Imagini ale paginilor
PDF
ePub

wrongful seizure of property, the seizure of the individual property of one partner is not to be considered.28

The same wrongful act may, of course, occasion both a partnership and an individual loss, so that a joint action for the joint wrong, and individual actions for the individual wrongs might be maintained. In the same general act there may also be duties to the partnership and other duties to the individual, for the violation of either of which an action might be brought.29

3. Effect of Personal Disability.

§ 331. Effect of disability of one partner-Recovering property wrongfully disposed of by him.-Where one partner has wrongfully disposed of partnership property, securities or money (as by using it to pay his own private debts), or has attempted, for the same purpose, to permit his own debt to be set off against a partnership demand, the question whether an action at law may be maintained to recover it or its value from the transferee is involved in dispute. It is said in many cases that no such action can be maintained,-not by the other partner alone, for the property did not belong to him alone, and he cannot even recover to the extent of his interest without an accounting; 30 and not by an action in which all of the partners, including the guilty one, are parties, for the guilty partner could not recover if he alone were involved (having consented to the act), and to allow a recovery where he is one of the plaintiffs is to permit him to profit by his own wrong.31 The remedy

Y. App. Div. 169, 134 N. Y. S. 847 with Wills v. Jones (1898), 13 App. Cas. D. C. 482.

28 See Watts v. Rice (1883), 75 Ala. 289. Partners in a joint action may not recover for seizure of individual exemptions of each. Rogers v. Raynor (1894), 102 Mich. 473, 60 N. W. 980.

29 Where the defendant was employed to make out a firm account and also an individual one for each partner, and he made out the indi

vidual account of one so carelessly that he suffered loss, an action may be brought by that one. Story v. Richardson (1839), 6 Bing. N. C. 123.

30 See Reed v. Gould (1895), 105 Mich. 368, 63 N. W. 415, 55 Am. St. R. 453; Bumpus v. Turgeon (1904), 98 Me. 550, 57 Atl. 883; White v. Campbell (1893), 18 R. I. 150, 26 Atl. 40.

31 See Jones v. Yates (1829), 9 B. & C. 532 (by assignee of firm):

of the innocent partner, according to these cases, is either against the guilty partner alone, or in equity against him and the transferee in a forum where all rights can be adjusted.32

Many other cases, on the other hand, permit the action to be maintained, either in the names of all for the benefit of the innocent partner,33 or in the latter's name alone to recover to the extent of his interest.34 This disability would not exist where

[But see Heilbert v. Nevill (1869), L. R. 4 Com. P. 354]; Homer v. Wood (1853), 65 Mass. (11 Cush.) 62; Farley v. Lovell (1869), 103 Mass. 387; Grover v. Smith (1896), 165 Mass. 132, 42 N. E. 555, 52 Am. St. R. 506; Cornells v. Stanhope (1883), 14 R. I. 97; Greeley v. Wyeth (1838), 10 N. H. 15; Chase v. Bean (1877), 58 N. H. 183; Craig v. Hulschizer (1871), 34 N. J. L. 363; Blodgett v. Sleeper (1877), 67 Me. 499; Bumpus v. Turgeon, supra; Church v. First Nat. Bank (1877), 87 Ill. 68 [compare McNair v. Platt (1867), 46 Ill. 211]; Carrie v. Cloverdale (1891), 90 Cal. 84, 27 Pac. 58; Estabrook v. Messersmith (1864), 18 Wis. 545 [compare Cotzhausen v. Judd (1877), 43 Wis. 213, 28 Am. Rep. 539].

32 See Hoff v. Rogers (1889), 67 Miss. 208, 7 So. 358, 19 Am. St. R. 301.

33 See Rogers v. Batchelor (1838), 37 U. S. (12 Peters) 221, 9 L. ed. 1063; Johnson v. Crichton (1880), 56 Md. 108; Dob v. Halsey (1819), 16 Johns. (N. Y.) 34, 8 Am. Dec. 293; Forney v. Adams (1881), 74 Mo. 138; Ackley v. Staehlin (1874), 56 Mo. 558; Nall v. McIntyre (1858), 31 Ala. 532; Buck v. Moseley (1852), 24 Miss. 170; Daniel v. Daniel (1848), 9 B. Mon. (Ky.)

