« EelmineJätka »
by two broad Common Law exceptions, mostly coincident that this rule will not cover any act affecting real property-nor any act requiring to be performed by deed. But the necessities of trade have broken through both exceptions on some points.
As to land, perhaps only on one. It has been held that one partner, in the absence but with the consent of another, may bind him by warrant of attorney to confess judgment (Brutton v. Burton, quoted Coll. Part. 313). It should be observed, however, that neither need the warrant be under seal, nor is it in fact that which binds the land, but only the judgment entered up upon it. And there is no power to bind where there is no consent of the absent partner (Hambidge v. De la Crouée, 3 C. B. 742).
As to deeds, a qualification generally recognised is that of releases. It seems to be considered that where a release has to be executed by deed, and is so executed by one copartner on behalf of the firm, such deed binds the firm (Coll. Part. 311-13; 2 Sw. 544; Hawkshaw v. Parkins). At the same time it will be observed that it is binding, not with reference to its character as a deed, but with reference to the nature of the transaction as a release. A partner “may release debts," it has been said, “because he has authority to receive them," (Maule, J., 3 C. B. 745; Hambidge v. De la Crouée.) A partner may release a cause of action, and so bind the firm where there is no fraud (1 Y. & J. 366; Barker v. Richardson). But so may any joint plaintiff release the action as against both. Referring to the deed which was in question before Lord Kenyon in Harrison v. Jackson, Lord Eldon observed, that that was a deed by which one partner undertook to make a grant, adding, “the effect of such a deed is very different from the effect of a release" (Hawkshaw v. Parkins, u. s.). And there is perhaps no authority as yet to show that a release by deed, by one of several copartners, will bind the others generally for any peculiar purposes for which the form of a deed may be required, unless executed under such circumstances as would render an ordinary deed valid against all; e. gr. by one in the presence, and by the direction, of others.
Other qualifications of the legal exceptions to the doctrine of the partnership agency occur in bankruptcy, and will be referred to under this head hereafter.
6. Equitable Doctrine as to Land brought into Partnership: Courts of Equity have, to some extent, come to the assistance of the trader against the wall-eyed justice of the Common Law, by recognising in the partnership relation a power to modify the rules of legal ownership as respects land. Professing to be Courts of Conscience—to deal, not only with the bare outward acts of men but with their intentions—to carry out those intentions, being in themselves legal and proper, and sufficiently definite, in many cases when they fall short of the act—even to correct that which is, in order to effect that which is meant-all things which they formulize in the maxim of considering that as done which ought to be done-Courts of Equity have taken cognizance of the question, what property is or is not intended to be brought into partnership ? The obvious intention of partners in entering into the partnership contract is, that all the property brought into stock shall be dealt with as a partnership asset, in one uniform manner, and according to the custom of trade. Applying this intention to the disposal of land, whilst a Court of Common Law can only inquire into the questions :—“Is this land disposed of according to law, by the parties legally entitled, being of capacity to act, and without fraud or violence ?” a Court of Equity goes further, and asks :-“Is this land part of the partnership stock ? Do the parties entitled to that stock concur in disposing of it ? ” If they do not, it will prevent the legal owner from disposing of it without them. If they dispose of it without him, it will compel him to give legal efficacy to their act.
Now it is evident that, in the same manner as Courts of Common Law might have obviated many difficulties of partnership, at least during the life of the partners, by a broad application of their own doctrine of the mutual agency of partners for each other, so might Courts of Equity have obviated many, by a broad application of their own doctrine of the conversion of property from one character, tenure, or mode of ownership into another, according to the intention of the holders. Just
as Equity looks upon land directed to be sold as personalty, and attributes to the personal representative the full equitable disposal of it-so it might have held that land, by being brought into partnership, became personalty in like manner, and an asset capable, like any other, of full equitable disposal by a single partner. But there is only one case, to my knowledge, in which this point has been in anywise directly approached, and that a case in Bankruptcy-a peculiar field, as we shall see hereafter, where English judges have been wont to sow the wild oats of their legal liberalism. Here, where a firm carried on business, and erected trade machinery on the freehold of one of the partners, and on some leasehold premises, it was held that by depositing the leases of the leaseholds, and a lease of the freehold itself, for advances made to the firm, that single partner could, as agent for it, mortgage its leasehold interest in the premises, and its property in the machinery (Ex parte Lloyd, 1 Mont. and A. 494; see pp. 512, and foll.). This case, from which might be deduced the right of a single partner to create an equitable mortgage on behalf of the firm, is not itself very clearly stated, as it does not appear by or to whom the leases were made. Further than this, Courts of Equity do not appear to have treated the question of the conversion of land to partnership purposes, otherwise than on the occasion of the dissolution of the partnership by death of one of the partners. Then indeed they treat it as converted simply into personalty, but only so far as is necessary for the purposes of partnership.
