(b) To partners.

One partner has implied authority to accept, in the ordinary course of business, security for a debt due to his firm; and where one member of a firm of bankers accepted as security for money due to the bank, shares in a company, and caused them to be registered in the name of the bank, it was held that he had implied authority so to do, although the consequence was that he thereby rendered himself and his co-partners liable as contributories of the company. (n)

23. Notice. Questions frequently arise as to whether notice to 23. Notice. one partner is notice to all.

General rule.

As a general rule, notice to a principal is notice to all his agents (0); and notice to an agent of matters connected with his agency is notice to his principal. (p) Consequently, as a general rule, notice to one partner of any matter relating to the business of the firm is notice to all the other members (q); and if two firms have a common partner, notice which is im

(n) Weikersheim's case, 8 Ch. 831. (0) See Mayhew v. Eames, 1 Car. & P. 550, and 3 B. & C. 601; Willis v. The Bank of England, 4 A. & E. 21.

(p) Dresser v. Norwood, 17 C. B. N. S. 466, reversing the decision below, 14 C. B. N. S. 574. Per Ashhurst, J., Fitzherbert v. Mather, 1 T. R. 16; Le Neve v. Le Neve, 1 Ves. S. 64; Collinson v. Lister, 7 DeG. M. & G. 634; and 20 Beav. 356. Whether a principal is affected by notice acquired by the agent, but not in that character, is perhaps scarcely yet settled. Dresser v. Norwood, is a strong authority that in commercial transactions he is.

See Ewell's Evans on Agency, 159, et seq.

(q) Alderson v. Pope, 1 Camp. 404; Porthouse v. Parker, ib. 82; Bignold v. Waterhouse, 1 M. &. S. 259; and see Salomons v. Nissen, 2 T. R. 647.

2

Howland v. Davis, 40 Mich., 546; Fitch v. Stamps, 7 Miss. 487; Sanders v. Ruddle, 2 T. B. Mon. 139; Barney v. Currier, 1 D. Chip. 315; Smith v. Hall, 5 Bosw. 319; Herbert v. Odlin, 40 N. H. 267. See, also, Manwaring v. Griffin, 5 Day, 561.

One partner agreed, on behalf of the the firm, to accept a mortgagee's interest in certain lands, in satisfaction of a debt due to the firm, with full knowledge of the mortgagor's title, took an absolute deed to the firm, and after receiving from the mortgagor the sum due on the mortgage, conveyed his share to a co-partner: Held, that notice to him was notice to the firm, and that a reconveyance to the mortgagor might be decreed. Barney v. Currier, 1 D. Chip. (Vt.) 315.

Where property is purchased by a partnership, notice to one is notice to all the partners; yet, if one of two persons, about entering into partnership. purchase of the other an undivided interest in property owned by him, to be held by the two for the use of the firm, this principle as to notice does not apply. Herbert v. Odlin, supra.

putable to one of the firms is imputable to the other also, if it relates to the business of that other. (r)*

In conformity with these principles, if a firm claims the benefit of a transaction entered into by one of its members, it *cannot effectually set up its own *288 by its agent's ignorance of what that member knew, so as to

be in a better position than he himself would have been in had he been dealing on his own account as a principal. (8) Collinson v. Thus in Collinson v. Lister, (t) it was held that a bank- Lister. ing company was not entitled to the benefit of a mortgage given to it by its own manager in his character of an executor. For the mortgage was given as a security for money borrowed by the manager as executor, and advanced by himself as manager for im

proper purposes, and in breach of the trusts which, as executor, he had to perform; and the company, in taking the mortgage, knew that their manager was giving a security on his testator's estate for money previously taken by him from the funds of the company, and which monies he had been requested to replace, or give security for. Under these circumstances it was treated as clear that the bank could stand in no better position than the manager would have done had he advanced the money himself and taken a mortgage for it from himself.

Meaning of

to all.

When it is said that notice to one partner is notice to all, what is meant is (1.), that a firm cannot, in its character of phrase, notice principal, set up the ignorance of some of its members against the knowledge of others of whose acts it claims the benefit, or by whose acts it is bound; and (2.), that when it is necessary to prove that a firm had notice, all that need be done is to show that notice was given to one of its members as the agent and on behalf of the firm. The expression means no more than this; and although every person has notice of what he himself does, it would be absurd to hold that a firm has notice of everything done by each of its members. Where one member is acting beyond his powers, or is committing a fraud on his co-partners, or is the person whose duty it is to give his firm notice of what he himself has done, in all such cases notice on his part is not equivalent to notice by them.

Bignold v.
Waterhouse.

In Bignold v. Waterhouse (u) one of a firm of carriers entered into an agreement to carry valuable parcels free of charge, but under such circumstances as to render the agreement not binding on the other partners. A parcel *289 known to the partner *who made the agreement to be of value, was sent, but was not entered or paid for as a valuable parcel. The other partners were held to be unaffected with the notice which their co-partner had of the nature of the parcel, and not to be liable for its loss.

Breaches of trust.

