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2ndly. Primâ facie a nominal partner ought to join in suing on any contract, whether express or implied, made with the firm ; for an agreement with the firm is prima facie an agreement with the persons who apparently make up the firm. But if it be distinctly shown that a person who is apparently the member of a firm is in reality not so (i. e., that he is merely a nominal partner), a contract made with the firm is not in reality made with him, and he need not join in suing upon it (y).
3rdly. It is an open question whether a nominal partner can join in cases in which it has been established that there is no necessity for his joining (z). As a mis-joinder(a) is a much less serious error than a non-joinder of plaintiffs, a nominal partner should, as a matter of prudence,
join in all actions on contracts made with the firm. Partner not A partner or member of an unincorporated company
cannot join in suing on any contract made before he
joined the firm or company (6), since he was not one of before he joined
the parties with whom the contract was made.
He can, indeed, sue on a bill or note transferable by delivery, which was given to the firm before he became a member of it; for, in such a case, the plaintiffs sue, not as partners, or as the persons with whom the contract was made, but as being the holders of the bill or note (c).
Suppose, again, that a debt is due to the firm of A. & B., and that C. joins them as partner; A., B., and C. may sometimes sue X., the debtor, for the debt due to the old firm of A. & B. But they can do this only when X. has either expressly or by his conduct contracted to pay to the new firm of A., B., & C. the debt due to the old firm
to sue on contracts made
(y) Compare Teed v. Elworthy, 14 East, 210, with Kell v. Nainby, 10 B. & C. 20.
(z) See in the affirmative, Collyer, Partnership, 467; in the negative, 1 Lindley, Partnership, 2nd ed., 479. Compare Bond v. Pittard, 3 M, & W. 357.
(a) See Chapter XXXIV.
(6) Wilsford v. Wood, 1 Esp. 182 ; Ord v. Portal, 3 Camp. 239, 1 Lindley, Partnership, 2nd ed., 489, 490.
(c) Ibid., 490.
to sue on contracts
of A. & B. A., B., and C., therefore, sue, not in respect PARTNERS. of the debt due to A. and B., but in respect of a new contract made with A., B., and C. after C. joined the firin (d). A
retired partner or member of an unincorpo- Partner rated company must sue on every contract made whilst he was a partner of the firm or member of the com
made while pany (e).
of firm. Exception.—One partner must or may sue alone on contracts Exception. made with him on behalf of the firm in the same cases in which
Partner an agent must or may sue on contracts made with him on behalf of his principal (S).
alone where Each partner is an agent of his co-partners within the sues insteal scope of the partnership business. Hence, he must sue of prin
cipal. alone on contracts made with the firm (his principals) in cases in which an action must be brought in the name of an agent, and cannot be brought in the name of a principal. He must sue alone when he is contracted with by deed in his own name (g) when he is made the party to a bill of exchange, &c. (h), or where the right to sue upon a contract is, by the terms or circumstances of it, expressly restricted to one of several partners (i).
A partner, again, may sue alone where a contract is made with him in his own name. In this case either the partner with whom the contract appears to be made may
(d) Moore v. Hill, Peake, Add. Cases, 10; 1 Lindley, Partnership, 2nd ed., 491.
(c) Dobbin v. Foster, 1 C. & K. 323.
Exception 2. Compare, however, as to the difference between bills indorsed in blank, on which any holder may sue, and bills specially indorsed, on which the persons named as drawers, indorsees, &c., must sue. Law v. Parnell, 29 L. J. 17, C. P. ; 7 C. B., N. S., 282; Machell v. Kinnear, i Stark. 499; Guidon v. Robson, 2 Camp. 302 ; Bauden v. Howell, 3 M. & G. 638 ; Phelps v. Lyle, 10 A. & E. 113 ; 1 Lindley, Partnership, 2nd ed., 474.
(i) Rule 17. Exception 3. Lucas v. De la Cour, 1 M. & S. 349. Compare Robson v. Drummond, 3 B, & Ad. 303; Humble v. Hunter, 12 Q. B. 310 ; 17.L. J. 350, Q. B.
sue as being the party to it, or the whole firm may sue as being the persons really interested in it (i). The principle, in short, to be kept firmly in mind is, that each partner being an agent for the firm, the question, whether he must or may sue without joining his co-partners, is in reality nothing but the inquiry, whether an agent must or may sue on a contract made with him on behalf of his principal.
Set-off:—Debts due from one partner, A., cannot be set off against debts due to the firm, A., B., and C., nor can debts due from the firm, A., B., and C., be set off against debts due to one partner A. (k).
This principle is subject to exceptions.
The first is, that where one partner is or has become (e.g., by the death of his co-partners) the only person capable of suing for a debt due to the firm, the debtor can set off a debt due, not from the firm, but from the partner individually. A., for example, is the
, only surviving partner of the firm of A., B., and C.; A., therefore, has become the only person who can sue for debts due to the firm (1). X., the debtor, can, in an action by A., set off debts due to him, not from the firm of A., B., and C., but from A. individually (m).
