plausible nature, such as intrigues for private benefit, are clearly offences against the partnership at large, and as such are relievable in a Court of equity. For, in the words of Lord Eldon, there is an implied obligation among partners to use the property for the benefit of those whose property it is (a). The doctrine here laid down is well exemplified by the case of Fawcett v. Whitehouse (b). Knight & Co., being partners and proprietors of certain iron works, which they held for a long term of years, and finding the trade unprofitable, employed Whitehouse to look out for a capitalist to take the property off their hands. Whitehouse then prevailed upon Fawcett and Shaw to join with him in carrying on the concern in partnership; and accordingly the lands, mines, and other premises were demised to the new partnership for a term of years. Immediately on the execution of the deed, Whitehouse received from Knight & Co. the sum of £12,000, for the purpose, as was pretended, of enabling him to advance the capital required for the partnership into which he was then entering, but, in reality, by way of premium for his services in procuring responsible tenants for the premises. The sum was at first advanced in the form of a conditional loan, but it was afterwards converted into an absolute gift. The whole of this transaction was studiously concealed by Whitehouse from his copartners, and about three years after the commencement of the partnership, he retired, receiving £13,500 for his share. The transaction with Knight & Co. having afterwards come to light, a bill was filed by the remaining partners against Whitehouse, praying, that, as to two thirds of the sum of £12,000, he might be declared a trustee for the partnership. Sir John Leach having decreed in favour of the plaintiffs, that decree was affirmed by Lord Lyndhurst, who, in the course of his judgment, said, that where there are several partners, and, in the course of a whole transaction, one acts as an agent for the others, and he stipulates for a particular advantage for himself, he shall not have the benefit of such stipulation. Here there was an evident anxiety in Whitehouse to gain such an advantage, and to conceal it from his partners; and the transaction amounted to a fraud.

The same equitable doctrine was carried still farther in the

(a) 15 Ves. 229.

(b) MS. and see 1 Russ. & My. 132.

case of Russell v. Austwick (a). There, several persons conducted the business of common carriers from London to Falmouth. A separate part of the road was allotted to each, and it was expressly agreed that no partnership should exist between them; that no one should be answerable for the debts of the other; but that each should receive the money paid in his particular district, and account quarterly for the balance. The defendant, Austwick, conducted the business in London and its neighbourhood. Some years after the commencement of the partnership, Austwick, by a letter dated the 11th of January, 1817, on behalf of himself and his copartners, made a proposal to the Deputy Master of the Mint to convey new silver from London to several towns upon the line of road between London and Falmouth, at certain rates of carriage, which were specified in a letter, and for an additional payment of 5s. per cent. on the value of the packages, by way of insurance for safe conveyance. The proposal was accepted, and the agreement made. Afterwards, Austwick entered into a further agreement with the Master of the Mint, to cause silver coin to be conveyed from London to towns not in the line of road from London to Falmouth, nor specified in the letter of the 11th of January, 1817. By this new agreement, Austwick guaranteed the Mint against any loss which might happen in respect of the silver coin, when it was not passing on the line of road from London to Falmouth, but on provincial or cross roads; and the Mint, in consideration of this guarantee, were to pay, not 5s. per cent. for insurance, according to the first agreement, but 7s. 6d. per cent. for all silver coin sent from the Mint, without any distinction whether it was delivered at the several towns specified in the first agreement, or whether it was sent, partially or wholly, by provincial or cross roads. In settling with his copartners in respect of this transaction with the Mint, Austwick accounted with them only for their shares of the profits made according to the first agreement. On the other hand, the copartners claimed to have the monies received under both agreements divided between themselves and Austwick, in proportion to their respective shares. They accordingly filed their bill against Austwick for that purpose; and Sir John Leach decided in favour of their claim, observing, that it was sufficiently plain

(a) 1 Sim. 52.

from the circumstances of the case, that the defendant Austwick did not apprize the Officers of the Mint that he was treating for himself in exclusion of the plaintiffs, and therefore, that, upon the settled principles of equity, he could not exclude the plaintiffs from the same proportion of the profits under the second agreement, as they were entitled to under the first.

The preceding case was succeeded by another, where a partner, who superintended exclusively the accounts of the concern, agreed to purchase his copartner's share of the business for a sum which he knew from accounts in his possession, but which he concealed from his copartners, was an inadequate consideration. The agreement was set aside (a).

