has a right to notify it. If his co-partners prevent him from exercising that right, they will be compelled to do what may be Each partner necessary to enable notice to be given. In Troughton notify it." v. Hunter (h), a partnership was dissolved by a decree Troughton v. of the Court. It appeared that no advertisement of the Hunter. dissolution would be inserted in the "Gazette," unless signed by both partners. The defendant, who it seems would not sign the advertisement, was ordered so to do by the Court. Effect of notice of dissolution.-Subject to two exceptions, which will be examined hereafter, notice of dissolution Effect of notice of a firm, or the retirement of a partner, duly given, of dissolution. determines the power previously possessed by each partner to bind the others. Hence, after the dissolution of a firm or the retirement of a member and notification of the fact, no member of the previously [existing firm is, by virtue of his connection therewith, liable for goods supplied to any of his late partners subsequently to the notification (); nor is he liable on bills or notes subsequently drawn, accepted, or indorsed by any of them in the name of the late firm (k); even although they may have been dated before the dissolution (7); or have been given for a debt previously owing from the firm (m) by the partner expressly authorized to get in and discharge its debts. (n)2 There are, it is true, cases to be met with in which, notwithstanding a dissolution and notice, a bill or note in the name Cases in which of the firm has been held to bind those who were mem- immaterial. (h) 18 Beav. 470. (i) Minnitt v. Whinery, 5 Bro. P. C. 489. (k) Paterson v. Zachariah, 1 Stark. 375; Abel v. Sutton, 3 Esp. 108; Spenceley v. Greenwood, 1 Fos. & Fin. 297. (1) Wrightson v. Pullan, 1 Stark. 375; S. C. Wright v. Pulham, 2 Chitty, 121. (m) Kilgour v. Finlyson, 1 H. Blacks. 156; Dolman v. Orchard, 2 Car. & P. 104. (n) Kilgour v. Finlyson, 1 H. Blacks. 156. See Lewis v. Reilly, infra, note (q) 2 As a general rule, after a dissolution of a partnership, neither partner can notice is make a new contract or incur new responsibilities in the firm name binding on the others without express authority; and no note, draft or acceptance so executed in the name of the firm will be valid, if the party with whom the contract is made had notice of the dissolution. Easter v. Farmers' Nat. Bank, 57 Ill. 215; Curry v. White, 51 Cal. 530; Brown v. Broach, 52 Miss. 536; Maxey v. Strong, 53 Miss. 280; Smith v. Shelden, 35 Mich. 42; Floyd v. Miller, 61 Ind. 225; Bacon v. Hutchings, 5 Bush, 595; Montague v. Reakert, 6 id. 393; Gale v. Miller, 1 Lans. 451; Whitworth v. Ballard, 56 Ind. 279; Meyer v. Atkins, 29 La. Ann. 586; Vaccaro v. Toof, 9 Heisk. 194. Burton v. Issitt. *409 bers thereof *prior to the dissolution; but in each of these cases there was some circumstance taking it out of the ordinary rule. In Burton v. Issitt (o), the continuing partner had authority to use the name of the retired partner in the prosecution of all suits for the recovery of partnership property. This was held to authorize the giving of a promissory note for sixpences, payable under the Lords' act, and the retired partner was therefore held bound by a note given by his late partner in payment of those sixpences. In Smith v. Winter (p), the continuing partner had express permission to use the name of his late partner, who was therefore justly held the execution of the note. Dodd r. Bishop, 30 La. An. 1178. Smith v. Winter. Where one of two co-partners, after the dissolution of the partnership, gave a note in the name of the firm for his own private debt, the creditor knowing that the partnership was dissolved; and this note being afterwards sued, and the party who made it having become bankrupt, the other partner compromised the suit by giving his own note for half the debt and all the cost, part of which note he afterwards voluntarily paid: Held, that the making and acceptance of the first note was a fraud upon the absent partner; and that the second note was therefore void. Stearns v. Burnham, 4 Me. 84. To charge one partner on a firm note made by another partner without special authority, after the dissolution of the firm, a ratification with knowledge of the facts must be shown. McElroy v. Melear, 7 Coldw. 