a

1833,

Ex parte

ROBINSON.

of HOUGHTON and another.

property in the assignees, as at the date of the act of bankruptcy. It was a question, therefore, not as to the liability of the firm on the indorsement of the two partners, but as to the right of the holder of the bill, which In the matter was assumed to be passed by that indorsement right, not against the firm, but a right to the bill pretended to be passed by that indorsement. Now it is in nowise inconsistent with this position, or the reasoning on which it rests, to hold that the bankrupt, still more the solvent partner, might bind the firm to an innocent holder, either by passing its own acceptance, or indorsing another person's in favour of that holder.

Then let us consider the cases which bear most immediately on the point in question, and which have never been controverted. In Fox v. Hanbury, Cowp. 450. Lord Mansfield held, not only that if partners dissolve a partnership they who deal with either without notice of such dissolution have a right against both, of which indeed there could be no doubt, but further, that after dissolution by bankruptcy the party out of possession of the partnership effects has the same lien on any new goods brought in which he had on the old; and he held, and the Court decided, after full consideration, that the bona fide vendee of partnership property by the solvent partner, after an act of bankruptcy committed by another partner, can hold that property against the assignees under a joint commission issued against both. To maintain the doctrine on which my opinion in the present case is founded there is no occasion to go so far, because the question here only relates to the liability of the partnership from the contract of the solvent partner, and not to the title given by him in the partnership property. But that the decision of the present case is involved in that determination of Fox and Hanbury, as the lesser is inVOL. I.

D

1833.

Ex parte ROBINSON.

In the matter

of HOUGHTON

and another.

volved in the greater, and that the judgment in review cannot stand along with that, can admit of no doubt. But the later case of Lacy v. Woolcott, 2 D. & R. 460, appears to have been before the Court below, and was cited by one of the learned Judges there when the case first came on, but respecting which I find no mention either in the judgment or in the report, except a statement by the counsel endeavouring to distinguish that case from the case at bar, and which case seems to have been treated as if it were of no authority, though it was a case most deliberately and solemnly adjudged, and decided without the least hesitation by the Court of King's Bench. The late case of Lacy v. Woolcott, 2 D. & R. 460, was in truth a decision of the very question in this present case, the only difference being, that there the bankrupt and here the solvent partner gave an acceptance, and that there it was given for a debt of the bankrupt wholly unconnected with the partnership dealings, and here it was given for a partnership debt; differences which, as far as they go, most clearly render that a stronger case than this against the title of the holder. It is observable that the Court of King's Bench in Lacy v. Woolcott had the matter before it on a special case. The point had been raised at the time, and the matter put into this shape for the sake of a more solemn determination, and the Court had no doubt or hesitation on the subject, stopping the counsel who were to have argued on the other side. Thompson v. Freere, 10 East, 418, was cited as well as Ramsbottom v. Lewis, 1 Camp. 278; and the answer given by the Court so lately in that case proceeded exactly on the distinction which I have here stated; and it will be observed that their decision has never been questioned, but as I understand has been acted upon at Nisi Prius, and is certainly

2

referred to as a recognised authority in a later case in the Common Pleas, I mean Craven v. Edmondson, 6 Bing. 737. So that the distinction which I have taken reconciles the authority of the Nisi Prius case of Ramsbottom v. Lewis, 1 Camp. 279, and Abel v. Sutton, 3 Esp. 108; for in each of these the question was touching the effect of the solvent partner's act in transferring the partnership property, that is, the interest of the firm in bills of exchange, after the bankruptcy of one partner. Next to Lacy v. Woolcott, 2 D. & R. 460, Harvey v. Crickett, 5 Maule & S. 342, is the most important case in every respect on the present question; for although the point which arises here was not expressly decided there, yet the principle of that case plainly governs this, and indeed goes beyond the question on which the present judgment rests; and the doctrine stated by the learned Judges, who gave the subject much consideration, is altogether applicable to the question before us. The difference, and the only one, is this: here the solvent partner assumes to bind the firm by an acceptance in the partnership name given to a creditor of the firm; there the solvent partner indorsed in his own name, to a partnership creditor, a bill drawn by a debtor to the firm, and made payable to the solvent partner; but the bill was drawn after the bankruptcy of the other partner, and was for a debt due to the partnership, and it was made payable to the solvent partner purposely, and upon the supposition that upon the failure of the other every thing devolved to the one that remained. The case was therefore treated as one of a solvent partner disposing of partnership property, not assuming to bind the firm; but I see no distinction in principle between the two cases, where the solvent partner only assumes to bind the firm for value for a debt before existing, and gives a negotiable security for

1833.

Ex parte ROBINSON.

In the matter

of HOUGHTON

an antecedent liability of the firm contracted before the act of bankruptcy. The observations of Bayley, J., that if the power of the solvent partner ceased on the bankruptcy of another the house must close at once, and that the rights of the bankrupt passing to his assignee and another. does not prevent the remaining partner from applying partnership property in satisfaction of partnership debts; and the observations of Best, J., that, if it did, the solvent partner might be ruined in the midst of plenty, are clearly applicable to the present question. Those observations, going beyond what it is necessary to go, are not quite reconcileable with some of the other cases; but on the decision of the case itself it cannot be doubted that the Court held the acts of the solvent partner binding on the firm, for he was permitted to transfer by indorsement the chose in action and partnership credit, and to bind, not merely his own undivided moiety, but also the moiety belonging to the bankrupt partner, that is, belonging to that partner's assignees. Had he indorsed the name of the firm, and had the bill not been paid by the drawer and acceptor, could the same Court which decided in favour of his right to transfer the security have denied that the holder of the bill had a right to go against the firm? Yet that would have been precisely this case. Then what is the difference between holding that a solvent partner can pay a partnership debt by transferring the credit of the firm, and holding that he can pay the same debt by giving a security which entitles the creditor or his transferee to go against that property, and it may be the credits of the firm? It must however be observed, that if, as is generally supposed, and as the argument of the learned Judges, particularly of Bayley, J., entitles us to believe, Harvey v. Crickett, 5 M. & Sel. 342, went the length I have been assuming, it goes a great deal further

than is necessary to support the view I take of the present question; for although the solvent partner had only the power of binding his own share of the partnership property, yet he might still, on the principle of that case, and on the general ground already stated, have the power of binding the firm by acceptances, for partnership liabilities given to a holder without notice of the bankruptcy. Harvey v. Crickett, in the full extent to which it goes, is not perhaps quite reconcileable with some earlier cases, particularly those at Nisi Prius to which I have referred, Abel v. Sutton, and Ramsbottom v. Lewis, but its principles have not been since shaken; and I do not see how, on these principles, the decision in Lacy v. Woolcott could stand, if the judgment of the Court of Review in this case be right.

On the whole, whether I regard the general principles which regulate partnership, or those of the bankrupt law, or the authority of the decided cases when narrowly examined, I have no more doubt how the law on this question stands than I should have, upon principle of the highest expediency, how the law ought to be, if we were now at liberty to enter upon such an enquiry. The decision is, that the petitioner has a right to prove; and the Court of Review ought not to have expunged his proof.

This only determines that the solvent partner can bind the firm by his acceptance passing to a holder ignorant of his co-partner's bankruptcy, and has no bearing on the power of that bankrupt to transfer the partnership property. The Court is not called on to deal with that question, in deciding that a bond fide holder, ignorant of the bankruptcy, has a right to prove against the estate of the bankrupts.

As this is a question of very great importance, and as there is some conflict even in the language of some of the