I. NOTICE TO PARTNERS. § 384. On dissolution by act of a partner.—Where the partnership is terminated by the act of a partner, whether it be a partnership at will or one for a definite time, it is ordinarily incumbent upon such partner to notify his copartners of that fact, and the termination would ordinarily not be deemed legally effected until such notice was given.1 Notice would ordinarily be necessary to terminate the agency of the other partners to bind the one seeking to dissolve the partnership. His secret intention, concealed in his own mind, or his purely ex parte acts, would have no effect. In many cases, the act itself by which the relationship is terminated would ipso facto give notice, as, e. g., where he sells out to his copartners, or sells to a third person whom the other partners contemporaneously admit to the partnership in his place. § 385. On dissolution by happening of events. Where the partnership is dissolved by one of those events which, like death, bankruptcy, war, change of law, and the like, operate to terminate the ordinary partnership, no notice of that fact could usually be required from one partner to another, because ordinarily one would have as much opportunity for notice in fact as another. There might well be cases, however, in which one partner, who had actual notice of such a fact which he knew his copartner did not have, would be deemed to be under a legal duty to inform him. § 386. Under Uniform Partnership Act.-With respect of the right of a partner to contribution from his copartners for lia * * 1 Thus, in Eagle v. Bucher (1856), 6 Ohio St. 295, 67 Am. Dec. 342, it is said: "That a partnership may be dissolved by the act of one of the partners we do not intend to impugn. That is too well settled to be now questioned. But to effect that purpose, the act must be done with a view to its accomplishment. It should be communicated at once to the other members of the firm. They should be advised of the new relations created by the withdrawal of a member, or a transfer of his interest in the concern. Their future relations toward each other, and their pursuit of the particular enterprise, depend on the acquisition of such knowledge." See, also, Abbot v. Johnson (1855), 32 N. H. 9; Jones v. Lloyd (1874), L. R. 18 Eq. 265, 271. bilities or expenses incurred by him after dissolution, the Uniform Partnership Act,1 confessedly to some extent changing the present law, provides that "where the dissolution is caused by the act, death or bankruptcy of a partner, each partner is liable to his copartners for his share of any liability created by any partner acting for the partnership as if the partnership had not been dissolved, unless (a) The dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution, or (b) The dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy" as those terms are defined by the Act. II. NOTICE TO THIRD PERSONS. § 387. The necessity of notice to them. The creation of a partnership and the transaction of its business are notice to the public that a relation has been entered into to which the law attaches certain incidents and liabilities. As a business venture it is ordinarily an invitation to third persons to deal upon the credit of the persons and the funds assembled for that purpose in the partnership. It seeks to establish good-will and habits of dealing. To be successful, the invitation to rely must usually be a continuing one. If this relation is terminated, it would seem to be a natural consequence that some notice of the fact should also be given, if it is desired to bring those incidents and liabilities to an end. And notice is required by law in many cases. We are now to consider when notice is required to third persons, to whom, and how it may be given. § 388. In what cases notice is required-Not on dissolution by mere operation of law.-As has been seen, the dissolution may result either from the operation of the law or by the act of the parties. The causes which will operate to dissolve the partnership by mere operation of law have been considered, and it is obvious that the existence of these causes is usually accom 1 Sec. 34. panied by facts and circumstances which must of themselves give publicity to the event. Thus, the fact that one of the partners has died is usually, if not always, accompanied by circumstances which must give publicity to the fact. The same is true of the bankruptcy of a partner, or the declaration of war between the countries of which partners respectively are citizens. Moreover, upon such death or bankruptcy new parties acquire interests in the property of the decedent or the bankrupt which can not be affected by the future acts of the former partners. The result of this necessary and inherent publicity is the general rule that no notice is required where the partnership is dissolved upon the happening of one of the events which terminate a partnership by mere operation of law. Such has, in fact, been held to be the rule in the case of dissolution by death, bankruptcy, war, and the marriage of a female partner. Change in the law, making the partnership thereafter illegal, must stand upon the same footing. Such, also, it is commonly said, is the case of dissolution by judicial decree: third persons must take V. Waddington 2 See Griswold (1818), 15 Johns. (N. Y.) 57, 16 id. 438; Marlett v. Jackman (1861), 85 Mass. (3 Allen) 287; Bank v. Matthews (1872), 49 N. Y. 12, Mechem's Cas. 962; Eustis v. Bolles (1888), 146 Mass. 413, 4 Am. St. Rep. 327, 16 N. E. 286, Mechem's Cas. 965. In this last case it is said: "The bankruptcy, like the death of a partner, dissolves the partnership; and, as it is a public and notorious proceeding, all