SECTION 2.-PARTICULAR POWERS

Uniform Partnership Act, Section 9. (3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:

(a) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership; (b) Dispose of the good will of the business;

(c) Do any other act which would make it impossible to carry on the ordinary business of the partnership;

(d) Confess a judgment;

(e) Submit a partnership claim or liability to arbitration or ref

erence.

(4) No act of a partner in contravention of a restriction on authority shall bind the partnership to persons having knowledge of the restriction.

Section 11. An admission or representation made by any partner concerning partnership affairs within the scope of his authority as conferred by this act is evidence against the partnership.

Section 12. Notice to any partner of any matter relating to partnership affairs, and the knowledge of the partner acting in the particular matter, acquired while a partner or then present to his mind, and the knowledge of any other partner who reasonably could and should have communicated it to the acting partner, operate as notice to or knowledge of the partnership, except in the case of a fraud on the partnership committed by or with the consent of that partner.3

2 Lewis' Note to Section 11.-Admissions before dissolution concerning a particular matter should bind the partnership only where the partner has authority to act in the particular matter, and after dissolution only if neeessary to wind up the business. Where the partner has no authority to act and the person with whom he is dealing knows he has no authority, or where the admission is made after dissolution and is not for the winding up of partnership affairs, it should not affect the partnership. If it is not the act of the partnership then it should not affect the partnership. If it is not the act of the partnership then it should not be evidence against it. The words "within the scope of his authority, as conferred by this act" produce this result.

3 Lewis' Note to Section 12.-At present, there is no confusion in the law when the "notice" is given to the partner while he is a partner. In such case the effect is the same as if notice was had by all the partners. Where the knowledge or notice has been received by the partner before he became a partner, and his partners are ignorant of this, and he is not the partner acting in the particular matter, there is no doubt that there has been nei ther knowledge of or notice to the partnership, Where, however, the partner acting in the particular matter acquired knowledge before he became a partner, and the knowledge is then present in his mind, the weight of authority, and, it is submitted, of reason, appears to be that the partnership should be charged with knowledge. Mechem on Agency, p. 721. The words "acquired while a partner or then present to his mind” effect the result de sired.

It is not clear what the present law is when "knowledge," which is not the knowledge that may come from notice, has been obtained by a partner after the formation of the partnership, but the partner having such "knowledge" is not the one acting in the particular matter. It seems clear that in this

SECTION 3.-POWERS WITH RESPECT TO PARTNERSHIP REALTY

Uniform Partnership Act, Section 10.4 (1) Where title to real property is in the partnership name, any partner may convey title to such property by a conveyance executed in the partnership name; but the partnership may recover such property unless the partner's act binds the partnership under the provisions of paragraph (1) of section 9, or unless such property has been conveyed by the grantee or a person claiming through such grantee to a holder for value without knowledge that the partner, in making the conveyance, has exceeded his authority.

(2) Where title to real property is in the name of the partnership, a conveyance executed by a partner, in his own name, passes the equitable interest of the partnership, provided the act is one within the authority of the partner under the provisions of paragraph (1) of section 9.

(3) Where title to real property is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership, the partners in whose name the title stands may convey title to such property, but the partnership may recover such property if the partners' act does not bind the partnership under the provisions of paragraph (1) of section 9, unless the pur-. chaser or his assignee, is a holder for value, without knowledge.

(4) Where the title to real property is in the name of one or more or all the partners, or in a third person in trust for the partnership, a conveyance executed by a partner in the partnership name, or in his own name, passes the equitable interest of the partnership, provided the act is one within the authority of the partner under the provisions of paragraph (1) of section 9.

(5) Where the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights in such property.

SECTION 4.-POWERS ARISING BY ESTOPPEL Uniform Partnership Act, Section 4. (2) The law of estoppel shall apply under this act.

(3) The law of agency shall apply under this act.

case the partnership should be charged only when the partner having "knowledge" had reason to believe that the fact related to a matter which had some possibility of being the subject of partnership business, and then only if he was so situated that he could communicate it to the partner acting in the particular matter before such partner gave binding effect to his act. The words "who reasonably could and should have communicated it to the acting partner" accomplish this result.

