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CHAPTER XXXI.

WHAT IS GENERALLY NECESSARY TO FIX LIABILITY ON A PRO-
MISE, EXPRESS OR IMPLIED. HOW CONTRACT MAY BE
BY AN AGENT OR THROUGH THE POST.

MADE

1. Defendant must have contracted expressly or impliedly.

The question in all cases in which the plaintiff seeks to fix the defendant with liability upon a contract, express or implied, is, whether such contract was made by the defendant, by himself or his agent, with the plaintiff or his agent. To recover against the defendant, the plaintiff must shew that the defendant contracted expressly or impliedly; expressly, by making a contract with the plaintiff; impliedly, by giving an order to him under such circumstances as to shew that it was not to be gratuitously executed. Pollock, C. B., 15 M. & W. 526.

The owner of a vessel may be liable for necessaries procured on its voyage, for seamen, to enable them to convey the vessel to its destination; but if when the vessel is pursuing its voyage, seamen leave it and obtain board and lodging at a public house, the captain has no implied authority from the owner to pledge his credit therefor. Organ v. Brodie, 28 Eng. Law & Eq. 530.

When medical service is rendered to an apprentice, not at the father's instance, there is no contract by the father, either express or implied, to pay therefor: the relation of master and apprentice imposes it as a duty upon the master to provide such service. Easley v. Craddock &c. 4 Rand. 423.

The law not devolving the responsibility arising from the contract of a prior, on a subsequent, guardian, an action for services rendered and supplies furnished a ward cannot be maintained against the subsequent guardian, when it appears that the contract, if any, for those services and supplies, was made by the former guardian, and that the services and supplies were rendered and furnished before the defendant became guardian, and were rendered and furnished, not at his request, but at the request of the former guardian, and without any express promise on the defendant's part to pay therefor. Young v. Warne &c. 2 Rob. 420.

2. If contract is not by defendant person authorized to bind him. authority.

personally, it must be by a General rule as to agent's

Where the action is on a contract not made by the defendant personally, it must be proved that it was made by an agent of the defendant, properly authorized, and that it was made as his contract. Pollock, C. B., 15 M. & W. 526; Andrews v. Kneeland, 6 Cow. 357; Miller v. Smith, 1 Mason 438.

The agency may be constituted by an express limited authority to make such a contract, or a larger authority to make all falling within the class or description to which it belongs, or a general authority to make any; or it may be proved by shewing that such a relation existed between the parties as by law would create the authority; as, for instance, that of partners, by which relation, when complete, one becomes by law the agent of the other for all purposes necessary for carrying on their particular partnership, whether general or special, or usually belonging to it; or the relation of husband and wife, in which the law, under certain circumstances, considers the husband to make his wife an agent. In all these cases if the agent, in making the contract, acts on that authority, the principal is bound by the contract, and the agent's contract is his contract, but not otherwise. This agency may be created by the immediate act of the party, that is, by really giving the authority to the agent, or representing to him that he is to have it, or by constituting that relation to which the law attaches agency; or it may be created by the representation of the defendant to the plaintiff, that the party making the contract is the agent of the defendant, or that such relation exists as to constitute him such; and if the plaintiff really makes the contract on the faith of the defendant's representation, the defendant is bound; he is estopped from disputing the truth of it with respect to that contract; and the representation of an authority is quoad hoc, precisely the same as a real authority given by the defendant to the supposed agent. This representation may be made directly to the plaintiff, or made publicly so that it may be inferred to have reached him, and may be made by words or conduct. Pollock, C. B. in Reynell v. Lewis, 15 M. & W. 527.

3. General rule as to agency applied in the particular instance of partners.

Upon none of the propositions just mentioned, is there, in

the opinion of the court of exchequer, the slightest doubt. But it may be advisable to state more in detail the operation of the rule in the instance of partners.

It is not essential to a partnership that one partner should have power to draw bills and notes in the partnership name to charge the others; they may stipulate between themselves that it shall not be done; and if a third person having notice of this, will take such a security from one of the partners, he shall not sue the others upon it, in breach of such stipulation nor in defiance of a notice previously given to him by one of them that he will not be liable for any bill or note signed by the others. Gallway v. Mathew &c. 1 Camp. 403; 10 East 264; Rooth v. Quin &c. 7 Price 193.

But in the absence of such stipulation and notice the general rule is that the act and assurance of one partner made with reference to business transacted by the firm will bind all the partners. Sandilands v. Marsh, 2 Barn. & Ald. 678. One partner communicates to the other, simply by the creation of that relation, and as incident thereto, all the authority necessary to carry on their partnership in its ordinary course, (Hawtayne v. Bourne, 7 M. & W. 595,) and all such authority as is usually exercised by partners in the same sort of trade but no more. 4 W. H. & G. 630.

One partner cannot bind another by a guaranty for collateral purposes. It has been argued that he has that power where the guaranty is connected with the partnership business and a reasonable mode of giving effect to a transaction within the scope of the partnership dealings. And the case Er parte Gardon, 15 Ves. 286, has been relied on to establish the doctrine. But this case, in the judgment of the court of exchequer, is not sufficient to establish it. 4 W. H. & G. 630.

