In my opinion, the finding of the learned referee that the loans were made to the defendants is not supported by the evidence. The witness Leech, who was acting in a fiduciary capacity for Merchant and his creditors, under a general assignment, testified that the moneys which came into his hands as such assignee were “loaned” by him to these defendants. He does not pretend to give any conversation respecting the transaction, but testifies that the entire transaction was with the defendant Bork. It does not appear that he was ever requested to loan the money to the firm, nor is there any evidence on his part showing that such loans were made, saving and excepting the conclusion which he testified to in stating that he loaned these moneys to these defendants. This evidence was given under objection, and received with the statement from the referee that unless the other defendant, Voght, was connected with the transaction, the evidence of Leech in that regard should not be considered. The defendant Voght was not so connected, yet the referee must have taken into consideration this conclusion of the witness, for otherwise the evidence is clearly insufficient to support his findings that these moneys were loaned to the defendants. The witness Bork does not testify that the moneys were loaned to the defendants, but that he received from Leech in 1890 and 1891 certain sums of money, and that the moneys thus received were “used in the business” of his firm. That is the extent of the evidence of Mr. Bork concerning the transaction of these alleged loans to the defendants. He does not testify, nor is it pretended by him or by the plaintiff, that the defendant Voght knew of these transactions; nor is it shown that' the firm required the money, or requested the loan of moneys, or that the moneys received by the defendant Bork from Leech were ever used in the business of the firm, except the bare statement by Bork that they were “used” in the firm business. There is no intimation that this firm was in need of moneys, nor is there any pretense that Joseph Bork, for the firm, or the firm itself, ever borrowed moneys. The evidence discloses that the transactions were clearly between Leech and Bork, and that the loan was made to Joseph Bork individually, and not to his firm. Whenever moneys were paid over by John W. Leech to Mr. Bork, and received by him, he gave a check, signed by himself individually, to the order of J. W. Leech, as assignee, representing the amount of moneys so advanced. Mr. Leech knew that these defendants were transacting business under the firm name of Bork & Voght, and not under the name of Joseph Bork; and yet we find no evidence of surprise or question on the part of Leech that the checks representing the alleged loans to the firm were all signed by Joseph Bork, and not by the firm. The record is entirely wanting in any evidence tending to show that at the time these moneys were loaned, as claimed by Leech, he relied upon the credit of the film; but all the evidence points irresistibly to the conclusion that the moneys were loaned to Joseph Bork upon his individual credit, and this is not denied by Mr. Leech or by Mr. Bork.
*84The evidence concerning the transaction of the sale of the personal property is the same as that of the alleged loan. Mr. Leech testified that the moneys which he claims to have loaned, and the property ■which he claims to have sold, to these defendants, were alike the property which came into his hands as the assignee of Merchant; and this personal property, he testified, he “sold to the defendants,” as he had also testified he “loaned to the defendants” the moneys of the trust estate. He gives no détails of the transaction pertaining to the sale of the property, but says that the transactions Were all with Joseph Bork, and that-he has never been paid therefor. Mr. Bork testified in connection with this transaction that he received from the assignee certain sums of money; that he is not sure about whether he also received from such assignee some articles of personal property, but says: “I think I did, some. What it was, I do not recollect.” And yet the referee finds that the personal property was sold to Joseph Bork individually, and that he has paid for it; while, practically, upon the same evidence, he finds that the loan of moneys by this assignee was to the firm, and not to Joseph Bork individually. The evidence that the sale of the personal property was to the firm is as cogent and convincing as is the evidence that the moneys were loaned to the firm. Joseph Bork, under the evidence in this case, had as much authority to purchase the personal property for this firm as he had to borrow the moneys aforesaid for the firm; and John W. Leech, under the evidence in this case, might as reasonably charge the value of the personal property to the firm as to charge it with the moneys alleged to have been loaned by him to it.
