the course of trade (a). The good-will of a mercantile establishment forms part of the partnership stock (b); and so a trade mark (c). stock. Property may remain the private pro perty of one partner. All the partners have a joint and mutual interest in all the All partners have a joint stock and effects of the partnership, including all that each interest in the partner has brought into it, and all that may have been acquired during the continuation of the partnership (d). But no partner has an exclusive right over any part of the joint effects until a balance of accounts be struck between him and his copartner (e). Property, although used and risked for common profits of the partners, may still remain the private property of one of them. The profits accruing from it may be divided, and yet not the ownership of property (f). A community of profit and loss does not necessarily carry with it a community in the capital stock; but in the absence of express contract to the contrary, such community will always be presumed (g). So an agreement between an author and a publisher, by which the publisher agreed to publish the work at his own expense and risk, and after deducting all charges and expenses, and a per-centage on the gross amount of the sale, for commission and risk of bad debts, the profits remaining to be equally divided, would not constitute a partnership in the unsold copies of the work, but only in the profits of the sale (h). Each partner has a specific lien on the partnership stock. Each partner has a specific lien on the partnership stock, not only for the amount of his share, but for all he may have advanced beyond that amount for the use of the partnership; and also for what may have been abstracted by his co-partner beyond the amount of his share (i). So the surviving partner has a lien on the share of the deceased partner for the payment of the debts of the partnership (k). Notwithstanding the joint tenancy in the partnership stock, No survivor (a) Crawshay v. Collins, 2 Russ. 339; Nerot v. Burnard, 4 Russ. 247; Bone v. Pollard, 24 Beav. 283; Forster v. Hale, 5 Ves. 308. (b) Kennedy v. Lee, 3 Meriv. 441; Shackle v. Baker, 14 Ves. 468. (c) Hine v. Lart, 10 Jur. 106. (d) West v. Skigs, 1 Ves. 242. (e) Lingen v. Simpson, 1 Sim. & Stu. 600; Fox v. Hanbury, Cowp. 445; Garbett v. Veale, 5 Q. B. 408. (f) Ex parte Hamper, 17 Ves. 404; Barton v. Hanson, 2 Taunt. 51; Wilson v. Whitehead, 10 M. & W. 503. (g) Reid v. Hollinshead, 4 B. & C. (h) Wilson v. Whitehead, 10 M. & 446. ship in mercantile partnership. Real estate is converted into personal estate. no survivorship takes place in mercantile partnerships; in case of death of one of the partners, the property vests in the representatives of the deceased partner (a). In the absence of a specific agreement to the contrary, real estates purchased with partnership funds, for partnership purposes, is converted into personal estate (b). But real estate purchased with partnership property, but not for partnership purposes, is not converted into personalty (c). Real estate brought into partnership by a partner, under an agreement ship fund not that during the partnership, and, if necessary, for partnership Real estate not purchased with partner so converted. Real estates devised to partner not partnership property. Partners joint tenants. purposes, after the expiration of the partnership should be considered as personal estate, but not purchased with partnership fund, and not required to be sold for partnership debts, or for any of the other purposes of the partnership, is not converted into personal estate as between heirs and personal representatives (d). Real estates devised to partners is not partnership property, though used for partnership purposes (e). Though partners purchase with partnership funds, the equity of redemption of mortgages devised to them, the equity of redemption follows the mortgage, and does not become partnership property. FOREIGN LAWS. France. Each partner must guarantee to his co-partner the property or the use of the funds he has invested. United States of America.-Partners are joint tenants in their stock in trade, but without the jus accrescendi or right of survivorship. On the death of one partner, his representatives become tenants in common with the survivor; and with respect to choses in action, survivorship so far exists at law, that the remedy to reduce them into possession vests exclusively in the survivor for the benefit of all the parties in interest. But no partner has an exclusive right to any part of the joint stock until a balance of accounts be struck between him and his (a) Jackson v. Jackson, 9 Ves. jun. Rep. Ch. 591. (b) Townsend v. Devaynes, 1 Mont. Partn. 97; Morris v. Kearsley, 2 Y. & Col. 139; Broom v. Broom, 3 My. & K. 443; Bissett on Partnerships, p. 56; Houghton v. Houghton, 11 Sim. 491; Thornton v. Dixon, 3 Bro. C. C. 199. (c) Randall v. Randall, 7 Sim. 271; Phillips v. Phillips, 1 My. & K. 649 ; Holroyd v. Holroyd, 28 L. J. Ch. 902. (d) Cookson v. Cookson, 8 Sim. 529. (e) Phillips v. Phillips, 1 My.