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debt is, at least in many cases, binding on the firm (a). It may here be added, that if two partners commence an action, one may release the subject matter of it (6). Hence it has been expressly decided, that if one of two plaintiffs, partners, release a defendant after action brought, without the consent of the other, a Court of law will not set aside such release unless fraud be clearly established (c).
In this case, the partner who released the action had agreed, by the partnership deed, not to interfere in the receipt or payment of the partnership debts; and this circumstance alone was not deemed sufficient to make the release fraudulent. But where the release is attended with clear circumstances of fraud, the Court will set it aside (d).
It is, however, to be remarked, that the power of one partner to give a release in these cases arises rather from the general practice in actions at law, than from the privileges of partnership: For it has been laid down generally, that one plaintiff may release a cause of action brought by two (e).
Where one of several partners gives a partnership bill, and undertakes to the acceptor to provide for it when due, this is in the nature of a release to the acceptor, of any action which might have been brought by the partnership on the bill (). So, where one of several partners takes an acceptance for a debt previously due to the firm, this is giving time to the debtor, although the bill be drawn in the name of this partner only; and the firm cannot sue the debtor for the original debt until the bill has arrived at maturity, and been dishonoured (9).
II. Payment to one partner is payment to the firm (h).
(a) Ante, p. 311, Art. II.
Anon. 3 Mod. 109; Hackett v. Herne, (6) Per Hullock, B., 1 Younge & 3 Mod. 135. J. 366.
(f) Richmond v. Heapy, 1 Stark. (c) Arton v. Booth, 4 Moore, 192; 202; Sparrow v. Chisman, 9 Barn. Furnival v. Weston, 7 Moore, 356. & Cres. 241 ; 4 Man. & Ryl. 206.
(d) Barker v. Richardson, 1 (9) Tomlins v. Lawrence, 3 Moore Younge & Jerv. 365 ; and see Legh & Payne, 555. v. Legh, 1 Bos. & Pull. 447 ; Jones (h) Anon. 12 Mod. 446; D. Tinv. Herbert, 7 Taunt. 471; Mount- dal, C. J., 3 Moore & Payne, 555; stephen v. Brooke, 1 Chit. 391. Duff v. East India Company, 15
(e) Per Dallas, C. J., 4 Moore, Ves. 198. 494. See Ruddock's case, 6 Rep. 256;
Where, therefore, upon the dissolution of a partnership, an agent was appointed by both partners to receive the partnership debts, and one of the debtors promised to pay his debt to the agent, but, before any payment, one of the partners countermanded the authority which had been given, and required the money to be paid to himself, which was done—the Court of King's Bench held this to be a valid payment; observing that, under the arrangement made by the partners, payment to the agent might have been a good discharge, without barring either of the partners from their right to receive the money (a). And in King v. Smith (6), Lord Tenterden held, that, after a dissolution of partnership between two partners, either partner may receive a debt due to the firm, notwithstanding a stipulation in the deed of dissolution that one shall receive all the debts. His Lordship therefore ruled, that, to an action brought by B. against C., on a bill drawn by B., and accepted by C., after the dissolution of the partnership of A. and B., but for a debt due from C. to that partnership, it was no answer for C. to say, that, by the term of the dissolution, A. only was to receive the debts of the firm.
In a late case (c), A. being entitled to a sum of £4500, charged on real estate, and payable at a future time, assigned the £4500 to B. and C., who were bankers and copartners, to secure monies to be advanced by them, or either of them, to A. C. survived B. It was held, that as the security was made to B. and C. jointly, C. was capable of giving a discharge for the whole of the sums advanced, and that B.'s representatives were not necessary parties to the conveyance of the real estate on which the £4500 was charged.
If a debtor of a partnership, instead of paying what he owes, gives one of the partners authority to receive monies on his account, in confidence that they will be applied in satisfaction of his debt, retainer of these monies by the partner receiving them is equivalent to payment (d).
But, where a person is indebted to a firm, and also separately to one of the partners, payment to that partner is not payment to the firm, unless the money be specifically appropriated to
such purpose. In a late case, one of two partners, solicitors, after the dissolution of the partnership, received the rents of a debtor to the firm, and retained out of them the amount of the debt; and he stated that he did this on an understanding that the debtor should have credit for the sum so retained; and that he considered the debt to have been satisfied by these monies, but no account had been settled between him and the debtorLord Brougham held, that, as against the other partner, the debt to the partnership was not to be considered as satisfied (a).
