This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
Where there is no joint purchase or joint incurring of debt, but a purchase by one to whom alone credit is given, a subsequent joint interest in the property purchased, and in the business and profits depending upon it, carries no liability for the original debt. (i) And where many persons join in an adventure, *each to contribute his share, each is liable alone for his share to the person from whom he bought it. No partnership arises until the several shares are brought together and mixed up in one common adventure. (i) But if the bargain was for a joint purchase and joint adventure, there is at once a joint liability for the original purchase, although it was made by one of the partners alone, and he alone was known to be interested, and credit was given to him alone. (A:) And the same rule is *applied, where the creditor of a foreign firm, aware of the persons composing the firm, and that the goods are to be shipped for the firm, in dealing with a resident member makes out the invoices to him individually, and draws upon him alone. (/) Because the liability of a partner springs either from his holding himself out to the world as a partner, or from his participation in the business and its profit or loss. If these two causes meet, as is usually the case, they strengthen each other; but either of them alone is, in general, sufficient to create this liability. (m) Nor is it necessary that there should be an express stipulation if in fact they share the business and the profits as partners. (mm) And there is no liability as a partner where there is neither a participation of profits, nor any such use of the defendant's name permitted by him as justifies the plaintiff in selling to others on his credit, although there may be in some other way or measure a community of interest. (n)
(ff) Wood v. Pennell, 51 Me. 52.
(g) Anderson v. Pope, 1 Camp. 404, n., and Lord Ellenborough in that case held that notice to one member of a firm, of such a stipulation, was notice to the whole partnership. It was also held in Batty v. McCundie, 3 C. & P. 202, that if one of several partners be concerned in preparing the prospectus of a projected newspaper, which prospectus states that he and others will act as treasurers and managers, and also that the subscribers are not to be partners, nor to be answerable for more than their subscription; and such partner be also aware, that a particular individual is to be sole nominal proprietor; the firm of which such a partner is a member (although he has not taken any share in the paper), cannot sue the subscribers who have taken shares, for the price of goods furnished for the paper. See also Burnes v. Pennell, 2 House of L. Cas. 497; Pratt v. Langdon, 97 Mass. 97, 100.
(h) Ridgway v. Philip, 1 C. M. & R. 415. See Gordon v. Bankard, 37 Ill 147; Barcroft v. Snodgrass, 1 Cold. 430.
36; Wheeler v. McEldowney, 60 Ill. 358; Wood v. Pennell, 51 Me. 52; Rice v. Barrett. 116 Mass. 312; Kritzer v. Sweet, 57 Mich. 617; Wright v. Boynton, 37 N. H. 9, Poillon v Secor, 61 N. Y. 456.
But not otherwise. Fox v. Clifton, 6 Bing. 776; Bishop v. Georgeson, 60 Ill. 484; Rimel v. Haves, 83 Mo. 200; Cassidy v. Hall, 97 N. Y. 139; Denithorne v. Hook, 112 Pa. 240.
1 Pott v. Eyton, 3 C. B. 32; Dickinson v. Valpy, 10 B. & C. 128; Thompson v. First Nat. Bank, 111 U. S. 529; Heffner v. Palmer, 67 Ill. 161; Wood v. Pennell, 51 Me. 52; Hahlo v. Mayer, 102 Mo. 93; Cook v. Penrhyn Slate Co. 36 Ohio St. 135; Denithorne v. Hook, 112 Pa 240.
