should not constitute a partnership between the lender and borrower. It was required, however, that such loans should be registered, and that in the event of bankruptcy of the borrower the rights of the lender should be postponed until all the creditors have been satisfied. To this there was added a clause that no agent should be deemed a partner by reason simply of his receiving in lieu of or in addition to wages for his service a portion of the profits made by his principal, or a sum varying according to the amount of such profits. This bill was rejected by the Commons on the ground that the publication of the names of the lenders on such terms might lead to a fictitious credit. In 1856 another bill was introduced to the same effect not providing for any registration, and with the addition that no person receiving by way of annuity or otherwise any portion of the profits made by any trader in his business, shall by reason only of such receipt be deemed to be a partner or be subject to any liabilities incurred by such trader. Considerable opposition was, however, offered to the progress of the bill; and upon the passing of a clause for the registration of such lenders, the framer of the bill, Mr. Lowe, withdrew it. Since then no further attempt has been made to legislate on the subject, and as the law of limited liability applies only to companies of seven or more partners, the unlimited liability in private partnership continues unaltered. BRITISH LAW. All the partners in a concern, whether active, nominal, or All partners dormant, are equally liable to third persons for all the debts and equally liable. engagements of the partnership, not only to the extent of their interest in the joint stock, but also to the whole extent of their separate property (a). partners. The unlimited responsibility of partners may, however, be Responsibility may be limited expressly limited by contract as between the parties themselves, between the and by special notice as between them and third persons (b). So where a partner gives notice to a person who has been in the habit of supplying the firm with goods that he will no longer (a) Carlen v. Drury, 1 V. & B. 157. (b) Re Athenæum Ins. Co., 7 Week. Rep. 137, 1 Johnson, 80; Hallett v. Dowdale, 21 L. J. Q. B. 98; Vice v. Fleming, 1 You. & Jer. 227; Hassell v. Or by special notice to a third party. Commencement and termination of liability. Incoming partner not liable for former acts. be answerable for such goods he cannot be charged for goods subsequently supplied (a). The liability of a partner commences with the commencement of the partnership, and ceases upon his dissolving it and giving notice of the dissolution (b). The firm is, therefore, not liable for debts contracted by any of the partners prior to the formation of the partnership, even if such debts were contracted for the purpose of founding the partnership (c). So an incoming partner is not liable for debts contracted previous to his joining the partnership, unless there be an express covenant for that purpose between the partners themselves, or a tacit or express agreement between the new partner and the Not even by creditor. The simple ratification of the former acts by the new partner would not render him liable. Therefore, where one purchased goods and another is afterwards permitted to share in the adventure, the seller could not recover against such other person the price of the goods (d). ratification of former acts. Liability contracted by receiving a benefit from former acts. Incoming partner sub If, however, the incoming partner receives a benefit from the contract, and there be sufficient evidence that he has assented to debts previously contracted by the firm, he will be liable (e). Slight circumstances would be sufficient to establish the liability of an incoming partner, where at any subsequent time he has acquired all the benefit of it (ƒ). An incoming partner joining without specifying the terms on which he becomes such partner would have the same rights same terms as and would be subject to the same liabilities as the original original ject to the partner. Dormant partner liable. partners (g). An infant partner coming of age and not disaffirming the partnership will stand in the same capacity of an incoming partner, but will in no case be liable for past contracts, unless he ratifies such contracts, or renews in writing the promise made during infancy (h). A dormant or secret partner is liable for all the contracts of a (a) Vice v. Fleming, 1 You. & Jer. 226; Lord Galway v. Mathew, 10 East, 266. (b) Battley v. Lewis, 1 M. & G. 155; (c) Greenslade v. Dower, 7 B. & C. (d) Young v. Hunter, 4 Taunt. 582. (e) Ex parte Jackson, 1 Ves. 131; Ex parte Peele, 6 Ves. 602. (f) Ex parte Peele, 6 Ves. 601. (g) Austen v. Boyd, 24 Beav. 598. (h) Goode v. Harrison, 5 B. & Ald. 150. partnership in which he was interested whenever discovered, and may be sued on the contract (a). One who holds himself out to the world as a partner will acquire all the liability of a partner, although he is not, in point of fact, a partner in the concern, and has no share or interest in the profits of the business (b). By inducing the public at large, or any particular person, to give credit to the partnership, a person becomes liable as a partner for the debts so contracted, although he should in reality not be a partner (c). It would, however, be otherwise where the person knows that the party thus appearing as a partner actually possesses no interest in the concern, and that by the contract between the parties he was not to be liable (d). And when a party is charged as a partner, on the ground of his having held himself out as such, he can only be affected by acts of holding out prior to the contract (e). A retiring partner known to be a member of the firm will continue to be liable for all the debts and contracts of the partnership to all persons who have previously dealt with the firm and who had no notice of his retirement (ƒ). Holding one self out as partner. Retiring partner liable for former acts. Liability may cease by notice. The liability of a partner for the future acts of his copartners and for the affairs of the partnership may at any time be made to cease by notice, except in case of death or bankruptcy, where no notice is required to prevent its continuation (g). But no notice is necessary to determine the liability of a No notice nedormant partner, his liability continuing only so long as he dormant was interested in the partnership, and for those contracts only partners. in which he was interested as a partner. If, however, he was known to any special creditor to have been a partner, special notice should be sent (h). cessary for A notice of retirement inserted in the Gazette is a sufficient What notice is sufficient. general notice to all who had no previous dealings with the (f) Heath v. Sansom, 4 B. & A. 172. (g) Devaynes v. Noble, 1 Meriv. 