If the obligation of one partner, e. g., his promissory note, be taken for a previously created partnership debt, the effect depends upon the intention. Such a note may be taken as payment of the firm debt, and if it is so taken the firm debt is gone; but in order to discharge the firm, according to the prevailing rule, the evidence must be clear that it was so taken in satisfaction, for this will not be presumed from the mere fact of the taking, and in the absence of such evidence the firm will still be bound upon the debt.14

§ 292. Same subject-Unknown partnership.-In those cases already considered in which it is held that the creditor has recourse against one partner only, it is because it is determined that the creditor has elected to give credit to such partner alone. But an election involves the opportunity of choice of choosing between the credit of the firm and that of the individual part

ner, and this opportunity of choice can only exist where the creditor knew that there was a partnership at the time that he gave credit. If he did not then know of the existence of the partnership, it is obvious that a different question is presented, but it is, at the same time, a question already considered in Agency. It is another phase of the liability of an undisclosed principal-the partnership-for the acts and contracts of his agent-the partner. As to this, it has been seen that an undisclosed principal when discovered is, in general, bound by the simple contracts of his agent, although at the time the other party gave credit to the agent alone, supposing him to be the principal. Two exceptions to this rule were found to prevail : 1. That the principal cannot be held where he had been previously led by the creditor's conduct to settle with the agent upon the assumption that the agent had paid such creditor; and 2. That the principal cannot be held where, after his discovery, the creditor has elected to give credit to the agent alone.15 This rule applies in the case of partnerships, and subject to the exceptions named, the undisclosed partners are liable, when discovered, upon the simple contracts made really in behalf of the firm though ostensibly by one partner only.16 This rule that the creditor may hold the undisclosed or dormant partners liable confers a right but does not impose a duty; that is, the creditor has usually his option to sue all or only the one with whom he dealt he may sue all, but is not obliged to do so.17

§ 293. Same subject-Contracts under seal.-In case the contract or obligation executed by the single partner was a bond, deed or other instrument under seal, different rules apply for technical reasons. In such a case, where the common-law incidents of a seal still exist, all previous obligations if any are usually deemed to be merged in the bond or deed, and only

15 See 2 Mechem on Agency, S$ 1729-1772.

16 See Beckham v. Drake (1841), 9 Mees. & Wels. 79; Reynolds v. Cleveland (1825), 4 Cowen (N. Y.) 282, 15 Am. Dec. 369; Griffith v.

Bufum (1850), 22 Vt. 181, 54 Am.
Dec. 64, Mechem's Cas. 385.

17 Cleveland v. Woodward (1843), 15 Vt. 302, 40 Am. Dec. 682, Mechem's Cas. 388.

those persons who are named as parties to it can sue or be sued; hence if one partner gives his own sealed obligation, or enters into a contract under seal, the other partners cannot be held at law, either upon the instrument itself or upon the consideration, by showing the contract was really made in behalf of the firm or that it received the benefit of it,18 except where the seal can be regarded as surplusage.19 But if there was originally a partnership obligation, which at law was deemed to be merged in the specialty executed by one partner, equity may at times, on the insolvency of that partner, allow relief against the others who, but for such merger, would be liable.20

§ 294. Same subject-Judgment against one partner.—A judgment against one partner alone for a partnership debt, by the common law, discharges the other partners whether ostensible or secret. The judgment is a higher security which ordinarily merges the lower; and, besides, the liability of the partners is a joint one, upon which they cannot usually be separately sued.21

This effect of a judgment as a merger has been altered in several States by statute,22 and statutes in several States make

18 See Tom v. Goodrich (1807), 2 Johns. (N. Y.) 213; United States v. Astley (1819), 3 Wash. (U. S. C. C.) 508 (but see U. S. v. Lyman (1818), 1 Mason U. S. C. C. 482, 506); North Penn. Coal Coal Co.'s Appeal (1863), 45 Pa. St. 181, 84 Am. Dec. 487; Williams v. Gillies (1878), 75 N. Y. 197, Burd. Cas. 290.

In Faris v. Cook (1901), 110 Ky. 867, 62 S. W. 1043, 63 S. W. 600, 23 Ky. L. R. 328, it was held that the other partners could be held upon a bond signed by one only upon proof that its execution in that form was by the authority of the others and on their account. It was, for the time being, making that partner's name the firm name.

19 See as to this, ante, § 263.

20 As to a liability in equity, see Alexander v. Alexander (1888), 85 Va. 353, 7 S. E. 335, 1 L. R. A. 125; Niday v. Harvey (1852), 9 Gratt. (Va.) 454.

21 See Mason v. Eldred (1867), 73 U. S. (6 Wall.) 231, 18 L. ed. 783, Mechem's Cas. 433, Burd. Cas. 388, Gilm. Cas. 281; Candee v. Clark (1851), 2 Mich. 255; Ward v. Johnson (1816), 13 Mass. 148; Smith v. Black (1822), 9 Serg. & R. (Pa.) 142, 11 Am. Dec. 686; Wann v. McNulty (1845), 7 Ill. 355, 43 Am. Dec. 58; Suydam v. Barber (1858), 18 N. Y. 468, 75 Am. Dec. 254. See, also, post, §§ 210, 211.