& K.649. co-partners, and the amount of his interest accurately ascertained. If partnership capital be invested in land for the benefit. of the company, though it may be a joint tenancy in law, yet equity will hold it to be a tenancy in common, and as forming part of the partnership fund, and liable to all the incidents of partnership property. The decisions of the Courts are not uniform in regarding land purchased with partnership fund as property in common. They seem to have considered that partners purchasing an estate out of the joint funds, and taking one conveyance to themselves as tenants in common, would hold their undivided moieties in separate and independent titles, and that the same would go, on the insolvency of the firm, or on the death of either, to pay their respective creditors at large (a). Germany. The funds invested by the partners in the partnership become the property of the partnership. In case of doubt, the presumption is that the property, both movable and immovable, which stands in favour of one partner only, but which has been entered into the inventory of the partnership, their advance. has become the property of the partnership (). Each partner Interest due to is entitled to receive 4 per cent. interest on the money he has partners for advanced beyond his share in the profit of the concern; and he will be also charged 4 per cent. interest on the amount which he takes out of the partnership. The interest credited to a partner is added to his share in the partnership fund. A partner cannot withdraw the funds he has invested in the partnership without the consent of all the other partners. But he may, even without this consent, take the interest due to him upon his share for the year, and an amount not exceeding his share of the profit of the year (c). Spain. No partner can withdraw a greater sum than that Power to withdraw profits fixed by agreement, and if he does so, he must restore the same. limited. SECTION XI. INTEREST OF PARTNERS IN PROFIT AND LOSS. BRITISH LAW. Where there is no express contract varying the rights of the Unless spe cially provided partners are equally interested in profit and loss. Agreement to and not losses void. partners, the presumption of law is, that there is to be an equal participation of the profits of the business, whatever be the difference in the capital or labour respectively brought in by the partners (a). Such presumption will, however, be rebutted, where, by the entries in the book, and other evidence, it be proved that the shares of the different partners differed in amount and value, and another practice than an equal distribution of profits has been introduced. An agreement between two partners that the profits shall be divide profits equally divided, but that the entire loss shall be borne by one of them, would be void. And when a partner is excluded from his share of profits, the Court of Equity will compel his copartner to account to him for it. What are profits and losses. The profits of the partnership consist of what remains in surplus of the capital invested after all the debts and expenses of administration have been defrayed, and the losses are the excess of debt, and expenses of management, over the capital extant. The profit and loss of the partnership are usually ascertained every year, and, except otherwise provided, each partner has a right to withdraw his share annually from the partnership. FOREIGN LAWS. France. Where the partnership deed does not determine the share of each partner in the profit and loss, the share of each is in proportion to the funds he has invested in the partnership, and the share of profits of the partner who gives his labour and skill is like that of the partner who invested the least amount of capital. Any convention giving to one partner the whole of the profits is void. Any stipulation which would free from contribution to losses the capital put in the partnership by one or more of the partners is also void (b). Holland.-Partners may stipulate that one or more of them shall alone bear all the losses (c). Spain. The same law prevails as in France respecting the (a) Peacock v. Peacock, 2 Camp. 45, 16 Ves. 49; Farrar v. Beswick, 1 M. & Rob. 527; Robinson v. Anderson, 20 Beav. 98; Webster v. Bray, 7 Hare, 159. (b) French Civil Code, §§ 1852 and 1855. (c) Dutch Code, § 1672. contributor of capital only. division of profits among the partners, but, unless specially pro- defrayed by vided, the losses are to be divided among the partners supplying capital, without allowing the industrial partner to participate in them (a). SECTION XII. DUTIES OF PARTNERS. BRITISH LAW. Duty of partner to bring in his share. use. The first duty of the partner is to hand over to the use of the partnership whatever he has promised to bring, and no partnership would be held to exist till this primary obligation is fulfilled (b). He must also guarantee to the partnership the He must right of property in, and the use of such investment, unless guarantee the otherwise provided by the contract; and where his quota of investment consists in his labour and skill, it is his duty to devote these exclusively to the benefit of the partnership. Partners being bound together by a general engagement to act for each other as each would act for himself, owe to one another a perfect fidelity. They are bound to communicate to one another all that belongs to the partnership and all that may prove advantageous to it, and neither of them can appropriate to himself more than the agreement gives him right to (c). In the discharge of his regular duties for the partnership, a partner is not allowed to secure to himself any private advantage or derive any profit at the expense of his copartners. His copartners may compel him to account for any profit which he may have appropriated from any business carried on in his own name which ought to belong to the partnership, whilst he would have no right of reciprocity against his copartners should the business have produced loss (d). So when a person owing money to a partner in his own account, as well as to the partnership, makes a payment without appropriating the amount, the partner cannot appropriate the same to his own account. (a) Spanish Code, § 319. (b) Venning v. Leckie, 13 East, 7. (c) Domat's Civil Law, L. 1, tit. viii. s. 4; Blisset v. Daniel, 10 Hare, 522, 536. (d) Pardessus, H. 1016; Fawcet v. Whitehouse, 1 Russ. & My. 148; Bentley v. Craven, 18 Beav. 75. Partners must be faithful to one another. Cannot derive advantage at the expense of another. Cannot appropriate payments to him self and neglect the partnership. |