letters that a party was a shareholder, Harvey v. Kay, 9 B. & C. 356.

(0) Goode v. Harrison, 5 B. & Ald.

147; ante, 125.

(p) Galway v. Matthew, 1 Camp. 404, n.; Batty v. M'Cundie, 3 Car

rington & P. 202.

(q) Ante, 189.

(r) See Dickinson v. Valpy, 10 B. & C. 141, 142, per Parke, J.; Fox v. Clifton, 6 Bing. 779, per Tindal, C.J., cited ante, 189, note (ƒ); Bourne v. Freeth, 9 B. & C. 632.

(s) Ellis v. Schmack, 3 M. & P. 220; 5 Bing. 521, S. C: The Cornwall and Devonshire Mining Company. See, however, post, 197, 198.

director, and acting as one (1); or giving orders by being a party to resolutions for them (u), &c.; he becomes responsible as a partner in the company, to the creditors thereof, although the company originated in fraud to which he was not privy (a); or he has not become an actual partner by signing the required deed, &c. (y); or the company has never been actually and finally formed (~); or has been abandoned (a); or become insolvent (b).

We have before noticed a case (c) in which it was decided that the unauthorised act of the secretary of an intended company in mentioning the name of a subscriber, in a list of subscribers, was not sufficient to render the subscriber liable, as a partner, to third persons. And in that case, the Chief Justice observed (d),"The holding oneself out to the world as a partner, as contradistinguished from the actual relation of partnership, imports, at least, the voluntary act of the party so holding himself out. It implies the lending of his name to the partnership; and is altogether incompatible with the want of knowledge that his name has been so used. Thus, in the ordinary instances of its occurrence, where a person allows his 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 advertisements, the knowledge of the party that his name is used, and his assent thereto, is the very ground upon which he is estopped from disputing his liability as a partner" (e).

In Bourne v. Freeth (f), it appeared that a prospectus was issued for the formation of a company for distilling whiskey. The prospectus imported only, that a company was to be formed, not that it was actually formed; and it was held that the defendant who subscribed his name to this prospectus, and who was present

Tindal, C. J.

(z) Dickinson v. Valpy, 10 B. & C. 141, 142; Fox v. Clifton, 6 Bing. 776, 9 id., 115, S. C,; Maudslay v. Le Blanc, 2 C. & P. 409.

(a) Doubleday v. Muskett, 7 Bing. 110; Nockells v. Crosby, 3 B. & C. 814. (b) Keasley v. Codd, 2 C. & P. 408. (c) Fox v. Clifton, ante, 189; see further, id., 9 Bing 115, S. C. (d) 6 Bing. 794.

(e) Per Tindal, C. J., Fox v. Clifton, 6 Bing. 794.

(f) 9 B. & C. 632.

at a meeting of subscribers when it was proposed to make certain premises for the purpose of carrying on the distillery, which were afterwards taken; and solicited others to become shareholders, and never paid his subscription, and who never interfered in other respects than as above mentioned; had not so far held himself out as a partner as to be chargeable for goods sold to the company.

There is no liability, as a partner, where there is neither a participation of profits, nor any use made of the party's name to obtain credit; although there may be to a certain extent a community of interest. Thus, where a broker employed by several persons to purchase some tea, of which the employers, with the broker, were to have separate shares, borrowed money upon the security of the tea warrant, without the knowledge of his employers, it was held that they were not liable to the lender (g). And, upon the same ground, a purchase by one of several parties, on an agreement between them that each shall have a distinct share of the whole, without any communion of profit, does not create a partnership between them, so as to render them jointly liable to third persons (h).

And where there is no joint purchase, but the contract is made by one party only, a subsequent joint interest and communion of profits, will not constitute a joint liability upon such contract. As, if several agree upon an adventure, and each is to furnish a certain proportion of goods, each is liable to the party supplying his share, not the whole of the adventurers jointly; and no partnership arises as to the goods till they be mixed in the common adventure on board the ship (i). But where the agreement is for a joint purchase for the adventure, the joint interest and partnership commences, and the joint responsibility attaches, immediately the goods are bought (k).

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 seve

(g) Hoare v. Dawes, Dougl. 371, (h) Coope v. Eyre, 1 Hen. Bla. 37, 45; 2 id., 234. See Cothay v. Fennell, 10 B. & C. 671.

(i) Saville v. Robertson, 4 T. R.

720.

(k) Gouthwaite v. Duckworth, 12 East, 421; Smith v. Watson, 2 B. & C. 401; 3 D. & R. 751, S. C.

rally 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 shall lose the residue; such vendor can recover only from the proprietor with whom he immediately dealt (7).

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 (m). 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 (n): 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 (o). But an agreement

(1) Barton v. Hanson, 2 Taunt. 49, overruling C. B. M'Donald's decision, in 2 Camp. 97, S. C. See Fromont v. Coupland, ante, 189.

(m) 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.

(n) Dixon v. Cooper, 3 Wils. 40; Cheap v. Cramond, 4 B. & Ald. 670. (0) Per Abbott, C. J., in Cheap v. Cramond, 4 B. & Ald. 670.

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 B. any share in the property so purchased, or in the proceeds thereof the parties having treated the broker as acting merely in that character (p).

:

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 (q). 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 (r.)

2dly. 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 (s). In the case of Fox v. Clifton (t), 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

(p) 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, 188. (q) Dry v. Boswell, 1 Camp. 329. (r) Id., 331, in notes.

(s) 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. i.

(1) 6 Bing. 795, cited ante, 189, 197; S. C. after third trial, 9 Bing. 115.