« PreviousContinue »
Each partner has an implied authority to contract in the name of the firm, and to bind the other partners. A contract made by one is the contract of all. As this authority, however, is generally by implication only, this implication may be rebutted by showing, that the partners have agreed not to contract without the express consent of each; or not to be bound by the promise of the firm made by one only, either generally or in particular cases, and by further showing, that the other contracting party had notice of such mutual arrangement by the members of the firm. So, if in any instance, when one partner is about giving the partnership note or other promise, another partner dissents, and gives notice to the persons about to receive the note, &c., that he will not be liable to pay it, the contract will bind only the individual who makes it, though he uses the partnership name." It is only in business which relates to the partnership, that authority is implied for one partner to bind the others; and it is only in such business, that third persons have a right to rely on the credit of the partnership funds. If, therefore, one partner, without the special consent of the others, make a contract in the name of the firm, for his own private benefit only; or out of the course of the partnership business; it will not bind the firm, but only himself, if the other contracting party have notice of the acting partner's want of authority. Thus, if one partner borrow money for his own private use, and give the note of the firm; or give such note in payment of a precedent private debt; the holder of the note, if he had notice, cannot collect it of the firm. It is not necessary, that express notice or knowledge should be fixed on the holder of such note, or the person contracting with a single partner in analogous cases. Circumstances, from which his knowledge may be inferred, or
* 10 East, 264, Gallway v. Mathew et al.
which ought to have put him upon inquiry, are sufficient to confine his remedy to the person with whom he contracted." As a general rule, one partner cannot bind another by deed, unless he be expressly authorized by deed.” In Ball v. Dunsterville,” it was decided, however, that if one execute a deed for himself and partner, by a parol authority from the copartner, and in his presence, it is a good deed to charge both, though only one seal be affixed. In Mackay v. Bloodgood," this principle was extended to a case, where the other party had previously read and approved the bond, and consented that his copartner should execute it for both, and was in the store when it was executed, though it was not signed and sealed in his immediate presence. And in Skinner v. Dayton,” it was held, that an express parol authority is sufficient to warrant one partner to bind another by deed; and that subsequent assent or acknowledgment by parol will ratify a deed thus made. This is contrary to the English doctrine, and is not known to have been adopted by any other court in this country."
13. ExECUTORS AND ADMINISTRATORS.
Executors and administrators are a species of agents, and subject to some of the rules, respecting contracts, which have already been mentioned. They act en autre droit. As their powers are conferred by law, they are not subject to the various modifications, which result from the different extent of powers conferred by the personal act of the parties. A testator may, by his will, enlarge or contract the power, which the law would give to his personal representative, if he were silent. But all administrators, except those who act with a will annexed, have the same legal authority. Administrators with the will annexed have the same authority that is incident to the executor named in the will, or which is legally conferred on him by the testator. If a will confers no more powers on the executor, than are incident to his office by mere operation of law, he stands on the same ground with an administrator. It is a settled principle, that executors and administrators have no power to charge the estate of the deceased by any contract originating with themselves; but their contracts in the course of administration, or for the debts of the deceased, render themselves personally liable. If, therefore, they give promissory notes for debts of the deceased; or, on selling his estate, by license of the proper authority, they covenant respecting the title; though they profess to do it as executors or administrators, or in their capacity as such ; they are personally liable, and must answer therefor, without reference to assets. The assets of persons deceased are not by law liable to be affected by the contracts of his representatives as such. As before remarked, this principle is subject to modification, by the express provision of a testator in his will.'
* See Chitty on Cont. 75; Bayley on Bills, (1st Am. ed.) 42; 3 Pick. 5, Chazournes r. Edwards et al; Watson on Part. ch. iv.; Gow on Part. ch. ii., § 2, and the cases there collected; Montague on Part. ch. ii. § 2.
* 7 Durnf. & E. 207, Harrison v. Jackson; Watson on Part. 918 ; Gow on Part. 83 . See 2 Caines's Rep. 254; 3 Johns. Cas. 180; 2 Johns. Rep. 213; 2 Caines Cas. in Error, 1, Ludlow v. Simond.
