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MONTREAL: THE SNOW LAW PUBLISHING CO. 1900. ?:<■ Entered according to Act of Parliament, in the year one thousand nine hundred, by The Snow Law Publishing Co., in the office of the Minister of Agriculture and Statistics at Ottawa. I i* PREFACE. Some apology may seem necessary for the publication of a^work upon a subject which has already been so ably dealt with by standard writers, but any person familiar with the condition of the law in Canada can readily understand that, no mattei how ably a subject may have been dealt with by an English text writer, there is still a field, though a more humble one, for the Canadian worker. It is perhaps only necessary to state that there are at least fourteen different Statutory enactments in force in Canada dealing with part- nership, in order to appreciate the application to the subject of this work of the above remarks. It has been the object of the authors to state the establish- ed principles of partnership in a concise form and in such a way that it may be seen at once what the law is in any of the various Provinces without, as at present, being obliged to first ascertain the Coi^mon law and then search through the Canadian Statutes and decisions to see how far it has been modified. '■ The scope of the work does not permit of an exhaustive citation of the English authorities, but a careful collection of the Canadian cases has been made, and the leading English cases have been given with references to the standard works where the other authorities are collected. It is hoped that the work will not only prove a saving of time to the profession, but will enable others who may have occasion to look into the law of partnership to ascertain readily what the general principles of the subject are in any particular Province. It has been thought desirable to treat of the Quebec law in separate chapters. Attention is also again directed to the fact that from pages I to 94 the paragraphs numbered with heavy black numerals contain the corresponding sections of the Imperial Partnership Act. ' . ; September, 1900. R. B. H. P. D. CONXKNXS. Part I.— General Principles of Partnership. page Cap. I.— Nature of Partnership II • ' 2. — Relation of Partners to Persons dealing with them 30 " 3. — Relation of Partners to one another 63 ** 4. — Dissolution of Partnership and its consequences 83 '* 5. — Subjects not dealt with in the Imperial Code II3 " 6. — Mining Partnerships ,,, 118 Part II. — Limited Partnerships. Cap. I. — Limited Partnerships in the Provinces other than New Brunswick and Nova Scotia I29 " 2. — Limited Partnerships in New Brunswick 145 " 3. — Limited Partnerships in Nova Scotia 154 Paht JII. — Registration of Co-Partnerships. Cap. I — Registration of Co- Partnerships in Provinces other than New Brunswick and Quebec ' 159 " 2. — New Brunswick Law as to Registration o..... 182 " 3. — Quebec Law as to Registration 186 Part IV. — Practice in Ontario, British Columbia, Manitoba AND Quebec. Cap. I . — Practice in Ontario 193 " 2. —Practice in British Columbia and Manitoba 209 ** 3. — Practice in Quebec 216 Recapitulation of Rules as to effect of death 220 Appendix containing Forms 223 I^IST OK CASES CirKD. PAOB Ldam V. Townend 201 k-hrens v. McGilll&at. re 207 ilklns V. Dominion, addenda. Iblon Life Assce. Society, In re t58 ilden V. Beckley 200 .Alderson v. Pope 42 "Lllard V. Rlcard ]31 I lien V. Fairfax, see Addenda, LlUson V. McDonald 52, 53 mnls V. Lewis 33 mtolne v. Dallaire 100 Archambault v. de Lisle 22 Archibald v. McNerhanie.. .. 12, 65, 121 At wood V. Maude I'o l!:iby V. Davenpo.rt 37 Baddeley v. Consolidated Bank 15 Baile V. Balle 108 Itailey v. Orifflth 50 Bailie V. Goodwin 199 J^ank of Commerce v. Marks 48 iBank of Commerce v. Wilson 33 "^Bank of Toronto v. Nixon.. .. 165 Banque du Peuple v. Gauthler 61 Barnes v. Cousirfeau 19*) Beals X. Sheldon 33 Boauchamp, re 200 B^audry v. Laflamme 24 Jeckwith v. Lordly 36 ?eique v. Dumond 60 Jell V. Ottawa Trust and De- posit Co 33, 117 Bernard v. Gaudry 191 Benedict v. Van Allen 131 Jentley v. Bates 118 Jerser v. Metivler 77 Jerkley v. Thompson 207 Jerniard v. Allard 103 Bertram v. Sarrasin 108 Jetjemann v. Betjemann 115 Jirkett v. McGulre 53, 54 Jlssell V. Foss 113 lais V. Vallleres 108 ?loomley V. Grinton 37 ioswell V. Piper 20:5 Jourg-ogne, La 194,195,199 Jowes V. Holland 141 brasserie de Beaufort v. Dlnan 105 Jresse v. Griffith .. .. 50 Jrlt. Col. Iron Works v. Buse 12, 47 Jrown V. Leonard '13 Jrunskill v. Chamasero 35 lurt V. Clarke 40 ?utchart v. Dresser 88 Jutler V. Butler , 69 Cameron v. Cameron 39 Ilameron v. Stephenson 37 impbell V. Farley 45 | llarruthers v. Ardagrh 33 j ;:;arter v. Grant 20 ; ;;haput V. Robert 173 Jhllds, re 114 Jhilds V. Thibault 132 Jhlppendale, ex parte 31, 68 Jity Bank v. Lafleur 25 PAGE City cf Glasgow Bank v. Mur- dock 36 Clark V. Cullen 214 Commercial Mutual Building So- cietv and Sutherland .. ..58, 136, 139 Commercial Mutual Building: So- ciety V. Fulton 139 Cook, ex parte 116 Cook V. Benbow ,• .. 68 Cook V. Brisbois Ill Corlstlne v. Hawes 110 Corp. of Ottawa v. M. O. & O. R. Co 77 Court V. Berlin 200 Coutu V. Guevrement 61, 77, 1S8 Couturier v. Brossard 28 Cowan V. OalDorne 59,79 Cox V. Hickman 13. 21 Crain v. Rapple 65,90 Craw.shav v. Maule 118 Crelghton v. Halifax Banking Co. 33 Crepeau v. Bolsvert 19, 106, 216 Cropper v. Smith 200 Crovdon v. Jackson 19S ruvllUer V. Gilbert.. .. 59 Danals v. Cote 25 Dansereau v. Gervais 102 Darling v. Maerann 41 David and Matthews, in re .. .. 92 Davidson v. Frechette 131, 137 Davidson v. Therkell 86 Davie v. S^'lvestre 19, 62 Davieg v. Andre 200 Davles v. Andrews... 201 Davies v. Bowes 141 Davis v. Morris 206 Day V. McLeod 34 Dean v. McDowell 71 De Hertel v. SupP'le 68 De Martlprnv v. Laviolette.. .. 82 De Montlpnv v. De Bellefeuille 103 Denis v. The Hudson Bay Co. 21 DeslonRchamps v. Poirier.. .. 107,112 Devin v. Vaudry 191,192 Doak V. Smith 107 Dobson V. Feste 197 Doe d. Walthman v. Mills.. .. 70 Dueber v. Tapgart, see Addenda. Eaves v. Freeman 131 Ellis V. Wadeson 200, 201 Emerson v. Tourvllle 131, 136 Federal Bank v. Northwood.. 33, 36 Finnan v. Inteimational Club.. 12, 201 Fisher v. Linton 32 Flowers, re ^99 Fort, in re, Ex P. Schofleld .. 16 Fortler v. Dupuls 78 Eraser v. Mcl^eod 35 Friend v. Young 46 Gagnon v. Sylva 24 Galway v. Mattljews 4r Gauthler v. Lacrolx 105 Gerhardt v. Davis 112 Gildersleeve v. Balfour 132 VI LIST OF CASES CITED. PAOB Glrard v. Rousseau lOU Glrard v. Trudel 28 Goldle V. Maxwell 33 Gordon V. McDonald 105 Graham v. Bennett 23, t,0 Grant v. Anderson 194, 195, 19'.) Gray v. Smith 13, G5 Greenshlelds v. Wyman 188 Grothe v. L»afleur 105, 210 Gurney v. Braden 51 Gurney v. Moore 35 Guy V. G. T. R. W. Co., In re.. 207 Halfpenny v. Pennock 37 Hamilton Provident and Loan Society V. StelnhofE 3o Hammond v. Heward 87 Harris v. Beauchamp 200 Harris v, McLeod 33 Hariis v. Robertson 38 Harvey v. Mowat 216 Hawtayne v. Bourne V.. Head, in re, Head v. Head.. .. 51 Heinemann & Co. v. Hale.. .. 197 HlKginson v. Lyman 82 Hill V. Bellhouse 13 Hlne V. Bediiome 51 Hinsram v. Bennett 112 Honsinger v. Love 56 Hoovey v. Cassels 33 Howard and Crangle, ex parte 40 Howell v. McParlane 37 Hudon v. Vallee 19 Hudson Bay Co. v. Stewart.. 34 Hughes v. Caverhill 100 Hutchison V. Bowes 142 Indigo Co. V. Ogilvy 197 J. V. S 208 Jackson v. Litchfield 201, 214 Jackson v. Page 104 Jeffreys v. Smith 119 Jelly V. Bins 192 Jelly V. Dunscombe 192 Jennings v. Jennings 92 TCahn v. Central Smelting Co. 119 Kane v. Wright .... 97 Kendall v. Hamilton 44 Knight V. Singleton 21, 58, 82 Kreh v. Bishop 12 Land Credit Co. of Ireland, Wei- kershelm's Case 34. ',i5 Lang V. Thompson 194, 212 Lavlolette v. Bosse 22 Laviolette v. Delisle 79 Leblanc v. Ackeriyian 61 Lecompte v. Duclos 21 Leduc V. Turcot 80 Leet V. Singer & Radford.. .. 102 Lefebvre v. Aubry 107, 108 Lemay v. Leveille 105 Lemire v. Bourdeau 24 Lesperance v. Bourassa 62 Lewis V. Osborne 59, 61 Lewis V. "Walters 59, 61 Liggett V. Hamilton 69 Lodge V. Pritchard 116 Logan V. Kirk 200 Logan V. Stranahan 38 London, Can., v. Morphy 56 Loranger v. Dupuls 28 Lovell V. Beauchamp 200 Lvsaght V. Clairk 196 Macauley v. City of Toronto.. 93 Macdonald v. Balfour. Addenda. Mackelcan v. Mewburn, Addenda. PAOB MacLean v. Stewart 74, 97, 108 Magulre v. Scott 60 Mallow V. Court of Wards.. .. 39 Manitoba Mortgage Co. v. Bank of Montreal 34, 65 Manseau v. Brodeur 28 Marks v. Wright 36- Martin v. Gault 59 Martin v. Martin 12, 15 Martyn v. Gray 40 Mason v. Cooper 200 Mason v. Mogridge IW, 212 Mead v. O'Keefe 91 Melbourne v. Toronto 200 Mendelssohn Piano Co. v. Gra- ham 12 Merchants Bank v. Thompson.. 12, 86 Metresse v. Brault 24 Mlchon V. Bousquet 21 Mitchell V. Lister 71 Moor V. Boyd 37, 38 Moore v. O'Leary 102 Moorehouse v. Boslwlck, Addenda. Morrison v. Earls 12, 86 Munster v. Railton 206 Murphy v. Page 104, 188 Murphy v. Phoenix Bridge Co. 19D Murphv V. Yeomans 86,88 Music Hall Block Co., in re.. .. 65 McBean v. McBean 102 McCaughey v. Walsh 32 McConneM v. Wilkins 32 McCord v. Field 33 MoFarlane v. Patt.. 20 McTndoe v. Pinkerton 61 McTndoe v. Pinkerton 24 McLaren v. Merchants Bank.. 22 McLaren v. Whiting 208 McLean v. Clark 39, 42, 135 McNerhanie v. Archibald.. .. 12, 65, 121 McPherson v. Hosklns 39 McRae v. McFarlane 28 Nelson v. Pastorino 199 Nicholle v. Herald 190 Niemann v. Niemann 34, 35 Noyes v. Crawley 115 Oakeley v. Pashellar 52, 53 Oakford v. European and Ameri- can Steam Shipping Co.. .. 53 O'Keefe v. Cunan 91 Ontario Glass Co. v. Swartz.. 207 O'Regan v. Williams 33 Osborne v. Henderson 50 Ouimet v. Bergevin 57 Overton v. Hewitt 12 Parker v. Odette 203 Pattei iOn v. Holland 131, 141 Patterson v. Maughan 37 Payne v. Hornby 90 Peacock v. Peacock 68 Pearson v. Pearson 92 People's Bank v. Gauthier.. .. 23, 28, 103 Phillips V. Kurr 112 Pini V. RoncaronI 208 Plttfleld V. Trotter 33, 54 Poison V. WulfCsohn 51 Pongola. The 115 Powell V. Robb 108 Potts V. Leask 56 Pratt V. Berger 19, 24 Prefontaine v. Barrle 22 Provencal V. Nadeau 21 Queen ex rel Joanisse v. Mason 66 Queen v. Webbe 207 LIST OF CASES CIIEU. VII PAOB 74, 97, 108 6U 39 84, 65 28 36. 59 12, 15 40 200 IW, 212 91 200 PAQB Hay V. Isblster 39, 40, 202 Held V. Hlssett 7ti, 1/7 Held V. C.'oleman 3U Held V. McFarliine 20, 21 Reg. V. Grannts 46 Hej,'. V. Llghlfoot 207 Heg, ex rel Hu^rdlng v. Bennett 66 Keg. ex rel. Joanlsse v. Mason CO Hlnfret v. May 39 Roberts v. Eberhardt 119 Robertson v. Jones 34 I Robinson v. Anderson 68 IRochette v. Rochette 53 iHoedUe v. News Advertiser.. .. V' , Ross, re 32 1 Rouse V. Bradford 52 Rowan v. Masse 23, 24 Rowe V. Wood 119 Royal Canadian Bank v. Wilson 33 Ruby, re 11*5 [Russell V. Cambefort 19G, 197, 206, 211 Sanborne v. Sanborne 65 Sandllands v. Marsh 36 Sanpster v. Hood 110 Scarf V. Jardine 40, 41 Scripture v. Gordon 56 Selffert v. Irving 12 Seyfang v. Mann 51 Shepherd v. Hlrsch 199, 210 Shinto V. Chllds 198 Simmons V. Fulton 60 Simpson's Claim 31 Sinclair v. Boll, re 197, 205 Sinpleton v. Knight 21, 58, 82 Singleton v. Roberts 194, 195 Small V. Ridden 56 South Grenvllle Election 66 Stadacona Bank v. Knight.. .. 57,98 Stafford v. Smith 22 Standard Bank v. Frlnd 202 Starrs v. Cosgrave 55 Stevenson v. Boyd 12 Steward v. Blakeway 119 Stewart v. Forbes 68 Stewart v. MacLean 74,97,108 PAOB Stewart v. Parker ao St. Gobian v. O'lloyermann .. 196, 206 Storm V. Cumberland 68 Stroud V. Ginger S9 Stuart V. Mott 12 Sutherland v. Webster, Addenda. Swire V. Redman 62, 53, 54 Symes v. Sutherland 188 iSaylor v. Cook 47 Taylor v. Cotton 212 Thomas v. Wilson, Addenda. Thompson v. Robinson 83 Tomllnson v. Broudsmith 200 Toothe V. Kettridge 115 Trego V. Hunt 92 Tucker, in re. Tucker v. Tucker Bl Union Bank v. Bulmer 33, 36, 59 Van Wart v. Critchley 36 Vernier v. Lortle 24 Vyse V. Foster 89 Waithman v. Miles, doe. d 75 Watts V. Robinson 51 Watts V. Tafft 131,136,142 Wai'gh V. Carver 33 Webster v. Bray 68 AVeikersheim's Case 34, 35 Wens V. Petty 12 "West V. Benjamin 115 Wesfbrook v. Wheeler 72 Western v. Percy 196,197 Westover v. Turner 207 ■UTilttemore v. Macdonell.. ..131,136,141 Wlgle v. Wiinams 39 Williams v. Beauchemin 132 Williams V. Keats 43 Wilson V. Brnwn 32, 33 Wilson V. Roger 206 T\''oods V. Woods 114 Worcester v. Firbank.. ..194,197,198,199 T\'orkman v. McKlnstry .... 34 Wylie V. WyHe 65 Wynget v. Heathcote 119 Young, ex parte 206 Young V. Parker 40, 207 Anlnles of Civil Code. I'AiiK 31 27, 98 32 27, 98 33 27, 98 34 27, 98 177 2G 179 26 323 34 825 8g 325(a) 28 326 » 334 86 336 (a) 25 689 108 696 109 697 109 698 no 699 110. Ill 700 109 701-753 Ill 710 109 987 24, 25 1002 34 1005 25 1030 ,97 1081 108 1054 62 1070-1078 W 1205 86 1727-1731 ^ W 1830 18. 20 -1831 19 1832 „ 23 1833 23. 96, 98 1834 186.188 1836 18" 1836 188 1837 189 1838 216, 217 1839 73, 98, 106 1840 7« 1841 76 « 1842 27 1843 78 1844 78 1845 79, 105 1846 ' 77,109 1,«47 79 1848 80 1849 80 1850 80 1851 81 1852 82 1853 82 1864 67 . 18BB 67 1856 62 Artlclei'of Civil Cotb. i'Am 29, M 130| lai 13^ 1231 13:^ 13« IStil 138l 13X1 139| iiol IMI 14l| 142| 1421 1431 1441 96. insl 96, 106l 9S| 76, 9it| ml 102, 1061 10^1 104, 1061 lOjf 79 ES. m ADDENDA ET CORRIGENDA. Pafi:e 12. Club. — Thirty-fifth 1 ne add Aikins v. Dominion, 17 P. R. 303; Tiiomas v. Wilson, 20 U. C. Q. B. 331. 35. Twenty- sixth line the word ^'agree" should read "agreed." 45. Judij:)ncnt a^s^oiiist joint debtors. — Second line after the word 'claim' add, "But see exceptions in Dueber v. Tag- gart, 26 A. R. 295." 51. Novation. — The following should be added at end of page, "x\nd see Dueber v. Taggart, 26 A. R. 295, 30 S. C. R- 373. where it was heild novation had taken place.'' Effect of Covenant to indemnify retiring p\rt- NER. — See Sutherland v. Webster, 21 A. R. 228; Mack- elcan v. Newburn, 19 A. R. 729. 54. Thirty-first line, "p. 40" should read "p. 41." QO. Second line, add "R. S. B. C. o. 150 s. 44." 116. Joint and separate Estate. — Sec. 7, R. S. O. Cap. 147, See Macdonald v. Balfour, 20 A. R. 404, and Moorehouse v. Bostwick, II A. R. 76. 117. Add at end of page "Bell v. Ottawa, 28 O. R. 519." 194 After word "liability" in fifth line add "But as to judg- ment recovered under rules 587, 603, 605; see Dueber v. Taggart, 26 A. R. 295." 210. Third line, rule 228, comma instead of semi-colon after the words "if any,'' 205. County Court. Add after Sec. 2, See Allen v. Fairfax, 21 O. R. 598. 212 and 213. The heading on p. 213 "(d) single person carry- ing on busijness under firm name'' should be inserted before rule 229 on p. 212. INTRODUCTORY. For the i)urposes of this work it will be found convenient to deal with the subject of Partnership under the following heading-s: — 1. General Principles of Partnership. 2. Limited Partnerships. 3. Ivegistration of Partnerships. 4. Rules of Practice in Ontario, Manitoba, British Co- lumbia and Quebec in Actions relating to Partnerships. I. — Gener.\l Pkixciples of Partnership. ]\Iost of the general principles relating to partnership will be found codified in the Imperial Partnership Act. This Act has been adoipted by Manitoba, North-West Territories, and British Columbia, but not by the other Provinces. As most of the sections, however, are simply declara- tions of the Common Law, the principles laid down in them will be found applicable in all the Provinces, save the Province of Quebec, Under this heading, thereCore, it is proposed to give the sections of the Act, noting wheirein they differ from the Common Law, and giving as far as pos- sible, illustrations from cases decided in 'Canada, as well a^ references and extracts from the standard English text writers. The Imperial Partnership Act has not been adopted in the I'rovince of Quebec, nor are its principles altogether applic- able to cases there arising. It is, of course, a well-known fact ihal Quebec differs from the other Provinces of the Dominion ill deriving its laws, generally speaking, from those of France. Its Civil Code, enacted in 1865, was based by the codifiers largely upon the old customary law of France and the Code Napoleon; but in dealing with subjects partaking of a com- niercial nature, such as Partnership, Insurance, Mandate and Merchant Shipping, they drew largely from the principles of the Common Law of England. 1 :. 10 Introductory. Consequently, we find that, on examining the articles of the Civil Code relating to Partnership, the codifiers have adopted principles which, in almost every case, find authority, in one form or another, in the old French iMw, the Code Na- poleon, the English Common .Law and the Scotch Law. They apparently felt bound by the verbiage of no one author, by the principles or plan of nlo one system. They drafted the articles containing the principles of the subject in the manner which seemed to them to best express the law which, up to that time, had been in force in the Province of Quebec or which was best suited to its peculiar position. . Under such circumstances, and when authority and prece- dent are, as a natural result, drawn from such divers sources, it is easily understdoid how the law and julrisprudence of the Province of Quebec upon this subject, in many instances, varies from that of the other Provinces. When, however, an article of the Civil Code is based either wholly or in part on English law, English precedent always has influence on the courts of the Proivince of Quebec. It has therefore been considered advisabUle to deal with the Quebec Law under that caption, following as closely as pos- sible for convenience of reference, the chapters of The Im- perial Partnership Act dealing with the same subjects. 2. — Limited Partnerships. Under this heading will be found the Statutory provisions in the dififerent Provinces, with notes of the cases which have been decided under the different sections- 3. — Registration of Partnerships. Under this heading there will be given also the Statutory Provisions in the dififerent Provinces, and notes ,of the cases decided on each sectilon. 4. — Rules of Practice in Ontario, Manitoba, British Columbia AND Quebec. The rules of practice in the above Provinces will be treated separately. PART I. GENERAL PRINCIPLES OF PARTNERSHIP. 1. Nature OF Partnership, or what constitutes a Partnership. 2. Relations of Partners to persons dealing with THEM. 3. Relatioxns of Partners to one another- . 4. Dissolution of Partnership, and its conse- quences. 5. Mining Partnerships. 6. Supplemental, CHAPTER I. Nature of Partnership, or what constitutes a Partnership. There has been much discussion as to what does and what does' not constitute Partnership. There are eighteen different definitions collected in Lindley on Partnership, 6th Ed., pp. 11, 12 and 13. The definition given by the Imperial Act, sec. i, as adapted by the Manitoba Act, will be found, speakmg generally, applic- ablle to all the Provinces which have not adopted the Act as well as to Manitoba. The Briiish Columbia and North-West Territoiries Acts give definitions which are substantially the same. The definition given in the Manitoba Act is as follows : (i) Partnership is a .Illation which subsists between persons carrying on business in coimmon, with a view to profit. (2) But the relation between members of an incorporated company or association is not a partnership within the mean- ing of the Act 60 Vic. (Man.), c. 24, sec. i. Ord. (1899) N. W. T., cap. 7, s. 3, sub-sec. 2, reads: — "The relation between members of any company or association 12 Nature of Partxership (Except Quebec). who constitute a body corporate under any law in force in the Territories/' instead of as in the Manitoba Act. The definition given in the British Columbia Act, R, S. B.C., c. 150, sec. 2, is as follows: — (i) Partnership is the relation which subsists between per- sons cairrying- 'oin business with a view to profit, (2) But the relation between any members of any company nv association which is (a) Registered as a company under the pr^ovisions of any Act of the Parliament of the United Kingdom or 6i the Parliament of Canada, or of the Legislature of the Province of Biritish Columbia for the time being in force, and relating to the registration of Joint Stock Companies, or (b) Formed or incorporated in or by pursuance of any other Statute or Letters Patent or Royal Charter is not a partnership within the meaning of this Act. The Imperial Companies Act provides that a private part- nership cannot be formed of more than ten persons for the purposes of banking business, or twenty for the purpose of any other' business. There is no such limitation in this coun- try. For iMustration of what has been said to constitute a con- tract of partnership, see the fodlow'ing cases: — Wells V. Petty, 5 B. C. R. 353: Where an agreement that plaintiff should be ''in ^om it " was held to give the plaintiff an interest in a mineral claim in the nature of a partnershp. Stevenson v. Boryd, 5 B. C. R. 626; Martin v. Maftin, I N.B. Equity 515; Merchants Bank v. Thompson, 3 O. R. 541 ; Morison v. Earls, 5 O. R. 434; Stuart v. Mott, 14 S. C. R. 734; SeifTert v- Irving, 15 O. R. 173; Mendlessohn Piano Co. v. Graham, 19 O. R. 83, 17 A. R. 378; Kreh v. Bishop, 17 Can. L. T. 171-278; BHt. Col. Iron Works v. Buse, 4 B. C. R. 419. As to position of a club, see Firmin v. International, 5 Times, 612, 694; Overton v. Hewitt, 3 Times 656. A»partnership may be formed by pafoll agreement, notwith- standing that it is to deal in land. Archibald v. McNerhani^, 35 Can. L. J. 489, 6 B. C. R. 260; affirmed by 29 S. C. R. 564. Nature of Partnership (Except Quebec). 13 But an ag^reemeiit to assign a share in a partnership, part of the assets of which consists in land, is within the Statute of Frauds, and must be in writing. Gray v. Smith, 43 Ch. D. 208. As to whether company can form a partnership with private individuals, see Roedde v. The News, 4 B. C. R. 7, Formertly it was thought that from the fact of participation in profits the existence of a partnership must necessarily be implied. The true rulle. hoxyevcr, was laid down in Cox v. Hickman, 8 H. L. C. 268, where it was held that, although the sharing of profits was very strong evidence of the existence of a partnership, it was not conclusive, and that the real in- tention of the parties as shown by the whole transaction must be given eflfect to. While the appeal to the House of Lords in Cox V. Hickman was pending, the case of Hill v. BeUihouse, 10 U. C C. P. 122, was decided by the Court of Appeal for Ontario, and although, as remarked by Hagarty, J., in his judgment, that case may be distinguished from Cox v. Hick- man, yet the principle on which Cox v. Hickman was ultimate- ly decided was there laid down. The extract from Story cited by Hagarty, J., in his judgment, is a clear statement of the law as it was finallly settled. "Tlie question is whether the circumstances under which the participati'oin in the profits exist may not qualify the pre- sumption and satisfactorily prove that the portion of the profits is taken, not in the character of a partner, but in the character of an agent, as a mere compensation for labor and services. If the latter be the ' ue predicament of the party, and the whole transaction admits, nay, requires, that very interpretation, where is the rule of law which foirices upon the transaction the opposite interpretation and requires the Court to> 'pronounce an agency to be a partnership contrary to the truth 'of the facts and the intention of the parties? Now, it is precisely upon th ^ very gi'ound that no such absolute rule exists, and that it is a mere presumption of law which prevails ini the absence of controlling circumstances, but is controlled by them, that the doctrines in the authorities alluded to are founded. If the participation in the profits can be clearly shewn to be in the character of agent, then the ^ presumption of pairtnership is re- 14 Nature of Partnership (Except Quebec). pelled. In this way tlie Jaw carries into effect the actual in- tention of tlie parties, and violates none of its own established rules." 'i'he above principle is recognized and embodied in section 2 of the Act. This section contains a number of what may be called negative definitions of partnership, or declarations of what partnelr'ship is not, or, as it is put by Pollock, p. 15 of Paiinership Act, "It;excll!udes in the first and second sub-sec- lions various relations which at first sight may appear to re- semble partnership but do not really satisfy the fundamental conditi'oms 'of carrying on a business in common, with a view to profit.' " Section 2 is as follows: — 2. In determining whether a partnelrship does or does not exist regard shall be had to the following rulies: — (i) Joint tenancy, tenancy in common, joint property, ocimnon property, or part ownership, does not of itself create*, a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof. (2) The sharing of gross returns does not of itself create a partnership, whether the persloms sharing such returns have or have not a joint or common, right or interest in any property from which, or from the use of which, such returns are derived- (3) The receipt by a person of the share of the profits of a business is prima facie evidence that he is a partner in the business, but the receipt of such a share or of a payment con- tingent on or varying with the profits of the business does not of itself make him a partner in the business and in particuiar — (a) The receipt by a person of a debt or other liquidated ammtnt by instalments or otherwise out of the accru- ing profits of a business does not of itself make him a partner in the business or liable as such; (/;) A contract for the remuneration of a servant or agent of a person engaged in a business by a share of the profits of a business does not of itself make the servant or agent a partner in the business or liable as such; (c) A person being the widow olr a child of the deceased Nature of Partnership (Except Quebec). 15 partner, and receiving by way of annuity a portion of the profits made in the business in which the deceas- ed person was a partner, is not by reason only of such receipt a partner in tlie business, or Hable a:- such; (d) 'File advance of money by way of loan to a persbm en- gaged or about to engage in any business on a contract with that person that the lender shall receive a rate of interest varying with the profits, or shall receive a share of the profits arising from carrying on the business, d'o€s not of itself jnake the lender a partner with the person or persons carrying on the business, or liable as sucji, provided that the contract is in writing, and signed by or on behalf of all the parties thereto; (e) A person receiving by way of annuity or otherwise a portion of the prioifits of a business in consideration of the sale by him of the good-will of the business is not by reason only of such receipt a partner in the business or liable as such. 60 Vic. (Man.), c. 24, s. 2; R. S. B. C, c. 150, s. 3; N. W. T. Ord., 1899, c. 7, s. 4. As to what will constitute partners inter se, see Martin v. Martin, i N. B. R. Equity 515. Sec. 2, sub-s. 3. — (a) "The receipt by a person of a share of the profits is prima facie evidence, etc." This wording is criticized by Lindley, who' points out (Part- nership Act, pp. 18 and 19) that the meaning of the rule which this section is intended to set forth is explained in Baddely v. Consolidated Bank, 38 Ch. D. 238. 'Tt may be, and probably is, true that if all that is known is that one persoD carries on a business and shares the profits ot that business with another prima facie, those twoi are part- ners, and prima facie the person carrying on the business is carrying it om as the agent of the persons with whom he shares its profits. . . . but when you have a great deal more to consider, it appears to me to be a fallacy to say that you are too proceed upon the idea that sharing profits prima facie creates a partnership or an agency, and that prima facie presumption has to be rebutted by something else." Sect. 2, s.-s. 3 (6): — See R. S. O., 157, ss. 3 and 4. I 1« Nature of Partnership (Except Quebec). The ComiTiloln Law does not require the contract to be in writing, and it has been decided that there is nothing in the Act to vary the rule. In re Fort ex-p. Schofield (1897), 2 O. B. 495- Lender reeek'iiijr interest varying zt'/V/i profits, ete., postponed to other ereditors. Section 3 provides that: — 3. In the event of any person to whom money has been ad- vanced by way of loan upon such a contract as is mentioned in the last foregoing section, or of any buyer of a good-will in consideration of a share in the prioifits of the business being adjudged a bankrupt or insolvent entering into an anrange- menf to pay his creditors less than (one hundred cents on the dollar), or dying in insolvent circumstances, the lender of the loan shall not be entitled to recover anything in respect of his loan, and the seller of the good-wiK shall not be entitled to recover anything in respect of the share of profits contracted for until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money's worth have been satisfied. 60 Vic. (Man.), c. 24, s, 3; R. S. B. C, c. 150, s. 4; N. W. T. Ord., 1899, c 7, s. 5. See in re Mason ex.-p. Bing., 1899, i Q. B. 8io« This section, and subsection 3, b, c, d, and e of section 2, are practically re-enactments of the Act known as Bovill's Act, 28 and 29 Vic, c. 86, the provisiioms of which (see sec- tions I and 5 of BoviW's Act), to some extent correspond with the provisions of the Acts respecting limited paraierships, which are in force in; all the Provinces of this country, and to the partnership en Commandite of the Civil Law^ Story, speaking lof these limited partnerships, says (7th Ed., para- graph 74, note 5): "Partnerships en Commandite, as established by the laws of the several States, are often called limited part- nerships. Paragraph 78. Partnerships en Commandite are de- fined to be limited partnerships "where the contract is between one or more persons who are general partners, and jo ntiy and severally responsible, and one oir more other persons who merely furnish a particular fund or capital stock, and thence are callied Commanditaire, or partners en Commandite, the busi- Nature of Paktni:rship (Quebec). 17 ness being carried. on under the social name or firm of the generaJ partners only composed of the ..ames of the general or complimentary partners, the partners en Commandite bemg Habile only to losses to the extent of the funds or capital fur- nished by them." The subject of limited partnerships will be dealt with in Part II. QUEBEC LAW. CHAPTER I. Nature of Partnership, and what constitutes a Partnepship. Sec. I. Nature of Partnership. Sec. 2. Participation in Profits. Sec. 3. Cases in which Partnership held not to exist. Sec. 4. Commencement and Duration of Partnership. Sec. 5. Proof oi Partnership. Sec. 6. Capacity to enter into Partnership, (i) Minors; (2) Interdicts; (3) Married Women; (4) Special Incapacities; (a) Husband and Wife; (5) Insane Peirsons, (6) Persons Civilly Dead. Sec. 7. DifTerent kinds of Partnership, (i) Universal; (2) Particular; (3) Commercial; (a) General; (b) Anonymous; (c) Limited Partnerships; ' ' r . (d) Joint Stock Companies. ? Sec. I. — Nature of Partnership. > The articles hereinafter qu'oted are those of the Civil Code. A sketch of their origin and the general plan to be followed 18 Nature of Part\f,«siiip (Quebec). in this work may be found in the introductory chapter (ante p. 9). C. C. 1830. — It is essential to the contract of pairtncrship that it shou'l However, in 1H93. in the ease of Reid Sc MeP'arlane, R J., 2 n. R.. 130, the Court of Queen's I'eneh. in contliet with some of the decisions previously rendered by the same Court, laid down the rude in reference to this (juesition. and pfavc to this article the followinj^ interpretatii m. which is still in force. Sir A. Lacoste, C. [., said: — "We onlv see here one of the " articles governinjj the contract of partnership, 'l^liis rule " is of the essence of partnership, but it is not the onily essen- *• tial element. This article 1830 (ante p. 18) tells us that it is of " the essence of the contract of partnership, that there should t)i " a contribution from each partner for the common benefit. "There can be a division of |)rofits without contribution by " one of the parties. Thus one person may promise a share " in the profits of his business in payment of services already " rendered. In such case there would not be a partnership, " seeing that there would not be a contribution on the part " of one of the parties, notwithstanding;' j^jarticipation in t.he " profits." " These are not the only essential elements. The contract "of partnership is. subject to the esseutial conditions of other " contracts. Thus, consent is necessary to create a partner- " ship. On the other hand, consent presupposes the inten- '' tion to make a like contract. Hence it is necessary that the " Court should reach the domclusiou that the pairities had the " intention of creatine: a partnership before declarin.q- that " there is a partnership." " Sharing in profits docs not then constitute in itself, alone, " the contract of partnership. It is necessary to find in it the " other essential elements of partnership, namely, the contri- " bution ficr the common benefit, and the intention of tke '' parties to form a partnership, and this applies to third par- " ties who are creditors, as well as to the parties among" them- " selves. For a contract cannot be a lease, a hiring" or a loan " between the parties and, at the same time, a partnership as " respects third parties. What the Court has first to deter- " mine is the nature of the contrtact iCf the parties inter se. Nature of Partxekshii* ((Quebec). 21 " If it readies the conclusion that it is a partnership, the ere- " (litors will have a recourse. Otherwise they wiill be dc- " prived of it." Tliis rule does not apply, of course, where the |.arty has held himself out as a f)artnor, as we shall see later. I'roin the abuve it is to be, therefore, noted that the rule in the Province of Quebec does not differ from the English rule laid down in Cox v. Hickman, discussed above (ante) p. 13). The above case of Reid v. Mcl'arlane has been followed by Lecompte & Dudos in 1893. R. J., 4 C. S., 336, and by the same Court in Denis v. Tlie Hudson Bay Co. in 1899, R. J., 8 P), R., 236. Fr(3ni the latter decision, however, Mr. Justice l-aiijLjclicr dissented on the ground that participation in the ])rt>tits of a business creates a presumption of partnership, which he. who has stipulated for this participatioti, oup^ht to destroy. This, in his opinion, the party in this case had not (lone. His view was not accepted by the majority of the Court. The case of Sing'leton v. Knig^ht, a decision of the Privy Council, 13 App. Cas., 788, aJlso bears upoln this (piestion of the sharing- of profits; but the Couirt of Queen's Bench in Reid v. McFarlane, above quoted, did not consider that it could be invoked as deciding tJiis question- In that case the principle laid down was that one of the partners could n'oit draw his fellow-partners into partnership with a third party without their knowledge or consent. Sec. 3. — Cases in which Partnership held not to exist. The construction of an aqueduct by different proprietors, for the commion use of their respective properties, does not constitute a partnership between them; and, if one of these proprietors abandons his property, he cannot ask for the par- ticipation or licitation of this, aqueduct. Michon v. Bousquet, 19 R. L. 504; M.L. R., 6 Q. B., 337. The possessitotn in common by several individuals of a mine, of which the title is in the name of one of them alone, does not constitute a partnership, but a community of property, C. R., Provenqal v. Nadeau, R. J., 9 C. S., 344. ' A lease by which it is stipulated that the rent will be a 23 Nature of Partnership (Quebec). share of the profits resulting from the business of the tenant, does not constitute a partnership between landlord and tenant. O. B., Prefontaine v. Barrie, 13 Q. L. R., 312. Tlie contract by which the owner of an artide charges an- other with the sale of it, with the stipulation that the latter shall have for his remuneration the surplus of the price of the sale in excess of a specified sum, constitutes a ''mandate for reward," and not a partnership. C. R., Stafforxl v. Smith, R. J., 10 C. S., 470. Where L- bought fnoim B. for $1,000, a half interest in a patent, and B. engaged (se fait fort) to inaugurate and form a company to carry into operation the object of the patent before a fixed date, but failed to do so, no partnership was constituted, and L. was entitled to revolver his $1,000. C. R., Laviolette v. Biosse, M. L. R., i S. C, 429. The Court of Queen's Bench has decided that if a retiring partner has left his capital in the new firm, and agrees that it shall rank after the creditors, he is not thereby constituted a partner. The Supreme Court, however, in this case held the dissolution to have been simulated. McLaren v. Merchants Bank, R. J., 2 B. R., 431; and 23 S. C. R, 143. W. and D. entered intO' a joint speculation in the purchase of real estate- Each looked after his individual interest in the operations resulting from this co-partnership. No power of attorney cr authority was given to enable one to act for the other, and they did not consider that any such authority ex- isted by virtue of the relations between them. All conveyances, required to carry out sales, were executed by each for his undivided interest. Upon the death of W. and D., the business was continued by their representatives on the same footing, and the representatives of W. subsequently sold their interest to T. W., who purchased ion behalf of and to protect some of the legatees of W., without any change being made in the manner of conducting the business. A book-keeper was employed to keep the books required for the various interests, with instructions to pay the moneys re- ceived at the office lof the co-proprietors into a bank, whence they were drawn upon cheques bearing the joint signatures Nature of Partnership (Quebec). 23 of the parties interested. The profits were divided equally between the representatives of the parties interested, some in cash, but generally by cheques drawn in a similar way, M. N. D., who looked after the business of" the representatives of D., paid diligent attention to the interests confided to him and received their share of such profits; but J. C. B., who actcvl in the W. interest, so negligently looked after the business as to enable the book-keeper to embezzle moneys, which represented part of the shares of the profits coming to tlie representatives of W. In an action brought by the representatives loif W. to make the representatives of D. bear a share of such losses, it was held by the Supreme Court, confiTming the judgment of the Superior Court and of the Superior Court sitting in Review, that the facts did not establish a partnership between the parties, but a mere ownership par indivis, and that the repre- sentatives of D. were not liable to make gdoid any part of the loss, having by proper vigilance and prudence obtained only the share which belonged to tihem- Even if the partnership existed, there would be none of the moneys paid over, to the parties after a division "made. Archambault & de Lisle, 25 S. C. R., I. Sec. 4. — Commencement and Duration of Partnership. C. C. 1 832. — If no time for the commencement of the part- nership be designated, it takes effect from 'the date of the contract. C. C. 1833. — If the term of the partnership be not desig- nated, it is considered to be for the life of the partners. This is subject to the provisions contained in the chapter on Dissolution of Partnership. Sec, 5. — Proof of Partnership. We have seen that the contract loif partnership need not be in writing (ante p. 18), Third parties may prove its existence by tes:\mony. Rowan V. Masse, M, L, R,, i S. C, 177; Graham v. Bennett, 12 R. L., 448; Peoples Bank v. Gauthier, R. J., 14 C. S., 18. 24 Nature of Partnership (Quebec). ! i But the parties themselves cannot make proof of a partner- ship between them, by testimony, unless there is a commence- ment of proof in writing. Beaudry v. Laflamme, 6 L. C. J., 134; Pratt V. Berg-er, 28 L. C. J., 192; Lemire v. Bourdeau, 12 R. L., 362; Rowan v. Masse, M. L. R., i S. C, 177; Mc- Indoe V. Pinkerton, M. L. R. 4 C. S., 102. Sec. 6. — Capacity to enter into Partnership. • All are capable (oif entering into the contract of pairtnership, except, (i) Minors, save in certain cases; (2) Interdicted per- sons; (3) Married women, save in certain cases; (4) Those who, by special provisions of law, are prohibited from con- tracting by reason of their relation to each other, or of the object of the contract; (5) Persons insane or suffering a tem- porary derangement of intellect arising from disease, accident, drunkenness or other cause, or who by reason of weakness of understanding are unable to give valid consent; (6) lliose civilly dead. C. C. 986. (i) Incapacity of Minors. TJie incapacity otf minors is established in their favor. Parties capable of contracting partnership cannot set up the incapacity of minors with whom they have contracted. C. C. 987. The nullity which attaches to the contract of the minor is a purely relative one, which he may or may not iraise, as he pleases. As respects Ciril partnerships (for distinctions between Civil and Commercial partnerships, see post pp. 27-28), the minor must allege and prove lesion or injury in order to escape from his liability. C. C. 1002; Q. B., Metrisse v. Brault, 4 L. C. J., 60; C. R., Gagnon v. Sylva, 24 L. C.J.,251; C. R. Veirner v. Lortie, i Q. L. R., 234. As respects Commercial partnerships, on the other hand, it is questiotnable as to whether the minor is subject to any incapacity. The principles of the law are that a minor engaged in trade is reputed of full age for all acts relating to such trade (C. C. 323) ; and that a minor, who is a banker, trader or mechanic, is not relievable for cause of lesion from con- Nature of Partnership (Quebec). 