That one of two partners engaged in business as merchants had not, by reason of that connection alone, power to bind the other by a guaranty apparently unconnected with the partnership trade, was decided by Lord Ellenborough in Duncan v. Lowndes, 3 Camp. 478, and the court of queen's bench gave a similar decision in a case where the defendants were in partnership as attorneys. Hasleham v. Young &c. 5 Adol. & El. N. S. 833, 48 Eng. Com. Law Rep. 833. No proof was given in either of these cases of the previous course of dealing or practice of the partners, which it is admitted in both cases might be sufficient to prove a mutual authority; nor was any evidence given of the usage of similar partnerships to give such guaranties; nor was there any of a recognition and adoption by the other partners, which would have

The case of

the same effect. Parke, B., 4 W. H. & G. 629. Sandilands v. Marsh, 2 Barn. & Ald. 678, proceeded on the latter ground.

In a subsequent case a partnership had entered into a contract with a railway company to do certain work; two persons made a sub-contract with them to do part of the work and required clay and coal to make bricks for that purpose. Not being able to procure credit for the coal, there was given by one of the partners in the name of the partnership a guaranty stating that those two persons had a contract requiring a large quantity of coal and engaging to see the coal paid for. On the faith of this guaranty the plaintiffs supplied the coal; and the action was brought therefor against the partnership. There was no evidence of the usage of the defendants in the particular business, or of others in a similar business, nor of the sanction by the other defendants of the act of their copartner. The only question was, whether he had the power in consequence of its being a reasonable mode of carrying into effect an acknowledged partnership contract. And the court of exchequer held that he had not. It was of opinion that to allow one partner to bind another by contracts out of the apparent scope of the partnership dealings because they were reasonable acts towards effecting the partnership purposes would be attended with great danger. Brettel v. Williams, 4 W. H. & G. 628.

It is considered to be now settled, in England, as well as in the United States, that one partner cannot bind the firm by a guaranty of the debt of another, without a special authority for that purpose, or an authority to be implied from the common course of the business of the firm, or the previous course of dealing between the parties; unless the guaranty be afterwards adopted and acted upon by the firm. Sweetser v. French &c. 2 Cush. 314; Sutton &c. v. Irwine &c. 12 S. & R. 13; Hamill v. Purvis, 2 Penrose & Watts 177.

With respect to a bill of exchange or negotiable note made, accepted or endorsed by one partner in the name of the firm, the presumption, when the partnership is admitted or proved, is that the instrument was given or transferred in the regular course of partnership dealings until the contrary is shewn. Doty v. Bates, 11 Johns. 546. But it may be shewn that it was made, accepted or endorsed by one partner, in the partnership name, for that partner's own debt or use, without the knowledge of his co-partner, and that the party bringing the action was acquainted with the circumstances when he took the paper.

Arden v. Sharpe &c. 2 Esp. 524; Shirreff v.

Wilks &c. 1 East 48; Livingston v. Hastie, 2 Caines's Rep. 249; Lansing v. Gaine &c. 2 Johns. 305; Dubois v. Roosevelt &c. 4 Johns. 262, note; Livingston v. Roosevelt, 4 Johns. 262; Crawford &c. v. Stirling, 4 Esp. 209. Lord Eldon considered it settled that if a man gives a partnership engagement in the partnership name with regard to a transaction, not in its nature a partnership transaction, he who seeks the benefit of that engagement must be able to say that though in its nature not a partnership transaction, yet there was some authority beyond the mere circumstance of partnership to enter into that contract so as to bind the partnership; and then it depends upon the degree of evidence. Er parte Peele, 6 Ves. 604; Ex parte Bonbonus, 8 Id. 543.

But this principle is applied in subordination to the rule as to the rights of a bona fide holder for value. Ante, p. 243248. Under that rule a partnership may sometimes be bound although a partner for his own accommodation pledges the partnership and the money comes to his own account only. If indeed it is manifest to the person taking a note or bill that it is upon the separate account, and so prima facie against good faith that he should pledge the partnership and that person sues the partnership, he must shew that the partner from whom he took the note or bill had authority to bind the partnership. But if it is in the ordinary course of commercial transactions, as upon discount, it would be monstrous to hold that a man borrowing money upon a bill or note pledging the partnership, without any knowledge in the bankers that it is a separate transaction, merely because that money is all carried into the books of the individual, therefore the partnership should not be bound. No case has gone that length. Ex parte Bonbonus, 8 Ves. 542.

The doctrine is, that a person receiving a bill of exchange endorsed in the name of the firm by one of the partners need not apply to each of the other partners to know whether he assented to such endorsement. In the absence of all fraud on the part of the endorsee, such endorsement will bind all the partners. Swan &c. v. Steele &c. 7 East 211. In England it has been held, that although a bill endorsed in the name of a firm be passed by one partner to a separate creditor in discharge of his private debt, that creditor may maintain an action on it against the acceptor, when there is no proof of covin between him and the holder, or that what that partner did was without the authority of his co-partner. Ridley v. Taylor, 13 East 182. This decision was greatly influenced by the consideration that if the partner in possession had not for value, or in virtue of some arrangement with the other part

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