See further, infra, under the heads Debts and Representations. 3. Agents. As to the appointment of agents, see ante, p. 246, and infra under the head Servants.' 3. Agents. 4. Amalgamation.-As to the power of directors to amalgamate one company with another, see infra under the heads 4. Amalgama Purchases and Sales. tion. special authority, 5. Arbitration.-One partner cannot, without bind the firm by a submission to arbitration. (s) power to refer disputes, even although they relate to partner, gave a writing, signed by his individual name, acknowledging that he had retained in his hands the money of A, to the amount due on the note, and promising to refund to A such sum as, in a suit then pending on the note, the court should find had been paid thereon. The money so retained had been received by C, as a member of the partnership, and for their use and benefit. The suit was then withdrawn, and A brought his action against B and C jointly, to recover back the amount first paid to B: Held, that the writing given by C to A was admissible in evidence. Story v. Barrell, 2 Conn. 665. After the dissolution of a partnership between an active and a dormant partner, an action for the balance of an account was brought against both, in which the dormant partner pleaded payment, and the active partner was defaulted: Held, that an admission made after the dissolution of the partnership by the active partner, that such balance in consequence of a mistake, had not been paid, was competent evidence. Bridge v. Gray, 14 Pick. 55. 'One partner may appoint an agent by parol to make and indorse bills, etc.; and such power is not void, though given by one partner by writing under seal. Lucas v. Bank of Darien, 2 Stew. 280. (s) See Stead v. Salt, 3 Bing. 101; Adams v. Bankhart, 1 Cr. M. & R. 681; Antram v. Chace, 15 East, 209. 2 Carthaus v. Ferrers, 1 Pet. 222; Jones The 5. Arbitration. v. Bailey, 5 Cal. 345; Wood v. Shepherd, 2 Patt. & H. 442; Buchoz v. Grandjean, 1 Mich. 367; Martin v. Thrasher, 40 Vt. 460. In Pennsylvania, Kentucky and Illinois, however, one partner may bind his co-partner by submission to arbitration by any agreement not under seal. Taylor v. Coryell, 12 Serg. & R. 243; Gay v. Waltman, 7 Weekly Notes of Cases, 1879, p. 175; Hallack v. Marsh, 25 Ill. 48; Southerland v. Steel, 3 Mon. 435; Gay v. Waltman, 89 Penn. St. 453. A reference to third parties of the extent of damage caused by fire, made by one partner without the assent of his co-partners, is binding on him as to his share of the damage. Brink v. New Amsterdam, etc. Ins. Co. 5 Robt. 104. One partner cannot bind another by a sealed bond to perform an award in the name of the firm; the bond is, however, binding upon the party who seals it, and may be declared upon accordingly. Armstrong v. Robinson, 5 Gill & J. 412. Where one partner signed a sealed submission to an award, and accepted the amount awarded in favor of the partnership, pursuant to such submission, and indorsed a receipt in full on the award: Held, that it operated either as a release by one partner, or as an award and satisfaction, and was sufficient to bar the partnership claim, though the submission might not have been binding upon his co-partner. Buchanan v. Curry, 19 Johns. 137. dealings with the firm, cannot be said to be necessary for carrying on its business in the ordinary way. (t) Where a partnership has been dissolved, and it has been agreed that one of the partners shall get in the debts due to the firm, he has no power after bringing an action in the name of the firm for a debt due to it, to bind his copartner by a reference of all matters in difference between the plaintiffs and the defendant. (u) The partner actually referring the dispute is, however, himself bound by the award. (x) By the Railway companies arbitration act, 1859 (y), railway comArbitration by panies are empowered to refer to arbitration any matcompanies. ters in which they are mutually interested, and which they might lawfully settle by agreement amongst themselves; and by the Companies act, 1862 (z), companies governed by that act are also empowered to refer disputes with other companies or persons to arbitration, in accordance with the Railway companies arbitration act, 1859. Where a company has entered into an agreement which *266 is *ultra vires, any agreement to refer disputes arising out of it to arbitration is equally ultra vires. (a) [5 a. Assignments.' ] 6. Bills of Exchange and Promissory Notes.