25 tracts made for the purposes of his business or trade. (C. C. 1005). These principles should be interpreted and read ■.>)■ ^eiher. (Mignault, Dr. Civ. Can., p. 266.) The question is whether a contract of commercial partnership made by a minor who is a trader, a banker or a mechanic, is "an act relatini;" to his trade cr made for the purpose of his business? " The {|Ucstion does not appear to have been decided, and is open to discussion; but we think the minor is, under such circum- stances, fully capable of entering into the contract and that he is unable to attack it for cause of lesion. ]n any event, there can be no doubt that a minor member of a connnercial partnership is liable to third parties dealinj::: with the partnership as an tirdinary member would be. C. R-, Danais v. Ccte, 5 L. C. R., 193; City Bank v. Lafleur, 20 L. C. ]., 131. A minor, when emancipated, can enter into any contract of partnership absolutely bindinj;' upon him, provided he has obtained the authorization of a family council and of a judge. Beaudry-Lacantinerie, Societe, No. 61. (2) Incapacity of Interdicts. . m Persons of full age may be interdicted who are in an habitual state of imbecility, insanity, madness (C. C. 325) or drunkenness (C. C. 325a); or who commit acts of prodigality, which give reason to fear that they will dissipate the whcle of their property (C. C. 326) ; or who make use of opium or other narcotics to excess. (C. C. 336a, added by 59 Vic. cap. 40.) , The incapacity of those interdicted for prodigality is es- tablished in their favor. Parties capable of contracting cannot set up the incapacity of such mterdicts, with whom they b.ave contracted. (C. C. 987.) Their irnrapacity is merely re- lative and not absolute, and their obligations may be avoided in the same manner as those of minors. Tihe same applies to acts done by those to whom an adviser has been given, without the assistance of such adviser. The incapacity of all other interdicts is absdute. C. C. 334. 26 Nature of Partnership (Quebec). (3) Capacity of Married Women. i A wife, even when separate as to property, cannot enter into a contract of partnership without the express authoriza- tion of her husband. Care should be taken that it be in writing. If the partnership be a commercial one, the wife thereby becoming a public trader, the authonzation of the husband may be either express or implied; but the wife, as such public trader, cannot commence business before registering the spe- cial declaration, referred to later in the chapter concerning Re- gistration of Partnership. When she so becomes a trader and a partner, she may, with- out the further authorization of her husband, obligate herself, and also her husband, if there be community between them, for all that relates to her commerce. When the wife has become separated from her husband as to bed and board, she can enter into partnership without his authorization. C. C. 177 and 179; Beaudry-Lacantinerie, Societe, No. 50. (4) Special Incapacities. (a) Husband and Wife. It is generally conceded that husband and wife cannot enter into partnership with each other, since to do so would be to conflict with the principle that the matrimonial relations should remain unchanged. (C. C, 1265.) The absolute equality, also, which exists between partners, would be in conflict with the relationship of husband and wife, which the consorts cannot alter. In short, partnership between husband and wife would facilitate disguised benefits of one to the other, which are forbidden by the law. Beaudry-Lacantinerie, Societe, Nos. 5-^ 53. 54, 55, 56, 57- Partnerships between the two consorts and a thi, d party are also null for the same reasons. Id. 58. Number five of the above enumeration of incapables ex- plains itself. (Ante p. 24.) Nature of Partnership (Quebec). (6) Those Ciznlly Dead. 27 Civil Death results from condemnation to death or from con- demnation to any otther corporal punishment for life. It also results from certain religious vows. C. C. 31, 32, 33, 34. Sec. 7. — Different kinds of Partnership. It is advisable to insert here the definitions of the dififerent kinds of partnership given by the Civil Code, in order that the succeeding references to the law of the Province of yuebec may be the more readily understood. C. C. 1 857. Partnerships arc either universal or particular. They are also either civil or commercial. (i) Universal Partnerships. C. C. 1858. Universal partnersihip may be either of all the property or of all the gains of the partners. C. C. 1859. In universal partnership of property all the property of the partners, moveable and immoveable, and all their gains, as well present as future, are put in common. C. C. 1 860. Parties contracting a universal partnership are presumed to intend only a partnership of gains, unless the contrary is expressly stipulated. C. C. 1861. In a universal partnership of gains is included all that the partners acquire by their industry in whatever em- ployment they are engaged during the continuance of the partnership. The moveable property and the enjoyment of the immoveables possessed by the partners at the date of the contract are also included; but the immoveables themselves are not included. Universal partnerships, it is almost unnecessary to add, are extremely rare, and hence require no comment here. (2) Particular Partnerships. G. C. 1862. Particular partnerships are those which apply only to certain determinaite objects. A partnership contracted for a single enterprise or for the exercise of any art or profes- sion is als-o a particular partnership. ; . • ,. >;; 28 Nature of Partnership (Quebec). (3) Comfuercial Partnerships. C. C. 1863. Commercial partnerships are those which are contracted for carrying on any trade, manufacture or other business of a commercial nature, whether general oir limited, to a specia'l branch or adventure. All other partnerships are civil partnerships. There is little difficulty in distinguishing Civil from Commer- cial partnerships. Those with which we hav« to deal are almost wholly the latter. Their distinguishing feature is that they must be for the carrying on of some traide, manufacture or other business of a commercial nature. (For discussion as to what constitutes "business of a commercial nature," see Revue de Legislation, vol. 2, p. 442, and vol. 3, pp. i and 41.) The status or occupation of the partners themselves is no criterion- Thus, a partnership between a sheriff, a lawyer and a merchant for the working of a saw mill (Couturier v. Bros- sard, 18 L. C. J., 8); between official assignees and a notary for the business of assignees and brokers (Loranger v. Dupuis, 5 L. N., 179); between contractors for the purpose of building railways (McRae v. McFarlane, M. L. R., 7 S. C-, 288); be- tween contractors for the cutting and flotation of logs, (Peoples Bank v. Gauthier, R. J., 14 C. S., 18); have all been held to be commercial partnerships. On the other hand partnerships between persons for the trafficing in real estate (Girard v. Trudel, 21 L- C. J., 295), and between architects (Manseau v. Brodeur, i P. R., 192) have been held to be civil partnerships. In fact, all partner- ships between professional men for the practice of their profes- sions are civil partnerships. C. C. 1 864. Commercial partnerships are divided into : 1. General partnerships; 2. Anonymous partnerships; ' ', 3. Partnerships en Commandite, or limited partnerships; 4. Joint stock companies. They are governed by the rules common to other partner- ships, when these are not inconsistent* with the rules contained in this section, and vdth the laws and usages speciallly applic- able in commercial matters. Natlkic of Partxeusiiip (yuebec). (a) General Commereial Partnerships. 29 C. C. 1865. General partnerships are thiose contracted for tlie purpose of carrying on business under a collective name or firm consisting ordinarily of the names of the partners, or one or more of them, all of whom are jointly and severally liable for the obligations of the partnership. (b) Anonymous Partnerships. C. C. 1870. In partnerships having no name or firm, whether they are general or confined to a single object or ad- venture, the partners are subject to the same liabilities in favor of third persons as in ordinary partnerships under a collective name. The principles governing the foregoing will be treated of conjointly in the two' succeeding chapters. (f) Limited Partnerships. (.',' '^ tf.- rf.ti-. '.f-i-r: '-_rl.ff I'J'''; .■■>-,,. . ' A' 80 Relations of Partners to Third Persons. (Except Quebec), CHAPTER II. Relations of Partners to Third Persons. This chapter will be sub-divided as follows: — Sec. I. Every partner an agent for his co-partner. Sec. 2. Doctrine of Holding Out. (0 Retired partner allowing himself to be held out is partner in the old firm. (a) When he is supposed to be a partner. (b) When he is known not to be a pairtner. Sec. 3. Nature of Partnership liability. (a) In the case of Contracts. (b) In the case of Torts. Sec. 4. Notice to and admissions by Partners. Sec. 5. Novation. Incoming and retiring Partners. Sec. 6. Notice to Creditors that Partners occupy the position of principal and surety towards each other. Sec. 7. Effect on Guaranty of change in firm. Sec. I. — Every partner an agent for his co-partxer. Every partner is an agent of the other partners for the purposes of the business of the partnership, but only those acts which are done in the usual course of business will bind the other partners. This is really only a particular instance of the general rule that an agent can bind his principal when act- ing within the scope of the business which he is conducting for him, but can bind him only when so acting, which in its turn is a particular instance of the still more general rule that if a person makes a representation intending that third parties should act on it, and a third person does act on it, the person making such representation will be estopped from denying its truth. If a man represents to the world that another is his Relations of Partners to Third Persons. 31 (Except Quebec). partner, he makes a representation that that other has a right to act as his agent within the sdope of the partnership business, but he does not make a representation that such other has a right to act for him in relation to any other business, conse- quently there will be no estoppel when a partner is acting out- side the scope of a partnership business, or when he pledges the credit of the firm fior a purpose apparently not connected with the firm's ordinary course of business, or when he is act- ing contrary to his authority to the knowledge of those with wiliom he is dealing. Even where it is necessary for the pre- servation of the principal's property, it has been held that the principal will not be bound if such act is outside the ordinary scope of the business. Hawtayne v. Bourne, 7 ]M. and W. 595. Ex p. Chippendale, 4 De G. M. and G. 19, Simpson's Claim, 36 Ch. D. 532. These principles are embodied in sections 5, 6 and 7 of the Act, which are as follows: — 5. Every partner is an agent of the firm and his other partners for the business of the partnership, and the acts of any partner who does any act flo,r carrying on in the usual way business of the kind carried on by the firm of which he is a member, bind the firm and his partners, unless the partner so acting has in fact no authority tio) act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority, or does not know and believe him to be a partner, 60 Vic, Man., c. 24, s. 5; R. S. B. C, c. 150, s. 6; N. W. T. Ord., 1899, c. 7. s. 7. 6. An act or instrument relating to the business of the firm, and done or executed in the firm name, or in any other man- ner, shewing an intention to bind the firm, by any person thereto authorized, whether a partner lor not, is binding on the firm and all the partners. Provided, that this section shall not effect any general rule of law relating to the execution of deeds or any negotiable instruments. 60 Vic, Man., c 24, s. 6; R. S. B. C, c 150, s. 7; N. W. T. Ord., 1899, c 7, s. 8. 7. Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm's ordinary I! 'I i i I 111! it 82 Relations of Partners to Third Persons. (Except Quebec), course of business, the firm is not bound unless he is in fact specially authorized by the other partners, but this section docs not aflfect any personal liability incurred by an individual part- ner. 60 \'ic., Man., c. 24, s. 7; R. S. B. C, c. 150, s. 8; X. VV. T. Ord., 1899, c. 7, s. 9. 'Hie cases which h'ave been decided in the Canadian Courts dealing with a partner's authlority to bind his co-partners, and illustrative of the above principles, may be classified under the following headings: — I Generally. 2. Right to bind firm by negotiable instruments. 3. Right to borrow money. 4. Taking in the firm name a security involving the assump- tion of a liability. 5. Right of partner to receive payment of debts due the firm, 6. Right of partner to give guaranty. 7. Execution of deeds by partners. (Jl) Generally. — Where a partner pledges the credit of the firm for a purpose apparently not connected witlfthe firm busi- * ness, the entry of the transaction in the firm books to which the other partners have access is not sufificient to fix the firm with liability. Fisher v. Linton, 28 O. R., 322. If one partner borrows money professedly for the purpose of the firm, but acknowledges that he is desirous of concealing the transaction from the other members of the firm, this is a cir- cumstance sufficient to rebut the presumption of implied authority, and the person advancing the money cannot recover from the firm if it turns out that the partner had not special authority. ]McConnell v. Wilkins, 13 A. R. 438. The implied power of a partner does not extend to giving the partnership name to secure the debt of a third person. Wilson V. Brown, 6 A. R. 411. • - . It is outside the ordinary scope ol a solicitor's business to give promissory notes. lb. As to liability of solicitor for fraudulent conduct of partner, see re McCaughey v. Walsh, 3 O. R. 425; re Ross, 16 Pr. R. Relations of Partnkrs to Third Persons. 33 (Except Quebec). 4S2 (Ont.); for negligence of partner, sec Thompson v. Rob- inson, 16 A. R. 175 (Ont.); see also O'Regan v. William, 24 X. S. R. 165. Ij) Liability of J' inn on Negotiable Instruments. — A firm is nut liable on a negotiable instrnment made, drawn or en- dorsed in the name of one partner only, uniless his name hap- pens to be the firm name. See Lindley, 6th Ed., p. 190- 1 ; Goldie V. Maxwell, i U. C. Q. B. 424; McCord v. Field, 27 U. C. C. P. 39T; Annis v. Lewis, 5 O. S. 198 (Ont.); Hoovey v. Cassels, 30 U. C. C. P. 230. If a creditor takes the note of one partner for the debt of the partnership, and after bringing an action fails to recover thereon, he is not precluded from afterwards claiming the amount of the note against the partnership. Carruthers v. Ar- dagh, 20 Gr. 579 (Ont.). Where a note was endorsed in the firm name, and the plain- tiffs who discounted it knew that it was endorsed as security for a third person, and had no reason to believe that it had any connection with the partnership business, the firm was held not liable. Federal Bank v. Northwood. 7 Ont. R. 389. Where a man is member of more than one firm, and gives a note of one firm in satisfaction of a debt due by the other, the person taking the note is put on enquiry as to his authority to sign the name of the other firm to the note. Creighton v. Halifax Banking Company, 18 S. C. R. 140. See also Wilson v. Brown, supra; Bell v. Ottawa Trust and Deposit Company, 28 Ont. R. 519. When one partner consents to his co-partner signing the firm name for a private debt, he is jointly liable, and not merely liable as surety, even after dissolution. Pittfield v. Trotter. 35 Can. L. J. 457. See also the following cases, in which instruments were held not binding on the partnership: — Beals v. Sheldon, 4 O. S. 302 (Ont.); Harris v. McLeod. 14 U. C. Q. B. 164; Royal Can. Bank v. Wilson, 24 U. C. C. P. 362; Union Bank v. Bulmer, 2 Man. R., and see also Bank of Commerce v. Wilson, 36 U. C. Q. B. 8, in which latter case the partnership was held to be bound. p:'' 34 Relatiuns of I'akt.nkus to Tiiiud Tkhsoxs. (Except Quebec). As to mutual authority to sign and endorse negotiable instru- ments, see Workman v. McKinstry, 21 U. C. Q. B. 623. (3) ^^i.i^lit to borroii' money. — Where a partnership is entered into for the purpose of buying and se'Uing huids, the lands acquired in the business are in equity considered as person- aHty. The active partner has an implied authority to borrow money on the security of mortj^a^a-s, and where an amount so borrowed is paid by cheque made payable to all the partners by name, the active partner liaving the ri.tiht to receive the cash, has also tiie right to endoirse his partners' names on the cheque, and the drawers have the right to assume that he did it for partnershij) purj>oses. Manitoba Mortgage Co. v. Bank of Montreal, 17 S. C. R. 692. In Robertson v. Jones, 208 N. B. R. 267. three judges held that the firm were not liable for money borrowed by one of the members, and applied to firm puri)oses, two were of opinion that plaintiff was entitled to recover from the firm, and see Hudson Bay Co. v. Stewart, 6 Man. R. 8; Day v. McLeod, 18 U. C. Q. B. 256. (4) One Partner talci)ig in the firm }ianie a security inrolring the assumption of a liability. — One partner has implied authority to accept, in the ordinary course of business, security for a debt due to his firm, but he cannot as a rule accept a security with a liability attached, such as shares on which calls are unpaid, or a conveyance of an equity of redemption with a term binding the firm to pay or assume the miortgage, and he cannot take even paid up shares in satisfaction of a debt with- out special authority. Lindley, 6th Ed., p. 153. In Weikershcim's case, L. R. 8, Ch. 831, it was held that one partner in a firm of bankers had implied authority to accept as security for a debt shares in a company, akhough he thereby rendered himself and his co-partners liable as con- tributories to the company, but this case, and also Lindlcy's note on it, was explained in Nieman v. Nieman, 43 Ch. D. 198, where it was pointed out that in the Weikersheim case all the partners In fact assented, and, further, that the judges who decided that case were of opinion that in the busings of bank- )le in»iru- 53- s ciitircd the lands s persoti- borrow 1 amiunit 2 partners 'ceive the les on the lat he did I. V. Bank dges held by one of ► were of firm, and McLeod, inzvlring authority rity for a a security calls are on with a ^e, and he debt with- d that one to accept hough he le as con- Lindley's :h. D. 198, m case all .idges who ;s of bank- ReLATIONS of PaRTNRKS to TiIIUU I'liUSUNS. 36 (Except Quebec). crs it was so ordinary to take shares in a company as security for a debt that it was part of tlie implied coiUract between them. Ci(4h these cases, the Weikersheim case and Xieman V. Nieman, arc discussed in Hamilton I'rovidetU v. Steiidioff, 23 App. R. 184 (Ont.). In that case two partners in a banking firm took from a customer as security for his indebtedness to them a conveyance to them individually of certain land, which was subject to mortgage. Subsequently, ui>()n the mortgagees (the plaintiffs) threatening prioceedmgs. ome of the [>artners. without the knowledge or conseiU of the other, signed in the firm name a covenant under seal to pay the arrears due on the mortgage. It was held that this bound only the partner who signed it. As to one partner binding another to accept shares in a company, see Gurney v. Moore, 21 I.'. C. Q. R. 127. In Fraser v. McLeod, 8 Gr. j68 (Ont.), it was held that where one member of a mercantile firm, without the knowledge of his co-partner, purchased lands subject to incumbrance from a debtor of the firm in his own name, and to discharge such incumbrance gave notes in the name of the firm, but without the knowledge of his co-partner, the partnership was not liable, although it was alleged that the arrangement had been made in order to more efTectually secure the debt due to the firm. (5) Payment to Partnership. — Brunskill v. Chumasero, 5 U.C. Q. B. 474. A and B., partners, agree! to sell to C 500 barrels of flour at so much per barrel, to be paid per hundred barrels after delivery, and upon production of the wharfinger's re- ceipt. The sion of A. came to C. with the wharfinger's rece'ipt for one hundred barrels. C. gave him a cheque- for the amount due in favor of the firm, and took his receipt. As the son was leaving, C.'s clerk, but without C.'s authority, reminded nim of a private note of his father's to C. for £40 then due. A.'s son, with the proceeds cf C.'s ch^ que, took up the note for £40; B., the other partner, in consequence, refused to send C. any more flour until the £40 was made good. Held, that the payment to A.'s son under such circumstances wwr ll! !!: i 36 Relations of Partners to Third Persons. (Except Quebec). was such a payment to the partnership as acquitted C. upon the whole sum paid, but if there had been a previoiis under- stanchn.t,'- it would not have done so. Any of the partners in the absence of an agreement to the contrary could receive the nu)ney, or any one bring^ini^ their authority. And see Van Wart v. Critchley, 17 Can. L. T. 316; Beck- with V. Lordley, i N. S. D. 72 (Gill and Oxley). (6) Giving of guaranty by one Partner. — In City Glasgow Bank v. Murdcjck, 11 U. C. C. P 138, a plea that a bill was accepted by one partner for accommodation, and without any consideration, and without any authority of the other partners, and that such acceptance was beyond the scope and object of the business, was held insufficient because the assent of the firm is to be presumed by the use of the name of the firm by one of the partners. And the onus pnobandi rests on those seeking to rebut the presumption. It should have been shewn that the acceptance had no reference to any transactions be- tween the drawers and the firm. This case was decided on the authority of Sandilands v. Marsh, 2 B. & Al. 673. But see Lindley, 6th edition, p. 150. where it is said in com- menting on this latter case: "The later cases, however, decide that unless it can be shown that the giving of guarantees is necessary for the carrying 011 the business of the firm in the ordinary way, one of the members will be held to have no implied authority to bind the firm by them.'' See Stewart v. Parker, 2 P. and B. 223, N. B.; Marks v. Wright. Hill T., 1828, N. B. Also Federal Bank v. Northwood, supra. Union Bank v. Buhner, 7 Can. L. T. 277, and Story Partnership, 7th Ed., sec. 177. "Tt is not a matter of necessity incident to all sorts of partnerships for one partner to possess the power to bind his co-partners by a guaranty. It must be shewn to be justified either by the usages of the particular trade or business, or by the known habits of the particular partner- ship, or by the express or implied approbation of all the parties in the case given." . C. upon s under- rs in the eive the i; Beck- jlasgow bill was lOut any )artners, 1 object It of the firm by ►n those n shewn ions be- l on the in corn- can be for the ry way, mplied arks V. hwood, d Story ecessity possess nust be ir trade )artner- partiesi Relations of Partners to Third Persons. 37 (Except Quebec). (7) Execution of Deeds. — As a general rule a deed in order to bind the firm must be executed by all the partners, but wlicre one partner signs in the name of buth in the presence of the other, and for him, with his assent, though there was but one seal it was the deed of both. Aloore v. Boyd. 15 U. C C. P. 513. One partner has not the power and authority without the express consent of his co-partner to execute a deed disposing of all stock in trade, effects and assets of the firm to a trustee to disjKJse of the same for the general benefit of the creditors of the partnership, iov such an assignment would amount to a suspension or dissolution of the partnership itself. Cameron v. Stevenson, 12 U. C. C. P. 389. \\'hen one partner authorizes another to obtain an endorser for the purpose of raising money from a bank fioT the use of the firm, he thereby authorizes his partner to do whatever is I reasonably necessary for the purpose. Halfpenny v. Pennock, 133 U. C. Q. B. 229." Even to mortgaging all the stock in trade. Paterson v. [Maughan, 39 U. C. Q. B. 371. And one partner may bind the firm by an instrument under [seal if the instrument would have been valid without a seal. [Bloomley v. Gricrton, 9 U. C. Q. B. 455. One of two partners camiot execute an arbitration bond in [the partnership name without the authority and consent of the )ther partner so as to bind the other partners. Baby v. Daven- [port, 3 U. C. Q. B. 54. WBien an agreement under seal, but of the nature not rc- juiring a seal, was executed by one of two partners in the name [of the firm, and the partners not executing afterwards acted [under and received the benefits of it, such agreement was sus- jtained as his deed, and it was held that he could not dispute [the authority by which it was executed in his name. Bloomley ^ Grierton, 9 U. C. Q. B. 455, and see Howdl v. McFarland, App. R. 31 (Ont.). An agreement under seal was made between the plaintift's of the one part and Samuel Farewell & Co, Query. — Whether 3^ Relations of Partners to Third Persons. (Except Quebec). this contract as executed by Farewell coii'ld bind the ether de- fendants, his partners? Logan v. Stranahan, 12 \J. C. Q. B. 15. In the above case the question as to how far execution of a specialty by one partner bound the rest was also raised, but .the case was decided on another point. See also Moore v. Boyd, 23 U. C. Q. B., 459, and Harris v. Robertson, 6 Allen 496, X. B. , ,M liiilliJi ! iMi I Sec. 2. — Doctrine of HoldiiiG Out. The above sections deal with the case of a man representing anotlier to be his partner. Sec. 14 deals with the case of a man who represents himself to be, or allows another to repre- sent him as a partner. This, again, is only another particular instance of the general principle that a man will be estopped from denying the truth of a representation made by him and acted on by third parties. ^ Sec. 14 is as follows: — (i) Every one who by words spoken or written, or by con- duct, represents himself, or who knowingly suffers himself to be represented as a partner in a particular firm, is liable as a partner to anyone who hr " on the faith of any such represen- tation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit, by or with the knowledge of the apparent partner mak- ing the representation, or suffering it to be made. (2) Provided that where after a partner's death the partner- ship business is continued in the old firm name, the continued use of that name, or of the deceased partner's name as part thereof, shall not of itself make his executors' or administra- tors' estate or effects liable for any partnership debts contracted after his death. 60 Vic. (Man.), c. 24, s. 14; R- S. B. C, c. 150. s. 15. This representing onesdf to be, or allowing oneself to be represented as a partner, is commonly called a ''Holding Out. The phrase might be considered equally applicable to the case of a man representing another to be his partner, but it ha? generally been confined to the former case. Relations of Partners to Third Persons. 39 (Except Quebec). The leading case on this point is Waugh v. Carver, 2 H. Black 235. In that case Chief Justice Eyre, p. 246, says : — "Now, a case may be stated in which it is the clear sense of the parties to the contract that they shall not be partners. . . But if (one of them) will lend his name as a partner, he becomes as against all the rest of the world a partner, not upon the ground of the real transaction between them, but upon principles of general policy to prevent the frauds to which creditors would be liable if they were to suppose that they lent their money upon the apparent credit of three or four persons, when in fact they lent it to two of them, to whom, without the others, they would have lent nothing." The above principle was affirmed by Sir Montague Smith, i.. Mallwo V. Court of Wards, L. R. 4, P. C. 419, at p. 435. See also Lind., 6th Ed., p. 65, and cases there cited. The following Canadian cases deal with the subject, and affirm the above principle: McLean v Clark, 20 A. R. 660. Th'is case is discussed below, p. 42. Til Wigle v. Williams, 24 S. C. R. 713, one of the defences set up was that even if the defendant, who permitted his name to be continued in the firm after retirement, was liable at all, he was only liable for debts incurred in respect of the class of business (that of a general store) which the firm carried on while he was a member, and not in respect of transactions in real estate and investing in securities carried on by the remain- ing partner after his withdrawal, but it was held that as no public notice of dissolution had been given, and as defendant was aware that his name still appeared in the firm, and was also aware of the general nature of the new business carried on in the firm name, he was liable. See also the following cases: — Ray v. Isbister, 22 A. R. (Ont.) 12; 26 S. C. R. 79; Reid v. Coleman, 19 Ont. 93; McPherson v. Hoskins, i Kerr, 430 (N.B.); Cameron v Cam- eron, 3 Man. 308. It does not matter that the person was induced by fraud to hold himself out as a partner, he will still be liable to third 40 Relations of Partners to Third Persons. (Except Quebec). parties who have given credit on the faith ot such holding o-u. Lindley, 6th Ed., p. 67. And a person may hold himself out or be held out as a pairtner without being named, or even if his name is re- fused, provided a description sufficient to identify him is given. Martyn v. Gray, 14 C. B. N. S., p. 841. In Burt V. Clarke, 8 Can. L. T. 155, a retired partner was held not liable for a tort committed by the firm, which had continued under the old partnership name, on the ground that he had no knowledge of the continuance. The decision might, however, have been rested on the ground that the doc- trine of ''Holding Out" has no application to the case of torts from the negligent conduct of a firm when no trust has been put in it. See Lindley, p. 75, Pollock Partnership Act, 54-5. In re Young v. Parker, 12 Pr. R. (Ont.), 646, it was held that R. S. O. (1887), c. 5, S.108, sub-ss. 4, 5 and 6, now R. S. O. 60, s. 112, ss. 4, 5 and 6 (being the sections of the Division Court Act as to service, etc, on firms), are applicable only to persons who are in truth partners, and mot to partners by estoppel. A frequent example of Holding Out is found when a re- tiring partner allows himself to be held out as a partner in the old firm. (a) IVhen he is supposed to be a Partner. Wher> a partnership is dissolved, or when a man who is known to be a partner retires, notice must be given, otherwise on the above principle of estoppel the partnership will be assumed to still exist. In Scarf v. Jardine, 7 App. Cas. 345, Lord Shelbornc at p. 349, citing from Lindley, stated the principle as follows: — "When an ostensible partner retires, or when a partnership between several known partners is dissolved, those who dealt with the firm before a change took place are entitled to assume, until they have notice to the contrary, that no change has oc- curred.'.' And he goes on to say: "The principle on which they are entitled to assume it is that of estoppel of a person who has accredited another as his known agent from denying that Relations of Partners to Third Persons. 41 (Except Quebec), agency at a subsequent time as against the persons to whom he has accredited him by any secret revocation." In the case of customers, special notice should be given, but to persons who had no dealings with the firm, notice by pubHcation is sufficient. As to what constitutes sufficient notice of dissolution, see Darling v. Magann, 12 U, C. Q. B., 471, p. 475. But when a partner who has retired from a firm is liable by estoppel, the creditoir who is entitled to rely on such estop- pel must elect whether he will hold the new firm or the old one, arid must either rely on the facts or on his rights of estoppel. Scarf v. Jardine, L. R. 7, A. R. 345. Section 2>^ of the Act provides as follows: — 36. (i) When 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. {2) An advertisement in the Gazette (the official Gazette of the Province) shall be notice as to persons who had not deal- ings wnth the firm before the date of the dissolution or change so advertised. (3) The estate of a partner who dies or who becomes bank- rupt, 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. 60 Vic. (Man.), c. 24, s. 36; R. S. B. C, c. 150, s. 37. And see N. W. T. Ord., 1899, c. 7, s. 38. (&) When he is known not to be a Partner. The above principle is quite clear when the person who is induced to give credit by the holding out is under the impres- siioin that a partneirship exists, but suppose he knows that there is no partnership: In dealing with this question it may be necessary to consider section 8, which provides as follows: — 8. "If it has been agreed between the partners that any restriction shall be placed on the pow^r of any one or more 3 I lip 42 Relations of Partners to Third Persons. (Except Quebec), of them to bind the firm, no act done in contravention of the agreement is binding on the firm with respect to persons haz- ing notice of the agreement.'' 60 Vic, (Man), c. 24, s. 8; R. S. B. C, c. 150, s. 9. In Alderson v. Pope, i Camp. 404, note to Galway v. Matthew, i Camp. 403, Lord EUenborough is reported to have sard that "When there is a stipulation between A., B. and C*, who appeared to the world as co-partners, that C. should not participate in profit and Loss, and should not be liable as a partner, C. should not be liable as such to those who had no- tice of the stipulation." Lindley, commenting on this case (see Lindley, 6th Ed., p. 186), says he considers this statement of the Common Law too wide, and at p. 66, dealing with a case in which "ex hy- pothesi," the person who gives credit knows that the person holding himself out as a partner does not share in the profits, he further says: "His name does not induce credit the less on account of his right to be indemnified by others against any loss falling in the first instance on himself, and although in the case supposed he cannot be believed to be a partner, the lend- ing of his name does justify the belief that he is willing to be responsible to those who may be induced to trust him for payment.'' It is only when knowledge of an agreement between partners necessarily involves knowledge that they decline to be re- sponsible for the acts of each other within the ordinary limits that a stranger's right against a firm can be prejudiced by what he may know of the {private stipulations between its members. Lindley further points out at pp. 185-6 that the law in England is now, by sec. 8 of the Partnership Act, settled as contended for by him. Cp. cases at p. 51, which decide that notice of the relation- ship of principal and surety between two of his debtors binds a creditor to recognize such relation. In McLean v. Clark, 20 A. R. 660 (Ont.), the Court of Appeal for Ontario seems to have taken a different view. The facts of that case are as follows : — Relations of Partners to Third Persons. 43 (Except Quebec). Some time prior to May, 1887, the defendant Clark had been carrying on the business of a general store. He determined to confine himself to the hardware part of the business, and on the nth of May he entered into an agreement with his co-defendant, Maitland, whereby he transferred his general stock to him, taking back a chattel' mortgage. Both businesses were then carried on on the old premises, a partition being put up to separate the hardware business carried on by Clark from the general business sold to Maitland, in other respects the premises were occupied as before. Maitland asked Clark to allow him to use his name. Clark at first objected, but finally consented on condition that a certificate under the Partnership Act should be registered, and the sign Clark, Maitland & Co, was placed over the door. The certificate was registered about six months afterwards. There was some correspondence in evidence, which shewed that after July plaia- tiffs knew that Clark was not a partner. It appears that before that date they thought he was. Slome of the goods were sup- plied before that date, and some after. Judgment was given for the plaintiffs for goods supplied before, but, as to the goods supplied after that date, it was held that plaintiffs were not entitled to recover, as the real position was known. If the principle laid down by Lindley, and adopted in sec. 8 of the Act (namely, that it may make no difference whether or not the creditor knows that the person lending his name was not a partner) had been acted on, would not the plaintiffs have had judgment for the price of the goods supplied after July, as well as for those supplied before, because, although they knew that Clark was not a partner, were they not justified in believing that he was willing to be responsible to those who might be induced tb trust him for payment? Perhaps the true ground of decision was that there was not such a holding out as to justify them in this belief. Possibly this point must be considered as at least doubtful in those Provinces in which the Act is not in force. And see Williams v. Keats, 2 Stark 290, and Brown v. Leonard, 2 Chitty 120. ^ Relations of Partners to Third Persons. (Except Quebec). Sec. 3. — Nature of Partnership Liability. (a) In case of contract liability is joint. Before the case of Kendall v. Hamilton, 4 A. C, 504, \va> decided, there was a popular impression that partnership lia- bility was joint and several. That case, however, decided that it was a joint liability only, except in the case of a deceased partner whose estate is severally as well as jointly liable, sub- ject to the prior payment of his separate debts. Tlie rule laid down in Kendall v. Hamilton is stated as follows in sec- tion 9: — 9. Every partner of a firm is liable jointly with the other part- ners for all debts and obligations of the firm incurred while he is a partner, and after his death his estate is also severally liable in a due course of administration for such debts and obligations so far as they remain unsatisfied, but subject to the prior payment of his separate debts. 60 Vic. (Man.), c. 24, s. 9; R. S. B. C, c. 150, s. 10; N. W. T. Ord., 1899, c. 7, s. 11. In order to appreciate the full effect of the above rule, it is necessary to understand the nature of a joint as distinguished from a joint and several liability. In the case of persons joint- ly liable there is only one cause of action, and therefoire a judg- ment obtained against one or more may be pleaded as a bar to any further claim in respect of that cause of action by any others who are jointly liable. In the case of persons jointly and severally liable, there is a separate cause of action against each one, and a judgment obtained against one will not be aj bar to any action against the others. It follows that, as partners are jointly liable, they must, if; it is sought toi hold them all, be all sued together, otherwise | if judgment were obtained against some it could be pleaded by the others as a bar to any further action against them. It should perhaps be explained here that, when we sayj partners are jointly and not jointly and severally liable, we do not mean that each partner cannot be held liable for all the J debts of the partnership. All that is imnlied is that tho^e who are iointiv li^blp i^n- a right to be sued together, and that, if judgment is obtained! 504, ^va'i irship lither part- [1 while he Y severally debts and subject to an.), c. 24, c. 7, s. II. »ve rule, it itinguished sons joint- Dire a judg- as a bar to on by any ons jointly ion against 11 not be a ey must, i* otherwise pleaded b\ m. en we say| liable, we| e for all the! is obtained! Relations of Partners to Third Persons. 45 (Except Quebec). against some, the others cannot afterwards be sued on the same claim. The judgment, however, that is obtained against joint debtors is joint and several, and execution may be issued and the judgment realized against any one of the joint debtors, leaving him to his right of contribution from the others. "-•];/(/ after his death his estate is also sez'erally liable." The principle laid down in the latter part of the section was dealt >vith in Campbell v. Farley, 18 Pr, R. (Ont.), 97, at p. 99. Upon the death of a partner "the only liability existing at law was that of the surviving partner, the estate of the deceased partner being only made available through the equities exist- ing in favour of the surviving partners, which the partnership creditors were allowed to make use of.'' Consequently, it was held in that case that a creditor coujd not sue the administra- trix direct, but that his only remedy so far as the deceased partner was concerned was to have his estate administered. It is pointed out in 19 Can. L. T., p. 122, that some of the dicta in this case appear to ignore sec. 15, R. S. O., 129; R. S. M., c. 146, sec. 57, which provides that: — In case any one or more joint contractors, obligors or part- ners die, the person interested in the contract, obligation or promise entered into by such joint contractors, obligoirs or partners may proceed by action against the representatives of the deceased contractor, obligor or partner in the same manner as if the contract, obligation or proimise had been joint and several, and this notwithstanding there may be another person liable under such contract, obligation or promise still living, ^ and an action pending against such person, but the property and effects of stockholders in chartered banks, olr the members of other incorporated companies shall not be liable to a greater extent than they would have been if this section had not been passed. The effect of this section would seem to be to put the cre- ditor in the same position as if deceased had been severally liable. Query. — Whether it has the effect of giving the creditor the right to rank equally with the separate creditors of the deceased? It can hardly have this effect in Manitoba, because .the above section 9 expressly provides that the liability is sub- 46 Relations of Partners to Third Persons. (Except Quebec). ject to the prior payment of liis separate debts. It may, however, have this effect in Ontario. The efifect of section 9 was considered in Friend v. Young, 1897, 2 Ch. 421. When F. & Co., a firm of commission agents, procured an order for goods, which was executed by E. & Co., and the goods were deHvered subsequent to the deatii of one of the partners, but in ignorance of his death, and the purchase money was received by his suirviving partner, but not account- ed for, it was held that the estate of deceased had incurred no dbhgation under section 9. "Before the Act the comtemion would scarcely have lieen arguable." See judgment of Stirling, J. It is to be noted thajt the liability referred to in sec, 9 is a liability which arises ex contractu, the liabdity for tart is a joint and several liability, and is dealt with in sections 10, il and 12. (b) In case of tort liability is joint and several. 