Of Acts by which one Partner may bind the Firm. 53 ment to commerce, if, in the ordinary transactions of their trade, it were necessary that the actual consent of each partner should be obtained, or that it should be ascertained that the transaction was really for the benefit of the firm; hence the act of one, when it has the appearance of being on behalf of the firm, is considered as the act of the rest. It is for the advantage of partners themselves, that they are thus held liable; as the credit of their firm in the mercantile world is hereby greatly enhanced, and a vast facility is given to all their dealings; insomuch, that they may reside in distant parts of the country, or in different quarters of the globe. A due regard to the interests of strangers is, at the same time, observed; for where a merchant deals. with one of several partners, he relies upon the credit of the whole partnership, and therefore ought to have his remedy against all the individuals who compose it.

It is a clear and undeniable proposition of law, that one partner may, by his own acts, bind his copartners in all transactions relating to the partnership(a). The power of an individual partner, by his separate act, thus to induce a joint responsibility, is not confined, simply, to the drawing or accepting a negotiable instrument, which species of engagement, according to the present course of mercantile dealings, is of most frequent occurrence, but the members of a firm will be bound by any contract or engagement into which any single partner may enter, provided the contract or engagement itself has a reference to the partnership. In a case that arose in the reign of Queen Anne (b), it was held, by Lord Ch. J. Holt, that if one member of a firm of bankers receive a sum of money to purchase a ticket in the lottery, and undertake to pay the benefit arising from it, the other members are liable if the

(b)

(a) Harrison v. Jackson, 7 T. R. 207.

v. Layfield, 1 Salk. 292. S. C. Holt's Rep. 434.

ticket, when purchased, be drawn a prize. So a partner, whilst employed in transacting the partnership business, may borrow money for the purpose of defraying his expenses, and it will be a charge upon the whole firm (a). In fact, whatever be the nature of the contract, there is no doubt but that the act of every single partner, in a transaction relating to the partnership, binds all the others (b). And the act or assurance of one partner, made with reference to business transacted by the firm, will bind all the partners, even although it be out of the regular course, and be contrary to an express arrangement amongst themselves, because it is within the scope of his authority. To illustrate this position, a case may be put where two persons, in partnership for the sale of horses, agree between themselves never to warrant any horse; yet, though this be their course of business, it is clear that if upon the sale of a horse, the property of the partnership, one of them should give a warranty, the other would be thereby bound, because the public cannot be supposed cognizant of their private arrangements (c). But the implied authority of one partner to bind another is generally limited to such facts as are, in their nature, essential to the general object of the partnership. We will, in the first place, consider in what cases one partner is invested by law with the power of binding his copartners, by the making, the drawing, the indorsing, or the accepting of promissory notes or bills of exchange, and, at the same time, we will point out the instances in which that authority is denied to him.

The power of one partner to bind the firm, by the making of promissory notes, or the drawing, accepting, or endorsing of bills of exchange, has never been disputed (d). It is within the scope of a trading

(a) Rothwell v. Humphreys, 1 Esp. N. P. C. 406. (6) Per Lord Mansficld, Hope v. Cust, cited 1 East, 48. Swan v. Steele, 7 East, 210. (c) Per Ab bott, C. J., Sandilands v. Marsh, 2 B. and A. 679. And see Fenn v. Harrison, 3 T. R. 760. (d) Per Lord Kenyon, Harrison v. Jackson, supra.

partner's general authority so to act, without the necessity of the creditors inquiring whether the particular partner had such an authority expressly delegated to him. This was so settled in the reign of King William the Third, by the case of Pinkney v. Hall (a), and in conformity with the custom of merchants, although many cases are extant, in which, previously to that period, the power of one partner to bind his copartners by such means was recognised.

The signature of one partner, as the maker of a joint promissory note, or the drawer of a bill of exchange, is therefore binding upon his copartner (b), and equally binding is his acceptance of a bill of exchange (c); for, the bill being drawn upon them jointly, the acceptance of a single partner, in the names of both, is in legal effect a joint acceptance(d). So, prima facie, the indorsement of a bill or note by one partner, in the name of the partnership, binds all the firm (e). Even where one partner indorses a bill in a different name from that of the actual firm, such an indorsement will be binding, if it be proved that the partner was in the habit of issuing bills into the world indorsed under the former designation; because such evidence would establish an acting by procuration, and there seems to be no doubt but that one partner may so act for the whole firm (f). Nor, in the case of a note or bill, does it form any valid objection to their enforcement against a firm, that the former is made, or the latter accepted, by one partner in his individual name, if it if it appear from the securities themselves that

