by its directors with the sanction of a general meeting of shareholders. (m) Nor is a fire insurance company, which has power to issue marine policies limiting the liability of the company to its funds, bound by marine policies issued in a name which is not the name of the company, and containing no stipulation as to the limit of liability. (n)

19. Interest.-An admission by one partner that a debt of the firm bears interest at a given rate is primâ facie bind

ing on the firm. (0)

See further ante, under the head Debts.

19. Interest.

20. Judicial Proceedings.-The power of one partner to act for the firm in legal proceedings will be noticed hereafter, 20. Judicial when treating of actions (Bk. II. c. 3, § 1), and bank- Proceedings. ruptcy (Bk. IV. c. 2).

21. Leases.-One partner, as such, has no authority to contract on behalf of the firm for a lease of a house for partner- 21. Leases. ship purposes. (p)1

Where a lease is made by several partners jointly, a notice to quit given by one on behalf of all is sufficient. (2)

With respect to leases to and by companies, a company may take on lease a larger house and more land than it wants at the time, and may sublet what it does not actually require at *the *284 time. (r) It has also been held that the directors of an hotel company might lease part of the hotel for the purposes of a government office (8); but in this case the circumstances were peculiar; the hotel was of an immense size and just finished; the letting was to be temporary; and the whole building could not have been ad

(m) Phoenix Life Assurance Co. 2 J. & H. 441.

(n) Hambro' v. Hull and London Fire Ins. Co. 3 H. & N. 789.

(0) See Fergusson v. Fyfe, 8 Cl. & Fin. 121.

(p) Sharp v. Milligan, 22 Beav. 605, where, however, specific performance was decreed against the firm, the contract having been ratified by the other partners.

1A partnership may be held jointly liable for rent of premises leased to and in the name of one member only, on

proof that they were hired for and used by the firm. Penn v. Kearney, 21 La. Ann. 21. See ante, 278, note.

(g) Doe v. Hulme, 2 Man. & Ry. 433; Doe v. Summersett, 1 B. & Ad. 135; Goodtitle v. Woodward, 3 B. & A. 689. See Right v. Cuthell, 5 East, 491.

(r) See Horsey's case, 5 Eq. 562. (s) Simpson v. Westminster Palace Hotel Co. 2 D. G. F. & J. 141, and 8 H. L. C. 712. See, also, Forrest v. Manchester and Sheffield Rail. Co. 30 Beav. 40, and 7 Jur. N. S. 887, as to temporary use of property.

vantageously opened as an hotel at once. It is settled that in the absence of express power so to do, one railway company cannot lease its line to another and exclude itself from using it. (t) Where, however, the articles of association of a company authorized twothirds of the shareholders to require the directors to do any act which the company itself could do, and two-thirds of the shareholders authorized and required the directors to lease the company's works for twenty-on years, and such lease was made accordingly, it was held to be valid and binding on the company and on dissentient members. (u)

22. Mortgages and pledges.

(a). By partners.

22. Mortgages and Pledges.-A legal mortgage cannot be made of partnership real estate without the concurrence of all the partners. (x)1

(t) See Winch v. Birkenhead Rail. Co. 5 DeG. & Sm. 562; London and Brighton Rail. Co. v. London and S. W. Rail. Co. 4 DeG. & J. 362; Shrewsbury and Birmingham Rail. Co. v. Northwestern Rail. Co. 6 H. L. C. 113. See, further, as to this much litigated case, 2 Mac. & G. 324; 3 ib. 70; 16 Beav. 441; 4 DeG. M. & G. 115; 17 Q. B. 652.

(u) Featherstonhaugh v. Lee Moor Porcelain Clay Co. 1 Eq. 318.

(x) See ante, heading Deed. In Juggeewundas Keeka Shah v. Ramdas Brijbooken Das, 2 Moo. In. Ap. 487, a mortgage by one partner was under peculiar circumstances held to bind the firm.

1See post, p. 652.

One partner may execute a chattel mortgage of the firm property to secure a partnership debt, without the consent of his co-partner; and his attaching a seal to the instrument, being unnecessary, will not affect its validity. Woodruff v. King, 47 Wis. 261.

One partner has authority, without the consent or knowledge of his co-partner, to mortgage the whole stock in trade of the firm to secure a particular creditor of the firm. Tapley v. Butterfield, 1 Metc. 515. See, also, Woodruff v. King, 2 N. W. Rep. N. S. 452; Willett v. Stringer, 17 Abb. Pr. 152; Mc

Clelland v. Remsen, 3 Abb. App. Dec. 74; Morrison v. Mendenhall, 18 Minn. 232; ante, p. 269, note.

