mere matter of discount; and I do not find any evidence to shew that it was anything else. It was supposed, indeed, by Burrough, (the bankrupt), that the money would be applied to the partnership use; and to such use it was in fact applied; but nothing passed from the defendants, to induce him to believe that it was a partnership concern, and to lend his money on that account. It does not appear that any contract of that sort took place, nor anything more than the mere discount of the bills; and it would be highly dangerous to follow the proceeds into the hands of every party to whose use they may be applied. In the absence, therefore, of any express contract between the parties, it appears to me that we must treat the transaction as a mere discount of the bills." Grose, J.-" It is contended, that this was money lent to the partnership; but it was only mere matter of discount, and not money advanced on the general security of the partnership, although it was applied to their use. At the time when the discount took place, the partnership had made no contract with the discounter, who therefore must be taken to have purchased the bills of one of the partners only. If the partners were not liable at the time when the discount was made, the subsequent application of the money cannot make them liable." And Le Blanc, J.-"Where another security is not required, the party who discounts a bill of exchange stands in the situation of a purchaser of the bill, and therefore cannot recover against the person with whom he discounts it, and whose name is not on the bill, the money advanced by way of discount."

Perhaps this decision might have been given in words of broader application. In Ex parte Hunter (a), where A. lent B. a sum of money, for the purpose of being applied to a partnership in which he was engaged, and had taken B.'s separate bond for the amount; upon the application of A. to prove as a joint creditor against the firm, Lord Hardwicke said—“ It has

(a) 1 Atk. 223; 1 Co. B. L. chap. 13. It appears by the latter report, that the loan arose from acquiescence on the part of A. in a wrongful act of B., who had previously, and with the knowledge of his partner, raised money on some securities of A., which he held in trust, and

applied the produce to the uses of the partnership. If the fact, as to the knowledge of the copartner, be true, which is expressly denied in Atkyns, this case is not to be reconciled with that of Smith v. Jameson, post, Chap. 3, sect. 3, art. V.

been contended, on the part of the petition, that the money in question was jointly lent to the partners; but that is expressly contradicted by their own affidavits; for they admit the sum to be lent to B., with an intention that he should apply the same for the benefit of the partnership. The consequence of this is, that here are plainly two contracts; one as between A. and B., the other as between B. and his partner." His Lordship accordingly held that A. could not come in upon the estate of B. and his partner, pari passu with the joint creditors, although he was otherwise entitled to relief.

The principle, therefore, of these cases is, that in order to charge a partnership as debtor, there must be satisfactory evidence that the contract which is the foundation of the charge was joint in point of law. In the case of goods supplied to a partnership, a joint contract may in part be inferred from the general nature of the transaction; but, in the case of money lent, the evidence of a joint contract must be more specific; for, as Lord Eldon observed-"It is not enough to prove that money borrowed by an individual goes into the partnership estate, to make the partners liable (a).”

On these principles, it has been decided in equity (6), that if a partner borrow a sum of money on his own security only, it does not become a partnership debt, although applied to partnership purposes, even with the knowledge of the other partner. In the case alluded to, Bevan and Lewis were partners. Lewis borrowed two several sums of £500, the first of Siely, and the second of Siely and Cubitt. For each of these sums he gave his separate promissory note, and his separate warrant of attorney. Judgments having been entered upon these warrants of attorney, and writs of fi. fa. having

(a) Ex parte Emly, 1 Rose, 61. D. Leach, arguendo-" If goods be delivered to an individual member of a partnership, although he does not disclose that it is for the partnership, and although the creditors imagined it to be merely for that individual, they may prove as against all the partners." D. Lord Eldon-"The law in regard to goods is as stated by Mr. Leach;

but it is a different question where goods are sold to A. B. and C. D., and it is part of the contract that A. B. shall give bills of exchange, whether those bills are not a payment? I except the case of antecedent debts."

(b) Bevan v. Lewis, 1 Sim. 376. See Loyd v. Freshfield, 2 Carr. & Payne, 325; Smith v. Craven, 1 Cromp. & Jerv. 500,

been sued out upon them, the sheriff took the partnership property in execution, sold part, and was proceeding to sell the other part, for the benefit of Siely and Cubitt. Bevan then filed his bill against Lewis, Siely, Cubitt, and the sheriff; insisting that the stock and effects of the partnership ought to be sold, the proceeds applied in payment of the partnership debts, and the surplus divided between the plaintiff and Lewis; that Siely and Cubitt were not entitled, under the execution, to sieze the stock and effects, nor had they any interest therein, except in Lewis's share of the surplus; and praying for the usual partnership accounts; that the stock and effects might be sold, and the produce applied in payment of the debts of the partnership; that the plaintiff's share of the surplus might be paid to him; for an injunction to restrain the execution; and for the appointment of a receiver, &c. By the answers of Siely and Cubitt it appeared, that Bevan was aware of both these loans; that, as to the first, he knew that part of it had been devoted to partnership purposes; and that, as to the second, it was applied for by Lewis at the request of Bevan, paid by Bevan's direction to the bankers of the partnership to the joint credit of the partners, and afterwards applied by them in payment of the partnership debts. Sir Anthony Hart, however, held, that there was a clear equity for the plaintiff. "The judgments," he said, "that have been entered up upon the securities for the sums in question, must take their character from the securities on which they have been so entered up; and, as those securities were executed by one only of the partners, they constitute the creditors joint proprietors only with the other partners. The accounts of the partnership estate and debts must therefore be taken in the manner prayed by the bill; and the defendants will be entitled to be paid their debts out of Lewis's share of any surplus that remains after all the demands on the partnership are satisfied."

