THE LAW

OF

CONTRACTS AND PROMISES.

PART THE THIRD.

OF CONTRACTS AND PROMISES BY AND BETWEEN PARTICULAR PERSONS.

CONTENTS.
I.

OF Contracts By and Between Partners; and Who may Be Deemed a Partner and made liable to Partnership Debts and Contracts: And How Partners must Sue and be Sued.

II.

OF Contracts By and Between Master and Servant.

III.

OF Contracts By and Between Principal, Agent, Factor, and Broker: and their respective Liabilities.

IV.

OF Contracts with Agents of Government, or other Public Bodies; or with an Officer in the Army on Behalf of a Regiment, &c.

V.

OF Contracts with Carriers, Wharfingers, and Warehousemen; and their Liabilities.

VI.

OF Contracts with Husband and Wife made before and after Marriage; and of their respective Liabilities: and of Contracts made with Persons living together as Man and Wife.

VII.

OF Contracts with Infants; and of the Liability of Parent or Child for Necessaries.

PART THE THIRD.

CHAPTER I.

OF CONTRACTS BY AND BETWEEN PARTNERS; AND WHO MAY BE DEEMED A PARTNER, AND MADE LIABLE TO PARTNERSHIP DEBTS AND CONTRACTS.

A

PARTNERSHIP is a contract or agreement between two or more persons, to enter into and carry on some lawful trade or business, or other adventure, on their joint account and risk; and in which money, skill, and labour are to be employed; and the profit or loss divided between them either in just proportions, according to their respective shares and interests, or as may be agreed upon. The legislature has, in a few instances, and by particular acts of parliament, limited the number of persons who may associate themselves together in partnership, namely, in the businesses of bankers, (a) and of coal merchants. (b) So, in marine insurances, and in lending of money on bottomree, an act of parliament passed in the reign of George the first, (c) wholly prohibiting private partnerships in these concerns. No other restraint, however, is put upon joint adventures, excepting those schemes which have a mischievous tendency to delude and aggrieve the unwary public; as was the case with the infamous South Sea bubble. Indeed we find that in the early part of the reign of George the first, these schemes and devices had come to such a height, as to call for legislative interference; and accordingly, by the statute 6 Geo. I. c. 18., after reciting the mischievous consequences of such projects, it is enacted, "that such undertakings and attempts as are described in the act, and all other public undertakings and attempts tending to the common grievance of his Majesty's subjects, or great numbers of them, in their trade, commerce, or other lawful affairs, and all public subscriptions, and other matters in furtherance of such objects, and more particularly acting as a corporate body raising transferable stock, shall be illegal and void; with a proviso, that the act shall not operate to prevent the carrying on partnerships as theretofore legally done."

When a partnership is legally formed, all the members of the firm are liable to those with whom they, or any of them, may contract respecting the

(a) Vide stats. 6 Anne c. 22. s. 9. 15 Geo. 2. s. 15. s. 5.

(b) 28 Geo. 3. c. 53. s. 1.
(c) Chap. 18. s. 12.

joint concern; and consequently secret or dormant partners, when known, are equally liable to third persons; and they cannot excuse themselves by any private stipulation or agreement with each other: for we shall find it laid down as a general rule, throughout all the cases on this subject, that all who participate in the profits shall be deemed partners, and liable to those who give credit to the firm: we shall also see, that a person may be made liable to partnership debts and contracts, if he participates in the profits, though by private agreement he is not to share in the loss; and even though, as between himself and the firm, he may not, in point of fact, be a partner; for an agreement to share profits alone cannot prevent the legal consequence of also sharing losses, for the benefit of creditors. Perhaps it may be difficult to find an exact definition of a partnership; but it has been always holden, with some few exceptions, that where there is a share of profits, there shall also be a share of losses; for whoever takes a part of the capital, or of the profits of it, takes a part of that fund to which the public have given credit, and to which they look for payment. If there be no original capital, the profits of the trade are themselves a capital, to which the creditor is to have recourse. (c) There are indeed cases in which a man, who is neither a partner in fact, nor participates in profit or loss, may render himself liable as such, and be fixed with partnership contracts, by his own improper conduct, either by allowing his name to be used as one of the firm, or by representing himself to be a partner; for the public, who deal with a firm, and know nothing of the private arrangement between the parties engaged in the business, but who give credit to outward appearances, and to the conduct of those who are actively engaged and appear to be jointly concerned, and who by their interference and conduct induce others to deal with and treat them as partners, ought not afterwards, when the creditor comes to demand payment from all of them, to be turned round and told that some of the parties were not in partnership. If, indeed, the law did not make them all jointly liable as partners, it would be permitting persons to hold out to the public false colours to a very mischievous extent. (d)

When once a person is fixed as a partner, it may be taken as a general rule, that he, and those who are acting with him, are liable not only for the joint acts of all, but also the separate acts of each, so far as they regard the particular trade or concern in which they are so jointly engaged: and one partner may pledge the credit of himself and co-partners to any amount. It was therefore very truly said by Lord Kenyon, in the case of Wells v. Masterman, (e) "That when a man enters into partnership he certainly commits his dearest rights to the discretion of every one who forms a part of that partnership in which he engages." And in the (d) Vide 2 H. Bl. 246. & 1 Esp. Rep. (e) 2 Esp. Rep. 751.

(c) Vide 2 H. Bl. 246. & 2 Sir William Black. 1000.

29.