sum the firm may be indebted to him, he has no exclusive right to any part of the joint effects, until a balance of accounts be struck between him and his copartners, and it be ascertained precisely what is the actual amount of his interest (a).

Besides the purchase of joint stock, partners are sometimes obliged to invest part of their capital in real property; for it very frequently happens, that joint undertakings require the possession of lands or houses, in order to carry on the intended trade or speculation. Wherever that is the case, and the lands or houses purchased with the joint capital are held for the purpose of, and as the substratum for the partnership concern, the partners are in reality, and to all beneficial intents, tenants in common thereof, without regard to the form of the conveyance, the individual to whom it is made, or the length of time for which the interest is to endure. Courts of law, it is true, must look to the legal estate; they will consider the survivor of two joint-tenants as, invariably, entitled to the whole by survivorship; and if lands are conveyed to one of several partners, they will invest him with all the rights of a tenant in severalty, excluding from their attention the funds from which the lands were bought, and the object of the purchase. But courts of equity, unfettered by technical rules, seek to effectuate the intention of the parties, and are guided by the justice of each particular case: they, consequently, conceive, that there is a tenancy in common between partners of real property, and they decree the person in whom the legal estate vests to be a trustee for those beneficially interested. In equity, therefore, real estates, bought by a commercial partnership, for the purpose of the partnership concern, are to be considered as forming a part of the partnership fund (b). Thus,

(a) Fox v. Hanbury, Cowp. 445. Smith v. De Silva, Ibid. 469. West v. Skip, 1 Ves. Jun. 242. S. C. 2 Swanst. 586. Lingen v. Simpson, 1 Sim. & Stu. 600. (b) Thornton v. Dixon, 3 Bro. C. C. 199. Per Lord Eldon, Crawshay v. Maule, 1 Swanst. 508, 521. See also Sugd. on Vend. and Purch. (5th ed.) 522.

where five persons purchased a tract of ground, with the intention of draining it, and the conveyance was to them as joint-tenants in fee, but they contributed rateably to the purchase, they were held to be tenants in common in equity; and though one of the five undertakers deserted the partnership for thirty years, yet he was afterwards admitted on such terms as would place the others on a footing of equality with him (a). So if a person becomes, by his acts, a partner in a colliery, for instance, in which land is necessary to carry on the trade, the interest in a lease will pass, by operation of law, as an incident to the trade, without being affected by the statute of frauds; and if one of the partners take a lease of the colliery in his own name, he will be deemed to take and hold the premises for himself and his copartners in equal shares (b). On the same principle, if the lease of the premises, where the joint trade is carried on, be renewed by one partner, in his own name, clandestinely, it is a trust for the partnership, and is to be accounted for as partnership property (c). And where real estates are purchased with the partnership funds, but conveyed only to one partner, they are, nevertheless, partnership property. But if estates are purchased out of the partnership fund, and conveyed to one partner under a specific agreement that the estates shall be his, and he shall be debtor for the money, the estates are his separate property. And a provision having been made for the wife of such purchaser previous to the marriage, and at that time an infant, in bar of dower, thirds, and all claim upon the real and personal estate of her husband, which in its nature was precarious and uncertain, she was held entitled to dower against the

(a) Lake v. Craddock, 3 P. Wms. 158. S. C. 1 Eq. Ca. Abr. 291. pl. 3. And see what is said by Lord Hardwicke in Rigden v. Vallier, 2 Ves. 258. S. C. 3 Atk. 731.

(b) Foster v. Hale, 3 Ves. 696. S. C. 5 Ves. 308.

(c) Featherstonhaugh v. Fenwick, 17 Ves. 298. See also Burroughs v. Elton 11 Ves. 29.

