« ForrigeFortsett »
One partner may, by deed, exeoute the ordinary release of a debt belonging to the copartnership, and thereby bar the firm of a right which it possessed jointly. This is within the general control of the partnership funds, and within the right which each partner possesses, to collect debts and receive payment, and to give a discharge. The rule of law and equity is the same; and it must be a case of collusion for fraudulent purposes, between the partner and the debtor, that will destroy the effect of the release. (c) A release by one partner, to a * part- * 49 nership debtor, after the dissolution of the partnership, has been held to be a bar of any action at law against the debtor. (a) So also in bankruptcy, one partner may execute a deed, and do any other act requisite in proceedings in bankruptcy, and thereby bind the partnership. This is another exception to the general rule, that one partner cannot bind the company by deed. (6) Nor can one partner bind the firm by a submission to arbitration, even of matters arising out of the business of the firm. The principle is, that there is no implied authority, except so far as it is necessary to carry on the business of the firm. (c) It would also go to deprive the other parties of their legal rights and remedies in the ordinary course of justice. (d)
to make a sealed instrument, executed by one partner only, binding on the firm, and which doctrine has become essentially relaxed in the commercial states.
(c) Tooker's case, 2 Co. 68; Ruddock's case, 6 Co. 25 ; Lord Kenyon, in Perry v. Jackson, 4 Term Rep. 519; Stead v. Salt, 3 Bing. 101 ; Hawkshaw v. Parkins, 2 Swanst. 539 ; Pierson v. Hooker, 3 Johns. 68 ; Bruen v. Marquand, 17 Johns. 58; Salmon v. Davis, 4 Binney, 375; Halsey v. Whitney, 4 Mason, 206, 232; Smith v. Stone, 4 Gill & Johns. 310.
(a) Salmon v. Davis, 4 Binney, 375 ; Huntington v. Potter, 32 Barb. (N. Y.) 300. (6) Ex parte Hodgkinson, 19 Vesey, 291.
(c) Stead v. Salt, 3 Bing. 101 ; Karthaus v. Ferrer, 1 Peters U. S. 222; Buchanan v. Curry, 19 Johns. 137; Lumsden v. Gordon, cited in 1 Stair's Institutions of the Law of Scotland, p. 141, edit. by More, 1832. Contra, Taylor v. Coryell, 12 Serg. & Rawle, 243 ; Southard v. Steele, 3 Monroe, 433.
(d) Story on Partn. § 114. By the civil and the French law, one partner cannot compromise a suit, or submit a controversy to arbitration, without the consent of his associates. Dig. 3, 3, 60; Pothier, de Société, n. 68. Nor can one partner retain an attorney, with power to appear and act for the firm in an action against it, for this would be beyond the ordinary duties of the relationship, and would expose the innocent partner to judgment and execution without his knowledge or consent. Hambidge v. De la Crouée, 3 Mann., Gr. & Scott, 742.1
1 Where there are three partners for an indefinite time, two cannot bind the third by an agreement to dissolve, and that one of the two shall be repaid his advances. Gan. sevoort v. Kennedy, 30 Barh. (N. Y.) 279.
(7). How far by admissions of debt.
The acknowledgment of an antecedent debt by a single partner, during the continuance of the partnership, will bind the firm equally with the creation of the debt in the first instance; and it will take the case out of the statute of limitations, if it be a clear and unqualified acknowledgment of the debt. (e) Whether any such acknowledgment, or promise to pay, if made by one partner after the dissolution of the partnership, will bind a firm, or take a case out of the statute as to the other partners, has been for some time an unsettled and quite a vexed quostion, in the books. In Whitcomb v. Whiting, (f) it was held, that the admission of one joint maker of a note took the case out of the statute as to the other maker, and that decision has been followed in this country. (g) The doctrine of that case has even been extended to acknowledgment by a partner after this dissolution of the
partnership, in relation to antecedent transactions, on the *50 * ground that, as to them, the partnership still contin
ued. (a) But there have been qualifications annexed to the general principle ; for after the dissolution of a partnership, the power of the members to bind the firm ceases, and an acknowledgment of a debt will not, of itself, be sufficient, inasmuch as that would, in effect, be keeping the firm in life and activity.(6) To give that acknowledgment any force, the existence of the original partnership debt must be proved, or admitted aliunde ; and then the confession of a partner, after the dissolution, is admis
(e) Pittam v. Foster, 1 Barn. & Cress. 248; Burleigh v. Stott, 8 Id. 36; Collyer on Partn. 286 - 290. The same principle applies as to the admission or misrepresentation of facts by one partner relative to a partnership transaction. Collyer on Partn. 290: Story on Partn. § 107.
(f) Doug. 652.
(9) Bound v. Lathrop, 4 Conn. 336; Hunt v. Bridgham, 2 Pick. 581 ; Ward v. Hovell, 5 Harr. & Johns. 60; Walton v. Robinson, 5 Iredell (N. C.) Law, 341. By Mass. R. S. c. 120, sec. 14, one joint promisor is not affected by the admission of the other.