So, if one partner is a trustee, and he improperly employs the trust funds in the partnership business, his knowledge that he is so doing is not imputable to the firm; and therefore, to affect the other partners with a breach of trust, further evidence must be adduced. (x)

(u) 1 M. &. S. 255.

(x) See Ex parte Heaton Buck, 386.

Notice to clerks.

Moreover, in cases of this kind, notice on the part the clerks of the firm of what the fraudulent partner is doing is no more than a notice to him: it is not sufficient to affect his co-partners. (y)

Ratification.

These cases show what indeed is obvious of itself, viz., that if a partner exceeds his authority, and it is contended that the firm is bound by what he has done, on the ground. that it has ratified his acts, evidence must be given to prove that at the time of the alleged ratification his co-partners knew of those It would be absurd to contend in such a case that knowledge by him was equivalent to knowledge by them. (z)

acts.

Again, to take shares in companies out of the reputed ownership of the registered owner, notice of their assignment Cases of reputed must be given, and notice to the secretary of the com- ownership. pany is notice to the company. But if the secretary is the person whose shares are in question, the notice which he himself has of what he himself has done, is not imputable to the company; and, consequently, his shares, notwithstanding an assignment of them by him, continue in his order and disposition. (a)

A retired partner is not affected with notice on the part of the continuing partners of what has occurred since the partnership, if the agency subsisting between them has been dissolved. (b)

Notice to com

*From the principle that the individual shareholders, and *290 even the individual directors of a company are not its agents (c), it follows that notice to one of them is not no- panies, &c. tice to the company (d)'; and a company is not deemed to have notice

(y) See Lacey v. Hill, 4 Ch. D. 537. (2) See acc. the last note.

(a) Ex parte Boulton, 1 DeG. & J. 163; Browne v. Savage, 4 Drew. 635; Willes v. Greenhill, 29 Beav. 376 and 387. See, also, book iv. ch. 2, § 6, under the head Reputed Ownership.

(b) Adams v. Bingley, 1 M. & W. 192.

(c) Ante, p. 274 et seq.

(d) See Powles v. Page, 3 C. B. 16; Re Carew, 31 Beav. 39; Peruvian Rail. Co. 2 Ch. 617.

1 This action was brought upon a note made by Charles F. Parker & Co., pay

able to their own order, indorsed by them, by A. Law, and by the firm of John Savery's Sons. The defendant, Law, who was a member of both firms, indorsed the name of the latter firm without authority, and delivered the note to a firm of brokers to whom he was indebted, who sold the note to the plaintiff and applied the proceeds upon Law's account. One of the firm of brokers who negotiated the sale of the note was a director of the plaintiff. Held, that the brokers knowing that Law was using firm paper to discharge an indi vidual indebtedness, could not enforce

through a director of a fraud on the company committed by that director (e); nor are two companies having some directors in cominon necessarily affected through them with notice of each other's affairs. (f) Thus where two companies, A. and B., had in common two directors and a solicitor, and company A., in order to buy up its own shares, borrowed money of company B., and this circumstance was known to one of the two directors and to the solicitor, it was nevertheless held that company B. had no notice of the impropriety of the transaction. (g) At the same time if, as sometimes happens, one director has authority to act for a company, his knowledge of matters within the scope of his authority affects the company; and it may be said generally that a company is affected by the knowledge of its agents or servants as to matters to which it is their duty to attend, but not as to other matters. (h) 24. Payments. 24. Payments.-See ante, under the head Debts. 25. Penalties.-One partner may bind the firm under a penalty to observe a contract which he is authorized to enter into on its behalf. (¿)

25. Penalties.

26. Purchases.

26. Purchases.-It has been long decided that every member of an ordinary trading partnership has implied power to purchase on the credit of the firm such goods as are or may be necessary for carrying on its business in the usual way. (This cannot be more strongly exemplified than by the case of Bond v. Gibson. () There two persons carried on business as harness makers; one of them bought on

Bond v. Gibson.

the same as against the defendants, John Savery's Sons; that the plaintiff having purchased the note in good faith, the knowledge of its director was not to be imputed to it, and that it was entitled to recover. Atlantic Bank v. Savery, 18 Hun, 36.

(e) Oriental Commercial Bank, 5 Ch. 358; Re Carew, 31 Beav. 39.

(f) Credit Foncier, &c., Co. 7 Ch. 161; Ebbw Vale Co. 8 Eq. 14.

(g) Credit Foncier, &c., Co., 7 Ch. 161. See, also, Gray v. Lewis, 8 Ch. 1035, reversing S. C. 8 Eq. 526.

(h) British and American Tel. Co. v. Albion Bank, L. R. 7 Ex. 119. See, also, Styles v. Cardiff Steam Boat Co.,

4 N. R. 483, Q. B.; a case as to notice of ferocity of a dog.

(i) Beckham v. Drake, 9 M. & W. 79.

(k) Hyatt v. Hare, Comb. 383.
(7) 1 Camp. 185.

? If there be an agreement of partnership, common or special, for the purpose of purchasing property at certain sales, all the purchases made at such sales by either of the partners, will be considered as made on the partnership account, although the advances by one exceed those of the other. Taylor v. Taylor, 2 Murph. 70.

Wherever the original credit was given to the partnership, that will con