where the parties specially agree upon terms whose natural and reasonable result is to segregate a particular transaction, they need not also declare in words that this is their intent.40

One of the most common of these cases is that wherein some or all of the partners execute and deliver to one partner a negotiable note payable at a date prior to any probable termination of the partnership. Its earlier maturity tends to show that it was not designed to await a final accounting of partnership affairs, and its negotiable character tends to show that it was to be payable absolutely, without regard to the state of the partnership accounts.41 Even though the payee might not be able to sue at law upon a note so given to him in the firm name (on account of the difficulty as to parties), his transferee might sue.

§ 218. On matters distinct from partnership one partner may sue another. d. As to matters entirely distinct from the partnership affairs, one partner may, of course, sue another as freely as though in respect to other matters they did not sustain the relation of partner.42

40 Thus the making of a promissory note by some of the partners in favor of another is said to be an acknowledgment of the separation of that sum from the partnership account. Bonnafee v. Fenner (1846), 6 Smedes & M. (Miss.) 212, 45 Am. Dec. 278. See, also, Fox v. Firth (1842), 10 M. & W. 131; Wilson v. Wilson (1894), 26 Oreg. 251, 38 Pac. 185, Burd. Cas. 538.

So, where upon closing up the business, it was agreed that one should take a certain lot of property and pay the other a certain sum for his interest in it: Jackson v. Stopherd, supra. So, where on dissolution, one partner bought the assets. He may later recover from his former partner money collected by him on a debt due the firm. Glade

v. White (1894), 42 Neb. 336, 60 N. W. 556, Burd. Cas. 541.

41 See Carpenter V. Greenop (1889), 74 Mich. 664, 42 N. W. 276, 4 L. R. A. 241, 16 Am. St. R. 662, Mechem's Cas. 296, Gilm. Cas. 467; Wilson v. Wilson (1894), 26 Oreg. 251, 38 Pac. 185, Burd. Cas. 538; Burnes v. Scott (1885), 117 U. S. 582, 6 Sup. Ct. 865, 29 L. ed. 991. Compare Martin V. Stubbings (1886), 20 Ill. App. 381 [s. c. 126 Ill. 387, 18 N. E. 657, 9 Am. St. R. 620]; Sewell v. Cooper (1869), 21 La. Ann. 582. See, also, Conway v. Zender (1913), 154 Wis. 479, 143 N. W. 162.

42 See Elder v. Hood (1865), 38 Ill. 533; Newsom v. Pitman (1892), 98 Ala. 526, 12 So. 412; Paine v. Moore (1844), 6 Ala. 129.

4. Firm Against Firm Having Common Partners.

§ 219. One firm cannot sue another at law if there is a common partner. 4. In the absence of a statute regulating it, one firm cannot maintain an action at law against another firm if there is a partner common to both firms, since such common partner would have to be both a plaintiff and a defendant.48 The death of the common partner will not remove the impediment as to matters arising before the death, nor will the dissolution of the firm.44 The nature of the claim is immaterial, if it is an obligation in favor of one firm and against the other as such. The forum for actions in such cases is the court of equity.45

It is not permitted, it is said in one case,46 "that one of the parties should thus appear both as a plaintiff and defendant, in effect prosecuting an action against himself, in which, if a recovery were to be allowed, it would be in his favor and at the same time against himself. Nor, at law, would the contract or agreement between the two firms having a common member be recognized as creating a legal obligation or cause of action. The transaction would be treated as an attempt by a party to enter into a contract with himself.47 The remedial system of the common law was too inflexible and restricted to enable it to adjust the complex rights and obligations of the parties under such circumstances. But in equity the agreements of the members of firms so related to each other were treated as obligatory, and the fact that one of the parties to the joint contract stood in the position of both an obligor and obligee did not stand in

43 See Beede v. Fraser (1894), 66 Vt. 114, 28 Atl. 880, 44 Am. St. R. 824, Mechem's Cas. 300; Green v. Chapman (1855), 27 Vt. 236; Denny v. Metcalf (1848), 28 Me. 389; Hall v. Kimball (1895), 77 Ill. 161; Crosby v. Timolat (1892), 50 Minn. 171, 52 N. W. 526, Gilm. Cas. 469; Noyes v. Ostrom (1910), 113 Minn. 111, 129 N. W. 142; Beacannon v. Liebe (1884), 11 Oreg. 443, 5 Pac. 273.

44 See Bosanquet v. Wray (1815), 6 Taunt. 597, Ames' Cas. 442; In re Buchhause (1874), 2 Lowell 331, Gilm. Cas. 572.

45 See cases cited in first note. 46 Crosby v. Timolat, supra. 47 Citing Bosanquet v. Wray, 6 Taunt. 597; De Tastet v. Shaw, 1 Barn. & Ald. 664, 669; Leake, Cont. 439, 440; McFadden v. Hunt, 5 Watts & S. 468; Price v. Spencer, 7

Phila. 179.

the way of affording such relief or remedy as might be found to be appropriate and necessary to the ends of justice."' 48

§220. Assignee Code. This objection might in many cases be obviated by assignment where the assignee could sue in his own name, and be free from the disabilities affecting the assignor.49 And in New York it has been held that the code of procedure, in abolishing the distinctions between actions at law and suits in equity, had made it possible to maintain a "civil action" in such cases.50

II. OF ACTIONS IN EQUITY.

§ 221. Equity the proper tribunal in partnership matters.The court of equity is the chief and appropriate tribunal for the settlement of all controversies growing out of partnership transactions as such. Its principal function is in winding up the partnership affairs and arriving at the respective interests therein of the partners and creditors, but its aid may often be sought in other matters. Thus

1. Specific Performance.

8222. In what cases granted.-Something of the power of courts of equity to enforce specific performance of partnership agreements has been already considered in a previous section,51 and, as there noticed, the jurisdiction is, in most cases, greatly limited by the nature of the case.52 But such stipulations as

48 Citing 1 Story, Eq. Jur., §§ 679, 680; Haven v. Wakefield, 39 Ill. 509; Chapman v. Evans, 44 Miss. 113; Calvit's Ex'rs v. Markham, 3 How. (Miss.) 343; Hayes v. Bement, 3 Sandf. 394.