E

1

assignees under a joint commission against the partners (a). When it is doubtful whether the purchasers bought the property to carry on trade, an inquiry will be directed before the master to ascertain the fact (b). But although, during the lives of the partners, freehold estates, purchased by a commercial partnership, as an article of stock, are considered as forming a portion of the joint fund, yet, on the death of any of the partners, it does not appear clearly established, whether they pass as real estate, or as stock, although, according to modern decisions, it may, perhaps, be considered as settled, that the right of survivorship does not exist even in such a case (c). Formerly, indeed, it was held, that lands, purchased for the purpose of a partnership concern, were in all respects a portion of the partnership fund, and were therefore distributable as personal property (d). And this doctrine seems more consonant to natural equity; for if the jus accrescendi were allowed to operate with regard to real property, it might happen that the partner, indebted to the partnership for his proportion of the purchase money, would succeed to the whole, while the representatives of the deceased partner, who advanced the money, would, by his death, be deprived of the benefit he intended should result from the purchase (e). However, Lord Thurlow determined (f), that, although a copartnership agreement might alter the nature of real property (g), it must be express to do so; and that if the intention of the parties, that such a conversion should take place, be not sufficiently manifested, the houses and lands they hold and use in the trade will descend according to the rules of the common law. Nor

(a) Smith v. Smith, 5 Ves. 189. And see Ex parte Emly, 1 Rose, 64.
(b) 1 Ves. jun. 435.

(c) See Mr. Eden's note to Thornton v. Dixon, 3 Bro. C. C. 200.

(d) Jefferys v. Small, 1 Vern. 217. Lake v. Craddock, supra. See also Elliot v. Brown, cited by Lord Eldon, 9. Ves. 597.

(e) Lake v. Craddock, supra.

(f) Thornton v. Dixon, supra. See also Stuart v. Marquis of Bute, 11 Vesey, (g) See Ripley v. Waterworth, 7 Vesey, 425.

665, 6.

does this determination stand unsupported; a succeeding, and a most eminent judge, has considered himself bound by its authority. In two cases (a) which came before the late learned Master of the Rolls (Sir W. Grant), he recognized and acted upon the decision of Lord Thurlow, considering the question as concluded by it. But notwithstanding the respect due to judicial opinions delivered by judges of such celebrity, it seems that the principle on which they are founded is at present very doubtful, if not expressly overruled. In the case of Townsend v. Devaynes (b) Lord Eldon decided, that the freehold of premises, purchased by partners, for the purpose of carrying on the business in which they are engaged, is, on the death of one partner, to be considered as personal estate. The same noble and learned lord is, in another case (c), represented to have stated it as his opinion, that all property involved in a partnership concern ought to be considered as personal. And the opinion entertained by gentlemen of the first professional eminence is, that where real estate has been purchased with partnership property, for the use of the partnership, it becomes personal property, not only as between the members of the partnership respectively, and as between the partnership and creditors, but also as between the representatives of a deceased and the surviving partner (d).

(a) Bell v. Phyn, 7 Vesey, 453. Balmain v. Shore, 9 Vesey, 500. (b) Mont. on Partn. in notes, p. 97.

(c) Selkrig v. Davies, 2 Dow. P. C. 242. See also Crawshay v. Maule, 1 Swanst. 508, 521. (d) Thornton v. Dixon, supra.

52

SECTION II.

Of Acts by which one Partner may bind the Firm.

THE object of our last inquiry was to ascertain what interest partners respectively possessed in the joint personal stock, and in real property acquired through the medium of the partnership funds: we will now endeavour to explain by what acts one partner may, in commercial transactions, bind the firm. It has been well observed (a), that the transactions of partners, in which they all severally and respectively join, differ in nothing, in respect to legal consequences, from transactions in which they are concerned individually. We are here, however, chiefly to consider in what instances, by virtue of the relation subsisting between them, the act of one shall be construed as the act of all. It may be laid down, that partners are bound universally by what is done by each other in the course of the partnership business. Their liability, under contracts, is commensurate and co-extensive with their rights. Although the general rule of law is, that no one is liable upon any contract, except such as are privy to it; yet this is not contravened by the liability of partners, since they may be imagined virtually present at, and sanctioning the proceedings they singly enter into in the course of trade; or as each vested with a power, enabling him to act at once as a principal, and as the authorized agent of his copartners. By entering into the partnership, each party reposes confidence in the other, and constitutes him his general agent, as to all the partnership concerns; and it would be a great impedi

(a) See Wats. on Partn. 167.