bind the other partners; and this doctrine, no doubt, had its origin in the fact that in a partnership, constituted by voluntary contract, with the understanding that there shall be a communion of profits between them, there must necessarily be in each partner a community of interest with the others in the whole property, business, and responsibilities of the concern, and therefore each partner is "præpositus negotiis societatis," and in the diverse and multiplied transactions of the business, each must, virtute officir, become the agent of the others, when acting within the scope and objects of the partnership. But, upon the dissolution of the partnership, this agency, as well as the relation of partners, ceases to exist, and the authority to create new contracts is revoked, and the rights of the partners thereafter can only extend to the settlement of the partnership concerns and the disbursement of the remaining funds. It is said that, "after dissolution, no valid draft, acceptance, or indorsation can be made by the firm; and it is no authority to do so, if any partner is in the notice empowered to receive and pay the debts of the company. The indorsation, draft, or acceptance must be done by all of the partners, or by one specially empowered to do the act for them." 2 Bell's Com. 644; Story on Part. § 332; 1 Smith, Lead. Cases, 730. No new contract can be created in the name of the firm, and no one of the partners can create such contract so as to charge the others, unless they specially authorize him to do so for them.

Now, the doctrine seems well settled by authority that an acknowledgment is to be considered, not as a continuation of the old promise, but as the evidence of a new promise; and therefore it is alone this new promise which takes the debt out of the statute. This new promise is a new contract, nothing more, nothing less; and it is a contract to pay a pre-existing debt, which of itself does not bind the party, because by force of the law it was extinguished. Hence, is not the acknowledgment, in essence and in law, the creation of a new contract, which gives the creditor a new cause of action, and not simply the enforcement of the old one? It therefore seems clear, both upon principle and authority, that, after the relation of partners has ceased to exist, one of the partners cannot, upon the ground of mutual agency, bind the others by such contract. The relation of the partners to their creditors, then, becomes that of joint debtors. Bell v. Morrison," supra; Hackley v. Patrick, 3 Johns. (N. Y.) 537; Green v. Crane, 2 Lord Raynı. 1101; Thompson v. Peters, 12 Wheat. (U. S.) 565, 6 L. Ed. 730; Tompkins v. Brown, 1 Denio (N. Y.) 247; Dean v. Hewit, 5 Wend. (N. Y.) 257; Dunham v. Dodge, 10 Barb. (N. Y.) 569.

It is, however, urged that the acknowledgment relied on in the case at bar consists of partial payments made on the original debt of J. C. Mayberry, and, as some of these payments were made before the time limited by the statute had expired, the statute of limitations did not attach as to the plaintiff in error; but it is said "that although

a part payment of a debt admits its existence as a subsisting obligation, and will, therefore, be sufficient to take it out of the statute, yet that it has no greater effect than any other unqualified acknowledgment, and must consequently be connected by sufficient evidence, both with the parties to the suit and the claim sought to be enforced." 1 Smith's Lead. Cases, 726. Such payments necessarily prove only the existence of the debt to the amount paid; but from the fact of such payment a promise is inferred to pay the residue. Dunham v. Dodge, supra. And, again, it is said: "The true rule unquestionably is that whether the admission precedes or follows the bar makes no difference, and that, while proof of the continued existence of the debt and of the willingness of the debtor to pay is requisite in all cases, nothing more will be requisite in any." 1 Smith's Lead. Cases, 714; Ayers v. Richards, 12 Ill. 146; Fryeburg v. Osgood, 21 Me. 176.

And now the question is, can one joint debtor, by an assumed authority as the virtual agent of the other, legally charge him with the payment of the debt, when otherwise he would be discharged, and the debt be extinguished as to him, by operation of the statute?

The doctrine that a promise or acknowledgment by one joint debtor takes the debt out of the statute, and binds his co-contractor, upon the ground that he who makes the promise virtually acts as the agent of the other, seems to have originated in an unreasoned decision of Lord Mansfield in the case of Whitcomb v. Whiting, Doug. 651. But that case is contrary to the previous case of Bland v. Haselrig, 2 Vent. 151, and it must be regarded as the cause of all the confusion which exists in the decisions, both in England and America, on the subject of the statute, in respect to joint debtors.

In England, however, the doctrine enunciated in Whitcomb v. Whiting has been somewhat restricted, which has remedied some of the mischief inherent in it. 1 B. & Ald. 467. And its force has been much weakened in the case of Atkins v. Tredgold, 2 Barn. & C. 23, in which Holroyd, J., seems to doubt Whitcomb v. Whiting as law.

Story, in his work on Partnership (section 321), says that: “In America no small diversity of judicial decision has been expressed on this subject. In some of the states, the English doctrine has been approved; in others it has been silently acquiesced in, or left doubtful; and in a considerable number it has been expressly overruled." In the Supreme Court of the United States it has been overruled, as unfounded in principle. Bell v. Morrison, supra; Van Keuren v. Parmelee, 2 N. Y. 525, 51 Am. Dec. 322; Dunham v. Dodge, 10 Barb. (N. Y.) 570; Forney v. Benedict, 5 Barr (Pa.) 227.

