and is founded upon reason. The plaintiff has no right to exact a penalty from Harris by reason of his failure to give notice. The word "dormant," when used in this connection, should be held to cover cases that clearly come within the reason of the rule. The plaintiff, in order to recover, must show that it has suffered in consequence of his neglect. It is frankly admitted that the president or officers of the plaintiff did not know that Harris was a member of the firm at any time until after the final credit was given and the general assignment of Blood & Co., was made. It therefore gave no credit to the firm on account of Harris, and it suffered nothing by his failure to give a notice of his retirement, unless his relation with the firm was so notorious and ostensible as to give it a financial standing and reputation with the public. There is no pretense that his relation was of this character, or that any credit was given by the plaintiff because of any such reputation. *

I am therefore of the opinion that the judgment should be affirmed, with costs.

CHAPTER V.

THE POWERS OF PARTNERS.

SECTION 1.-ORIGIN AND NATURE OF THE PARTNER'S POWERS.

WINSHIP et al. v. BANK OF THE UNITED STATES.

(Supreme Court of the United States, 1831. 5 Pet. 552, 8 L. Ed. 216.)

Action against John Winship, Ambs Binney, and John Binney, copartners trading under the name of John Winship, on several promissory notes, signed by John Winship as indorser. The partnership articles and a bond given by said Winship to the Binneys (construed as a part of the partnership agreement) provided for a partnership between the Binneys and Winship for the manufacture of soap and candles, and, in addition to prescribing the rights and duties of the respective parties, expressly provided that the "said John Winship shall

* wholly abstain from becoming the surety or indorser of any person." At the trial numerous exceptions were taken to instructions given to the jury. Only that part of the opinion dealing with the exception to the third instruction is given here.

A verdict was found for the plaintiffs, and judgment entered thereon, which was brought up for review by writ of error.

MARSHALL, C. J. *

The third instruction asked in the Circuit Court goes to the construction of the articles of copartnership. The plaintiff in error contends that those articles gave Winship no authority to raise money on the credit of the firm, or to bind it by his signature for the purpose of borrowing money.

The instruction given was that, if the particular terms of the articles were unknown to the public, they had a right to deal with the firm, in respect to the business thereof, upon the general principles and presumptions of limited partnerships of a like nature, and that any special restrictions did not affect them; that in such partnerships it was within the general authority of the partners to make and indorse notes, and to obtain advances and credits for the business and benefit of the firm, and, if such was the general usage of trade, the authority must be presumed to exist, but that it did not extend to transactions beyond the scope and object of the copartnership; that, in the present articles, Winship was, in effect, constituted the active partner, and has general authority to transact its ordinary business, with persons ignor

ant

Such

of

any private restriction, to the same extent that partners in limited partnerships usually possess. The amount of the charge is that if Winship and the two Binneys composed a joint company for carrying on the soap and candle business, of which Winship was the acting partner, he might borrow money for the business on the credit of the company, in the manner usually practiced in such partnerships, notwithstanding any secret restriction on his powers in any agreement between the parties, provided such restriction was unknown to the lender.

The counsel for the plaintiff in error has objected to this instruction with great force of reasoning. He contends, very truly, that in fact scarcely any unlimited partnerships exist. They are more or less extensive. They may extend to many or to few objects, but all are in some degree limited.

That the liability of a partner arises from pledging his name if his name is introduced into the firm, or from receiving profits if he is a secret partner.

No man can be pledged but by himself. If he is to be bound by another, that other must derive authority from him. The power of an agent is limited by the authority given him; and, if he transcends that authority, the act cannot affect his principal. He acts no longer as an agent. The same principle applies to partners. One binds the others so far only as he is the agent of the others.

1

If the truth of these propositions be admitted, yet their influence on the case may be questioned. Partnerships for commercial purposes, for trading with the world, for buying and selling from and to a great number of individuals, are necessarily governed by many general principles, which are known to the public, which subserve the purpose of justice, and which society is concerned in sustaining. One of these is that a man who shares in the profits, although his name may not be in the firm, is responsible for all its debts. Another, more applicable to the subject under consideration, is that a partner, certainly the acting partner, has power to transact the whole business of the firm, whatever that may be, and consequently to bind his partners in such transactions as entirely as himself. This is a general power, essential to the well conducting of business, which is implied in the existence of a partnership When, then, a partnership is formed for a particular purpose, it is understood to be in itself a grant of power to the acting members of the company to transact its business in the usual way. If that business be to buy and sell, then the individual buys and sells for the company, and every person with whom he trades in the way of its business has a right to consider him as the company, whoever may compose it. It is usual to buy and sell on credit; and, if it be so, the partner who purchases on credit in the name of the firm must bind the firm. This is a general authority held out to the world, to which the world has a right to trust. The articles of copartnership are, perhaps, never published. They are rarely, if ever, seen, except