49 See Beacannon v. Liebe, supra. Not in Virginia: Aylett v. Walker (1896), 92 Va. 540, 24 S. E. 226.

50 See Cole v. Reynolds (1858), 18 N. Y. 74, Mechem's Cas. 292; Mangels v. Shaen (1897), 21 App. Div. 507, 48 N. Y. S. 526, Mechem's Cas.

290. See, also, Gibson v. Ohio Farina Co. (1859), 2 Disney (Ohio) 499, 13 Ohio Dec. 306.

51 See ante, § 119.

52 See Scott v. Rayment (1868), L. R. 7 Eq. 112; Morris v. Peckham (1883), 51 Conn. 128; Clark v. Truitt (1899), 183 Ill. 239, 55 N. E. 683; Buck v. Smith (1874), 29 Mich. 166, 18 Am. R. 84, Mechem's Cas. 322; Hercy v. Birch (1804), 9 Ves. 357; Karrick v. Hannaman (1897), 168 U. S. 328, 18 Sup. Ct.

are capable of specific performance may be enforced, either directly,58 or negatively by an injunction against their breach.54

The chief objections which arise to the exercise of the power to grant specific performance in partnership cases are those which inhere in the peculiar nature of the subject. The cases which involve the question fall usually into one or the other of two classes: First, those where specific performance is sought of an agreement to become or remain partners; and Second, those which involve some incidental right or liability growing out of an established relation, such as agreements to buy or sell, take shares on a valuation, and the like. The cases in the former class are the more difficult. Thus, where the purpose is to compel parties to enter into partnership as agreed, if no time was stipulated for its continuance, of what avail is it to enforce the creation of a partnership which the parties may immediately dissolve?-if a term of continuance was agreed upon, can the court assume the task of constantly watching the parties to observe whether they are performing their duties as partners?

§ 223. Same subject.-In one case 55 in which the question arose, the court, in denying the application, said: "It is extremely plain that the court cannot assume to enforce the performance of daily prospective duties, or supervise or direct in advance the course or conduct of one who is to control and manage in the interest of a firm in which he is to stand as a member, and where, too, the stipulated arrangement as plainly set forth contemplates that his personal skill and judgment shall

R. 135, 42 L. ed. 484; Hyer v. Richmond Traction Co. (1897), 168 U. S. 471, 18 Sup. Ct. 114, 42 L. ed. 547; Marble Co. v. Ripley (1870), 10 Wall. (U. S.) 339, 19 L. ed. 955. Compare England v. Curling (1844), 8 Beav. 129; Somerby v. Buntin (1875), 118 Mass. 279, 19 Am. R. 459, Mechem's Cas. 326; Byrne v. Reid [1902], 2 Ch. 735, Mechem's Cas. 930; Birchett V. Bolling (1817), 5 Munf. (Va.) 442; Wadsworth v. Manning (1853), 4 Md. 59.

53 See cases cited in second and third sections following.

54 See Leavitt v. Windsor Land & Inv. Co. (1893), 4 C. C. A. 425, 54 Fed. 439.

55 Buck v. Smith (1874), 29 Mich. 166, 18 Am. Rep. 84, Mechem's Cas. 322, Gilm. Cas. 479. The court in this case also urged, as a ground for refusing the relief, that, under the contract there involved, it could not make its relief mutual.

be applied and govern according to the shifting needs of property and business. No court is competent to execute such an arrangement."

In another case,56 involving the same question, the court said: "It is a rule in equity that the court will not decree a specific performance where it has no power to enforce the decree. Hence partnership articles will not be enforced, especially where no time is fixed for its continuance, as either party may dissolve it at pleasure. And even where a time is fixed it is difficult to see how the decree can be enforced. Take this case as an illustration: Is the court to keep its hand on the parties for seventeen years and compel them to carry on this business?''

§ 224. Same subject.-There may, however, be cases in which the court will enforce specific performance of an agreement to form a partnership, by requiring the execution of the agreed articles or other similar act, notwithstanding that it may be immediately dissolved. This may be done, for example, where it will secure to a partner the interests in property to which by the partnership agreement he is entitled.57

The execution of such deeds, etc., as might be necessary to give full effect to the agreement would fall within the same rule. The act required here is a certain, definite and agreed one, which may be of importance to the protection of the party's interests and which may in some cases be of value even though the enforcement of the remainder of the agreement, i. e., to carry on the partnership so formed for the agreed period may be thought to be beyond the power of the court.58

1

56 Morris v. Peckham (1883), 51 Conn. 128. Same: Clark v. Truitt (1899), 183 Ill. 239, 55 N. E. 683.

57 Somerby v. Buntin (1875), 118 Mass. 279, 19 Am. R. 459, Mechem's Cas. 326; Satterthwait v. Marshall (1872), 4 Del. Ch. 337; Karrick v. Hannaman, supra.

58 See Byrne v. Reid [1902], 2 Ch. 735, Mechem's Cas. 930 (where the execution of such deeds as were necessary to give effect to the agree

ment was held to be within the power of the court. This case, however, was in fact attended by a certain consent order which may have affected the question, though at least one judge intimated that he would have been of the same opinion without that fact). [See comments 3 Columbia Law Review 108]; England v. Curling (1844), 8 Beav. 129.