(a) 1 Salk. 126. S. C. 1 Ld. Raym. 175. (b) Smith v. Baily, 11 Mod. 401. Lane v. Williams, 2 Vern. 277. S. C. 16 Vin. Abr. 243. (c) Anon. Styles, 370. Bull. Nisi Prius, 279. (d) Anon. Holt, 67. Pinkney v. Hall. 1 Salk. 126. S. C. 1 Ld. Raym. 175. (e) Wells v. Masterman, 2 Esp. N. P. C.731. Swan v. Steele, 7 East, 210. Ridley v. Taylor, 13 East, 175. Where a bill or note is payable to several persons, not in partnership, the right to transfer it is in all collectively, not in any individually; and an indorsement by and in the name of one only will not give the indorsee a right to sue. Carvick v. Vickery, Dougl. 653. n. So, where a bill is drawn on two persons, who are not partners, if it is only accepted by one, it must be protested. Holt, 297. Mar. 64. Beawes, pl. 228. (ƒ) Williamson v. Johnson, 1 B. and C. 146.

it was intended they should have a joint operation : in such cases the holder may, at his election, enforce payment either jointly against the firm, or separately against the party whose signature is attached (a). Thus, a promissory note, by which the maker individually, but on the behalf of himself and his partners, engaged to pay a stipulated sum, has been held to affect the whole firm; and it is not to be considered as a mere personal undertaking, by the individual partner, to pay a debt due from himself and his copartners (b). In like manner, a bill of exchange drawn upon a firm, but accepted by one in the name of the other partner, is binding upon the firm, because the mere acceptance, as indicating an intention. to be bound by the terms of the request in the bill, would be sufficient to give the bill validity, and the effect of that acceptance cannot therefore be controlled by the addition of the name of an individual partner (c). And it is indisputable, that in every case in which a firm becomes, through the instru mentality of a single member, a party to a negotiable security, and the transaction which occasioned the giving the security was bona fide, and fairly referable to the partnership concerns, the act of the single partner, in pledging the joint credit, will have a conclusive binding operation upon all the partners collectively. And cases exist in which one partner may enter into a joint engagement in a transaction not relating to the partnership, and it will be binding upon the firm if it have received either their express or implied sanction. In many cases of partnership

(a) Hall v. Smith, 1 B. and C. 407. See Clerk v. Blackstock, Holt's N. P. C. 474. March v. Ward, Peake's N. P. C. 130. (b) Lord Galway v. Matthew, 1 Campb. 403. But see Emly v. Lye, 15 East, 11, 12. In Hall v. Smith, 1 B. and C. 497, it was held that a promissory note beginning "I promise to pay," signed by one member of a firm for himself and his partners, was binding upon the party signing as a several note, or as a joint note was binding upon the firm. (c) Mason v. Rumsey, 1 Campb. 384. Wells v. Masterman, supra. In the case of Thomas v. Clarke, 2 Stark, N. P. C. 451. Lord C. J. Abbott held that a partner who executed a charter party of affreightment, and in the commencement of it professed to contract for himself and his co-partner, thereby bound the latter, although all the stipulations and obligations in the remaining part of the instrument were made in the name of the said freighter.

it is frequently necessary for its salvation, that the private demand of one partner should be satisfied at the moment, as the ruin of the one might affect the other partners; and therefore the firm, to avert such a possible evil, would rather allow the individual partner to liberate himself by dealing with it, than expose themselves to the consequences which might ensue from their non-acquiescence (a). In these cases the joint liability depends upon the degree of evidence adduced to prove the authority, the mere relation of partners not of itself being sufficient to confer upon each the power of binding the firm in separate transactions (b). The nature of the entries in the books, or the appropriation of the money to the partnership, or to a separate account, or the privity and silence of the firm, would be evidence of an authority delegated to the single partner (c). Previous authority is not the only criterion by which to determine the joint liability of the partners under such circumstances: subsequent approbation being, for this purpose, of equal efficacy; for a strong case of subsequent approbation by all the partners raises an inference of their previous positive authority having been given to the particular partner to sign the partnership name to a bill, or to negotiate it, and will subject the partners to liability in a transaction where they would not have been chargeable without such subsequent assent (d). In instances of this description, the act of the partner must be ascribed rather to his character of agent than of partner; and, the agency being established, of course the partnership would be as firmly bound by his separate acts as they would have been had they expressly and personally concurred in them. But where no such agency exists, and a joint security is pledged in a transaction unconnected with the partnership, if it be manifest to the person advancing money upon it

(a) Per Lord Eldon, Ex parte Bonbonus, 8 Vesey, 520. Peele, 6 Vesey, 600. (c) Ex parte Bonbonus, supra.

(b) Ex parte (d) Id. Ibid.