One partner may execute a valid mortgage of a vessel owned by the firm, by signing the individual names of the members of the firm. Patch v. Wheatland, 8 Allen, 102.

The execution of a mortgage of personal property of a partnership by one partner in his individual name, passes no title. Clark v. Houghton, 12 Gray, 38.

A mortgage signed with the partnership name, but in the body of which it is recited that it was the act of one of the partners, and given as a security for his individual debt, is not, on its face, a partnership act. Scott v. Dansby, 12 Ala. 714.

Under Wagner's (Mo.) Stat. 281, requiring mortgages of personal property to be acknowledged as conveyances of land, are by law required to be a mortgage by a partnership may be signed and acknowledged by any one of the partners, with the firm name, although his name does not appear in the style of the firm. Keck v. Fisher, 58 Mo. 532.

A partner recognizing a chattel mortgage on the partnership property, executed by his partner, is estopped to deny its validity. Richardson v. Lester, 83

It being, however, decided that a member of an ordinary trading partnership has power to borrow money on the credit of the firm, it follows almost necessarily that he should have power to pledge partnership property as a security for advances. The writer is not aware of any decision in which an equitable mortgage made by one partner by a deposit of deeds relating to partnership real estate has been upheld, or the contrary; he can therefore only venture to submit, that such a mortgage ought to be held valid in all cases in which it is made by a *partner having an implied *285 power to borrow on the credit of the firm. (y)

The implied authority of a partner having power to borrow, to pledge the personal property of the firm for money Pledges of borrowed, is beyond dispute (2)'; and the power is not chattels

Ill. 55. See, also, Hawkins v. Hastings
Bank, 1 Dill. 462.

That individual property is not embraced by a mortgage executed by partners on their property, unless specifically set forth and described. See Reid v. Godwin, 48 Ga. 527.

One partner may make a valid mortgage upon the partnership crop to secure a partnership debt, but cannot mortgage the individual property of his co-partner without his consent or acquiescence, under such circumstances as to create an estoppel. Gates v. Bennett, 33 Ark. 311.

Although a mortgage by a partner of firm property without his co-partner's consent, to secure his individual debt, will not be permitted to operate as a mortgage, yet if, on a payment of the firm debts and a division of the assets of the firm, such mortgaged property falls to the mortgagor, it becomes operative and can be enforced. Smith v. Andrews, 49 Ill. 28.

(y) See Ex parte National Bank, 14 Eq. 507; Patent File Co. 6 Ch. 83; Ex parte Lloyd, 1 Mont. & Ayr. 494. Compare 7 T. R. 210, per Lord Kenyon.

(z) See Ex parte Bonbonus, 8 Ves. 540; Butchart v. Dresser, 10 Ha. 453, and 4 DeG. M. & G. 542; Brownrigg v.

Rae, 5 Ex. 489; Gordon v. Ellis, 7 Man. & Gr. 607. See, also, Langmead's Trusts, 20 Beav. 20, and 7 DeG. Mac. & G. 353; and as to ships, Ex parte How · den, 2 M. D. & D. 574.

1

Gregg v. Fisher, 3 Brad. (Ill.) 261. M. gave money to R. to invest in leaf tobacco, with a verbal agreement that they should share the profits equally, saying nothing about losses. R. used the money to pay his own debts and bought tobacco in the name of M., giving his own acceptances for the purchase-money, and pledging the tobacco for the payment of the acceptances to the defendants, who gave a bill of sale receipted in the name of M. M. was unknown to the defendants, and they were informed by R. that the purchase was for himself, though made in M.'s name: Held, that M. and R. were to be regarded as partners in the purchase of the tobacco, and that M. was bound by the agreement of R. pledging the tobacco to secure the payment of his acceptances for the purchase money; that the defendants were not responsible to M. for the misapplication by R. of the money he had received from M.; that the receipted bill given by the defendants in the name of M., on the receiving the acceptances of R., was open to explana

confined to cases in which there is a general partnership; for, if several join in a purchase of goods to be sold for their common profit, a pledge of those goods by one of the persons interested is binding on them all. (a) The implied power to pledge, moreover, extends to pledges for antecedent debts. (b)

Any partner may, on behalf of the firm, redeem a pledge of the firm; but he alone is not the proper person to bring an action to recover the thing pledged. (c)

Redemption.

A question of some importance arises as to the effect, if any, of the Factors' acts (d) on the power of one partner to sell Factors' acts. and pledge the goods of the firm. The writer is not aware of any authority upon this subject, but he conceives that those acts neither extend nor abridge the power in question. The Factors' acts do not apparently render valid any sale or pledge by one partner of partnership goods, which is not valid, independently of the acts, upon the principles of the common law.

