Page:Encyclopædia Britannica, Ninth Edition, v. 18.djvu/353

331 firm lias been accepted in place of that of the previous j firm. A guarantee to or for a firm ceases upon a change in the firm unless it appears by express stipulation or t necessary implication that the guarantee is to continue, : 19 & 20 Viet. c. 97, 4. There are cases in which a j relation of quasi-partnership is created, i.e., in which persons not partners inter se become partners qua third , persons. A person who holds himself out as a partner incurs the liability of a partner. This was clearly laid down by Lord Chief Justice Eyre in Waugh v. Carver, and is now an established principle of law. " Holding out " means that credit has been obtained by the use of his name, or even by permitting reference to him as one who wishes to have his name concealed. Where the liability arises out of tort, the law is not quite the same as it is where the liability arises from con tract. The presumption is against the authority of a partner to commit a tort, and so opposed to the presump tion in the case of contract. But a partnership is liable jointly and severally for any wrongful act or omission of one of its members in conducting the business of the firm, e.g., the neglect of a managing partner to keep the shaft of a mine in order, but not for a wilful wrong unconnected with the business, e.g., malicious prosecution. With respect to fraud by misappropriation of money, some obligation on the part of the firm to take care of the money must be shown. A receipt from the firm pritna facie imposes this obligation. An action should be brought by all the partners (except merely nominal partners, who need not be joined unless in an action on a contract under seal). They cannot delegate a right of action to one of themselves for convenience. This can only be done by statute, as 7 Geo. IV. c. 46, enabling banking companies to sue and be sued by a public officer. All the partners ought to be sued, subject to any statutory exception, as that contained in the Carriers Act, 11 Geo. IV., and 1 Will. IV. c. 68, 5, 6. But misjoinder or nonjoinder of parties does not defeat an action (Rules of the Supreme Court, 1883, ord. xvi. r. 11). The method of procedure does not affect the principle of the liability of each partner in solido, a principle on which is based one of the main points of difference between a partnership and a corporation. In a corporation the collective whole is distinct from the in dividuals composing it (see CORPORATION). But in a partnership the firm, as distinct from the individual partners, is recognized by English law only to a very limited extent, and as matter of procedure rather than of substantive law. Since the Judicature Acts, in an action against a partnership, power is given to sue and be sued in the firm name, but the partners are bound to disclose the names of the persons constituting the firm, and, though judgment goes against the firm, execution may issue against a partner (Rules of the Supreme Court, 1883, ord. vii. r. 2, xvi. r. 14, xlii. r. 10). An adjudication of bankruptcy cannot be made against the firm in the firm name, but only against the partners individually (Bank ruptcy Rules, 1883, r. 197). A partnership at will is dissolved by determination of the will or assignment of the partnership share. A partnership other than a partnership at will is dissolved by (1) effluxion of time; (2) retirement of a partner; (3) alienation by operation of law of a partner s share, e.g., by bankruptcy or (formerly) by marriage of a female partner ; (4) death ; (5) business becoming unlawful, as by a partner becoming an alien enemy ; (6) assignment of partnership share ; (7) lunacy ; (8) liability of a partner to criminal prosecution ; (9) impossibility of carrying on the business. In the last four cases the partnership is not ipso facto dissolved, but they are grounds on which the court may order a dissolution (see Pollock, art. 47 sq.). Where a partner has been induced to enter into a partner ship by fraud, he has in general the option of affirming or rescinding the contract at his election. The dissolution of partnerships and the taking of partner ship accounts are matters specially assigned to the Chancery Division (Judicature Act, 1873, 34). After dissolution the persons who constituted the partnership become tenants in common of the partnership property until the division of assets, unless any other provision is made by agreement. The partnership debts are paid out of the partnership assets, and the private debts out of the private assets. The principle of law that a partnership debt is joint and several comes into operation where the partnership is dis solved by bankruptcy or death. The joint estate is the primary fund for the payment of joint debts, but the joint creditors can look to any surplus of the separate estate (after payment of the separate debts) to satisfy any deficiency in the joint estate. See the Bankruptcy Act, 1883, 59. Partners cannot compete with the creditors of the firm either against the joint estate or the several estate of a partner; that is to say, they cannot be satisfied until all the debts of the firm have been paid. In the case of death, although the partnership is dissolved by death, it is still treated as subsisting for the purposes of administra tion. The creditor has the same rights against the estate of the deceased as he would have had in his lifetime in some cases, so that he may proceed against this estate in the first instance, without recourse to the surviving partners (see the judgment of Lord Selborne in Kendall v. Hamilton, Law Rep., 5 App. Cas. 539). Further, the death of a partner has the result of converting the real property of the firm. " Whenever a partnership purchases real estate for partnership purposes, and with partnership funds, it is, as between the real and personal representatives of the partners, personal estate" (Darby v. Darby, 3 Drewry 506). At common law no criminal prosecution was maintain able by one partner against another for stealing the property of the firm. But this difficulty has been removed by 31 & 32 Viet. c. 116. Though the English law of partnership is based upon Roman law, there are several matters in which the two systems differ. (1) There was no limit to the number of partners in Roman law. (2) In societas one partner could generally bind another only by express mandatum ; one partner was not regarded as the implied agent of the others. (3) The debts of a societas were apparently joint, and not joint and several. (4) The heres of a deceased partner could not succeed to the rights of the deceased, even by express stipulation. There is no such disability in England. (5) In actions between partners in Roman law, the beneficiiim competentiee applied, that is, thj privilege of being condemned only in such an amount as the partner could pay without being reduced to destitution. (6) The Roman partner was in some respects more strictly bound by his fiduciary position than is the English partner. For instance, a Roman partner could not retire in order to enjoy alone a gain which he knew was awaiting him. (7) There was no special tribunal to which matters arising out of societas were referred. The law of Scotland as to partnership agrees in the main with the law of England. The principal difference is that Scots law recognizes the firm as an entity distinct from the individuals com posing it. English law, as has been said, does this only to a very limited extent. The firm of the company 1 is either proper or descriptive. A proper or personal firm is a firm designated by the 1 The term " company " is not confined, as in England, to an association existing by virtue of the Companies Act, 1862, or similar Acts.