A case was lately decided in the Court of Bankruptcy (a), which at first sight appears irreconcilable with the preceding authorities; but upon a careful investigation of it, there seems no reason to say that it is not in accordance with the principles already laid down. In that case, one partner borrowed money for partnership purposes, upon the security of certain shares of

(a) Ex parte Raleigh, 3 Mont. & A. 670; 3 Deac. 160.

a banking house which belonged to the partnership, but which stood in the name of his copartner. The copartner being resident in America, the borrowing partner gave his separate undertaking to procure the assignment of the shares, and, in consideration of this undertaking, the buyers of the shares gave their acceptance for the amount to a bill drawn upon them by the borrowing partner in the name of the firm. The drawers of the bill having become bankrupt, the question was, whether the buyers could prove the amount of the bill against the separate estate of the partner who gave the separate undertaking, and the Court of Review held that they could not; being, as it should seem, of opinion, that the contract was made with the firm, and not with the individual partner. Now, supposing the buyers to have had notice of the fact of these shares being the property of the partnership, and to have insisted on having the separate undertaking of the borrowing partner, merely as a collateral security in consequence of the absence of his copartner, there is nothing in this case which militates against the foregoing authorities; and it seems clear, проп the whole, that such were the circumstances of the case, or, at all events, that the Court in its judgment proceeded on this hypothesis (a).

In the cases which have just been examined, a separate security was uniformly taken by the creditor; a circumstance which, per se, would be evidence of a separate contract. But even where no separate security has been taken, and where the creditor, through the fraud of his debtor, has acted on the belief that the contract is joint-the money advanced being carried to the funds of the debtor's partnership—still, if the creditor be proved to have acted with want of ordinary caution,

(a) The reports of this case, as of some others in the Court of Review, vary from each other in very essential points. In the report of Montague & Ayrton, an affidavit is set out from which it should appear that the buyers were not informed, and had no reason to believe, that the shares were the joint property of the firm. On the other hand, according to Deacon's report, the

Y

Chief Judge said-" It appears from the affidavits, that the shares were in fact the joint property of the firm of Rostern, brothers, though standing in the name of James Rostern at the bank; that this fact was explained to the Duncans at the time of the contract of sale, and that they then said, they would have the personal responsibility of L. Rostern."

the contract will be held to be several, and the firm of the debtor is not answerable for the debt. In the case of Loyd v. Freshfield (a), A., who was in partnership as a solicitor, borrowed money of the plaintiffs, who were bankers, alleging that he was instructed to raise a sum for a client of his firm. The plaintiffs lent the money, without consulting A.'s copartners or the client, and A. paid the money into the funds of his copartnership, in satisfaction of certain other monies which he had previously drawn out without the knowledge of his copartners. It appeared in evidence, that A.'s firm never had an account with the plaintiffs' banking house, although A. himself had. The plaintiff's having brought their action for money lent against the firm of A., the jury, under all the circumstances, found a verdict for the defendants, and the Court of King's Bench refused to set aside the verdict. Abbott, C. J.-"Taking the evidence together, it appeared to me at the trial, that the advance was to B. alone, and not to his firm. As to any rule, that if one partner borrow money on his separate credit, he, by applying it to partnership purposes, thereby makes the house liable, I wish it to be distinctly understood, that I do not subscribe to that doctrine." Bayley, J.-" There is no ground to disturb the verdict. In point of law, one of several partners may pledge the partnership name for money bona fide lent, the lender supposing that one partner has the authority of the house to borrow, and that he is borrowing for the purposes of the house. But if there be gross negligence, and the transaction be out of the ordinary course of business, the lenders cannot recover against the other partners, if the money be misapplied. The plaintiffs lend to A. alone; the sum is very large; and there is no document, not even a letter from the client, stating that he wants any money; and no deed passes. It was a negligent act at least in the plaintiffs, to lend the money, and they therefore cannot call on an innocent party for its repayment.

(a) 2 Carr. & Payne, 325; and see Parkin v. Carruthers, 3 Esp. 248. See ante, p. 263. In America it has been held, that where there is a general partnership, and money is borrowed by one of the firm in the name of the firm, all the partners

are liable, although the money, when obtained, be appropriated by the partner borrowing it to his own use. Church v. Sparrow, 5 Wendell, 223. But it is apprehended, that in England, so general a decision would not be made.