by the partners themselves. The stipulations they may contain are to regulate the conduct and rights of the parties as between themselves. The trading world, with whom the company is in perpetual intercourse, cannot individually examine these articles, but must trust to the general powers contained in all partnerships. The acting partners are identified with the company, and have power to conduct its usual business in the usual way. This power is conferred by entering into the partnership, and is perhaps never to be found in the articles., If it is to be restrained, fair dealing requires that the restrictions should be made known. These stipulations may bind the partners, but ought not to affect those to whom they are unknown, and who trust to the general and well-established commercial law. 2 H. Bl. 235; 17 Ves. 412; Gow on Part. 17.

The judgment is affirmed.1

BURGAN v. LYELL et al.

(Supreme Court of Michigan, 1856. 2 Mich. 102, 55 Am. Dec. 53.)

PRATT, J. This is an action of assumpsit, brought by the plaintiff in Wayne county court, for work and labor claimed to have been performed for the defendants in their mining business.

The cause was submitted to the court below on a written statement, in which it is admitted that the defendants impleaded in this suit included all the members of the company; that they all signed the original article of copartnership, and prosecuted the business of mining under them.

These concessions, thus made, constitute conclusive evidence, as against the defendants, of a partnership in fact, in which they are all, as partners, engaged in the business of mining. 2 Greenleaf, Ev. § 484. It further appears, from the case submitted, that Andrew Harvie, a member and one of the managers of the company, employed the plaintiff to perform the work in question. But whether his powers, as one of the managers of the company, were general, or special and limited, does not appear; nor is it material to a judicial determination of this cause, as every member, in legal contemplation, without any special powers being conferred upon him by the articles of copartnership, is not only a principal of the firm, but a general agent, for all the copartners, in the transaction of their legitimate company business (Story on Part. 1; Har. Ch. 172), each member being vested with power which enables him to act at once as principal, and all are regarded as being present and sanctioning the engagements and contracts which they may singly enter into within the scope of their partnership matters (Story on Part. 158, 159). Harvie, then, being one of the part

1 The dissenting opinion of Baldwin, J., is omitted.

ners

any

W

was vested with the right of contracting with the plaintiff, and Ork performed by him for the company under the contract would legally bind all of the partners for the payment of it. Although HarVie, as a single member, was inhibited from making such a contract by some express provision of the articles of copartnership, still the rights of third persons, to whom such provision was unknown, would not be thereby affected, nor would it tend in the least to bar a third person, who had by the procurement of a single member, without notice, rendered services for the company, in recovering therefor in a suit against all. 2 Greenleaf, Ev. § 481; Story on Part. 193. The plaintiff, by the procurement of Harvie, as appears by the case, labored for the company in their mining operations nine months and two days, at $18 per month. In this labor of the plaintiff all the partners are interested, and in judgment of law all are presumed to have been cognizant of its performance, and to have derived at least some benefit from it; hence all are, as they should be by every principle of justice, held equally responsible to the plaintiff for the payment of the services thus rendered. And as regards their joint liability it is a matter of no legal moment whether some of the partners were dormant in fact, or whether they subsequently assented to, or dissented from the proceedings of those with whom they had entrusted the management of their company business. They would, nevertheless, be jointly liable to the plaintiff for his work.

After the services were rendered, the plaintiff, as appears by the case, made out an account therefor against the company, the balance of which, after deducting some small sums which had been paid and credited, amounted to $147.43, on which John Greenfield, their superintending agent of the hands employed on the mining location, certified to John Winder, a member and also one of the managers of the company, that the account was correct, and that the balance thereof was due to the plaintiff. Winder afterwards, on presentation of the account and certificate to him, paid to the plaintiff $40, which was indorsed thereon.

It is a well-settled principle of law "that the acknowledgment by one partner, during the continuance of the partnership, of a debt as due by the partnership, will amount to a promise binding the firm." The certificate of the superintending agent, and the recognition of the account by a member and one of the managers of the company, constitute sufficient evidence of such acknowledgment. "And so a part payment of a debt of a firm by one partner, during the continuance of the partnership, will not only extinguish pro tanto the partnership debt, but will operate as an admission of the existence of the residue of the debt, binding on all the partners." Story on Partnership, p. 160. These are rules of law about which there has never been any disagreement, either by legal authors or courts of last resort; and by them all the members of this company are equally liable to the plaintiff for the payment of the balance due him on the account. *