4 Lewis' Note to Section 10.-The adoption of this section does away with the existing uncertainty surrounding the subject of the conveyance of real property belonging to a partnership.

BANK OF MONONGAHELA VALLEY v. WESTON et al.

(Court of Appeals of New York, 1902. 172 N. Y. 259, 64 N. E. 946.) William W. Weston and his two brothers were partners under the firm name of Weston Bros. The other members remained silent during many years, while William made or indorsed in the firm's name many notes for his individual purposes; the notes aggregating more than $1,000,000. Finally the partnership was dissolved. After dissolution, but before any notice of dissolution was given, William indorsed, in the firm name, for his individual purposes, the two notes now sued upon by a bank which discounted them. One note was for $6,500, and the other for $5,000. From a judgment in favor of the defendants, William W. Weston's partners, the bank, plaintiff, appeals.

* * *

O'BRIEN, J. * It appears without any dispute, since the facts were testified to by Abijah Weston himself, that for 10 years prior to the indorsement of the notes in question he knew that his brother who made the indorsement on these notes was using the firm name for the accommodation of others by indorsing notes in the name of the firm outside the partnership business. He had warned him against this course of business several times, and forbid him to do it any more. The brother and member of the firm who was thus engaged for years in using the firm name to give credit to the paper of parties outside the partnership business was all the time acting or assuming to act as the agent of the firm. When one partner, with the knowledge of the other partners, uses the firm name and indorsement to give credit to others in matters foreign to the partnership business, and this course of conduct is allowed by the other partners to continue during a long series of years, the question must always arise as to how far the habitual exercise of such an agency or authority, originally irregular or even void, is cured by acquiescence, or made binding upon the firm as such by the doctrines of negligence or estoppel; and this brings us to the exceptions taken to the charge of the learned trial judge in submitting the case to the jury.

*

The plaintiff's counsel requested the court to charge that, when the defendant became aware of the persistent and continued use of the firm name by his brother outside the business of the firm, it became his duty to take some public action for the protection of outside parties. The court refused to charge the request, and the plaintiff's counsel excepted. We think that the request embodied a correct and important principle applicable to the proofs in the case, and that affected the issue between the parties from various directions, and should have been charged. * * The right of one partner to use the firm name rests upon those rules and principles applicable to the relations of principal and agent. The principal will be often bound by the act of his agent in excess or abuse of his actual authority as between the principal and third persons, who, believing and having the right to believe that the agent was acting within and not exceeding his authority, would sustain loss if the act was not considered that of the principal. The doctrine is established to prevent fraud, and proceeds also upon the ground that, when one of two innocent persons must suffer from the act of a third person, he shall sustain the loss who has enabled the third person to do the injury. * * When a partnership firm, having knowledge of the continued and persistent conduct of one of its members in lend

ing the credit of the firm to others by means of accommodation paper, neglects to promptly and actively condemn the unauthorized act, and to seek judicial redress after knowledge of the committal of it, that will be deemed an acquiescence in it, and, if innocent third persons have been led thereby to put themselves in a position from which they cannot be taken without loss, if the act were held invalid, the other partners will be estopped from questioning it. *

Judgment reversed.

SECTION 5.-LIABILITY OF PARTNERS, WHEN JOINT OR JOINT AND SEVERAL

Uniform Partnership Act, Section 15. All partners are liable: (b) Jointly for all debts and obligations of the partnership; but any partner may enter into a separate obligation to perform a partnership contract."

Lewis' Note to Section 15 (b). The actual condition of the American statute law affecting the nature of partnership liability is as follows:

In the following states, by specific declaration of statutes, all partnership liability is made both joint and several: Mississippi, Missouri, New Mexico, Alabama, Maryland, West Virginia, Iowa, Kansas, Minnesota, North Carolina, and Arkansas. In some of these states the liability is merely "deemed to be joint and several for the purposes of suit." In some of the states referred to the statutes are general-that is, they include all joint liability -while in others there is the general statement, followed by specific enumeration of partnership liability. But in all the states referred to the statutes taken as a whole, effect, not only partnership liability, but also all joint liability.