140. After dissolution, only the liquidating partner may, without express authority from his fellows, borrow money to pay a firm debt and give a firm note for it. McCowin v. Cubbison, 72 Pa. St. 358. A declaration, alleging that a note was made in the name of the firm by one of the partners after a dissolution, unless for the purpose of settlement, and given for a pre-existing debt of the firm, does not show a partnership liability, but does show the liability of the partner making the note in his separate capacity. Fontaine v. Lee, 6 Ala. 889. It has been held that a partner after dissolution of the firm, with notice to its creditors, cannot renew a partnership note of his late partnership. Moore v. Lackman, 52 Mo. 323. See, also, Haddock v. Crocheron, 32 Tex. 276. See, however, Taylor v. Hill, 36 Md. 494. But when, in the advertisement of the dissolution of a co-partnership, power is given to the continuing partner to settle the business of the firm, and for that purpose to use the partnership name, the jury may infer, from the transactions of trade, and the usage and custom of merchants, as well as from the advertisement itself, whether this power extends to the signing of the partnership name to renewals of a note which had been discounted in bank previous to the dissolution; and it is not necessary that the authority should be given by a special power of attorney, or other writ (p) 4 M. & W. 454. liable on a bill given in the name of the old firm after his retirement. The only case, indeed, of this description which presents any difficulty is Lewis v. Reilly. (9) There two part- Lewis v. Reilly. ners drew a bill payable to their own order, and after wards dissolved partnership. One of them then indorsed the bill in the name of both to the plaintiff, who knew of the dissolution. It was held, in an action by him against both partners, that he was entitled to recover on the bill, and that it was immaterial whether he knew of the dissolution or not. The precise ground of this decision does not distinctly appear. The Court seems to have proceeded on the supposition that an indorsement by one of several payees in the name of all is sufficient; but the writer has been un ten instrument. Myers v. Huggins, 1 Strobh. 473. Where a partner, after the partnership had been dissolved by the absconding of his co-partner, gave a note in the name of the firm, payable on demand, in lieu of a note given by the firm which had not become payable, with a view to enable the creditor to secure his debt by an attachment of property: Held, that the other partner was not bound by the transaction, because the giving of the new note was not in the usual course of dealing, and that the attachment was void as to other creditors. Whitman v. Leonard, 3 Pick. 177. A partner drew a check in the name of his firm, retained it in his possession, and after the dissolution of the firm transferred it to a creditor, in payment of his individual indebtedness. In an action brought by the latter thereon: Held, that after the dissolution of the firm one partner could not, by transferring a check previously signed, create a liability against it. Gale v. Miller, 54 N. Y. 536. After the dissolution of a partnership, a note made in the firm name, with the assent of the partners, for a debt due by the firm, is a valid obligation. The debt due by the firm, particularly when an extension of the time of its payment is secured by giving the note, is a suffi cient consideration therefor. Randolph v. Peck, 1 Hun, 138. ! Written authority to one of the partners to use the firm name after the partnership is dissolved, so as to be binding on all, is not required; it may be given by parol. Easter v. Farmers' Nat. Bank, 57 Ill. 215. The mere fact, however, that the other partners have for some reason paid certain other notes executed by him in the firm name after dissolution, is not of itself sufficient evidence of authority in such partner to execute the note in question. Easter v. Farmers' Nat. Bank, supra. An authority to one of a partnership, to settle the affairs, receive and pay the debts, does not warrant his drawing a bill, or giving a note in the partnership name after dissolution of the firm. Martin v. Walton, 1 McCord, 16; Bank of S. C. v. Humphreys, Id. 388. Where one of the surviving members of a partnership answered under oath to a suit upon a due-bill signed in the firm name, denying its execution and the existence of such a firm, a reply that after its execution he ratified the act of his partner in signing it, was held to be good on demurrer. Pattison v. Norris, 29 Ind. 165. (q) 1 Q. B. 349. able to find any previous authority for such a doctrine, save where the indorsers are partners, which in the case in question they were not, as the plaintiff was found by the jury to have known. The case is certainly anomalous and requires reconsideration. (r) The exceptions alluded to above as qualifying the rule that the agency of each partner is determined by dissolution (or retirement) and notice are First, where a partner who has retired and notified his retireWhen a partner ment, nevertheless continues to hold himself out as a hold himselfout. partner; and secondly, where what is done only carries out what was begun before. continues to *410 *1. If a partner retires and gives notice of his retirement, and he nevertheless allows his name to be used as if he were still a partner, he will continue to incur liability on the principle of holding out, explained in an earlier part of of this treatise.' In Williams v. Keats (s), after a partner had retired, and after notice thereof had been given by advertisement, a Williams v. Keats. (r) See Story on Bills, § 197, and Abel v. Sutton, 3 Esp. 108. The cases go further than is suggested in Garland v. Jacomb, L. R. 8 Ex. 220, for the notice of dissolution is what creates the difficulty. See infra, p. 413, note. (i) (s) 2 Stark. 