195.

34 See McNair v. Wilcox (1888), 121 Pa. 437, 15 Atl. 575, 6 Am. St. R. 799; Doll v. Hennessy Merc. Co. (1905), 33 Mont. 80, 81 Pac. 625; Phillips v. Thorp (1903), 12 Okla. 617, 73 Pac. 268; Eady v. Newton Coal Co. (1905), 123 Ga. 557, 51 S. E. 661, 1 L. R. A. (N. S.) 650; as assignee of other partner, Viles v. Bangs (1874), 36 Wis. 131. See, also, Liberty Bank v. Campbell (1881), 75 Va. 534.

Where the wrongful disposal by one partner occurred after the dissolution and after all firm debts were paid, other may recover to the extent of interest: Hogendobler v. Lyon (1893), 12 Kan. 276. Where one partner fraudulently released a firm claim on receipt of a portion of it, and deposited one half of the sum so received in a bank for his copartner, the latter was permitted to recover one half of the residue. Busby v. Rooks (1904), 72 Ark. 657, 81 S. W. 1056. But in a case (not officially reported) in Kentucky, where the circumstances were similar except that the fraudulent partner kept the whole sum received, the other partners were permitted to recover the whole claim. Phoenix Ins. Co. v. Miller (1891), 13 Ky. L. Repr. 464.

one partner has acquired, e. g., by assignment, the right to sue in his own name alone without joining the guilty partner.35 So if the innocent partner survived the other, he could recover.36

II. PARTIES TO ACTIONS AGAINST THE PARTNERSHIP.

§ 332. Who should be sued in actions against the firm.-The question, who are proper parties defendant in actions against the partnership, presents substantially the same considerations. as the question who should be plaintiffs, though the two cases are not identical.

1. In Contract.

§ 333. All actual and ostensible partners should be joined.— The contract obligations of the firm being joint, all of the actual and ostensible partners who were such at the date of the contract must, as a rule, be joined as parties defendant in actions on contract.37 Failure to join them must, however, at common law, be taken advantage of by a plea in abatement,38 unless the defect appeared upon the face of the papers, in which case the question could be raised by demurrer, motion in arrest of judgment, or writ of error.39 This rule of joinder, however, has been changed in several states by statutes which make joint debts joint and several at the option of the obligee.40

As has been seen, the fact that one who was a partner when the contract was made has since retired will not of itself relieve him from liability; neither can one who was not then a partner,

35 See Brickett v. Downs (1895), 163 Mass. 70, 39 N. E. 776, Burd. Cas. 215.

36 See Binns v. Waddill (1879), 32 Gratt. (Va.) 588.

37 See Smith v. Cooke (1869), 31 Md. 174, 100 Am. Dec. 58; Sandusky v. Sidwell (1898), 173 Ill. 493, 50 N. E. 1003; Harrison v. McCormick (1886), 69 Cal. 616, 11 Pac. 456.

38 See Fogg v. Virgin (1841), 19 Me. 352, 36 Am. Dec. 757; Cleve

land v. Woodward (1843), 15 Vt. 302, 40 Am. Dec. 682, Mechem's Cas. 388; Wilson v. McCormick (1890), 86 Va. 995, 11 S. E. 976.

