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CHAPTER III.

POWER AND AGENCY OF PARTNERS.

SECTION 20. SCOPE OF AUTHORITY.

There is a presumption in the absence of agreement shown and notice thereof brought home to those concerned that each partner is the agent of the partnership as to all contracts and transactions within the scope of the parntership business as tested by the nature of the particular business and its ordinary usages.1

Evidence of the common and usual manner of the dealing of persons engaged in the same business and in the same locality is competent.2

The law of the place where the partnership was formed and had its place of business governs, though the transaction occurred outside of the State."

And the course pursued by the firm may be indicative of the powers of its members.*

SECTION 21. RECOGNIZED POWERS.

Among these powers, the following are usual: The purchase and sale of property; the transfer of property in payment of debts; the pledge and mortgage of personal property to secure partnership creditors; the perfecting of a mechanic's lien; the drawing

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'Todd vs. Jackson, 75 Ind., 272;

Harris vs. Baltimore, 73 Md., 22;
25 Am. St. Rep., 565; Crasswell
vs. Lehman, 54 Ala., 363; Sar-
gent vs. Henderson, 79 Ga.,
268; Davis vs. Wiley, 3 Ky. L.
Rep., 315; Faler vs. Jordan,
44 Miss., 283.

Smith vs. Collins, 115 Mass., 388.

Cutler vs. Thomas, 25 Vt., 73.
Midland Nat. Bank vs. Schoen,

123 Mo., 650; Hymes vs. Weld,
91 Ga., 742.
Richardson vs. Lester, 83 Ill., 55;
Letts vs. McMaster, 83 Iowa,
499; Keck vs. Fisher, 58 Mo.,
532; Clay vs. Greenwood, 35
Neb., 736.

of checks, notes and contracts, and the signing of the firm name to the same, or, if there is no firm name, the signing of the individual partner's names to the same; the compromise and discharge of debts and the signing and sealing of a release for the same; the acknowledgment of a debt, but not after dissolution, when barred by the statute of limitations; the engagement of servants and agents; the employment of an attorney; the taking but not the giving of a lease;" in real estate business the execution of a bond for title; the insurance of property.

SECTION 22. MATTERS NOT USUALLY WITHIN PARTNER'S POWER.

Among matters not ordinarily assumed to be within the scope of the power of a partner are the following: Confessions of judgment; submission to arbitration; the making of a general assignment;' the sale of the business or its necessary equipments; the conveyance or mortgage of realty; the making of the firm partner with another person or firm; using the firm name as a gratuitous favor in accommodation or guaranty; the making of any contract or covenant under seal, if the seal is necessary or usual and not merely superfluous; the making of any illegal or usurious contract.

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SECTION 23. NEGOTIABLE PAPER.

The making and dealing in negotiable paper (except the drawing of checks or orders on partner

Ravelsky vs. Brown, 92 Ala., 522; 25 Am. St. Rep., 83.

'Hook vs. Stone, 134 Mo., 329; Claffin Co. vs. Evans, 55 Ohio St, 183.

Edwards vs. Dillon, 147 Ill., 64; 37 Am. St. Rep., 199; Gibson vs. Warden, 14 Wall, 247; May ratify; Swan vs. Stedman, 4 Metc., 548.

ship funds in payment of firm obligations) is held not to be in the ordinary scope of a non-trading firm. There is sometimes difficulty in determining what constitutes a trading or non-trading firm. There are decisions holding that partnerships carrying on the following trades or occupations were non-trading firms: The occupation of factors and brokers; printers and publishers; contractors; plumbers; farmers; the keepers of livery stables and taverns; the business of operating a mine; running a threshing machine; conducting a theater; carrying on the real estate, loan, and insurance business; running gas works; operating water-works, lumber mill, flouring mill; and the business of contracting and building.

SECTION 24. POWERS DETERMINED BY AGREEMENT.

Who the partners shall be, their interests, rights, powers, duties, and liabilities among themselves, all depend on the original partnership agreement, which cannot be changed without the consent of all the partners. And the withdrawal, bankruptcy, death, or sale of the share of one, whether voluntary or involuntary, ipso facto, dissolves the partnership, and thereupon the agency of the partners is restricted to the disposal of the firm property and the winding up of the affairs of the business, although, when specifically determined by original or contemporaneous agreement, a new firm, even with the same name, may at once take the place of the old.

But the liabilities of the firm, and the members thereof, to third parties, and their obligations and duties toward their creditors, debtors, servants, agents, and others cannot be fixed, to the detriment of these parties, by private arrangements among the partners.

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SECTION 25. NOTICE OF DISSOLUTION.

Death and Bankruptcy are notice to the world of the dissolution of a partnership; but in the case of a voluntary withdrawal of a member from a firm, it is incumbent on the firm to give notice in order that his power to use the firm name may cease, and it is incumbent on the retiring partner to give notice in order that his liabilities as a partner may cease; but actual notice, no matter by whom or how given, is sufficient. It is usual to inform the public generally by notice in paper, and former patrons by mail, as the law requires proof of actual notice to the latter.

SECTION 26. DELECTUS PERSONARUM.

A partner has the power, if not the right, to dispose of his interest in the partnership, but no power or right, except by express agreement, to compel his co-partners to accept his vendee as a new partner. This right of unanimous selection of members is called delectus personarum.

SECTION 27. DESIGNATION OF PARTNERS.

Before discussing further the powers of partners, it will be well to give the technical names by which they are known according to their position in or relation to the partnership. Members may be active or non-active, that is, taking a hand in the management of the business or not; ostensible or non-ostensible, that is, known or unknown to the public as members; and one who has no actual interest in the partnership may lend his name to the firm for the purpose of adding to its credit or standing. Such a person is called a nominal partner, and his liabilities to those without knowledge of the actual situation are the same as

those of a real partner. A dormant, that is, sleeping partner, has an interest in the partnership and its profits, but is non-active and non-ostensible; secret and dormant are distinguished from the fact that a secret partner, though not appearing to the public as a partner, takes a regular hand in the conduct of the business by counsel or otherwise; he is awake in a back room; an ostensible partner who takes no active part in the business is often called a silent partner, the word ostensible being restricted to an active as well as known partner. A managing partner is one who is held out as the general business agent of the firm, nevertheless his powers must be assumed to be restricted to the general scope of the business; a new partner taken into the firm is called an incoming partner; and one who withdraws is called the retiring partner; on the withdrawal of one or more members if the business is continued by the others as a new firm, the latter are called continuing partners. On dissolution, all and each of the partners, while without right to make new contracts, revive debts outlawed, or issue negotiable paper, have the right to complete old contracts, dispose of the property, and wind up the business; this duty, however, usually devolves by agreement on some one of the partners who is then called a liquidating partner. In case of dissolution by death of one of the partners, the others are called surviving partners, and the title to the personal property vests in them with the same duties as a liquidating partner. By agreement with all those interested in the estate the surviving partners may purchase the interest of the deceased partner, and frequently by the original articles of co-partnership, there is a provision for such purchase and for a determination

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