partnership in relation to other persons

power of a partner to bind the firm

-S. 7-10 PA

1. act in relation to partnership business

-S. 9 PA – NO CASE – Chop Cheong Tuck

2. act is for carrying on business in the usual way – if partner’s act is an act commonly done in the
business, the partner’s act can bind and impose liability on the firm

a. Trading partnership

Mercantile Credit v Garrod – Parkin and Garrod were in a partnership to let out garages and repaired
cars – Parkin sold a car to P (Mercantile Credit) – P tried to claim back amount paid to buy the car –
Held, P can claim, the act of selling cars is a usual act in tht business

-Chop Cheong Tuck v Chop Tack Loong – P claims money frm firm even tho 3rd D was the one who
lent money – Held, managing partner has implied authority to borrow money for partnership
purposes – may bind other partners even tho he used the money outside of partnership purposes

b. Non-trading partnership

Higgins v Beauchamp – Miles took out a loan from Higgins (bank) – bank claims loan frm Beauchamp
(D) – Held, theres an implied authority for trading business (tht sells products) to take out loans, but
not non-trading businesses (present case, cinema operator firm)

3. act is done as a partner

-S. 8 PA

-Re Briggs and Co., ex parte Wright – son forges dads (in partnership) name in a deed assignment to
pay off loans to a creditor – Held, dad liable as well cause forgery was done to save the partnership,
act was done by son, the partner

-Hock Hin Chan v Ng Kee Woo – validity of a bill of sale made by partners - partner can grant a bill of
sale for himself and on behalf of partners

power to bind in a limited liability partnership

-S. 23(1) – (2) // in PA, S.23 is about partnership property – no mentions on limited liability
partnership

tortious liability in PA 1961

-S. 12 PA – partner also liable for wrongful act or omission tht causes loss or injury to any person
who’s not a partner

-Chung Shin Kian v PP – second defendant found jointly liable for civil proceeding in a partnership w
the first defendant who committed a crime by falsely labelling clothing sold as ‘Texwood’ product
(CONFIRM)
-Hamlyn v Houston and Co 1903 1 KB 81 – D (firm) liable for H’s act to bribe a clerk to obtain
information abt other firm’s contracts – H used firm’s money and committed the act for the purpose
of the partnership

-S. 13 PA – misapplication of money or property of 3rd person

a) receipt (of money) by partner

-British Homes Assurance Corp v Patterson- P engaged one Atkinson to act as solicitor regarding
mortgage, Atkinson informed them tht D (Patterson) joined partnership, P ignored existence of the
firm when sending cheque, Atkinson misappropriated cheque, P sought to claim frm D – Held, P cant
claim frm D as they chose to deal w Atkinson as an individual at all times (also ignored existence of
partnership – sending of cheque)

b) receipt by firm

-Rhodes v Moules – P entered into mortgage – his solicitor informed him tht lenders wanted more
security – P transferred share warrants to solicitor, solicitor misappropriated share warrants – Held,
firm (D) liable for P’s loss as share warrants were received under ordinary course of business and
within authority of the partner

-S. 15 PA – improper employment of trust property for partnership purposes

-no other partner is liable for improper employment of trust by another UNLESS a) partner has
notice of (defaulting/liable) partner’s breach of trust b) money in firm’s possession and can be
recovered

-Re Bell’s Indenture – solicitor, without partner’s knowledge, dealt w trust funds in a manner which
led to breach of trust, beneficiary sought to claim frm firm – Held, solicitor (H) who misapplied trust
liable, not D – acted honestly throughout (only got implied authority to receive trust money as agent
of the firm, but no implied authority to be a consecutive trustee)

contract/torts

Joint and/or several liability

under contract law,

-a partner will be jointly liable for debts and obligations while he IS A PARTNER

-Bagel v Miller – the firm entered into a purchase agreement for various shipment of goods – one of
the partners died – Held, dead partner’s estate was only responsible to pay for goods delivered
before his death, not after (several)

-Osman v Chan Kang Swi (guarantor)- P attempts to exempt himself frm debt owed to D (D paid
firm’s debt to 3rd party as guarantor) – P liable as money borrowed by partner was for the
partnership (joint)

under tort law, S. 14 PA – every partner can either be jointly or severally liable for everything which
the firm is liable while he IS a partner under S. 12 and 13

-Chung Shin Kian v PP – the 1st defendant was sentenced for falsely creating and intending to
distribute clothing labelled under “Texwood” label – Held, the 2nd defendant’s (partner) sentencing
was quashed since S.14 PA provides for joint liability in civil proceedings not criminal proceedings
(proceeding against 1st defendant was criminal in nature)
*to choose claims tht hold partners jointly or severally liable is a matter of strategy – jointly, claim
once against all partners – Severally, first claim against A, B, second claim against A, C, D (Kendall v
Hamilton)

Holding out

-S. 16 – liable as partner if they represented by words, conduct, knowingly suffers himself to be
represented (?) tht they are a partner to the firm

-Tower Cabinet Co Ltd v Ingram – Ingram (D) and Christmas involved in household furnishings
business, D resigned as a partner, Christmas bought furniture frm P, didn’t pay, P brought action
against D as well for payment of goods – Held, even though Defendant was published as partner in
old letter note, and not London Gazette (where notice to Plaintiff would be considered sufficient as
first-time creditor) Defendant not liable for debt between Plaintiff and Christmas as he didn’t
represent himself as a partner of the firm after his resignation

-exception: continued use of a deceased partner’s name does not in itself, make the deceased
partner’s estate liable for partnership debt

-PP v Wong – accused involved in CBT case – Held, doctrine of ‘holding out’ only applies to third
parties who deals with the firm, does not apply in this case (a criminal case) where the accused
attempts to escape criminal liability by holding himself out as a partner when he is in fact a salaried
employee – firm termed accused as ‘salaried partner’, In actuality, just an employee

Liabilities

of incoming partners – S.19(1) – not liable for anything done before hes a partner

-NO CASE

of outgoing partners – S.19(2) – still liable for debts incurred before his retirement

-Court v Berlin – Plaintiff (solicitor) files action against Defendant and partners to recover costs frm a
debt recovery case – Benjamin and Brooklyn exempted liability as retired partners – Held, Benjamin
and Brooklyn were liable as no notice on their dissolution had been served to the Plaintiff

-S. 20 – guarantees in absence of agreement, can be revoked (???)

future dealings – S. 38(1) – in change of firm’s constitution, shall treat former partner as partner
unless sufficient notice is given

-Tower Cabinet Co Ltd v Ingram – Plaintiff wasn’t informed of Defendant’s resignation as it wasn’t
published in London’s Gazette (constitutes as sufficient notice for first-time creditor like Plaintiff) –
STILL, Defendant not liable as he didn’t represent himself as partner after resignation

Limited liability partnership -still a limited liability partner, UNLESS

-person dealing w LLP knows former partner ceased to be partner

-got notice
-notice has been lodged with Registrar -just cause info is made to Registrar only, //does not give you
reason to not know of the notice (???)