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apparent power of the partner under this explanation is considered.

Sec. 35. APPARENT POWER OF PARTNER TO BUY AND SELL STOCK IN TRADE. Each partner in a trading concern has the apparent authority to bind the firm in the purchase or sale of goods of the class in which it regularly deals.

A partner in a trading concern has apparent authority to replenish its stock in trade, sell goods from the stock in trade, and make contracts in reference to the same. The main business of the concern is to buy and sell, and every partner has the implied and apparent authority to do so. Of course, in any particular case, the power of a partner might be limited by his consent, but this would not be chargeable to those with whom he dealt who had no notice thereof.

Whether the partner deflects from its proper use goods bought by him ostensibly for the firm is immaterial.

Example 9. Two partners were in the harness business, and one of them bought bridles on the credit of the firm, which he then pawned for money for his own use. Held: that the other partner was bound on the purchase.41

A member of a non-trading firm has no power, real or apparent, to represent the firm in buying or selling except where that power has been conferred or seems to have been conferred by word or conduct in the particular case. 42

Sec. 36. IMPLIED OR APPARENT POWER OF PARTNER TO SELL OTHERWISE THAN IN USUAL COURSE OF TRADE. A partner has generally no appar

41. Bond v. Gibson, 1 Camp. 185 (Eng.). 42. Judge v. Braswell, 76 Ky. 67.

ent power to sell property of the firm except in the apparent prosecution of its business.

The power of a partner to sell its property is a fairly broad one, but ought not to be extended to situations in which the purchaser ought to know as a reasonable person that the partner is exceeding his powers. Accordingly if the partner sells out all the assets of the firm, unless that is in the usual way of trade, the sale will not stand against the objections of the other partners. And, generally, a sale of the property with which the concern carries on its business, such as capital assets, would not be good unless actually authorized.

Example 9a. A and B are partners in dairy business. A sells one of the cows to C. B can recover the animal.43

Sec. 37. IMPLIED OR APPARENT POWER OF PARTNER TO SELL CHOSES IN ACTION BELONGING TO FIRM. Choses in action belonging to firm may be disposed of by a partner.

Choses in action, that is to say, credits, book accounts, promissory notes, and the like, may be disposed of by any of the partners to give a good title thereto to an innocent purchaser.

Example 10. Mills, Clark & Company, a partnership, had a contract with Visconti & Vigilanti to furnish the latter firm certain material, on the performance of which the sum of $250 became due. Mills assigned this account to G, for value, who notified V. & V. to pay her the amount thereof. They were notified not to do so by the other members of the firm. But held that the assignment by the partner was valid and gave G a good title to the claim.44

43. Lowman v. Sheets, 124 Ind. 417.

44. Sullivan v. Visconti, 69 N. J. L. 452, 55 Atl. 1133.

Sec. 38. IMPLIED OR APPARENT POWER OF PARTNER TO BUY OR SELL FIRM REAL ESTATE. A partner would ordinarily have no apparent power to bind the partnership on a contract to buy real estate, or to sell real estate for the firm.

A partner cannot buy real estate for the firm except upon appointment.44 He has no power to convey the firm real estate, unless he has real authority, unless it stands in his own name, and the firm's interest therein is unknown to the purchaser.

Sec. 39. POWER OF PARTNER TO MAKE WARRANTIES. Where a partner has actual or apparent power to sell goods he has the apparent authority to make usual warranties.

Having the power to sell, a partner may make ordinary warranties, as that a horse is sound, and all the partners will be bound upon the warranties.45

Sec. 40. POWER TO BIND FIRM ON NEGOTIABLE PAPER. A member of a trading firm, whose usual business requires the use of negotiable paper may bind the firm upon such paper.

If negotiable paper is issued, accepted, or endorsed, by a partner in a firm, the conduct of whose usual business requires the use of negotiable paper, the firm will be bound.46 In such case the fact that the partner may make a personal use of the paper is immaterial so long as

44a. Judge v. Braswell, 76 Ky. 67.

45. Edwards v. Dillon, 147 Ill. 14.

46. Dowling v. Exch. Bk., 145 U. S. 512.

the other parties have no notice. Thus a partner having the power to sell stock in trade, might take a note in payment thereof and sell the note to a banker, pocketing the proceeds. The firm would be bound as endorser.

No one is bound upon firm paper except his name, real or fictitious, appears thereon. Thus, if a partner signed only his own name the other partners would not be bound. But if he signed the names of the partners, or the partnership name, all the partners would be bound, provided he had apparent authority to sign.

If a partner has apparent authority to bind the firm upon negotiable paper, the partnership will be bound upon any paper which comes into the hands of an innocent purchaser, for value, although there was no apparent authority to issue this particular paper in question so far as the original parties were concerned. Thus the party to whom the paper was payable might have known that A was binding the firm for his own personal profit. Consequently such party would have no rights. But a party to whom the paper was sold might have a good title.

A member of a non-trading firm is usually not to have any apparent power to bind the firm upon negotiable paper, unless it had been the custom of such firm to permit one of its members to issue, endorse or accept paper, and the person now seeking to hold the firm knew of such custom and relied upon it.47

Sec. 41. POWER OF PARTNER TO BORROW MONEY ON FIRM CREDIT. A partner of a trading concern has apparent power to borrow money on firm credit in cases in which it is necessary for the purpose of carrying on the business of the partnership, even though as between the partners that power has been negatived by express restric

47. Id. and see Nego. Paper in this series.

tion, and though the partner borrowing the money misapplies it. But a member of a non-trading firm has no such apparent authority unless in the particular case the fact establish such appearance of authority.

The apparent power of a partner to borrow money whereby he may bind the firm to repay it, even though he has misapplied it, is a power to be narrowly construed, yet nevertheless exists where the loan is made under circumstances that indicate a necessity on the part of the firm for the money, and provided also the partnership is a trading partnership.48

But if a firm is non-trading (see Section 10, supra), there is no such implied authority. In such a case it would be necessary to prove either that actual authority existed, or that there were facts in the particular case that warranted a reasonable belief that such authority existed.

Sec. 42. APPARENT POWER OF PARTNER TO APPOINT AGENTS AND EMPLOY SERVANTS. Each partner of a trading partnership has the apparent power to employ agents and servants reasonably necessary to conduct the business of the firm.

A partner of a trading partnership has apparent authority to employ agents and servants. Of course the particular scope and extent of the partnership would be a large consideration. Thus if there were a very large partnership, the employment of bookkeepers and sales agents would not be unreasonable, whereas it might be so in a small concern.

48. Lindley on Partnerships, 8th Ed., p. 167; Funk v. Babbitt, 55 Ill. Ap. 124, 156 I11. 408, 41 N. E. 166; Coller v. Porter, 88 Mich. 549, 50 N. W. 658.

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