10. Where by any wrongful act or omission k>f any partner acting in the ordinary course of the business of the firm, or with the authority of his co-pairtners, loss or injury is caused U any person not being a partner in the firm or any penalty is incurred, the firm is liable therefor to the same extent as the partner so acting or omitting to act. 60 Vic. (Man.), c. 24, s. 10; R. S. B. C, c. 150, s. 11; N. W. T. Ord., 1899, c. 7. s. 12. It has been held in Regina v. Grannis, 5 Man. L. R.. 153, and in ex parte How-ard and Crangle, 25 N. B. 191. that a joint conviction against partners for breach of a statute is bad. 11, In the following cases, namely: — (a) Where one partner, acting within the scope of his ap- parent authority, receives the money or property oif a third person, and misapplies it; and ' (b) Where a firm in the course of its business receives money or property of a third person, and the money or property so received is misapplied by one or more of the partners while it is in the custody of the firm, the firm is liable to make good It may, . Yuung, curceen eo, 9 is a tart is a ■ns lo. II y partner : firm, or is caused y penalty tnt a> the , c. 24, s. 7. s. 12. R.. 153. I. that a te is bad. Df his ap- )if a third es money ^perty so ers while ake good Relations of Partners to Third Persons. 47 (Except Quebec). the loss. 60 \ic., Man., c. 24, s. 11 ; R. S. B. C, c. 150, s. 12; X. W. T. Ord.. 1899, c. 7, s. 13. See in adchtion to cases cited by Lindlcy, p. 166, ct scq. Rhodes v. Monies, 1895, i Ch. 236. 12. l^vor>- partner is liable jointly with his co-partners and also severally for everything- for which the firm, while he is a partner therein, becomes liable under either of the last two pre- cedinpf sections. 60 \'ic. (Man.), c. 24, s. 12; R. S. B. C, c. 150, s. 13; N. W. T. Ord., 1899, c. 7, s. 14. 13. If a partner beinp^ a trustee improperly employs trust r^'operty in the business or on account of the partnership, no other partner is liable for the trust property to the persons beneficially interested therein. Provided as follows: — (i) This section shall not affect any liability incurred by any partner by reason of his having^ notice of a breach of trust; and (2) Nothing' in this section shall prevent trust money from being followed and recovered from the firm if scill in its possession or under its control. 60 Vic. (Man.), c. 24, s. 13; R. S. B. C, c. 150, s. 14; N. W. T. Ord., 1899, cap. 7, s. 15. Sec. 4. — Notice to, and admissions by Partners. 15. An admission or representation made by any partner concerning the partnership afifairs, and in the ordinary course of its business, is evidence against the firm. 60 Vic. (Man.), c. 24,5.15: R. S. B-C.,c. 150, s. 16; N.W. T. Ord., 1899, c. 7. s. 17. . This rule does not apply to a representation made by one partner as to the extent of his authority to bind the firm. Lindley, 6th Ed., 164-5. In order that such admissions should bind the firm, the person making them must have been a partner at the time they were made. Taylor v. Cook, 11 Pr. 60 (Ont.); Brit. Col. Iron Co. V. Buse, 4 B. C. R. 419. 16. Notice to any partner who habitually acts in the part- nership business of any matter relating to- partnership affairs 48 Relations of Partners to Third Persons. (Kxce;)t Quebec). oinratcs as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner. 60 \ ic (Man.), c. 24. s. 16; R. S. B. C, c. 150, s. 17; N. W. T. Uu\., 1899, c. 7, s. 18. " lllw habitually acts in the partnership business." Tliesc words excUule dormant partners, and the special partners of our Acts. Where the Act is not in force it is doubtful whether or not the rule contained in the above section applies to such partners. Skc. 5. — Incoming and Retiring Partners. Novation. Section 17 deals with the riphts of third parties as affected b; a change in the firm owinp to a partner retiring or a new partner bciiip^ taken in, and with the substituted liability of the new firm for that of the old, which sometimes arises on such a change taking place. This agreement of substituted liability, which is technically called novation, is an agreement to which the retiring partner, the new firm and the creditor must all be parties. Where the agreement is express, no difficulty is likely to arise, but when ii nuist be inferred from the course of dealing between the parties, the question arises what course of dealing will warrant the implication that an agreement has been made by the new firm to assume the debts of the old, and by the creditor to accept the new firm as debtors in substitution for the old? In practice this question generally reduces itself to the enquiry as to what course of dealing between a creditor and a new firm, which has assumed the debts o-partner, gave an acceptance in the firm name in satisfaction of a pri- vate, debt, it was held by the full Court in Nova Scotia that the co-partner was not entitled to be considered as a surety on a renewal given after dissolution. In this case, however, the plaintiff had no nictice of the dissolution. See also section 36, supra, p. 40. Sec. 7. — Effect of change in firm on guaranty. 18. A continuing guaranty or cautionary obligation given either to a firm or to a third person in respect of the transac- tiious of a firm is in the absence of agreement to the contrary revoked as to future transactions by any change in the con- Relations of Partners to Third Persons. 55 (Except Quebec). stitution of the firm to which or of the firm in respect of the transactions of which the guairanty or obHgation was given. 60 Vic. (Man.), c. 24, s. 18; R. S. B. C, c, 150, s. 19; N. W. T. Ord., 1899, cap. 7, s. 20; R. S. N. S., c. 83, s. 46. This section was substituted for section 4 of the Imp. Mer- cantile Law Amendment Act, 19 and 20 Vic, c, 97. In some ot the Provinces there has been no such legislation, but, as 19 and 20 Vic. 97, was simply a confirmation of the Common Law, the law is the same in all the Provinces. See judgment Ritchie, C. J., in Starrs v. Cosgrave, 12 S. C. R. 371 at p. 580. "The Mercantile Amendment Act did not alter the English law as settled by decided cases." Wheilicr or not a guaranty is continuing depends upon the construction of the particular contract under which the giu'.rant} is given, lut a guarantor should be careful to limit his guaranty to one particular transaction, if he does not wish to liave it construed as a continuing guaranty. See Smith's Mercantile Law, loth Ed., 579 et seq. And see Lindley, 6th Ed., p. 128. By the Mercantile Law Amendment Act, R. S. O., c. 145, s. 2, 3, 4; R. S. N. S. (1884), c. 104, Order 62; R. S. B. C, 56, s. 16, sub-s. 15. (2) Every person who, being surety for the debt or duty of another, or being liable with aniother for any debt or duty, pays the debt or performs the duty, shall be entitled to have assigned to him or a trustee for him every judgment, specialty or other security, which is ^''Id by the creditor in respect of such debt or duty, whether such judgment, specialty or other security be or be not deemed at law tio have been satisfied by the pay- ment of the debt or the performance of the duty. (3) Such person shall be entitled to stand in the place of the creditor, and to use all the remedies and if need be, and on pro- per indemnity, to use the name of the creditor in any action cr other proceeding in order to obtain from the principal debtor or any co-security, co-contractor, or co-debtor as the case may be, indemnification for the advances made and loss sustained by the person, who has so paid such debt or per- 56 Relations of P.\rtxkrs to Third Persons (Quebec). formed such cii y, ul such payment or performance so made by such surety shall not be a defence to such action or other proceeding by him. (4) Nio co-surety, co-contractor, or co-debtor shall be en- titled to recover from any other co-surety, co-contractor or co-debtor by the means aforesaid more than the just proportion to which as between tlitotse parties themselves such last men- tioned person is justly liable. In Small v. Riddell, 31 U. C. C. P. 373, the above sections v(^ere held not to apply to partnership transactions. See also Potts V. Leask, 36 U. C. Q. B. 476, and Scripture v. Gordon, 7 Pr. R. (Ont.) 164. But in London, Can. v. Morphy, 14 A. R. (Ont.) 577, Osier, J. A., at p. 581, says: — "I doubt if under the Mercantile Law Amendment Act, R. S. O. (1887), c. 116, ss. 2, 3 and 4, one person paying a judgment against the firm is entitled as a matter of right to enforce it for his own benefit, except it may be to the extent that anything may be proved due to him upon the taking of the accounts between them." And in Honsinger v. Love, 16 Ont. R. 170, it was held that the above sections applied in the case of partners. QUEBEC LAW. CHAPTER IL Relations of Partners to Third Persons. Sec. I Sec. 2 Sec. 3 Sec. 4 Sec. 5 Sec. 6. Sec. 7. Sec. 8. Rule as to Civil Partnerships. Rule as to Commercial Partnerships. Contracts toil behalf of Partnership in name of one Partner. Contracts in Partnership name. Contracts in name of one Partner. Doirmant or unknown Partners. Holding Out. Additional General Rules from Title of Mandate, as to liabilities of Partners for acts of each other. Relations OF Partnkrs TO Tin Ki) Pkusons (Quebec). 57 Sec. I. — Rule as to Civil Partnerships. C. C. 1854. Partners are not jointly and severally liable for the debts of the partnership. They are liable to the creditor in equal shares, althoug'h the shares in the partnership may be unequal. . This article does not apply in connnercial partnerships. This article, which apphes only to civil, and not to commer- cial partnerships, is drafted on the principle of the old French laAv, and on articles of the Code Napoleon. It has been held under it, that professional attorneys, who carry on a business under a firm name, are jointly and severally (liable as partners for moneys collected by the firm, notwithstandingc the fact that it is a civil partnership. Ouimet v. Bergevin, "22 L. C. J., 265. Sec. 2. — Rule as to Commercial Partnerships. The rule as to commercial partnerships, which is laid down in C. C. 1865, already quoted (ante page 29), is that all the partners are jointly and severally liable for the obligations of the partnership. If one of the partners should die, the surviv- ing partners may be sued and held liable for the whole debt, without the representations of the deceased partner being made parties to the suit. Stadacona Bank v. Knight, i Q. L. R., 193. Sec. 3. — Contract on behalf of Partnership in name of one partner. C. C. 1855. A stipulation that the obligation is contracted for the partnership binds only the partner contracting, when he acts without the authority, express or implied, of his co-partners; unless the partnership is benefited by his act, in which case all the partners are bound. This article is also based on the old French law and on the Code Napoleon. The contract designated is one in which a partner, in his own name, stipulates on behalf of the partnership. In order that the latter may be bound, the partner so acting must have authority from his co-partners either express or implied, or the partnership be benefited by his act. Ignorance of the partner's power to act dooild not be pleaded by the third party with whom he contracted. 'llll m il ;■■■ ■■■ Hi i % !ii;j; M fir 1 58 Rf.lations of Partners to Third Persons (Quebec). In a case in which one of three partners lent money on terms that the borrower, besides paying interest, should make over one-half his profits to the partnership to which the lender belonged, the borrower failed, and his creditors sued the partners of the lender. It was held by the Privy Council that one partner had no authority from the other partners to enter into a partnership with other persons in another business so as to bind them, where they had in no way been benefited by the transaction. Knight v. Singleton, 13 App. Cas. 788; also ante p. 21. • On the other hand, wHien a partnership benefited by the acts of the partner, it was held liable even though the partner had obtained the moneys dishonestly, and the partners had no knowledge idf his dishonesty. Commercial Mutual Building Society of Montreal v. Sutherland, M. L. R., 4 Q. B., 52. ' Sec. 4. — Contracts in Partnership name. C. C. 1866. The partners may make such stipulations Among themselves concerning their respective powers in the management of the partnership business as they see fit, but, with respect to third persons dealing with them in good faith, each partner has an impilied power to bind the partnership for all obligatiloms contracted in its name and in its usual course of dealing and business. This article, as also 1867, 1868, 1869 and 1870, are based on the English and Scotch law, and apply to Commercial Part- nerships only. C. C. 1866 refers to contracts made in the firm name in dis- tinction to the preceding and succeeding articles. . Undeir it the only restriction upon the partner's power is that the obligatilcto should be in the "usual course of dealing and business'' of the partnership. It is not necessary that the partner acting should really possess the power to do so, or that the transaction should result for the profit of the partnership, as in the case of civUi palrtnerships, under C. C. 1855. ■ _ - ■ • '" If, at the time of the transaction which one of the partners desires to enter into and before it may be concluded, one of the other partners object, it cannot be concluded. 4 Pothier (Bugnet) Societe, No. 90. . . .,, Relations of Partners to Third Persons (Quebec). 69 Where an individual's name has been given to a business, and it is being- conducted by him, whether he is a partner or nfot, it is sufficient to hold him out to the world as a general agent, and the firm is liable for the amount of a draft dis- counted by him, whatever might be the use to which he put the proceeds, unless he who gave the discount knew that they were to be misapplied. Lewis v. Walters, M. L. R.', 4 Q. B., 256; and Lewis v. Osborne, M. L. R., 2 Q. B., 353. So, too, in an action on a promissory note, the defence was that the note of which it was a renewal! was given for the ac- commodation of the payee by the defendant's partner who had no authority to make it, and that the plaintiffs when they took it knew of its defective character, it was held that, as it did not appear that such knowledge attached when the original note came into plaintiff's possession, plaintiffs were entitled to recover. Union Bank of Canada and Bulmer, 10 L. N., 361. But where the plaintiff knew that the sum lent to a partner was s/oildy for the latter's individual benefit, although the note was that of the firm, he could not recover. Rochette & Ro« chette, 10 Q. L. R., 342. A guaranty of a certain sum given for a third person, signed by a partner in the name of the firm, has been held valid and binding. Martin v. Gault, 15 L. C. J., 237. Even damages can be recovered from the members of a partnership under a collective name, for a false arrest made at the instigation otf one of them. Cowan & Osborne, 12 R. L., 29. . ■ Any agreements made between the partners restricting the mandate which the law presumes between them is of no effect as against third parties. Osborne v. Lewis, 17 R. L., 234. An instance of an attempt to do so was an agreement between the partners that no sale of pig iron of over $100 in value should be made without the consent of all. A contract for the sale of over $100 made by one of the partners in the iirn^ name, was held to be within the scope of the partnership business, and the purdhaser buying in good faith was entitled to re- cover. Cuvillier v. Gilbert, 18 L. C. J., 22. I .:iii ^*0 Relations OF Partners ro TiiiRu Persons (yuebcc). Sec. 5. — Contracts in name of one partner. C. C. 1867. The partners are liable for obligations ooiitract- ed by one of them, in his own name, only when the obligation is for objects which are in the usual course of dealing and business of the partnership, or are applied to its use. This principle was adopted in the, Province of Quebec as early as 1857, in the case of Alaguire v. Scott, referred to below. It applies to contracts made by partners in their own in- dividual names, instead of the firm name. Even then the firm is bound if the objects are in the usual course of dealing and business of the partnership, or are applied to its use. Hence, it is bound if the 'olbject be in the ordinary course of dealing, even though it is not benefited; and it is also bound if it is benefited, even though the object be not in the ordinary course of dealing. Thus this article embodies the conditions and re- strictions of t'he two preceding articles, 1855 and 1866. A vendor who sells to one partner in his individual name and upon his own responsibility and credit, has a right to recover against the firm of which he is a member, provided that the firm has benefited by the transaction, and although the vendor was ignorant of the partnership at the time he sold the goods. In such a case, answers to interrogations, upon faits et articles, of the purchasing partner, to the effect that he applied the goods so purchased by him to the purposes of the firm, are not omly admissible, but are conclusive evidence to bind the firm. Q. B., Maguire & Scott, 7 L. C. R., p. 451. But a creditioir of an insolvent cannot claim upon the part- nership of which the insolvent was a member for the price of goods sold to the insolvent before his partnership, upon the ground that the partnership afterwards got the benefit of the partnership. Simmlotis & Fulton, 20 L. C. J., 296. This article has, however, been somewhat restrictively in- terpreted in the following sense: — In two cases decided in 1883 (Beique & Dumond, 12 R. L., 436; and Graham v. Bennett, 12 R. L., 448), Mr. Justice Mathieu lays down the principle that in order 'that the partnership should be bound, the third pajrty should both know of its existence, and :). Relations of Partnkks to Tiiikd Persons (Quebec). 61 have inteiuled to contract with it, even though the amtract be in the name of one of the partners solely. No authorities are (juotecl in the report of either case, and the cases do not appear to have been taken to appeal. In 1886, the Court of Review further held that where an in- dividual partner contracts in his own name and without refer- cincc to the partnership, he does not thereby bind the part- nership or any of the members thereof, except himself. C. R. Coutu V. Guevremont, 31 L. C. J. 188. The cases of Lewis & Walters and Lewis & Osborne re- ferred to under the preceding article (ante p. 59) are also of interest in this connection. Sec. 6. — Dormant or unknown Partners. C. C. 1 868. Dormant or unknown partners are, during the continuance of the partnership, subject to the same liabilities towards third persons as ordinary partners under a collective name. This article is based upon the French and English law. It i.-. tlie converse of the article which follows. Sec. 7. — Holding out. C. C. 1 869. Nominal partners and persons who give reason- able cause for the belief that they are partners, although not so in fact, are liable as sucli to third parties dealing in good faitli under that belief. The above article thus succinctly defines the law of the Pro- vince of Quebec on the doctrine of "holding out.'' An ostensible partnership with respect to third persons may exist between traders, without there being an actual partner- ship between the partners, entitling the one to claim from the other contribution tloi the pairtnership debts. Consequently, in such a case of ostensible partnership a release given by cre- ditors to the ostensible and not actual partner does not enure to the benefit of the real partner. Mclndoe v. Pinkerton, M. L. R., 4 S. C, loi. Cases in which the facts disclosed that the parties had given reasonable cause fior the belief that they were partners are Leblanc & Akerman, i R. de J., 425; Banque du Peuple & Gauthier, C. R., R. J., 14 S. C, 18. A case in which the facts did not disclose that the party had 62 Kelatiuns of Partners h* Third 1'ersons ((Jucbcc). given such cause is tliat of Lcsporance v. Bourassa, decided by the Court of Queen's Bench, Montreal, 28th October, 1899, and not yet reixjrted. "Hohling out" can be proved by parole evidence. Q. B., Davie v. Sylvestrc, 33 L. C. J., 321. Sec. 8. — Additional General Rules from the Title of Mandate, as to liahilities of the Partners for the acts of each other. In addition, article 1856 of the Goide provides that liabilities of the partners for the acts of each other when not regulated by the foregoing are subject to the rules contained in the title of mandate. The principal of these articles are given here without comment. C. C. 1727. The mandator is bound in favor of third per- sons for all tlie acts of his mandatary, done in execution and within the powers of the mandate, except in the case provided for in Art. 1738 of this title, and the cases wherein by agree- ment or the usage of trade the latter alone is bound. The mandator is alsio answerable for acts which exceed such power, if he had ratified them either expressly or tacitly. C. C. 1728. The mandator or his legal representative i-s bound towards third persons for all acts of the mandatary, done in execution and within the powers of the mandate after it has been extinguished, if its extinction be not known to such third persons. C. C. 1723. The mandator or his legal representative is bound for all acts of the mandatory done in execution and within the powers of the mandate after it has been extin- guished, when such acts are a necessary consequence of a business already begun. He is also boiimd for acts of the mandatory done after the extinction of the mandate by death or cessation of authority in the mandator, for the completion of a business, where loss or injury might have been caused by delay. C. C. 1730. The mandator is liable to third parties who in good faith contract with a person not his mandatory, under the belief that he is so, when the mandator has given reason- able cause for such belief. C. C. 1731. He is liable for damages caused by the fault of the mandatory, according to the rules declared in article 1054. C. C. 1054. He (every person) is responsible not only for the damage caused by his own fault, but also for that caused by the fault of persons under his control. Rklations of Partxkrs to One Another (Except Quebec). 63 CHAPTER III. Relations of Partners to one another. This Chapter will be sub-divided as follows: — Sec. I. — Variation by consent of terms of pairtnership. Sec. 2. — Partnership property. (a) Rules for determining what constitutes partner- ship property. (b) Rules regulating the rights of partners in such property. Sec. 3. — As to expulsion, and determining rights of partners in partnership at will and rights when term has expired and the partnership is continued without a new agree- ment. , Sec. 4. — Duty of partners to account. Sec. 5. — Eflfect of assignment of share and rights of assignor. Sec. I. — Variation by Consent of Terms of Partnership. 19. The mutual rights and duties of partners, whether as- certained by agreement or defined by this Act, may be varied by the consent of all the partners, and such consent may be either express or inferred friom a couirse of dealing. 60 Vic. (Man.), c. 24, s. 19; R. S. B. C, c. 150, s. 20; N.W.T. Ord., 1899, c. 7, s. 21. For usual clauses in partnership artides, see appendix. Sec. 2. — Partnership Property. (a) Sections 20, 21, and 22 contain the following rules for determining what shall he deemed partnership property: — 20. (i) All property and rights and interest in property originally brought into the partnership stock, or acquired, whether by purchase or (otherwise, on account of the firm, or for the purposes and in the course of the partnership business, m '■t\ !:■ .1 m ■!:,!■'. ;i ■i.i'-. !l i'i . i' i»:!;ai,'il! Ik' s'i 111 fi4 ' Relations of Partners to One Another (Except Quebec), are called in the Act partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership, and in accordance with the partnership agree- ment. (2) Provided that the legal estate or interest in any land which belongs to the partnership shall devolve according to the nature and tenure thereof, and the general rules of law thereto applicable, but in trust so far as necessary for the persons beneficially interested in the land under this seciion. (3) Where co-owners of an estate or interest in any land not being itself partnership prioperty are pairtners as to profits made by the use of that land, and purchase other land out of the profits to be used in like manner, the land so purchased be- longs to them in the absence of an agreement to the contrary, not a*" partners but as co-owners for the same respective es- tates and interests as are held by them in the land first men- tioned at the date of the purchase. 60 Vic. (Man.), c. 24, s. 20; R. S. B. C, c. 150, s. 21; N. W. T. Ord., 1899, c. 7, s. 22. For cases illustrating this sub-section, see Lindiey, 6th ed., 340. The ultimate test, however, must be the agreement of the parties, Lindiey, 6th Ed., p. 332, 21. Unless the contrr.ry intention appears, property bought with money belonging tcy the firm is deemed to have been •n account of the firm, 60 V bough (Man.), c. 24, R. S. B. C, c. 150, s. 22; N. .W. T. Ord., 1899, c. 7, s. 23. 22. ''Wliere land or any interest therein has become part- nership property, it shall', unless the contrairy intention appear, be treated as between the partners (including the representa- tives of a deceased partner) and also as between the heirs of a deceased partner and his executors or administrators, as personal or moveable, and not real estate.'' 60 Vic. (Man.), c. 24, s. 22; R. S. B. C, c. 150, s. 23; N. W. T. Ord., 1899, c. 7> s. 24. The Brit. Col. Act reads in the first line, "where land or any heritable interest therein," and the last line, "and not real or heritable estate." • Ri-:lati().\s of Partners to One Another 65 (Except Quebec). , At Common Law, while the decisions are conflicting, there is an almost overwhelming preixynderance of authority in favor of the rule as here laid down, and it may safely be said to be the rule in all the Provinces, and not only in those in which the Act is in force. See Lindley, 6th Ed., pp. 352, et seq. Wylie V. Wylie, 4 Grant, 278. Sanborn v. Sanborn, 11 Grant, 359. Manitoba Mortgage Company v. Bank of Miomtreal, 17 S. C. R., 692. As partnership lands are really personalty, dower does not attach. See in re Music Hall Block, 8 Ont. R. 225. An agreement to assign a share in a j>alrtnership, part of the assets of which consist of land, is within sec. 4 of the Statute of Frauds, Gray v. Smith, 43 Ch. D., 208. But a partnership may be floir'med by parol agreement, not- withstanding it is to deal in land. Archibald v. McNerhanie, 2y S. C. R., 564. It is competent for the partners to agree that land shall not be t'reated as personalty, and an agreement expressed or im- plied that the land shall not be sold would seem to amount to an agreement not to treat it as personalty, because the doc- trine that partnership lands are to be treated as personalty rests on the equitable doctrine of conversion. In other words each partner has the right on a dissolution to have the land siok\ and turned into money, so that equity treats it as per- sonalty or money, but if there were an agreement that it should not be sold, this would amount to an agreement not to treat it as personalty. Where a contract is made by one partner foir the sale of partnership lands, to which the other |>airtner refuses to con- sent, the purchaser cannot insist upon taking the share of the contracting partner in the lands with a proportionate abatement in the price. Grain v. Rapple, 20 A. R. 291. Right to vote on Partnership Property. When two partners occupied premises, the freehold of which was vested in one of them, and the assessment of the premises i I'll 1'! ^' Relations of Partners to One Another (Except Quebec), was sufficient to give a qualification to each, both parties were held qualified to vote. South Grenville Election. Ellis v. Fraser, H. E. C. 163; and see Queen v. Joanisse, 28 O. R. 495; Regina v. Bennett, 27 O. R. 314. Charging order: — 23.(1) The Court of Queen's Bench or a judge thereof may. on the application by summons of any judgment creditor of a partner, make an order charging that partner's interest in the partnership property and profits, with payment of the amount of the judgment debt and interest thereon, and may by the same lor a subsequent order, appoint a receiver of that part- ner's share of profits (whether already declaired or accruing), and of any other money which may be coming to him in re- spect of the partnership, and direct all accounts and enquiries, and give all other orders and directions which might have been directed or given if the charge had ' een made in favour cf the judgment creditor by the partner, or which the circum- stances of the case may require. (2) The other partner or partners shall be at liberty at any time to redeem the interest, or in case of a sale being directed to purchase the same. The corresponding section of tlie Brit. Col. Act, sec. 24, pro- vides that: — 24. (i) After the commencement of this Act a writ lotf ex- ^ ecution shall not issue against any partnership property except on a judgment against the firm. (2) The Supreme Court or a judge thereof, or a judge of a County Court, within his teirritorial jurisdiction, may, ion the application by summons of any judgment creditor of a partner, make an order charging that partner's interest in the partner ship property and profits, with payment of the amount of the judgment debt and interest thereon, and may by the same or a subsequent order appoint a receiver of that partner's share of the profits (whether already declaired or accruing), and of any other money which may be coming to him in respect of the partnership, and direct all accounts and enquiries, and give aid other orders and directions which might have been directed or given if the charge had been made in favor of '! Relations of Partners to One Another 67 (Exceot Quebec), the judgment creditor by the partner, or which the circum- stances of the case might require. • (3) The other partner or partners shall be at liberty at any time to redeem the interest charged, or in case of a sale being directed, to purchase the same. (4) This section shall apply in the case of a cost book com- pany, as if the company were a partnership within the mean- ing of this Act, and see N. W. T. Ord., c. 7, s. 25. These provisions apply to British Columbia, Manitoba and North-West Territories. The other provinces have no pro- sions as to charging orders. (b) Rules for determining rights of Partners in Partnership Property. 24. The interests of partners in the partnership property and their rights and duties in relation to the partnership shall be determined subject to any agreement, express or implied, between the partners by the following rules : — (i) All the partners are entitled to shaire equally in tlie capital and profits of the business, and must contribute equally towards the loisses, whether of capital or otherwise, sustained by the firm. (2) The firm mu§t indemnify every partner in respect of pay- ments made and personal liabilities incurred by him. (a) In his ordinary and proper conduct >f the firm, or (b) In or about anything necessarily done for the pre- servation of the business or property 'of the firm. (3) A palrtner making for the purpose of the partnership any actual payment or advance beyond the amount of capital which he has agreed to subscribe, is entitled to interest at the rate of five per cent, per annum from the date of the payment or advance. (4) A partner is not entitled before the ascertainment of profits to interest on the capital subscribed by him. (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. II', I'" m 68 Relations of Partners to One Another (Except Quebec). (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 o* 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, 60 Vic. (Man.), c. 24, s. 24; R. S. B. C, c. 150, s. 25; N. W. T. drd., 1899, c. 7, s. 26. Sub-sec I. — "All the Partners arc entitled to share equally, etc.'* Although the partners may have contributed the capital un- equally, they will, in the absence of any agreement to the con- trary, share profits and losses, whether of capital or othefrwise, equally. Lindley, Act62; Stewart v. Forbes, i Mac. & G. 137; Webster v. Bray, 7 Ha. 159; Robinson v. Anderson, 20 Beav. 98; Peacock v. Peacock, 16 Ves. 49. If it has been agreed that profits shall be divided in a certain proportion, the inference in the absence of an agreement to the contrary is that losses are to be shared in the same propor- tion, Lindley, Act 62, referring to judgment of Jessel, M. R., 'in Albion Life Ass, Society, 16 Ch. D. p. 87. Storm v Cumberland, 18 Gr. 245. Sub-sec. 3. — "Partners making advance entitled to Interest** It has been suggested that at Common Law there was some doubt as to this (rule, and the cases oif DeHertel v. Supple, 14 Gr. 421, and Cooke v Benbow, 3 DeG. J. & S. i, have been re- ferred to as deciding that interest will not be allowed, but De Hertei v. Supple was not a partnership case, and Cook v. Benbow only decided that advances on account oif capital should not bear interest, while in Ex-parte Chippendale, 4 De G. M. & G. 19, though the judges acknowledged that they felt some difficulty on the point, yet they expressly decided that Rklatkjn'S or Partxkrs to Oxii Another 69 (Except Quebec), partners making such advances were entitled to interest, and Lindley, see Act, p. 65, says that the sub-sec. is in accordance with the previous law. But a partner indebted to the firm in irespect of money bor- rowed, or in respect of a balance in his hands, is not liable for interest unless there has been a fraudulent retention or an improper application of the money. Lindley, Act 65 ; Rhodes v. Rhodes, Johns 653, there cited. In the Provinces in which the Act is not in force (as also in the North-West Territories where the Act does not mention the rate), probably the rate of interest would be six per cent, instead of five. Sub-sec. 5. — "Every Partner may take part in the management." This does not apply to the special partners of the Canadian Acts. A special partner by taking part in the management of the business would (render himself liable as a general partner. See Limited Partnerships. Sub-sec. 6. — Remuneration. It was held in Butler v. Butler, 29 N. S. R. 145, that in the absence of special agreement a partner is not entitled to be paid for personal services in winding up the business. And see Liggett v. Hamilton, 24 S. C. R. 665. Sec. 3. — As to expulsion and determining Partnership AT WILL. Partner eannot be expelled by majority. 25. No majority of the partners can expel any partner, unless a power to do so has been confenred by express agree- ment between the partners. 60 Vic. (Man.), c. 24, s. 25; R. S. B. C, c. 150, s. 26; N. W. ~ Ord., 1899, c. 7, s. 27. Right to determine partnership at will. 26. (i) 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. (2) Where the partnership has originally been constituted IF If 1^ 70 Relations of Partnkrs to Onk Another (Except Quebec), by deed, a notice in writing, signed by the partner giving it, shall be sufficient for this purpose. 60 Vic. (Man.), c. 24, s. 26; R. S. :B. C, c. 150, s. 27; N. W. T. Ord., 1899, c. 7, s. 28. Perhaps where the Act is not in fcirce a partnership con- stituted by deed must be dissolved by deed. See Lindley, 6th Ed., 560, and Doe. D. Waithman v. Miles, 4 Camp. 373. 27. (i) 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. (2) A continuance of the business by the partners, or such oif them as habitually acted therein during the term, without any settlement or liciuidation of the partnership affairs, is pre- sumed to be a continuance of the partnership. 60 Vic. (Man.), c. 24, s. 27; R. S. B. C, c. 150, S.28; N. W. T. Ord., 1899, c. 7, s. 29. Sec. 4. — Duty of Partners to account. This is dealt with in sections 28, 29 and 30. These sections are founded on the "brolad principle of equity that from every person standing in a situation of trust and confidence with re- spect to another a conduct marked with the most scrupulous good faith shall be required." 28. Partners are bound to render true accounts and full informatiiotn of all' things affecting the partnership to any part- ner or his legal representatives. 60 Vic. (Man.), c. 24, s. 28; R. S. B. C, c. 150,8.29; N. W. T. Ord., 1899, c. 7, s. 30. Partner must account for private profit. 29. (i) Every partner must account to the firm for any benefit derived by him without the consent of the other partners from any t;ansaction concerning the partnership, or from any use by him of the partnership property, name or busi- ness connection. (2) This section applies also to transactions undertaken after a partner^ip has been dissolved by .the death of a partner, i full part- 5. 28; 30- lip, or r busi- naiter Relations of Partners to One Another 71 (Except Quebec). and before the affairs thereof have been completely wound up, either by any surviving partner or by the representatives of the deceased partner. 60 Vic. (Man.), c. 24, s. 29; R. S. B. C, c. 150, s. 30; N. W. T. Ord., 1899, c. 7, s. 31. In Mitchell v. Lister, 21 Ont. 318, where after notice of dissolution one of the partners had taken orders on his own account to be filled by him after the termination of the partner- ship, it was held following Dean v. McDowell- 8 Ch. D. 365, that his co-partner had no equity to compel him to account for the proifits of the business thus done. The proper remedy is by injunction or an action for damages. Partner carrying on business of same nature must account. 30. 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. 60 Vic. (Man.), c. 24, s. 30; R. S. B. C, c. 150, s. 31; N. W. T. Ord., 1899, c. 7, s. 32. See Mitchell v. Lister, supra. Sec. 5. — Effect of assignment of share and rights op assignee. Does the assignment lOif his share by one partner operate as a dissolution of the partnership? In this connection it is necessary to consider section 31, which deals with the assign- ment of a share in a partnership, and which provides as fol- lows : — 31. (i) An assignment by any partner lOtf his share in the partnership, either absolute or by way of mortgage or redeem- able 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 busi- ness or aflfaiirs, or to require any accounts of the pvartnership transactions, or to inspect the partnership books, but entitles the assignee only to receive the share of profits to which the assigning partner would oth( 'se be entitled' and the as- signee must accept the accouu. . prolfits agreed to by the partners. • < ,' 72 Rklatioxs of Paktnkus to Onk Anothkr (Except Quebec). (2) In case of a dissolution of the partnership, whetlicr as respects all the partners or as respects the assigning 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 purpose of ascer- taining that share to an account as from the date of the disso- lution, 60 Vic. (Man.), c. 24, s. 31; R. S. B. C, c. 150, s. 32; N. W. T. Ord., 1899, c. 7, s. 33. The question as to whether an assignment by one partner of his share in the partnership operates as a dissolution cannot be said to have been decided in ,Eng*liand. The better opinion seems to be that before the Act it wiAild have so operated in the case of a partnership at will, and in other cases would give the co-partners the right at their option to dissolve. Since the Act, however, it seems doubtful whether such an assign- ment would in any case operate as a dissolution. It might be inferred from the silence otf sections 32 and 33 that it does not so operate, though, on the other hand, it might be argued that, by virtue of section 45- which provides that the rules of Equity and Common Law shall continue ,in force, except so far as they are inconsistent with the express provisions of the Act, no change in the law has been made. See Lindley, 6th Ed., 575-7, and Act yy. In America, an assignment of his share by one partner operates as a dissolution not only in the case of a partnership at will but also in the case of a partnership for a fixed period at the instance of the assignor or assignee, and against the will of the other partners. In Ontario the American rule was adopted in the case of Westbrook v. Wheeler, 25 Ont. 559. The position of the law in the various Provinces may be stated as follows: — If it be correct that the Act introiduced a change in the law as above set out, then in Manitoba, British Columbia and North-West Territories an assignment by one partner of his share will not in any case operate as a dissolution. In Ontario, under Westbrook v. Wheeler, supra, such an assignment will in every case operate as a dissolution, and in the other Pro- Relations of Partnkrs to One Another (Quebec). 