Contracts with Agents. to have been paid, that the sale was void for the bribe, whatever CH. IX. s. 1. may have been its effect on the surgeon's mind, and that the plaintiff could not recover on a cheque for the price which the buyer had sent, but had stopped on discovering the unsoundness. of the horses (i). (g) Setting up Jus Tertii. An agent cannot in general, dispute the title of his principal (j). And therefore, where a ship, which originally belonged to one of two partners, had been conveyed to B. for securing a debt, and B. became the sole registered owner of the ship, and afterwards, as agent for both partners, insured the ship and freight, charging them with the premiums, &c.; and, on a loss happening, received the money from the underwriters; it was held that he was accountable to the assignees of the surviving partner for the surplus after payment of his own debt, and not to the executor of the deceased partner to whom the ship originally belonged (k). But this rule is not of universal application. And, accordingly, where an action was brought by a principal against his agent, to recover the proceeds of certain goods which the latter had sold on his account: the agent was permitted to prove as a defence, that the goods in question had come to the possession of the principal by collusion with a third person, who had no title to them; and that, before he had paid over the proceeds thereof to his principal, the person really entitled to the goods had given him, the agent, notice of his claim (1). So the agent may set up the jus tertii, in answer to an action for money received to the use of his principal, wherever he is able to show that he defends the action upon the right and title, and by the authority of such third person (m). But he cannot set up the jus tertii, merely because an adverse claim has been made upon him, which might entitle him to relief under an interpleader (n). And, à fortiori, if the true owner of the goods-although aware of the circumstances under which the principal became possessed of them—makes no claim, or abandons his claim thereto, the agent will not be allowed to set up the title of such owner, in answer to an action by the principal for the proceeds of the goods (0). (h) When an Agent may Sue. A servant or agent cannot sue upon a contract entered into by him as such (p). And where A. F., a broker, who had a parcel of (i) See note (i) p. 248. (j) See Tassell v. Cooper (1850), 9 C. B. 509; White v. Bartlett (1832), 9 Bing. 378. (k) Dixon v. Hamond (1819), 2 B. & Al. 310; and see Crosskey v. Mills (1834), 1 Cr., M. & R. 298. (1) Hardman v. Wilcock, 9 Bing. 382, n. (0) Betteley v. Reed (1843), 4 Q. B. 511. When agent may set up the jus tertii. CH. IX. s. 1. with Agents. Where he has a beneficial interest; or contracts in his own name. Lien of factor for price. rum for sale, made a contract with the defendant, and gave him a sale note in the following terms:-Mr. L.,-I have this day bought in my own name, for your account, of T., 259 puncheonsof Cuba rum ;" and this note, after stating the price at which the rum was sold, and certain other particulars, was signed, “A. F., broker:" it was held that A. F. could not sue the defendant, in his own name, for the price of the rum (q). But the case is different where the agent has some beneficial interest in the completion of the contract, e.g., in respect of commission, or otherwise; or a special property or interest in the subject-matter of the contract; as in the case of a factor (r), or a carrier, or warehouseman (s); or an auctioneer (t), or other similar agent, acting for reward, and not being a mere servant (u). So, if a factor make a contract in his own name, for an undisclosed principal, he may sue in his own name thereon; because then he is, in contemplation of law, the real contracting party (x); and it makes no difference whether the agent, in such a case, acts under a commission del credere or not (y). If an agent purchase goods for a principal and by his authority, but in his, the agent's, name; and state to the vendor that there is an unnamed principal; and the agent under the same authority agrees to resell the goods; he may sue the vendor, in his own name, for the non-delivery of the goods: although the principal renounced the contract, and by a subsequent arrangement between the agent and the