There was" no actual authority given the defendant Bork to borrow these moneys. There was no implied authority, as the act done by the one partner was not shown to have been necessary for the carrying-on of the partnership business in the ordinary way; and the firm, under such circumstances, could be liable only upon authority to do the act in question, or some ratification of it, being shown to have been conferred or made by the other partner. ‘What is necessary to carry on the partnership business in the ordinary way is made the test of authority where no actual authority or ratification can be proved. This is conformable to the most recent and carefully considered decisions, but by adopting it the liability of a firm for the acts of its co-partners is not so extensive as nonlawyers sometimes imagine. The act of one partner to bind the firm must be necessary for the carrying on of its business. If all that can be said of it was that it was convenient, or that it facilitated the transaction of the business of the firm, that is not sufficient, in the absence of evidence of sanction by the other partners. Hor, it seems, will necessity itself be sufficient, if it be an extraordinary necessity. What is necessary for carrying on the business of the firm under ordinary circumstances and in the usual way is the test; and, therefore, in a case where the nature of the business was one in which there was no necessity to borrow money to carry it on under ordinary circumstances and in the ordinary manner, the court held the firm not liable for money borrowed by its agent under extraordinary circumstances, although money was absolutely requisite to save the property of the firm from ruin. Haw*85tayne v. Bourne, 7 Mees. & W. 595. And see Ex parte Chippendale, 4 De Gex, M. & G. 19. See, also, In re Cunningham, 36 Ch. Div. 532. This case (Hawtayne v. Bourne, supra) is an authority for saying that a power to do what is usual does not include a power to do what is unusual, however urgent; and although in the case referred to the money was not borrowed by a partner, but by a person who was only an agent of the firm, the decision would, it is apprehended, have been the same if it had been a partner. For notwithstanding the fact that every partner is, to a certain extent, a principal as well as an agent, the liability of its co-partners for his acts can only be established on the ground of agency. As their agent he has no discretion, except within the limits set by them to his authority; and the fact that he is himself, as one of tire firm, a principal, does not warrant him in extending those limits, save on his own responsibility.” 1 Lindl. Partn. 126, 127.
Liability on the part of appellant, Voght, for the acts of his partner, Bork, in borrowing this money, cannot be established upon the bare fact that entries of these transactions appear upon the books of account of Bork & Voght. These books, it appears, were also the books of account of Bork as an individual. His individual transactions .were large and numerous, and were all entered in these books of accounts. If the attention of Voght had been called to these entries, he would have seen that they were exchange of checks with John W. Leech; and, if further inquiry had been made, he would have been informed by Mr. Leech that the checks were made and signed by Mr. Bork individually, and were received, as testified by Mr. Leech himself, as receipts for loans. It is not claimed that the defendant Voght participated in negotiating these loans, or that he had any notification that his partner contemplated borrowing the money, nor that he ever did borrow the money. So far as the record discloses, no loans were ever negotiated or needed by this firm. While a large sum of money was yearly expended, large amounts also were constantly being received by the firm, and there is no intimation throughout all the evidence that the firm was ever in a condition where it became necessary to borrow. “No evidence was given that any other individual or firm transacting business of the same nature as that transacted by this: firm ever made a practice of borrowing money, or that it was necessary to do so in the transaction of such a business in the way in which it was carried on. The nature of the business, and the practice of those who carry it on (usage or custom of the trade), must be- the test of necessity which will justify one partner in borrowing money for the transaction of the business in which the partners are engaged.” Hogarth v. Latham, 3 Q. B. Div. 643; Taunton v. Insurance Co., 2 Hem. & M. 135. The power of borrowing money, like every other implied power of a partner, only exists where it is necessary for the transaction of the partnership business in the ordinary way. In Bank v. Bayliss, 41 Mo. 287, it was held that where one partner gave his own note for borrow'ed money, unless he borrowed it for the use of the firm, and upon the firm credit, the other members were not liable on the note, nor for the borrowed money. The money being used by the partnership only entitled the partner borrowing it to a credit for *86the amount in the account between him and his partner. In Emly v. Lye, 15 East, 7, it was held that if one partner draws a bill in his own individual name, and procures it to be discounted, the party discounting it has no claim upon the other partners, although it proved the money was used for the benefit of the firm by the partner drawing the bill. In Ricketts v. Bennett, 4 Man. G. & S. 686, it was held that one of the several co-adventurers in a mine, even if he be the general manager, has not such authority to pledge the credit of the general body for money borrowed for the purposes of the general concern, in the absence of circumstances from which an implied authority could be inferred. Hawtayne v. Bourne, supra.
