with it. But in such a case it is necessary that the party dealing with the firm disclose every item material to the bargain. The parties stand in a relation of trust and confidence, not at arm's length, and secret information not necessary to disclose where strangers bargain together must be disclosed in such a case as this.

Sec. 31. RIGHT OF PARTNER TO SUE FIRM. A partner cannot sue another at law, but must go into equity and ask an accounting or other suitable relief.

It is a general rule that one partner cannot sue the partnership or his other partners in an ordinary action at law. He must go into a court of equity and ask for an accounting and such other relief as may be necessary.

In case two partners have made a final settlement and struck a balance, there is a right to bring a simple suit at law for the amount agreed upon. 38

Sec. 32. RIGHT OF PARTNER TO COMPENSATION, INTEREST, ETC. A partner has no right to any salary or compensation for time and labor, or any interest on capital invested, unless there is an express agreement to that effect.

(1) No right to compensation for services unless agreed.

A partner is presumed to have entered into the partnership agreement in expectation of profits to be derived from the business, and to that end he devotes his time and labor. He can claim no compensation for his time though he may indeed have given more time than required. 39

38. Bullard v. Kennedy, 10 Cal. 60.

39. Lindsay v. Stranahan, 129 Pa. St. 635. By the act, a surviving partner is entitled to compensation for services in liquidation. Sec. 18.

Often a partner is allowed a salary by special agreement in view of the fact that he is to spend more time in the business of the firm that the other partners. In that case his share of the profits is in addition to his salary.

A partner cannot prove his claim against the firm in the event of its bankruptcy until other creditors are satisfied, for that would allow him to prove up against his own creditors.

(2) Interest on capital.

There is no right to interest on capital unless agreed. (3) Interest on loans and advances.

By some authorities interest is denied unless agreed upon, but by others, perhaps taking a more modern view, allowed. 39 a

39a. Baker v. Mayo, 129 Mass. 517; Mack v. Engel, 165 Mich. 540. The Partnership Act allows interest in such a case.

PART IV.

THE PARTNERSHIP AND THIRD PERSONS.

CHAPTER 6.

AUTHORITY OF THE PARTNER TO REPRESENT THE FIRM.

Sec. 33. GENERAL STATEMENT. Each partner has in the absence of an agreement to the contrary on his part actual authority to represent the firm and bind it upon all contracts made in the regular conduct of the business of the firm; and he has apparent authority to this effect though his actual authority be lacking.

Partners being co-owners, are principals in the business. Each is impliedly entitled to take his part in the conduct of the firm business, and this necessitates that he be able to bind the firm in the usual operation of the business that it carries on. He has this actual power unless he has in the partnership agreement consented to the imposition of a limitation thereon. He has the apparent power notwithstanding limitations unless they are known to the person with whom he deals.

What apparent authority a partner has, we have said grows out of the real authority which partners in a like situation usually have. Therefore, in any particular case we have to consider the nature of the business and what authority partners in that kind of business usually have. But then we have also further to consider, after all, the particular business, as it has actually been conducted. For

instance, we might find that in a special sort of partnerships a partner does not have apparent authority to bind the firm on negotiable paper, yet in a particular firm we might find that the authority had evidently been conferred, as the partner whose act is now questioned had been accustomed to issue such paper and the firm had been accustomed to honor and pay it without objection. So we have always to bear in mind these considerations and to solve the question by reference thereto.

A member of a trading partnership has, usually, larger apparent powers than a member of a non-trading partnership. A non-trading partnership does not buy and sell except incidentally, and consequently a partner does not need to have the power to do those things which go with buying and selling.

We will consider in the following sections whether a partner has apparent powers to do certain things, bearing in mind that we approach the subject from the standpoint of the powers usually existing in such a case. In any particular case there might be either a curtailment of such powers or an addition thereto by the course of dealing in that particular partnership.

Sec. 34. RECITAL OF POWERS OF PARTNER IN UNIFORM LAW. The Uniform Partnership Act recites the powers of the partner as follows: 40

"(1) Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member, binds the partnership, unless the partner so acting has in

40. Sec. 9.

fact no authority to act for the partnership in the particular matter and the person with whom he is dealing has knowledge of the fact that he has no such authority.

(2) An act of the partnership which is not apparently for the carrying on of the business of the partnership in the usual way does not bind the partnership unless authorized by the other partners.

(3) Unless authorized by the other partners or unless they have abandoned the business, one or more but less than all the partners have no authority to:

(a) Assign the partnership property in trust for creditors or on the assignee's promise to pay the debts of the partnership;

(b) Dispose of the good will of the business;

(c) Do any other act which would make it impossible to carry on the ordinary business of the partnership; Confess a judgment;

(d)

(e) Submit a partnership claim to arbitration or ref

erence;

(4) No act of a partner in contravention of a restriction on his authority shall bind the partnership to persons. having knowledge of the restriction."

In the following sections let us inquire specifically of the implied or apparent powers of partners, that is to say, what power is a partner justified in believing he has by implication? And therefore what power has a third person the right to believe the partner has by implication? From the standpoint of the partner the implication that would otherwise exist may be negatived by an agreement to the contrary. From the standpoint of a third person who deals with the partner such a power might apparently exist even though negatived because implied unless negatived, and the negation is not known to such third person. In the following sections, the power of the implied or