73 vinces it will, according as the American or English nile is {ollowed, either in every case operate as a dissolution, or will, in the case of a partnership at will, operate as a dissolution, and in other cases give the remaining partners the right at their option to dissolve. QUEBEC LAW. CHAPTER III. Relations of Partners to One Another. Sec. I. — Contributions to Partnership Capital. (a) In Full Property. (b) In Usufruct Only. Sec. 2. — Private Business carried on by Partner. Sec. 3. — Imputation of Payments received by Partners and Partnership. Sec. 4. — Damages caused by Fault of Partner. Sec. 5. — Reimbursement and Indemnification of Partner by Partnership. Sec. 6. — Profits and Losses. Sec. 7. — Management of the Business of the Partnership. (a) By agreement. (b) Without Agreement. Sec. 8. — Third Parties associated in Share of Partner. The Chapter of the Civil Code dealing with the obligations and rights of partners among -themselves contains fifteen articles drawn for the greater part from the Roman Law. They generally dcincide with the Code Napoleon. Sec. I. — Contributions to P/rtnership Capital. (a) In Full Property. C. C. 1 839. Each partner is a debtor to the partnership for all that he has agreed to contribute to it. When such a contribution consists of a certain thing, and the partnership is evicted of it' the partner is subject to warranty in the same manner as a seller is in favor of the buyer. Each partner ought to contribute something, although not necessarilv of the same value or nature. 6 . f! 74 Relations ok Paktnkrs to One Another (< )iiebec). C. C, 1830 (ante p. 18) enumerates property, credit, ?kill or industry. The word "property" comprises even incor- pyoreal things, such as a secret process, a patent, a trade mark, or good will. (Beaudry-Lacantinerie, Solciete, No. 158.) The contribution of a public office is, however, illegal. (Id. 159.) Each partner is a debtor to the partnership, on the prin- ciple (ante p. 18) that the latter constitutes a moral entity. The partner and partnership practically occupy the positions of seller and buyer. Hence the partnership becomes tlie owner by the consent alone of the parties, and the thing is at once at its risk, provided it does not perish by the fault of the partner, and provided the thing perish before the partner is in default to transfer it. (Pothier, Societe, No. no.) The other rules of sale likewise apply to the contract. (Beaudry- Lacantinerie, Societe, No. 165.) The following case, which went to the Privy Ooimcil, is of interest: — MacLean, Stewart and Smith had entered into jDartnership under the name of John MacLean & Co., in continuation of a former partnership under the following conditions : — Each of the partners was to contribute to the new partnership to form its capital the amounts which were ,credited to their account in the books of the former partnership. These sums were $4,480.91 for MacLean. $25,292.47 for Stewart, and $30,350.96 for Smith, thus forming a partnership capital of $60,124.34. The partners were to share in the profits and losses. MacLean for one-half, and Stewart and Smith for one- quarter each. Some years after this agreement, the partnership of John MacLean & Co. became insolvent, and it was proved that the partnership capital had been completely lost in the operations of the partnership. During these operations Mac- Lean had withdrawn from the partnership the portion of the capital which he had domtributed to it himself, plus the sum of $29,079.31, charged to the knowledge of MacLean to the capital account in the books of the partnership. After the as- signment, MacLean purchased from the creditors all the as-sets of the partnership for fifty cents on the dollar, which was the true value of these assets, and a discharge was given by the creditors to the three partners. Relations of I'aktnkus to Onk A.notmkr (Qnchec). "5 of The foll'imm^ was held by the Court of Ouccn's Bench, confinr.iiij,' the jiul^Miient of Jette, J.. K. j.. 4 S. C. 36. I. That, under the circumstances, the partnership capital having been completely lost, each of the partners had to bear this loss in the proportions indicated by the partnership arti- cles; and that MacLean, having only contributed to this capital a portion tcif his share in the loss, and Stewart cuul Smith re- j:i)ectively more than the amcimt which they ought to bear in the loss of the capital, MacLean ought to reimburse his partners the amount which the latter had contributed to the partnership capital, over and above the proportion which they ought to bear in the loiss of this capital; 2. That MacLean, having only paid to the creditors the real value of the assess of the ixirtnership, he could not ^et up in compensation against his co-partners any part of the sum paid by him in considerati'011 of the reconveyance to him of the assets, and this in spite of the discharge granted to his part- ners ; 3. That the claim in questiion constituted rather a debt of the partners than a debt of the partnership; and, in conse- quence, MacLean, the debtor of thi« claim, and creditor, as the result of the reconveyance of the assets to him, of all the debts of the partnership, had not extinguished this claim by the confusion in his person of the qualities of debtor of this claim and creditor of the debts of the partnership; 4. That, in principle, the assignment of a commercial part- nership includes the property and actions of the partners in- dividually- and even the recourse which they can exercise anvong themselves, but when, after the assignment, as in this instance there has been a composition by the partnership and a discharge in the name of the creditors, this discharge has the etTect of giving back to the partners the exercise of their per- sonal rights, and hence the rights which they can exercise against their co-partners. MacLean & Stewart, R. J., 3 B. R- 434- These decisions were reversed by the Supreme Court, Sir Henry Strong, CJ. and Mr. Justice Taschereau dissenting (25 S. C. R., 225) ; but were again restored by an unanimous 70 Relations of Pautnkrs to One Another ((Jiicbec). judj^ent of tlic I'rivv Council on the ist of August, 1896. Tlic latter judpnictit is not reported. It is simply formal and contains no reasons. The judj^nncnt in Rcid v. Hi»set, 15 Q. L. K., 108, was ap- proved by the foregoing decision. C. C. 1840. A partner who fails to pay any sum of money which he has agreed f ;■ contribute to the partnership is liable fur interest on such sum from the day of his default. He is also liable for interest upon any sum taken by him from the partnership funds for his particular benefit from the day that he has withdrawn it. This article contains an exception to the general rule in that such interest is due from the day of the partner's default to pay the sum to be contributed, or from the day on which he has withdrawn the partnership funds, instead of being due only from the date of the demand. The action to re- cover such interest is prescribed by five years (C. C. 2250). The partner cannot object to pay it on the ground that the partnership has not suffered. (Fuzier-Herman, C. C. 18467.) C. C. 1 841 . i lie provisions contained in the last two preced- ing articles are without prejudice to the rights of the other partners to damages agairfst the partner in default, and to ob- tain a dissolution of the partnership, according to the rules con- tained in the title "Of Obligations," and in article 1896. 'This article was adopted by the codifiers to remove all doubt as to the extent of the responsibility of a partner under the conditions mentioned. The rules referred to in the title "Of Obligatiions" are C. C. 1070 to 1078. Article 1896 is to be found later. See also C. C, 1845 (post p. 79). The Corporation of the County of Ottawa, under the author- ity of a by-law, undertook to deliver tlo the Montreal, Ottawa and Occidental Railway Company, for stock subscribed by them, a certain number of debentures bearing interest. On the refusal of the County, without valid reasons, to ddiver the debentures, the Supreme Court held that the relationship be- tween the parties constituted a partnership, and thai tha 1 1 Relations of Partnkks to Onk Anothkr (Oucbcc). 77 County was liable under these articles for interest on the bonds, in addition to damages. Corp. of Co. of Ottawa, and M. (). iS; ( ). U. Co., 14 S. C. K. 193. (b) In Usufruct only. C. C. 1846. A certain and determinate thinjj;. which does not consumed by use, and of which the enjoyment only is cim- tributed to the partnership, is at the risk of the partner who is the owner of it. Things which consume by use or deteriorate by keeping, or which arc intended to be sold, or are contributed to the part- nership at a fixed valuation, are at the risk of the partnership. By way of exception to the general rule laid (Iv)wn in the first paragraph of the article, the partnership become* pro- prietor of the things of which the enjoyment alome has been contributed in the different cases mentioned in the second paragraph. It is therefore evident that the partner who has contributed things which deteriorate in keeping, cannot, on the expiry of the paintncrship, be compelled to take back the same identical things. (Fuzier-Herman, C. C, ,1851-1.) Neither can he demand that they be returned tiDi him. He can only demand the value of the things, and this value should be that which the thing possessed, when contributed. (Id. 2 and 3.) Sec. 2. — Private Bi-sixess carried on by a Pautnicr. C. C. 1842. A partner cannot earn- on privately any busi- ness or adventure which deprives the partnership of a portion of the skill, industry or capital which he is bound to employ therein. If he does so, he is obliged to account to the partner- ship for the profits of such business. The portion of skill, industry or capital which he is bound to employ will, of course, depend on the contract. If, by the partnership articles, each partner is free to undertake work for his sole benefit, outside the business of the partnership, he need not account to the partnership for the profits of such work. Berger v. Metivier, i Q. B. R.. 327. This art'cle refers solelv to the relations of the partners among themselves, and not to their liability to tliird parties. C. R., Coutu V. Guevrement, 31 L. C. J, 188. !l 78 Relations of Partners to One Another (gueLec). Sec. 3. — Imputation of payments receivbo by Partners AND Partnership. C. C. 1843. When a partner is creditor individually of a I)erson who is also indebted to the partnership, and both ^ebts are actually payable, the imputation of any i)ayment received by hini from the debtor is .made upon l>oth'debts in proportion to their respective amounts, although by the receipt he mav have imputed it upon his private debt only; but if by the re- ceipt he impute thv. payment wholly upon the partnership debt, such imputation is to be maintained. This article expresses both the law of Quebec and oi France to-day. but dififers from the English law in that, by the latter, the payment would be imputed on the private debt in the ab- sence of a special imputation ,on the debts of the partnership. It is a disputed point as to whether, if the imputation of payment has been made by the debtor himself, the partnership should, save in case of fraud, stand the consequences, even if they are prejudicial to it and advantageous for the partner. The greater number of authorities are in favor of the affirma- tive. (Fuzier-Herman, C. C. 1848-3.) It has been held that an agreement by which the manager of a partnership sold certain goods belonging to the partner- ship, and agreed that the prices of these goods shall be applied by the purchaser in payment of the personal debt of any or all of the members of the partnership to the purchaser, is legal ^nd binds tl "lartnership. and allows the purchaser to retain the price of these gocds in payment of a persor»al debt, which he has against the manager, who was also a partner. It was proved in this case that all the members of the firm had ac- quiesced in the agreement. Q. B., Fortier & Dupuis, 18 R. L.. 244. C. C. 1 844. When a partner has been paid his .'ull share of a debt due to the partnership and the debtor becomes insolvent, such partner is obliged to return to the partnership what he has received, although he may have given a discharge specially for h's part. He ha^ only recovered a part of the common thing and hence should return it. If the failure of the partaer to recover m Relations of I'aktxeks to Oxe Another (Quebec). 79 from the insolvent is the result of negligence of one of the partners, he can be compelled to reimburse the partnership under the following article, f Troplong, t. 2, n. 562.) This article and the three foUbwing are taken from the Code Napoleon. Skc. 4. — I)ama(;i:s caused by fatu.t of Partner. C. C. 1845. I'^ach partner is liable to the partnership for damages caused by his fault. He cannot set up in compensation (»• such damages the profits which the partnership has derived fri'ni his industry in other affairs. But there is no prohibition against his setting up the profits of the transaction in regard to which he is sued. (Fuzier- IKrman, C. C. 1850-4.) Jn a contract between several persons for the keeping of a ferry, with power to any one of them to sell or convey his rij:;;^ht therein, the assignees of any of the said partners cannot act so as to injure the business. The other co-partners have a personal and direct action against such assignees, as well for the damages from their breach of the original contract, as for • the rescission of the contract for the future. Q. B., Lavioiette & Dedisle, 8 L. C. R.- 174; see also Cowan v. Osborne (ante P- 59)- Six. 5. — Reimbursement and Indemnification of Part- ner BY Partnership. C. C. 1847. A partner has a right against the partnership, not only to recover money disbursed by him for it, but aiso to be indemnified for obligations contracted by him in good faith in the business ol the partnership, and for the risks insepar- able from his management. If such risks could have been avoided by prudence on his part, he cannot recover. (Pothier, Societe, Noi. 129.) ( )n a judgment rendered jointly and severally against two partners for a debt personal to one of them, the payment made by the personal debtor frees his partner, and! he who has paid may then cause himself to be subrogated in the rights of the plaintiff, but should, if he has any claim against his part- 80 Relations of Partners to One Another ^Quebec). ner, proceed directly by an . action to account (pro socio). Leduc V. Turcot, 5 L. C. J., 96. For the action to account, see later. Sec. 6. — Profits and Losses. C. C. 1848. When there is no agreement concerning the shares of the partners in the profits and losses of the partner- ship, they share equally. This article expresses a rule of Roman Law, which, in the absence of stipulation, always presumes equality of shares. It is in accordance with English, Scotch and United States law. A great diversity of opinion on the subject exists in France, however. The Code Napoleon declares the shares to be in proportion to the contributions. Sec. 7. — Management of the Uusinkss of the Partnership. (a) By Agreement. The following article, C. C. 1849, commences a series of articles devoted to the mr.nagemenit of partnerships. Their sole object is to supplement the will of the interested parties. Hence the following rules are only applicable in the cases and so far as the agreement of partnership is silent. C. C. 1849. A partner charged with the management of ,the business on an application for a new trial it was held that a duty arose to get the notes discounted, and to pay the proceeds to the plaintifif, or to return the notes to him. The judgment might have been put on the ground, and though not expressly so stated it is submitted that it was put on the ground that, "Each partner had the power after dissolution to bind the firm so far as necessary to complete transactions begun but not finished at the time of dissolution." In Murphy v. Yeomans, 29 U. C. C. P. 421, two partners dissolved the partnership by agreement, one of them continu- ing the business. Subsequently, the other partner, on the ground that he was a minor, and was not bound by the agree- ment for dissolution, filed a bill for an account. Subsequent to the filing of the bill, the partner continuing the business, in order to meet existing demands against the firm, sold some wheat, which was an asset of the partnership. The purchaser knew of the dissolution, but did not know of the bill having < been filed. It was held by Gwynne J., following Butchart v. Dresser, 4 De G. M. & G., 542, that the sale was valid. When a firm has employed a solicitor to conduct litigation, and one of the partners retires while the litigation is pending, he will be liable to the solicitor for costs incurred subsequent to his retirement, even though a dormant partner. Court V. Berlin, 1897, 2 Q. B. 396. (fl) Rights of retired partner zvJien business eontimied after disso- lution without any settlement. 42. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing part- ners carry on the business of the firm with its capital or assets without any final settlement of accounts as between the firm Dissolution of Partxekshii' (Except Quebec). B9 and the outpoinp partner or his estate, then in tlie absence of any agreement to tiie contrary the outj^oinj^ partner or his es- tate is entitled at the option of himself or his representatives to such share of the prohts made since the dissolution as the Court may find to be attributable t > thj usj of his share of the partnershij) assets or to interest (at the legal rate) on the aniiiunt of his share of the partnership assets. Provided that when by the partnership contract an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is (hdy exercised, the estate of the deceased partner or the out- going partner or his estate- as the case may be, is not entitled to any further or other share of profits, but if any partner as- suming to act in exercise oif the option, does not in all ma- terial respects comply with the terms thereof, he is liable to account under the foregoing provisions of this section. 60 Vic. (Man.), c. 24, s. 42; R. S. B. C, c. 150, s. 43; N. W. T. Ord., 1899, c. 7, s. 44. In aetermining the proportion of profits to which a partner or his estate is entitled, each case must depend on its own circumstances *'The proportion in which profits were divided before the dissolution appears to have little or nothing to do with it.'' Lindley, Act 109. If the executors of the deceased partner, not being members ci the firm, lend their testator's share in the assets to the con- tinuing partners at interest, the continuing partners will only bo liable for interest and not for profits, though they know that the loan is unauthorized. Stroud v. Gwyer, 28 Beav. 130. If the executors are members of the firm, it appears doubtful whether the persons interested in the testator's estate have or have not an option between profits and interest, Lindley, Act, 108, citing Vyse v. Foster, L. R. 8 Ch., p. 334. (h) Amount due outgoing partner is a debt accruing at death or dissolution. Section 43 provides that, subject to any agreement between the partners, the amount due to an outgoing partner or the estate of a deceased partner in respect of his share, is a debt 6 IMAGE EVALUATION TEST TARGET (MT-3) / // {/

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citing among other cases Pearson V. Pearsom, 27 Ch. D. 145. Since the last edition of Lindley was published, however, Pearson v. Pearson has been overruled by the House of Lords in Trego v. Hunt, L. R. (1896), A. C. 7, where it was held that, when the good-will of a business is sold without fur- ther provision, the vendor may set up a rival business, but he is not entitled to canvass the customers of the old firm, a.id may be restrained by injunction from so doing. In Jennings V. Jennings, 1898, i Ch. 378, it was held that, when, by an agreement between the partners, one partner on dissolution was to retain "the assets," the good-will was included, though not specifically mentioned, and the continuing partner was held entitled to an injunction restraining the other partner from canvassing the old customers. • , • In re David v. Matthews, L. R. i Ch. (1899) 378, it was held ^hat under an agreement "that in case of the death of one of the partners a general account of the position shall be made, including all effects and securities of whatsoever nature that they possess, and the value cf such effects and securities be estimated as at the date of such decease." the good-will ought to be included in the valuation, and that it should be valued on the footing that if it were sold, the surviving partner would be at liberty to carry on a rival business, but would not have the right tO' solicit customers of the old firm, or carry on busi- ness under the style of the old firm. It is expressly stated in this case that the old doctrine that the good will survives tD the living partner is no longer law. When the land on which a trade is carried on is expropriated^ Dissolution of Partnership (Except Quebec). 93 damage to the good-will may be a proper subject of compen- sation. Re McCauley v. City of Toronto, i8 O. R. 416. Sec. 8. — Return of premium on dissolution. The custom of paying a premium upon entering into a part- nership is too well known tot require comment. But when such a premium has been paid for a partnership for a fixed term, and the partnership becomes dissolved before the ex- piration of such term, the question arises as to whether the party paying is entitled to a return of the premium. The rule which was adopted by the Act may be stated as follows : — Where one partner has paid a premium upon entering into a partnership for a fixed term, and the partnership is dissolved before the expiration of the term otherwise than by death or the misconduct of the partner who has paid the premium, or by an agreement containing no provision for the return of the premium, the Cowrt may order the return of the premium, or such part as it thinks just. See Act, sec. 40, 60 Vic. (Man,), c. 24, s. 40; R. S. B. C, c. 150, s. 41. See N. W. T. Ord., 1899, c. 7, s. 42. See Mead v O'Keefe supra. In which case, however, in consideration of the payment of the premium all interest in the good-will of the business was sold to the partners paying the premium. - This section was intended to state the law as laid down in Alwood V. Maude, L. R. 3, Chy. 369. See Lindley, Act, 105. In that case the Court directed a return ctf a part of tne premium proportionate to the unexpired portion of the term of the partnership. This may be said to be the general rule on which the Court acts, though otner circumstances are some- times taken into consideratidn. In the case of a partnership at will, the Court will not order a return of the premium in the absence of agreement unless the premium was obtained by fraud. Sec. 9. — Final settlement of accounts on ihssolution. The rules as to final' settlement of accounts are contained in section 44 of the Act. 94 Dissolution of Partnership (Except Quebec). 44. In settling accounts between the partners after a dis- solution of partnership, the following rules shall, subject to any agreement, be observed. (a) Losses, includ!ing losses and deficiencies of capital, shall be paid first out of profits, next out of capital, and lastly if necessary by the partners individually in the proportion in which they were entitled to share profits. (b) The asisets of the firm, including the sums, if any, con- tributed by the partners to make up losses or deficiencies of capital, shall be applied in the following manner and order. 1. In paying the debts and liabilities of the firm to persons who are not partners therein. 2. In paying to each pairtner rateably what is due from the firm to him for advances as distinguished from capital. 3. In paying to each pairtner rateably what is due from the firm to him in respect of capital. 4. The ultimate residue, if any, shall be divided among the partners in the proportion in which profits are divisible. 60 Vic, c. 24, s. 44; R. S. B. C, c. 150, s. 45; N. W. T. Ora., 1899, c. 7, s. 46. Before leaving tne subject of the Act, the foMowing sections should be noted : — 4. Persons who have entered into partnership with one ^another are for the purposes of this Act called collectively a firm, and the na,me under which their business is carried on is called the firm name. 60 Vic. (Man.), c. 24, s. 4; R. S. B. C, c. 150, s. 5; N.W. T.Ord. (1899), s. 6. A firm is not recognized by the English Law as an entity independently of the individuals who compose it. See Lind- ley, 6th Ed., pp. 118 et seq. 46. The rules of Equity and of Common Law applicable to partnership shall continue in force except so far as they are inconsistent with the express provisions of this Act. 60 Vic. (Man.), c. 24, s. 46; R. S. B. C, c. 150, s. 83; N. W.T. Ord., 1899, c. 7, s. 67. The British Columbia Act does not apply to Mining Part- nership. For the Mining Partnership Acts, see later. Dissolution of Partnership (Quebec). QUEBEC LAW. CHAPTER IV. Dissolution of Partnership. Sec. I. — How Partnership is dissolved, (i) By the Efflux of Time. (2) By the Extinction or Loss of the Partnership Pro- perty. (3) By the Accomplishment of the business for which it was Contracted. (4) By Bankruptcy. (5) By the Death of one of the Partners. (6) By the Civil Death, or Interdiction, or Bankruptcy of one of the Partners. (7) By the Will of one or more of the Partners. (a) In Partnerships Unlimited as to Duration. (b) In Partnerships Limited as to Duration. (c) Fraudulent Dissolutions. (8) By its business becoming Impossible or Unlawful. (9) By seizure of Partner's Share at instance of one of his Creditors. Sec. 2.— Effects of Dissolution as to Third Persons. (i) When Partners may subsequently be bound in favor of Third Persons. (2) Rights of Third Persons against Property of Part- nership and Partners. Sec. 3.— Effects of Dissolution as to the Partners Themselves, (i) Damages resulting from Dissolution. (2) Cessation of Powers of Partners. (3) Action to Account and for Partition of Assets. : •i : :., (a) Acaount (pro socio), /a, , >^^.;^.,:.^ .•;,•.,,...> t ' '..•.: ' (b) F SLTt'ition (communi dividundo). /v -^^ c^a ; 'v. .^ (4) Right to carry on a wSimilar Business. ,' , Sec. 4.— Appointment of Liquidator after Dissolution or de- mand therefor. B8 Dissolution of Partnership (Quebec). Sec. I. — How Partnership is Dissolved. The enumeration of C. C. 1892 is followed, (i) By the EfHux of Time. If the term of the Partnership be not designated, it is con- sidered to be for the Hfe of the Partners, subject, of course, to the other provisions of this section. C. C. 1833. It may, then, be terminated by n/oitice, as provided in paragraph (7), Post, p. 99. If the term of the Partnership be fixed by agreement, as is customary, that term must Tun its course, provided none of the other causes of dissolution intervene. (2) By tlie Extinction or Loss of the Partnership Property. • C. C. 1 893. When one of the partners has promised to put in common the property in a thing, the loss of such thmg before the contribution of it has been made, dissolves the part- nership with respect to all the partners. The partnership is equally dissolved by the loss of the thing when only the enjoyment of it is put in common, and the prtciperty of the thing remains with the partner. But the partnership is not dissolved by the loss of the thing of which the property has already been brought into the part- nership; unless such thing constitutes the whole capital stock of the partnership, or is so important a part of it that the business of the partnership cannot be carried on without it. t The first two paragraphs of this article reproduce in sub- stance the article of the Code Napoleon. The last paragraph is added as expressing the views of the French authors on the subject. Ifi the partnership is evicted of the thing after its contribu- tion, it has its recourse against the partner who contributed it, under C. C. 1839. (Considered ante p. 73.) ■ Before contribution, the loss of the thing dissolves the part- nership. After contribution the loss must be of the whole capital stock of the partnership, or so important a part of it that the business of the partnership cannot be carried on without it. Dissolution of Partx\ership (Quebec). 97 (3) By the Accomplishment of the Business for uhich it was Contracted. It is self-evident that a partnership should be dissolved when its object has been accomplished. C. C. 1892 declares that it is so. When parties agree to share the profits cm any contract they rnay obtain, the partnership thus created does not cease on the refusal of their tender, if they are subsequently able to ob- tain a sub-contract from him whose tender has been accepted, Q. B., Kane v. Wright, i Q. B. R., 297. A partnership formed for two years toir a certain work, which is required to be finished in that time, does not cease on the expiry of the two years, if the work be then unfinishea, and the time for completing the same has been extended by him for whom it is being done. Guillouard, No. 292. (4) By Bankruptcy. The abandonment made by a partnership must be agreed to by each of the members, and must comprise not only the property of the partnership, but also the private property of the partners. C. R., Reid v. Bisset, 15 Q. L. R. 1889. If one or more of the members of a partnership is dead or absent from the Province, the declaration of abandonment and statement of assets and liabilities may be signed by the surviving or by the resident partners; but the abandonment does not then afTect the private property of the dead or absent partner. C. C. P. 860. When dissolution occurs by bankruptcy, the assignment of the property of a commercial partnership comprises the property and actions of the partners individually, and even the actions which they can exercise among themselves. Mc- Lean V. Stewart, R. J., 3 B. R., 434; also ante p. 74. (5) By the Death of one of the Partners. The Civil Code provides (C. C. 1030) that a persou is deemed to have stipulated for himself, his heirs and legal repre- sentatives, unless the contrary is expressed, or result from the nature of the c/ontract. Partnership is just such a contract. 98 Dissolution of Partnership (Quebec). In it, the personality of the partner dominates. The death of one partner frequently results in disorganization. Hence it is that, where no term is expressed, partnership only continues for the life of the partners (C. C. 1833); and where a term i? expressed, the partnership is dissolved at any time, by the death of any of the partners, subject to the following article: C. C. 1 894. It may be stipulated that, in case of the death of one of the partners, the partnership shall continue with his legal representatives, or only between the surviving partners. In the latter case, the representative of the deceased partner is entitled to a division of the partnership property, only as it exists at the time of the partner's death. He cannot claim the benefit of any transaction subsequent thereto, unless such transaction is a necessary consequence of something done before the death occurred. This article agrees with the Code Napoleon. It differs from the Roman Law as to the continuation of the partner- ship with the heirs. It agrees with it as to the continuation between the surviving partners. If one of several partners die, the surviving partners may be sued without the representatives of the deceased partner being made parties to the suit. Meredith, C. J., Stadacona Bank v. Knight, i Q. L. R., p. 193. X6) By the Civil Death, or Interdiction, or Bankruptcy of one of the Partners. Civil Death results from condemnation to death, and to im- prisonment for life. It results also from certain religious vows. C. C. 31, 32, 33, 34. It deprives the person of all his civil rights. r Interdiction may be obtained under the circumstances men- tioned at ante p. 25. Interdicts are deprived of the capacity to contract. Bankruptcy of a partner is proof that he can no longer meet his engagements. It deprives him of the administration of his property, disorganizes the management df the partnership, Dissolution of Partnership (Quebec). 9» and diminishes the oonfidence which third parties can have in the partners, and which the latter can have in the insolvent. It furtheP causes the latter to fear that they alone will have to bear the partnership losses. (7) By the Will of one or more of the Partners. (a) In Partnerships Unlimited as to Duration. C. C. 1895. Those partnerships only which are not limited as to duration can be dissodved at the will of one of the part- ners by a notice to all the others of his renunciation. Such renunciation must be in good faith, and not made at a time unfavorable for the partnership. This article agrees in substance with the French, English and Scotch law. The Code Napoleon (C. N. 1870), however, goes further, and states that "the renunciation is not in gloiod faith when "the partner renounces in order to appropriate to himseflif " the profit which the partners intended to withdraw in com- " mon. It is made at a time 'unfavorable for the partnership* " when the things are no longer entire, and it is important " to the partnership that dissiolution be postponed." This would assist in the interpretation of our own article. {b) In Partnerships Limited as to Duration. C. C. 1896. The dissolution of a partnership limited as to duration, may be demanded by one of the partners before the expiration of the stipulated term, upon just cause shown, or when another partner fails to fulfil his engagement, or is guilty of gross misconduct, or from habitual infirmity or physical impossibility, is unable to attend to the business of the partnership, or when his condition and status are essen- tally changed, and in other cases of a like nature. This article is based on the Roman Law, and is a little more detailed than that of the Code Napoleon. In other instances, dissolution takes place by operation of law or simple notice. Under this article, an action at law is necessary to obtain that result, and just cause must be shown. Instances of what may be considered just cause are given in the article. 100 Dissolution of Partnershii' (Quebec). For example, a partnership is dissolved by the marriage oi a female partner, who has thereby changed her status and condition. Antoine v. Dallaiire> 2 R. de L., 74. But this dis- solution can only be set up by those who have contracted with the consorts after the marriage, Beaudry-Lacantinerie, Societe, No. 59. Other exampll'es of ''just causes'' which would justify a de- mand for dissolution are: — The loss of partnership property, which, though insufTicient to cause dissolution, ipso facto, under paragraph 2 of this section, is sufficient to prevent the carrying on of the partnership; the absence of profits; the appointment of a judicial adviser to one partnet; and grave misunderstanding between the partners. War between two countries, however, does not dissolve nor is it cause for dissolu- tion of a partnership between membets of the two belligerent nations. Beaudry-Lacantinerie, Societe, Nos. 462, 463, 464. (c) Fraudulent Dissolutions. A case in which the Supreme Court held the dissolution to have been simulated is that of McLaren & Merchants Bank, 23 S. C. R., 143. An instance of a fraudulent dissolution is in the case of Hughes & Caverhill, R, J., 15 C. S. 225, Confirmed in Re- view. (8) By the Business of the Partnership becoming Impossible or Unlawful. This cause of dissolution is self-evident. In the absence of agreement, it would, withbiut doubt, be necessary to obtain a judgment under the foregoing article, in order to give effect to dissolution, on the above grounds. (9) By Seizure of Partner's Share at instance of one of his Creditors, -yy \ i ^ , Commercial partnerships are also terminated by judgment maintaining, at the instance of a creditor of one of the part- ners, the seizure of such partner's share in the stock of the Dissolution of Partnersiiii' (Quebec). lol partnership, or at the instance of one of the partners after such seizure. C. C. 1892. This paragraph of article C. C. 1892 was added by the statute 60 Vic, cap. 50, s. 32, owing to a change made in tlie Code of Civil Procedure in 1897. Tlie new article in the Code of Civil Proicedure is as fol- lows : — C. P. 698. Whenever, by virtue of a judgment readered against a partner personally, a seizure by garnishment is served upon a commercial partnership to which he belongs, the partnership must, if it is not indebted to the judgment debtor in an amount sufficient to discharge the seizure, state in its declaration as garnishee, in addition to the requirements of article 685, the share of the judgment debtor in the stock and profits of the partnership. The seizure remains binding even as to profits not earned or in process of being earned at the time of its service. If, after the declaration, the partnership becomes indebted to the judgment debtor, or if it is dissolved, the garnishees r.'ust forthwith make a new declaration. For the purpose of rendering such seizure effectual, the judge may order the production of such booiks, documents and statements, allow the examination of such witnesses, and give such other orders as he may deem necessary. If the partnership fails to comply with the above rules- it becomes subject to the same responsibility as in the case of failure to make the original declaration. This rule does not apply to joint stock c®mpanies incor- norated by Royal Charter or by Act of Parliament, or of the Legislature. The result of a successful seizure by a creditor, of a part- ner's share in the stock of the partnership under article C. C. P. 698, is, therefore, the dissolution of the partnership. This applies, however, only to Commercial Partnerships. Conse- quentfliy, a partnership between architects not being a commer- cial one, its members cannot be compelled to produce their books, documents, etc., under this article, Manson v. Brodeur, I P. R., 192. ^-•-- -■■■ ■ ■';'■■' ■-^■•' -■■'■^''■■■^ ^■- '■'■-■■■■ ■' ■_ The declaration of the garnishee or partnership must dis- close the share of the defendant in the stock amd profits of the partnership, even when the declaration of the garnishee denies 102 Dissolution of Partnership (Quebec). all indebtedness to the defendant; and where the declaration of the garnishee fails VOi give such information, the Court, on motion to reject the declaration, will order the garnishee to complete his declaration by setting forth the share of the defendant in the stock and profits of the partnership. Leet v. Singer & Radford, R. J., 15 C. S., 142. Sec. 2. — The Effects of Dissolution as to Third Persons. There are no articles in the Code Napoleon corresponding with the following. The rules which they embody, were drawn by the codifiers from various sources. ( i) When partners may subsequently be bound in favor of Third Persons. C. C. 1 897. The mandate and powers of the partners to act for the partnership cease with its dissolution, except for such acts as are a necessary consequence of business already be- gim; nevertheless, whatever is done in the usual course of dealing and business of the partnership, by a partner acting in good faith and in ignorance of the dissolution, binds the other partners in the same manner as if the partnership still subsisted. This is the rule of the French Law, both ancient and modern, but it differs from that of England, Scotland and the United 'States. In the latter countries, the partners or su-v Ivors have the right to liquidate the property of the partnership, retain- ing for this purpose only the powers which they had before the dissolution. The codifiers, while thinking that perhaps this rule was the more just, did not feel disposed to alter the law 'of the Province, in this respect. A partner cannot confess judgment on behalf of a partner- ship after dis&odution (Moore v. O'Leary, 9 L. C. J., 164); nor make an admission which will bind his former partners (Dansereau & Gervais, R. L., 12 C. S., 86); nor borrow money in the name of the firm for the purposes of the partnership business. McBean & McBean, 6 L. N. 95. Nor has one partner the sole right to receive the letters addressed to the Dissolution of Partnership (Quebec). 108 former partnership, even though he has acquired all its debts. C. R. Bernaird v. Allaire, 17 Q. L. R., 198. In the case of a civil partnership, for example, between lawyers, one of the former partners, after dissolution, can only give a valid receipt for his own share, one-half, of a debt owing the partnership. -If the debtor pays him the whoftie debt he can be compelled to pay the other partner his share in ad- dition. De Montigny v. De BellefeuiMe. 