-Any member of Notice to one of the co-partners, who have separately signed articles of submision to arbitration, is notice to the firm. Haywood v. Harmon 17 Ill. 477. (t) Stead v. Salt, 3 Bing. 101; Adams v. Bankhart, 1 Cr. M. & R. 681; and see Boyd v. Emerson, 2 A. & E. 184. (u) Hatton v. Boyle, 3 H. & N. 500. (x) Strangford v. Green, 2 Mod. 228. (y) 22 & 23 Vict. c. 59. (2) §§ 72 and 73. (a) Maunsell v. Midland Great Western Rail Co. 1 Hem. & M. 130. 'See bills and notes, post. One partner may transfer or assign a chose in action, or a debt due to the partnership, or any other partnership effects, so far as the same can be transferred or assigned in law. Clarke v. Hogeman, 13 W. Va. 718; Everit v. 350 Strong, 5 Hill, 163; Cullom v. Bloodgood, 15 Ala. 34; Harrison v. Sterry, 5 Cranch, 289; Anderson v. Tompkins, 1 Brock. 456; Mills v. Barber, 4 Day, 428; Randolph Bank v. Armstrong, 11 Iowa, 515; Fromme v. Jones, 13 Iowa, 474; Quiner v. Marblehead Ins. Co. 10 Mass. 476; Lamb v. Durant, 12 Id. 54; United States Bank v. Binney, 5 Mason, 176; Hodges v. Harris, 6 Pick. 360; Halsey r. Whitney, 4 Mason, 206; Clark v. Rives, 33 Mo. 579; Boswell v. Green, 25 N. J. L. 390; McClelland v. Remsen, 36 Barb. 622; 14 Abb. Pr. 331; S. C. 23 How. Pr. 175. An assignment by one partner of a debt due to the partnership, to another partner for his benefit individually, is not binding on the other partners. Wood v. Shepherd, 2 Patt. & H. 442. an ordinary trading partnership can bind the firm by drawing, accepting, or indorsing bills of exchange, or by mak- 6. Bills and A partner cannot, however, sue in his own name to recover property of the firm fraudulently assigned by a copartner to his individual creditor. Miller v. Price, 20 Wis. 117. When a note payable to a partnership is transferred by one of the partners in payment of his individual debts, the purchaser acquires only the assignor's interest, and holds the note subject in equity to the claim of the other partners. An assignee who purchased the note for cash, after maturity, while it was in the hands of an attorney for collection, and who relied upon the representations of the partner assigning it, as to the state of accounts between his copartner and himself, and as to his right to dispose of the note, is affected, with notice of the co-partner's interest therein. Halstead v. Shepard, 23 Ala. 558. The assignment of a bond by one of two joint obligees made in the joint name, conveys no title, unless it appear (the obligees being partners) that the assignment relates to a matter within the scope of the partnership business. Hudson v. McKenzie, 1 E. D. Smith, 358. Where an assignment of a partnership claim was made by an agent of the firm with the consent of one of the partners, to apply on a demand against the agent and the consenting partner, it was held that the objection that the assignment was invalid for want of the assent of all the partners, only went to the sufficiency of the consideration as between the partnership and the assignees, and could only be raised by the partners themselves. An assignment in the name of a firm cannot be contested by a third person without showing that the partners did not acquiesce in it. Kull v. Thompson, 38 Mich. 685. One partner may, without the knowl notes. edge or assent of his co-partner, assign directly to a creditor a part or the whole of the partnership property to pay or secure a firm debt existing or about to be contracted. Mabbett v. White, 12 N. Y. 442; McClelland v. Remsen, 14 Abb. Pr. 335; S. C. 36 Barb. 622; Mills v. Barber, 4 Day, 428; Harrison v. Sterry, 5 Cranch, 289; Dana v. Lull, 17 Vt. 390; Deming v. Colt, 3 Sandf. 290; Anderson v. Tompkins, 1 Brock. 