(i) Persons are not to be held jointly liable upon a contract as partners, unless they have a joint interest existing at the time of the formation of the contract. The case of Young v. Hunter, 4 Taunt. 582, well illustrates this principle. In an action for goods sold and delivered, two of the defendants, Hunter and Rayney, suffered judgment to go by default; the other defendants, Hoffham & Co., pleaded the general issue. On trial it appeared that Hunter and Rayney had bought goods of the plaintiffs and others, which they intended to ship for the Baltic, and the defendants, Hoffham & Co. (not otherwise partners of Hunter & Co.), were afterwards allowed to join in the adventure, and to have a fifth share upon the goods being put on board. The plaintiffs knew nothing of Hoffham & Co., but sold the goods to Hunter & Co. only. The question was whether this was a case of common sleeping partners. Mansfield, C. J., directed the jury to find for defendant, with liberty for plaintiff to move for a new trial; a rule nisi was obtained on the ground that Hoffham & Co., having had the benefit of the goods, were liable to pay for them, though they were originally furnished to Hunter & Co. only. On a new trial, Mansfield, C. J., continued of the same opinion. Heath, J.: " The proposition of the plaintiff's counsel, that if it be shown that at any one period of the transaction there was a partnership subsisting, it was therefore to be inferred that there had been a partnership in the particular original purchase, is wholly unfounded." Chambre, J., was of the same opinion. Gibbs, J.: " The only possible ground for a new trial would be, if the plaintiffs could show that at the time of the purchase of the goods from the plaintiffs, Hoffham & Co. and Hunter & Rayney were concerned in that purchase in their joint account. It only appears that they were so interested at the time of shipment." Hutton v. Bulloch, L. R. 8 Q. B. 331. - This principle is further illustrated by many cases showing that where one, on his individual credit alone, borrows money for the use of the firm, the firm will not be liable merely because the money came to their use. See Siffkin v. Walker, 2 Tamp. 308; Graeff v. Hitchman, 5 Watts, 454; Emly v. Lye, 15 East, 7; Green v. Tanner, 8 Met. 411; Ripley v. Kingsbury, 1 Day, 150, (n); Evans v. Winston," 74 Ala. 349; Bank v. Sawyer, 3S Ohio St. 339; McNaughton's Appeal, 101 Pa. 550, Stebbins v. Willard, 53 Vt. 665. (j) This principle is fully established by the case of Saville v. Robertson, 4 T. R. 720. See also Gouthwaite v. Duckworth, 12 East, 421, where Saville v. Robertson is distinguished. Lord Ellen-borough, in Gouthwaite v. Duckworth, says . " The case of Saville v. Robertson does indeed approach very near to this; but the distinction is, that there each party brought his separate parcel of goods, which were afterwards to be mixed in the common adventure, on board the ship; and till that admixture the partnership in the goods did not rise. But here the goods in question were purchased in pursuance of the agreement for the adventure, of which it had been before settled that Duckworth was to have a moiety." And Mr. Justice Bayley observed, that, " In Saville v. Robertson, after the purchase of the goods made by the several adventurers, there was a still further act to be done, which was the putting them on board the ship in which they had a common concern, for the joint adventure; and until that further act was done, the goods purchased by each remained the separate property of each. But here, as soon as the goods were purchased, the interest of the three attached in them at the same instant, by virtue of the previous agreement." See also Post v. Kimberly, 9 Johns. 470, in which it was held, that there was no partnership between A and B, and C and D, in the outward cargo, except, perhaps, so far as related to the transport and selling of it; for that, although the whole cargo was shipped on board the same vessel, yet it was clear that each house purchased and put on board its aliquot part, without the concern or responsibility of the other. Brooke v. Evans, 5 Watts, 196; Sims v. Willing, 8 S. & R. 103.
(k) Thus, where three persons were engaged in a joint speculation, for the purchase and importation of corn, hut no partnership fund was raised for the speculation, and the parties met the expenses in thirds, and two only of the three had the management of the speculation, one of these two being the consignee and the other the salesman of the corn; it was nevertheless very truly said, that, if there had been a claim in that case by the seller of the corn, no doubt he would have been entitled to proceed against all the parties, and might have called on them all for payment. Smith v. Cragen, 1 Cr. &J. 500. Upon the same principles, where A and others agreed to become partners in the purchase of fifteen shares of a copper adventure, amd in pursuance of the agreement, A alone, and in his own name, contracted for the purchase of the shares, and paid a deposit, to which the others contributed; it was held that the others, as well as A, were hound by this contract, and that upon an action and verdict against A for the non-performance of it, the others were hound to contribute their proportion of the damages and costs. Browne v. Gibbins, 5 Bro. 1'. C 491. So, where A and B, publishers, ordered certain stationers to supply paper to C and D, printers, for the purpose of printing certain specified works, and, upon the bankruptcy of A and B, the stationers discovered that C and D were partners with A and B in the publication of those works, and thereupon brought an action against C and I), to recover the value of the paper, Lord Denman, C. J., told the jury that if they thought, that, at the time when the goods were furnished, the defendants were partners in the concern for whose benefit they were furnished, the jury were to find for the plaintiffs. The jury did so find, and the Court of King's Bench refused to grant a new trial. Gardiner v. Childs, 8 C. & P. 345. - See Coope v. Eyre, 1 H. Bl. 37, Barton v. Hanson, 2 Taunt. 49, Sims v. Willing, 8 S. & R. 103.
(l) Bottomly v. Nuttall, 94 Eng. C. L. 122; s. c. 5 C. B. (N. S.) 122.
(m) See Buckingham v. Burgess, 3 McLean, 364; Markham v Jones, 7 B. Mon. 456; Benedict v. Davis, 2 McLean, 347; Cottrill v. Vanduzen, 22 Vt, 511.
(mm) Duryea v. Burt, 28 Cal. 569.
(n) See Osborne v. Brennan, 2 Nott & McC 447, Milburn v. Guyther, 8 Gill, 92. - And a lay or share in the proceeds of a whaling voyage, does not create a partnership in the profits of the voyage, but is in the nature of seamen's wages, and governed by the same rules. Collin v. Jenkins, 3 Story, 108.
 
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