principal, the latter was to have no interest therein (z). Where a factor has a lien on the price of goods sold in his own name for his principal, he may insist on such price being paid to himself, even in opposition to his principal (a). v. Thompson (1802), 3 B. & P. 147, (q) Fawkes v. Lamb (1862), 31 L. J., (r) Snee v. Prescott (1743), 1 Atk. 245; Houghton v. Matthews (1803), 3 B. & P. 485, 495; 7 R. R. 815; Sadler v. Leigh (1815), 4 Camp. 195. (8) See per Lord Ellenborough, C.J., Martini v. Coles (1813), 1 M. & S. 140, 147. (t) Robinson v. Rutter (1855), 4 E. & B. 954; Williams v. Millington (1788), H. Bl. 81; 2 R. R. 724; and see Grice v. Kenrick (1870), L. R., 5 Q. B. 340. (u) See Gardiner v. Davies (1825), 2 C. & P. 49; Joseph v. Knox (1813), 3 Camp. 320. (x) Per Cur., Sims v. Bond (1833), 5 B. & Ad. 389, 393. An agent who lets land for an undisclosed principal, may sue in his own name for use and occupation; see Fisher v. Marsh (1865), 6B. & S. 411; Evans v. Evans (1835), 3 Ad. & E. 132. (y) Per Lord Alvanley, C.J., Houghton v. Matthews (1803), 3 B. & P. 485, 495; 7 R. R. 815. (z) Short v. Spackman (1831), 2 B. & Ad. 962. (a) Drinkwater v. Goodwin (1775). Cowp. 251; Hudson v. Granger (1821), 3 B. & Al. 27; Stevens v. Biller (1883, 25 Ch. D. 31, C. A.; and see Robinson v. Rutter (1855), 4 E. & B. 954, 957, where it was said that the first part of the marginal note in Coppin v. Walker (1816), 7 Taunt. 236, was not justified by the decision. A foreign factor may, primâ facie, in all cases sue in his own CH. IX. s. 1. name on contracts of sale or purchase made by him (b). Contracts with Agents. Foreign The action upon a policy of insurance, whether by simple contract or deed effected by a broker, may be brought either in the factor. name of the broker or in that of the assured (c). Policy broker. SECT. 2.-Partners. (a) of the Formation of a Partnership. The substantial parts of the law of partnership are codified by Definition of partnership. the Partnership Act, 1890, 53 & 54 Vict. c. 39 (d), and sect. 1 of that Act defines "partnership" as "the relation which subsists between persons carrying on a business in common with a view to profit." The number of the partners is restricted by sect. 4 of the Number of Companies Act, 1862, to twenty, or in Banking Partnerships, to partners. ten; and partnerships regulated by that Act or other Act of Parliament are not subject to the terms of the Partnership Act. without Frauds not A partnership may be created by deed, or by writing not under By agreement seal, or merely by word of mouth. For even as to partnerships writing. to commence more than a year from the date of the agreement, as an agreement for partnership to last for more than a year, or as to a partnership of which the business relates to land, which might seem to come within the 4th section of the Statute of Statute of Frauds, and so to require a signed writing to create them, the authorities are clear (e) that if once partnership can even by parol evidence be proved to have existed and to have been acted upon, it will be enforced; and everything done under it by the partners referred to it (f). As regards third parties no doubt partnership may be proved in a less formal way, see pp. 253 et seq., but it remains open whether to an action for damages, as for non-performance of (b) See Elbinger Actien Gesellschafft v. Claye (1873), L. R., 8 Q. B. 313, 317. (e) Sunderland Marine Insurance Company v. Kearney (1851), 16 Q. B. 925, 939. (d) By sect. 46 of the Partnership Act, 1890, the rules of equity and of common law applicable to partnerships shall continue in force except so far as they are inconsistent with this Act," which contains 50 sections. (e) See De Nicols, In re, De Nicols v. Curlier, [1900] 2 Ch. at p. 417, per Kekewich, J., referring, however, to Lindley on Partnership, 6th ed., at p. 89, (f) Forster v. Hale (1800), 3 Ves. 308, applying. CH. IX. s. 2. an existing contract of partnership under which nothing has been done, the Statute of Frauds might not be a successful defence. Contracts with Partners. Commencement of partnership. Duration of partnership. Rules for determining existence of partnership. Joint tenancy, &c., not. Sharing gross returns. An action cannot be maintained for the breach of an agreement to become a partner, without such proof of the terms of the intended