461; Hodges v. Harris, 6 Pick. 360; Tapley v. Butterfield, 1 Metc. 515; Egberts v. Woods, 3 Paige, 517; Boswell v. Green, 25 N. J. L. 390; Cullum v. Bloodgood, 15 Ala. 34; Everet v. Strong, 5 Hill, 163; S. C. 7 Hill, 585; McCollough v. Sommerville, 8 Leigh, 415; Ormsbee v. Davis, 5 R. I. 443; Russel v. Leland, 12 Allen, 349. Where, however, the business of the firm is not trade, buying and selling, but a business to which the continued ownership of the property sold is indispensable, one partner has not authority even to sell the firm property without the knowledge or assent of his co-partner. So held, in Sloan v. Moore, 37 Pa. St. 217, where authority was denied one partner so to sell a newspaper which he and his co-partner were publishing. But one partner cannot, without the knowledge or assent of his co-partner, assign the partnership property to a trustee for the benefit of creditors. Deming v. Colt, 3 Sandf. 284; Hayes v. Heyer, 3 Sandf. 293; Havens v. Hussey, 5 Paige, 30; Kirby v. Ingersoll, 1 Doug. 477; Dana v. Lull, 17 Vt. 390; Fisher v. Murray, 1 E. D. Smith, 341; Wetler v. Shlieper, 4 E. D. Smith, 707; Stein v. Ladow, 13 Minn. 413; Holland v. Drake, 29 Ohio St. 441; Hook v. Stone, 34 Mo. 329; Pearpont v. Graham, 4 Wash. C. C. 234; Hughes v. Ellison, 5 Mo. 463; Dickinson v. Legare, 1 Dessaus. 537, And ing and indorsing promissory notes in its name. (b) if two partners unknown to each other give two bills in the name Kimball v. Hamilton, 8 Bosw. 495; Ormsbee v. Davis, 5 R. I. 442; Dunklin v. Kimball, 50 Ala. 251; Brooks v. Sullivan, 32 Wis. 444; Hudson v. McKenzie, 1 E. D. Smith, 358; Kelly v. Baker, 2 Hilt. 531; Haggarty v. Granger, 15 How. Pr. 243; Paton v. Wright, 15 How. Pr. 481; Pettee v. Orser, 18 How. Pr. 442; S. C. 6 Bosw. 123; Welles v. March, 30 N. Y. 344; Coope v. Bowles, 42 Barb. 88. See, however, Graves v. Hali, 32 Tex. 665, and McGregor, 2 Disney, 286. But while the law implies from the mere partnership relation no power in one partner to make a general assignment for the benefit of creditors, yet a power to make such an assignment may be expressly conferred by one partner upon another, or may, like any other power, be inferred from the conduct of the partners, their manner of doing business, and the circumstances in which they place themselves in reference to the business of the firm. Kirby v. Ingersoll, 1 Doug. 490, 491. Its exercise has been upheld by the courts in cases where the non-assenting partners were absent, and could not be consulted, or had made the assignor sole managing partner, or subsequently ratified the assignment. See Anderson v. Tompkins, 1 Brock. 456; Stein v. Ladow, 13 Minn. 412; Robinson v. Crowder, 4 McCord, 519; Deckard v. Case, 5 Watts, 22; Harrison v. Sterry, 5 Cranch, 300; McCollough v. Sommerville, 8 Leigh, 433, 436; Robinson v. McIntosh, 3 E. D. Smith, 221; Fisher v. Murray, 1 E. D. Smith, 341; Kemp v. Camley, 3 Duer, 1; McNutt v. Strayhorn, 39 Pa. St. 269; Clark v. Wilson, 19 Pa. St. 414; Bank v. Sackett, 2 Daly, 395; Roberts v. Shepard, 2 Daly, 110; Brooks v. Sullivan, 32 Wis. 444; Corwin v. Suydam, (b) See Re Riches, 5 N. R. 287; 24 Ohio St. 209; Hewes v. Bayley, 20 Pick. 96; Clark v. McClelland, 2 Grant's Cases, 31; Baldwin v. Tynes, 19 Abb. Pr. 32; Kelly v. Baker, 2 Hilt. 531; Forbes v. Scannel, 13 Cal. 243; Robinson v. Gregory, 29 Barb. 560; Palmer v. Myers, 43 Barb. 509; Bank v. Sackett, 2 Abb. Pr. N. S. 286; Hitchcock v. St. John, 1 Hoffm. 511; Hennessey v. Bank, 6 Watts & S. 300; Sheldon v. Smith, 28 Barb. 593; Welles v. March, 30 N. Y. 344; Palmer v. Myers, 29 How. Pr. 8. But see Pettee v. Orser, 6 Bosw. 123, in which absence of the partners not assenting was held to create no emergency which justified the assignment in that case; and see Coope v. Bowles, 42 Barb. 88. Before the adoption of the Revised Statutes, an assignment, by the surviving partner, of all the partnership funds, for the benefit of the assignees, who were creditors, and one of whom was administrator of the deceased partner, was held valid. Hutchinson v. Smith, 7 Paige, 26. A general assignment of the property of the firm, for the benefit of a portion of the firm creditors, made by one partner against the opposition of the other partner, of which the beneficiaries under such assignment, or their agent procuring it, have notice prior to its execution, is invalid. Bull v. Harris, 18 B. Mon. 195. The law will not favor an attempt by one partner to give a preference to particular creditors against the wish of his co-partners. Matter of Lowenstein, 7 How. Pr. 100. An assignment by a partner of his separate property, in trust for the payment of the partnership debts, is valid as against a separate creditor of such partNewman v. Bagley, 16 Pick. 570. 