In my opinion, therefore, there being no evidence of express authority in the partner Bork to borrow this money, and no evidence of the usage or custom of this firm, x>r of others engaged in a similar business to that of the defendants, to borrow money, nor evidence of the sanctioning by the partner Voght of the act of his co-partner, the contract was not that of the firm, but of the individual member of the finn, Joseph Bork, and that the defendant Voght is not liable therefor. The contention of the respondent, however, is, and her chief reliance is upon the evidence of the defendant Bork to that effect, that the money thus loaned went into the partnership business. The plaintiff cannot avail herself of this fact (if, from the evidence of Bork, it may be called a fact), for the reason, as has been shown, that the money was loaned by Leech to Bork individually, and upon the individual credit of Bork; and the fact that it went into the co-partnership business did not constitute Leech a creditor of the firm of Bork & Voght. Jaques v. Marquand, 6 Cow. 497; Emly v. Lye, 15 East, 7. The learned referee justifies his conclusion upon the principle laid down in the cases of Crocker v. Colwell, 46 N. Y. 212, and kindred cases. The cases thus relied upon were those where it was sought to charge a dormant partner; and as was said in the case of Bank v. Thomas, 47 N. Y. 19:
“It is probably true that a dormant partner may be charged upon an express contract made by the active and known partners in the name in which the co-partnership business is ordinarily done, as well as upon the implied contracts of the firm. In either case the contract is in the name by which the dormant partner is represented, and in which he has authorized business to be transacted for his benefit. A dormant partner is one who takes no part in the business, and whose connection with the business is unknown. Both secrecy and inactivity are implied by the word.”
So that, if it had been shown that the defendant Voght was not known in the partnership, and if the partnership business in which he was interested had been carried on in the name of Joseph Bork, the case would have been brought within the principle enunciated in those cases upon which the learned referee relied in making his conclusions of law in this case. But the partner Voght was not a dormant partner. He was actively engaged in the business. The firm name was Bork & Voght. The business of the firm was transacted under that name. The partnership transactions under the name of Bork & Voght were public, and were known to Leech at the time of his transactions with Joseph Bork; and he had been cognizant for years before these transactions that Bork and Voght were partners, *87and that the partnership business was being transacted publicly under that firm name.
I have heretofore referred to the fact that when this money was loaned a check representing the amount so loaned, signed by Joseph Bork individually, was given for the loan, and that there is no intimation in the evidence that Mr. Leech was surprised, or made any question as to why the name of Bork & Voght was not signed to the instrument representing a loan which he now claims was made to the firm. This omission is significant of an intent on his part to rely upon Bork individually, and not upon the co-partnership; otherwise, he would have insisted upon the firm name being signed to the checks which were given at the time of such loans, and which Leech testified were given and received by him merely as receipts for the loans thus made.
We conclude, therefore, that upon the evidence presented the learned referee erred in his conclusion that the defendant was chargeable as a co-partner with the defendant Bork for. the money alleged to have been loaned by John W. Leech; and we are also of the opinion that the loans were to Joseph Bork, an individual member of the firm, and not to the firm, and that in making such loans the lender relied upon the individual credit of Joseph Bork, and not upon the firm credit. As there must necessarily be a new trial, and as the evidence may be changed upon such new trial, we deem it unnecessary to consider the question of the liability of the defendant Voght upon the claim of plaintiff for rents alleged to have been collected for John W. Leech by these defendants, and upon which the plaintiff alleges there is a balance still unpaid.
The judgment herein should be reversed, and a new trial ordered before another referee, with costs to the appellant to abide the event of the action.