money, goods, property, connection, etc.; and every incoming partner, such premium or other consideration as he may have covenanted to pay. Stipulated deposits and calls, made in conformity with the provisions of the contract, form obligations against such as join public companies (a). Failure or refusal to fulfil such obligations will ground action against the offending partner at the company's instance, and may afford good reason for dissolution in private copartneries. In public companies, and also in ordinary trading firms, it is often provided that offences of this kind shall warrant the company to exercise the right of expulsion or forfeiture of shares, or to withhold dividends until the obligation is fulfilled (¿). The fact of entering into partnership may sometimes amount Waiver of preto a waiver of all previous claims between those who become inferred from partners. Such an arrangement may be a mode of contribution; partnership. or a discharge of his debt may have been the premium in respect of which the debtor agreed to become a partner with his creditor. When such questions present themselves, they ought to be determined by a jury (c). vious claims constituting management. All partners, whether active, latent, or dormant, are entitled Sharing in to take part in the company management, to have free access to and inspection of the books and accounts, and to receive full information from their copartners on every particular relating to the affairs of the company. Even in public companies these rights can never be eliminated, though they may be subjected to such rules and restrictions as have been assented to by all for the general good. But in the exercise of these rights, shareholders no less than partners are entitled to do nothing which may compromise the interests of the company (d). In all matters relative to the common interest, partners are Bona fides. bound to conduct themselves towards each other with the utmost fidelity and good faith. They are bound to the company as an agent is to his principal; they must not benefit themselves at the expense of its interests, and they have no right to publish its affairs in a way detrimental to its welfare (e). (a) Rights and Obligations of Com panies. (b) See p. 153 et seq. 1831, 5 W. and S. 16; 7 Bligh N. S. (d) See postea, 'Right to share in (c) Thomson v. Campbell's Trustees, Management,' p. 385. (e) See p. 329 et seq. Accounting. Contribution Improprieties of this kind subject the offending member in damages, and in private firms may perhaps form a good ground for dissolution (a). Partners are bound to communicate to the company any profits or advantages which they may have secured by making use of its capital, interest, or connection (b). In Partners are entitled to call their fellows to account for their whole intromissions with the company property and assets, and are bound to answer in like manner at the suit of the company. actions of this kind between the company and its partners, the difficulties and embarrassments which arise in the law of England from the non-recognition of the quasi person, are very little felt in Scotland (e). Partners are, moreover, entitled to be indemnified for all losses and indemnity. incurred by them on account of the concern, under deduction of the share falling to themselves; they are likewise entitled to be relieved of all obligations which they have undertaken for the company with the consent or approval of their copartners; and to be repaid all advances or loans which they have made to the company over and above their own stipulated amount of contribution (d). Right to interest on advances. A partner is entitled to interest on advances or loans of money made by him to the firm; for he is entitled to deal with it as with a third party; and it is said that he may demand interest on advances made in bona fide for partnership purposes, when this was done without the direct authority, and even without the knowledge, of his fellows (e). This would seem, however, to be law only in special circumstances (f). It would seem that a partner is entitled to interest on dividends not paid within a reasonable time, unless he has forfeited this claim by mora or acquiescence (g). This may, however, be otherwise fixed in the contract or incorporating instrument. It is very doubtful whether interest is due ex lege on unpaid (a) See antea, p. 182 et seq., and (b) Last references, and p. 330. (d) See 'Contribution and Indem- (e) See Denton v. Rodie, 3 Camp. 496; ex parte Chippendale, 4 De G. Mac. and G. 36; ex parte Bignold, 22 Beav. 143; Collyer, p. 231. (f) See Stevens v. Cook, 5 E. Jur. N. S. 1415. (g) Ballandene v. Glasgow Union Bank, 1839, 1 D. 1170. money contributions until they have been constituted by action. This, however, is often regulated by the company contract (a). and dividends. The right to share profits is so necessary to the very existence of Right to profits the partnership relation, that, except in very special circumstances, it cannot be forfeited. The same is true of dividends in public companies; and therefore clauses and provisions of forfeiture, which are frequently inserted in the special acts or other instruments of formation (b), will be very strictly interpreted. Unless in the case of a special contract, partners are not entitled to any remuneration for services rendered to the company (c). This rule, however, does not seem to apply to public companies formed into proper corporations. The company being a separate person, is alone entitled to demand satisfaction of its debts, rights, and claims. Hence no partner, nor any number of partners, are entitled to sue as individuals for that which is due only to the company (d); and hence, though partners are entitled to raise action in the company name, the action will be dismissed if it is found that they are doing so without authority, or to serve their own purposes (e). This holds good not only in questions with the public, but in questions between the partners themselves. Thus, one of the two partners of a company was held not entitled in his own name, or in that of the company, to insist in a summary process against his copartner for removing him from a house, into possession of which he had been put as a partner and manager of the company, though the house was vested in the person of the partner pursuing for behoof of the company (f). For the same reason, if, pending an action by a company, dissolution takes place, a partner wishing to carry it on must show that he has been authorized to do so by the company (g). It must be observed, however, that when the ground of action is something which affects the partner personally as well as the No right to remuneration for services. Rights of part ner to sue for company debts, etc. When ground the partner individually. of action affects Partner may sue after dissolution. Rights of partner retiring without dissolution. company of which he is a member, he will be entitled both to sue and defend in his own name, whether the company chooses to appear or not. Thus, when a libel reflects directly on one partner, and through him against the firm, he will be entitled to sue as an individual, without prejudice to an action at the instance of the company; but the conclusions of the first action must be for individual damage; those of the second, for injury to the company (a). And it should seem that, though the libel affects a partner more particularly as such, he is still entitled to an action in his own name (b); and so also where a random charge is made against a company without specification of individuals (e). An action lies by a shareholder against a person who slanders the title to his shares, and thereby causes him damage (d). After dissolution of a firm by death, the survivor may sue in the company name for its outstanding debts (e); and if the executors of the deceased partner are dissatisfied with the fitness of the survivor for this duty, their remedy appears to be to apply to the Court for the appointment of a judicial factor (f). But the executors-creditors of a deceased partner have been found to have no right to sue for a debt said to be due the company, though the sole surviving partner was stated to have disclaimed all interest therein (g). When a partner retires without a dissolution, he is entitled to compel his former partners, who still continue to carry on the concern, to fulfil all the obligations which they undertook to him, as conditions of his retirement; e.g. payment of an annuity, and indemnity against liability for former or subsequent company obligations. These claims are not merely good against his former partners, but against any other firm coming in their place (h). (a) Harrison v. Bevington, 8 C. and P. 708; Haythorne v. Lawson, 3 C. and P. 196; Forster v. Lawson, 3 Bing. 452; Solomon v. Medex, 1 Stark. 191. (b) Harrison v. Bevington, supra ; Robinson v. Marchant, 7 Q. B. 918. (c) Le Fanu v. Malcolmson, 1 House of Lords Cases 637. See Blaikie v. Duncan, 1857, 19 D. 983; North of Scotland Banking Co. v. Duncan, 1857, 19 D. 881. (d) Malachy v. Soper, 3 Bing. N. C. 371. (e) Boyd's v. Fraser's Trs., 1822, 1 S. 231; 2 Bell's Com. 638; Fraser, 2 K. and J. 496; Allen, 4 Madd. 464. (f) See 'Judicial Factor,' and 'Consequences of Dissolution.' (g) Roger v. Jamieson, 1838, 16 S. 418. (h) Alexander v. Clark, etc., 1862, 24 D. 323. partners as Though in general a discharge to the company is a release to Claims between the partners, yet this applies only to company obligations; and individuals. therefore an agreement between partners to grant 'full and competent discharges to each other, in full of all bonds, etc., as individuals or partners,' was held not to embrace a bond by one partner to another relating to a private transaction between themselves (a). dissolve. It is often of great importance to partners that they should Right to have the power of dissolving the company when they find that it is not working profitably, that a further continuance may involve them in heavy liabilities, or that the realization and division of the property is of importance for their individual interests. Hence, in all partnerships at will, every partner may operate a dissolution when he thinks fit; and in partnerships for a term, there are certain cases in which, for the common good of all, the Court will interfere to wind up the concern (b). When, as is frequently the case, the contract of formation provides that a joint-stock company shall be dissolved on the occurrence of certain circumstances, such as loss of a certain amount of capital, any partner is entitled to raise an action of declarator for this purpose, when the contemplated event has taken place (c). A partner may lose the power of insisting in his rights by Loss of rights. delay amounting to acquiescence, or by doing something which involves ratification of the acts of his copartners. Thus when a contract of copartnery provided that, on balances being struck and subscribed at certain times, they should be 'probative,' it was held in an action between representatives of partners, raised nearly thirty years after the last doquet, that as the subscriptions were admitted, though not adhibited at the times fixed, the balances were obligatory (d). But the right of claiming an accounting between partners will not readily be held to have been passed from; so an executor of a deceased partner was held entitled, fifteen years after the company accounts had been adjusted and settled, to prove that a certain heritable bond which had not been included in the accounting had belonged to the copartnery, and to claim a share (a) Crawford v. M'Cormick, 1827, 2 W. and S. 569. (b) See Dissolution. (c) North British Bank v. Collins, 1850, 13 D. 349; aff. 1852, 15 D. (d) Maclaren or Law, etc., v. Lid- |