2 One of several partners has an im ner. Pinckney v. Hall, 1 Salk. 126; Dickin of the firm in payment of the same demand, the firm will be liable on both bills, if held by a bona fide holder for value. (c) plied authority to execute promissory notes in the name of the firm, where such authority is necessary to the successful carrying on of the business of the firm; or 2, according to the usage of similar partnerships; or 3, according to the course of trade of that particular partnership. Gray v. Ward, 18 Ill. 32; Storer v. Hinkley, Kirby, 147; Newell v. Smith, 23 Ga. 170; Dow v. Phillips; 24 Ill. 249; Miller v. Hughes, 1 A. K. Marsh. 181; Waldo Bank v. Lumbert, 16 Me. 416; Coursey v. Baker, 7 Har. & J. 28; Bascom v. Young, 7 Mo. 1; Potter v. Dillon, 7 Mo. 228; Partin v. Leiterloh, 6 Jones' Eq. 341; Kirkpatrick v. Turnbull, Add. 259. Each partner is the agent of the other to sign the partnership name to notes given within the scope of the partnership business, but not to sign the firm name to notes relating to business outside of the scope of the partnership. Zuel v. Bowen, 78 Ill. 234; Blodgett v. Weed, 119 Mass. 215; Nat. Union Bank v. London, 66 Barb. 189; Ditts v. Lonsdale, 49 Ind. 521. Stipulations between the partners restricting the power of signing the firm name to negotiable paper to one or more of their number, will not affect third parties without notice. Laler v. Jordan, 44 Miss. 283; Sylverstein v. Atkinson, 45 id. 81; Nat. Union Bank v. London, 66 Barb. 189. So, a firm is bound by the indorsement by a partner to a bona fide purchaser for value, of a bill of exchange payable to the partnership; although, as between the partners, it was his sole property, and they had agreed that no member should indorse paper to make son v. Valpy, 10 B. & C. 128; Sutton v. Gregory, 2 Peake, 150; Smith v. Bailey, 11 Mod. 401; Lewis v. Reilly, 1 Q. B. the others liable. Barrett v. Russell, 45 Vt. 43. Where A, being indebted, forms a partnership with B, who assumes half of the indebtedness of A, and succeeds to half of the property of A in the business, and they afterwards, as partners, execute a note to a creditor of A for A's debt, and B then sells his interest in the firm to C, who succeeds as to all the rights and liabilities of B in the firm, and A then sells his interest in the firm to D, who succeeds to all his rights and liabilities in the firm of A & C, C and D taking the place of A and B, the note of A & B will be held a firm indebtedness as to the new firm of C & D, and either one of such firm will be authorized to give a firm note in place of the note given by A & B. Silverman v. Chase, 90 Ill. 37. If a firm is engaged to any extent in making collections, even though that may not be the principal business of the partnership, one of the partners may bind the firm by a promissory note given for a balance of money collected by it. Van Brunt v. Mather, 48 Iowa, 503. Where an application was made to an insurance company, through a broker, for insurance, on account of a firm of merchants, on a ship, the loss, if any, payable to the firm, and the company upon the receipt of the firm's note, signed in the name of the firm by one of the partners, issued a policy upon the ship as the property of the firm: Held, that the company were not put upon inquiry as to whether or not the firm owned the ship, or whether or not the insurance was a firm transaction, and that the note bound all the part 349; Stephens v. Reynolds, 5 H. & N. 513. (c) Davison v. Robertson, 3 Dow. 218. |