290. See, too, Dolman v. Orchard, 2 Car. & P. 104; Emmet v. Bradley, 7 Taunt. 600. 1 Where the relations of a partner to his co-partners, have been terminated, yet his name was continued in the name and style of the firm formed by his former co-partners, with his knowledge, sanction and approval: Held, that he was liable on the contracts and obligations of the firm so using his name, as if he had actually continued as a member and partner thereof. Freeman บ. Falconer, 44 N. Y. Sup. Ct. (12 Jones & Sp.) 132. See, also, Ellis v. Bronson, 40 Ill. 455; Speer v. Bishop, 24 Ohio St. 598. A retiring partner, who gives notice by publication in a newspaper that he has ceased to be a partner, but who after that allows his name to appear in the firm as a partner, and continues in its employment, is liable as a partner to one who deals with the firm, and is misled by the appearances, and has no notice that he is not a partner, although the fact is generally known at the place where the contract is made. Wait v. Brewster, 31 Vt. 516. It is competent in an action against a partnership, to show that notwithstanding the withdrawal of a partner and a change of the firm name, the partnership had remained practically the same, and the business was conducted by the same persons, both before and after the withdrawal and change. Mellinger v. Parsons, 51 Iowa, 58. The mere fact that a partnership name has been kept over the door after the dissolution of the partnership, is not of itself sufficient to authorize one who holds a note signed in the partnership name, to recover upon it. Boyd v. MeCann, 10 Md. 118. Two surviving partners publish notice that the business of the late firm will for the present be carried on in the same name, under the charge of J. H.," (one of the partners), "who will con preventing use *410 bill was accepted by his co-partner in the names of himself and late partner. The names of both still remained painted up over their late place of business, and Lord Ellenborough held that the partner who had retired was liable on this bill notwithstanding the advertisement; for there was no evidence to show that the plain- Effect of not tiff in fact knew of the dissolution. (t) Upon this, of name. however, it is to be observed that the only evidence that the retired partner authorized the continued use of his name, was the fact that he had not prevented it. Now, authorities are not wanting to show that if a partner retires, and notice of his retirement is given by advertisement, he will not continue to incur liability by the acts of his co-partners, simply because they continue to carry on business in the old name, and he does not take steps to stop them. (u) His forbearance in this respect does not necessarily amount to an authority to use his name as before; and unless hist name is used by his authority he is not liable on the ground that he holds himself out as a partner. (a) But although Principle of it may be doubtful whether in Williams v. Keats there Keats correct. was a sufficient holding out, it is clear that if a partner retires and does still hold himself out as a partner, this is in fact signifying that he is willing to incur the responsibilities of a partner for the sake of those with whom his name is associated; and therefore he tinue, and who is duly authorized to adjust and settle matters relative to the same:" Held, that the surviving partners held out to the world that they would continue to transact business under that name, and that a note given by J. H. in the name of the firm was binding upon both. Casco Bank v. Hills, 16 Me. 155. The members of a firm, in the 'publication of notice of their dissolution, used the following language: "Either of the parties are authorized to use the name of the firm in liquidation only of past business:" Held, that this did not authorize the parties to renew a note given by the firm for a partnership debt, nor confer upon any of the parties powers which they did not possess by law. Martin v. Kirk, 2 Humph. 529. A co-partnership was incorporated, Williams v. and transferred their property to the corporation, and, by a by-law, the business was to be carried on in the name of the co-partnership: Held, that, though the partnership was thus dissolved, the members were liable as partners upon contracts subsequently made with third persons having no notice of the dissolution. Goddard v. Pratt, 16 Pick. 412. (t) See, as to this, Brown v. Leonard, 2 Chitty, 120, infra. (u) See Newsome v. Coles, 2 Camp. 617. (x) As to a retiring partner's right to an injunction to restrain the continuing partners from carrying on business in the old name, see De Tastet v. Bordenave, Jac. 516; Webster v. Webster, 3 Swanst. 490, note; Lewis v. Langdon, 7 Sim. 421. |