cially receiving and holding the beneficial results of it; as, for example, taking and holding money received from it.

By the earlier and more stringent rules of law, a partner could not bind his copartners by an instrument under seal, unless he was himself authorized under seal; and their subsequent acknowledgment of his authority did not cure the defect. Now, however, a partner may bind his firm by an instrument under seal, if it be in the name and for the use of the firm, and in the transaction of their usual business, provided the other copartners assent thereto before execution, or adopt and ratify the same afterwards; and they may assent or ratify by word as well as by seal; or provided he could have made the same conveyance, or done the same act effectually, without a deed. And a deed executed by one partner in the presence and with the assent of the other partners will bind them.

A partnership has no seal at law, and can have none: only a person or a corporation can have a seal. Instruments are sometimes executed, " A B & Co.,” and a seal is affixed to the name, This is, strictly speaking, no seal at all; and if the instrument needs a seal to make it valid, as if it were a deed of land, it would, at law, be wholly void. But the courts in some of our States are somewhat lax on this subject, and might construe it as the seal of each one of the partners to give the instrument validity.

A majority of the members cannot conclusively bind the minority, unless in reference to the internal concerns of the firm; as, for example, the salary or appointment of a clerk, the hiring or fittingup of a counting-room, the manner of keeping accounts, and the like. But one member may, so far as he is concerned, arrest a negotiation which was only begun, and prevent a bargain which would be binding on him, by giving notice to the third party of his dissent and refusal in season to enable him to decline the bargain without detriment.

Partners must act as such, to bind each other. Thus, if a partner makes a note, and signs it with his own name and his partner's name, as a joint and several note, it does not bind his partner, for the partnership gave him no authority to make such a note.

-

If the name of one partner be also the name of the firm, for John Smith and Henry Robinson may do business as partners under the name of "John Smith,”—this name is not necessarily the name of the firm when used in a note or contract; and if the partner whose name is used carries on mercantile business for himself, it will not be supposed to be used as the name of the firm, without sufficient proof.

One who is not a partner will not have either the authority or the obligation of a partner cast upon him by an agreement of the

firm to be governed by his advice. Nor shall one be charged as partner with others, unless he has incurred the liability by his own voluntary act.

The reception of a new member constitutes, in law, a new firm ; but the new firm may recognize the old debts, as by express agreement, or paying interest, or other evidence of adoption, and then the new firm is jointly liable for the old debt. But there must be some fact from which the assent of the new member to this adoption of the old debt may be inferred, for his liability is not to be presumed.

A notice in legal proceedings, abandonment to insurers by one who was insured for himself and others, a notice to quit of one of joint lessors or lessees who are partners in trade, notice to one partner of the dishonor of a note or bill bearing the name of the firm, a release to one partner or by one partner, will bind all the partners, and render them jointly liable. But a service of legal process should be made upon each partner personally.

If money be lent to a partner for partnership purposes, it creates a partnership debt; but not if lent expressly on the individual credit of the person borrowing; and not if the borrowing partner receives it to enable him to pay his contribution to the capital of the firm. Though the money be not used for the firm, if it was borrowed by one partner on the credit of the firm, in a manner and under circumstances justifying the lender in trusting to that credit, it creates a partnership debt. And if a partner uses funds in his hands as trustee, for partnership purposes, the firm are certainly jointly bound, if it was done with their knowledge. And if it was done without their knowledge, and the partners are distinctly and directly benefited by the transaction, and retain the benefit, they will be liable as if they had authorized it.

If in any case a person, knowing the existence of the firm, gave credit to a single partner only, then he can look only to that partner, and not to the firm, although the money was applied to and used for partnership purposes. But if the partner held himself out as borrowing for the firm, and the lender without any want of due care gave credit to the firm, and the transaction was a fair business transaction on the part of the lender, the firm will be liable, although the money is fraudulently appropriated by the partner to his own use.

In the absence of evidence showing to whom the credit was given, the fact that money lent to one partner was applied to the use of the firm, will make the firm liable for the payment; but not if the partner employed it as his contribution to increase the capital of the firm.

If the purchaser of goods or the borrower of money have a dormant and secret partner, and the goods were bought or the money borrowed for partnership purposes, the seller or lender may look to both partners for payment, unless the seller or lender, knowing all the partners, gave credit to one only.

The firm is liable only to one who deals with a partner in good faith. Thus, if one receives negotiable paper bearing the name of a firm, knowing that it is not in the business of the firm, and is given for no consideration received by the firm, he cannot hold the firm. And if a creditor of one partner receive for his separate debt a partnership security, this would be a fraud, unless the partner had, or was supposed by the creditor to have, the authority of the rest.

If he supposed the partner had this authority, he cannot hold. the partnership if the partner had not the authority, unless the partnership had caused him to believe it. And if the partnership security be transferred for two considerations, one of which is private and fraudulent, and the other is joint and honest, the partnership is bound for so much of it as is not tainted with fraud, and only for that.