partnership as will enable the Court or jury to decide on the extent and value of the plaintiff's interest thereunder (g). But it seems that specific performance of a contract for a partnership will not, as a general rule, be decreed, except, perhaps, where the Court has ordered a deed to be executed; or where there has been part performance and it is necessary to find out the status of the parties that accounts may be taken (h). The time when the partnership is commenced is usually fixed in the agreement; if no time is fixed it is presumed that the partnership is intended to commence from the date of the agreement to become partners (i), unless, of course, it is an agreement for a future partnership or subject to a condition being fulfilled (k). The time for the duration is usually fixed by the agreement, but if no time is fixed, it is a partnership at will determinable on reasonable notice; and when there is a partnership for a term of years, and the term of years has expired and it is continued at will, the rule in the absence of contract to the contrary is that it may be presumed that the new business is carried on upon the old terms as far as they are applicable to it, and only so far; i.e., with the implied condition of its being determinable at will (1). The 2nd section of the Partnership Act, 1890, lays down a series of rules for determining whether a partnership exists or not in any particular case, in the following terms, the effect of which is almost entirely negative: In determining whether a partnership does or does not exist, regard shall be had to the following rules:— (1) Joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof. (2) The sharing of gross returns does not of itself create a partnership whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived. (g) Figes v. Cutler (1822), 3 Stark. 139. (h) Scott v. Rayment (1868), L. R., 7 Eq. 112, where all the earlier authorities are cited, and see too Lindley on Partnership, 5th ed., pp. 475 et seq.; Bk. III., Ch. X., sect. 4; and Fry on Specific Performance, 3rd ed., Pt. VI., Ch. III. (i) Williams v. Jones (1826), 5 B. & C. 108; Howell v. Brodie (1839), 6 Bing. N. C. 44; as to invalid agreement, see Davis v. Jones (1856), 17 Q. B. 625. (k) Parsons on Partnership, 2nd ed., pp. 13, 14; Story on Partnership, sect. 146 et seq.; Lindley on Partnership, 5th ed., pp. 201, 412. (1) Neilson v. Mossend Iron Co. (1886), 11 App. Cas. 298; and see Daw v. Herring, [1892] 1 Ch. 284. Contracts with Partners. Receipt of profits. share of (3) The receipt by a person of a share of the profits of a business is primâ CH. IX. s. 2. facie evidence that he is a partner in the business, but the receipt of such a share or of a payment contingent on or varying with the profits of a business, does not of itself make him a partner in the business; and in particular— (a) The receipt by a person of a debt or other liquidated amount by instalments or otherwise out of the accruing profits of a business does not of itself make him a partner in the business or liable as such : (b) A contract for the remuneration of a servant or agent of a person engaged in a business by a share of the profits of the business does not of itself make the servant or agent a partner in the business or liable as such: (c) A person being the widow or child of a deceased partner and receiving (e) A person receiving by way of annuity or otherwise a portion of the Loan at interest varying with profits. (b) What Contracts by one Partner bind the Firm. As to the relation of partners to persons dealing with them, the 5th section of the Partnership Act, 1890, 53 & 54 Vict. c. 39, provides that Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority, or does not know or believe him to be a partner. by horse dealer. Thus, although two horse dealers, partners, should agree Warranty between themselves never to warrant any horse; there is no doubt that if, upon the sale of a horse, the property of the partnership, one of them should give a warranty, the other would be bound thereby (n). (m) But sect. 3, which provides that such a lender shall not receive anything in respect of his loan in case of the borrower's bankruptcy, until the claims of other creditors of the borrower have been satisfied, applies whether the con tract to lend be oral or in writing; (n) Per Abbott, C.J., Sandilands v. |