(a) Wood v. Braddick, 1 Taunt. 104; Lacy v. M'Neile, 4 Dowl. & Ryl. 7; Cady v. Shepherd, 11 Pick. 408; Austin v. Bostwick, 9 Conn. 496 ; Hendricks v. Campbell, i Bailey (S. C.) 522 ; Simpson v. Geddes, 2 Bay, 533 ; Fisher v. Tacker, 1 M'Cord Ch. 190; Fellows v. Guimarin, Dudley (Geo.) 100; Brewster v. Hardeman, Ibid. 140; Greenleaf v. Quincy, 3 Fairfield, 11.
(6) Hackley v. Patrick, 3 Johns. 536; Walden v. Sherburne, 15 Id. 409; Baker v. Stackpole, 9 Cowen, 420; Shelton v. Cocke, 3 Munf. 191 ; Chardon v. Colder, 2 Const. (S. C.) 685; Fisher v. Tucker, 1 M'Cord Ch. 177, 179 ; Walker v. Duberry, A. K Marsh. 189; Lachometto v. Thomas, 5 Rob. (Louis.) 172.
sible, as to demands not barred by the statute of limitations. (c) Of late, however, the decision in Whitcomb v. Whiting has been very much questioned in England; and it seems now to be considered as an unsound authority by the court which originally pronounced it. (d) And we have high authority in this country for the conclusion, that the acknowledgment by a partner, after the dissolution of the partnership, of a debt barred by the statute of limitations, will be of no avail against the statute, so as to take the debt out of it as to the other partner, on the ground that the power to create a new right against the partnership does not exist in any partner after the dissolution of it;1 and the acknowledgment of a debt, barred by the statute of limitations, is not the mere continuation of the original promise, but a new contract, springing out of and supported by the original consideration. This is the doctrine, not only in New York, Indiana, Pennsylvania, Tennessee, Georgia, and Louisiana, but in the Supreme Court of the United * States ; (a) and the law in England *51 and in this country seems equally to be tending to this
(c) Smith v. Ludlows, 6 Johns. 267; Johnson v. Beardslee, 15 Id. 3; Cady v. Shepherd, 11 Pick. 400 ; Brisban v. Boyd, 4 Paige, 17; Greenleaf v. Quincy, 3 Fairfield, 11; Sage v. Ensign, 2 Allen, 245.
(d) Brandram v. Wharton, 1 B. & Ald. 463 ; Atkins v. Tredgold, 2 Barn. & Cress. 23. But in Perham v. Raynall, 9 Moore C. B. 566, the authority of the case of Whitcomb v. Whiting is reinstated ; and it was held to contain sound doctrine, to the extent that an acknowledgment within the six years, by one of two makers of a joint and several note, revives the debt against both, though the other had signed the note as a surety. Pease v. Hirst, 10 Barn. & Cress. 122; Pritchard v. Draper, 1 Russ. & Myl. 191, S. P.
(a) Bell v. Morrison, 1 Peters U. S. 351 ; Levy v. Cadet, 17 Serg. & Rawle, 126 ; Searight v. Craighead, 1 Penn. 135; Yandes v. Lefavour, 2 Blackf. (Ind.) 371; Hopkins v. Banks, 7 Cowen, 650; Baker v. Stackpoole, 9 Id. 420 ; Brewster v. Hardeman, Dudley, 138 ; Lambeth v. Vawter, 6 Rob. (Louis.) 128; 2 Humph. 166, 529 ; Bispham v. Patterson, 2 McLean. 87. In this last case, Mr. Justice McLean considers the Eng. lish rule, that the admission of one partner, made after the dissolution of the partnership, and even of a payment made to him after the dissolution, is good evidence to bind the other partners, to be well settled and upon sound principles; but he yields his better judgment to the contrary doctrine, settled by the weight of American authority.
1 Such is the settled law of New York. Van Keuren v. Parmelee, 2 Comst. 523; Shoemaker y, Benedict, 1 Kernan, 176. But see Reid v. McNaughton, 15 Barb. (N Y.) 168. If the creditors have no notice of the dissolution, a partial payment by one partner will take the case out of the statute. Tappan v. Kimball
, 10 Foster, 136. The doctrine of the text is law in Missouri. Pope v. Risley, 23 Missou. (2 Jones,) 185 ; anıl in Michigan, Pennover v. Navid, 8 Mich. 407.
conclusion. (6) But there is a distinction between an acknowledgment which goes to create a new contract, and the declarations of a partner, made after the dissolution of the partnership, concerning facts which transpired previous to that event; and declarations of that character are held to be admissible. (c)
If, however, in the terms of dissolution of a partnership, one partner be authorized to use the name of the firm in the prosecu. tion of suits, he may bind all by a note for himself and his partners, in a matter concerning judicial proceedings. (d)
(8.) Dealing on separate account.
