Rogers vs. Batchelor. firm who became such after the testator's death; and that such creditors had no lien on the estate in the hands of the devisees uuder the will, although they might eventually participate in the profits of the trade. There was another point decided in that case, upon which we wish to be understood as expressing no opinion. Upon the whole, our opinion is, that the decree of the Circuit Court dismissing the bill ought to be affirmed with costs. This case has been inserted in consequence of the practical importance of the principle it affirms, to the creditors and executors of a deceased partner, whose assets have been embarked in trade in pursuance of the direction of his will. A slight difference in the wording of a will may produce consequences widely different as to the fund to which either may look for indemnity. ROGERS & SONS vs. BATCHELOR ET ALS., ADMINISTRATORS of ABEL A. BUCKHOLTS, DECEASED. * Rights of a Partner over partnership property. MR. JUSTICE STORY delivered the opinion of the Court. This cause comes before us on a writ of error to the District Court of the district of Mississippi. The original action was debt, brought by the plaintiffs in error (Rogers & Sons), against Abel H. Buckholts, upon the following writing obligatory,"Natchez, Mississippi, $3288,03. On the first day of April next, we promise to pay N. Rogers & Sons, or order, three thousand two hundred and eighty-eight dollars three cents, value received, with interest from date. Witness our hands and seals, this first day of January, 1824. Jno. Richards, [seal.] A. H. Buckholts, [seal.]" Upon such an instrument, by the laws of Mississippi, one of the parties may be sued alone; and accordingly, Richards was no party to the suit. Upon the plea of payment, issue was joined, and, pending the proceedings, Buckholts died, and his administrators were made parties; and upon the trial, a verdict was found for the defendants for the sum of eighteen hundred and twenty-six dollars and seventy-four cents, being the 12 Peters, 221. Rogers vs. Batchelor. balance due to them upon certain set-offs set up at the trial. A bill of exceptions was taken at the trial by the plaintiffs; and, judgment having passed for the defendants, the present writ of error has been brought to revise that judgment. By the bill of exceptions, it appears, that the defendants set up as a set-off, an account headed "Dr. Messrs. N. Rogers & Sons, in account current to first of April, 1830, with John Richards & Co. Cr.," on the debit side of which account were the two following items, which constituted the grounds of the objections, which have been made at the argument;—“ To cash, $1450 46." "To our acceptance of your draft, payable at six months, $3000." To support their case, the defendants offered the testimony of one Rowan; who testified to a conversation had in his presence, in the year 1830, between Buckholts and one of the plaintiffs, relative to their accounts; that the accounts then before them were accounts made out by Rogers & Sons, between themselves and Richards & Buckholts, and John Richards & Co., and John Richards & Lambert & Brothers in account with John Richards & Co., Richards & Buckholts, and John Richards and an account made out by Buckholts between Richards & Buckholts, and Rogers & Sons. In the conversation relative to these accounts, Buckholts asked Rogers if the several items charged in his account had not been received; and Rogers admitted that they had been. Among other items so admitted, were the above items of fourteen hundred and fifty dollars forty-six cents, and three thousand dollars. In the conversation about the item of fourteen hundred and fifty dollars forty-six cents, Rogers admitted that that sum had been received by Rogers & Sons, from Lambert and Brothers, in New York, and that it was part of the proceeds of seventy-four bales of cotton, shipped by Richards & Buckholts to Lambert & Brothers. Very little was said about the item of three thousand dollars. Something was said between Buckholts and Rogers about the right to apply moneys to the payment of John Richards's private debts, Buckholts contending, that he had no right so to do, and Rogers that he had; but which particular item of payment the witness did not understand. This was all the evidence of payment introduced by the defendants to support the above two items of fourteen hundred and fifty dollars forty-six cents, and three thousand dollars. The witness stated, that he had understood, that John Richards had once failed, before he went into Rogers vs. Batchelor. partnership with Buckholts. It was admitted by the defendants, that the item of three thousand dollars was for a bill of exchange, drawn in 1825 on Rogers & Sons by John Richards alone. The plaintiffs then introduced a letter written by John Richards to the plaintiffs, dated at Natchez, June 6th, 1825 (which is in the record), containing statements relative to the shipment of seventy-eight bales of cotton, made to Lambert & Co. and to certain payments, which, the letter says, "we have left in the hands of Messrs. Lambert, Brothers & Co., to be divided among you and them." It then enumerates eight thousand five hundred and fifty dollars, "intended to pay my own debts," and on account of Richards & Co. three thousand dollars. It then adds, that the sum of six hundred and fifty-four dollars fifty-five cents had been that day sent to New Orleans to purchase exchange on New York, to be forwarded, and go to the payment of John Richards & Co.'s debt to plaintiffs, and Messrs. Lambert, Brothers & Co. Upon this evidence, the plaintiffs requested the Court to charge the jury, that the defendants were not entitled, upon the evidence before them, to the item of fourteen hundred and fifty dollars forty-six cents, as an offset to the plaintiffs' claim; and also that the defendants were not entitled, upon the evidence before the jury, to the item of the three thousand dollars, as an offset, which charge the Court refused to give, and in our judgment, very properly refused to give, as it involved the determination of matters of fact, properly