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It was agreed between the plaintiff and one of the defendants, proprietors of a stage-coach, to carry certain parcels for the plaintiff free of expense, which were accordingly carried for two years, but there was no evidence of any knowledge of this agreement by the other defendants; and the defendants had given notice that they would not be accountable for parcels above the value of 57., unless entered and paid for, &c.; it was held that the defendants were not liable for the loss of a parcel above the value of 51., sent by the plaintiff under the agreement. No notice of the value of the parcel had been given to the defendants. The court considered the agreement with one of the firm as a fraud on the other partners, and made for the individual benefit of that defendant (h).

Although no fraud exist, and the transaction be purely of a partnership nature, the act or contract of one partner does not bind the firm, if the creditor received a previous express warning from the other partners that they would not consider themselves responsible (i). The authority of one partner to bind the firm is only implied, and no one can become the creditor of another against his express and declared will.

There have been some decisions in regard to the liability of partners for money actually advanced to one partner, but applied to partnership purposes. It seems that if a partner solely borrow a sum of money, and give his own security for it, it does not become a partnership debt, by being applied for partnership purposes, even with the knowledge of the other partner (k). In Smith v. Craven (1), it appeared that A., B., and C., not being general partners, entered into a joint speculation, and each was to contribute a third; it was held that A., who had paid his share, was not liable to the bankers of B. for monies advanced by such bankers, on the individual credit of B., with the knowledge of A., though such monies were applied in payment of bills drawn upon B. in the course of the joint speculation. And where one of two partners drew bills of exchange in his own name, which he procured to be discounted with a banker, through the medium

(h) Bignold v. Waterhouse, 1 M. & Selw. 255.

(i) V. Layfield, 1 Salk. 292; Gallway v. Matthew, 10 East, 264; Willis v. Dyson, 1 Stark. R. 164; Vice v. Fleming, 1 Y. & J. 227. A subsequent act of adoption or re

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cognition might render the party liable; Willis v. Dyson. See ante,

253.

(k) Beavan v. Lewis, 1 Sim. 376; Loyd v. Freshfield, 2 C. & P. 325; Vere v. Ashby, 10 B. & C. 288. (1) 1 C. & J. 500.

of the same agent, who procured the discount of other bills drawn in the partnership firm with the same banker; it was held that the latter had no remedy against the partnership, either upon the bills so drawn by the single partner, or for money had and received through the medium of such bills, although the proceeds were carried to the partnership account; the money being advanced solely on the security of the parties, whose names were on the bills, by way of discount, and not by way of loan to the partnership, although the bankers conceived at the time that all the bills were drawn on the partnership account (m). But where one of two partners having authority to bind the other by drawing or indorsing bills of exchange, raised money by bills in fictitious names, indorsed by him in the partnership firm, and the money was afterwards applied to the partnership purposes; it was held that the other partner was liable to the persons from whom the money was so obtained (n). So where one of several partners, with the privity and by the authority of the others, drew bills of exchange in his own name upon the partnership firm, in favour of persons who advanced the amount, which he applied to the use of the partnership; Lord Ellenborough, C. J. held at nisi prius, that although the partners were not jointly liable on the bills, they might be jointly sued by the payees for money lent, the transaction being a loan rather than a discount (o).

Although the firm may be liable to the lender of money advanced to one partner for the partnership purposes, on the credit of the firm, yet if the loan be made to one partner, under circumstances of negligence, and out of the ordinary course of business, and the money be misapplied, the other partners, not being privy to the advance, will not be liable, although the partner who received the money said at the time that he borrowed it for the firm (p).

In regard to contracts of a personal nature with a firm, as a contract with coachmakers to hire of them a carriage for a certain term, it seems that the firm cannot, by dissolving the firm and receiving a new partner, and transferring the carriage and the

(m) Emly v. Lye, 15 East, 7; see Ex parte Bolitho, Buck, 1100.

(n) Thicknesse v. Bromilow, 2 C. &

J. 425.

(0) Denton v. Robie, 3 Camp. 493;

observed upon by Mr. Baron Bayley in Smith v. Craven, 1 C. & J. 507; Ex parte Bolitho, Buck, 1100.

(p) Loyd v. Freshfield, 2 C. & P.

325.

interest of one of the partners in the contract to another person, vest in him a right of action on such contract (q).

III. Of the Dissolution of a Partnership, and of Contracts subsequently made.

A partnership may be dissolved (r); 1st, by the act of the parties, as by their mutual consent; or where no specific period is limited for the continuance of the partnership, either party may dissolve it instantly (s): 2ndly, by the act of God, as by the death (t) of one of the partners: 3rdly, by act of law, as where the partnership is formed to effect a particular object, which is found to be impracticable and wholly fails (u); or where one of the partners becomes a bankrupt (x).

But in order to render the dissolution of a partnership by consent effectual as regards the public, it is in general necessary that notice should be given thereof in the Gazette (y). And if a partner retire, without notice being given in the Gazette, and the name of the firm is still preserved, a person dealing with the firm after the dissolution may still call upon all the original parties, unless he had notice or knew that one of them had

(9) Robson v. Drummond, 2 B. & Ad. 303.

(r) See 1 Montagu on Partnership, 86, part iii. c. 1; French Code Civil, book 3, tit. 9, c. 3.

(s) Master v. Kirton, 3 Ves. 74; Tattersall v. Groote, 2 B. & P. 131; Peacock v. Peacock, 16 Ves. 49; Featherstonhaugh v. Fenwick, 17 id. 298; Crawshay v. Maule, 1 Swanst. 508, per Lord Eldon, C.; see Littlewood v. Caldwell, 11 Price, 48; Heath v. Sansom, 1 Nev. & M. 104; 4 B. & Ad. 173, S. C.

