Johns. 60; Jackson v. Marsh, 6 Cow. 281; Hathaway v. Power, 6 Hill, 453.

The further objection is also made by the defendant that the plaintiff, as administrator of the will annexed of Kennelly, deceased, cannot give good title to the real estate contracted to be sold by the executors of Kennelly. The terms of the will authorized the executors to sell and convey the real estate of the testator at their discretion, at any time before the youngest person entitled to receive a share of the real estate under the will should attain the age of 21 years. After the executors had entered into the contract for the sale of the real estate to the defendant, but after they had tendered a deed to the defendant pursuant to the terms of the contract, one of them died. This suit was brought by the surviving executor, but he resigned in December, 1885, and the plaintiff was appointed administrator with the will annexed; and upon the death of the surviving executor, which occurred shortly after his resignation, the action was revived, and the administrator substituted as plaintiff. The deed was tendered by the executors to the plaintiff May 17, 1884. At that time the proceedings which had been had in the district court of the United States for the Southern district of New York for a resale of the real estate by the general assignee in bankruptcy had been annulled by the order of that court, and the only defects in the title then tendered to the defendant were those predicated upon the objections which have been considered. The present objection comes with ill graće from the defendant, because he should have accepted the deed tendered by the executors; and if it were true that good title cannot now be made, the consequences should fall upon the defendant, rather than upon the plaintiff, who is in no way responsible for the situation. But it seems reasonably clear that a deed from the plaintiff will give the defendant a good title. The executors had exercised the discretionary power given to them by the will conformably with the terms of the trust so far as to enter into a contract with the defendant for the sale and conveyance of the real estate. If this was a complete execution of the power of sale, their rights and duties thereafter in respect to the enforcement of the contract were those strictly of executors, and not of trustees. There can be no doubt that the defendant, notwithstanding the death of the executors, could compel a specific performance of the contract. In such a suit, however, the devisees of the testator would be necessary parties. Fry, Spec. Perf. § 190. The statute provides that administrators with the will annexed "shall have the same rights and powers, and be subject to the same duties, as if they had been named executors in such will." 2 Rev. St. p. 72, § 22. Judge DENIO said in Roome v. Philips, 27 N. Y. 363, that as an original question he should have supposed that under this statute such an administrator was competent to execute a discretionary power to sell and convey real estate conferred by the will on an executor. But the decisions of the courts of the state, including the court of last resort, are the other way; and it is held that, where the power is discretionary, the executor takes it in a capacity distinctly different from that of executor, and he is to be regarded as trustee, and not

as executor; and that the power does not pass under the statute to an administrator with the will annexed. Mott v. Ackerman, 92 N. Y. 539. If the power in trust conferred upon the executors by the will was fully exercised when they made the contract with the defendant, and thereafter their only duties in the premises were to execute a conveyance and receive the purchase money, these duties were executor's duties, not involving discretion, and can therefore be carried into effect by an administrator with the will annexed. It was held in Demarest v. Ray, 29 Barb. 563, that such a power is executed as well by an executory contract made by the trustees as by a deed of present bargain and sale. The question now presented was involved in the case of Mott v. Ackerman, but the power of sale in the will in that case was held by the court to be an imperative, and not a discretionary, one; and the court did not consider the question because the conclusion was reached that such a power could be exercised by the administrator as completely as by the executor. A decree is ordered for the complainant.

OSBORNE et al. v. BARGE et al.

(Circuit Court, N. D. Iowa, C. D. May 9, 1888.)

PARTNERSHIP

POWER OF PARTNER TO BIND THE FIRMOF STOCK-FRAUDULENT PREFERENCE.

CHATTEL MORTGAGE

A large creditor of B. & K., fearing that they were insolvent, dispatched an agent to obtain security. The partners met on Saturday, and promised to save the agent harmless, B. to give a mortgage on his individual property on Monday. An examination was made of the books, and, they clearly showing insolvency, both partners agreed to make a general assignment. Schedules were accordingly prepared, and instructions given the firm's attorney to have the papers ready for execution Monday morning. Sunday night K. went with the agent to another attorney, and was there induced to agree to execute a mortgage on the stock in trade in favor of the creditor by a promise of a position in his employ. The following morning K. refused to join in the assignment unless the creditor was first secured, and, B. not assenting to this, K. signed the mortgage in the firm's name, and delivered it to the agent. This mortgage authorized the mortgagee to take immediate possession and sell. B., who knew nothing of the mortgage until demand was made under it for possession, then executed the assignment in the firm name, and turned the property over to the assignee. Held, on bill to foreclose, that under the circumstances, according to the rule in Iowa, the mortgage was fraudulent and void.

