Co. clearly shew that the parties understood this as a joint concern or partnership in the goods. Such a partnership may well exist, although the price is, in the first instance, advanced by one party, the other contributing his time, and skill, and security, in the selection and purchase of the commodities. It is true, that the plaintiffs, in their first letter, stipulate that Davidson & Co. shall act in the business free of commission, and this circumstance was relied on as making the present case parallel to that of Smith v. Watson; but the facts of the two cases are very different. In the present case, Davidson & Co. were not brokers; the correspondence is, in our opinion, the language of persons to be jointly interested in the purchase as well as the sale of the goods. Davidson & Co., before these transactions, occasionally purchased on their own account, though they were general American commission merchants, and also transacted business upon commission; and in our opinion, the stipulation, that they should act in the business free of commission, plainly denotes that they were to act in it as merchants, and not as agents."

IV. A few remarks may here be made on the powers which partners have of disposing of their interests inter se.

In the words of Eyre, C. J., "partners may, by their acts, convert the joint property of the general partnership into the separate property of an individual, or into the joint property of two or more partners, or e converso." These transactions, if done bond fide, and for a valuable consideration, are binding upon third persons, and materially affect their interests. For instance, in equity and bankruptcy, joint property is the fund for the payment of the joint creditors in the first instance; and then, if anything remains, of the separate creditors of each partner, according to their proportion of the stock. But, if the joint property be converted bond fide into separate property of one partner (a), it immediately becomes the fund for the payment of the separate creditors of that partner in the first instance; and then, if anything remains, of the joint creditor. It is clear, therefore, that under this power of disposition which the partners possess, the order of payment to their creditors may

(a) However, if it be not converted into land, it will, in case of bankruptcy, still go to the joint cre

I

ditors; it being in the "order and disposition" of the partnership. 2 Swanst. 573.

be affected, though of course the debt itself can in no case be defeated. Of this subject we shall treat more at large when we come to consider the bankruptcy of partners.

V. The interest of partners in the partnership property is not altered by seizure of the property in a foreign country, followed by restitution in specie. Thus, if A. and B. be two partners, A. resident here and B. in a foreign country, and, upon a declaration of war between the two countries, the partnership effects abroad be seized by the foreign government, and afterwards B.'s share be restored, and the rest confiscated and sold; it appears, that, upon taking the partnership accounts in this country, the goods restored will be held to be partnership effects, and A.'s estate will be credited with a share proportioned to his share in the goods seized (a).

But if no part of the goods be restored, but the government which made the seizure decree a money compensation to be made to B., the money when paid will not be held to be part of the partnership estate, but is B.'s separate property, vested in him by way of gift from the government. In the case of Campbell v. Mullett (b), Zacharie and Vocheż, residing at Baltimore, and Coopman, a French subject resident at St. Domingo, were merchants and partners, and owners of certain ships captured by British privateers. After these captures had taken place, a treaty of amity was entered into between the King of England and the President of the United States. By the 7th article of that treaty, commissioners were appointed for awarding compensation to American subjects, who had suffered losses by capture. The assignees of the partnership in England accordingly presented several memorials to the commissioners, praying compensation and relief for the loss sustained by Zacharie, Coopman, and Vochez, as copartners, by reason of the capture and condemnation of their ships. In consequence of this memorial, the commissioners awarded certain sums to the two Americans, but with express exclusion of the French citizen, as being an alien enemy. The partnership having become insolvent, the joint creditors claimed the benefit of the award. But Sir William Grant held, that they had no interest in the money so awarded, as their right could only depend on the

(a) Thompson v. Ryan, 2 Swanst. 565, in notes. (b) 2 Swanst. 551.

supposition that Coopman had an equitable claim on this fund, and then, on the general principle, that the equities of creditors must be worked through the medium of the partners. But he was of opinion that Coopman had no such claim, and that this case differed from that of Thompson v. Ryan (a), in the circumstance that, in the latter case, there was restitution of the thing itself; the very thing which had impressed on it the character of partnership property, remained in solido in the possession of one partner untouched by the sentence of condemnation. "Here," said his Honour, "the thing is irrevocably gone, the sentence not being subject to reversal by any suit that could be instituted in any municipal Court. This is not a case in which property is recovered in a Court of law by the medium of a sentence, and as matter of right. The principle on which this case depends is, that the fund in question is for the first time created by the award; and though, in some respects, arising out of the antecedent capture of joint property, yet not connected with it as a continued claim of property, pursued in the usual course in which right is ascertained. It is more analogous to gifts by individuals to one of several partners, in case of casual loss to the partnership: a grant to one, and not to the rest. I cannot declare that the creditors of Coopman have any interest in a fund which I think does not belong to him."

Where restitution has been decreed in solidum to the whole firm, and one of the partners is a bankrupt, it seems clear that his assignees have a right to the bankrupt's share of the property restored. But in cases of this nature, the Court of Admiralty will decline to assist the assignees; though, on the other hand, it will interfere if the bankrupt's share is outstanding, and he has a right to restitution. In the case of The Jefferson (b), a petition was presented to the Court of Admiralty on behalf of the assignees of a bankrupt, who had been partner with some persons in America, and who had received restitution jointly with the other partners, praying that a severance might be made as to his share, and that it might be directed to be paid out of the registry to the assignees. Sed per Sir W. Scott"I thought at first that this question had arisen on the reserved share of that partner, whose national character has not yet (b) 1 Rob. 323.

(a) See the preceding page.

been satisfactorily made out to the Court; but now, understanding that the share of this bankrupt was amongst the property restored to the house of trade in America, I can have no doubts. All the severance that was necessary in this case to determine the national character of the parties, has been already made. Restitution stands decreed to this house. I am functus officio, and I shall not begin again at the prayer of the assignees, who now say that one of the partners is likewise an English merchant and a bankrupt. They must resort to some other authority to make the discrimination between this American partnership stock, for the purpose of subjecting a partner's share to a British bankruptcy. It is no part of the duty of the Court of Admiralty to do this, and I dismiss the petition."

CHAPTER II.

OF THE PERSONAL RIGHTS AND OBLIGATIONS OF PARTNERS.

SECTION I.

Of the Rights and Obligations of Partners in general.

MUTUAL confidence in the conduct of a partnership was always inculcated by the civilians. Under the general name of societas, they classed both a partnership in trade and a partnership in marriage (a); and accordingly, in some countries, the mode of distribution of effects under these two species of connexion became the same (b). In our own country, where commercial transactions have risen to such magnitude and importance, the mutual faith of partners is indispensable to the welfare of the society. The result is, that, even in the greatest concerns, this faith is frequently, as much of necessity as of choice, unlimited.

Absolute and unqualified fraud, therefore, committed by one partner against another, is a crime of no ordinary stamp. In rebus minoribus socium fallere, turpissimum est; neque injurid: propterea quod auxilium sibi se putat adjunxisse, qui cum altero rem communicavit. Ad cujus igitur fidem confugiet, cum per ejus fidem læditur cui se commiserit? Tecti esse ad alienos possumus; intimi multa apertiora videant necesse est; socium vero cavere quí possumus? quem etiam si metuimus, jus officii lædimus. Recte igitur majores eum, qui socium fefellisset, in virorum bonorum numéro non putârunt haberi oportere (c).

II. 1. Not only gross frauds, but transactions of a more

(a) Vinn. Comm. lib. 3, tit. 26, sect. 2; Pothier, Contr. de Soc. chap.3. (b) Huber, lib. 3, tit. 26; Van

Leewen, Comm. 410.

(c) Cic. pro Roscio, cap. xl. noticed by Puffendorf, lib. 5, c. 9.