that this may probably be the reason why Courts of equity have considered joint contracts of this sort (that is, contracts joint in form) as standing on a different footing from others. I conceive therefore that partnership trading debts are only one, and that the most frequent case of the general rule, which is, that wherever a Court of equity sees that in a contract joint in form, the real intention of the parties is, that it shall be joint and several, it will give effect to such intention. Now, I think that a contract for a loan of money giving to the creditor the benefit of the security of several persons, is of that description. Here it is a loan of money by bankers to certain persons, their joint customers. Is it not obviously the intention of both parties that the property of all shall be responsible for the money thus obtained? In the case of Simpson v. Vaughan, Lord Hardwicke, upon this obvious intention, corrected the mistake in the joint bond. Then the question arises, whether this equity exists until after all the surviving contractors have been found incapable of paying the amount. I think that question concluded by the case of Wilkinson v. Henderson, to the reasons of which I fully accede."

We ought not to conclude this subject without adverting to the question, whether, when a partnership creditor has obtained a decree in equity for payment of his debt out of the estate of the deceased partner, he is entitled to receive payment pari passu with the separate creditors of that partner. If this point were decided on principle alone, and without reference to any supposed analogy between the practice in the Courts of equity and the practice in bankruptcy, it seems clear, that the partnership creditor, as resting on his separate contract, would have a right to come in competition with the separate creditors. On the other hand, the cases of Gray v. Chiswell (a), and Cowell v. Sikes (b), tend to shew, that, by analogy to the rule in bankruptcy, the partnership creditor will in such case be postponed to the separate creditors, unless there be no joint estate. In Thorpe v. Jackson (c), the joint creditors did not attempt to compete with the separate creditors.

I. 2. The principle, that a joint loan is to be considered in equity as joint and several, might seem to lead to the conclu(b) 2 Russ. 191.

(a) Ante, p. 405.

(c) 2 Y. & C. 559.

sion, that where joint debtors, not being partners in trade, have entered into a joint bond or joint covenant for payment of their debt, a Court of equity would rectify the instrument by construing it several, although there might be no evidence of fraud or mistake in framing it. No general proposition, however, on this subject can be maintained; because the fact of joint debtors giving a joint security might, under some circumstances, rebut the presumption of their several liability in equity (a). Probably, in deciding on a case of this nature, the Courts would be disposed to inquire whether the instrument had been executed at the time when the debt was contracted, or had been given as a security for a bygone debt; for on these circumstances might depend the question, whether the debt was or was not measured by the strict terms of the covenant.

But where partners in trade enter into a joint security for the payment of monies due from the partnership, Courts of equity will rectify the instrument by construing it several as well as joint; the obligation to pay, independently of the instrument, being several as well as joint, and the Courts presuming that it was the intention of the parties to carry that obligation into full force. If it were otherwise, the instrument would be the means of diminishing the security of the creditor.

This mode of dealing with joint instruments executed by partners has long been applied to the case of partnership notes (6), upon the ground that, though the instrument was joint, the debt was the debt of each partner. Where, however, the partnership debt has been secured by the joint bond of the partners, Courts of equity, in rectifying the bond, have taken into their consideration not merely the presumed nature of the debt, but the fact of positive mistake or fraud in framing the instrument. The authorities, however, seem clearly to establish that all joint securities entered into by partners on the partnership account, whether under seal or otherwise, and although there may be no evidence of mistake or fraud in framing the instrument, will in equity be considered several as well as joint, and will be rectified accordingly. Thus, in Simpson v. Vaughan (c), where a bill was brought by the executor of

(a) See Sumner v. Powell, infra.

(b) Lane v. Williams, 2 Vern. 292; Jaccomb v. Harwood, 2 Vez. sen. 265.

(c) 2 Atk. 31; 2 Vez. sen. 101 : and see Primrose v. Bromley, 1 Atk. 89.

the obligee of a bond given by two joint debtors, for the purpose of having payment out of the estate of one of the debtors, Lord Hardwicke, though he adverted to the fact of mistake in drawing up the bond, also took notice that the debt arose from the contract itself; and that if there was any defect in the contract, the Court would resort to what was the principal intention of the parties, that they should be severally and jointly bound. And upon these considerations his Lordship rectified the instrument. Again, in Bishop v. Church (a), where money was borrowed by partners on their joint bonds, although Lord Hardwicke doubted at first whether it sufficiently appeared that the bonds were intended to be separate as well as joint, yet, when he found that the money had been borrowed in the course of trade as partners, he declared the bonds valid as against the heir and executor of the deceased partner. And the principles of these decisions have been recognised and approved in succeeding cases (b).