30 L. C. J. 299. C. C. 1 900. The dissolution of a partnership by the terms of the contract, or the voluntary act of the partners, or by the expiration of time, or by the death or retirement otherwise of a partner, does not affect the rights of third persons dealing afterwards with one of the partners on account of the pan- nership firm, except in the cases following: 1. When notice is given as required by law or the usage of trade; 2. When the partnership is limited to a particular enterprise or adventure, which is terminated before the transaction takes place; 3. When the transaction is not within the usual course of dealing and business of the partnership; 4. When the transaction is in bad faith or illegal, or other- wise void; 5. When the partner sought to be charged is a dormant or unknown partner, to whom no credit is actually given, and who lias retired before the transaction takes place. The codifiers speak of this article as follows : — "It relates to the effect of the dissolution upon the right ■' of third parties. After a crreful examination of the books under the French and other systems of law, the article has been prepared, declaring first the general rule that dissolution " by any of the several means specified in it does not affect the " rights of third persons, afterwards dealing with the partners " as such, and then enumerating the exceptions to that rule. " The enumeration has been chiefly taken from Story's treatise ■' on partnership, as that author presents the subject in a very *' compact and complete form. His opinion is not, however, " altogether followed upon the question of notice. Great ''difference of opinion is found upon that subject, and much " subtlety of distinction appears in the books in stating the << '( lOi DissoLUTiox OF Partxersiiip (Quebec). " cases in which notice is, or is not, necessary. Pothier holds " that it is not necessary when the partnership expires by efflux " of time, according to the contract, and that it is necessary " in cases of dissolution by death. The English, Scotch and " American law on the contrary seems to be that it is neces- " sary in the former case and not in the latter. This article ** makes a notice necessary in both case? as that seems to " be the safest and most equitable rule; for it is right that all the " practical precautions should be taken to guard innocent third " persons from surprise and loss. In modern France the sub- " ject of dissolution is regulated by article 46, Code de Coni' " merce, and the other articles there referred to. The system '■ of registration and publication of partnership in that country *' is much more complete than our own. With respect to the '• other provisions of the article, they are coincident with our " law, and the other systems referred to, and do not call for ' any special observation." Partners who have filed a certificate of partnership continue liable after a dissolution, if they have omitted to file under the Partnership Act a certificate of dissolution. Murphy v. Page, 5 L. C. J. 335; Jackson v. Page, 6 L. C. J. io5- (2) Rights of Third Persons against Property of Partnership and Partners. C. C. 1 899. The property of the partnership is to be applied t'o the payment '^i the creditors of the firm, in preference to tlie separate creditors of any partner, and in case such property be found insufficient for the purpose, the private properties of the partners, or of any one of them, is also to be applied to the payment of the debts of the partnership, but only after the payment out of it of the separate creditors of such partners or partner respectively. .. This article is based on a section of the old Consolidated Statutes of Lower Canada. Partnership, as has been noted (ante p. 18), is by the French Law considered a moral entity, or a person quite distinct and apart from the partners themselves. The partnership property being that of this moral entity or person, could not, according Dissolution of Partnership (Quebec). 105 to the law, as it formerly existed, be made liable fbr the debts of any of the partners individually. No judgment against an individual partner could, formerly, be executed against it. Under late amendments to the law, however, the share of a partner in the profits and assets of the partnership can now be seized, and its dissolution thus brought about. C. C. 1892, and C. C. P. 698, ante p. 96. The debts of the partnership would, of course, have preference in virtue of article 1899. If, after dissolution, one partner assigns all the assets to the other, the creditors of the partnership retain their preference over the creditors of the latter partner until the liquidation of the partnership is completed. Q. B., Lemay & Leveille, R. J., 4 B. R. 187. After the dissolution of the partnership, it can be sued and summoned, and the partners made jointly and severally liable as if not dissolved for a debt contracted during its existence. Peoples Bank & Gauthier, R. J., 14 C. S., 20; C. R., Gordon & McDonald, 4 L. N. 133. Before dissolution, all the partners must be sued for all obligations of the partnership, and jointly and severally. The judgment may be executed against any or all' of them. Bras- serie de Beaufort & Dinan, R. J., 14 C. S., 284. When the endloirser and maker of a promissory note are the - sole members of a partnership, the property of the latter is liable for judgment on the note, saving of course the rights of the creditors of the partnership itself. C. R., Grothe & Lafleur, R. J., 9 C. S., 156. Tlie debtor of a partnership under a collective name can, after its dissolution, set up in compensation against a claim by the former partnership, a debt which he has against one of its partners to the extent of the share of the latter. Q. B., Gauthier & Lacroix, 12 R. L., 508. Sec 3. — Effects of Dissolution as to Partners Themselves. . • (i) Damages resulting from Dissolution. Such damages are due in virtue of the general principle laid down by C. C. 1845, already mentioned (ante p. 79). Tlie .7 106 Dissolution of Partnership (Quebec). partner by whose fault iliie partnership has been judicially dis- solved is Mable for damages caused thereby. If dissolution has been caused by eviction of one of the things contributed (see C. C, 1839, ante pp. 73 and 96, and C. C. 1893, ante p. 96), the partner, whose share has thus been taken from the partner- ship, is liable in damages. But, in the absence of any fault, a partner is not liablie for damages in any way. Beaudry- Lacantinerie, No. 472, (2) Cessation of Powers of Partners. See Article C. C. 1897, (ante p. 102). When the title of a debt of a partnership is a judgment it should be executed in the name of the partnership; but only for the share of the former member who executes it, and the writ of execution should so state. When the partnership has already obtained judgment against the debtor for the entire debt, one member cannot, after dissolution, obtain another judgment for his share of the same debt, but can execute for his share the judgment already obtained. Crepeau v. Bois- vert, R. J., 13 C. S., 405- j"' (3) Action to Account and for Partition of Assets. C. C. 1 898. upon the dissolution of the partnership, each partner or his legal representative may demand of his co- partners an account and partition of the property of the part- nership ; such partition to be made according to the rules re- Jciting to the partition of successions, in so far as they can be made to apply. Nevertheless, in commercial partnerships these rules are to be applied 'omly when they are consistent with the laivs and usages specially applicable in commercial matters. This is probably the most important section of the law of partnership. Under it, certainly, the greatest amount of liti- gation arises. Strange to say, the codifiers make no comment upon it, and we are left to conjecture what are the "laws and usages specially applicable in commercial matters," which are referred to. Any custom of trade might successfully be pleaded in variance of the rules relating to the partition of successions. The article of the Code Napoleon contains neither the first Dissolution of Partnership (Quebec). 107 clause of the fiirst paragraph, nor the last paragraph of our article. According to Pothier (Societe No. i6i), each partner has the choice of an action to account (pro socio) or an action to obtain a partition (communi dividtmdo). Our article speaks of both conjointly. "Each partner! may demand of his co^partners an account and partition of the property of the partnership." It is to be presumed that one or other may be taken, or both joined in one. These actions should be taken against all the partners or their heirs. If taken against one or a part ol them, those sued can demand that the other be included as well. The Court should suspend the action for that purpose. Q. B., Doak v. Smith, 15 L. C. J., 58. Those who are not sued may intervene in the action without waiting to be summoned. These actions cannot be prescribed. Pothier 166. (a) Account. The Ruiles of Practice governing accounting are to be fioiund in C. P. 566 and following, to be found in Part IV., concern- ing Practice. The Supreme Court of Canada has held that, where one. of the partners has been entrusted with the collection of moneys due. as the mandatory of the others, any of his co- partners may bring suit against him directly, either for an account under the mandate, of for mioiney had and received. Lefebre v. Aubry, 26 S. C. R., 602. When a partnership has been dissolved and a liquidator appointed, one of the partners cannot, during the liquidation, demand an account from his partners. Deslong'champs v. Poirier, R. J., 6 C. S., 273. After an assignment, however, when one of the partners has repurchased frotm the assignee all the assets of the part- nership, and obtained a discharge from the creditor for him- self and his co-partners- it has been held by the Privy Council that one of the latter can sue and recover from the former the plaintiff's share of the capital of the partnership, which had 108 Dissolution of Partnership (Quebec). been improperly drawn out by the defendant during its con- tinuance. Stewart & McLean, ante pp. 74 and 97. If the defendant fails toi render an account within a delay fixed by the judgment, the plaintiff can lorce him to pay him a certain sum to stand for the balance of the account, had it been rendered. C. R., Bertram & Sarrazin, 29 L. C. J., 290. A partner whoi calls upon a co-partner to account after dis- solution, must himself render an account, otherwise his action is ill-founded. Baile v. Baile, R J., 7 C. S., 79; C. R., Blais & VaUieres, 10 Q. L. R., 382. The books of the partnership make proof as between the partners. Baudry-Lacantinerie, No. 488. Where |t is impossible to ascertain from the books the true amount of the outstanding accounts due the firm» the Court will divide the amount ascertained, reserving to each party his rights against the other for any balance due. Q. B., Powell & Robb, 8 R. L., 125. (b) Partition. The rules relating tbi the partition of successions are to be found in the Civil Code, airticles 689 and seq. Their applica- tion is not without difficulty, and would not frequently occur in Commercial Partnerships, as rules for partition are usually inserted in the partnership deed. They must be applied, ^ however, when there is no other arrangement between the partneins. Lefebvre v. Aubry, 26 S. C. R. 602. Each partner may demand the partition. Minors cannot demand the parti- ttom of immoveable property, but those of majority can de- mand such partition as against minors. Pothier (Bugnet) Societe, Nos. 163 and 164. Usually, partition can be demanded as soon as the partner- ship is dissolved. It may, however, be agreed or ordered that the pairtition shall be deferred during a limited time, if there be any reason of utility which justifies the delay. C. C. 689. Creditors of the partners may take this acti!o(n, when, to the creditors' prejudice, they refuse to do so. C. C. 103 1, Guillouard, No. 342. They have, however, no right to inter- vene in the partition. Beaudry-Lacantinerie, No. 483. The Dissolution of Partnership (Quebec). 109 demand must apply to the whole of the assets, and not alome to any one thing or class (Id. 484). The valuation of immoveables is made by experts who are chosen by the parties interested, or who, upon the refusal of such parties, are officially appbonted. The report of the experts must declare the grounds of the valuation, it must indicate whether the thing estimated can be conveniently divided, and in what manner, and must deter- mine, in case of division, each of the portions which may be made of it, and the value of such portion. C. C. 696. Each partner must return, into the mass the sums in which he is indebted. C. C. 700; Beaudry-Lacantinerie, No. 487. In the absence of agreement, the partners cannot compel a third party to return a partner's share, which he has acquired, notwithstanding C. C. 710. Baudry-Lacantinerie, No. 244. The partition should be not only of the assets (fonds social), but of the profits realized, less that portion which should have been divided during the partnership. Baudry-Lacantinerie, No. 490. The partition is retro-active only to the date of the disso- lution, and not to the date oif the acquisition of the property by the partnership. Girard v. Rousseau, 31 L. C. J., 112; M. L. R., 3 C. S., 293. Each of the partners may demand his share in kind of the moveable and innnoveable property of the partnership, never- theless, if there be seizing or opposing creditors, or if the ma- jority of the partners deem a sale necessary to discharge the liabilities of the partnership, the moveable property is publicly sold in the ordinary manner. C. C. 697. But a partner cannot receive back in kind what he has given in full property. He does receive back in kind that of which he has merely given the enjoyment. If, however, it is a thing which consumes by use, or de- teriorates by keeping, or which was intended to be sold, or which was contributed to the partnership at a fixed valuation, he cannot be forced to take it back, as C. C. 1846 (ante p yy). places these at the risk of the partnership and hence the pro- perty in them is practically transferred to it. On the other hand he may demand ilts equivalent or its Ho Dissolution of Partnership (Quebec). fixed value. He cannot demand any increase in value. If the value of the thing has not been fixed, it is estimated as it was at the formation of the partnership. Baudry-Lacantinerie, Nos. 500-501. When two partners make a partition of shares, forming a part of the partnership assets, and one is evicted from his share, the other partner is not Hable for more than the balance of the shares at the time of the partition; that is, his obhgation is merely to equalize the value of the portions, without a new partition. Privy Council, Prentice & McDougali, 8 L. N., 162; 4 Q. B. R., 91. The partner, who has furnished his name, can take it back. Baudry-Lacantinerie, No. 503. Possibly each partner, after dissolution, has a right to the use of the firm name for the continuance of the business ; but the partner who has left the firm and discontinued business, clearly has no legal claim against the other for a conjectured value of the good willl attaching to the use of the name under which the business had been established. Coristine & Hawes, Q. B., Montreal, 1899, not yet reported. If the moveabtlies cannot conveniently be divided, they must be sold by licitation before the court. Nevertheless, the partners may consent to the licitation being made before a notary upon the choice of whom they agree. C. C. 698. Buildings erected by a partnership under a collective name on land belonging to one of the members, belong, after dis- solution, to all its members and not to the owner of the land alone; and they can be sold and the proceeds divided at the suit of any one of the partners. Q. B,, Sangster v. Hood, 18 R. L., 40; M. L. R. 5 and Q. B., 384. After the moveable and immoveable property have been estimated and sold, if there be cause for it, the court may send the parties before a notary upon whom they have agreed, or has been officially named if they have not agreed in their choice. They are to proceed, before such notary, to the account to which they are bound towards one another to the formation of the general mass, the composition of the shares and the fixing Dissolution of Partnership (Quebec). Ill of the compyensation to be fuimished to each of the co-par- titioiiers. C. C. 699. C. C. 701 to C. C. 753 contain minor details more or less applicable to partnerships, but rarely apphed. (4) Right to carry on a Similar Business. Each partner can, after diss-oilution, cany on a business analogous to that of the former partnership. A covenant de- priving a partner of this right, is null unless it is limited as to time or place. Baudry-Lacantinerie No. ^5; Cook v. Brisebois, R. J., 16 C. S. 46. Sec. 4. — Appointment of Liquidator after Dissolution OR Demand Therefor. been send rreed, their C. C. 1896a. If a partnership be dissolved or a judicial demand be made for such dissolution, the Court or the judge, upon the demand of one of the partners, after notice given to the others, has power to appoint one or more liquidators. The liquidators thus appointed must be sworn to well and faithfully perform the duties of their office. They immediately give notice of their appointment by an advertisement to that effect published in the Quebec Official Gazette and in two newspapers, one in the French and the other in the English language, published at the place of busi- ness of the partnership, or at the nearest place, and in such other manner as the Court or judge may prescribe. They become pleno jure seized of the assets of the part- nership for purposes of the liquidation; they furnish the security prescribed by the Court or judge, and aje in all re- spects subject to the summary jurisdiction of such Court or judge. They possess all the powers and are subject to all the obligations of judicial sequestrators, with the exception of the putting into possession, which is done without the inter- mediary of a bailiff. Acts, exceeding those of administration, cannot be per- formed by the liquidators without the consent of all the part- ners, and, in default of such consent, only with the approval of the Court or, judge, after previous notice to the members of the partnership. The remuneration of the liquidators is fixed by the Court or judge. 112 Dissolution of Partnership (Quebec). Proceedings respecting the appointment of liquidators and the performance of the duties of their office are summary. Provisional execution takes place notwithstanding the ap- proval, saving the right of the Court to which the cause is taken in appeal to summarily suspend such execution. Two judges of the Court seized of the appeal may also give such order for suspension after notice to the adverse party. The discretion given by this article to the judge to appoint a liquidator can, however, only be exerdsed in that sense, upon cause shown against the partner complained of, A demand for the dissolution of a partnership is not, in itself, a sufficient cause to deprive the partners, to whom the administration of the partnership has been confided by the partnership articles, of such administration. Q. B., Gerhardt & Davis, M. L. R., 7 Q. B., 473. When a partnership has been dissolved and a liquidator ap- pointed, one of the partners cannol:, during the liquidation, demand an account from his fellow-partners, i Deslongchamps V. Poirier, R. J., 6 C. S., 273. Neither can the liquidator pay over the money in his hands to one of the pvartners without an order from the Court. He is bound to render an accoiint and deliver over the eflfects in his possession, as sequestrator, before he is entitled tO' his discharge. Phillips v. Kurr, R. J., 7 C. S., 358. It is for the judge to decide whether a partnership exists or not. C. R., Hingram v. Bennet, R.iJ., i C. S., 269. Rules of Law not Comprised in the Imperial Act. 113 CHAPTER V. RULES OF LAW NOT COMPRISED IN THE IMPERIAL ACT. There are several subjects not dealt with in the Act, which will be noticed very briefly in this Chapter. They are: — 1st. — Persons capablle of entering into an agreement of Partnership. 2nd. — The Statute of Limitations as it afifects Partner- ships. 3rd. — Administration of the partnership assets on In- solvency. I. — Persons capable of entering into an Agreement OF Partnership. Any person wlio is capable of entering into a binding agree- ment is also capable of entering into a contract of partner- ship. And as there are certain persons who are under dis- ability with respect to contracts generally, so there are certain persons who cannot make a valid agreement to enter into part- nership. Married women, infants and lunatics are the prin- cipal classes of persons under a disability as toi contracts in general, and these disabilities afifect their rights to enter into partnership. Foreigners, too, or rather persons residing tin a foreign country, wliich is at war with Great Britain, are under a disability, and if a partnership exist between a person residing in a foreign country and a person residing in British Dominions, the breaking out of war between the two counrtiries will operate as a dissolution of the partnership. (a) Married Women. A married woman may make a valid contract of partnership, but only her separate estate will be liable for the debts of the partnership. Before the Married Woman's Property Acts 114 Rules of Law not Comprised in the Imperial Act. came into force, a husband and wife could mat enter into part- nership. "They could enter into a quasi partnership in this sense that the husband might carry on the business under a trust dediared for the wife." Lush, p. 170, citing re Childs, L. R. 9, ch. 508. But they could not do more tlian this. Now there is no such restriction. She may enter into partnership with her husband, and may of course enter intx> partnership with a third person, "and incur the liabiUties of a partner, and the fact that she is carrying on business as a partner was suffi- cient evidence to show that she was possessed of separate estate at the time when it was necessary to prove the existence of separate estate to make her Hable on a contract made under the Act of 1882'' i(Imp.). See Lush, p. 170. (6) Infants. Though an infant may be a member oif a partnership, he cannot be made liable for the j>airitnership debts, unless he has been guilty of fraud, but if he repudiates the liabilities, he cannot share in the profits, and he may not only repudiate the liabilities, but he may at his option avoid the contract of partnership itself either before he comes of age, or within a reasonable time thereafter. If, after he comes of age, he does not repudiate the contract of partnership within a reasonable time, then he will be deemed to be a partner and liable for the debts incurred after he has attained his majority. See Lindley, 6th Ed., p. 82-4; Simpson on Infants, 45. But if he has made no representation he need not irepudiate. Woods v. Woods, 3 Man. 33. (c) Lunatics. A lunatic may enter into a binding contract of partnership, and when entered into bona fide and without knowledge of the Irnacy it cannot be set aside at the option of the lunatic. If a member of a partnership become insane, this in itseif will not operate as a dissolution of the partnership. Any dealings with a man known to be a lunatic are, however, liable to be impeached. See Lindley, 6th Ed., p. 84. See supra as to when a dissolution will be granted on the ground of lunacy. Rules of Law not Comprised in the Imperial Act. 116 2ND. — Statute of Limitations. " So long as a partnership is subsisting and each partner is enjoying his own property, the Statute of Limitations has, it is conceived, no application; at all; but as soon as a partner- ship is dissdved, or there is any exclusion of one partner by the others, the case is very different, and the Statute begins to run." Lindley, 6th Ed., 512, citing Noyes v. Crawley, 10 Ch. D., 31. In Toothe v. Kettridge, 24 S. C. R., 287, this case was followed, and it was also held that long delay, if not ab- solute evidence, was at least a presumption of acquiescence. In West V. Benjamin, 29 S. C. R., 282, mutual releases based on erroneous statements were set aside, and the accounts which had been settled at various times were opened up, though these settHtements had been made more than six years before action brought. The question of the Statute, though set up in the pleadings and discussed on the argument, is not dealt with in the judgments. See also Betjemann v. Betjemann, 1895, 2 Chy., 474. The Pongola, 73 L. T. 512. 3RD. — Administering Assets on Insolvency. The question of administration of assets on the insolvency of a firm, or lof one ofi the partners, is another point not dealt with by the Act. The general principle upon which the Common Law pro- ceeded was adopted by the English Bankruptcy Act, 1883, and is expressed as follows in sections 40 (3) and. 59 (i) of that Act: — 40 (3)- — In the case of partners, the joint estate shall be applicable in the first instance in payment of their joint debts, and the separate estate of each partner shall be applicable in the fiTst instance in payment of his separate debts. If there is a surplus lolf the joint estate, it shall be dealt with as part of the respective separate estates, in proportion to the right and interest of each partner in the joint estate. 59 (i). — ^Where one partner of a firm is adjudged bankrupt, a creditor to whom the bankrupt is indebted jointly v/ith the 116 Rules of Law not Comprised in the Imperial Act. other partners of the firm, or any of them, shall not neceive any dividend out of the separate property till the separate cre- ditors have received the fuM' amount of their respective debts. This being the same as the Common Law, is the rule in force in Canada. Cf. ex-parte Cook, 2 P. W. 500, and see Lindley, 6th Ed., pp. 709-10. R. S. O., cap. 147, sec, 7, provides that: — "If any assignor or assignors executing an assignment under this Act for the general benefit of his or their creditors, owes loir owe debts both individually and as a member of a co-partnership, or as a member of different co-partnerships, the claims shall rank first upon the estate by which the debts they represent were contracted, and shall only rank upon the other or others after all the creditors of such other estate or estates have been paid in full. R. S M. cap. 7, s. 31; 61 Vic, N.S. c. 11, s. 6; 58 V., N.B., c. 6, s. 5, and see R. S. B.C., c. 102, s. 9. The same rule applies in the case of a deceased partner. Lodge V. Pritchard, i De G. J. & S. 610. Partmr cannot rank on Separate Estate of Cc Partner. As the surplus of separate estate after paying the separate creditors is available for payment of the firm debts, it follows on the principle that a creditor cannot compete with his own debtor that a partner could not rank on the separate estate of His insolvent co-partner, because by s;oi doing he would impair the surplus out of which the firm creditors are entitled to be paid. If, however, the separate estate is insolvent apart from the claim of the pairtner, the partner may rank with the separ- ate creditors. In re Ruby, 24 A. R. Ont. 509, Boyd, C, at p. 516, say?,:— *'The rule in administering assets which precludes afl part- ners from ranking as a separate creditor of his co-partner was established not so much with reference tc^ the separate creditors, as for the advantage of the joint creditors, because the joint creditors have the right to come in upon the separate estate of the one partner after his separate creditors are paid in full, and if the other partners were allowed to prove for a Rules of Law not Comprised in the Imperial Act. 117 separate claim against his co-pairtner, it wouild tend to reduce the amount of the (supposed) surplus available for the joint creditors. But if the reason for the rule disappears, the rule itseilf goes/' And in that case it was held that, as the separate estate was insolvent, apart from the claim of the partner, the partner could rank with the separate creditors. Again, if a partner pay all the partnership debts, or place assets which are sufificient to meet all the firm debts at the disposal of the bankrupt's estate, he may rank on the separate estate. The decision in re Ruby was based on this ground also. It is provided by R. S. O., c. 132, s. i, that on the adminis- tration of the estate of a deceased person a creditor holding security shall in case K)i a deficiency of assets, value his se- curity, and when the claim of the creditor is based on a nego- tiable instrument upon which the estate of the deceased debtor is only secondarily liable, and which are not mature, the cre- ditor shall be considered to hold security within the meaning of this section. It was held under this section that a partner whoi has in- dividually joined as the maker of a promissory note of his firm for their accommodation is not indirectly or secondarily liable within the meaning of the above section, which at that tim'e was contained in 59 Vic. (Ont.), c. 22, s. i, but that he is primarily liable, and the holder of such a note need not value his security. 118 Mining Partnerships. CHAPTER VI. Mining Partnerships. Speaking generally, mining partnerships are regulated by the same rules as other partnerships, but, as we shall see presently, special statutory provisions have been enacted in British Columbia regulating Mining Partnerships in that Province. As we have seen at p. 14, property may be held by two or more persons simply as co-owners, in which case each is entitled to an accoimt from the others of the profits they have derived from the property, and each has a right to assign his share, and, in the case of real estate, to have the property partitioned. Again, property may be held by two or more persons as co-owners, and they may be partners in the profits derived therefrom, or they may be partners both with respect to the property and the profits, in which latter case "the mutual rights and obligations of the owners aire de- termined partly by the law of partnership, and partly by the law of co-ownership," Lindley, 6th Ed., p. 29, et seq. When the property consists in a mine, the above rules equallly apply, subject to the statutory provisions in force in British Columbia. Lindley, 6th Ed., p. 29, gives the following rules, which apply to the last of the above-mentioned cases, viz.: When two or more persons hold the property as .co-owners and are partners with respect to the profits: "i. Each co-owner may transfer his interest in the mine and in the partnership working it without the consent of the other owners. Bentley v. Bates' 4 Y. and C. Ex., 182. Crawshay v. Maule, I Swanst, 517." "2. Each owner is entitled to maintain an action for an ac- count against the others without seeking for a dissolution of the partnership. Bentley v. Bates (supra)." Mining Partnerships. 119 "3. Upon a dissolution of the partnership, the mine itself not being partnership property, must be divided amongst its several owners, and not sold. Steward v. Blakeway, 4 Ch. 603, and 6 Eq. 479, unless under the Statute enabling sales to be made in lieu of partition." "4. As between the real and personal representative of a deceased partner, his share of the mine will be real and not personali estate. Steward v. Blakeway (supra)." 5. "With a view to a dissolution the Court will, if necessary, appoint a receiver and manager to carry on the mine for the benefit of all parties interested. Roberts v. Eberhardt, Kay 148; Lees v. Jones, 3 Jur. N. S. 954; Jeffreys v. Smith, i J. & W. 302; Rowe V. Wood, 2 J. & W. 553; Wynget v. Heath- cote, cited in Bentley v. Bates (supra)." 6. "The obligation of each co-owner to account to the others is the same as that of one partner to account to his coi-part- ners, and much more extensive therefore than the obligation which exists in a case of mere co-ownership. The lien which each partner has on the shares of his co-partners for what is due from them to the partnership extends to cases of this class (i.e., co-owners sharing in the profits), as does also the obligation which one partner is under to account to his co- partners for benefits he may have received in respect of the common property." In Kahn v. Central Smelting Co., 102 U. S. 641, it was held that owners of a mine, who co-operate in working it, con- stitute a mining partnership; an'd such a partnership is not dissolved by the death, bankruptcy, assignment or mortgage of the share of one of its members. And see Bissill v. Foss, 114 U. S. 252. As a large amount of the business in British Columbia consists in mining, and as many miners enter into partnership without foreseeing or providing for the contingencies which naturally arise out of the relationship of partners, the Legisla- ture has provided statutjory articles which are to be in force when there is no written agreement regulating the rights of the partners. 120 Mining Partnerships, One set of these articles is to be found in the Minerals Act, R. S. B. C. 135, and the other in the Placer Mining Act, R. S. B. C 136. The provisions of each are similar, with the modifications necessarily incident to the different kinds of mining with which they respectively deal. The above-mentioned Acts do not apply to coal mines. It should be noted that these Acts presuppose an agreement for partnership; they do not create a pattnership if it does not already exist. Two persons, for instance, might be merely co-owners of a mine, but not partners, in which case the Acts would not apply. Where, however, there is a mining part- nership which has no written articles, the Acts step in and supply statutory articles. Partnerships in Mines other than Coal. R. S. B. C, c. 135, s. 59. All mining partnerships shall be governed by the provisions hereof, unless they shall have other and written articles of partnership. 60. A mining partnership shall, unless othdnwise agreed upon, be deemed to be a yeari'y partnership, renewable from year to year by tacit consent. 61. The business of the partnership shall be mining and such other matters as pertain solely thereto. * 62, Mining partnerships can locate and record in the part- nership name a mineral claim for each partner, but the name of every partner and the number of every partner's free miner's certificate shall be on the recotd of every such claim. The partnership name must appear on every such record, and all the claims so taken up shall be the property of the partner- ship: Provided always that no free miner who is the member of a mining partnership holding by right of location a mineral claim shall be entitled to hold by right of location in his oiwn name or in the name of any other partnership any interest in any other mineral claim on the same vein or lode on which the partnership claim is situate. 63. Should any partner fail to keep up his free miner's certificate, such failure shall not cause a forfeiture, or act as an Mining Partnerships. 121 abandonment of the partnership claim, but the share of the partner who shall so fail to keep up his free miner's certificate shall' ipso facto be and become vested in his pairtners, pro rata, according to their former interests, on the said partners paying the free miner's certificate for the year. See McNerhanie v. Archibald, 6 B. C. R. 260, 29 S. C. R. 564- 64. A partner in any mining partnership, or his agent auth- orized in writing, shall at any meeting thereof be entitled to vote upon an}- interest or fraction of an interest which he may hold therein; but the result of the votes given shall be determined by the number of the full interests voted upon, and not by the number of partners voting at such meeting. 65. A majority of such votes may decide when, how long, and in what manner to work the partnership claim, the number ot men to be employed, and the extent and manner of levying the assessments to defray the expenses incurred by the partner- ship. Such majority may also choose a foreman or manager, who shall represent the partnership, and sue and be sued in the name of the partnership for assessments and otherwise ; and he shall have power to bind them by his contracts. Every part- ner or his duly authorized agent shall be entitled to represent his interest in the partnership property by work and labour so long as such work and labour be satisfactory to the foreman or manager.^ In the event of such workman being discharged by the foreman or manager, the Court having jurisdiction in mining disputes may, if requested, summon the foreman or manager before it, and upon hearing the facts, make such order as it shall deem just. 66. All assessments shall be payable within thirty days after being made. 67. Any partner making default in payment after receiving a notice specifying the amoimt due by him shall, if such amount be correct, be personally liable therefor to the part- nership, and his interest in the partnership ^property may be sold by the partnership for the payment of the debt, and any further assessment which may have accrued thereon ^up to the day of sale, together with all costs and charges occasioned by 8 122 Mining Partnerships. such default; and if the proceeds of the sale be insufificient to pay off the several sums mentioned, the Court having juris- diction in mining disputes upon being applied to, shall issue an order directed to the Sheriff to seize and sell any other personal property of the debtor. Notices of sale shall, in .either of the above cases, be conspicuously posted thirty clear days prior to the day of sale in the vicinity of such mining or other property, and ,on the Court House or Mining Recorder's office nearest thereto. But if such partner be absent from the dis- trict, such notices shall be posted as aforesaid sixty clear days before the day of sale, and a copy of such notice shall be pub- lished in some newspaper circulating in the district wherein such mining or other property is situate. Such sale shall be by public auction to ,the highest bidder. The purchaser shall be entitled to possession ,of the property sold, and to a bill of sale therefor signed by thie auctioneer; such bill of ,sale shall confer such title upon the purchaser as the owner had. And for the purpose of carrying out the provisions of this section the Mining Recorder of the mining division in which the property to be sold is situate, or some one appointed by him, may act as auctioneer. 68. After a notice pi abandonment in writing shall have been served on the foreman or manager of a partnership by any member thereof, and duly recorded, such member shall / not be liable for ,any debts or other liabilities of the partner- ship incurred after service and record of such notice, and no member shall be deemed to have abandoned an interest until service and .record of such notice. 69. Upon the abandonment of any share in a mining part- nership the title to the abandoned share shall vest in the con- tinuing partners, pro rata, according to their former inteirests. 70. Any partner shall be entitled to sell or contract for the sale of his interest in the partnership property, but such in- terest shall continue liable for all the debts of the partnership. 71. No pairtner shall, after a bill of sale conveying his in- terest has been recorded, be liable for any indebtedness of the partnership incurred thereafter. Mining Partnerships. Limited Liability. 123 ^2. Any mining partnership ccmposed of two or more free miners may limit the liability of its members upon complying with the requirements following, that is to say: Upon filing with the Mining Recorder a declaratory state- ment containing the name of the partnership, the location and size of every partnership claim, and the particular interest of each partner; and also placing upon a conspicuous part of every such claim in large letters the name of the partnership, followed by the words ''Limited Liability." 73. The words "Limited Liability'' shall thereupon become part of the partnership name. 74. After such conditions shall have been complied with, no member of such partnership shall be liable for any indebted- ness incurred thereafter beyond an amount proportioned to his interest in the partnership. 75. Every such partnership shall keep a correct account of its assets and liabilities, together with the names of the partners and the interest held by each, and shall make out a monthly balance sheet, showing the names of the creditors and the amounts due to each, and file the same among the papers of the partnership; and such balance sheet and all the books of the partnership shall be open to the inspection of creditors at all reasonable hours. 76. . Every partner in such partnership shall be at liberty to sell or dispose of his interest therein, or of any part thereof, to any other free miner. 'jj. Noi member of such partnership after a bill of sale con- veying his interest has been duly recorded, or after he has served a notice of abandonment of his interest on the foreman, and left a copy thereof with the Mining Recorder, shall be liable for any indebtedness of the partnership incurred there- after. 78. No such partr ^rship shall declare any dividend until all its liabilities have en paid. 79. Every such partnership shall appoint a foreman or manager, who shall represent the partnership, who shall sue 124 Mining Partnerships. and be sued in the name of the partnership, and his contracts in relation to the business of the partnership shall be deemed to be the contracts of the partnership. 80. No such partnership shall be liable for any other in- debtedness than that contracted by its foreman or manager, or by its agent duly authorized in writing. 81. Should any such partnership fail to. comply with any of the provisons of this Act relating exclus.ively to "limited liability" partnerships, such partnerships shall, from the date of such failure, cease to be a '^limited liability'' partnership. . Placer Mining. R. S. B. C, c. 136, s. 57. All mining partnerships shall be governed by the provisions hereof, unless they shall have other and written articles of partnership. 58. A mining partnership shall, unless otherwise agreed upon, be deemed to. be a yearly partnership, renewable from year to year by tacit consent. 59. The business of such partnership shalli be mining and such other matters as pertain soilely thereto. 