Expulsion of partner.

Retirement

from part nership at will.

Where partnership for term is continued

over, continuance on old

sumed.

(5) Every partner may take part in the management of the

partnership business.

(6) No partner shall be entitled to remuneration for acting in the partnership business.

(7) No person may be introduced as a partner without the consent of all existing partners.

(8) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no change may be made in the nature of the partnership business without the consent of all existing partners.

(9) The partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than one), and every partner may, when he thinks fit, have access to and inspect and copy any of them.

Rules have also been prescribed by the legislature with regard to the expulsion of a partner, the retirement of a partner from a partnership at will, and with regard to the continuance of a partnership beyond the agreed term. Sects. 25, 26, and 27 of the Partnership Act provide that

No majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.

Where no fixed term has been agreed upon for the duration of the partnership, any partner may determine the partnership at any time on giving notice of his intention so to do to all the other partners.

Where the partnership has originally been constituted by deed, a notice in writing, signed by the partner giving it, shall be sufficient for this purpose.

Where a partnership entered into for a fixed term is continued after the term has expired, and without any express new agreement, the rights and duties of the partners remain the same as they were at the expiration of the term, so far as is consistent with the incidents of a partnership at will.

A continuance of the business by the partners or such of terms pre- them as habitually acted therein during the term, without any settlement or liquidation of the partnership affairs, is presumed to be a continuance of the partnership (1).

(1) 53 & 54 Vict. c. 39, ss. 25, 26,
27.
Sect. 25 affirms the existing
law. Observe as to sect. 26 that the
notice must be in writing signed by

the partner giving it, but need not be under seal. See as to continuance of partnership: Neilson v. Mossend Iron Co., 11 App. Cas. 298.

a man

It has been laid down by the House of Lords that " obtaining his locus standi, and his opportunity for making such arrangements, by the position he occupies as a partner, is bound by his obligation to his co-partners in such dealings not to separate his interest from theirs, but, if he acquires any benefit, to communicate it to them." (1)

The subject of the duty of partners to each other to render accounts, the accountability of partners for private profits, and the duty of a partner not to compete with the firm of which he is a member, are dealt with by the Partnership Act, 1890, ss. 28, 29, 30, in the following manner :

66

Partners are bound to render true accounts and full information of all things affecting the partnership to any partner or his legal representatives.

66

Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any transaction concerning the partnership, or from any use by him of the partnership property, name, or business con

nection.

66

"This section applies also to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs thereof have been completely wound up, either by any surviving partner or by the representatives of the deceased partner.

"If a partner, without the consent of the other partners, carries on any business of the same nature as and competing with that of the firm, he must account for and pay over to the firm all profits made by him in that business." (2)

(1) Cassels v. Stewart, 6 App. Cas. 61.

(2) 53 & 54 Vict. c. 39, ss. 28, 29, 30. With regard to the rights of an assignee of a share in a partnership, sect. 31 provides as follows:

(1) An assignment by any partner of his share in the partnership, either absolute or by way of mortgage or redeemable charge, does not, as against the other partners, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any accounts of the partnership transactions, or to inspect the partnership books, but entitles

the assignee only to receive the
share of profits to which the assign-
ing partner would otherwise be en-
titled, and the assignee must accept
the account of profits agreed to by
the partners.

(2) In case of a dissolution of the
partnership, whether as respects all
the partners or as respects the assign-
ing partner, the assignee is entitled
to receive the share of the partnership
assets to which the assigning partner
is entitled as between himself and
the other partners, and, for the pur-
pose of ascertaining that share, to
an account as from the date of the
dissolution.

Duty of
partners to

account,
&c., and
not to
compete
with firm.

Next may be considered the provisions of the Partnership Act with regard to

Dissolution of Partnership, and its consequences.

"Subject to any agreement between the partners, a partnerby expira ship is dissolved

Dissolution

tion or notice.

Dissolution by bankruptcy, death, or charge.

Dissolution by illegality of partnership.

66

(a) If entered into for a fixed term, by the expiration of that

term:

"(b) If entered into for a single adventure or undertaking, by
the termination of that adventure or undertaking:
"(c) If entered into for an undefined time, by any partner
giving notice to the other or others of his intention to
dissolve the partnership.

"In the last-mentioned case the partnership is dissolved as from the date mentioned in the notice as the date of dissolution, or, if no date is so mentioned, as from the date of the communication of the notice.

"Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death or bankruptcy of any partner.

"A partnership may, at the option of the other partners, be dissolved if any partner suffers his share of the partnership property to be charged under this Act for his separate debt (1). "A partnership is in every case dissolved by the happening of any event which makes it unlawful for the business of the firm to be carried on or for the members of the firm to carry it on in partnership." (2)

Let us next consider the subject of

Dissolution of Partnership by the Court.

