(2) What was the nature and scope of the firm business! Do you think the Court would have been less likely to have held the partner liable for the tort of libel had the business been of a mercantile nature? Why?

Case 607. Rosenkrans v. Barker, 115 Ill. 331.

Facts: Suit brought by Barker against Rosenkrans and Weber to recover damages for an alleged malicious prosecution and false imprisonment. In 1882, Barker resided in Iowa and was engaged in the jewelry business. In the latter part of 1882 he bought a bill of goods of Rosenkrans and Weber. When the bill was due $100 was paid, but the rest ($250) has never been paid. Rosenkrans was then a resident of Milwaukee, Wisconsin, but he was in partnership with Weber in Chicago. Weber induced Barker to come to Chicago and caused his arrest and detention for 10 or 12 hours. Rosenkrans did not hear of this until long after until the case was on appeal when he at once told his partner he was wrong and that the appeal should not be prosecuted, and his advice was followed and the appeal dropped.

Point Involved: Whether one partner is liable for the wrongful arrest of a debtor to the firm, caused by the other.

"It is, however, claimed by appellee that Rosenkrans is liable upon either one of two grounds: First, because those who caused the arrest were servants or agents of Rosenkrans, acting within the scope of their agency; second, the wrongful proceeding was instituted for Rosenkrans, and in his name, and when he became aware of what had been done he ratified it. Weber, who caused the arrest of Barker, was not in fact a partner of Rosenkrans, but he acted for his wife, who was the partner, and, so far as the acts are concerned, they may be regarded as the acts of Rosenkrans' partner. In many respects one partner is the agent of the other. In the purchase and sale of goods within the scope of the part

nership business the acts of one may be regarded as the acts of both. In such cases the one that transacts the business acts for himself and in the capacity as agent of the other, and in that capacity he binds himself and also binds his partner. By entering into partnership each party reposes confidence in the other, and constitutes him his general agent as to all partnership concerns. Gow, Partn. 52. But the question involved here is not as to the liability of one partner for the contracts of the other, but it is whether one partner may be liable in damages for the wrongs of the other. Mr. Collyer, in his work on Partnership, § 457, says: 'A learned writer observes that though partners are in general bound by the contracts, they are not answerable for the wrongs, of each other. In general, acts or omissions in the course of the partnership trade, or business, in violation of law, will only implicate those who are guilty of them.' And, in 1 Lindl. Partn. bk. 2, c. 1, § 4, the author says: 'As a rule, however, the wilful tort of one partner is not imputable to the firm. For example, if one partner maliciously prosecutes a person for stealing partnership property, the firm is not answerable unless all the members are in fact privy to the malicious prosecution.'

"In Gilbert v. Emmons, 42 Ill. 143, where a question arose as to the liability of one partner for the act of the other in causing the arrest of a person charged with larceny of money belonging to the firm, it was held that the mere knowledge and consent of one partner that the other should have the person accused arrested would not render the partner so knowing and consenting liable to an action for malicious prosecution; it was necessary that the consent should be of such a character as to amount to advice and co-operation. In Grund v. Van Vleck, 69 Ill. 478, a question arose as to the liability of one partner for the tort of the other, and it was held that one partner cannot involve another in a trespass unless in the ordinary course of their business, and in a case where the trespass is in the nature of a taking which is available to the partnership; and in such case, to ren

der the partner liable who did not join in the commission of the trespass, he must afterwards have concurred and received the benefit of it. Here no part of the debt was collected by the commencement or prosecution of the proceedings against Barker, and it is not claimed that a liability exists on account of receiving any benefit from the arrest; and if Rosenkrans is to be held liable, it is upon the ground that he was a member of the firm which instituted the suit and caused the arrest. This under the authorities cited, cannot be done [and there was no ratification]."

What was

Question 607: What was the tort in this case? the nature of the business? Was the other partner held liable?

(Note: The suggestion that a partner is not liable for the wilful torts of his co-partner is inaccurate. Fraud, libel, etc., are wilful torts. The question is not whether it is wilful, but whether it is within the scope of the partnership.)

CHAPTER 73

RIGHTS OF THIRD PERSONS AGAINST INCOMING, OUTGOING AND SECRET PARTNERS

§ 610. Liability of incoming partner.

§ 611. Liability of outgoing partner. § 612. Liability of secret partner.

§ 610. (Partnerships, Sec. 51.) Liability of incoming partner.

Case 608. Karraker v. Eddleman, 101 Ill. Ap. 23.

MR. JUSTICE CREIGHTON: 66*

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"A firm or copartnership as constituted after an incoming partner has become a member thereof cannot in any case be held for the payment of a previously contracted debt for which such incoming member has not in some way become bound, and it is the clearly and universally established doctrine, that a new partner, coming into an existing firm, will not be liable in respect to debts contracted by the firm previous to his entering it, unless he assumes them, and the same rule applies where one becomes a partner with another in business already established. The presumption always is that such incoming partner does not assume the payment of previously contracted debts 'but such presumption may be rebutted by satisfactory proof of the contrary intention and agreement' All the Illinois authorities proceed upon the theory that to hold such partner for such debt there must have been on his part a promise, agreement or intention to assume the debt, but we regard it as well established that such promise, agreement or intention may be proved by circumstantial evidence, i. e., may be inferred by proof of such facts,

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and circumstances as clearly warrant such inference.

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Question 608: (1) Is an incoming partner liable for past indebtedness by his mere act of coming into the firm?

(2) May creditors hold him as a member of the firm where he assumes such debts in his agreement with the other partners! (3) As such incoming partner was not in the firm when the debt was created, why do you think that this assumption of indebtedness should give the past creditors any right against him?

(4) How may this assumption of indebtedness be inferred?

Case 609. Uniform Partnership Act, Sec. 17.

"Sec. 17. A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he had been a partner when such obligations were incurred except that his liability shall be satisfied only out of partnership property."

(Note: This provision and Sec. 41 of the Act operates to change or clear up existing law. By the common law (see Karraker v. Eddleman, supra) if the firm of A and B owe creditors X, and C is admitted, a new firm is formed and creditors Y of that firm have priority over creditors X because creditors X are not creditors of the new firm unless C assumed liability. This meant that in cases of insolvency creditors X were with-out remedy. The act lets in the old and new creditors on an equal basis.)

§ 671. (Partnerships, Sec. 52.) Liability of outgoing partner for debts created after his withdrawal.

Case 610. Austin v. Holland, 69 N. Y. 571.

Facts: Suit on a promissory note dated August 1, 1869, signed in the firm name of Dillon, Beebe & Co. Holland is sought to be held as a member of such firm. He denies that he was at that time a member of the firm. Loveland received the note for services rendered by him after Holland withdrew. A notice of dissolution was