(t) Pearce v. Chamberlain, 2 Ves. 33; Crawshay v. Maule, 1 Swanst. 508; per Eldon, C.;-" Although a partnership is entered into for a term of years, it is previously dissolved by the death of either of the partners, unless there be an express stipulation to the contrary;" Crawford v. Hamilton, 3 Madd. 251. As to the effect of such stipulation, if nominee of deceased partner will not act, &c., Regshaw v. Matthews, 2 Russ. 62. The lunacy of a partner is not ipso facto a

dissolution of the partnership, but forms ground for a decree of dissolution if the other partner come to the court with clear and decisive evidence of the lunacy; Jones v. Noy, 2 Myl. & K. 125; Kirby v. Carr, 3 Y. & Col. 184; 2 Jurist, 741, S. C.; and see Sayer v. Burnett, Wats. on P. 382; 1 Montagu on P.16, n.; and the cases cited in the note to Crawshay v. Maule, 1 Swanst. 514. The lunatic partner is entitled to a share of the profits up to the time of actual dissolution, Jones v. Noy, supra.

(u) Baring v. Dix, 1 Montag. Partnership, 90, note (h); Nockles v. Crosby, 3 B. & C. 814; 5 D. & R. 751, S. C.

(x) Hayne v. Rolleston, Burr. 2174; For v. Hanbury, Cowp. 447; Er parte Ruffin, 6 Ves. 126; Smith v. Stokes, 1 East, 364; Thomason v. Frere, 10 id. 418; Harvey v. Crickett, 5 M. & Selw. 336, 340.

(y) Gorham v. Thompson, Peake's R. 42; Godfrey v. Turnbull, 1 Esp.

R. 371.

retired (2). And even where an infant held himself out as being in partnership with T. S., and continued to act as such till within a short period of his coming of age, but there was no proof of his doing any act as a partner after that period; it was held that it was his duty to notify his disaffirmance of the partnership on arriving at the age of twenty-one, and as he had neglected to do so, that he was responsible to persons who had trusted T. S. with goods subsequently to the infant's attaining twenty-one, on the credit of the partnership (a). A public notice will however be sufficient to exonerate a retiring partner from the responsibility on contracts entered into by the firm after such dissolution, with persons who had not previously transacted business with it; even though such persons were ignorant of the dissolution, and the remaining partners carry on the concern under the style of the old firm, without the consent of the former partner (b). And it appears that a partner who has never been known to be such, that is, a dormant partner, need give no notice whatever of his retirement to discharge himself from responsibility to persons who, being ignorant that he was once a partner, subsequently contract with the firm (c). But if a debtor, who is a partner in a firm, leaves that firm, and any person trading with the firm has notice of it, and goes on trading with the firm and making fresh contracts, the retiring partner is not liable, though no new partner joins the firm (d).

It is however clear that an express and particular notice of the dissolution must be given, or actual knowledge thereof proved, to discharge a retiring partner from future responsibility to persons who before the dissolution trusted and dealt with all the partners (e); but such knowledge may either be shown by direct evidence or inferred by the jury from circumstances (f).

A change of partners in a banking-house is generally notified by a circular letter to the customers; but it seems that a change of names in the printed cheques of the house is sufficient notice of the dissolution of the partnership to those customers who have

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drawn cheques addressed to the new firm (g). And where a person sued as a partner for the value of goods furnished for "the owners" of a ship, was neither a partner in fact at the time (having parted with his share some time before), nor held himself out as such, having before withdrawn his name from the description of the firm at the counting-house, and sent circular letters to the correspondents of the house notifying the change; it was decided that he should not be charged, merely because having effectually conveyed his whole share in the ship before that time, he had subsequently joined with the assignees of the bankrupt partners in the ship, in making a good title to it, to a purchaser from the assignees (h).

Whenever a communication has been made of the intention of parties to dissolve a partnership, which is in the course of execution, the burden is thrown upon the creditor of proving that the intention has been abandoned (i).

After the dissolution of a firm, and due notice thereof given when necessary, it is not in the power of one of the members who composed the firm to bind the others, by putting the partnership name on any negociable security, although the instrument existed prior to their dissolution, or was made for the purpose of liquidating the partnership debts, and the party signing was authorised to settle the partnership affairs (k). But the authority and power of the partners continue for some purposes in regard to transactions which occurred during the partnership (1). Thus either party may after a dissolution receive, or it seems release a debt due to the old firm, although it were stipulated as one of the terms of dissolution that the debt should be paid to the other partner or to a third person (m); and an admission made by one of two partners (n) after the dissolution of the partnership, concerning joint contracts that took place during the partnership, is competent evidence to charge the other partner (o). And where by a deed of dissolution of partnership a power was reserved to the remaining partners to use the name of the retiring partner in

(g) Barfoot v. Goodall, 3 Camp. 147. (h) MIverv. Humble, 16 East, 169. (i) Paterson v. Zachariah, 1 Stark. R. 71.

(k) Abel v. Sutton, 3 Esp. 108; Ramsbottom v. Lewis, 1 Camp. 281; Thomason v. Frere, 10 East, 418.

(1) Beak v. Beak, 3 Swanst. 627.

(m) Porter v. Bristow, 6 M. & Selw. 156; King v. Smith, 4 C. & P. 108. See Biggs v. Fellows, 8 B. & C. 402.

(n) Aliter in the case of part owners of a ship, Jaggers v. Binnings, 1 Stark. 64; Hooper v. Lusby, 4 Camp. 66.

(0) Wood v. Braddick, 1 Taunt. 104.

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