A judgment taken by one of two joint creditors does not extinguish the debt, unless it be clearly taken with the concurrence of both. Where, therefore, previously to the dissolution of a partnership, one of two partners took a warrant of attorney to himself alone from a debtor to the firm, and afterwards, with notice of the debtor's insolvency, entered up judgment, levied execution on the debtor's goods, and received several sums of money from the sale of those goods, and died—it was held, that this act of the deceased partner did not extinguish the debt as a joint debt, there being no evidence that the surviving partner had extinguished his power to receive; consequently, that the latter was liable to repay to the assignees of the debtor the money so received by the deceased partner (6).
Where two houses are partners in a particular transaction, payment to one house, on acconnt of that transaction, is payment to both. So, where two houses have a common partner, payment of a bill of exchange indorsed from one house to the other, is in law payment to both; and, although one house is deprived of the benefit of such payment, it cannot sue the acceptor. In Jacaud v. French (c), Blair and Jacaud were partners in Dublin, and Jacaud and Gordon were partners in London. The firm of Jacaud & Gordon shipped goods, effected insurances, accepted bills, and transacted other the affairs of the firm of Blair & Jacaud; and the firm of Blair & Jacaud from time to time made remittances to the firm of Jacaud & Gordon, to cover or answer their advances and acceptances. Farrell drew a bill upon French, payable to the order of Farrell, which was accepted by French, who indorsed it to Blair & Jacaud, who
(a) Pritchard v. Draper, 1 Russ. & Myl. 191.
(6) Biggs v. Fellows, 8 Barn. &
Cres. 402; 2 Man. & Ryl. 450.
(c) 12 East, 317.
indorsed and remitted it to Jacaud & Gordon, the latter being under acceptances for Blair & Jacaud to a large amount. Before the bill became due, Farrell paid to the house of Blair & Jacaud several acceptances and notes, for the express and specific purpose of liquidating and providing thereout for the due payment of the bill in question. It was also agreed between Blair, on the part of the house of Blair & Jacaud, and Farrell, that in case the bill should not be paid when due, it should be returned and delivered up to Farrell. The house of Blair & Jacaud applied to their own use the notes and acceptances so received from Farrell, and failed to take up the bill of exchange, and gave no notice to the house of Jacaud & Gordon, of the deposit or payment so made by Farrell. Under these circumstances, the question was, whether Jacaud & Gordon could recover the amount in an action against the acceptor, French; and the Court of King's Bench held they could not.
“ It is impossible,” said Lord Ellenborough, “to sever the individuality of the person. Jacaud, being a partner with Blair, must be considered as having, together with Blair, received money from the drawers to take up this very bill. How then can he, because he is also partner with Gordon in another house, be permitted to contravene his own act, and sue upon this bill, which has been already satisfied as to him. If A. and B., partners, receive money to apply to a particular purpose, A. and C., in another partnership, can never be permitted to contravene the receipt of it for that purpose, and apply it to another.”
OF ACTIONS BY PARTNERS.
FROM what has been said in the preceding chapter relative to the rights of partners against third persons, it is clear that, generally speaking, they possess, as a body, the same power as individuals have, of enforcing those rights by action. In some respects, however, the power of partners to sue in an action ex contractu, is not co-extensive with that of individuals. That power, we have seen (a), may possibly be lost by the death or accession of a partner. So, also, where the same person is member of two different firms, an action of assumpsit cannot be brought by one firm against the other; for, in such case, the same person would be both plaintiff and defendant in the same action; and it is a rule of law, that a man cannot sue himself (6). In the case of Mainwaring v. Newman (c), A., B., and C. were partners, and C., D., and E. were partners. E. drew a promissory note in favour of C., D., and E., which was indorsed by them to A., B., and C. To an action of assumpsit by A., B., and C., against D., as one of the indorsers, D. pleaded in bar, that C., one of the plaintiffs, was liable as an indorser, together with D. ; and the plea was held good on special de
So, also, after the death of the common partner, on general principles, one firm cannot sue the other for a debt due in his lifetime, but they may upon transactions which have taken place subsequent to his decease (d).
There is another particular in which the rights of partners to sue in actions ex contractu appears to be limited. We have
(a) Ante, Chap. 4, sect. 1.
(6) Bosanquet v. Wray, 6 Taunt. 598; Moffatt v. Van Millingen, 2 Bos. & Pull. 124; De Tastet v.
Shaw, 1 Barn. & Ald. 664.
(c) 2 Bos. & Pull. 120; and see Jacaud v. French, ante, p. 455.
(d) Bosanquet v, Wray, supra.