*

*

It seems the doctrine that one joint debtor can take a debt out of the statute as to all is based exclusively on the theory that there is a virtual agency in each co-contractor, in such case, by which the promise of one binds the rest. But upon what principle can this doctrine of mutual agency be maintained? It cannot be founded on a communion of profits or a community of interests, as in the case of

partnership, for the reason that in fact no such interests exist between the persons who are merely joint debtors; and it cannot be grounded merely upon a new promise by only one of the parties, for the reason that in fact and in law, as seems now to be well settled, such promise is a new contract, which is necessarily different from the original contract in respect to form, time, and substance, and is the creation of a new cause of action; and the proposition will not be questioned that one joint debtor can, by such new contract, bind his co-contractors. It is, therefore, certainly difficult to discover any just grounds upon which the doctrine of mutual agency in joint debtors can be founded; hence must it not rest alone upon a mere assumption, which is untrue in fact, and unsupported by any reasonable and just interpretation of law?

It is not only contrary to the earlier cases in England, but we think it is opposed to the object and spirit of our statute, which, it seems clear, was intended to protect the individual against claims after the time limited by the law for the commencement of the action has expired. The statute is one of repose; and, when the time limited by it has expired, then in legal contemplation the debt is extinguished, and it can only be revived by a new promise by the person sought to be charged, or by some person lawfully authorized by him for that purpose.

* * *

We are, therefore, of opinion that the plea of the statute of limitations, interposed by the plaintiff in error, constituted a good defense in this action, under the evidence in the case, and that the judgment of the court below must be reversed, and the cause remanded. Judgment reversed.

GIL.PART.-27

CHAPTER VI.

RIGHTS AND DUTIES OF PARTNERS INTER SE.

SECTION 1.—DUTY TO OBSERVE GOOD FAITH.

BURTON v. WOOKEY.

(In Chancery, before Sir John Leach, V. C., 1822. 6 Madd. 367.) The plaintiff and defendant entered into partnership together to deal in lapis calaminaris. The defendant, who was a shopkeeper, was to take the active part in the concern, and to purchase the lapis calaminaris from the miners, in whose neighborhood he lived. Many of the miners were, before the partnership, in the habit of dealing at his shop, and continued so for some years after the partnership, receiving from the defendant ready money for the lapis calaminaris, and paying for their shop goods afterwards as they would have done to any shopkeeper; but in the year 1817 or 1818, owing, as the defendant alleged, to the distress of the times, a new course of dealing took place between the defendant and the miners. In the place of paying them for the lapis calaminaris with money, he paid them with shop goods, and in his account with the plaintiff he charged him as for cash paid to the amount of the price of the goods.

The question was whether he could justify this charge, or whether he must divide the profit made by him on the sale of the goods with the plaintiff.

The VICE CHANCELLOR. It is a maxim of courts of equity that a person who stands in a relation of trust or confidence to another shall not be permitted, in pursuit of his private advantage, to place himself in a situation which gives him a bias against the due discharge of that trust or confidence. The defendant here stood in a relation of trust or confidence towards the plaintiff, which made it his duty to purchase the lapis calaminaris at the lowest possible price. When, in the place of purchasing the lapis calaminaris, he obtained it by barter for his own shop goods, he had a bias against a fair discharge of his duty to the plaintiff. The more goods he gave in barter for the article purchased, the greater was the profit which he derived from the dealing in store goods, and as this profit belonged to him individually, and as the saving by a low price of the article purchased was to be equally divided between him and the plaintiff, he had plainly a bias against the due discharge of his trust or confidence towards the

plaintiff. I must therefore decree an account of the profit made by the defendant in his barter of goods, and must declare that the plaintiff is entitled to an equal division of that profit with the plaintiff.

MITCHELL v. REED.

(Commission of Appeals of New York, 1876. 61 N. Y. 123, 19 Am. Rep. 252.)

Appeal from judgment of the General Term of the Supreme Court in the First Judicial Department, affirming a judgment in favor of defendant, entered upon decision of the court at Special Term.

This action was brought to have certain leases, obtained by the defendant during the existence of a copartnership between him and plaintiff, for terms to commence at its termination, of premises leased and occupied by the firm, declared to have been taken for the partnership, and to have it adjudged that the defendant held them as trustee for the partnership.

*

The court found, as conclusions of law, that the defendant, Reed, was the sole owner of the leases executed to him as aforesaid, and that the plaintiff had no right, title, or interest in or to them, or either of them, and that the defendant have judgment accordingly, to which plaintiff duly excepted. Judgment was rendered accordingly.

EARL, C. The relation of partners with each other is one of trust and confidence. Each is the general agent of the firm, and is bound to act in entire good faith to the other. The functions, rights, and duties of partners in a great measure comprehend those both of trustees and agents, and the general rules of law applicable to such characters are applicable to them. Neither partner can, in the business and affairs of the firm, clandestinely stipulate for a private advantage to himself. He can neither sell to nor buy from the firm at a concealed profit to himself. Every advantage which he can obtain in the business of the firm must inure to the benefit of the firm. These principles are elementary, and are not contested. Story, §§ 174, 175; Collyer, §§ 181, 182. It has been frequently held that when one partner obtains the renewal of a partnership lease secretly, in his own name, he will be held 1 a trustee for the firm as to the renewed lease. It is conceded that this is the rule where the partnership is for a limited term, and either partner takes a lease commencing within the term; but the contention is that the rule does not apply where the lease thus taken is for a term to commence after the expiration of the partnership by its own limitation, and whether this contention is well founded is one of the grave questions to be determined upon this appeal.

It is not necessary, in maintaining the right of the plaintiff in this case, to hold that in all cases a lease thus taken shall inure to the benefit of the firm, but whether, upon the facts of this case, these leases ought to inure to the benefit of this firm. I will briefly allude