Sect. 35 provides as follows:-" On application by a partner the Court may decree a dissolution of the partnership in any of the following cases :

Dissolution "(a) When a partner is found lunatic (3) by inquisition, or in

by the

Court.

Scotland by cognition, or is shewn to the satisfaction of the Court to be of permanently unsound mind, in either of which cases the application may be made as well on behalf of that partner by his committee or

(1) Under sect. 23, ante, p. 625,

note.

(2) 53 & 54 Vict. c. 39, ss. 32, 33,
31.
It would seem clear that under
the present law the marriage of a

female partner does not dissolve the partnership (45 & 46 Vict. c. 75), s. 1.

(3) See also Lunacy Act, 1890 (53 Vict. c. 5), s. 119, and Lindley, Supplement, p. 86.

next friend or person having title to intervene as by
any other partner:

"(b) When a partner, other than the partner suing, becomes
in any other way permanently incapable of performing
his part of the partnership contract:

"(c) When a partner, other than the partner suing, has been
guilty of such conduct as, in the opinion of the Court,
regard being had to the nature of the business, is
calculated to prejudicially affect the carrying on of
the business:

"(d) When a partner, other than the partner suing, wilfully
or persistently commits a breach of the partnership
agreement or otherwise so conducts himself in matters
relating to the partnership business that it is not
reasonably practicable for the other partner or partners
to carry on the business in partnership with him:
"(e) When the business of the partnership can only be carried
on at a loss:

"(f) Whenever in any case circumstances have arisen which,
in the opinion of the Court, render it just and equitable
that the partnership be dissolved."

The Act next deals with the rights of persons dealing with a firm after a change in its constitution, with the right of any partner to notify a dissolution, with the continuing authority of partners for the purpose of winding up the partnership and with the rights of partners as to the application of partnership property in the following manner :—

"Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm as still being members of the firm until he has notice of the change.

"The estate of a partner who dies, or who becomes bankrupt, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable for partnership debts contracted after the date of the death, bankruptcy, or retirement respectively. (1)

Rights of persons dealing with firm against apparent

members of

"On the dissolution of a partnership or retirement of a partner Right of

(1) 53 & 54 Vict. c. 39, s. 36, sub8. 2, provides that "an advertisement in the London Gazette as to a firm whose principal place of business is in England or Wales, in the Edinburgh Gazette as to a firm whose principal place of business is in

Scotland, and in the Dublin Gazette
as to a firm whose principal place of
business is in Ireland, shall be notice
as to persons who had not dealings
with the firm before the date of the
dissolution or change so advertised."

partners to notify dissolution.

Continuing authority

of partners for purposes of

winding up.

Rights of partners as to application of

partnership property.

Return of

any partner may publicly notify the same, and may require the other partner or partners to concur for that purpose in all necessary or proper acts, if any, which cannot be done without his or their concurrence. (1)

After the dissolution of a partnership the authority of each partner to bind the firm, and the other rights and obligations of the partners, continue notwithstanding the dissolution so far as may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise. (2)

66

On the dissolution of partnership every partner is entitled, as against the other partners in the firm, and all persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after such payment applied in payment of what may be due to the partners respectively after deducting what may be due from them as partners to the firm; and for that purpose any partner or his representatives may on the termination of the partnership apply to the Court to wind up the business and affairs of the firm.” (3)

A partner often pays a premium on being taken into the premium. partnership. Suppose now that the partnership is prematurely dissolved, otherwise than by the death of a partner, how is the sum of money so paid to be dealt with? (4) The law on this subject is settled by the Partnership Act, 1890, sect. 40, as follows:

Apportionment of premium where

partner

ship prematurely

dissolved.

"Where one partner has paid a premium to another on entering into a partnership for a fixed term, and the partnership is dissolved before the expiration of that term, otherwise than by the death of a partner, the Court may order the repayment of the premium, or of such part thereof as it thinks just, having regard

(1) 53 & 54 Vict. c. 39, s. 37. It has been held that the Court has jurisdiction to compel a retiring partner to sign a notice of dissolution for the Gazette in an action in which no other specified relief is claimed: Hendry v. Turner, 32 Ch. D. 355.

(2) 53 & 54 Vict. c. 39, s. 38. It is, however, provided that the firm is in no case bound by the acts of a partner who has become bankrupt, "but this proviso does not affect the liability of any person who has after the bankruptcy represented himself

or knowingly suffered himself to be represented as a partner of the bankrupt."

(3) 53 & 54 Vict. c. 39, s. 39.

() See Atwood v. Maude, L. R. 3 Ch. 369; Wilson v. Johnstone, L. R. 16 Eq. 606, 609; Edmonds v. Robinson, 29 Ch. D. 170; Lyon v. Tweddell, 17 Ch. D. 529, where it was laid down that in such cases the Court of Appeal will not interfere with the discretion of the judges of first instance, except on very special grounds.