" The signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm." (Section 23, s.s. 2, Bills of Exchange Act, 1552.1 A partner is, as a general rule, able to bind all the other partners so long as what he does comes within the range of their business, unless the person with whom he is dealing has knowledge that the partner is acting contrary to some particular condition, or limitation of powers in connection with the partnership. His position is like that of a " general agent," and he is unable to bind his fellow-partners in matters which are not connected with their particular business. Bills of Exchange drawn, accepted or indorsed by a trading partnership must be signed in the name of the firm, otherwise, if signed without the firm's name, the partners signing will be liable in their indi vidual private capacity, but if the business is carried on in the name of one of the partners, then the signing of his name is sufficient, because that is the only name the firm has. Where a partnership is a non trading one, as in the case of solicitors and medical men, a partner cannot draw, or accept, bills of exchange, or make promissory notes or sign guarantees in the firm's name so as to bind the other partners, but it appears that he may by indorsement in the firm's name transfer a bill from one party to another.
It has been held (Wheatley v. Smithers, 1906, 2 K.B. 321) that a partner in a firm of auctioneers has no implied authority to bind the firm by his acceptance of a bill in the name of the firm.
An " infant " may be a partner, but lie cannot be held liable for any overdraft. If the other partners want him to sign cheques, they must give an authority to the banker to honour his signature on the firm's account.
If cheques payable to a firm are placed by one of the partners to his own private account, the banker must exercise the greatest care, as, in the case of misappro priation, the banker may be held to have been guilty of negligence. If the money really belongs to the partner, the correct way (in the absence of written authority by 1 the partners) would be for the cheque to be credited to the partnership account, because, on the face of it, it is partnership property, and a cheque drawn on the partnership account in the usual way. It has been held
that in the absence of express authority, it cannot be affirmed as a proposition of law that a partner has authority, from the mere fact of partnership, to open an account on behalf of the partnership in his own name.
Where securities belonging to a partner ship have been deposited to cover advances on the firm's account, and a change takes place in the partnership either by the death or retirement of a partner, a fresh memo randum of deposit or mortgage, signed by the surviving partners should be taken, otherwise it might be held that the securities pledged before the change in the partnership ' covered only the overdraft existing at the time of the change. The admission of a new partner may also necessitate a fresh memo randum of deposit or mortgage being signed, and a cheque to transfer an overdraft to a new account should be signed by all the partners.
A change in a partnership, such as death, retirement, or bankruptcy of a partner, amounts in law to a dissolution of the firm, and if the banker desires to preserve a lien on the estate of the partner who is dead, bankrupt, or has retired, the account should be stopped and the surviving partners be requested to open a new account and pass all subsequent transactions through it. Otherwise if the account is continued as before—that is, without a break—the rule in " Clayton's case " (q.v.) will apply and the retired partner's estate will be released to the extent of each payment to credit.
By the Companies (Consolidation) Act, 190S :— Act of Parliament, or of letters patent.
" (2) No company, association, or partner ship consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association, or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Act of Parliament, or of letters patent, or is a company engaged in working mines within the stannaries and subject to the jurisdiction of the Court exercising the stannaries j urisdiction. " The following are the principal Sections of the Partnership Act, 1S90 (53 LS: 54 \'ict. c. 39) from the point of view of persons dealing with partnerships :—