Sir E. Sugden and Mr. Richards for the appellants :The question is, Whether, after an act of bankruptcy by one of two partners, the solvent partner can bind the firm by accepting a bill in the name of the firm for a partnership liability; and whether a bill so accepted is or is not, on the bankruptcy of both partners, proveable, in the hands of a bona fide holder, against the joint estate? In considering this, two questions arise,

First, Whether, in the ordinary case of a secret dissolution of a partnership, the power of one partner exists so as to enable him to make his co-partner liable?

Secondly, assuming that he may, Whether there is any difference when the dissolution is caused by the bankruptcy of one partner?

First, upon the question, in ordinary cases, Whether a partner can, after a secret dissolution, bind the firm? there cannot exist any doubt. One partner may bind the firm previous to notice of the dissolution. Osborne v. Harper, 5 East, 225; Goode v. Harrison, 5 B. & A. 157; Williams v. Keates, 2 Stark. 290, and various other

cases.

In Goode v. Harrison, 5 B. & A. 157, an infant had been in partnership, but upon his attaining twenty-one he did not manifest his disaffirmance of the partnership: and Abbot, C. J., says, "No doubt Bennison, whilst under twenty-one, had been a partner, and had held himself out as such to many persons, and amongst others to the plaintiff. Upon his coming of age he does nothing. He indeed ceases to act as a partner, or to purchase goods, but he gives no notice to any body that he has so ceased. Then it is insisted on his behalf, that as all he did in the character of a partner was done in his infancy, this was not necessary; and that he is not liable, unless it be affirmatively shewn that he was a

1833.

Ex parte ROBINSON. In the matter

of HOUGHTON and another.

1833.

Ex parte ROBINSON.

of

HOUGHTON

and another.

partner with Goode when he came of age. If once a person holds himself out as being a partner, till he gives

notice he has ceased to be so, those who deal with the In the matter firm upon the faith of the supposed partnership may consider him as such, and he is bound by that representation. It is not necessary, in fact or in law, that to create a legal obligation a partnership should be still continuing. The legal obligation may arise from the acts of the party. Here, during infancy, the defendant acts as partner, and when he comes of age he forbears to inform the world that he was not so." A dissolution, therefore, does not terminate the liability of a partner for the acts of his co-partners, unless notoriety of the dissolution is duly given.

Secondly, with respect to the question, when the dissolution is by bankruptcy, there is not any dif ference either upon principle or upon decision, although there may be some apparently conflicting dicta upon the subject.

Upon principle it is clear; for if the law were as is contended by the respondents, the consequence would be, as was said by Lord Ellenborough, C. J., Bayley, J., and Abbot, J., in Harvey v. Crickett, 5 M. & S. 343, "That, upon an act of bankruptcy being committed by one partner, the partnership must stop, and the solvent partner be ruined in the midst of plenty."

Upon decision a solvent partner has, after the bankruptcy of his co-partner, dominion over the partnership property. Fox v. Hanbury, Cowp. 445; Smith v. Oriel, 1 East, 368; Harvey v. Crickett, 5 Maule & S. 342; Coldwell v. Gregory, 1 Price 129, from which cases it will appear that a payment made by a solvent partner after an act of bankruptcy by his co-partner is valid.

1833.

Ex parte ROBINSON

But the question now under consideration is, not as to the dominion of the solvent partner over partnership property, but merely as to the right of a bona fide creditor to prove against the joint estate upon a joint bill In the matter of exchange given by the solvent partner for a partnership liability.

If the payment of a debt by the solvent partner is valid, a fortiori, therefore, the solvent partner may, for the same purpose, draw or accept a bill; and so it is décided by Lacy v. Woolcott, 2 D. & R. 460; Ramsbottom v. Lewis, 1 Camp. 278; Craven v. Edmondson, 4 M. & P. 627; 6 Bingham, 737, where the case of Lacy v. Woolcott is recognized by the Court as law.

It has been said, that by relation there was a severance of the partnership from the time of the act of bankruptcy, and that, after the severance, there was no joint property, and therefore no joint debt could be contracted.

[LORD CHANCELLOR :-A third party, the assignees, having been introduced.]

The fallacy of that argument is obvious, for, if so, there could be no joint estate to be administered under the commission.

Had the bankruptcy not happened, the joint property, or the separate property of each partner, might have been taken in execution under a joint judgment, and the only difference in bankruptcy is, that the right of the creditor is limited upon a joint debt, by compelling him to resort to the joint estate, which the assignees must keep distinct, to satisfy the joint debts. The joint property continues the same in the hands of the assignees as it was before the bankruptcy. That there is not any such severance will, however, appear from the cases already cited.

of

HOUGHTON and another.

1833.

Ex parte ROBINSON.

It has been said, that there is a difference between transferring property and creating a liability. It is true that, previous to the passing of the 49 Geo. 3, c. 135., s. 2, a debt contracted after an act of bankruptcy was not proveable; but by that statute the party must have and another. notice of the act of bankruptcy at the time of giving

In the matter

of HOUGHTON

credit, to affect his right; and the law is the same in cases of set-off. Hawkins v. Whitten, 10 B. & C. 217; Dickson v. Cass, 1 B. & Ado. 355.

And again, by sect. 82, all payments bona fide made by or to any bankrupt are valid, notwithstanding a prior act of bankruptcy, "provided the person so dealing with the bankrupt had not at the time of such payment notice of such act of bankruptcy.". Such is the spirit of the whole statute. (a)

Upon the whole, therefore, it is submitted, that the judgment of the Court of Review is erroneous, and that the appellant is entitled to prove against the joint

estate.

Mr. Swanston and Mr. Montagu for the respondents:

The argument for the appellant has not been. addressed to the specific question before the Court; and the various cases cited are wholly inapplicable to the real question. It is not, whether the solvent partner has dominion over the partnership effects after the bankruptcy of his co-partner, nor is it as to any personal liability of the parties, nor is the question, whether the appellant is entitled to prove, but against what estate he is so entitled.

(a) See sections 81, 84, 88.

As to the cases which have been cited to shew that the partners would be personally liable, or that the solvent partner is authorized to deal with the partnership property, they are inapplicable to the present case, as the only question now under consideration is, whether, after the bankruptcy by one partner, his co-partner is competent to create a new liability by a bill of exchange upon which a proof can be made against the joint estate; and it has been contended that he is. But there is not any case to warrant such a proposition. It is true that most of the decisions opposed to this proposition are the dicta of Judges at Nisi Prius; but they have been so little doubted, that it does not appear that any have been brought under the consideration of the Court in Banco.

It may be admitted that, in the case of an existing partnership, the joint estate would be liable; but in the present case there was no existing partnership; and the assignees had, by relation, become tenants in common with the solvent partner, of the partnership property; and the question is, whether he can bind himself and the assignees.

But a solvent partner cannot so bind the estate of himself and the assignees. Kilgour v. Finlayson, 1 H. B. 155; ex parte Ruffin, 6 Ves. 119; ex parte Wait, 1 J. & W. 605; Dutton v. Morrison, 17 Ves. 197, in which case Lord Eldon says, "It is not the property of A. and B., but the joint property of A. and the assignees of B.

In Kilgour v. Finlayson, 1 H. B. 155, it was decided. that a joint liability cannot be created if there is no joint interest in property upon which liability can attach.

In Abel v. Sutton, 3 Esp. 108, it was decided by Lord Kenyon, that, after the dissolution of a partnership, one of the persons who composed the firm cannot put the

1833.

Ex parte ROBINSON. In the matter of HOUGHTON and another.