The business and contracts of a partner, distinct from and inde pendent of the business of the partnership, are on his own account; and yet it is said that one partner cannot be permitted to deal on his own private account in any matter which is obviously at variance with the business of the partnership, and that the company would be entitled to claim the benefit of every such contract. (e) The object of this rule is to withdraw from each partner the temptation to bestow more attention, and exercise a sharper sagacity, in respect to his own purchases and sales, than to the concerns of the partnership * in the same line of business. The
(6) This is contrary to a decision in North Carolina, in M’Intire v. Oliver, 2 Hawks, 209, and recognized in Willis v. Hill, 2 Dev. & Bat. 234, and in Walton v. Robinson, 5 Iredell Law (N. C.) 341 ; but it may now be considered as the better and more authoritative, and perhaps the settled doctrine. By the English statute of 9th May, 1828, entitled “An Act rendering a written memorandum necessary to the validity of certain promises and engagements,” it is declared, in reference to acknowledgments and promises offered in evidence to take cases out of the statute of limitations, that joint contractors, or executors, or administrators of any contractor, shall not be chargeable in respect of any written acknowledgment of his co-contractor, &c., though such co-contractor, his executors, &c., may be rendered liable by virtue of such new acknowledgment or promise. The like law in Mass. R. S. c. 120, sec. 14; Gay » Bowen, 8 Metcalf, 100; Cady v. Shepherd, 11 Pick. 400.
(c) Parker v. Merrill, 6 Greenl. 41 ; Mann v. Locke, 11 N. Hamp. 246. (d) Burton v. Issit, 5 B. & Ald. 267.
(e) Pothier, Traité du Con. de Soc. No. 59; Glassington v. Thwaites, 1 Sim. & Stu. 133 ; Featherstonhaugh v. Fenwick, 17 Vesey, 298; Burton v. Wookey, Madd. & Geld. 367; Russell v. Austwick, 1 Sim. 52; Fawcett v. Whitehouse, 1 Russ. & My. 132, 148. In the case from Vesey, one partner had secretly, for his own benefit, obtained a renewal of the release of the premises where the joint trade was carried on, and the lease was held to be a trust for the benefit of the copartnership. See infra, vol. iv. 371.
1 Anderson v. Lemon, 4 Seld. 236; Rothwell v. Dervees, 2 Black, 613.
rule is evidently founded in sound policy ; and the same rule is applied to the case of a master of a vessel, charged with a cargo for a foreign market, and in which he has a joint concern. (a) But a person may become a partner with one individual of a partnership, without being concerned in that partnership; for though A. & B. are mercantile partners, A. may form a separate partner ship with C., and the latter would have no right to a share in the profits, nor would he be bound for the engagements of the house of A. & B., because his partnership would only extend to the house of A. & C. (6)? But such involved partnerships require to be watched with a jealous observation, and especially if they relate to the business of the same kind, inasmuch as the attention of the person belonging to both firms might be distracted in the conflicts of interest, and his vigilance and duty in respect to one or the other of the concerns become much relaxed. Partners are bound to conduct themselves with good faith, and to apply themselves with diligence in the business of the concern, and not to divert the funds to any purpose foreign to the trust. (c)
(a) Boulay Paty, Cours de Droit Com. tom. ii. 94.
(6) Ex parte Barrow, 2 Rose Cases in Bankr. 252; Glassington v. Thwaites, 1 Sim. & Stu. 124, 133. Lord Eldon there refers to the case of Sir Charles Raymond, as containing the doctrine. It was also the doctrine of the civil law, and is the law of those countries which follow the civil law. Socii mei socius, meus socius non est, Dig. 17, 2, 20; Pothier, Traité du Con. de Soc. No. 91 ; Ersk. Inst. vol. ü. 6, 3, sec. 22; Bell's Com. vol. ii. 654 ; Civil Code of Louisiana, art. 2842. There can be no doubt, said Lord Ch. J. Eyre, 1 Bos. & Pull. 546, that, as between themselves, a partnership may have transactions with an individual partner, 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 convert the joint property of the general partnership into the separate property of an individual partner, or into the joint prop erty of two or more partners, or e converso. See, also, Gow on Partn. p. 75; Collyer on Partn. pp. 175 – 178; Story on Partn. $ 219.
(c) Stoughton v. Lynch, 1 Johns. Ch. 470 ; Long v. Majestre, Ibid. 305; Fawcett v. Whitehouse, 1 Russ. & My. 132; Collyer on Partn. 96. If the partnership suffers loss from the gross negligence, unskilfulness, fraud, or wanton misconduct of a partner, in the course of their business, or from a known deviation from the partnership articles, he is ordinarily responsible over to the other partners for all losses and damages sustained thereby. Maddeford v. Austwick, 1 Sim. 89; Pothier, de Société, n. 133; Story on Partn. S$ 169 - 173.2
1 As to sub-partnerships and the liability of sub-partners for the debts of the firm, see Collyer on Partn. (5th Am. ed.) § 194 and note ; Fairholm v. Majoribanks, 3 Ross Com. Law, 697 ; 1 Lindley Partn. (Eng. ed.) 53 ; Bray v. Fromont, 6 Madd. 5 ; Killock v. Greg, 4 Russ. 285; Ex parte Dodgson, Mont. & M'Ar. 445; Poth. Partn. c. 5, § 11, No. 91 ; Fitch v. Harrington, 13 Gray 468.
2 Terry v. Carter, 25 Miss. 168.