See “The Partnership.” Art is a partner of Alphabet Builders, a partnership in the construction business. The three partners of Alphabet Builders have agreed that the partnership may not borrow money unless all the partners approve the borrowing. In the name of the partnership, but without the consent of his partners, Art borrows money from a bank. Art tells the bank that the partnership will use the money for general purposes.

Art endorses the loan check in the name of the partnership but deposits the money in his personal account. Art uses the money to purchase commodities futures. Art loses the money on the futures and is unable to repay the loan. The bank sues Alphabet Builders and its partners. Are Alphabet Builders and its partners liable to the bank on the loan? Does Art have any liability to the other two partners?