belonging to the province of the jury. The defendants then requested the Court to charge the jury as follows: "First, that if the jury believe the offset of fourteen hundred and fifty dollars was the proceeds of cotton of Richards & Buckholts, or John Richards & Co., shipped on their joint accounts, then it is a legal offset to a joint debt, and cannot be applied to an individual debt of John Richards, without proof that Buckholts was himself consulted, and agreed to it. Second, that if the jury believed that the draft of three thousand dollars was paid by Richards & Buckholts or John Richards & Co., or out of the effects of either of those firms, with the knowledge of Rogers & Sons, then in law it is a legal offset to the joint debt of the said Richards & Buckholts, or John Richards & Co., and cannot be applied to the private debt of either partner, without the consent of the other partner. Third, that the letter of John Richards, read in this case, is not evidence against Buckholts, Rogers vs. Batchelor. unless the jury believe that Buckholts knew of the letter, and sanctioned its contents." The Court gave the charge as requested, and the present bill of exceptions has brought before us for consideration the propriety of each of these instructions. The first instruction raises these questions: whether the funds of a partnership can be rightfully applied by one partner to the discharge of his own separate pre-existing debt, without the assent, express or implied, of the other partner; and whether it makes any difference, in such a case, that the separate creditor had no knowledge, at the time of the fact, of the fund being partnership property. We are of opinion in the negative on both questions. The implied authority of each partner to dispose of the partnership funds strictly and rightfully extends only to the business and transactions of the partnership itself; and any disposition of those funds by any partner beyond such purposes, is an excess of his authority as partner, and a misappropriation of those funds for which the partner is responsible to the partnership, though in the case of bona fide purchasers, without notice, for a valuable consideration, the partnership may be bound by such acts. Whatever acts, therefore, are done by any partner, in regard to partnership property or contracts, beyond the scope and objects of the partnership, must, in general, in order to bind the partnership, be derived from some further authority, express or implied, conferred upon such partner, beyond that resulting from his character as partner. Such is the general principle; and, in our judgment, it is founded in good sense and reason. One man ought not to be permitted to dispose of the property, or to bind the rights of another, unless the latter has authorized the act. In the case of a partner paying his own separate debt out of the partnership funds, it is manifest, that it is a violation of his duty and of the right of his partners, unless they have assented to it. The act is an illegal conversion of the funds; and the separate creditor can have no better title to the funds than the partner himself had. Does it make any difference, that the separate creditor had no knowledge at the time, that there was a misappropriation of the partnership funds? We think not. If he had such knowledge, undoubtedly he would be guilty of gross fraud, not only in morals, but in law. That was expressly decided in Sheriff vs. Wilks, 1 East. R. 48: and indeed seems too plain upon principle to admit of any serious doubt. But we do not think Rogers vs. Batchelor. that such knowledge is an essential ingredient in such a case. The true question is, whether the title to the property has passed from the partnership to the separate creditor. If it has not, then the partnership may reassert their claim to it in the hands of such creditor. The case of Ridley vs. Taylor, 13 East, R. 175, has been supposed to inculcate a different and more modified doctrine. But upon a close examination it will be found to have turned upon its own peculiar circumstances. Lord Ellenborough, in that case, admitted that one partner could not pledge the partnership property for his own separate debt; and if he could not do such an act of a limited nature, it is somewhat difficult to see how he could do an act of a higher nature, and sell the property. And his judgment seems to have been greatly influenced by the consideration, that the creditor in that case might fairly presume that the partner was the real owner of the partnership security; and that there was an absence of all the evidence (which existed, and might have been produced) to show that the other partner did not know and had not authorized the act. If it had appeared from any evidence that the act was unknown to, or unauthorized by the other partners, it is very far from being clear that the case could have been decided in favor of the separate creditor; for his lordship seems to have put the case upon the ground that either actual covin in the creditor should be shown, or that there should be pregnant evidence that the act was unauthorized by the other partners. The case of Green vs. Deacon, 2 Starkie's Rep. 347, before Lord Ellenborough, seems to have proceeded upon the ground that fraud or knowledge by the separate creditor was not a necessary ingredient. In the recent case Ex parte Goulding, cited in Collyer on Partnership, 283, 284, the Vice-Chancellor (Sir John Leach) seems to have adopted the broad ground upon which we are disposed to place the doctrine. Upon the appeal, his decision was confirmed by Lord Lyndhurst. Upon that occasion his Lordship said: "No principle can be more clear than that where a partner and a creditor enter into a contract on a separate account, the partner cannot pledge the partnership funds, or give the partnership acceptances in discharge of this contract, so as to bind the firm." There was no pretence in that case, of any fraud on the part of the separate creditor: and Lord Lyndhurst seems to have put his judgment upon the ground, that unless the other partner assented to the transaction |