creditors are bound to take notice of it, and no further notice need be given. The publication of bankruptcy or insolvency proceedings is legal notice to all persons by which they are bound. Story on Partnership, secs. 332-336; Arnold v. Brown, 24 Pick. (Mass.) 89, 94, 35 Am. Dec. 296; Marlett v. Jackman, 3 Allen (Mass.) 287, Ames' Cas. 551, Burd. Cas. 547; last statement, however, was not made concerning an adjudication of insanity. Where partnership is dissolved by war, no notice is required: Bank v. Matthews, supra; Griswold v. Waddington, supra. So held also in case of dissolution by marriage of a female partner: Little v. Hazlett (1900), 197 Pa. 591, 47 Atl. 855. An assignment for the benefit of creditors is not an act of which all persons are charged with notice: Kuser v. Wright (1894), 52 N. J. Eq. 825, 31 Atl. 397. notice, though where disconnected with an adjudication as to property this seems not so clear. The doctrine, it is said, does not extend so far as to require one to take notice of the decrees of courts of other states.* The Uniform Partnership Act, as to death and bankruptcy at least, repudiates this rule of imputed notice in case of death or bankruptcy, clearly as between the partners, and, apparently, as to third persons also.6 § 389. Required on dissolution by or through act of parties. But in the case of a dissolution by or through the act of the partners, no such publicity is necessarily incident and therefore a different rule prevails. In such cases, whether the partnership comes to an end by lapse of time or by mutual consent, or by the act of one of the partners, notice must usually be given. § 390. To whom notice required.-Notice may be required for two purposes and to two classes of persons: 1. If a partner intends to dissolve the partnership in pursuance of his power to do so, he must, as has been seen in the preceding subdivision, usually give his partners notice of that fact, both as a means to the dissolution, and also for the purpose of withdrawing the powers conferred upon them at the time the partnership was created. 2. But the question most frequently arising, and the one giving most difficulty, is the question of notice to third persons. Of these there are two classes: those who have had previous 3 Thus there is frequently cited the statement of Adams' Equity, 157: "For it is presumed that legal proceedings, during their continuance, are publicly known throughout the realm.'' See Mining Co. v. Anglo-Calif. Bank (1881), 104 U. S. 192, 26 L. ed. 707. 4 The realm referred to in the rule quoted, in proceedings concerning property, means the state where the property is. Carr v. Lewis Coal Co. (1888), 96 Mo. 149, 9 Am. St. R. 328, 8 S. W. 907. See also Shelton v. Johnson (1857), 4 Sneed (Tenn.) 672, 70 Am. Dec. 265 (a case concerning property). 5 Sec. 34. The commissioners, in their note to this section, avow the purpose to make this change as between the partners themselves. 6 Sec. 35 makes no exception of dissolution by such events. dealings with the firm and relied upon its credit, and those who have not. The former have necessarily knowlege of the existence of the firm, and have had occasion to rely upon the credit of its members, while the latter have not necessarily known of it, and have been brought into no personal relation with it. Notice to both classes may perhaps be necessary-to the former because they have already known and trusted to the partnership and are therefore likely to continue to do so; to the latter because if they do not already know of its existence or have not dealt with it, they may hereafter deal in reliance upon it and be deceived by supposing it to continue; but the same kind of notice is not required for both classes. Thus § 391. How notice given-1. To those who have given credit to the firm.-Persons of the first class, having had actual notice of the existence of the partnership, and having given credit to it, frequently spoken of as "former dealers," should be given actual notice of its dissolution. 8 Uniform Partnership Act, sec. 35 (16 I), uses the language: "Had extended credit to the partnership prior to the dissolution and had no knowledge or notice of the dissolution." This would exclude, e. g., the case in which the first dealings were after dissolution, and then, before notice, the dealing in question. A former dealer" within the meaning of the rule requiring actual notice is one who has extended credit to the firm: 2 Bates on Partnership, § 613. The term does not include one who has previously merely purchased goods from the firm: Askew v. Silman (1895), 95 Ga. 678, 22 S. E. 573, Mechem's Cas. 474, Burd. Cas. 106 (though the Georgia Code requires that notice shall be given "to creditors"). A single former transaction may be enough. Block v. Price (1887), 32 Fed. 562; Lyon v. Johnson (1859), It is not very material how the 28 Conn. 1, Gilm. Cas. 341; Thayer v. Goss (1895), 91 Wis. 90, 64 N. W. 312, Mechem's Cas. 492; but compare Merritt v. Williams (1876), 17 Kan. 287, where a habit of dealing is said to be necessary. The question does not turn upon the amount of the dealing: Clapp v. Rogers (1855), 12 N. Y. 283. A single sale of goods to the firm for cash is not enough: Clapp v. Rogers, supra; Merritt v. Williams, supra. Ordinarily the dealing must be with the firm directly, and it is not enough, for example, that the plaintiff has taken, from others, paper upon which the firm was a maker or endorser: Hutchins v. Bank of Tennessee (1847), 8 Humph. (Tenn.) 418; per Verplanck, Senator, in Vernon v. Manhattan Co. (1839), 22 Wend. (N. Y.) 183; Rocky Mt. Nat. Bank v. McCaskill (1891), 16 Colo. 408, 26 Pac. 821. Cases may easily |