This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
(h) Church v. Sparrow, 5 Wend. 223; Whitaker v. Brown, 16 id. 505; Miller v. Manice, 6 Hill (N. Y.), 114. Whether the money was so borrowed and appropriated is a question for the jury. Church v. Sparrow, supra. - In Miller v. Manice, supra, Walworth, Ch., is reported to have said at p. 119: "Where a third person lends money to one of the copartners upon the check or notes of the firm, he has a right to presume it is for the use of the firm; unless there is something to create a suspicion that the money is not borrowed for the firm, and that the borrower is committing a fraud upon his copartners. And where money is thus borrowed upon the note or check of the firm, the members of the firm or those of them to whom the credit was given by the lender, are bound to show, not only that the money was not applied to their use, but also that the lender had reasons to believe it was not intended to be so applied at the time it was lent. Bond v. Gibson, 1 Camp. 185; Whitaker v. Brown, 16 Wend. 505." See further Jaques v, Marquand, 6 Cowen, 497.
But if such obligation was in fact executed in the firm's business and for its benefit, it will be regarded as a copartnership obligation, and will be payable out of the firm assets. Ex parte Stone, L. R. 8 Ch. 914; Nelson v. Neely, 63 Ind. 194; Carson v. Byers, 67 Ia. 606; Spalding v. Wilson, 80 Ky. 589, 595; Mitchell v. D'Armond, 30 La. An. 396; Gay v. Johnson, 45 N. H. 587; Berkshire Woollen Co. v. Juillard, 75 N. Y. 535: In re Waldron, 98 N. Y. 671; Clanton v. Price, 90 N. C. 96, 99; McKee v. Hamilton, 33 Ohio St. 7; Frow, Jacobs & Co's Est. 73 Pa. 459. The same result has been reached when a note was made by one partner and endorsed by the others. Ex parte First Nat. Bank, 70 Me. 369; Thayer v. Smith, 116 Mass. 363; Booth v. Farmers', etc. Bank, 74 N. Y. 228. So where the signing of a firm name as " M. & G. by G." to an instrument shows that it was intended to be the act of all the partners although but one partner, "G," is named in the instrument, George v. Tate, 102 U. S. 564; and it is equally true that where all firm checks or notes are drawn in one partner's name, a check or note so drawn binds the firm. Crocker v. Colwell, 46 N. Y. 212; McKee v. Hamilton, 33 Ohio St. 7, 12. - A letter beginning " We hereby guarantee," signed by the firm name and each of the partners, is both joint and several. Ex parte Harding, 12 Ch. D. 557. - If there is no firm style, one partner may sign his copartners' names to a note given in the course of the partnership business, and bind them. Nelson v. Neely, 63 Ind. 194; Kitner v. Whitlock, 88 Ill. 513.
certainly bound. (i) And it has been decided, upon strong reasons, that they are so held without their knowledge and consent.(j) Still if a partner borrows money on his own individual credit, and subsequently applies it to the benefit of the firm, this does not make the firm liable to the original lender. (k)
A partner cannot bind his copartners by a submission of a partnership question to a reference. (kk)1
It was decided many years ago, in one case, that a purchase by one partner bound the others; and in another case, that a sale by one partner bound the others; (l) and these rules are * the basis of a partnership liability now And the seller or the purchaser will not be affected by the fraudulent intention of the partner in the transaction, unless there has been collusion, or want of good faith, or gross negligence, on his part. (m) But the power of one partner to dispose of partnership property is confined strictly to personal effects. (n)
(i) Hutchinson v. Smith, 7 Paige, 26; Jaques v Marquaud, 6 Cowen, 497; Nicholson v. Leavitt, 4 Sandf. 309.
(j) Richardson v. French, 4 Met. 577. In this case it was determined that where an administrator, who is a member of a partnership, applies to the partnership concerns money belonging to his intestate's estate, and afterwards gives the note of the firm to a creditor of the intestate, to whom such money was due, in discharge of such creditor's claim on the estate, the firm is bound to pay the note, although the money was not in the hands of the firm when the note was given. And Hubbard, J., in giving the opinion of the court, said: " It was sufficient for that purpose if the money, to which the plaintiff had an equitable claim, had in fact been used by the firm, to authorize the giving of the note so as to bind them."
(k) Green v Tanner, 8 Met. 411; Sevan v. Lewis, 1 Sim. 376; Graeff v. Hitch-man, 5 Watts, 454; Logan v. Bond, 13 Ga. 192; Wiggins v. Hammond, 1 Mo. 121. If the note be signed A B, for A B
& Co., the firm will be liable. Staats v. Howlett, 4 Denio, 559. If a partner bor row money on his own note for the use of the firm, he may afterwards substitute the note of the firm for his own, and it will be no fraud, and the firm will be bound. Union Bank v. Eaton, 5 Humph. 499. See ante, p. *180.
(kk) Stead v. Salt, 3 Bing. 101; Backus v. Coyne, 35 Mich. 5; Martin v. Thrasher, 40 Vt. 460. Contra in Hallack v. March, 25 Ill. 48; Gay v. Waltman, 89 Penn. St. 453; see Thomas v. Atherton, 10 Ch. D. 185.
(l) Lambert's case, Godb. 244; Hyatt v Hare, Comb. 383. And see Winship v. Bank of United States, 5 Pet. 561; Wal den v. Sherburne, 15 Johns. 422; Mills v. Barber, 4 Day, 430; Dougal v. Cowles, 5 Day, 515.
(m) Bond v. Gibson, 1 Camp. 185. Assumpsit, for goods sold and delivered. It appeared that while the defendants were carrying on the trade of harness makers together, Jephson bought of the plaintiff a great number of bits to be made up into bridles, which he carried
(n) Anderson v. Tompkins, 1 Brock. 456; Shaw, C. J., in Tapley v. Butter-field, 1 Met. 519; Coles v. Coles, 15 Johns. 159. - Nor can one partner without special authority, bind the firm by a contract for the sale of real estate employed in the business of the firm. Lawrence v. Taylor, 5 Hill (N. Y ), 107.
1 Neither can one partner confess judgment to bind his copartners. Hopper v. Lucas, 86 Ind. 43; Soper v. Fry, 37 Mich. 236; Rhodes v. Amsinck, 38 Md. 345. Ellis v. Ellis, 47 X.J. L. 69; Shedd v. Bank of Brattlehoro, 32 Vt. 709; contra, Ross v. Howell, 84 Penn. St. 129. As to whether a partner, before or after dissolution, can cause the appearance of another partner to be entered to a suit against the firm, see Hall v. Lanning, 91 U. S. 160.
 
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