22 See Mason v. Eldred, supra; Tibbetts v. Shapleigh (1881), 60 N.

partnership obligations joint and several.23 The Uniform Partnership Act does not make this change.24

Moreover, it has been held in a number of States, even in the absence of a statute, that where the debtors, at the time of the action, reside in different States, so that no one court by its process can acquire jurisdiction over all of them, a judgment against part in a court having jurisdiction over them, will, if unsatisfied, be no bar to a later judgment against the others in a court having jurisdiction over them.25

§ 295. Contracts made in individual names of all the partners. Where a firm name has been adopted, it should be used in partnership transactions, and, as a rule, the partnership cannot be bound as such by any other name. But this rule is not inflexible, and between themselves partners may adopt such names as they please. They may also do this as to creditors if the transaction is really a partnership transaction and for its benefit. Thus, though an obligation signed, not in the firm name, but in the individual names of all of the partners, is prima facie an individual transaction and not a partnership one, it may be shown to be a partnership transaction not only between the partners themselves, but also in favor of the obligee and against other creditors of the firm.26 Parol evidence is admissible for

H. 487; Odom v. Denny (1860), 82 Mass. (16 Gray) 114; Campbell v. Steele (1849), 11 Pa. St. 394; Bonesteel v. Todd (1861), 9 Mich. 371, 80 Am. Dec. 90; Wood v. Watkinson (1846), 17 Conn. 500, 44 Am. Dec. 562.

23 In some of the states, the general statutes making the liability on joint contracts joint and several, have been held not to apply to partnership debts; in others, contra. See post, § 308.

24 Sec. 15.

25 See Rand v. Nutter (1868), 56 Me. 339; Yoho v. McGovern (1884), 42 Ohio St. 11; Tibbetts v. Shapleigh (1881), 60 N. H. 487; Olcott

v. Little (1838), 9 N. H. 259, 32 Am. Dec. 357; Cox v. Maddux (1880), 72 Ind. 206; Merriman v. Barker (1889), 121 Ind. 74, 22 N. E. 992; Brown v. Birdsall (1859), 29 Barb. (N. Y.) 549; Hitchcock v. Frackelton (1898), 116 Mich. 487, 74 N. W. 720; even though note was made in a state where the judgment would be a bar: Wiley v. Holmes (1859), 28 Mo. 286, 75 Am. Dec. 126. Foreign judgment no bar: Eastern Townships Bank v. Beebe (1880), 53 Vt. 177, 38 Am. Rep. 665.

26 See Berkshire Woolen Co. v. Juillard (1879), 75 N. Y. 535, 31 Am. Rep. 488, Mechem's Cas. 389,

this purpose: it does not contradict the writing, nor violate the rule that no one but a party to it can be held upon a negotiable instrument.27

§ 296. Contracts where firm does business in name of one partner. It is not uncommon, as has been seen, for a partnership to do business in the name of a single partner, and contracts made in that name for the partnership will bind all members.28 If that partner carries on no individual business separate from that of the firm, contracts made in such name will be presumed to bind the partnership; if he does carry on a separate business, no such presumption arises, and the person who would charge the partnership upon a contract made in the name of such partner must show that it was intended to bind the partnership.29

Gilm. Cas. 156; Mix v. Shattuck (1878), 50 Vt. 421, 28 Am. Rep. 511; Freeman v. Campbell (1880), 55 Cal. 197; Iddings v. Pierson (1884), 100 Ind. 418; Warriner v. Mitchell (1889), 128 Pa. St. 153, 18 Atl. 337; Carson v. Byers (1885), 67 Iowa 606, 25 N. W. 826; Dreyfus v. Union Bank (1896), 164 Ill. 83, 45 N. E. 408, Burd. Cas. 139; Howell v. Moores (1889), 127 Ill. 67, 19 N. E. 863; Rouse v. Wallace (1897), 10 Colo. App. 93, 50 Pac. 366; Davis v. Turner (1903), 56 C. C. A. 669, 120 Fed. 605; In re Kuhn (1917), 241 Fed. 935; Purvis v. Butler (1891), 87 Mich. 248, 49 N. W. 564.

So although the firm name is "C. W. Rollins," a note made in the course of the business but signed "C. W. Rollins & Co.," may bind the partnership. Baxter v. Rollins (1894), 90 Iowa 217, 57 N. W. 838, 48 Am. St. R. 432.

In Colwell v. Weybossit Bank (1888), 16 R. I. 288, 15 Atl. 80, 17 Atl. 913, it was shown that it was

the custom of the partners to borrow money on notes signed by one partner and endorsed by the other. Held, to be partnership obligations.

But if the note was not in fact the obligation of the partnership the fact that all the partners signed it as individuals will not make it such. Lill v. Egan (1878), 89 Ill. 609. 27 See Dreyfus v. Union Bank, supra.

28 See Rumsey v. Briggs (1893), 139 N. Y. 323, 34 N. E. 929; Gavin v. Walker (1885), 82 Tenn. (14 Lea) 643; Pitkin v. Benfer (1892), 50 Kan. 108, 31 Pac. 695, 34 Am. St. R. 110, Mechem's Cas. 383; Baxter v. Rollins (1894), 90 Iowa 217, 57 N. W. 838, 48 Am. St. R. 432.

29 See United States Bank v. Binney (1828), 5 Mason (U. S. C. C.), 189; Yorkshire Banking Co. v. Beatson (1880), L. R. 5 C. P. Div. 109, Burd. Cas. 141, Gilm. Cas. 157, 317; Bank of Rochester v. Monteath (1845), 1 Denio (N. Y.) 402, 43 Am. Dec. 681.