Muwatta 2144

Likewise, when a man takes money from its owner in profit-sharing, and the owner says: do not buy with it any animal or goods of such and such, naming goods, and forbids him from them, disliking that he place his money in them. The one who took the money buys the goods he was forbidden, intending to make the money answerable and to take the owner's profit. If he does that, the owner of the money has the choice: if he wishes to enter with him into the goods on the profit-sharing they agreed, he does so; if he wishes, he takes his capital as a guaranteed claim against the one who took the money and exceeded. ¹

Belongs to the Muwatta, Book of Judgments. Source: the Muwatta. Mentions Yahya ibn Yahya al-Laythi, Malik ibn Anas. Built on in the chapters on profit-sharing (qiradh).