In Equity. Bill to foreclose a chattel mortgage.

Martin & Wamback and Wright & Farrell, for complainants.

W. J. Covil and Kamrar & Boyes, for defendants.
Before BREWER and SHIRAS, JJ.

SHIRAS, J. Complainants in this cause seek the foreclosure of a chattel mortgage executed in the firm name of Barge & King, and covering substantially the stock of goods formerly owned by the firm at Webster

City, Iowa. The question before the court is as to the validity of this mortgage, and it arises under the following facts: In November, 1886, the firm of Barge & King, carrying on business at Webster City, had become insolvent, being indebted to complainants, among others, in a sum exceeding $2,000. An agent of the complainants visited Webster City for the purpose of endeavoring to get security for the debt due them. At an interview, at which both the members of the firm were present, he was assured that security would be given him on realty owned by B. F. Barge, the understanding being that by the following Monday-the interview taking place on Saturday-Barge would select the property upon which the security was to be given. During Saturday and Sunday the members of the firm made an examination of the condition of their business, and it then became apparent to them that the firm was insolvent, and the conclusion was reached that the best thing to be done was to make a general assignment for the benefit of creditors. For this purpose schedules of the firm property and debts were made out, directions given to their attorneys to prepare the deed of assignment ready for execution on Monday morning, and a discussion had as to the proper person to act as assignee, Robert Fullerton being finally agreed on for the position. On Sunday evening complainants' agent, with Mr. King, visited the office of complainants' attorneys, and remained there until about 3 o'clock Monday morning. During this time the chattel mortgage in question was drawn up, covering the stock in trade of the firm, and authorizing the mortgagees to take immediate possession of the mortgaged property, for the purpose of selling the same. The influences brought to bear upon King to induce him to give the chattel mortgage are readily discernible. He had previously been in the employ of D. M. Osborne & Co. He knew that the business of the firm was at an end. Complainants' agent himself testifies that "he said to him that it was by no means right or proper for him to engage in the practice of bad faith, after making for himself a good record in the employment of D. M. Osborne & Co., who were constantly in need of many men to carry on their business; and no one at his age, under such circumstances, could afford to lose the respect which it had taken so many years to gain." The evidence shows that King, within 30 or 60 days after the execution of the mortgage, was taken into the employ of D. M. Osborne & Co., and is still with them. The result of the pressure and influence thus brought to bear upon King was manifested on Monday morning, when King refused to sign the deed of assignment unless the claim of D. M. Osborne & Co. was first secured, regardless of the fact that, had such security then been given, it would, under the Iowa statute, have destroyed the validity of the assignment. The fact of the preparation of the chattel mortgage, the same having been signed and acknowledged by King on Monday morning, was studiously concealed from Barge; and when the latter notified complainants' agent that he would not secure that claim, but that all must share alike, then King gave the agent the chattel mortgage, which was at once filed for record. In the mean time, upon King's refusal to sign the deed of assignment, Barge executed the same in the

firm name. Complainants' agent then endeavored to take actual possession of the firm property under the mortgage, which was resisted by Barge and the assignee under the deed of assignment, and, failing in securing the control of the property, the complainants brought the present proceeding for the purpose of foreclosing the mortgage. B. F. Barge, in his own name and in the name of the firm, denies the validity of the mortgage, as does also the assignee under the deed of assignment.