In Illinois the court refused to interpret a general statute making all liability joint and several so as to include partnership liability, Fleming v. Ross, 225 Ill. 149, 80 N. E. 92, 8 Ann. Cas. 314 (1907); also the courts of Colorado, Erskine v. Russell, 43 Colo. 453, 96 Pac, 249 (1908). In New York, though the statute apparently made partners liable jointly and severally, the court refused so to interpret the act. Seligman v. Friedlander, 138 App. Div. 784, 123 N. Y. Supp. 583 (1910).

In Texas, Oklahoma, Montana, Pennsylvania, New York, Colorado, Illinois, North Dakota, South Dakota, Ohio, Massachusetts, New Jersey, Georgia, Vermont, Virginia, Rhode Island, Kentucky, Michigan, Maine, Connecticut, Idaho, and Indiana, partnership liability is joint. In many of these states, however, the results of joint liability, as known to the common law, have been modified by statute and decision. The extent of the modification varies. In some each partner must be sued severally, or all jointly; an election being required. In some the partnership may be sued in the partnership name, and thereafter the partners separately until satisfaction is had. In all the estate of the deceased partner is subject to liability, but in some only after action first had against the survivors; in others, proof of no partnership property must first be made; in others, proceedings may be first had against the estate.

The purpose of the statutes in those states which have made the liability joint and several was to effect certain procedural results, rather than to affect the substantive law. Where, therefore, a state has already declared the liability to be joint and several, then the principle of uniformity would not be affected by that state so altering this paragraph as to make the liability joint and several, as this change would affect only the procedural law and this act is one to make uniform the substantive law of partnership.

MASON v. ELDRED et al.

(Supreme Court of the United States, 1867. 6 Wall. 231, 18 L. Ed. 783.) On certificate of division between the judges of the Circuit Court of Wisconsin. The plaintiff, Mason, sued in the Circuit Court for Wisconsin Anson Eldred, Elisha Eldred, and one Balcom, trading as partners, upon a partnership note of theirs. Process was served on Anson Eldred alone, who alone appeared and pleaded non assumpsit. On the trial, the note being put in evidence by the plaintiff, Eldred offered the record of a judgment in one of the state courts of Michigan, showing that Mason had already brought suit in that court on the same note against the partnership, where, though Elisha Eldred was alone served and alone appeared, judgment in form had been passed against all the defendants for the full amount due upon the note. The evidence being objected to by the plaintiff, because not admissible under the pleadings, and because it appeared on the face of the record that there was no judgment against either of the defendants named, except Elisha Eldred, who alone, as appeared also, was served or appeared, and because it was insufficient to bar the plaintiff's action, the question whether it was evidence under the issue in bar of, and to defeat, recovery against Anson Eldred, was certified to, this court for decision as one on which the judges of the Circuit Court were opposed.

FIELD, J. The counsel of the plaintiff suggests that the question presented by the certificate of the judges of the Circuit Court is divisible into two parts: (1) Whether the record of the judgment recovered in Michigan was admissible under the pleadings; and (2) whether, if admissible, the judgment constituted a bar to the present action. We think, however, that the admissibility of the record depends upon the operation of the judgment.

If the note in suit was merged in the judgment, then the judgment is a bar to the action, and an exemplification of its record is admissible; for it has long been settled that under the pleas of the general issue in assumpsit evidence may be received to show, not merely that the alleged cause of action never existed, but also to show that it did not subsist at the commencement of the suit. * * * On the other hand, if the note is not thus merged, it still forms a subsisting cause of action, and the judgment is immaterial and irrelevant.

The question, then, for determination, relates to the operation of the judgment upon the note in suit.

The plaintiff contends that a copartnership note is the several obligation of each copartner, as well as the joint obligation of all, and that a judgment recovered upon the note against one copartner is not a bar to a suit upon the same note against another copartner; and the latter position is insisted upon as the rule of the common law, independent of the joint debtor act of Michigan.

It is true that each copartner is bound for the entire amount due on copartnership contracts, and that this obligation is so far several that, if he is sued alone and does not plead the nonjoinder of his copartners a recovery may be had against him for the whole amount due upon the contract and a joint judgment against the copartners may be enforced against the property of each. But this is a different thing from the liability which arises from a joint and several contract. There the contract contains distinct engagements, that of each contractor in