Power of Partners - II

Abstract

In considering the powers which a partner possessed, it was stated in our former article, that he could make a chattel mortgage to secure a debt due from his firm. It becomes necessary to state, now that we are considering the powers which he does not possess, that he can not mortgage the partnership realty. And it makes no difference that the mortgage was made to secure a pre-existing debt of the firm, contracted within the scope of the partnership business. In the case last cited it was held that, while a mortgage on lands could not be foreclosed as to the interest of any person who had not executed it, or assented to, or ratified it, yet it could be foreclosed as to the interest of the person who executed it, though in executing it he may have used the partnership name, reciting that he was a member of the firm. He could not deny that he had an interest in the firm at the date of the execution of the mortgage. It is also settled that he can not make a chattel mortgage for the purpose of securing his own private or individual debts. And if he makes such a mortgage, the other party will not take, though ignorant at the time of the facts constituting the illegality. It has also been held that one partner can not mortgage his undivided interest in a specific part of the property belonging to the firm.