2. It is objected that the

WINSLOW, J.: "* chattel mortgage upon the logging outfit was invalid, because made by one partner alone, without the knowledge of his co-partner. The general power of one partner to pay firm debts out of firm property in the ordinary course of business is well established; and, if he may pay a debt, no good reason is perceived why he may not secure its payment by pledging or mortgaging firm property. It has been held by this Court that one partner may, in the absence of his co-partner, mortgage the firm property to secure a bona fide partnership debt (Hage v. Campbell, 78 Wis. 573); also, that one partner may make a valid voluntary assignment of the personal property of the firm for the benefit of creditors where the other partner has absconded (Voshmik v. Urquhart, 91 Wis. 513). There has been some diversity of opinion upon the question whether one partner may, without the consent of his co-partner who is accessible for consultation, mortgage the entire firm property to secure a firm debt, when the effect of the mortgage would be to practically terminate the business of the firm, although the weight of opinion seems to favor the validity of such a mortgage. Jones, Chattel Mortgages, Sec. 46. But it is certain that the subsequent acquiescence or consent of the other partner would remove all question as to the validity of the mortgage. Jones, Chattel Mortgages, supra. Such acquiescence was proven in the present case."

Question 603: Does a partner have power to mortgage the firm property to secure a firm debt? Does he have authority to mortgage the entire property of the firm? Is there a difference of opinion on this question?

(Note: Under partnership act and on general principles, it would seem there is no power to mortgage entire firm assets unless special circumstances exist.)

CHAPTER 72

LIABILITY OF PARTNER FOR TORTS OF
CO-PARTNER

§§ 606-609. (Partnerships, Secs. 47-50.) Torts of partner; liability of other partners for.

Case 604.

Wolf v. Mills, 56 Ill. 360.

Facts: See the opinion.

Point Involved: Whether one partner is liable to third persons for the deceit of the other partner in the sale of goods for the firm.

MR. JUSTICE THORNTON: "The appellee brought an action on the case, alleging that appellants sold him a lot of sheep pelts, having on them a large quantity of wool; and, with intent to defraud him, delivered other and inferior pelts in quality, and deficient in the quantity of wool. Appellee recovered a verdict.

"Wolf and Haber jointly owned the pelts at the time of the sale. The proof is satisfactory that the pelts sold averaged about five pounds of wool per pelt; and the pelts delivered, only three pounds.

"As to the alleged fraud the evidence is conflicting. One witness testifies positively, that he saw young Haber, a son of appellant, change the pelts, and that he placed light in place of the heavy pelts, soon after the sale. This was contradicted by the son; but the weight of evidence has been determined by a jury, and we shall not disturb the finding, unless some principle of law has been violated.

"Appellants urge that, as there is no evidence to prove the change, if made, was by the direction of Wolf, or by any person in his employment or under his control, there

fore he is not liable. The evidence does show that Wolf & Haber were partners in the buying and selling of the sheep pelts, and that young Haber was handling them and throwing them from one pile to the other. The jury were justified in the inference that this was in the scope of the partnership business, as it was connected with the joint property. It is improbable that the son would be thus engaged, unless directed. The father must have given him some instructions in regard to the exchange.

"There was then, no error in the following instruction given for appellee: 'If the jury believe, from the evidence, that the defendants sold the plaintiff a certain lot of sheep pelts at an agreed price and that plaintiff has paid such price, and that the defendants afterwards, either in person, by their agents, servants, or employees delivered to plaintiff a lot of sheep pelts in any respect different from and inferior to those actually sold, intending thereby to have the plaintiff believe they were the same he had purchased, and intending to deceive and defraud the plaintiff, then the jury are instructed to find defendants guilty, and to assess as damages whatever loss the evidence may show the plaintiff sustained through such fraud and deceit.'

"A tortious act of one partner will often create a liability against the firm. So a fraud, committed by one partner, in the course of the partnership business, binds the firm, even though the other partners have no knowledge of, or participation in, the fraud.

"The jury might reasonably infer all that was necessary to fix the liability of the firm.

"The judgment must be affirmed."

Question 604: State the facts, the question presented and the Court's decision in this case.

Case 605. Hess v. Lowrey, 122 Ind. 225.

Facts: Lowrey sues Luther W. Hess and Frank C. Hess, as co-partners, for damages caused by malpractice. The alleged malpractice was committed by one of the

partners (who is now deceased) and it is sought to hold

the other liable.

Point Involved.

MITCHELL, C. J.:

66

191; Taylor v.

That each partner is the agent of the firm while engaged in the prosecution of the partnership business, and that the firm is liable for the torts of each, if committed within the scope of his agency, appears to be well settled. Champlin v. Laytin, 18 Wend. 407, 31 Am. Dec. 382; Tucker v. Cole, 54 Wis. 539, 11 N. W. Rep. 703; Fletcher v. Ingram, 46 Wis. Jones, 42 N. H. 25; Schwabacker v. Riddle, 84 Ill. 517; Story Partn. §§ 107-166; 1 Bates, Partn. § 461. 'It follows from the principles of agency, coupled with the doctrine that each partner is the agent of the firm, for the purpose of carrying on its business in the usual way, that an ordinary partnership is liable in damages for the negligence of any one of its members in conducting the business of the partnership.' 1 Lindl. Partn. 299. Thus, in Hyrne v. Erwin, 23 S. C. 226, 55 Am. Rep. 15, which was an action against two physicians for an injury resulting from the negligent and unskillful setting of a broken arm, it was held that the act of one within the scope of the partnership business was the act of each and all, as fully as if each was present, participating in all that was done, and that each partner guaranties that the one in charge, shall display reasonable care, diligence, and skill, and that the failure of one is the failure of all."

Question 605: (1) What was the tort for which defendant was sought to be held in this case? Did the Court hold him liable?

(2) Defendants were partners in owning and operating a coal mine. One of the defendants was manager of the mine and it was under his personal superintendence. He allowed it to get into an unsafe condition whereby an employee was injured. Can the other defendant be held? (Mellors v. Shaw, 1 B. & S. 437.)

Case 606. Lathrop v. Adams, 133 Mass. 471. Facts: Suit against defendants as co-partners of a newspaper for publishing a libelous article concerning plaintiff.

Point Involved: Whether one of the partners was chargeable with this libel published without his knowledge by the other partner.

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FIELD, J.: But it has been established on much consideration, as one of the general principles of the law of agency, that the principal is liable civilly in damages for the torts of his agent done for his benefit in the prosecution of his business, and within the scope of the agent's employment, and this rule has been extended to wilful trespasses, fraudulent misrepresentations, malicious prosecutions and libels.

**

"The logical difficulty of imputing the actual malice or fraud of an agent to his principal is perhaps less when the principal is a person than when it is a corporation; still the foundation of the imputation is not that it is inferred that the principal actually participated in the malice or fraud, but, the act having been done for his benefit by his agent acting within the scope of his employment in his business, it is just he should be held responsible for it in damages.

"As partners are the general agents of each other and of the firm, within the scope of the business of the partnership, we think a test of the question we are considering is the liability of the proprietor of a newspaper in damages for a libel maliciously published without his knowledge by his agent, whom he has trusted with the management of his newspaper, and this we regard as well settled. Shepheard v. Whitaker, L. R. 10 C. P. 502; Dunn v. Hall, 1 Ind. 344; Andres v. Wells, 7 Johns, 260; Perret v. New Orleans Times Newspaper, 25 La. An. 170; Storey v. Wallace, 60 Ill. 51.

*

Question 606: What was the tort in this case committed by the one partner for which the other was held liable?