otherwise he may be liable, on this same principle of holding out, for the debts of the firm contracted after he has ceased to be a member. But the creditors in such a case must show that they believed that he was a member at the time they gave credit to the firm, and that they gave such credit on the strength of his being a member, otherwise they cannot recover from him. (Carter v. Whalley, 1 B. and Ad. 11.)

executor of

ner.

ner acts as

But the executor of a deceased partner Liability of does not incur any liability by the name of deceased partthe old firm being continued; the reason being that the death of a partner acts as a Death of partdissolution of the partnership. In order to dissolution. make any person liable on the principle of holding out, it must be shown that credit was given to the firm on the strength of the assumed partner's name, and under the impression that he actually was a partner at the time such credit was given.

Amendment Act

c. 97, s. 4.

The Mercantile Law Amendment Act, 19 Mercantile Law and 20 Vict., c. 97, s. 4, enacts, that "No 19 and 20 Vict., promise to answer for the debt, default, or miscarriage of another made to a firm consisting of two or more persons, or to a single person trading under the name of a firm shall be binding on the person making such promise in respect of anything done, or omitted to be done, after a change shall have taken place in any one or more of the

Position as to sureties.

Surety, how discharged.

persons constituting the firm, or in the person trading under the name of the firm, unless the intention of the parties that such promise shall continue to be binding notwithstanding such change shall appear either by express stipulation or by necessary implication from the nature of the case or otherwise." This clause does not appear to have laid down any new principle of law, but simply to have consolidated the various decisions of the courts in cases where the position of a surety had been adjudicated upon. For it is a fundamental principle of the law of suretyship, that any alteration in the position of the surety that takes place without his consent discharges him from his liability. Where a person becomes surety to a firm, it is a matter of importance to know whether he intended his liability to remain in case of a change in the firm, either brought about by the retirement of a partner, or by the introduction of a new partner. In either of these cases, in the absence of agreement to the contrary, such surety will be considered as discharged from his liability. (Strange v. Lee, 3 East, 484. Myers v. Edge, 7 T. R., 254.)

CHAPTER IV.

PARTNERSHIPS.-Continued.

THE POWERS AND RESPONSIBILITIES OF PARTNErs.

partners.

All partners are liable jointly for the debts Joint liability of and liabilities of the firm contracted in the ordinary course of business during the time that they are members of the firm.

estate of

ner.

After the death of a partner, his estate is Liability of the liable severally for such debts and liabilities deceased partas, being incurred in his life-time, remain unpaid at his death. The rule in such a Law of principal case, is that each partner is a principal, and applied to

each is the agent for the other; each principal is, therefore, liable for the acts of his agent, so long as they are done in the ordinary course of business. The law of principal and agent would, in this case, therefore apply to partnerships.

and agent as

partnerships.

It was formerly considered that each part- Joint and several liability ner was jointly and severally liable for the of partners. debts of the firm; but that theory has been somewhat modified by the judgment of the House of Lords in the case of Kendall v. Hamilton, 4 App., C. 504, when it was decided

Retiring partner,

that partnership debts are joint only, but that the estate of a deceased partner is severally liable. The facts in the above case were as follows:-A and B were a firm carrying on business, and in the course of their business borrowed money from C for the purpose of speculating in iron. C nof being able to get back his loan, sued the firm and obtained judgment, but the judgment was not satisfied. C afterwards discovered that D was a partner with A and B at the time that the loan was contracted for the purpose of the speculation, C therefore brought an action againt D. It was there held that the action against D was not maintainable, and that there was no authority for the doctrine that partnership debts were joint and several; that C having obtained judgment against A and B, could get no further relief from the court.

A partner who retires from a firm does not thereby cease to be liable for the debts and engagements of the firm contracted or entered into before his retirement; neither does the estate of a deceased partner cease to be liable after his death for the debts previously contracted. A retiring partner,

how discharged. however, may be discharged by his copartners from all liability in respect of such debts by an agreement to that effect.

A partner who joins a firm is not liable

liable for old debts.

for the debts contracted before he became a New partner not member, but may become so by an agreement between the members of the new firm and the creditors. (Swire v. Redman, I Q. B. D. 536; Billborough v. Holmes, 5 Ch., Div. 255). Such agreement may be implied from the ordinary course of business between the new firm and the creditors.

ner to bind the

an agent for the

Every partner has power to bind his co- Power of partpartner by his engagements so long as such firm. engagements are entered into in the ordinary course of partnership business. This rule. does not, of course, apply to cases in which he has no authority to bind the firm in any particular matter. A partnership is founded upon the mutual trust and confidence of the members; and, for carrying on the business Each partner is of the firm, each partner is the duly others. authorized agent of the other, (Baird's case, 5 Ch., 733). Story on agency, section 124, What partner in discussing this, says, "Each partner may (if the partnership be of the ordinary commercial character) pledge or sell the partnership property, he may buy goods, borrow money, and contract debts on account of the partnership, and consequently pay them when due; he may draw, sign, make, endorse, transfer, negotiate, and procure to be discounted, promissory notes, bills of exchange, cheques, and other negotiable paper, in the name and on account of the partnership."

can do.