60. Mining partnerships can locate and record in the part- nership name a placer claim for each partner who is a free miner. Such partnership claims may be located and recorded as a set of claims, and each such claim shall be staked as an ^ ordinary placer claim. One stake on each such claim shall be marked as an initial stake, by writing thereon the words "Initial post." It shall not be requisite to post more than one location notice on each get of claims, which notice shall be on the first initial post. 61. A set of claims may be recorded in one record. The name of every partner, and the number of every partner's free miner's certificate, shall be on the record of every set of claims. The partnership name shall appear on every such re- cord, and all ,claims so taken up shall be the property of the partnership. 62. A partner in any mining partnership or his agent auth- orized in writing shall at any meeting thereof be entitled to vote upon any interest or fraction of an interest which he may Mining Partnerships. 125 hold therein; but the result of the votes given shall be deter- mined by the number of the full interests voted upon and not by the number of partners voting at such meeting. 63. A majority of such votes may decide when, how long, and in what manner to woirk the partnership claim or set of claims, the number of men to be employed, which number shall not be less than ,one man to each claim, and the extent and manner of levying the assessments to defray the expenses incurred by the partnership. Such majority may also choose a foreman or manager, who shall represent the partnership, and sue and be sued in the name of the partnership for assess- ments and otherwise; and he shall have power to b'ind them by his contracts. Every partner or his duly authorized agent ^hall be entitled to represent his interest in the partnership property by work and labour so long as such work and labour be satisfactory to the foreman or manager. In the event of such partner or agent being discharged by the foreman or manager, the Court having jurisdiction in mining disputes may, if requested, summon the foreman or manager before it, and, upon hearing the facts, make such order as it shall deem just. 64. All assessments shall be payable within five days after being made. 65. Any partner making default in payment after receiving a notice certifying the amount due by him shall, if such amount be correct, be personally liable therefor to the partner- ship, and his interest in the partnership property may be sold by the partnership for the payment of the debt, and any further assessment which may have accrued thereon up to the day of sale, together with all costs and charges occasioned by such default; and if the proceeds of the sale be insufficient to pay off the several sums mentioned, the Court having jurisdiction in mining disputes, upon being applied to, shall issue an .order directed to the Sheriflf to seize and sell any other personal property of the debtor. Notices ,of sale shall in either of the above cases be conspicuously posted ten cleair days prior to the day of sale in the vicinity of Such mining or ,other pro- perty, and on the Court House or Mining Recorder's office 126 Mining Partnerships. nearest thereto. But if such partner be absent from the dis- trict, such notices shall be posted as aforesaid thirty clear days before the day of sale, and a copy of such ,notice shall be published in some newspaper circulating in the district wherein such mining or other property is situate for the same period. Such sale shall be by public auction to the highest bidder. The purchaser shall be entitled to possession of the property sold, and to a bill of sale therefor signed by the auctioneer; such bill of saie shall confer such title upon the purchaser as the owner had. 66. After a nofice of abadonment in writing shall have been served on the foreman or manager of a partnership by any member thereof, ;and duly recorded, such member shall not be liable for any debts or other liabilities of the partnership in- curred after service and record of such notice, and no member shall be deemed to have abandoned an interest until service and record of such notice. 67. Any partner shall be entitled to sell or contract for the sale of his interest in the pairtnership property, but such in- terest shall continue liable for all the debts of the partnership. 68. No partner shall after a bill of sale conveying his in- terest has been recorded be liable for any indebtedness of the partnership incurred thereafter. Limited Liability. 69. Any mining partnership composed of two or mure free miners, and bdng free from all debts in respect of the part- nership property, may limit the liability of its members upon complying with the (requirements following, that is to say: Upon filing with the Mining Recorder a declaratory state- ment containing the name of the partnership, the location and size of every partnership claim, and the particular interest of each partner; and also placing upon a conspicuous part of every such claim or set of claims in large letters the name of the partnership followed by the words "Limited Liability." 70. The words "Limited Liability" shall thereupon become part of the partnership name. Mining Partnerships. 127 71. After such conditions shall have been complied with no member of such pairtnership shall be liable for any in- debtedness incurred thereafter beyond an amount proportioned to his interest in the partnership. ^2,. Every such partnership shall keep a correct account of its assets and liabilities, together with the names of the partners and the interest held by each, and shall make out a monthly balance sheet, showing the names of the creditors and the amounts due to each, and file the same among the papers of the partnership ; and such balance sheet and all the books of the partnership shall be open to the inspection of creditors ,at all reasonable hours. 73. Every partner in such ipartnership shall be at liberty to sell or dispose of his interest therein, or of any part thereof to any other free miner; but such partner shall )be liable for the indebtedness on the said interest in proportion to his interest in the partnership. 74. No member of such partnership after a bill of sale con- veying his interest has been duly recorded, or ^fter he has served a notice of abandonment of his interest on the fore- man, and left a copy thereof with .the Mining Recorder, shall be liable for any indebtedness of the partnership incurred thereafter. 75. No such partnership shall declare any dividend until all its liabilities have been paid. , . 76. Every such partnership shall appoint a foreman or man- ager, who shail represent the partnership, and who shall sue and be sued in the name of the partnership; and his contracts in relation to the business ,of the partnership shall be deemed to be the contracts of the partnership. 'jy. No such partnership shall be liable for any other in- debtedness than that contracted by its foreman or manager, or by its agent duly authorized in writing. Mining Partner concealing Gold or Silver. By sec. 312 of the Criminal Code any person who conceals gold or silver with intent to defraud his co-partner in any mining claim is guilty of theft. . PART II. LIMITED PARTNERSHIPS. Limitea partnerships are unrecognized by the law of Eng- land. They are derived from tiie French law. Pothier thus defines them: — "Part>icrship en Commandite (or limited part- nership) is a partnership which a merchant contracts with another individual for a business which will be carried c. 114, s. 33, corresponds. North-West Territories. Ord., 1899, c. 7, s. 64, is substantially the same. Quebec. C. C. 1886 corresponds to section 18 of the Ontario Act. (4) No Premature Dissolution till Notice Filed. 19. No dissolution of such partnership by the acts of the parties shall take place previous to the time specified in the certificate of its formation, or in the certificate of its renewal until a notice of such dissolution has been filed in the office in which the original certificate was recorded, and has been pub- lished once in each week for three weeks in a newspaper pub- lished in the county or district where the pairftnership has its principal place of business, and for the same time in the Ontario Gazette. R. S. O., c. 151, s. 19. British Columbia. The British Columbia section, R, S. B. C, c. 150, s. 64, con- tains the words, "if there be a newspaper published there, and for .the same time in the British Columbia Gazette.'' The British Columbia Act has the following additional sec- tion 65. — "Save as hereinbefore provided for in this part, limited partnerships shall be governed by the provisions so far as applicable to part i of this Act." v 144 Limited Partnerships in Provinces. Manitoba. The Manitoba section, R. S. M., c. 114, s. 24' reads: — "No such dissolution of such 'limited' partnership, etc./' and pro^- vides at the end of the section "that the notice shall be pub- lished once in each week for three weeks in a newspaper pub- lished in the municipality v/here the partnership has its prin- cipal place of business, or the nearest place t'^ereto wherein a newspaper is published, and once in the Manitoba Gazette." North-West Territories. Ord., 1899, c. 7, s. 65, is substantially the same. The North-West Territories Act has aH'so the following sec- tion 66: — "The provisions of the sections of this ordinance numbered from 2 to 46, both inclusive, shall, as regards limited partnerships, be subject to the special provisions herein con- tained regarding such partnerships.'' Quebec. C. C. 1887 corresponds to section 19 of the Ontario Act but, as to the publication of the dissolution, irefers to the original section 18 in chapter 60, C. S. C, which, respecting such publication, reads: — "And has been published once in every week for three weeks, in a newspaper published in the Qounty or District where the partnership has its principal place of business* and for the same time in the Canada Gazette.'' It is presumable that publication in the Quebec Gazette would suffice, but there is no authodty on the point. The New Brunswick Act. 145 CHAPTER II. The New Brunswick Act relating to Limited Partnerships. Sec. I. Formation and Constitution, (i) How constituted. (2) Certificate. (a) Contents and Form of. (b) Rules as to Filing and Publishing. Sec. 2. Continuance and Termination of. Sec. 3. Duties and Liabilities of General and Special Part- ners in Conducting the Business. (a) Name of the Partnership. (b) Withdrawal of Capital by Special Partner. (c) Rights of Special Partner in Management of Busi- ness. (d) Actions By and Against. (e) Accounting inter se. (f) No Premature Dissolution. (g) Alteration to be Deemed a Dissolution. (h) Rights and Liabilities where no Provision in Act. The New Brunswick Act respecting ^Limited Partnerships is to be found in 52 Vict. (N. B ), cap. 4, which repeals 45 Vict., cap. 24, except sect. 22, and except as to pairtnerships formed under the repealed Act. Section 22 is simply a section repealing former provisions relating to Limited Partnerships. This Statute came into force on 17th April, 1889. Sec. I — Formation and Constitution. (i) How Constituted. I. Limited partnerships for the transaction of all business may be formed by two or more persons. 146 The New Brunswick Act 2. Such partnerships may consist of one or more general partners, who shall be jointly and severally responsible as partners now are by law, and also of any /cither person or persons who shall contribute to the common stock a specific sum in actual cash payments as capital, who shalJi be called special partners, and shall not be personally liable for any debts of the partnership except in the cases hereafter men- tioned. Cp. Ont. Act, sees, i, 2 and 3, and notes, pp. 130-1. (2) Certificate, (a) Contents and Form of. 3. The persons forming such partnership shall make and severally sign a certificate which shall contain the name or firm of the partnership, the names and respective places of residence of the general and special partners, distinguishing the general from the special, the amount of capital each special partner has contributed, the general nature of the business to be transacted, and the time when the partnership is to commence and to terminate. Op. Ont. Act, sec 5, p. 133. {/>) Rides as to Filing and Publishing. t 4. No such partnerships shall be deemed to have been formed until a certificate made as aforesaid shall be acknow- ledged by the partners, if such acknowledgment be taken with- in the Province, before any of the officials or persons pro- vided by section 6 of chapter 74 of the Consolidated Statutes, for the taking of ackniolwledgment or proof within the Pro- vince of a conveyance, and if taken without the Province, then before any of the officials or persons provided by the said section for the taking of acknowledgment or pirobf without the Province of a conveyance, and in either case certified or authenticated in the same manner and with the same formality in all respects as though such acknowilledgment were the taking of the proof or acknowledgment of a conveyance, and regis- tered in the office of the Registrar of Deeds of the County of RELATING TO LIMITED PARTNERSHIPS. 147 their principal place of business, in a book to be kept for that purpose, open to the public inspection; and if the part- nership shall have places of business situated in different Counties, a copy thereof, certified by the Registrar of Deeds, where registered, shall also be registered in such Counties in a similar book, and if any false statement shall be made in such certificate, all the persons interested fn the pairt- nership shall be liable as general partners for all the engage- ments thereof. That for registering such certificate and in- dexing the same, the said Registrar shall receive the sum of fifty cents, and fqr every certified copy thereof the sum of forty cents, and a certified copy lOlf ,such certificate under the hand of the Registrar of Deeds shall be evidence in all courts of law and equity. That such certificate shall be in the form following, with ,such variation as each case may require: "The undersigned, desirous of forming a limited partnorship under the laws of the Province lOlf New Brunswick, hereby certify — (i) That the name or firm under which such partnership is to be conducted is (here insert the firm name) ; (2) That the general nature of the business intended to be transacted by such partnerships is (here designate the general nature of the business, as the buying and selling, on commis- sion or otherwise, at wholesale and retail, of such articles as arc usually bought and sold by dealers in such wares and goods) ; (3) That the names of all the general and special partners interested in said partnership are as follows: — A. B., who resides at , and C. D., who resides at , are the general partners, and E. F., who resides at , and G. H., who resides at , are the special partners ; (4) That the said E. F., has contributed the sum of dollars, and the said G. H. the sum of dollars, as capital to the common stock; (5) That the period at which the- said partnership is to commence is the day of A. D., 18 (insert the date, which .should be some day after that 148 The New Brunswick Act OR which the certificate is to be filed and recorded), and the period at which the said partnership is to terminate is the day of , A.D., i8 . , Dated this day of , , A. D., i8 . (Signatures.)" Cp. Ont. Act, sects. 5, 6, 7, 8 and 9, and notes, pp. 133-6. 5. The partners shall for three months immediately follow- ing such registry publish a ooipy of the certificate above mentioned in ,a newspaper published in the city or county where their principal place of business is situated, and if there shall be no such newspaper, ,such publication shall be made m the Royal Gazette; if such publication be not so made the partnership shall be deemed general. 6. That an affidavit of the publication of such copy of such certificate sworn to by the printer lor proprietor of the news- paper in which the same shall be published, before a Justice of the Peace, and filed with the said Registrar of Deeds, shall be evidence of the facts therein contained, and a copy certified by such Registrar of every certificate and affidavit filed undeir this Act shall be evidence thereof in any court of law or equity. That such affidavit shall be in the form or to the effect follofwing: — City and County ( or Parish or City of a S. S. Pirovince of New Brunswick. ( A.B., of , being duly sworn, says: I am the printer (or proprietor) of the .newspaper, known as the , published daily (or weekly) at (designate place of its publicatiloin), land that the advertisement or notice, a copy whereof is hereto annexed, was published in the said news- paper for three months successively, that is to say, in the several issues of the said newspaper from the day el last past, to the day of instant (or last past), both inclusive. Sworn to before me at this day of , A.D., 18 A. B. (signature). C. D., One ,of Her Majesty's Justices lolf the Peace for the City and County of RELATING TO LiMITED PARTNERSHIPS. 149 Sec. 2. — Continuance and Termination of. 7. Every such partnership shall be held to continue on the original terms .until the period at which the same is provided for by the original certificate, or the continuing certificate hereafter mentioned, to determine, .shall have elapsed, or until a certificate by all the .partners shall be signed, acknfotwledged, registered and pubUshed as in the first instance declaring the withdrawal of any one or more partners from the concern, in which case, and when such publication shall have been com- pleted, such one or more partners shall be taken and deemed to be withdrawn from the concern and released from further liability, if l^efore the period for which the partnership has been established, or to which the same has been continued as here- after provided shall have elapsed, it shall be decided by the partners then constituting the partnership to continue or fur- ther continue the same, such partners may so do by signing, acknowledging, registering and publishing a continuing cer- tificate as in the first instance, in form folllo^ving, or to that effect: "The undersigned, constituting a limited partnership under the laws of New Brunswick under the name (here insert name as in the original certificate) which will expire ;on the day of , A.D., 18 (insert the date), continue the said partnership until the , day of A.D., 18 . (Insert the date to which the partnership is to be continued.) Dated this day of . A.D., 18 (Insert the date.)" And thereupon in case such publication shall be ddmpleted before the expiration of the Original or further partnership, the same ;Shall continue on the original terms, and be deemed a continuation of the original partnership until the expiration of the date mentioned in the continuing certificate, and any partnershp may be further vcontinued as aforesaid as often as the partners may desire, and all provisions of this Act shall, so far as applicable, apply to all continuations of -an original limited partnership in like manner as to such original partner- sliip. . • Cp. Ont. Act, sees. 10 and 19, pp. 137-143. ^^^ The New Brunswick Act Sec. 3. — Duties and Liabilities oi General and Special Partners in Conducting the Business. (a) Name of the Partnership. 8. The business of the partnership shnH be idoti ducted by the general patrtner or partners under such firm name as he or they shall adopt, and if ,the name of any special partner shall be used as such firm name, or a part of the same, with his consent and privity, fOr if he shall personally make any contract respecting the concerns of the palrtnership with any person except the general partner or partners, or except as hereinafter provided, he shall be deemed and treated as a general partner, but to use the name of any special partner with the addition thereto "special partner" or ''limited partner'' or to that effect, shall not be considered as .using such name as such firm name, or a part of the same. Cp. Ont. Act., sec. 12. (6) Withdrazval of Capital by Special Partner. 9. No part of the sum which any special partner shall have contributed to the capital stock shall be withdrawn by him, or p2'd or transferred to him in the shape of dividends, pnofits or otherwise, at any time during the .continuance of the part- nership, but any partner may annually or semi-annually re- 'ceive lawful interest on the sum so contributed by him, if the payment of such interest shall not reduce the original amount of such capital; and if after ,the payment of such interest any profits shall remain to be divided, he may also \neceive his portion of such profits. ■*" , Cp. Ont. Act, sect. 14. 10. If it shall appear that by the payment of interest or profits to any special partner the original capital has been reduced, the partner receiving the same shall be bound to restore the amount necessary to make good his share of capital with interest. Cp. Ont. Act, sect. 15, p. 140. RELATING TO LIMITED PARTNERSHIPS. 151 pital . (c) Rights of Special Partner in Management of Business. 11. A special partner may, from time to time, examine into the state and progress of the partnership concerns, and may advise as to their management; 'he may also loan money to and advance and pay money for the partnership, and may take and hold the notes, drafts, acceptances and bonds, of tor belonging to the partnership as security for the repayment of such moneys and interest, and may use and lend his name and credit as security for the partnership in any business thereof, and shall have the same rights and remedies in these respects as any other creditors might have; he may also ne- gotiate sales, purchases and other business for the partnership, but nio business so negotiated shall be binding upon the part- nership until approved by a general partner, or a majority of the general partners. Excepting as herein mentioned, he shall not transact any business on account of the partnership, nor be employed for that purpose as agent, attorney or other- wise; if he shall interfere domtrary to these pftiovisions he shall be deemed a general partner. Cp. Ont. Act, sect. i6, p. 141. 12. It shall be lawful for a special partner in any limited partnership to lease to the general pairtner or partners any lands, tenements or other property, for the purposes of the partnership, at such rents and upon such terms as may be agreed upon between them. • (d) Actions By and Against. 13. All suits respecting the business of such pairtnership shall be prosecuted by or against the general partner or partners only, except in those cases where any special partner or partners by the provisions of this Act shall be deemed general. Cp. Ont. Act, sect. 13, p. 139. (e) Accounting inter se. 14. The general partners shall be liable to account to each other, and to the special partners, for their management of 152 The New Brunswick Act the concern, both at law and in equity, as other partners now are by law. Cp. Ont. Act, sect. 17, p. 142. 15. Every partner who shall be .guilty of any fraud in the affairs of the partnership shall be liable civilly to the party injured to the extent of his damage, in addition to any liability under the Dominion or Provincial law or statute. 16. In case of the insolvency or bankruptcy of the partner^ ship, no special partner shall, except for claims contracted pursuant to section eleven of this Act, under any circumstances be allowed to claim as a creditor until the claims of all the other creditors of the partnership shall be satisfied. Cp. Ont. Act, sect. 18, p. 142. (f) No Premature Dissolution. 17. No dissolution of such partnership shall take place except by the elapsing of the time limited for its existence, or by operation of law, or as in this Act otherwise provided, unless a notice thereof shall be registered in the same manner as the original certificate, and unless such notice shall be published for six successive weeks in some newspaper of the city or county where such certificate or a copy thereof was published; and if there be no such newspaper, then in the Royal Gazette, according to the pnovisions of this Act, in Avhich case and when said publication is completed the said partnership shall be taken and deemed to be dissolved. Cp. Ont. Act, sect. 19, p. 143. (g) Alteration to he Deemed a Dissolution. • , 18. Every alteration which shall be made in the name of the general partners, in the nature of the business, or in the capital or shares thereof contributed, held or owned, or to be contributed, held or owned by any of the special partners, and -the death of any partner, .whether general or special, shall be deemed a dissolution of partnership, and notice thereof shall be registered and published by any special partner or his legal representative in the manner provided in the precedmg section. i Cp. Ont. Act, sect. 11, p. 138. . RELATING TO LiMITED PaRTXERSHIPS. {h) Rights and Liabilities when no Provision in Act. 153 19- In all cases not otherwise herein provided for the members of limited partnerships shall be subject to all the liabilities and entitled to all the rights ol general partners. 20. The Act 45th Victoria, chapter 24, excepting section 22] is hereby repealed; provided that the said repealed Act shall continue and be of the same effect as if this Act had not been passed as regards any partnership formed under the said re- pealed Act before the passing of this Act, whether such part-- nership is still in existence or not. 1^ 10 I 154 The Nova Scotia Act CHAPTER III. The Nova Scotia Act relating to Limited Partnerships. Sec. I. Formation of. (a) How Constituted. (b) Certificate. (c) Publication of Terms. Sec. 2. Renewal or Alteration of. Sec. 3. Rules as to Conduct of Business, (a) Name of Partnership. ;. (b) Actions By and Against. * (c) Rights and L-iabilities of General and Special Part- ners. The Nova Scotia Act is containea in R. S. N. S. (5th series), «cap. 83, sections 32 et seq. Sec. I. — Formation of. '" (a) How Constituted. 32. Two or more persons may enter into and form limited partnerships for the transaction of mercantile, mechanical or manufacturing business, upon the term.s, with the rights aftd powers, and subject to ^he conaitions and liabilities herein- after prescribed. Nothi. g herein shall authorize any such partnerships to engage in any banking operation, or to be- come insurers upon any marine risk, or upon loss by fire, or upon any life. Such partnerships may consist of one or more persons called general partners, who shall be responsible as general partners now are, and of one or more persons who shall contribute in actual cash payments a specific sum as capital to the common stock called special partners. Special partners shall not be liable for the debts of the partnership be- yond the fund so contributed by them to the capital, except in RELATING TO LIMITED PARTNERSHIPS. 155 cases hereinafter mentioned. The general partners only shall be authorized to transact the business of the partnership, and bind the same by the signature of the partnership name or otherwise. Compare Ont. Act, sects, i, 2, 3 and 4, and note, pp. i3Chi-3 (b) Certificate. 33. Persons desirous of forming such partnerships shall before the same shall go into operation make and severally sign a certificate containing the name of the firm under which such partnership is to be conducted, the nature of the business to be transacted, the names of all the partners interested therein, distinguishing which are general and which special partners, and their respective places of residence, the amount of capital which each special partner shall have contributed to the common stock, the period at which the partnership is to commence, and at which it will tdrminate. Such certificate shall be acknowledged by the several persons signing the same before a judge of the Supreme ict County Court, or justice of the peace, and such acknowledgment shall be certi- fied in writing on such certificates by the person before whom the same is made. The certificate so acknowledged and ceirti- fied shall be filed in the office of the Registrar of Deeds of the county or district where the principal place lof business of the partnership shall be situated, and shall be recorded by him at large in a book to be kept for that puirpose, open to public inspection, and if the partnership shall have places of business situated in different counties or districts a transcript of the certificate and of the acknowledgment thereof duly certified by such Registrar shall be filed and recorded in like manner in the office of the Registrar of every such county or district. Com,),! re uiitario Act, sections 5, 6 and 7. See pp. 133-4. » 34. An affidavit of one or more of the general partners, ana also of one or more of the special partners shall also at the same time be filed in the -"^me office, stating tHat the sums specified in the certificate U lave been contributed by each of the special partners to the common stock have been actually and in good faith paid in cash, and no such partnership shall 156 The Nova Scotia Act bo deemed to have been formed until a certificate shall have been made, acknowledged, filed and reciorded, and an affidavit filed as above directed, and if any false statement be made in such certificate or affidavit all persons interested in such part- nership shall be liable as general partners. Compare Ont. Act, sect. 9, p. 135. (c) Ptiblicathn of Terms. 35. Tlie terms of every such partnership, when registered, shall immediately be published at least six weeks in the Royal Gazette and one other newspaper published in Halifax, and by handbills posted up in some public places in the township in which the business of the partnership shall be carried on. If such publication be mot so made such partnership shall be deemed general. Affidavits taken before a justice of the publi- cation of such notice by the printers of newspapers who shall have published the same, and by the persons who shall have posted the handbills, may be filed with the registrar with whom the certificate of the partnership shall have been filea, and shall be evidence thereof. Sec. 2. — Renewal or Alteration of. 36. Every renewal or continuance of any such partnership beyiond the time originally fixed for its duration shall be certified, acknowledged and recorded, anl an affidavit of a general and special partner made and filed, and notice given in the manner herein required for its original formation. Every such partnership otherwise renewed or continued shall be deemed a general partnership. Compare Ont. Act, sect. 10. See p. 137. 37. Every alteration made in the names of the partners, the nature of the business, or the capital or shares thereof, or in any other matter specified in the original certificate, shall be deemed a dissolution of the partnership, and every such partnership carried on after any alteration shall be deemed a general partnership, unless renewed as a special partnership according to the provisions of the foregoing secti'on. " / Compare Ont. Act, sect. n. See p. 138. * RKLATING TO LiMITED PARTNERSHIPS. 157 [hip be i a Iven ery be the br in jl he Isucb led a :ship Sec. 3. — Rules as to Conduct of Business. (a) Name of Partnership. • .^8. The business of the partnership shall be conducted under a f-rm in the names of the general partners, only without the addition of the word Company, or any other gfeneral term. And any special partner whose name shall be used in such firm with his privity shall be deemed a general partner. Compare Ont. Act, sect. 12. See p. 139. (b) Actions By and Against. 39. Actions and suits in relation to the business of the partnership may be brought and conducted by and against the general partners as if there were no special partners. Compare Ont. Act, sect. 13. See p. 139. (f) Rights and Liabilities of General and Special Partners. 40. No part of the sum contributed by a special partner to the capital stock shall be withdrawn by him or paid or trans- ferred to him in the shape of dividends, profits or otherwise at any time during the continuance of the partnership; but a partner may annually receive lawful interest on the sum so contributed by him, if payment thereof shall mot reduce the original capital, and if after the payment of such .interest any profit shall remain to be divided, he may also receive his por- tion of such profit; but if it shall appear that by the payment of interest or profits to any special partner the original capital has been reduced, the partner receiving the same shall restore the amioimt necessary to make good his share oi capital with interest. Compare Ont. Act, sect. 14 and 15. See p. 140. 41. A special partner may from time to time examine into the state and progress of the partnership concerns, and may advise as to their management, but he shall not transact any business on account of the partnership, nor be employed for that purpose as agent, attorney ior otherwise, and if he shall interfere contrary to these provisions he shall be deemed a 158 The Nova Scotia Act, general partner. General .partners shall be liable to account to each other, and to the special partners for the manage- ment of the concern, as other partners now are. Compare Ortt. Act, sects. i6 and 17 and notes. See pp. 141-2. 42. A partner .guilty of any fraud in the afYairs of such partnership shall be liable civilly to the party injured to the extent of the damage. 43. Every sale, assignment or transfer of any of the pro- perty or effects of such partnership or of a general or special partner made by such partnership, or a general or special partner when insolvent or 'in contemplation of insolvency^ with intent of giving a preference to any creditor of such part- nership or insolvent partner over other creditors of such partnership, and every warrant of attorney executed, and every judgment confessed, lien created or security given by such partnership or general or special partner under the like cir- cumstances, and with the like intent, shall be Void as against the creditors of the partnership. A special partner who hall violate any provision of this chapter, or concur in or assent to any such violation by the partnership, or by any individual partner shall be liable as a general partner. * 44. In case of the insolvency or bankruptcy ol the ^>artner- ship, no special partner shall under any circumstances be allowed to claim as a creditor until the claims of all other creditors of the partnership are satisfied. Compare Ont. Act, sect. 18, p. 142. 45. No dissolution of such partnership by the acts of the parties shall take place previous to the time specified in the certificate of its formation, or in the certificate of its renewal, until a notice of such dissolution shall have been filed and re- core yi in the Registrar's office in which the original certificate was recorded, and published once in each week for four weeks in the Royal Gazette, and in sbme other newspaper printed in each of the counties where the partnership may have places of business. Compare Ont. Act, sect. 19. See p. 143. ther the Iwal, leeks Id in PART III. REGISTRATION OF PARTNERSHIPS. As the Acts of the majority of the Provinces concerning Registration are very similar, the sections of the Ontario Act, R. S. O., cap. 152, will be set out in full, and the variations in the Acts r>f the other Provinces, except those of New Bruns- wick and Quebec, which will be given separately, will be pointed out. In some of the Provinces as is noted below alt the statutory provisions as to partnership are contained in the one chapter. In other Provinces the provisions as to limit- ed partnerships and registration of partnerships are contained in the same chapter, while in other Provinces limited partnership and registration of partnership are dealt with in separate chapters. CHAPTER I. Registration of Co-Partxerships in Provinces other THAN New Brunswick and Quebec. Sec. I. — Declaration of Partnership. (a) Who must make. (b) Form and Requisites as to Filing. (c) New Declaration when Change in Firm. . (d) Statements in Declaration cannot be Controverted. (e) Old Declaration Binding till New Filed. Sec. 2. Declaration of Dissolution. Sec. 3. Actions Against Partners when no Declaration Filed. Sec. 4. Declaration by Sole Trader Using Firm Name. Sec. 5. Penalty for Non-Compliance. Sec. 6. Duties of Registrar. Sec. 7. Additional Sections in the various Provinces. Sec. I. — Declaration of Partnership. * T. (a) Who must Make. 1, (i) All persons associated in partnership for trading,, manufacture or mining purposes, shall cause to be delivered to ^(>0 Registration of Co-Partnerships in Provinces the Registrar of the registry division in which they carry on or intend to carry on business, a declaration in writing signeu by the several members of such co-partnership. British Columbia. R. S. B, C, c. 150, s. 66 (i), reads: "All persons now asso- •ciated in or hereafter entering into a general partnership/' and the declaration is to be delivered to "the Registrar of the County Court of the county in which they carry on or intend to carry 6n busmess," otherwise it corresponds to the Ontario Act. Manitoba. R. S. M., c. 114, s. 3 (i), reads: "All persons who at the time of the coming into force of this Act, or who hereafter may be associated in partnership for trading, manufacturing or mining purposes in this Province, shall cause to be filed in the proper office for the judicial district in which the prin- cipal place of business of the partnership is situate or intended to be situate, a declaration, etc.," as in Ontario Act. North-West Territories. Con. Ord. (1898), cap. 45. s. i (First Part), correspo^nds to the above sub-section i of the Ontario Act, but the words "in the territories" are inserted in the second line after the words "mining purposes." The declaration is to be filed "in the office of the registration clerk of the registration district for registration of chattel mortgages and other transfers of personal property in the territories.'' ' Nova Scotia. R. S. N. S. (1884), cap. 83, s. I (First Part), corresponds to the above sub-section i of the Ontario Act, but the declaration is to be delivered to the "Registrar of Deeds of the County, etc." V ' • . . 1 . (2) If, however, any of the said members are absent from the place where they carry on or intend to carry on business at OTHER THAN NeW BrUXSWICK AND QuEBEC. 161 the time of making the declaration, then the declaration shall be signed by the members present in their own names and also for their absent co-members under their special authority to that effect, and such special authority shall be at the same time filed with the registrar and annexed to the declaration. British Columbia. R. S. B. C, c. 150, s. 66 (2), corresponds. • ^, aIanitoba. R. S. M., c. 114, s. 3, corresponds, except that the words "at the time of making the declaration" are before instead of after "are absent from the place where they carry on or intend to carry on business,'' and the word "provided" is used in- stead of "if." North-West Territories. Con. Ord. (1898), cap. 45, s. i, the second part of section i begins: "Provided, however, that if any of the said members be absent'' and the special authority is to be filed with "the ^aid registration clerk," otherwise it is substantially the same as the above Ont. sub-section. Nova Scotia. R. S. N. S. (1884), cap. 83, s. I (Second Part), is the same .as the above sub-section, except that the "registrar" is de- scribed as the "registrar of deeds." The Nova Scotia Act also contains the following section :— (2) When the persons so associated are resident out of the Province, and are doing business in the Province by an at- torney, agent, or other representative, such declaration may be signed by such attorney, agent, or other representative under special authority of the persons so associated, and such special authority shall be annexed to the declaration and filed at the same time with the Registrar of Deeds, and the form of the declaration shall be modified accordingly. 162 Registration of Co-Partnerships in Provinces (b) Form of Declaration and Requisites as to Filing- 2. The declaration shall be in the form or to the effect of Schedule A to this Act, and shall contain the names, surnames, additions and residences of each and every partner, as afore- said, and the name, style or firm under which they carry on or intend to carry on such business, and shall state also the time during which the partnership has existed, or is to pxist, and shall declare that the persons therein named are the only members of such co-partnership. For Form, see Appendix. British Columbia. R. S. B. C, c. 150, s. 67, is the same, but refers to Schedule B instead of A, and instead of "the name, style or firm under which they carry on or intend to carry on. such business," reads simply "and the tirm name.'' Manitoba. R. S. M., c. 114, s. 5. — "Such declaration shall contain the names, surnames and residences of each and every partner or associate as aforesaid, and the name, style or firm under which they carry on or intend to carry on such business, and shall state also the time during which the partnership has existed 6i- is to exist, also declaring that the persons therein named are the only members of such co-partnership or association." North-West Territories. Con. Ord. (1898), c. 45, s. 2, begins: "Such declaration shall be in the form A in the schedule to this Ordinance, etc.," sub- stantially as in the Ontario section, except that "associate'' and "association" are mentioned as well as "partner" and "co-partnership." Nova Scotia. R. S. N. S. (1884), cap. 83, sec. 3, corresponds, but with the following variations. The "said declaration" "Sche:lule A to OTHER THAN NeW BrUNSVVICK AND QuEBEC. 16^ this chapter" and the last three lines read: "and shall state also the time during which the partnership has existed, and declare, etc.," leaving out the words "or is to exist." 3. The declaration shall be filed within six months next after the formation of the partnership. British Columbia. R. S. B. C, c. 150, s. 68, provides for filing within three months of coming into force of Act, or formation of the firm. Manitoba. (See next section.) North-West Territories. (See next Section.) Nova Scotia. R. S. N. S. (1884), cap. 83, s. 4: "The said declaration shall be filed within three months, etc." (c) New Declaration when Change in Partnership. 