Generally speaking, one partner has an implied authority to bind the firm by contracts relating to the partnership. and he can do this by mere verbal or written agreements, or by negotiable securities, such as bills of exchange and promissory notes. One partner may pledge the credit of the firm to any amount ; but there are some exceptions to this rule. A dormant partner is in all cases liable for the con tracts of the firm during the time that he is actually a partner ; and a nominal part ner is in the same manner liable during the time that he holds himself out to the world as a partner. A partner will be liable in respect of a fraud committed by his co-partner, if committed in the capa city of partner, in contracts relating to the co-partnership, made with third per sons. Thus if a partner purchase goods such as are used in the business, and fraudulently convert them to his own use, the innocent partner, provided there be no collusion between the seller and the buyer, is liable for the price of the ar ticles. One partner has no implied au thority to bind his co-partner by deed, yet if he execute a deed on behalf of the firm, in the presence of and with the con sent of his co-partners, it will bind the firm. It seems that a release by one of several partners to a debtor of the firm binds the firm ; but if such release be fraudulent, it will be set aside by a court of equity ; and even a court of law will interfere to prevent a fraudulent release from being pleaded.
Where uo time is mentioned in the deed of partnership for its commencement, the liabilities of the firm will commence from the date of the deed ; but in adventures, unless the parties have previously held themselves out as partners, the liabilities commence from the time fixed by the contract. An in-coming partner is not liable for debts contracted before he joined the firm, but if he pay any of the old debts or interest upon them, or do other special acts, he may render himself liable in equity. On the retirement of an ostensible partner, notice of his retirement must be given, or he will be liable to the creditors of the continuing firm for sub sequent contracts made by them, and such notice is usually given in the Gazette ;' but notice in the ' Gazette' will not bind creditors who are not shown to have seen the notice. Third persons have a claim against a dormant partner for contracts entered into by the firm while he was a partner. This claim is founded on such dormant partner being actually a partner; and therefore it is unnecessary, on the dissolution of a partnership between an ostensible and a dormant partner, to give notice of the dissolution to the creditors, in order to protect the latter from subse quent contracts : for when the dormant partner has ceased to be a partner, he is relieved from all future liability.
It is collected from the majority of cases that a partnership contract is joint (not joint and several) both at law and in equity. Upon the death of a partner, therefore, the legal remedy against him in respect to the joint contract is extin guished, and the creditor can maintain an fiction against the surviving partners only. But the rule of equity as applicable to partners with respect to third parties was considered to be that the joint debts should he satisfied out of the joint estate ; if that were insufficient, then subject to the claims of their separate creditors out of their se parate estates proportionally ; and if any of them were insolvent, then out of the remaining separate estates proportionally.
But the case of Devaynes v. Noble (1 Mer., 529), affirmed on appeal by Lord Brougham (2 R. & M. 495), has esta blished the principle that a partnership contract is several as well as joint ; and that a partnership creditor may have re course for full payment to the estate of a deceased partner. And the same judge (Sir W. Grant) who decided that case, declared that a partnership debt has been treated in equity as the several debt of each partner, though at law it is only the joint debt of all. By this decision it ap pears that a joint creditor on the death of one partner obtains a more advantageous remedy against his estate than he would have had against his separate estate if living. But it seems doubtful whether this point can be considered as finally settled.
Notice of the decease of a partner to the creditors of the firm is not necessary to free his estate from future liability ; but it is otherwise if one of the surviving partners be executor of the deceased. A deceased partner sometimes directs his executors to continue the trade • in that case his estate will be liable to the extent to which he directs his assets to be em ployed. If the executor exceed that limit, he becomes personally responsible.
In actions by partners, all the partners may, and all ostensible partners must, join as plaintiffs, unless the contract neon which the action is brought be in writing under seal, when only those partners who are included can sue thereon. But if a contract not under seal be made by some, for the benefit of themselves and others, those for whose benefit it is made, as well as those whose names appear on the con tract, may sue. Persons who may legally be partners in foreign countries, as hus band and wife, cannot sue here as part ners, for by the law of England husband and wife are not permitted to sue as partners. On the other hand, partners trading abroad in such a manner as to make a partnership here, may sue as partners for consignments sent to this country, though they cannot sue as part ners at the place of trading by reason of the particular law of that place. The construction of contracts is governed by the laws of the country in which they are made ; but remedies must be pursued by the means pointed out by the law of the country whose tribunals are appealed to. The laws of the country where the contract was made can only have a re ference to the nature of the contract, not to the mode of enforcing it. If partners have occasion to prefer an indictment relating to the partnership property, such property may be stated in the indictment as belonging to one of them by name, and to another or others, as the case may be. But though it is not neoary to name all the partners, yet where there are other partners, that fact should appear in the indictment, or the prisoner must be acquitted.