It is obvious that, in any well regulated partnership, no question of any difficulty could ever arise as to the bringing of land into partnership, if the principles of mercantile bookkeeping were attended to; since the simple inspection of the books, if honestly kept, would show whether the land has ever been entered as capital or stock. If it has, it is the property of the firm ; if not, of the individual partners.
7. Remedies on Partnership Contracts for or against Strangers :-We have seen cases in which the doctrines, either of the Common Law or of Equity, have seemed almost on the point of coinciding with mercantile theory in respect to part
nership. But the application of the doctrine of the mutual agency of partners to one particular contract—that by bill or note-leads for some purposes to the actual legal recognition of the firm. A bill or note drawn, accepted, or indorsed by one partner in the name of the firm, will, by the custoin of England, except in particular trades, bind the firm itself. “It would be strange and novel doctrine," said Lord Ellenborough in a case of indorsement, “ to hold it necessary for a person receiving a bill of exchange, indorsed by one of several partners, to apply to each of the other partners to know whether he assented to such indorsement” (7 East, 213; Swan v. Steele). “Where a partnership name is pledged,” said B. Bayley," the partnership, of whomsoever it may consist, and whether the partners are named or not, will be bound, unless the title of the person who seeks to charge them can be impeached” (1 Cr. & J. 318; Wintle v. Crowther). This will be the case where the firm consists, not in reality of individuals, but of separate firms. In one instance, “it appeared that the business of about half a dozen different firms was carried on under the same general name," and the House of Lords (as Lord Eldon described the case) "held that, unless they could fix the man who held any of their bills with the knowledge that it was the bill of A and Co., or any other of the separate firms, he had got paper which gave him recourse upon them all,” (3 Dow, 229-30 ; Davidson v. Robertson). So also it has been held that where two businesses are carried on under the same firm, a partner in the one business will be liable for bills given in the course of the other, although not known to be connected with it (Swan v. Steele, 7 East, 210; Vere v. Ashby, 10 B. and Cr. 288; Lloyd v. Ashby, 2 B. and Ad. 23; Wintle v. Crowther, u. s.). The principle upon which exceptions have been introduced to this rule (such as those of farming partnerships-mining partnerships—joint-stock companies) is, that it is not necessary for the purposes of the excepted business that bills should be drawn or accepted.
Nor is this specially mercantile form of contract--the bill of exchange or promissory note—the only one in respect to which Courts of justice have condescended to take notice of the mercantile firm. A guarantee or letter of credit, given by one partner in the name of the firm, will bind the firm, when it is really the act of one with reference to the partnership business itself (Sandilands v. Marsh, 2 B. & Ald. 673; Ex parte Gardom, 15 Ves. 286; Ex parte Nolte, 2 Gl. & Jam. 295); although various exceptions and counter-exceptions have been introduced to the rule (see Brettel v. Williams, 4 Exch. 623; Er parte Nolte, u. s.).
But when the law has thus recognised the firm for the purpose of fixing the liability, it suddenly shuts its eyes upon it for the purpose of enforcing it. A bill for £1000 has been drawn or indorsed in the firm of Jones, Smith, and Co. The law looks to the firm signature, and by it holds bound the individual Joneses, Smiths, Browns, and Robinsons, who compose the firm. But do Jones, Smith, and Co., require to sue and be sued in legal proceedings ? instantly the law insists upon the names of the individual partners being used. And then we enter upon that sea of litigation at Common Law and in Equity--narrowed indeed by recent statutes—as to the procedure in actions and suits by and against partners; the cases in which all must join or be joined, as plaintiffs or defendants; the cases in which the contracting partners alone may sue and be sued; the cases in which sleeping partners must or must not be joined. I need not go into these in detail, for two reasons; 1st, that the difficulties of procedure have formed hitherto the chief subject of complaint in respect to the law of partnership; 2ndly, that such difficulties are precisely those with which I am least conversant. Let it be observed, that the very slightest extension to procedure of even the acknowledged principles of partnership law would have cured the evil. The Courts practically treated the partners as jointand-several agents for each other quoad the disposal of assets ; why should they not have treated them as such quoad suing and being sued? What greater mischief is there for A., being in Canada, that B. his partner, being in England, should bind him in judicial matters, than that the same B. should bind him by a bill drawn in the name of the firm of A., B., and Co.? If the litigation be fraudulent, he might easily have similar