39 See Sandusky v. Sidwell, supra; Sinsheimer V. Skinner Mfg. Co. (1897), 165 Ill. 116, 46 N. E. 262.

40 This seems to be the case in Alabama, Arkansas, Colorado, Georgia, Iowa, Kansas, Kentucky, Mississippi, Missouri, Montana, New Jersey, New Mexico, North Carolina and Tennessee.

but has since come in, be held liable unless by novation or otherwise he has assumed liability in such a way that the creditor may proceed against him at law.41

If the partnership was dissolved by death, then, as will be seen, legal actions usually may be brought against the survivors only, and the representatives of the deceased partner are not to be joined; 42 though recourse may usually be had in equity to the estate of the deceased partner.43

[ocr errors]

§ 334. How when contract made in name of one partner.Where a partner is known to be acting as such for a known partnership, it is the presumption that all of the ordinary, informal contracts which he makes are upon the account of the partnership, and they should be enforced in the usual manner. If, however, credit were given to him to the exclusion of the partnership, he would be the only one bound to the other party. In making formal contracts in writing, he may so stipulate as to bind himself, even though that may not have been his actual intention. On non-negotiable and simple contracts so made, the partners would also usually be liable at the option of the other party, even though so framed that the single partner might be sued alone. Dormant and secret partners are dealt with in the next section.

§ 335. Dormant and secret partners proper but not necessary parties. Dormant and secret partners are proper but not necessary parties. If the contract were made by one partner in his own name, but really for the firm, that partner or all of the partners may be sued, if it were a simple contract; but if it were a specialty or a negotiable instrument the partner named in it as the maker of it can alone be sued upon it.44

The ordinary rules of agency respecting the liability of an undisclosed principal apply here.

41 See ante, §§ 317-321.

42 See post, § 402.

43 See post, § 411.

44 See Cleveland V. Woodward (1843), 15 Vt. 302, 40 Am. Dec. 682, Mechem's Cas. 388; North v. Bloss

(1864), 30 N. Y. 374; Scott v. Conway (1874), 58 N. Y. 619; Page v. Brant (1856), 18 Ill. 37; Hatch v. Wood (1862), 43 N. H. 633; Wright v. Herrick (1878), 125 Mass. 154.

[ocr errors]

§ 336. Nominal partners. Similarly, a nominal partner, i. e., one who is not really a partner but, who has caused or permitted himself to appear to the plaintiff to be a partner, is a proper but not a necessary party. He may be held, but the plaintiff may decline or omit to do so, and rely on those who are in fact the partners, if he can make a case against them.45 If there were no actual partners or if they were not liable for the act, as for example where it was the unauthorized act of the nominal partner only, the latter alone would be liable.

§337. Firm as such not to be sued, except by statute.-As in the case of parties plaintiff already referred to, the firm as such is not such a legal entity as may be sued, except where some statute so declares.46 Nor, in the absence of a statute, may actions be brought against the partners in the firm name; though statutes are common which give such a right, either generally or to sustain the action until the proper individual names can be learned and supplied.

2. Actions of Tort.

§ 338. Actions of tort may be brought against all or any of the partners.-Causes of action in tort for wrongs for which the partnership is responsible, whether committed by a partner or by partnership servants or agents, and not essentially consisting of a breach of a partnership contract, are not joint, but joint and several, and the suit may be brought against all or any of the partners.47

45 See Hatch v. Wood (1862), 43 N. H. 633; Wright v. Herrick, supra; Scarf v. Jardine (1882), L. R. 7 App. Cas. 345, Mechem's Cas. 484; Ex parte Watson (1815), 19 Ves. 459; Thayer v. Goss (1895), 91 Wis. 90, 64 N. W. 312, Mechem's Cas. 492.

46 Thus in Georgia the statute (§ 3167, Code 1911), provides: "Judgments may be entered up and execution issue in the name of the firm or against a firm. And service

of process on one partner, with a return of non est inventus as to the cthers, shall authorize a judgment against the firm binding all the firm assets and the individual property of the one served.''

In penal actions, proceedings should be against the partners, not against the firm as an entity. People v. Paisley (1919), 288 Ill. 310, 123 N. E. 573.

47 See Albright V. McTighe (1892), 49 Fed. 817; Wisconsin

« ÎnapoiContinuă »