Deckard v. Case, 5 Watts 22

Deckard v. Case

5 Watts 22 | Pa. | 1836

The opinion of the Court was delivered by

Rogers, J.

It is a general principle of the law of partnership, that the partners are bound by what is done by each other in the course of the partnership business. They are considered as virtually present at and sanctioning the contracts they singly enter into in the course of trade; and each is vested with authority to act at the same time as principal, and as the authorised agent of his co-partners. Each partner reposes confidence in the other, and by the act of entering into the partnership, constitutes him his general agent as to all the partnership business. These principles are established for the benefit of the partners themselves; for it would be a great im*24pediment to commercial dealings if, in the ordinary transactions of trade, it were necessary that the actual consent of each partner should be obtained; or that it should be required, that the transaction should be really for the benefit of the firm. When, therefore, the act of one has the appearance of being on behalf of the firm, it is considered as-the act of all. Among the powers most ordinarily exercised by partners, is the jus disponandi, or the power which each partner, individually, has of disposing of the joint stock or merchandise. But it is contended that these powers are subject to certain limitations; and on the authority of Justice Washington, in Pearpoint and Lord v. Graham Wash. C. C. R. 234, it is said to admit of serious doubt whether one partner can, without the consent of his associates, assign the whole of the partnership effects (otherwise than in the course of the trade in which the firm is engaged) in such a manner as to terminate the partnership. Justice Washington inclines to take a distinction between a voluntary act of a partner, and those cases where, by the act of God, or by the operation of the law the partnership is dissolved, as by death or bankruptcy of a partner. But why should the disposal of the whole stock in trade necessarily dissolve the partnership ? The transaction may be for the benefit of the concern, and may increase, rather than diminish the ability of the firm to continue their business. It is admitted he can sell part without the actual consent of his associates, and the policy of limiting that right is not very apparent, where the transaction is concluded in good faith; still less in a case iike the present, when the arrangement is most clearly for the benefit of the firm. For had the property been sold by the sheriff in its unfinished state, it would have been attended with the sacrifice of the interests of all the parties. Mead, aware that the property had been taken in execution, abandoned all care of it. From necessity, then, the other partner should have the power of disposal, in payment of the debts of the firm. It cannot, with any propriety, be considered as a voluntary act of disposition, but some-arrangement was required to relieve the property from the custody of the sheriff. But is the power so limited as that one partner cannot dispose of the whole of the partnership effects ? In Fox v. Harbury, Cowp. 445, lord Mansfield held, that each partner has a power singly to dispose of the whole of the partnership effects. The authority is implied from the nature of the business. Justice Brainard, in 4 jDay’s Rep. 430, expresses the opinion that one partner has the absolute power of disposing of the whole. And in Harrison v. Story et al., 5 Cranch, it is held, that one partner may, in the partnership name, assign the partnership effects and credits in trust for creditors of the firm. The case of Duherse v. Legeon, 1 Dess. C. R. 537, would seem to have been put on the ground of fraud, and certainly the transaction must be free from every taint of fraud; but when the assignment is bona fide, I cannot doubt the power of one partner to transfer the whole, as well as a part of the partnership effects. Nor do I think it can make any difference in passing the interest of the *25firm, when Hie property has been delivered, whether the instrument of transfer be under seal or not. The assignment transfers the whole right of the firm, and not merely the right of Lowe. It purports to assign the whole interest, and contains a warranty against all persons whatsoever.

There is no ground to say, that there was fraud in the contract. The fact of fraud was left by the court to the jury, and they have found that the contract was bona fide. Nor has the plaintiff in error a just cause to complain of the charge in relation to legal fraud. At the time of the agreement, the property had been severed from the possession of the debtor, and was afterwards re-transferred to the premises from which it was taken. The levy was made upon all the property of the defendant: after the levy, it was removed to an adjoining warehouse and held by the sheriff in custody for several days; and when so held, the contract was made for a valuable consideration. The shop to which the property was re-transferred was rented by the vendees; it was under their superintendence and care; they hired the,workmen, purchased the materials, and continued the direction of the concern for fourteen or fifteen months. There is nothing in all this either fraudulent in fact or forbidden by the policy of the law. Nor will the fact that the plaintiff employed Lowe as a journeyman, affect the transaction, unless his employment was a part of the consideration of the contract.

Judgment affirmed.