4. A similar declaration shall in like manner be filed when and so often as any change or alteration takes place in the membership of the partnership, or in the name, style or firm urder which they intend to carry on business, or in the place of residence of any member of the firm, and every new declara- tion shall state the alteration in the partnership. British Columbia. R. S. B. C, c. 150, s. 69. — *'A similar declaration shall in like manner be filed when and so often as any change or altera- tion takes place in the membership of the firm, or in the firm name, or in the case of any member of the firm ceasing to res'de in the Province, and every new declaration shall state the al- teration in the partnership.'* 1H4 Registration of Co-Partnerships in Provinces ' Manitoba. R. S. M., c. 114, s. 6. — "The said declaration, if filed before the coming into force of the Act chaptered seventeen of the Consolidated Statutes, or within the time provided by that Act, shall stand good, and hereafter such declaration shall be filed within six months next after the formation of any partnership, and a similar declaration shall in like manner be filed when and so often as any dissolution of partnership or any change or alteration in the membership of such partner- ship, or in the name, style or firm under which they intend to •carry on business, or in the place of residence of a member of said firm shall take place." North-West Territories. Con. Ord. (1898), c. 45, s. 3, provides that "Such declaration shall be filed within six months next after the formation of any such partnership, and a similar declaration shall in like manner be filed when and so often as any change or alteration of partnership takes place in the membership of such partner- ship, or in the name, style or firm under which they intend to cairy on business, or in the place of residence of each member of said firm, and every new declaration shall state the alteration in the partnership.'' Nova Scotia. R. S. N. S. (1884), c. 83, s. 5, is substantially the same as the Ontario section. (d) Statements in Declaration cannot he Controverted. 5. The allegations made in the declarations aforesaid shall not be controvertible as against any party by any person who has signed the same, nor as against any parvy not being a member of the partnership by any person who has signed the same, or who was really a member of the partnership therein mentioned at the time the declarations were respectively made. OTHER THAN NeW BRUNSWICK AND QuEBEC 165. British Columbia. R. S. B. C, c. 150, s, 71, is the same, except that the word "firm" is used instead oi "partnership.'' Manitoba. R. S. M., c. 114, s. 13, is the same in effect, though the wording is slightly different. "Declaration" the singular is used instead of declarations, and the words "who shall have signed "^ instead of "who has signed." North-West Territories. Ccn. Ord. (1898), c. 45, s. 10, provides that "the allegations made in the declaration aforesaid cannot be controverted by any pcrscn who has signed the same, nor can they be con- troverted as against any party not being a partner by a person who has not signed the same, but who was really a member of the i irtnership therein mentioned at the time such declara- tion wac made." Nova Scotia. R. S. N. S. (1884), c. 83, s. 6, is the same as the Ontario- section. Sec. 2. — Declaration of Dissolution to be Filed. 6. Upon the dissolution of a partnersh'ip, any or all of the persons who composed the partnership may sign a declaration certifying the dissolution of the partnerships such declaration may be in the form of Schedule B to this Act. For Forms, see Appendix. "The section is only permissive." Bank of Toronto v. Nixon, 4 A. R. (Ont.), 346, p. 352. '< X^ Ontario this section formerly followed section 7, as it still do€s in the other Provinces, but by the revision of 1897 these sections were transposed. Query, whether this will ' "ve the effect of making this one of the "new declarations as a said," under sec, 7. If so, "no person shall' be deemed to have T / y 1G6 Registration of Co-Partnerships in Provinces ceased to be a partner" till a declaration of dissolution shall have been filed. Section 6, however, says nothing about filing, and the alteration in the Statute is hardly sufficiently explicit to reverse the old rule. British Columbia. R. S. B. C, c. 150, s. ^2, is the same, except that "firm", is lised instead of ''partnership," and Schedule C is referred to instead of Schedule B. Manitoba. R. S. M., c. 114, does not contain this section. North-West Territories. Con. Ord. (1898), c. 45, s. 12, provides that, "Upon the dis- solution of any partnership any or all oi the persons who com- pose such partnership may sign and file a declaration certify- ing the dissolution of the partnership in the form D in the schedule to this Ordinance." Nova Scotia. R. S. N. S. (1884), c. 83, s. 8, is substantially the same as the Ontario section. (r) Old Declaration Binding till New Filed. 7. Until a new declaration is made and filed by him or by I'is co-partners oir aiiy of them as aforesaid no person who shall have signed the declaration filed shall be deemed to have ceased to be a partner; but nothing herein contained shall exempt from liability any person who, being a partner, fails to declare the same as already provided, and such person may, notwithstanding such omissioai, be sued jointly with the part- ners mentioned in the declaration, or they may be sued alone, and if judgment is recovered against them any other part- ner or partners may be sued jointly or severally in an action on the original cause of action upon which the judgment was OTHER THAN NeVV BrUNSWICK AND QuEBEC. 167 rendered; nor shall anything in this Act be construed to affect the rights of any partners with regard to each other, except that no declaration as aforesaid shall be controverted by any person who has signed the same. British Columbia. R. S. B. C, c. 150, s. 71, is the same, except that the word "partners" is used in the second line instead of "co-partners," and the word "signer" is used instead of the words in the Ontario Act. The word "Part," too, is used instead of "Act." Manitoba. There is no corresponding section in the Manitoba Act. North-West Territories. Con. Ord. (1898) c. 45, s. 11, corresponds, except that the word "signer" is used instead of the words in the Ont. Act, and there are one or two other slight differences which are not material. Nova Scotia. R. S. N. S. (1*884), c. 83, s. 7, provides. — "Until a new de- claration is made and filgl by him or by his co-partners or the attorney, agent or representative of such non-resident co- partner, no such signer or non-resident co-partner, or any of them as aforesaid, shall be deemed to have ceased to be a partner." The section then proceeds substantially as in the Ont. Act, but the following provision is added: ''Service of process on the attorney, agent or representative of such non- resident co-partner sliall be deemed good service on the said co-partner or co-partners, provided always that the said at- torney, agent or representative may apply to the judge of the Court, and obtain time to consult his principal. The attorney, agent or representative of such non-resident ccv-partner or co-partners shaH' file with the registrar of deeds his authoriza- tion to act as such attorney, agent or representative, verified under oath and certified before a noitary public." See p. 194, infra. 168 Registration of Co-Partnerships in Provinces Sec. 3. — Actions against Partners when no Declara- tion Filed. 8. (0 If any persons are associated as partners for the pur- pose of trade, and no declaration is filed under this Act with regard to such partnership, then any action which might be brofught against all the members of the partnership may also be brought against any one or more of them as carrying on or as having carried on business jointly with others without naming such others in the writ or declaration under the name and style of their said co-partnership firm; and if judgment be recovered against him oir them, any other partner or part- ners may be sued jointly or severally on the original cause of action on which such judgment is rendered. British Columbia R. S. B. C, c. 150, s. 73 (i), reads: "for trading, manufactur- ing or mining purposes.'' "Firm" is used instead of ''partner- ship," 'Tart" instead of "Act," and after the words "without naming such others in the writ," the British Columbia Act has the wiolrds, "or plaint or other process under the name and style of their said partnership or firm," instead of as in* the Ontario Act. Manitoba. R. S. M., c. 114, s. 14. — "If any persons shall be or shall liave been associated as partners or associates for the purpose of trade or other business, and shall so have carried on trade cr other business in the Province,'' etc., as in Ontario Act. the concluding words being "on which such judgment shall have been recovered," instead of as in the Ontario Act. North-West Territories. There is no corresponding section. Nova Scotia. R. S. N. S. (1884), c. 83, s. 9 (First Part), is substantially the same as the Ontario section, except that the sectioij applies to "persons associated for the purpose of trade or other busi- ness," and not merely to persons associated for the purpose of trade. See p. 194, infra. OTHER THAN NeVV BrUNSWICK AND QuEBEC. 169 8. (2) If any such action be founded on any objection or instrument in writing in which all or any of the partners bound by it are named, then all the partners named therein shall be made parties to such action; and a judgment rendered against any member of such existing co-partnership for a partnership debt or liability may be executed by process of execution against all and every the partnership stock, property and effects in the same manner and to the same extent as if such judgment had been rendered against such co-partnership. British Columbia. R. S. B. C, c. 150, is the same except that the word "firm"' is used instead ol ''partnership." Manitoba. ' R. S. M., c. 114 (s. 14, latter part, and sec. 15), beginning "Any judgment recovered under the last preceding section against any member,'' and ending "had been recovered against all the members of the co-partnership in the usual way/' instead of as in the Ontario Act. North-West Territories. There is no corresponding section. Nova Scotia. R. S. N. S. (1884),) c. 83, s. 9 (Second Part), is substantially the same as the above Ontario sub-section. Sec. 4. — Declaration by Sole Trader using a Firm Name. 9. Every person who is engaged in business for trading, manufacturing or mining purposes, and who is not associated in partnership with any other person or persons, but who uses ar his business style some name or designation other than his own name, €\r who in such style uses his own name with the addition of "and Company" or some other word or phrase in- 11 I'O Registration of Co-partnerships in Provinces dicating a plurality of members in the firm, shall cause to be delivered to tho registrar of the registry division in which such person carries on or intends toi carry on business, a de- claration in writing, signed by such person. British Columbia. R. S. B. C, c. 150, s. 74, is the same, except that "the de- claration is to be delivered to the Registrar of the County Court of the county in which, etc." Manitoba. H. S. M., c. 114, s. 7, has, "who in such business uses his own name," instead of as in the Ontario section, and the de- claration is to be filed "in the proper office for the judicial district in which the principal place of such business is situate." • Nortii-West Territories. . Con. Ord. (1898), c. 45, s. 4, is the same as the Ontario section, but the words "who is" are omitted in the first line, and the words "who in such business uses his own name " are used instead of as in the Ontario Act. The provision as to filing reads "shall cause to be filed as aforesaid a declaration of the fact in writing signed by such person.'' / Nova Scotia. R. S. N. S., c. 83, s. 10, is the same, but the declaration is to be delivered "to the Registrar of Deeds of the county or dis- trict in which such person carries on, etc.," and the following provision is added, "And in case such person is resident out of the Province, and carries on business by an attorney, agent or other representative in the Province, such declaration may be made by such agent, attorney or other representative, the declaration shall state in addition with certainty the street and number of his place of business or residence,'' and see p. 194, infra. 10. Such declaration shall contain the name, surname, addi- tion and residence of the person making the same, and the OTHER THAN NeW BrUNSWICK AND QUEBEC. 171 • nnme, style or firm under which he carries on or intends to carry on business, and siiall also state that no other person is associated with him in partnership; and such declaration shall be filed within iix months of the time when such style is first used. ; ;i, „. J British Columbia. R. S. Pi. C, c. 150, s. 75, the same except that declarations shall be filed "in existing cases within three months of coming into force of Act," or within three months from time when such etylel is first used. Manitoba. R. S. M., c. 114, reads. — "The declaration last aforesaid,'' and provides that "the same shall be filed in manner and within the time hereinbefore provided, and subject to the provisions aforesaid.'' Otherwise it is the same as the Ontario section. North-West Territories. Con. Ord. (1898), c. 45, s. 5, is substantially the same as the Ont. section. Nova Scotia. ' R. S. N. S. (1884), c. 83, s. II, contains the additional provi- sion, ''And in the case of a person residing out of the Province and doing business in the Province by an agent, attorney ot other representative, the declaration shall state in addition with certainty the street and number of the place of residence or business," and the provision r ; to filing is contained in the next section, sec. 12. The declaration is to be filed within three months. Otherwise the provisions are the same as in the above Ontario section. Sec. 5. — Penalty for Non-Compliance. 11, Every member of a partnership or other person re- quired to register a declaration under the provisions of this Act who fails to comply with the requirements of this Act, shall 172 Registration of Co-Partnerships in Provinces foirfeit the sum of $100.00, to be recovered before any Court oi competent jurisdiction by any person suing as well in his own behalf as on behalf of Her Majesty; and half of such pen- alty shall belong to the Crown for the uses of the Province, and the other half to the i>arty suing for the same unless the a'^tioin is brought as it may be on behalf of the Crown only, in which case the whole of the penalty shall belong to Her Majesty for the uses aforesaid. I British Columbia. R. S. B. C, c. 150, s. 76, is the same, except that the word "firm'' is used instead of "partnership," and "part" instead of "Act." Manitoba. R. S. M., c. 114, begins, "Each and every member of any partnership or association as aforesaid, and each and every person carrying on business as mentioned in the seventh section of this Act," and then proceeds as in the Ontario Act. North-West Territories. Con. Ord. (1898), c. 45, s. 9, provides that half the penalty shall belong "to the general revenue fund of the "Territories'^ instead of ''ta the Crown," otherwise the section is substanr tialiy the same as the above. Nova Scoti. R. S. N. S., c. 83, s. 13. — "Every member of any partner- ship, and every person doing business in the manner described in the tenth section of this chapter who fails to comply with the requirements of this chapter, shall forfeit the sum of not less than twenty nor more tuan ome hundred dollars, to be recovered before any Court of competent jurisdiction by any person suing as well in his own behalf as on behalf of Her Majesty, a id half of such penalty shall belong to the Crown fcr the uses of the county or distrirt, and the other half to ^he party suing for the same, unless the suit is brought as it may be on tehalf of the Crown only, jn which case the whole OTHER THAN NeW BrUNoWICK AND QUEBEC. 178 of the penalty shall belong toi Her Majesty for the uses afore- said." The action may be brought by mote than one person jnd by persons residing in another Province, and two defendants may be joined in the same action for several penalties. Cha- put V. Robert, 14 A. R. 354. Sec. 6. — Duties of Registrar. 12. It shall be the duty of the Registrar to enter all de- clarations made under this Act in the order in which the same are received in a book to be by him kept for that purpose, which shall at all times during office hours be open to the inspection of the public gratuitously; and for registering each such declaration the Registrar shall be entitled to receive from the person filing the same the sum of fifty cents, if it does not contain more than two hundred words, and at the rate ot ten cents per hundred words for all above the number of two hundred. British Columbia. R. S. B. C, c. 150, s. yy, is the same, except that it provides that the book shall be called the Firm Index Book, and the fees are "one dollar" and "twenty cents a word," instead of 50 cents and ten cents. Manitoba. There is no corresponding section. ( North-V/est Territories. There is no corresponding section. Nova Scotia. R. S. N. S., c. 83, s. 14, is substantially the same. "Registrar of Deeds" is used instead of ''Registrar," and "Chapter" instead of "Act." The fee is 25 cents instead of 50 if declaration does not contain more than 100 words, and ten cents a hundred for all over a hundred. Books to be kept. 13. It shall be the duty of each registrar to keep two al- phabetical index books of all declarations delivered tol him in pursuance of the provisions of this Act. . * 174 Registration of Co-Partnerships in Provinces British Columbia. R. S. B. C, c. 150, s. 78, "Part" instead of "Act." Manitoba. ' R. S. M., c. 114, s. 9, "It shall be the duty of the Protho- notary and Deputy Clerks of the Crown and Pleas to keep two alphabetical indices of all declarations of co-partnership or business styles filed in their respective offices in pursuance of the provisions hereof. North-West Territories. Con. Ord. (1898), s. 6. — "All declarations of co-partnership'' instead of "all declarations" in pursuance of the provisions hereof. Nova Scotia. R. S. N. S., c. 83, s. 15, is the same, using the word ''Chap- ter" instead of "Act." Firm Index Book. 14. In one of such books hereinafter called the "Firm Index Book," the Registrar shall enter in alphabetical order the styles of the respective firms in respect to v/hich declarations have been delivered to him, and shall place opposite each such t entry the names of the person or persons composing such firm, and the date of the receipt by him of the declaration in the manner shewn in the form of "Firm Index Book" given in Schedule "C" to this Act. For Forms, see Appendix. R. S. B. C, c. Schedule D. British Columbia. 150, s. 79. — The same, but reference to Manitoba. R. S. M., c. 114, s, 10. — "The Prothonotary or Deputy Clerk of the Crown and Pleas," "the styles of the respective firms and businesses," "comprising such firms, or carrying on such businesses." " > OTHER THAN NeW BrUNSWICK AND QUEBEC. 1"5 North-West Territories. Con. Ord. (1898), c. 45, s. 7, is the same in effect as the Ontario Act, though the wording is slightly different. Nova Scotia. R. S. N. S., c. 83, s. 16, is substantially the same as the Ontario section. Individual Index Book. 15. In the second of such books hereinafter called the "Individual Index BcKjk" the Registrar shall enter in alpha- betical order the names of the respective members of each of such firms, and shall place opposite such entry the style of the firm of which such person is a member, and the date of the receipt cf the declaration in the manner shewn in the form of. ''Individual Index Book." given in Schedule D to this Act. For Forms, see Appendix. British Columbia. R. S. B. C, c. 150, s. 80, is the same, but reference to- Schedule E. Manitoba. R. S. M., c. 114, s. II, corresponds, but with the same varia- ' tions noted in preceding section. North-West Territories. Con. Ord, (1898), c. 45. s. 8, substantially the same as the Ontario section. Nova Scotia. R. S, N. S., c. 83, s. 17, same as the Ontario section. Fees. ' ' • 16. The Registrar shall be entitled to charge for searches the following fees and no more: — For searching in Finp Index — each firm ten cents ; For searching in Individual Index — each name ten cents; For each certificate when required — twenty-five cents; 176 Registration of Co-Partnerships in Provinces British Columbia. R. S. B. C, c. 150, s. 81, has in addition: — For searching in Firm Declaration Book, each declaration five cents. Manitoba. R. S. M., c. 114, s. 35, provides tb^t "The Prothonotary, Deputy Clerks of the Crown and Pleas and Registrars shall Tt'ceive the following fees: — (a) For filing and recording every declara- tion or certificate under this Act, one dollar.. .. $100 (b) For searching in respect of each firm or business in the "Firm Index Book'' or the book , for registering certificates of Hmited partnerships, twenty-five cents 25 (c) For searching in the Individual Index Book in respect of each name, twemty-five cents 25 (d) For each certificate when required, seventy- five cents 75 North-West Ierritories. Con. Ord. (1898), c. 45, s. 13, provides that "The said Re- pstration Clerk shall be entitled for filing a declarationi under tlris Ordinance to a fee of fifty cents, and for searches made in each of such books the following fees and no more: — For searching in the Firm Index Book, each firm 10 For searching in the Individual Index Book, each name . 10 For each certificate when required 25 Nova Scotia. R. S. N, S., c. 83, s. 18, same as Ontario section. 17. All the books required for the puitiposes of this Act shall be furnished by the treasurer of the municipality whose duty it is to furnish registry books (or in case of his default by the Registrar) in the same manner as other registry books. OTHER THAN NeVV BrUNSWICK AND QuEBEC. 177 British Columbia. R. S. B. C, c. 150, s. 82, provides that the books shall be fiunished by Queen's Printer. Manitoba. R. S. M., c. 114, contains no corresponding section. North-West Territories. Con. Ord. (1898), c. 45, contains no corresponding section. Nova Scotia, , R. S. N. S., c. 83, contains no corresponding section. 18. This Act shall not be construed to apply to associations .of individuals for the manufacture of cheese and contributing produce from their dairies for that purpose. British Columbia. The British Columbia Act has no* corresponding section. Manitoba. • The Manitoba Act has no corresponding section. North-West Territories. The N. W. T. Act has no corresponding section. Nova Scotia. The Nova Scotia Act has no corresponding section. Sec. 7. — Additional Sections in Various Provinces. The Acts of some of the Provinces have sections which are not found in the Ontario Act. British Columbia. It should be noted that the British Columbia Act is divided into three parts. The first part contains the codification of the Common Law rules as to Partnership. The Second Part deals with Limited Partnerships, and the third part deals with 178 Registration of Co-Partnerships in Provinces Registration of Partnerships. There are in addition three supplementary sections, which are as follows: — 82. The section given at p. 177. 83. The rules of Equity and Common Law applicable to partnership shall continue in force, except so far as they are inconsistent with the express provisions of this Act. See P- 94. 84. This Act does not apply to Mining Partnerships within the meaning of the Mineral Act, or of the Placer Mining Act. 85. This Act shall come into operation on the ist day of July, 1894. Manitoba. The Manitoba Act. R. S. M., c. 114, deals with Registration of Partnerships and Limited Partnerships. The coditication of the Common Law rules as we have seen above is contained in 60 Vic, cap. 24. In addition to the sections above set out the Manitoba Act contains the following section: — 36. All fees levied by or payable to the Prothonotary and the Deputy Clerks of the Crown and Pleas under this Act shall be payable to the Crown in stamps, subject to the pro- vision of the Act respecting law stamps, and shall form part of the Consolidated Revenue fund of the Provinces. North-West Territories. y Con. Ord. (1898), c. 45, deals only with the Registration of Partnerships, and contains no additional sections. Nova Scotia. R. S. N. S., c. 83, deals with the Registration of Partner- ships and Limited Partnerships, and has also the following Names to be oji Bill Heads. 19. In all cases where a firm name is used the name or names of the person or persons composing the firm shall be dis- tinctly written or printed on all the bill heads and letters made or issued by the firm. 20. Nothing in the foregoing provisions of this chapter shall be held to apply to cases arising under the provisions hereinafter contained as to Limited Partnerships. OTHER THAN NeW BrUNSWICK AXD OuEDEC. 179 Arbitration Clauses. « 21. In cases of partnership where two persons only are con- cerned, and their partnership shall have terminated, either of tlicm may file a petition in the Supreme Court stating the facts respecting their dealings, and praying the aid of the Court. A Writ of Summons shall thereupon issue against the partner complained of in the usual manner. 22. A copy of the petition shall be served on the partner complained of at the time of the service of the Summons. 23. On the return of the Summons, if it shall be shewn to the Court that the partnership consisted of two persons only, the Court shall by rule direct eacli partner to select one fit person as an arbitrator between them. 24. If the partners do not within the time specified by the Court select two such persons, the Court shall appoint two persons to act as arbitrators. 25. The two persons so appointed shall select one other person, and they, with such person, shall be arbitrators to examine and settle the partnership dealings. 26. The arbitrators before commencing such examination shall make before a judge or commissioner the following affi- davit, which shall be filed in the Prothoiiotary's office. We, A.B., C. D.. and E.F., do hereby solemnly swear honestly and fairly to settle the partnership accounts and deahngs of G. H. and J. L. to the best of our knowledge and ability. Sworn at before me. t^iis dav 189 G. H., J.P., A. B. C. D., E. F. 27. 'T'he arbitrators shall then order the production of all books, papers and accounts relative to the partnership deal- ings, and shall appoint such times and places as may appear expedient for the investigation of the partne hip dealings and the examination of the partners and their witnesses. If either of the partners after due notice shall fail to attend, the arbi- trators shall proceed "ex parte.'' 180 Registration of Co-Partnerships in Provinces 28. Witnesses shall be summoned to attend before the arbitrators by subpoena in the usual! form, and if, upon being duly summoned, they shall neglect to attend and give evidence, they shall be liable to the same penalites as witnesses are subject to who neglect to attend the Supreme Court on subpoena; and the Supreme Court on application to them for that purpose shall enforce the same. 29. The arbitrators shall examine the partners and their witnesses upon oath to be administered by any one of the arbitrators, and shall make an award in favor of such party ^s they or two of them shall find justly entitled thereto, which shall be filed in the prothonotary's office, and judgment shall be entered for the amount thereof, with or without costs, as directed by the arbitrators in their award, at the next term if no sufficient objection be made thereto. 30. Execution may be issued on such judgment in the usual course, and the arbitrators or any two of them shall have power to direct the costs of the proceedings, including reason- able compensation for their services, to be taxed and allowed by the Court to be paid by either of the partners, and in such manner as the arbitrators or any two of them shall direct; and the Court shall enforce such payment by attachment or otherwise. ■ 31. Neither of the partners shall, after such adjudication, mmence any proceedings in the Supreme Court touching the partnership dealings, and the judgment of the Supreme Court under the above provisions shall be final. In proceedings in the Supreme Court for the settlement of partnership dealings under this chapter a judge at chambers may make any order therein subject to appeal to the Court in term. Guarantee to a firm or of a firm to be in Writing. 46. No promise made to answer for the debt, default or mis- ■carriage of another made to a firm consisting oif two or more persons, or to a smgle person trading under the name of a firm, and no promise to answer for the debt, default or mis- carriage of a firm consisting of two or more persons, or of a single person trading under the name of a firm, shall be OTHER THAN NeW BruNSVVICK AND QuEBEC. 181 binding on the person making such promise in respect of any- thing done or omitted to be done after a change shall have taken pdace m any one or mome of the persons constituting the firm or m the person trading under the name of a firm, unless the mtention of the parties that such promise shall continue to be bmdmg, notwithstanding such change, shall appear either by express stipulation or by necessary implication from the nature of the firm or otherwise. 47- Nothing in this chapter shall be construed to contra- vene or conflict with any legislation (intra vires) of the Par- liament of the Dominion of Canada. I 182 The New Brunswick Act as to Registration. CHAPTER II. . • The New Brunswick Act as to Registration. Sec. I. Certificate of Partnership, Sec. 2. Certificate of Dissolution. Sec. 3. Duties of Registrars. Sec. 4. Penalty for Neglect to File Certificate. Sec. 5. Manner of Proving Partnership. Sec. 6. Publication of Certificate. Tlie New Brunswick Act as to Registration of Partnerships is contained in Consolidated Statutes of New Brunswick, cap. 97, sections 14 to 25, inclusive. It is not drawn on the same fines as the Acts in the other Provinces, and it will therefore be found more convenient to give its provisions separately. The first part of this Act treated of Limited Partnerships. This part, however, was repealed by 45 Vic, cap. 24, which in turn was repealed by 52 \'ic., cap. 4, for the provisions of which see p. 145. ' Sec. I. — Certificate of Partnership. 14. All persons now carrying on business together in co- partnership in this Province as general partners, and who have not heretofore signed, filed and published certificates in the -manner hcTein provided, shall, within six months after the coming into force of this chapter, severally make and sign a certificate, which certificate shall contain the name or firm of the co-partnership, and the names and respective places of residence of the dififerent partners. 15. In all general co-partnerships hereafter to be formed, 01 that shall at any time carry on business in this Province, the dififerent members thereof do and shall, previous to en- tering upon the joint business, or to establishing the same ThiS New Brunswick Act as to Rlgistration. 183 in this Province, severally make and sij^n a certificate con- taininj^ the same particulars as mentioned m the last preceding section. i6. The signatures to all certificates made and signed under the provisions of Part Second of this Chapter, shall be acknowledged or proved in the same manner and before the same persons as Deeds of Conveyances are retjuired to be ac- knowledged; and all such certificates being so made, signed and acknowledged, shall be forthwith filed in the office of the Registrar of Deeds for the respective county or counties where the co-partnership business is carried on. Sec. 2. — Certificate to be Signed on Dissolution or Change. 17. On the occasiom of a dissolution, or any change or changes in any co-partnership, a certificate shall be made and signed by the retiring, incoming and other partner or partners, which certificate shall state the name of the retiring partner or partners, and the names and respective pilaces of residence of the incoming partners, and which certificate shall l)e forthwith acknowledged and filed as hereinbefore mentioned. 23. In case of dissolution, addition or alteration in the name 01 the firm, or of the parties composing any co-partnership, whose certificate has been filed in accordance with this chapter, it shall be imperative that a certificate of such dissolution, addition, or alteration, shall be within thirty days after such dissolution, addition or alteration, be (without any notice re- quired to be given to the said parties or any of them) filed, registered and published as hereinbefore set forth for the fil- ing of certificate of co-partnerships, and subject to the same penalties and forfeitures as for non-compliance with the filing ol the original certificate in Part Second of this Chapter set forth. Sec. 3. — Duties of Registrars. 18. The several Registrars of Deeds in and for the different counties in this Province are hereby required to receive and file all certificates produced to them, and duly acknowledged or proved according to the provisions of Part Second of this Chapter, and that each Registrar of Deeds respectively shall IMAGE EVALUATION TEST TARGET (AAT-3) / O (./ 1.0 1.25 1^ IM 1^ y£ 2.2 I.I I.'- IS 1.8 U III 1.6 ^ >> * «» * '/ /^ ^4 &? 184 The New Brunswick Act as to Registration. keep a book in which he shall enter the different co-partnership names or styles, and the names of the different members com- posing each co-partnership, and for filing and entering each certificate he shall be entitled to receive and take a fee of twenty-five cents, and that such book shall at all times be opca to inspection on payment of a fee cif twenty cents for each inspection. 19. A copy of all such certificates shall, as soon as the same are filed, be published in the Royal Gazette for two con- secutive weeks next following the filing thereof. Sec. 4. — Penalty for Neglect to File Certificate. 20. Any person or persons engaged or hereafter to be en- gaged in business as general partners in this Province, ne- glecting or refusing to make, sign, acknowledge, file or publish such certificate as aforesaid, shall forfeit and pay the sum of sixty dollars, and shall also forfeit /and pay the further Sim of ten dollars per day for each and every day that such person shall so neglect or refuse after notice so to do from any creditor or creditors of such firm, or from any person or pi'sons having dealings or transactioms therewith. 21. The penalties imposed in and by the last section shall and may be recovered by action of debt, to be brought in the name of the Clerk of the Peace in and for the county in which such certificate should be filed, against the co-partner- ^ship by its joint style, name or firm, and that in anj such action judgment may be signed against such co-partnership by its joint name, style or firm, and execution issued thereupon against the persons or goods, chattels, lands and tenements of the firm, which execution may be levied respectively upon the bodies of such members thereof as are known or upon their property; and all penalties recovered under Part Second of this Chapter shall be paid to the County Treasurer of the county for the uses and purposes of the said county where such certificate should have been filed. 22. Provided always that nothing herein contained shall be construed or held as in any way to; prejudice or affect the rights of third parties against any co-partnership or to limit or restrain the liability of the different members thereof. The New Brunswick Act as to Registration. 185 Sec 5. — Manner of Proving Partnership. 24. When a party may be desirous of proving the partner- ships in any suit in a Coiurt of Law or Equity, he may pro- duce in evidence a copy of the registry of such certificate certified by the Registrar of the County where the same is registered, which copy shall be prima facie evidence of such partnership; provided always, that nothing herein contained shall prevent the parties from proving the partnership in the usual way. Sec. 6. — Publication of Certificate, Etc. 25. Whenever the publication of any notice or certificate in any newspaper is required by this chapter, and no such news- paper is published as herein required, such publication shall be made in the Royal Gazette. 12 186 Registration of Partnership in Quebec. CHAPTER III. Registration of Partnership in Quebec. Sec. :, Declaration for Registration. Sec. 2. Effects of Registration. Sec. 3. Effects of Non-Registration. Sec. 4. Penalties for Non-Registration and their Recovery. Sec. 5. Registration by Married Women. Sec. I. — Declaration for Registration. C. C. 1834 (in part). In partnerships for trading, manu- facturing or mechanical purposes, or for the construction of roads, dams and bridges, oin for the purpose of colonization, or of settlement, or of land traffic, the partners must deliver to the Prothonotary of the Superior Court in each district, and to the Registrar of each county, in which they carry on business, a declaration in writing in the form and subject to the rules provided in the statute intituled: "An Act respecting Partner- ships." This Act respecting Partnerships is to be found in Articles 5635 and following of the Revised Statutes of Quebec. They follow. R. S. Q. 5635. — The declaration which should be submitted to the Prothonotary and Registrar under the Civil Code by all persons associated in partnership, in the Province, for trading, manufacturing or mechanical purposes, or fcr pur- poses of construction of roads, dams, bridges or other works, or for the purposes of colonization, or of settlement, or of land traffic, shall be signed by the several members of such partnership, and if any of the said members be absent at the time, then by the members present, in their own names and for their absent co-members, under their special authority to that effect. 2. Such declaration shall be in the form or to the effect of Registration of Partnership in Quebec. 187 litted le by {or pur- rorks, lor of such It the id for that lect of the Schedule A annexed tO' this section, and shall contain the names, surnames, addition and residence of every partner, and the name, style or firm, under which they carry on or intend to carry on such business, and shall state the time during which the partnership has existed, and declare that the persons, therein named are the only members of such partnership. Form of Declaration. Province of Quebec, | . ; " District of ) We of in (Grocers)V hereby certify that we (have carried on and) intend to carry on trade and business as (grocers), at , in partner- ship under the name and firm of (or, as the case may be), or I (or we), the undersigned, of hereby certify that I (or we) (have carried on and) intend to carry on trade and business as at in partnership with C. D., of , and E. F., of and that the said partnership has subs'lsted since the day of one tliousand , and that we (or I or we, and the said C. D. and E. F.), are, and have been since the said day the only members of the said part nership. Witness our hands at , this day ot one thousand (or as the case- may be). C. S. L. C, c. 65, Schedule. 3. Such declaration shall be filed within sixty days after the formation of the partnership. 4. A similar declaration shall be filed in like manner when and so often as any change ct alteration takes place in the membership of such partnership, or in the name, style or firm under which they intend to carry on business. Re S. Q. 5635 (a) (Added by 61 Vic, cap. 42.)— No such declaration can be registered if it give to any partnership the name, style or firm name of an existing partnership, or a name, style or fiirlm name so similar that the public may be.' induced into error. " . 183 Registration of Partnership in Quebec. Every registration made contrary to the provisions of this article may be annulled by the Superior Court of the district, upon petition of which notice has been given to the parties in- terested, to the Prothonotary and to the Registrar. R. S. Q. 5637. — The Prothonotary and the Registrar shall enter such declaration in a registry book, which they shall keep to that effect, which book shall, at all times during office hours, be gratuitously open to public inspection. Each may require from the person delivering such declara- tion the sum of fifty cents for registering it, if it does not con- tain more than two hundred words, and the sum of five cents for each additional hundred words. The fee is the same for every" certificate required and de- livered. »"» Sec. 2. — Effects of Registration. C. C. 1835. — The allegations contained in the declaration mentioned in the last preceding article cannot be controverted by any person who has signed the same, nor can they be con- troverted, as against any party not being a partner, by a person who has not signed, but who was really a member of the partnership at the time the declaration was made; and no partner, whether he has signed or not, is deemed to have ceased to be a partner until a new declaration has been made and filed as aforesaid, stating the alteration in the partnership. ' It was held, before the Cede, that particular notice of dis- solution had to be given to persons with whom the partnership had been in the habit of dealing, and general notice in the Gazette to all with whom it had not, in order to exonerate the .several members of the partnership from payment of the debts due to third persons, not notified, and who contracted with any of them, in the name of the firm, either before or after dis- solution. (Court of Appeals — Symcs v. Sutherland, Stuart's Rep. 49) Cases in somewhat the same sense are Murphy v. Page, 5 L. C. J. 335; Greenshields v. Wyman, 21 L. C. J. 40; C. R. Coutu V. Guevrement, 31 L. C. J., p. 128. After registration of declaration that an individual has Registration of PartiNership in Quebec. 