Thus the question is presented whether the mortgage is valid and binding upon the firm and its property, under the circumstances developed in the testimony. That one partner may, for the purpose of procuring money to continue the business of the firm, or for the purpose of securing or paying the firm indebtedness, or for any other purpose in furtherance of the business of the partnership, sell or incumber the property of the firm in whole or in part, is not questioned, subject, however, to the qualification that, if the immediate and necessary result of the transfer will be to put an end to the firm business, then ordinarily the actual consent of the other partner is required to give validity to such transfer. Bates, Partn. § 403. The power of a partner to bind the firm arises from the fact that each partner is deemed to be an agent of the firm, and the extent of the power to bind the firm in a given case is a question of agency. Irwin v. Williar, 110 U. S. 499, 4 Sup. Ct. Rep. 160. In the absence of special limitations in the articles of partnership, each partner has the authority to do any and all acts which, from the nature of the business as generally conducted, may be deemed reasonably intended to further the partnership interests. The payment of the firm debts is usually in furtherance of the business, and hence the application of the firm property in payment or by way of security of the firm debts is within the power of the partner. It is, however, held that one partner has not the right, without the assent, express or implied, of his copartner, to make such a disposition of the firm property as that it necessarily terminates the business of the firm, and, by depriving the firm of the control and management of the property, virtually dissolves the partnership. Thus it is held that one partner has not the right to execute a general assignment of the firm property for the benefit of creditors. By the assignment the property is appropriated to the payment of the debts; and in ordinary commercial partnerships, whose business it is to buy and sell property, each partner has the right to sell property kept for sale, and to pay the firm debts; but the right to make a general assignment is denied to a single partner, because, in effect, the assignment ends the partnership, and deprives the firm of the present control of the property. Bates, Partn. § 338. In Loeb v. Pierpont, 58 Iowa, 469, 12 N. W. Rep. 544, the supreme court of Iowa holds that one partner has not the power to execute a general assignment of the firm property without the assent, express or implied, of the copartner. In the opinion it is said:

"It would appear upon principle that such power is not possessed by a partner. Under its exercise the business of the firm may be, and, under almost all circumstances, would be, destroyed, and the partnership itself practically dissolved as to future business. It is true that, theoretically, the assignment

is for the purpose of effecting the payment of firm debts, and that the law allows one partner to use the property of the firm to discharge the indebtedness; but this rule of law is applied to transactions occurring in the ordinary business of the firm, and does not authorize one partner, upon the exercise of his individual discretion, to terminate the business of the copartnership. In a matter of such great importance to each partner both ought to be consulted, and be permitted to determine whether the condition of their affairs requires them to transfer all their property, and abandon their business."

In Hunter v. Wayneck, 25 N. W. Rep. 776, the question was whether a sale of the entire partnership property, made by one partner without the assent of the copartner, could be sustained, and the supreme court of Iowa held that it could not, saying:

"That it is said there is some conflict of authority as to the power of one partner, without the knowledge or assent of his copartner, to sell or assign all the partnership property Conceding this to be so, such question must be regarded as settled in this state. It was held in Loeb v. Pierpont, 58 Iowa, 469, 12 N. W. Rep. 544, that one partner did not have such power, when his copartner resided in the same town and could have been readily consulted. * * * Practically the plaintiff was present when the sale was made, and yet he was not consulted. The appellant had knowledge of the partnership, the residence of the plaintiff, and that he was not consulted."

The evidence showed that the copartner resided about 75 miles from the place where the firm business was transacted. The court held that, as he was not consulted, the sale was void for want of authority in the one partner to make it.

From these authorities it would seem to be the rule in Iowa that the general power of a partner to sell the property of a firm kept for the purposes of sale, and to appropriate the firm property for the payment or securing of the firm debts, is nevertheless subject to the limitation that one partner cannot, without the assent, express or implied, of the copartner, even for the purpose of paying or securing the firm debts, make such a disposition of the firm property as that it, ipso facto, terminates the business of the firm, by depriving the partners of the control and management of the property, without which the partnership business cannot be conducted.

On behalf of complainants it is forcibly urged that, while the great weight of authority sustains the proposition that one partner has not the power to execute a general assignment, it is equally well settled that one partner may execute a chattel mortgage to secure a firm debt upon the entire property of the firm. Does it follow, however, that because many chattel mortgages are sustained, that all must be? Is it not the effect of the transfer, rather than its mere form, which is to be considered? In Loeb v. Pierpont the transfer in form was an assignment, and in Hunter v. Wayneck it was an absolute sale, yet both were held void for the same reason. The power to mortgage is included in the power to sell, and is derived from it, and it is difficult to see why the same limitation should not apply to both modes of transfer; that is to say, if the contract between the creditor and the one partner contemplates an immediate change in the possession and control of the partnership assets, so that, in effect,