With respect to mortgages and pledges by companies *286 little *need be added to what has been said above, and under the head Borrowing money. It has been held that a trading company can give a valid bill of sale to secure a debt of the company (e); that the directors of a steamship comby companies. pany having general powers of management can mortgage its ships for money borrowed (f), and that the directors of a

Mortgages, &c.,

tion, and did not estop the defendants from holding the tobacco to secure the payment of the acceptances according to their agreement with R. Miller v. Sullivan, 1 Cincinnati, 271.

One partner has no authority to agree that private property of the other partner, pledged by him for a firm debt, shall also stand as security for further advances. Beardsley v. Tuttle, 11 Wis. 74.

See post, 330 and note.

(a) Reid v. Hollinshead, 4 B. & C. 867; Re Gellar, 1 Rose, 297; Raba v. Ryland, Gow N. P. 133; Tupper v. Haythorne, ib. 135; but see Barton v. Williams, 5 B. & A. 395, p. 405, per Best, J., and note that there the goods pledged were not partnership property when the pledge was made. In Ex parte Cope

land, 2 Mont. & Ayr. 177, it was questioned whether a pledge by one partner was valid if the pledgee had notice that the pledgor was not the only owner, but this it is conceived could only be material where the pledge is not made for ostensible partnership purposes.

(b) Patent File Co. 6 Ch. 83, and see Story on Partn. § 101.

(c) See Harper v. Godsell, L. R. 5 Q. B. 422.

(d) 6 Geo. 4, c. 94, and 5 & 6 Vict. c. 39. See, upon them, Navulshaw v. Brownrigg, 2 DeG. M & G. 441.

(e) Shears v. Jacob, L. R. 1 C. P. 513; Deffell v. White, L. R. 2 C. P. 144, which see as to the mode of complying with the bills of sale act.

(ƒ) Australian Steam Clipper Co. v. Mounsey, 4 K. & J. 733.

manufacturing company with similar powers can equitably mortgage its property by depositing its deeds (g); but that a mortgage of the uncalled-up capital of a company is invalid. (h)

As to mortgages by companies governed by the Companies clauses consolidation act, see ante, under the head Borrowing money, and also 8 & 9 Vict. c. 16, § 38 et seq., and as to debenture stock, 26 & 27 Vict. c. 118, § 22, et seq., 32 & 33 Vict. c 48, § 1.

All limited registered companies are required by the Companies act, 1862, to keep a register of all mortgages and charges specifically affecting their property, and to allow the register to be inspected (); but unregistered mortgages are not necessarily invalid. (k)

benture Act.

By the Mortgage Debenture Act, 1865 (28 & 29 Vict. c. 78, amended by 33 & 34 Vict. c. 20) (1), facilities are given Mortgage Defor the issue, by certain classes of companies, of transferable mortgage debentures, upon certain terms and conditions. But the act only applies to, 1, companies governed by the Companies act, 1862, and restricted by their memoranda of association to the objects of advancing money on real securities, and of borrowing money on transferable mortgage debentures, or on real securities (m); 2, to companies incorporated by act of *Par- *287 liament for similarly restricted purposes. Moreover, the paid-up capitals of these companies must not be less than 100,000Z., and each share must be of the nominal value of not less than 50%., of which not less than one-tenth nor more than one-half must have been paid up.

(g) Ex parte National Bank, 14 Eq. Valpy and Chaplin, 7 Ch. 289, and Na507; Patent File Co. 6 Ch. 83.

(h) See ante, p. 271.

(i) 25 & 26 Vict. c. 89, § 43.

(k) General South American Co. 2 Ch. D. 337; Borough of Hackney Newspaper Co. 3 Ch. D. 669; North and South Wales Bank, 10 Eq. 515. Compare Native Iron Ore Co. 2 Ch. D. 345; Ex parte Valpy and Chaplin, 7 Ch. 289, where, however, the mortgages were held invalid. In the case of Knowle's mortgage, 6 Ch. D. 556, the Master of the Rolls declined to hold an unregistered mortgage to a director invalid as against an equitable sub-mortgagee from him. This is opposed to Ex parte

tive Iron Ore Co. 2 Ch. D. 345, from both of which the Master of the Rolls expressly dissented. In the absence of fraud, it is difficult to see why non-registration of a mortgage can affect its validity or priority. See § 43 of the Act.

(1) The act contains a great variety of important provisions, to which it is unnecessary to allude in the present place.

(m) There is power to alter the memorandum so as to restrict it to these objects where the memorandum as originally framed includes them, but extends to others as well. See § 3.