But although in rectifying joint securities given by partners in trade, Courts of equity would look to the fact of the obligors being partners as evidence of their intention to be severally bound, yet, it by no means follows that every joint instrument executed by partners in relation to the partnership transactions, shall be considered several as well as joint. In Summer v. Powell (c), one of several partners died. Instead of winding up the affairs of the partnership by taking a general account, and satisfying all the claims upon the firm, his executor, S., and the surviving partners, entered into an arrangement, by which the former received what was estimated to be his testator's share of the joint estate, he releasing to the other partners all interest in the residue. S. likewise received from the surviving partners a joint covenant of indemnity against the debts of the old partnership. W., one of the surviving partners, afterwards died, and the others became bankrupt. S., having been compelled to pay a partnership debt, insisted that he had a right to be repaid out of W.'s estate, and that, to enforce this demand, the joint covenant of indemnity ought to be construed several. But Sir William Grant held the contrary, and dismissed the plaintiff's bill, though without costs. "When the obligation," observed his

(a) 2 Vez. sen. 100, 371.

(b) Orr v. Chase, 1 Mer. 729;

Thorpe v. Jackson, supra.
(c) 2 Mer. 30.

Honour," exists only by virtue of the covenant, its extent can be measured only by the words in which it is conceived. A partnership debt has been treated in equity as the several debt of each partner; though at law, it is only the joint debt of all. But there, all have had a benefit from the money advanced or the credit given, and the obligation to pay exists independently of any instrument by which the debt may have been secured. So, where a joint bond has, in equity, been considered as several, there has been a credit previously given to the different persons who have entered into the obligation. It was not the bond that first created the liability to pay. But, in this case, the covenant is purely matter of arbitrary convention, growing out of no antecedent liability in all or any of the covenantors to do what they have thereby undertaken. Why was Mr. Sumner's share of the partnership estate to remain unaffected by any claims by which that estate might afterwards be diminished? There was no equity that entitled him to demand from the other partners an engagement to that effect. But they are contented to give him a covenant of indemnity. As it is only a joint covenant that is given, how can I say that it is anything more than a joint covenant that was meant to be given? It is not attempted to be shewn, that there was any mistake in drawing the deed, or that there was any agreement for a covenant of a different sort. There is nothing but the covenant itself by which its intended extent can be ascertained. There is no ground, therefore, on which a Court of equity can give it any other than its legal operation and effect."

I. 3. It is obvious from what has preceded, that the partnership creditor has a right to receive payment of his debt out of the assets of the deceased partner, to the full amount of his demand against the original firm; and that, although the demand may arise from a fraud to which the deceased was no party (a).

In Vulliamy v. Noble (b), stock was transferred to a partner

(a) Oldaker v. Lavender, 5 Sim. 239.

(b) 3 Mer. 593; and see Clayton's case, 1 Mer. 572; Ward's case, Id. 624; Houlton's case, Id. 616. Where stock has been misapplied

in the manner above mentioned, the creditor may elect to consider the proceeds of the stock as a debt due from the deceased partner's estate, or to have the stock specifically replaced. Baring's case, 1 Mer. 611.

in a banking-house, by way of security for money borrowed of the firm, by one of their customers. The debt was subsequently discharged; but, by consent, the stock was not retransferred. The stock was afterwards fraudulently disposed of. Then one of the partners died, and after his decease the remaining partners became bankrupt. Lord Eldon held the creditor entitled to have the remaining stock transferred to him; to receive the residue of his debt, if possible, out of the estate of the bankrupt partners; and to go against the deceased partner's estate for the deficiency. "It cannot," said Lord Eldon, "be made a question that a deceased partner's estate must remain liable in equity, until the debts which affected him, at the time of his death, have been fully discharged. There are various ways in which the discharge may take place, but discharged they must be before his liability ceases."

I. 4. It seems not to have been expressly determined as between the surviving partner, and the representatives of the deceased partner, and vice versa, to what extent the acts or admissions of these parties respectively shall operate against the other, so as to take a contract made with the partnership in the lifetime of the deceased partner, out of the Statute of Limitations. It is apprehended, however, that the strict rule of law on which the cases of Atkins v. Tredgold, and Slater v. Lawson (a) depended, and by which an admission by a joint-contractor or his representatives has no effect against the statute after the joint contract has been severed by death, will not apply in the case now under consideration. In Braithwaite v. Britain (b) the bill was filed by a creditor of a banking firm against the representatives of John Britain, deceased, who was a partner in the bank, and against the surviving partners, praying for an account and payment of the plaintiff's deposits. John Britain died in March, 1824, and the bill was not filed till April, 1833; but it appeared the plaintiff received from the surviving partners several small sums on account in the course of the years 1827, 1828, and 1829. It was contended, that these payments would not take the case out of the Statute of Limitations as against John Britain's estate, and the cases at law which have been already noticed, were cited in support of

(a) See ante, p. 285.

EE

(b) 1 Keen, 206.