The partnership may be liable for injury caused by the criminal or wrongful acts of a partner, if these were done in the transaction of partnership business, and if it was the partnership which gave to the wrong-doer the means and opportunity of doing the wrong. But an illegal contract will not bind the copartners, for the parties entering into it must be presumed to know its illegality; and the law enforces no bargain that is contrary to law.

The acknowledgment of one who had been a partner, after the dissolution of the partnership, may take the debt out of the statute of limitations as to him, but not so as to restore the liability of all the partners without their assent.

SECTION VI.

REMEDIES OF PARTNERS AGAINST EACH OTHER.

It is seldom that a partner can have a claim against another partner, as such, which can be examined and adjusted without an investigation into the accounts of the partnership, and, perhaps, a settlement of them. Courts of law have ordinarily no adequate means of doing this; and therefore it is generally true that no partner can sue a copartner at law for any claim growing out of partuership transactions and involving partnership interests. But the objection to a suit at law between partners goes no further than

the reason of it; and, therefore, one may sue his copartner upon his debt or agreement to do any act which is not so far a partnership matter as to involve the partnership accounts.

If the accounts are finally adjusted, either partner may sue for a balance; and so it would be if the accounts generally remained open, but a specific part of them were severed from the rest, and a balance found on that. The rule is generally laid down, that an action cannot be sustained by a partner against a partner for a balance, unless there is an express promise to pay it. But such promise would be inferred in all cases in which an account had been taken, and a balance admitted to be due.

In general, any action at law between partners can be main tained only when a rendering of judgment in this action will com. pletely terminate all partnership matters, so that no further cause of action can grow out of them.

What a court of law cannot do as to actions between partners a court of equity can; and, generally, a court of equity has a full jurisdiction over all disputes and claims between partners, and may do whatever is necessary to settle them in conformity with justice.

A partner may sue his copartner for money advanced before the partnership was formed, although the loan was made to promote the partnership. And for work done for the firm before he became a member of it, he may sue those who were members when he did the work. And he may sue a copartner on his note or bill, although the consideration was on partnership account; but, in general, no action at law can be maintained by a partner against his partners for work and labor performed, or money expended for the partnership.

A partner who pays more than his proportion of a debt of the partnership cannot demand specific contribution from his copartners, but must charge his payment to the firm. The reason is, that they may have claims against him on other accounts, and they must be all settled together to strike the balance.

If one of a firm be a member also of another firm, the one firm cannot sue the other; for the same person cannot be plaintiff and defendant of record. A cannot sue A; and therefore A, B, & C cannot sue C, D, & A. In all these cases an adequate remedy be found in a court of equity.

may

If a firm have a negotiable note which it cannot sue, because one of its own firm is liable upon it and must be made defendant, it can indorse the note over, and the indorsee may sue it in his own name, as we have before stated. (See Section 6, Chapter XVIII.)

The partners are entitled to perfect good faith from each copartner; and a court of equity will interfere to enforce this. No part

ner will be permitted to treat privately, and for his own benefit alone, for a renewal of a lease, or to transfer to himself of any benefit or interest properly belonging to the firm. And so careful is a court of equity in this respect, that it will not permit a copartner, by his private contract or arrangement, to subject himself to a bias or interest which might be injurious to the firm, and conflict with his duty to them, but will declare void any contract of this kind.

SECTION VII.

RIGHTS OF THE FIRM AGAINST THIRD PARTIES.

If a partner sells the goods of the firm in his own name, the firm may sue for the price. But the rights of one who deals in good faith with a copartner, as with him alone, are so far regarded, that he may set off any claim, or make use of any other defences against the suit of the firm, which he could have made had the person with whom he dealt sued alone.

Therefore, if A honestly bought goods of a firm from a partner whom he supposed to be sole owner of them, and paid him the price, the firm cannot recover this price from the buyer, although the seller sold the goods fraudulently, and cheated the firm out of the money, but must charge the price to the selling partner.

A guaranty to a copartner, if for the use and benefit of the firm, gives to them a right of action.

A new firm, created by some change in the membership of an old firm, is entitled to the benefit of a guaranty given to the old firm, even if sealed, only when it shall distinctly appear that the instrument was intended to have that effect, and extend to the new firm.

SECTION VIII.

RIGHTS OF CREDITORS IN RESPECT TO FUNDS.

The property of a partnership is bound to pay the partnership debts; and, therefore, a creditor of one copartner has no claim to the partnership funds until the partnership debts are paid. If there be then a surplus, he may have that copartner's interest therein, in payment of his private debt.

If a private creditor attaches partnership property, or in any way seeks to appropriate it to his private debt, the partnership debts being unpaid, he cannot hold it, either at law or in equity. Such attachment or appropriation is wholly subject to the paramount claims of the partnership creditors, and is wholly defeated by the