forbid the sale. But it is sufficient to say in regard to all matters of illegality in transactions with third persons, that partners are bound by the same law as individuals not partners. And the act of one partner is the act of all if done with actual or implied authority. But one partner cannot be bound by the crime of another, committed without his sanction, though to promote the firm's interest, and no authority is implied to commit any wrongful act outside of the scope of or even in connection with the business, if not in furtherance of its profits and success, but wilful and malicious. Such wilful and independent acts, involving personal malice only, render no one but the actor responsible, though committed against a patron of the firm in the course of transacting firm business. It is the excess or wrong committed in the performance of a partnership transaction by a member or agent of the firm that renders the firm liable in an action of tort. As where a partner having the right to eject a drunken or disorderly person from the firm premises does so with excessive force or careless indifference to the person's safety. On the other hand, a political discussion between a partner and a patron on the firm premises leading to an assault would not involve the firm. So a malicious prosecution for an alleged theft, of partnership goods directed by one partner would give no cause of action against another partner who had no hand in it, while an attachment or capias sued out maliciously for the purpose of securing a firm debt might give cause of action against all the partners. SECTION 34. LIABILITY OF PARTNER TO FIRM FOR NEGLIGENCE, ETC. Every partner is liable to the firm for loss caused by his failure to exercise due care and diligence in his conduct of the firm business.15 And every presumption will be against those to whose negligence or misconduct the non-production of proper accounts is due. And the books should be kept in the firm's place of business where all members may inspect them.17 16 SECTION 35. COMPENSATION FOR SERVICES. In absence of contract no partner is entitled to payment for his service however much these may exceed those of the other partners. Even if unusual services are necessitated by the illness of a partner or employe compensation cannot be demanded. 18 SECTION 36. NEGLECT OF DUTY. On the other hand, mere mistakes in judgment, and mere neglect of interests where no duty devolves under agreement impose no liability, a distinction being made between the negligent performance of duties and the neglect to be a diligent and efficient partner where no duty is undertaken or imposed by contract. 19 SECTION 37. RULE OF THE MAJORITY. A person dealing with the firm may consider the consent of a majority to a contract as the consent of the firm, although he knows of the dissent of the minority of the members. In an even division a "Fordyce vs. Shriver, 115 Ill., 530; Yetzer vs. Applegate, 83 Iowa, Pierce vs. Scott, 37 Ark., 308; 18 Heath vs. Waters, 40 Mich., 457; Scudder vs. Ames, 89 Nev., 496. 19 Lyles vs. Styles, 2 Wash. (Ú. S.), 224; Exchange Bank vs. Gardner, 104 Iowa, 176; Brownell vs. Stiere, 128 Ill., 209; Einstein vs. Scnebly, 89 Fed. Rep., 540. proposed transaction fails of sanction. And even in the case of a majority approval the transaction must not be for the private benefit of the approving majority, otherwise the transaction is vitiated as to those who have notice of the private character of the transaction.2 20 And whenever an important transaction is to be entered upon, notice thereof should be given to the minority that opportunity may be had for objections. A general provision in the articles of copartnership that a majority shall govern in all matters does not alter the common rule that unanimous consent is necessary for a change in the nature of the business or in the terms of the association." Without provision in the articles of agreement a majority cannot expel a member, and all such powers when given are strictly construed. When there is a miscarriage or failure in the objects of the partnership, a bill for accounting and dissolution is the proper remedy; a notice to patrons and to the public of withdrawal and dissolution of the firm, or the formation of a new partnership, might subject the disrupting members to a suit for breach of contract on the part of dissenting members, even if complications in the disposition of property or in the accounting did not arise.22 SECTION 38. INCOMING PARTNERS AND DEBTS. An incoming partner is not liable for debts of the firm contracted before he became a partner as the Peacock vs. Cummings, 46 Pa. St., 434; Johnston vs. Dutton, 27 Ala., 253; Western Stage Co. vs. Walker, 2 Iowa, 513; 65 Am. Dec., 789; Staples VB. Sprague, 75 Me., 458; Gray vs. Portland Bank, 3 Am. Dec., 156; notice to minority, Western Stage Co. vs. Walker, supra. "Zabriskie vs. Hackensack R. R. Co., 90 Am. Dec., 617; Livingston vs. Lynch, 4 Johns, Ch. 573. "Blisset vs. Daniel, 10 Hare, 493. members were not his agents in contracting them.23 This does not apply to a continuing contract relating to property furnished to the firm after the admission of the new member, or to the payment for use of property continuing in use after such admission. That is, the new member is bound on obligations of the old firm for the receipt or use of property by the new firm.24 When the business is continued after one or more members retire from the firm, it is customary for those who continue the firm business to assume the debts of the old firm as a part of the consideration of the contract of dissolution, and in such case, if the creditors assent to the arrangement, it becomes binding upon them also; but mere notice of the arrangement is not sufficient, the creditors must consent to look to the new firm for payment. SECTION 40. PARTIES DEFENDANT TO A SUIT. Dormant and secret partners are proper but not necessary parties defendant to a suit against the firm; but if they are not made parties, even though the failure to make them so arises from ignorance of their existence, a judgment obtained against the ostensible members will forever release the others. Of course, prior to final judgment, after suit begun, a discovery will entitle the plaintiff to amend and make them parties. 76; Penn vs. Fogler, 182 Ill., 24 Jones vs. Davies, 60 Kan., 315; Allen vs, Atkinson, 26 Tex., 628. SECTION 41. EXTENSION OF TIME TO CONTINUING PARTNER. It is a common law principle that an extension of time for consideration to a principal releases the surety. And where a firm is continued on the retirement of one partner with assumption of debts and mere notice of the arrangement to creditors, the retiring partner stands somewhat in the relation of a surety to those who continue the business so far as old firm debts are concerned. The creditors may or may not join the retiring partner or partners in suit on the debt. Nevertheless, it has been held that an extension of time given by the creditors to the continuing partner does not release the retiring partners. That is, the continuing partner is still the agent of the retiring partner as to settlement of firm debts, but an agent who has entered into an engagement to be personally responsible for them in the first instance.25 SECTION 42. PARTITION OF REAL ESTATE. On the American rule that on dissolution partners, after debts and obligations of the firm are met, have a right to partition of real estate bought for the purpose of occupation and use in the firm business, see the following cases: Duden vs. Maloy, 63 Fed. Rep., 183; Moran vs. McInery, 129 Cal., 29; Molineaux vs. Reynolds, 54 N. J. Eq., 559; for English rule, see Pennypacker vs. Leary, 65 Iowa, 220. SECTION 43. LAND PURCHASED FOR SPECULATION. That real property purchased for the purpose of speculation is considered personalty, at least till death "Wood vs. Rhoads, 24 W. N. C (Pa.), 124. Vol. VIII.-5. |