The second is, that if the firm have allowed one of the partners, A., to enter into a contract as if he were the only person with whom the contract was made, X., the other contracting party, may set off
(j) Skinner v. Stocks, 4 B. & Ald. 437; Garrett v. Handley, 4 B. & C. 664 ; Cothay v. Fennell, 10 B. & C. 671 ; Alexander v. Barker, 2 C. & J. 133. See Rule 17. Exception 4.
(k) Oven v. Wilkinson, 5 C. B., N. S., 526 ; 28 L. J. 3, C. P. A debt due from partners on a joint and several obligation (e. g., a promissory note), may always be treated as a debt due from each of the partners separately. Hence, if A. bring an action for a debt due to him indivi. dually, a debt due from A., B., and C. on their joint and several promissory note may be set off against A.'s claim. 1 Lindley, Partnership, 2nd ed., 516, 517.
(1) See Rule 16.
against the debt due to the firm debts due to him from PARTNERS. A. individually (n) (o).
RULE 22.—One partner or member of an unincor- Rule 22. porated company cannot sue another upon any One partmatter involving the accounts (p) of the partnership or company
ner cannot sue another in respect of partnership matters.
The technical ground of this rule is, that, in an action on any matter involving the partnership accounts, all the members of the firm must be either plaintiffs or defendants; and if, therefore, such an action were brought by or against a partner, the same person would appear both as plaintiff and as defendant. If, for example, A. were to sue the firm of A., B., and C., for the price of work and labour done for it (9), for a share of the profits (r), on a bill accepted in the name of the firm (s), or for money which he had been compelled to pay for the firm (t), the action would be an action brought by A. against A., B., and C., i. e., A. would be both plaintiff and defendant; and, as already pointed out (u), the same person cannot occupy at once the position both of plaintiff and of defendant. On the same ground, if A. is a partner in two firms (e.g., A., B., & C., and A., X. & Y.), neither firm can sue the
(n) Gordon v. Ellis, 2 C. B. 821 ; 15 L. J. 178, C. P.; Ramazotti v. Bowring, 7 C. B., N. S., 851. See 1 Lindley, Partnership, 2nd ed., 514-520.
(0) “If a partner, being indebted to a person who is indebted to the firm, agrees with him that one debt shall be set off against the other, and the two settle their accounts together on this footing, the firm is bound by this transaction, and the debt owing to it is extinguished.” Ibid. 517. Wallace v. Kelsall, 7 M. & W. 264.
(p) Smith, Mercantile Law, 7th ed., 34, 35; 2 Lindley, Partnership, 2nd ed., 878—883.
(9) Holmes v. Higgins, 1 B. & C. 74.
PARTNERS. other on a contract made between them (x), nor, after
A.'s death, can either firm sue the other on a contract
executor, bring an action for the debt due to M. (2). Companies
Companies empowered to sue.-These companies are empowered merely partnerships endowed with the right of suing and
being sued in the name of a public officer.
If this officer (e. g., the secretary) represents each of the members of the company, he can no more sue a member than one partner can sue another, since he represents as much the person sued as the person suing, and therefore would occupy, in an action, the position at once of plaintiff and of defendant (a).
Modern Acts of Parliament generally make the officer the representative of the company, as distinguished from its members. Where this is done, legal proceedings between the public officer and individual members are as unobjectionable as proceedings between incorporated companies and their shareholders (6).
There is, however, great difficulty in the way of an action by a shareholder against an unincorporated company, at any rate, for declared dividends; since, “even if the company be empowered to sue and be sued by
(x) Moffat v. Van Millingen, 2 B. & P. 124; Mainwaring v. Newman, ibid. 120.
(y) 2 Lindley, Partnership, 2nd ed., 883. Bosanquet v. Wray, 6 Taunt. 597.
(z) Moffat v. Van Millingen, 2 B. & P. 124, The rule applies to persons who are partners in a particular venture.
(a) 2 Lindley, Partnership, 2nd ed., 858. Hichens v. Congreve, 4 Russ. 562 ; McMahon v. Upton, 2 Sim. 473; Hughes v. Thorpe, 5 M. & W. 656.
(6) 2 Lindley, Partnership, 2nd ed., 858. Wills v. Sutherland, 4 Ex. 211 ; 18 L. J. 450, Ex. ; 5 Ex. 980 ; 20 L. J. 28 Ex. (Ex. Ch.); Reddish v. Pinnock, 10 Ex. 213 ; Smith v. Goldsworthy, 4 Q. B. 430; 11 L. J. 151, Q. B. ; Chapman v. Milvain, 5 Ex. 61 ; 19 L. J. 228, Ex. It is settled that one public officer of a banking company under 7 Geo. 4, c. 46, is the proper person to sue a shareholder for calls. 2 Lindley, Part. nership, 2nd ed., 858.