II. 2. The principles which are the foundation of the foregoing decisions were long ago inculcated by the civilians, especially in that particular case where a dissolution is contemplated with a view to private benefit (b). "The renunciation of the society," says Pothier, "is not made in good faith, when a partner renounces in order to appropriate to himself alone the profits which the partners proposed to acquire in contracting that relation (c)." In recent times, the case of Featherstonhaugh v. Fenwick (d) seems to illustrate the doctrine here laid down. The plaintiff and Fenwick were partners at will in the business of glass manufacturers, and for that purpose had taken a lease of some glass-houses and a free-stone quarry. Fenwick's son having afterwards been admitted into the partnership, he and his father applied for a renewal of the lease, in their own names alone, without communicating the fact to the plaintiff. They stated to Wilkinson, the agent of the lessor, that they were determined to have no farther connexion in trade with the plaintiff, though, at that moment, they had not apprized him of their intention to dissolve the partnership. By agreement executed between the Fenwicks and Wilkinson, the lease was renewed from the 22nd of November following. The Fenwicks then gave the plaintiff notice of their intention to dissolve the partnership on the same 22nd of November. Sir William Grant held, clearly, that the lease so renewed was the

(a) Maddeford v. Austwick, 1 Sim. 89.

(b) Inst. lib. 3, tit. 26, sect. 4.

(c) Contr. de Soc. chap. 8, sect. 4,

art. 150.

(d) 17 Ves. 298; 2 Hov. Supp. 478.

property of the partnership of the plaintiff and the Fenwicks. "It is clear," he said, "that one partner cannot treat privately, and behind the backs of his copartners, for a lease of the premises where the joint trade is carried on, for his own individual benefit; if he does so treat, and obtains a lease in his own. name, it is a trust for the partnership; and this renewal must be held to have been so obtained."

In what has preceded, we see that the same rules and tests are applied to the conduct of partners, as are ordinarily applied to that of trustees. A trustee ought strictly to pursue the tenor of his way, without perverting it, directly or indirectly, to his own personal advantage (a). So, there is an obligation imposed upon a partner the instant he receives partnership property, either to apply it to partnership purposes, or to charge himself as debtor with it in the partnership books (b). And, indeed, it is not always sufficient for a partner to charge himself as a debtor in the partnership books with merely the sums due from him to the partnership, with interest thereon. If he applies the sums received by him as a partner in any profitable private speculation, he must account to his copartners for the profits by the money so applied (c).

III. As it is the duty of partners to devote themselves to the interest of the firm, it seems clear, that no man has a right to engage in any business or speculation which must necessarily deprive the partnership of a portion of his skill, industry, or capital. In the American case of Long v. Majestre (d), A. and B. carried on business as partners in the name of B., but with the funds of A.; and B., without any dissolution of the partnership, or rendering any account to A., and without his consent, entered into partnership with C., and carried all the funds of A., in his hands, into the new copartnership. On the death of B., A. filed a bill against his administratrix and C. for an account. It was held, that he was entitled to an account from C. of the transactions and profits of the partnership between him and the intestate, and of the personal estate of the intestate in his hands.

(a) 1 Madd. Chan. 140; Richardson v. Chapman, 7 Bro. P. C. 324. (b) Ex parte Yonge, 3 Ves. & B.

36.

(c) Stoughton v. Lynch, 1 Johns. Ch. R. 470. And see Burton v. Wookey, infra.

(d) 1 Johns. Ch. R. 305.

"The principles of Courts of equity," observes Sir John Leach, "will not permit that parties, bound to each other by express or implied contract to promote an undertaking for the common benefit, shall of them any in another concern, engage which necessarily gives them a direct interest adverse to that undertaking. For example, there is, necessarily, some degree of rivalry between a morning and an evening paper, especially in the country. It might clearly, therefore, be made a question whether it would be a due act of management in the partnership concern of a morning paper, to assist, with its property and its labour, the publication of any other newspaper, so as to enable the majority of the partners in that respect to bind the minority (a)."

IV. 1. The principles which have just been discussed, may be carried still farther; for it has been expressly laid down, that no partner who owes a duty towards another can place himself in a situation which gives him a bias against the discharge of that duty. In Burton v. Wookey (b), the plaintiff and defendant entered into partnership together, to deal in lapis calaminaris. The defendant, who was a shopkeeper, was to take an active part in the concern, and to purchase the lapis calaminaris from the miners, in whose neighbourhood he lived. Many of the miners were, before the partnership, in the habit of dealing at his shop, and continued so for some years after the partnership, receiving from the defendant ready money for the lapis calaminaris, and paying for their shop goods afterwards, as they would have done to any other shopkeeper; but, in the year 1817 or 1818, owing, as the defendant alleged, to the distress of the times, a new course of dealing took place between the defendant and the miners: in the place of paying them for the lapis calaminaris with money, he paid them with shop goods, and in his account with the plaintiff, he charged him as for cash paid, to the amount of the price of the goods. The question was, whether he could justify this charge, or whether he must not divide the profit made by him on the sale of the goods, with the plaintiff. Sir John Leach-"It is a maxim of the Courts

(a) Glassington v. Thwaites, 1 S. & S. 133.

(b) Madd. & Geld. 367. But in Glassington v. Thwaites, it was held

that a temptation to abuse the partnership property is not sufficient to induce the Court to interfere by injunction.