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CHAPTER VII.

OF SUITS IN EQUITY BY AND AGAINST PARTNERS.

IT is obvious that the subject of suits in equity by partners, can involve but little that is not incident to suits by individuals. One instance of a bill peculiar to partners, is, where the majority of the firm seek to restrain execution against the partnership effects, for the separate debt of one partner (a).

Where a bill is filed by partners to enforce a partnership demand, all the partners must be parties to the suit, unless they are so numerous that it would be inconvenient to join them, in which case the bill may be filed by some of them on behalf of themselves and all others the partners (b). If any of the partners die, it may be doubted whether it is necessary to make the personal representative of the deceased a party (c), and it is evident that there are cases in which that course has not been adopted (d), and perhaps it may be stated that in an ordinary case it is not necessary to take this course (e). Where, however, A. & B. deposited with a firm of which A. was a member, the title-deeds of an estate of which they were joint owners, as a security for a debt due from them to the firm, and A. died intestate, it was held that A.'s personal representative was a necessary party to a bill filed by the surviving partners of the firm against B. and the heir of A., for a sale of the estate (ƒ). Where an action is brought against some only of the mem

bers of a partnership, all the members may file a bill of discovery in aid of the defence to the action at law, if the bill allege that the parties omitted in the record of the action, were out of the jurisdiction when the action was brought (a).

II. A bill may be sustained against partners in respect of mutual unsettled accounts between them and any particular creditor, or to enforce the execution of a trust deed entered into between them and their creditors generally, or any particular class of creditors; or for the specific performance of contracts entered into by the partners jointly; or to compel the partners to interplead in cases where they have delivered goods to a bailee, and subsequently dispute amongst themselves as to the ownership of those goods (b). Other instances of suits in equity against partners will occur to the mind of the learned reader.

Where a bill is filed against partners for an account and payment in respect of mutual dealings and transactions with the plaintiff, it must appear upon the bill specifically that the dealings and transactions were mutual, for it is not sufficient to charge that fact generally (c). And where the bill is brought against the members of successive partnerships, it must appear that the mutual dealings have been carried on through all the partnerships; otherwise the bill is demurrable (d).

Where the bill is filed against partners to enforce the execution of a deed of trust, a few of the creditors will be permitted to sue on behalf of themselves and the other creditors named in the deed (e). Where both joint and separate creditors are parties to a composition deed, the bill may be filed either by the joint or the separate creditors, or some of both. In a case where A. and B. were partners, and a bill was filed by some separate creditors of B., on behalf of themselves and all other the joint and separate creditors of A. and B., to carry the trusts of a creditors' deed into execution; it being objected that one at least of each class of creditors ought to have been brought

(a) Darthez v. Lee, 2 You. & Coll. 12.

(b) On this last point, Pearson v. Carden, 2 Russ. & Myl. 606.

(c) Frietas v. Dos Santos, 1 You. & Jer. 574.

(d) Jones v. Maund, 3 You. & Coll. 347.

(e) Story, Eq. Pl. § 102; 2 Vez. Sen. 113; Newton v. Earl of Egremont, 4 Sim. 574.

before the Court, Sir John Leach overruled the objection, observing, that it was not necessary to make a joint creditor of A. and B., or a separate creditor of A., a party to the suit; and that the plaintiff, being a separate creditor of B., was entitled to represent all who claimed under this deed, although they did not claim in the same order (a).

In suits of this nature, the creditors who file the bill must allege that they do so on behalf of themselves and the other creditors (b). They must likewise allege that the other creditors are numerous, unless that fact appear by some other means on the face of the bill (c).

III. 1. Where a bill is filed against partners, the general rule is, that all the individual members of the firm should be made defendants. So also, in a suit against partners for specific performance of an agreement, they who were parties to the agreement must be made defendants, although some may have since parted with their interest in the subject-matter of the agreement. As where three partners agreed in writing to grant a lease of a house to A., and upon the dissolution of their partnership it was settled amongst them that the house should belong solely to F., one of the partners, and A. agreed to become tenant to F. alone, the bill for specific performance of the agreement was properly filed against all (d).