616; Webster v. Webster, 3 Swanst. 490; Brown v. Gordon, 16 Beav. 302. (h) Heath v. Sansom, 4 B. & A. 172; Parkin v. Carruthers, 3 Esp. 248; Stables v. Eley, 1 C. & P. 614; Evans 2. Drummond, 4 Esp. 89; Farrar v. Deflinne, 1 C. & K. 580. Effect of the notice. Payment by new firm discharges old firm. Rule as to payments by continuing partners. Payments by surviving partners. Special appropriation. Payment by one partner. firm; but as respects those who have had dealings an express notice, or an ordinary circular sent round to all the correspondents, would be required (a). Such notice exonerates the retiring partner from all future debts, though it does not affect past transactions (b). When by the retirement of any of the partners a new firm is called into existence, payment by the new firm will discharge the debts contracted by the old firm (c). Where any payment is made by the new firm in current account generally without any special appropriation, that payment would be applied to the earliest standing account. Where two partners were indebted to a person, and after dissolution of the partnership the continuing partner also becomes indebted on his personal account to the same person, all payments made by such continuing partner without any specific appropriation after the dissolution would be applied to the reduction of the entire account, and go to the discharge of the partnership debt (d). So where one of several partners dies, and the surviving partners continue their dealings with a particular creditor, towards whom the partnership also was indebted, if the creditor joins the transactions of the old and the new firm in one entire account, then the payments made from time to time by the surviving partners would be applied to the old debt (e). Where, however, a special appropriation has been made, or an intention to appropriate the payment to some particular debt can be shown to have existed from any circumstance, arising either out of the course of business between the parties or of the source from which the money was obtained, then the rule ceases to be applicable, and the payment would be made as specially appropriated (ƒ). The payment of a partnership debt by one of the partners with partnership funds extinguishes the liability of all the others. If, however, the partner paid the debt with his own money, with (a) Newsome v. Coles, 2 Camp. 617; Hart v. Alexander, 7 C. & P. 753; Ex parte Burton, 16 Jur. 967; Ex parte Leaf, 1 Deac. 176; Graham v. Hope, 1 Peak. 208. (b) Wood v. Braddick, 1 Taunt. 104; Ault v. Goodrich, 4 Russ. 430; Dobbin v. Foster, 1 C. & K. 323. (c) See Lindley on Partnership, p. 340. (d) Clayton's Case, 1 Meriv. 572; Smith v. Wigley, 3 Moo. & Sc. 174. (e) Simson v. Ingham, 2 B. & C. 72. (f) Stoveld v. Eade, 4 Bing. 154; Thompson v. Brown, Moo. & M. 40; Wickham v. Wickham, 2 K. & J. 478. the intention of keeping the debt alive against the firm, their liability will in that case still continue (a). Where a partner in trade who is indebted to the same person to whom the partnership is also indebted pays the amount out of the funds of the partnership, the payment is deemed to have been made on behalf of the firm, and their liability is thereby extinguished (b). A release to one partner from a partnership debt, or of a debt for which several persons are jointly and severally bound, is a release to all the others, except where the right against the other parties is expressly reserved. To discharge a partner from his liability by the substitution of another party, there must be a clear agreement on the part of the party entitled, and the creditor is never presumed to have discharged the original debtor. Therefore an agreement by the continuing partners with a retiring partner that they will take all the debts upon themselves, though valid as a contract of indemnity as between the parties, will not discharge the retiring partner from his liability to third persons (c). Even where the creditor treats the continuing partner as his What will discharge the debtor, or even accepts a new security for the old debt, unless original debt. he discharge the retiring partner, or unless the new security is of such a nature as to merge the original debt, the liability of the retiring partner will still continue (d). the new firm necessary to discharge the old. Nor would the introduction of a new partner affect the Adoption of liability of the retiring partner, or the estate of the deceased partner. Nothing but the adoption by the creditor of the new firm as his sole debtors will have the effect of a discharge of the original liability (e). Where, however, the creditor receives a security of a higher Merger in a higher nature than he had before the original debt, as where a creditor security. accepts the bond of one partner for the simple contract debt of both, then the debt is merged in the higher security (f). The right of suing partners on any contract not under seal is Right of suing (a) Watters v. Smith, 2 B. & Ad. 889; M'Intyre v. Miller, 13 M. & W. 725; Thorne v. Smith, 10 C. B. 659. (b) Thompson v. Brown, Moo. & M. 40; Thorne v. Smith, 10 C. B. 659. (c) Smith v. Jameson, 5 T. R. 601. VOL. I. (d) Heath v. Percival, 1 P. W. 682; (f) Ex parte Hernaman, 12Jur. 642 ; C |