* 4 D. & E. 313. * 9 Johns. 285. * 19 Johns. 513.
* See Holt's N. P. Rep. 141, Steiglitz v. Egginton; 2 Greenl. 358, Stetson r. Patten. See 3 Kent's Comm. (1st ed.) 24, note (b), where the author suggests, that the decisions in New York were not intended to enlarge the English doctrine.
A deed (that is, a bond, &c.) executed by one partner in the name of himself and partners-without authority, is good as the several deed of the party executing it; 2 B. & P. 338, Elliot v. Davis.
By the laws of Massachusetts, guardians are mere agents of their wards, as to contracts, and cannot bind, by contract,
1 See 8 Mass. Rep. 162, Sumner v. Williams; 1 D. & E. 489, by Buller, J.; Yelverton, 11, (Metcalf's ed.) note (2); 5 Moore, 282, Childs v. Monins et al.
a ward's person or estate. If, therefore, they promise or covenant, as guardians, they are personally liable." The reason of the distinction, in this particular, between common agents and guardians, executors, &c. has already been adverted to, viz., that the powers of the latter are conferred exclusively by law; and that the law is, by legal intendment, as well known by those who contract with them, as by themselves.
Contracts between guardians and wards, made soon after the guardianship ceases, have always been “viewed with a jealous eye by courts of chancery.” The interest of the ward is protected, by those courts, against the advantage taken by the guardian of his influence over one who has been under his care.”
Corporations, like individuals, have the power of making contracts, and, of course, are liable in law for the breach of them. One of the incidents of these bodies, connected with the subject of contracts, is the right to have a common seal; and the old doctrine was, that a corporation could act and speak only by its corporate seal, because it is an invisible body, and incapable of manifesting its intentions by any personal or oral discourse.
This notion does not prevail at the present time. For many purposes, a vote of a corporation, recorded in its books, is allowed to have the effect which was formerly given only to its seal. Of late, and especially in this country, where corporations are greatly multiplied, it has been repeatedly decided in the state courts, that a corporation may be bound, without either deed or vote, by implication from corporate acts; that a contract may be implied from its conduct, in the same manner, as in the case of an individual. This point was raised, in the supreme court of the United States, in the case of the United States' Bank v. Dandridge and others,' and decided in the same manner. Chief justice Marshall, however, dissented, and held that a corporation could evince its assent in no other way than by writing. A careful examination of this case will render any further reading unnecessary to a full comprehension of this part of the subject. While it was held that no corporate contract could be made, except under seal, it of course followed that a corporation could not be sued in assumpsit. This doctrine fell, when a corporate vote was allowed to bind a corporation.” There are, however, recent cases in the English reports, from which it might perhaps be inferred, that a corporation cannot bind itself except by deed, (and of course is not liable in assumpsit), unless authority is given in the act establishing the corporation, to make simple contracts.” Such contracts are authorized by the act incorporating the Bank of England, and many other corporations in Great Britain. The bank has express statute power to issue notes signed by its agent. And such is the power, either expressly conferred, or necessarily incident, in all cases of bank charters in this country.* A corporation is a mere creature of the law. It is what the incorporating act makes it; derives its powers wholly from that act; and can legally exercise them only in the manner in which it is thereby authorized. A corporation
* 6 Mass. 58, Forster v. Fuller; 5 Mass. 299, Thacher v. Dinsmore; 7 Mass.
6, by Parsons, C. J.; 1 Pick. 317.
1 12 Wheat. 64. * See 10 Mass. 397, Hayden v. Middlesex Turnpike; 7 Cranch, 297, Bank v. Patterson; 12 Johns. 227; 14 Johns. 118; 15 Johns. 44; 3 Dallas, 496; 2 Nevile & Perry, 283. * See 5 Taunt. 792, Slark v. Highgate Archway Company; 3 Barn. & Ald. 1, Broughton v. Manchester and Salford Water Works Company. * See Rex v. Bigg, 3 P. W. 419.