But the rule as to joinder of parties will not be enforced in all cases. Thus, a person claiming against a numerous partnership or club, may, if he be not a partner, file a bill against a few of the partners or members only (e); but it should seem that the bill must allege that the defendants are sued as representing the whole body (f), and perhaps also that the plaintiff is unable to discover who are the other partners (g). This latter allegation, however, it is conceived, will be unnecessary where

(a) Weld v. Bonham, 2 Sim. & Stu. 91.

(b) Leigh v. Thomas, 2 Vez. 313; Boddy v. Kent, 1 Mer. 361.

(c) 2 Sim. & Stu. 93.

(d) Van v. Corpe, 3 Myl. & K. 269.

(e) Baldwin v. Lawrence, 2 Sim. & Stu. 26; Meux v. Maltby, 2 Swanst.

277; Adair v. New River Company, 11 Ves. 429.

(f) Lanchester v. Thompson, 5 Madd. 12.

(g) Cullen v. Duke of Queensbury, 1 Bro. C. C. 101; Meux v. Maltby, supra; Fenn v. Craig, 3 You. & Coll. 216.

the society against which the bill is filed contracts by means of a committee (a). And where one partner is resident abroad, the bill may be filed against him who is resident here, the absence of the other partner being accounted for and proved (b). And, in such case, the partner before the Court will be liable to pay the whole of the joint demand (c).

Where a person claims a derivative interest from one of several partners or co-adventurers, it is unnecessary to make him a party to a suit against the partners; as for instance, a dredger of oysters, who receives from the boat owners wages proportioned to the number of oysters taken (d).

When one of the partners becomes bankrupt or dies, his assignees (e), executors, or trustees must be made defendants. It will not generally be necessary to make persons claiming under the executors or trustees parties to the suit; but it has been laid down that persons having specific charges on the trust property are in many cases necessary parties (f). In the case of Baring v. Noble (g), the trustees (who were likewise the executors) under the will of Devaynes, the assignees of the surviving partners of Devaynes, and the cestui que trusts under the will of Devaynes, were made defendants.

In Wilkinson v. Henderson (h), in which the suit was brought by a joint creditor on behalf of himself and all other joint creditors of a partnership, for satisfaction of their debts out of the deceased partner's assets, Sir John Leach held, that the surviving partner was properly made a defendant, though no decree could be had against him; he being interested to contest the demand of the plaintiff: and this decision was followed by Mr. Baron Alderson, in Thorpe v. Jackson (i), which was not a case of trading partnership, but of joint contractors only.

Where the bill states the same case against all the partners,

and one of them demurs for want of equity, and his demurrer is allowed, it seems clear that the other partners may plead this matter in bar of the suit (a).

In a suit by a creditor against the representatives of a deceased partner and the assignees of the surviving partner, proving fraud in those whom the defendants represent, the plaintiff will be allowed his costs; which will be apportioned between the estate of the deceased partner, and that of the bankrupt (6).

III. 2. Upon the death of a partner his separate creditor may institute a suit for the administration of that partner's assets, without reference to the joint trade, and consequently without making the surviving partners parties to the suit. And where the testator has appointed no executor, and the next of kin of such partner are unable or refuse to act in the administration of his estate, his separate creditor may have recourse to a bill against the surviving partners for an account of the partnership dealings, and for payment of the debts of all the creditors; provided he offer by his bill to put himself in the situation and submit to the liabilities of the deceased partner (c). The plaintiff, however, under such circumstances ought to procure from the Ecclesiastical Court a limited administration for the purpose of substantiating proceedings in Chancery (d).

But even where the deceased partner has appointed an executor, his separate creditor or residuary legatee may, in certain cases, make the surviving partners of the testator parties to a suit filed by such separate creditor or legatees, for the administration of the testator's assets. This may be done either where there has been collusion between the executor and the surviving partner, or where the surviving partner has in his hands specific assets of the testator; in which latter case the bill need

(a) Tarleton v. Hornby, 1 You. & Coll. 333; Attorney-General v. Cradock, 8 Sim. 466.

(b) Vulliamy v. Noble, 3 Mer. 621. (c) Burroughs v. Elton, 11 Ves. 29. Lord Eldon, considering the great advantages under which the plaintiff stood as between himself and the defendant, at first hesitated

whether he should not insist upon the plaintiff giving security to answer the result of the account; but finding no precedent of such a proceeding, he did not adopt this

course.

(d) Cawthorne v. Chalie, 2 Sim. & Stu. 129.