189 ceased to be a partner, no evidence on the part of the firm will be allowed to contradict that statement. (C. R., Mc- Lachlan v. Accident Ins. Co., R. J., 3 C. S., 230. C. C. 1 836. — Any partner, although not mentioned in the declaration may be sfled jointly and severally with the partners mentioned therein, or the latter may be sued alone, and if judgment be recovered against them, any other partner or partners may be sued on the original cause of action on which such judgment was rendered. The miles which govern the determinaticn of liability in: such a case are to be found in Part I., Chapter I., sects, i and 2 of this work. (Ante pp. 17 and 19.) The case of Peoples Bank & Gauthier (R. J., 14 S. C, 18,. ante pp. 2^ and 28) is also of interest under this article. Sf.c. 3. — Effects of Non-Registration. C. C. 1834 iyn part). — The omission to deliver such de- claration does not render the partnership nuiil; it subjects the contravening parties to the penalties and liabilities imposed by the Statute. C. C. 1837. — When persons are associated as partners in Lower Canada (Province of Quebec) for any of the purposes mentioned in article 1834 (ante p. 185), and no declaration has been filed as aforesaid, any action which might be brought against all the members of the partnership may also be brought against any one or mere of them, as carrying on or as having carried on trade jointly with others, without naming such others in the writ or declaration, under the name and style of their partnership firm; and if judgment be recovered against him or them, any other partner or partners may be sued jointly or severally oa1»le to serve any partner so as to bind him personally, he cannot, if he be domiciled out of the jurisdiction and a for- eigner, be served under this rule, but the ordinary practice for service out of the jurisdiction must be followed. See Snow, An. Pr. 1899, p. 662. See also re Sinclair & Bell, 28 O. R. 483, at p. 485- It 15 to be noted, however, that the above cases were de- cided under the old rules, and it cannot be said to be settled beyond question that in dealing with such a case under the new rules the courts would follow the above decisions. See Worcester v. Firbank, 1894, i Q. B., 784, and Holmested & Langton, 2nd Ed., pp. 397-8-9. 198 Practice in Ontario. When the case. comes under this rule the writ may be served upon one of the partners within the jurisdiction, or by serving it at the principal place of business of the partner- ship within the jurisdiction if they have such a place, upon any pcri^cm having control or management of the business there. J>ut these are the only two modes of service under this rule. Substituted serv^ice upon any other person cannot under this rule be allowed. Worcester v. Fiirbank, 1894, i Q. B. 784^ 788. A plaintiff might, of course, proceed against partners out of the jurisdiction personally, by obtaining leave under the rules as to service out of the jurisdiction, and might in a proper case obtain an order for substituted service, but such a pro- ceeding would not be a proceeding against the firm within the meaning of the above rules. In the case of an Ontario partnership, and in the case of a partnership some of whose members reside within Ontario, it does not seem clear when the proceeding is under those rules whether a partner within Ontario may be served substi- tutionally. Holmested & Langton, 2nd Ed., p. 398, and Shillito V. Childs, W. N., 1883, 208; Croydon v. Jackson, 3 T. L. R, 650, and Worcester v. Firbank, supra, at p. 790-2, there cited. In Shillito v. Childs it was held that substituted service could not be ordered. In Croyden v. Jackson the Master of the Rolls said it was absurd to say substitutional service could not be ordered when a firm was ^ued. Worcester v. Firbank was decided on the ground that substituted service cannot be ordered when personal service could not be validly affected. If it is sought to bind the property of the individual partners as well as the assets of the firm they should be served person- ally because, if they are not personally served and do not appear in their own names under rule 225 or 226, judgment cannot be signed against them personally, but only against the firm. "At the Principal Place, etc." This means a place within the jurisdiction where the busi- ness of the firm is carried on in the firm's name by a partner or some person who is in the pay of the firm. Snow, An. Pr. Practice in Ontario. 19» 1899, 663; Worcester v. Firbank, supra; Grant v. Anderson (1892), I Q. B, 108. It does not mean an agency. See Baillie V. Goodwin, 33 Ch. D. 604. For discussion as to what con- stitutes a carrying on of business and not a mere agency, see La Bourgogne (1899), i P. i, Murphy v. Phoenix Bridge Co., 18 P. R. 406, though these decisions were under the rules as to service on corporations. Service on a receiver and manager appointed by the Court is bad, re Flowers, 1897, i Q. B. 14. rvice the not was be d. ;ners son- not ment it the "But in the case of a Partnership which HAS been Dissolved." This proviso was formerly contained in rule 317, for which rule 222 is now substituted. The history of the proviso is given in Shepherd v. Hirsch, 45 Ch. D. 231, p. 234. Under this proviso an action may be brought against the firm in the name of the firm as it existed at the date of accrual of the right of action, notwithstanding that it may have been dissolved before action. But if it has been so dissolved to the knowledge of the plaintiffs, the writ of summons must be served upon every one in Ontario sought to be rnade liable. If in such case any of the partners are out of the jurisdic- tion, they must be made parties to the writ, and served under the rules for service out of the jurisdiction. See note at end of Shepherd v. Hirsch, supra. When plaintiflf does not know of the dissolution he can serve his writ as provided in the first j>art of the rule. 224. Where a writ is issued against a firm and is served as directed by tule 223, every person upon whom it is served shall be informed by notice in writing given at the time of service, whether he is served as a partner or as a person hav- ing the control or management of the partnership business, or in both characters. In default of such notice the person served shall be deemed to be served as a partner. See Nelson v. Pastorino, 49 L. T. 564. The notice need not be directed to anyone by name. Pr. 200 Practice in Ontario. (c) Appearance by Partners. (a) Partners to Appear Individually. 225. "Persons sued as partners in. the name of the firm shall appear individually in their own names, but all 3ubsequent proceedings shall continue in the nanie of the firm.'' The time for appearance is to be computed from the time of a valid service on the firm under rule 223. Where a manager and partner are both served, it runs from the date of the last of such services. Alden v. Beckley, 25 Q. B. D. 543. If a person is served as a partner he may appear and dis- pute the fact of his being a partner. If he is not served as a partner he should not appear at all. See Davies v. Andre, 24 Q. B. D. 598. Partners should, if possible, put in one defence, but if they cannot agree and put in inconsistent defences, the plaintiffs, in order to succeed, nuist satisfy the Couint that not one of the defences prevents a judgment being entered against the part- nership. Ellis V. Wadeson 1899, i Q.B., p. 714, and see Cropper v. Smith, 10 App. Cas. 249, and Melbourne v. Toronto, 13 P. R. 346; Logan v. Kirk, 14 P. R. 130. When a partner has not been served, but an appearance is entered for him by in- struction of a co-partner, who has been served on behalf of the firm, such appe-nancc ,if unauthorized, will be set aside on the prompt application of the partner in whose name it was en- tered. Mason v. Cooper, 15 P. R. 418, but ordinarily in- structions from a managing partner to defend an action for the price of goods supplied to the firm in the ordinary course of business is good authority to a solicitor to enter an ap- pearance for all the partners. Tomlinson v. Broadsmith (1896), i Q. B. 386; Court v. Berlin (1897), 2 Q. B. 396; Holmested & Langton, 2nd Ed., 401. Where one partner is an infant, and appears by a guardian ad litem, the appearance is proper, but the judgment when granted should be against the firm "other than A. B., an infant.' Harris v. Beauchamp (1893), 2 Q. B. 534. Re Beauchamp (1894), i Q. B. i. Lovell V. Beauchamp (1894), A. C. 607. Practice in Ontario. 201 Where one partner dies after writ and appearance, the sur- viving partner should not put in a personal defence, but one in the name of the firm. Ellis v. Wadeson, 1899, i Q. B. 714. In such a case the form of the defence should be as follows: "Statement of defence of A. B. (the partnership name), by B., sole surviving partner, ib.'' If the partner dies before action the action may still be brought against the firm, but if it is sought to bind the de- ceased partner's estate his personal representative should be- joined, ib. Where partners have recovered a judgment, and-, one of them dies, the action survives, so that the surviving.' partner may issue execution. Davies v. Andrews, 28 SoL Jour 4-1 1. " (/3) Person Jiai'iiig Control need not Appear. 226. Where a writ is served under rule 223, upon a person having the control or management of the partnership business, an appearance by him shall not be necessary unless he is a member of the firm.| (7) Person may enter Appearance ,under Protest. 227. A person served as a partner under rule 223 may enter an appearance under protest, denying that he is a partner,, but such appearance shall not preclude the plaintiff from otherwise serving the firm and obtaining judgment against the firm in default of appearance if no partner has entered an appearance in the ordinary form. Judgment cannot be entered individually against a partner who does not appear. The plaintiff is left to his rights under rule 228. Jackson v. Litchfield, 8 Q. B. D. 474, Adjrin v. Townend, 14 Q. B. D. 103; Firmin v. Internatignal Club, S T. L. R. 612. (d) Against what Property Execution may Issue when Judgment Obtained against Firm. 228. (i) Where a judgment or order is obtained against a firm execution may issue: (a) Against any property of the partnership within Ontario ; (b) Against any person who has appeared in his own. 13 :'02 Practice iy Ontario. name under rule 225 or rule 226, or who has admitted on the pleadings that he is or who has been adjudged to be a partner. (c) Against any person who has been individually served as a partner witn the writ of summons, and has failed to appear. (2) If the party who has obtained the judgment or order claims to be entitled to issue execution against any other person as being a member of the firm, he may apply for leave so to do, and tiie Court or a Judge may give sucl leave, if the /iability be not disputed, or, if disputed, may order that the liability be determined in any manner in which any issue or question in an action may be determined. Except as against any property of the partnership, a judgment against a firm shall not render liable release or otherwise afifect any member thereof who was out of Ontario when the writ was issued, and who has not appeared to the writ, unless he has been made a party under rules 162 to 167, or has been served within Ontario after the writ was issued. t Infant Partners. In the case of an infant partner execution may issue against the firivi so as to bind the firm assets, but it cannot bind the infant partners individually. Clause (2) does not apply in the case of a partnership by estoppel. Standard Bank v. Frind, 15. P. R. 438; Ray v. fsbister, 22 A. R. Ont. 12. R'lles 162 to 167 a'-e the rules for service out of Ontario. , See provisions of R. S. O., cap. 152, sec. 8. 229. Debts owing from a firm carrying on business within the jurisdiction may be attached under rule 911, although one or more members of the firm may be resident out of Ontario, provided that any person having the control or management of the partnership business or any member of the firm within Ontario is served with the attaching order. Appearance by a member pursuant to the order shall be sufficient appearance by the firm. Same as the Eng. Rule, O. 48 a ^ 9- Practice in Ontario. 203 The right to attach debts is by rule 911 confined to cases Where the garnishee is within Ontario, and where, under rule 162, leave might be given to the debtor to serve a writ of stimn'.ons on a garnishee out of the jurisdiction, under rule 162; see rule 911. Parker v. Odette, 16 PR. 69; Boswell v. Piper, i.y P. R. 257. The present rule, therefore, is an en- largement of the right to attach debts due by firms given by rule 911, lO c:.se& where some of the garnishees are out of Ontario upon proof that their firm carries on business within tl'iC jurisdiction. The appearance referred to in this rule is merely the ap- pearance by a member of the firm by solicitor or counsel upon the motion to pay over, and not the formal entry of an ap- pearance as provided by by rules 169, 225, Holmested v. Langton, 2nd Ed. 406. {e) Actions between Firm and one of its Members. 230. Rules 222 to 229 shall apply to actions between a firm and one or more of the members, and to actions between firms having one or more members in common, if the firm or firms carry on business within Ontario, but execution shall not issue in such actions without leave of the Court or a Judge, and on an application for leave all such accounts and inquiries may be ordered and directions given as may seem just. Same as the Eng. Rule, O. 48a, r, 10. Although rule 228 is made applicable to the class of actions mentioned in this rule, yet the subsequent words of the rule show that in no case coming within this rule is execution to issue without leave. Holmested & Langton, 2nd Ed., 406. (f) Actions by and against Person Carrying on Business in Name or Style other than His Own. 231. (i) Any person (whether a British subject or not, ana whether residing within or without Ontario) carrying on busi- ness within Ontario in a name or style other than his own name, may be sued in such name or style. (2) Leave shall not be necessary to issue the writ of sum- mons in such case. 204 Practice in Ontario. (3) 'The writ may be served upon the person so carrying on the business, if he be within Ontario, or at the place of business within Ontario (or if there are several such places at the place within the county in which the cause of action arose)^ upon any person having the control or management of the business there; and such service shall be equivalent to^ per- sonal service on the person so sued. (4) The person upon whom the writ is served shall be informed by notice in writing given at the time of senvice whether he is so served as the person carrying on the business or as a person having the control or management of the business, or in botli characters. In default of such notice he shall be deemed to' be served as the person carrying on the business. (5) Any party may apply to the Court or a Judge for a state- ment of the name and address of the person who is, and of the person who, at the time of the accruing of the cause of action, was carrying on business in such name or style, to be furnished in such manner and verified on oath or otherwise, as may be directed. (6) The person so sued shall appear in his own name, but all subsequent proceedings shall continue in the said name or style. (7) A person served as the person carrying on the business may enter an appearance under protest, denying that he is the person so carrying on the business; but such appearance shall not preclude the plaintiff from otherwise serving the per- son sued or from obtaining judgment in default of appearance in the ordinary form by the person so sued. (8) Where a writ is serveci under clause 3 of this rule on a person having the control or management of but not carrying on the business, an appearance by him shall not be necessary. (9) Any judgment or order in the action may be enforced by execution against (a) The property of the person so sued, used or em- ployed in or in connection with the business; (b) The property within Ontario of the person so sued : if he has appeared in the action, or has been adjudged Pkactk'' in Ontario. 20S to be the person cairying on the business, or has ueen personally served with the writ within Ontario and has failed to appear. (lo) If the person so sued has not appeared or has not been personally served, or has not been adjudged to be the person carrying on the business, the plaintiff may apply for leave to issue execution against the person within Ontario whom the plaintiff alleges to be the person carrying on the business, and the Court oi* a Judge may give such leave ' the liability be not disputed, or, if disputed, may order that the liability of such person be determined in any manner in which anv issue or question in an action may be determined. Sec. 2. — County Courts. R. S. O., cap. 55, sec. 23, s.-sec. 9, provides that County Courts shall have jurisdiction: "In actions by persons en- titled to and seeking an account of the dealings and trans- actions of a partnership, the joint stock or capital not having been over $1,000, whether such account is sought by claim or counter-claim. Sec. 3. — Division Courts. By R. S. O., cap. 60, sec. no, it is provided that: — 1 10. In case of a debt or demand against two or more per- sons, partners in trade, or otherwise jointly liable, but re- siding in different divisions, or one or more of whom cannot be found, one or more of such persons may be served with process, and judgment may be obtained and execution is- sued against the person or persons served notwithstanding others jointly liable have not been served or sued, reserving always to the person or persons against whom execution issues his or their right to demand contribution from any other person jointly liable with him. See re Sinclair & Bell, 28 O. R. 483, at p. 485' 111. Where judgment has been obtained j^gainst such part- ner, and the Judge certifies that the demand proved was strictly a partnership transaction, the bailiff, in order to satis- fy the judgment and costs and charges thereon, may seize and 206 Practice in Ontario. sell the property of the firm as well as that of the defendants who have been served. 112, s.-s. 4. Any two or more persons claimmg gt being liable as co-partners, may sue or be sued in the name of the respective fijrms, if any. Where partners are sued in the name of their firm the summons may be served on one or more of the partners, and subject to the provisions in the next two sub-sections contained, such service shail be deemed good service upon the firm; but the affidavit of the service of the summons shall state the name of the partner served. Any party may at any time before or after judgment apply to the judge for an order directing a statement toi be furnished of the names of all the persons who are co-partners in any firm which is a party to the action by the firm named. Compare rule 222, p. 193, supra, and the old rules 317, and J. A. rule 100, which were the originals of rule 222. It will be noted that the words, "of which such persons were co-partners at the time of the accruing of the cause of action," are not contained in the above rule. It was held, however, under the old High Court rules, which did not con- tain these words, that the right to sue partners in the name of their firm was not limited to the case of partners carrying on business at the date c;f the writ, and it is a question of fact whether the plaintifif intended to sue under the firm name former partners as well as those composing the firm at the date of the commencement of the action. Davis v. Morris, 10 QIB.D. 436; ilsWon v. Roger, 10 P. R. Ont. 355; Ex. p. Young, 19 Ch. D. 124; Munster v. Raillton, 10 Q. B. D. 475. As we have seen at p. 196, supra, the original High Court rules toi which the above rule corresponds were held not to apply to foreign firms. Russell v. Combefort, supra. St. Gobian v. Hoyermann (1893), 2 Q. B. 96, and other cases above cited. These cases are applicable to the above rules. But section 105, s.-s. (i), of the same Act, R. S. O. 60, provides that: — "Every summons or process issued out of a Division Court against a corporation, firm or individual not having its chief place of business within the Province, and all subsequent papers and proceedings in the action, or proceeding in which Practice in OxNTario. 207 the summons or process has been issued, may be served on the agent of the corporation, firm or individual whose office cr place of residence as such agent is either within the division in which the summons or process issued or is nearest thereto." So that a foreign firm who has an agent within the jurisdiction as above provided may be sued under the above section. This section 105 was first introduced in 1885. Prior to that there was no provision by which in ordinary actions against such corporations or person residing out of, but carrying on business within the Province, service of process could be eflfected. Bicknell & Seager, p. 137, and the following cases there cited: Ahrens v. McGilligat, 23 C. P. 171; Westover V. Turner, 26 C. P. 510; In re Guy v. G. T. R., 10 P. R. 372; Berkley v. Thompson, 10 App. Cases 45; Ont. Glass Co. v. SwMz, 9 P. R. 252; R. V. Lightfoot. 6 E. & B. 822. See also Queen v. Webb, 1896, i Q. B. 487. The section formerly applied only to corporations, but by 52 v., c. 12, s. II, ''firms or individuals" were included. 112, s.-s. 5. Where a judgment is against partners in the name of the firm, execution may issue in the manner following: (a) Against any goods of the partners; (b) Against the goods of any person who has admitted in the notice of c ispute or defence filed that he is a partner or who has been adjudged a partner; (c) Against any person who has been served as a part- ner with a copy of the summons, and who has failed to appear. See rule 228, High Court, supra p. 201. 112, s.-s. 6. Upon the trial of an action against a firm, if the plaintiff is desirous of obtaining a judgment against the individual partners other than the one served with a copy of the summons, and in addition to his judgment against the firm he may procure the addition of the remaining partners as defendants under suD-sections i and 3 of this section, and thereafter proceed to judgment against them in the action as in other cases. Sub-sections 4, 5 and 6 of 112 do not apply to partners by "holding-out." Young v. Parker, 12 P. R. 646. Sub-section 4 applies to a firm which has been dissolved. lb. . 208 PUACTICE IN CNTARIO. Sec. 4. — Appointment of Receiver. By section 58, sub-section 9, of the Judicature Act, R. S. O. 51, a receiver may be appointed by an interlocutory order of the Court in all cases in which it shall appear to the Court to be just and convenient. The mere fact of a dissolution does not entitle a partner to a receiver against his co-partners. Pini v. Roncoroni, 1892, I Ch. 633. The lunacy of a partner is a ground for appointing a receiver. J. v. S., 1894, 3 Ch, 72. A receiver and manager of a partnership business were appointed at the instance of the trrstee in bankruptcy of one of the partners, notwithstanding a provision in the articles that the share of a bankrupt partner should remain in the business as a loan to the solvent partners until the end of the term. In an action for the dissolution and winding up of an insol- vent partnership, an order was made for the sale of the assets by a receiver before trial , the assets being of such a character that their sale at once was desirable, and other special circum- stances existing. McLaren v. Whiting-, 16 P. R. Ont. 552; see Holmested & Langton, 2nd Ed., p. 95; see also ib., pp. 18 and 19. The Court will not appoint a receiver except for the pur- pose of dissolution and winding up the afifairs of a partner- ship. Lindley, 6th ed., 532. Practice in Manitoba and Bkitisi! Columbia. 209 CHAPTER II. Practice in Manitoba and British Columbia. Sec. I. Actions by and against Palrtnership Firms. (a) Plaintiff Firm to Declare Names, etc. (b) Partners may Sue and be Sued in Firm Name. • (c) Service upon Partners. (d) Single Person Carrying on Business in Firm Name. (e) Execution against Firm. By the Queen's Bench Act, 58 and 59 Vic, Man., c. 6, s. 26 (b). In all matters relating to trusts, executors and adminis- trators, co-partnership and accounts, mortgages and awards, or to infants, idiots or lunatics, and their estates, the Court shall have the like jurisdiction and powers as, by the laws of England, were on the 15th of July, 1870, possessed and exer- cised by the Court of Chancery in England. The following rules are also contained in the same Act. Sec. I. — Actions by and against Partnership Firms. (a) Plaintiff Firm to Declare Names, etc-, of Firm. Manitoba. 176. Where a statement of claim is sued out by partners in the name 01 their firm, the plaintiffs shall on demand in writing by or on behalf of any defendant, declare forthwith in writing the names and places of residence of all the persons constituting the firm. (a) And if the plaintiffs or their solicitors shall fail to comply with such demand, all proceedings in the action may upon an application for that purpose be stayed upon such terms as the Court or a Judge may direct. 210 Practice in Manitoba and British Columbia. (b) Where the names of the partners are so declared the action shall proceed in the same manner, and the same conse- quences in all respects shall follow as if they had been named as the plaintiflfs in the statement of claim. But all proceedings shaJl nevertheless continue in the name of the firm. British Columbia. The British Columbia rule 29 corresponds. (b) Partners may Sue and be Sued in Firm Name. Manitoba. 228. Any two or more persons claiming or sought to be made liable as co-partners may sue or be sued in the name of the respective firms ; \( any of which such persons were co- partners at the time of the accruing of the cause of action; and any party (to an action) may in such case apply to the Court or a Judge for a s' ^tement of the names of the persons who were at the time of the accruing of the cause of action co- partners in any such firm, to be furnished in such manner and verified on oath or otherwise as the judge may direct. Pro- vided that, in the case of a co-partnership which has been dis- solved to the knowledge of the plaintiflf before the commence- ment of the action, the statement of claim shall be served upon every person sought to be made liable. This is substantially the same as the Ontario Rule 222, for- tneirly 317, and the English Rule O. 48, a. r. i, formerly before they were amended. The Ont. Rule (see p. 193) has been amended: — (i) By inserting after the words *'two or more persons'' in the first line the words, "whether British subjects or not, or whether residing within or without Ontario.'" (2) By inserting after the words ''liable as (co-) partners" in the 2nd line the words "and carrying on business within Ontario." (3) By striking out the proviso at the end of the rule. This proviso has now been placed at the end of Ont. Rule 223 (formerly 265, the rule as to service on partnerships), which corresponds to Man. Rule 191, set out at p. 211. , . See note to Ont. Rule 223, p. 199 and Shepherd v. Hirsch, 45 Ch. D. 231, p. 234. Practice in Manitoba and British CoLUMnr.. 211 British Columbia. " • • ' The British Columbia Rule 104 corresponds. ' ^ (c) Service upon Partners. ' ' . ' ' r Manitoba. 191. Where partners are sued in the name of their firm, the statement of claim shall be served either upon any one or more of the partners, or at the principal place within Manitoba of the business of the partnership upon any person having at the time of service the control or management of the partnership business there; and subject to the rules hereinafter contained, such service shall be deemed good service upon the firm. British .Columbia. The British Columbia Rule 39 corresponds. In Russell v. Cambefort, 23 Q. B. D. 526, i. e. (see p. 196), it was held that when a firm consisted of persons who were not British subjects, and who were resident out of the jurisdiction, though they had a place of business and carried on business within the jurisdiction, they could not be served under the English rule corresponding to this one, Manitoba. In Manitoba, however, they may be served through their agent under Ruies 181 and 182, which provide that: 181. Every person who, within the Province of Manitoba, transacts or carries on any business as the general agent for any person or partnership, company or firm not incorporated, or for any corporation, whether domestic or foreign, whose chief place of business or head ofllice is without the said Pro- vince, shall, for the purpose of being served with the state- ments of claim, petitions, otders, writs, papers or other pro- ceedings aforesaid, and every of them, be deemed the agent of such person, partnership, company or firm; and service on such agent of all statements of claim, petitions, orders, writs, papers or other proceedings shall be treated as personal service upon such person, partnership, company, firm or cor- poration. 182, Every corporation aggregate or partnership company, whether domestic or foreign, and whether the principal or head -212 Practice in Mamtobv and Bi^itish Columbia. office shall be within the Province of Manitoba or elsewhere outside of said Province transacting or carrying on any busi- ness within said Province by or through any branch or agency thereof situate within said Province, shall in respect of any matter or thing arising within the said Provnce be deemed to be and shall be within the jurisdiction of the Courts of the said Province in all attaching or garnishing orders, or other proceedings to the same extent as if the principal or head office were situate and was within the said Province. Or they may be served substitutionaiiy under rule 178 (2), which provides: 178 (2). It shall be lawful for the Court or Judge on applica- tion for that purpose on proper grounds upon such conditions, and in such manner as shall seem just and right under the cir- cumstances to order substitutional or other service of all state- ments of claim, f)etitions, papers and proceedings, attaching or garnishing orders, summonses and proceedings, upon all per- sons, partnerships, associations, companies and firms, and upon all corporations, whether domestic or foreign, and whether domiciled within or without the Province, and upon all persons whether resident within or without the Province; and the service made in pursuance of any such order shall be good and efTectuil service, and shall' have the same effect as though personally effected within the Province; and previous service so made may be homologated by a subsequent order, atiy itatute, usage, custom or law to- the contrary thereof notwith- standing. 229. Any person carrying on business in the name of a firm apparently consisting of more than one person may be sued in the name ot such fi'-m. Same as the old Ontario Rule 318. Appearance must be entered by such person in his own name. Taylor v. Cotton, 30 W. R. 701. He cannot sue in theiirm name. See Mason V. Morgridge, 8 T. L. R. 805; Lang v. Thompson,, 16 P. R. (Ont.) S16, and see p. 194 supra. . British Columbia. The British Columbia Rule 105 is the same. ' " . Practice in Manitoba and British Columbia, 213' (d) Single Person Carrying on Business in Firm Name. Manitoba. 192. Where one person carrying on business in the namv° of. a firm apparently consisting of more than one person is sued in the firm name, the statement of claim may be served at the principal place within Manitoba of the business so carried on upon any person having at the time of service the control or management of the business there; and subject to any Rules of Court such service shall be deemed good service on the person so sued. Same as the old Ontario rule 266. The rule as to actions against a person carrying on business apparently in a firm, name is now contained in Ont. Rule 231. See p. 203. British Columbia. The British Columbia Rule 40 corresponds. The'concluding words are "And such service if sufficient in other respects- shall be deemed good service on the person so served'' instead of as in the Manitoba Rule. (e) Execution against Firm. Manitoba. 692. Where a judgment is against partners in the name of the firm, execution may issue in manner following: — (a) Against any property of the partners as such ; (b) Against any person who has admitted on the pleadings that he is, or who has been, adjudged to be a partner; (c) Against any person who has been served as a partner with the statement of claim, and has failed to defend. I British Columbia. The corresponding British Columbia Rule 465 reads as fol- lows : — 465. Where a judgment or order is against a firm, execution may issue in the manner following: — (a) Against any property of the partnership; 214 Practice in Manitoba and British Columbia. (b) Against any person who has appeared in- his. own nam^ under Order 12, Rule 8 (rule 59 supra), or who ha« admitted on the pleadings that he is or has been adjudged to be a partner. (c) Against any person who has been served as a partner with the writ of summons, and has failed to appear. MNNiroBA. 693. If the party who has obtained judgment claims to be entitled to issue execution against any other person as being a member of the firm, he may apply to the Court or a Judge for leave so to. do; and the Court or Judge may give such leave if the liability be not disputed, or if such liability be dis- puted, may order that the liability of such person be tried and determined in any manner in which any issue or question in an action may be tried and determined. 692 and 693 are the same as the old Ontario Rule 876, which, as amended, now appears as Rule 228. See p. 201. The judgment must folloiw the writ, so that if the writ is issued against the firm, and no appearance is entered, judgment cannot be signed against any of the partners in- dividually, even if they have been served with the writ. Jack- son V. Litchfield, 8 Q. B. D. 474. The plaintiff is not confined to his remedy by execution under these rules, but may bring fresh actions against the partners individually upon the judgment obtained against the firm. Clark v. Cullen, 9 Q. B. D. 355. British Columbia. ;■■•■■■ '■ ,,;r .■ ^ : . ■ The British Columbia Rule 465 (latter part) is the same, but the first line reads: "If the party who obtained judgment or an order." Tlie following British Columbia rules have no cor- responding rule in Manitoba. , Rule 194 British Columbia. — If either party wishes to deny the right of any other party to claim as executor or as trustee, whether in bankruptcy or otherwise, or in any representative or other alleged capacity, or Practice in Manitoba and British Columbia. 215 the alleged constitution of any partnership firm, he shall deny the same specifically. Rule 59 British Columbia. — Where persons are sued as partners in the name of their firm they shall appear individually in their own names, but all subse- quent proceedings shall nevertheless continue in the name of the firm. Same as Ontario Rule 225. Rule 60 British Columb"n. — Where any person carrying on business in the name of a firm apparently consisting of more than one person shall tje sued in the name of the firm, he shall appear in his own name; but all subsequent proceedings shall nevertheless continue in the name of the firm. f^-. ' '■ 216 Practice in Quebec. CHAPTER III. I ,,\ . i PkACTICh IN QUtBEC. Sec. I. Actions by and against Partnership. Sec. 2. Service on Partnership. Sec. 3. Execution. Sec. 4. Accounting. Sec, I. — Actions by and against Partnership. , C. P. 122 0'» part). — The writ must state the names, the oc- cupation or quality and the domicile of the plaintiff, and the names and the present or last known residence of the defend- ant. Where a partnership is a party to the suit, the full names of the individual partners must be given, their residence, their occupation, if paintiffs, and the statement that they are carry- ing on business at a certain place, in partnership, under a firm name, which must also be given. An exception to this rule, however, is contained in the following paragraph of the same article. 'C. P. 122 (cont.). — If a commercial partnership, having its ' principal place of business outside the district, is not regis- tered therein, it may be summoned by its firm name, with mention of the place where such principal place of business is situated; but the judgment rendered against it is then executory only against partnership property. ' See also C. C. 1836 and 1837, and remarks thereunder, ante pp. 188 and 189. The fact that the maker and endorser of a note are de- scribed in the writ of summons, as carrying on business to- gether in partnership, does not give to the partnership the right to demand the dismissal of the action on the pretext that it is, itself, a moral being, which is sued for the debt of the /Practice in Quebec. 217 partners individually, when in reality the partners are sum- moned individually, although composing together such part- nership. Grothe v. Laflcur et al., C. R., R. J., 9 C. S. 156. In an action against a partnership, one o£ the defendants may set forth, in a plea on the merits, that he is not a member of the defendant partnership, and such allegation will not be rejected as being a matter of exception to the form. Harvey v. Mowat, 2 P. R. 212. When the title of a debt of a dissolved partnership is a judgment, it should be executed in the name of the partner- ship, but only for the share of the foimier partner who ex- ecutes, and the writ of execution should so mention. The partner cannot obtain another judgment specially foir his share. C. R., Crepeau v. Boisvert, R. J., 13 C. S. 405. Sec. 2. — Service on Partnership. C. C. 1838. — The service of summons or process, for any claim or demand founded upon any liability of an existing partnership, at the office or place of business of such partner- ship within the Province of Canada (Quebec and Ontario), has the same efifect as the service made upon the members of such partnership personally. C. P. 1 39 dectlares that service upon a general partnership may be made at its place of business, or, if it has none, upon one of the partners. • ' , ; The (result of these somewhat equivocal provisions is a uni- form jurisprudence to the efTect that service on a general partnership must be made at its place of business, if it has one. If it has none, that fact must be stated in the bailiff's return of a service made upon a partner elsewhere. C. R., Underwood & Malone, R. J., 10 C. S. 435, and authorities there cited. After dissolution, each partner must be served either per- sonally or at his domicile, (i Pigeau Crivelli, 1837, p. 184.) Sec. 3. — Ex ution. -"- Execution against Partner for Private Debt. See C. C. 1892 and C. P.I598 and remarks theireunder (ante pp. 96 and 105). 14 218 Practice in Quebec. Execution against Partnership. C. C. 1838 0" part). — Any juderment rendered against any member of an existing partnership, for a partnership debt or liability, may be enforced by process of execution against the partnership property in the same manner as if the judg- ment had been rendered against the partnership. See ailso C. C. 1899 (ante p. 104). Sec. 4. — Accounting. The obligation of the partners to account to each other is dealt with under article C. C. 1898 (ante p. 106). The follow- ing articles of the Code of Procedure are given for purposes of reference, as containing general pi'inciples. The jurispru- dence is not given as being too technical for a work of this character. , ' 1 |jj j. C. P. 566. — Every judgment ordering an account must fix a delay for rendering it. C. P. 567. — The account must be (rendered nomirtately to the party entitled to it; it must be sworn to and be filed in the office of the Court within the delay fixed, together with the vouchers in support of it. The Judge may, however, upon motion, extend the delay for rendering the account. C. P. 568. — The account must contain, under separate heads, receipt and expenditure, and close with a recapitulation pf such receipts of expenditure establisMng the balance; what- ever remains to be recovered is reserved for a separate head. C. C. 569. — Under the head of receipts must be placed all sums which the accoimting party has received, and all those that he ought to have received during his management. C. P. 570. — The accounting party cannot place under the head of expenditure the costs of the judgment ordeiring him to account, unless he is authorized to do so by the Court; but he may charge under that head his travelling expenses, the attendances of the court who made up the account, the costs of pireparing, presenting and verifying it, and of whatever copies thereof are required. Q -p 571. — If the account shows an excess of receipts over expenditure, the party to whom it is rendered may provision- Practice in Quebec. 219 ally demand execution for the balance, saving his right to contest the remainder of the account. C. P. 572. — The party accounted to is bound to take conv munication of the account and vouchers at the office of the court, and to file his contestations of the account, if he con- tests it, within a delay of fifteen days, which may be extended by the Judge upon application. C. P. 573. — Parties accounted to, whose interests are the same, must name the same attorney; if they do not agree in their choice, the attorney first in this case remains attorney of record saving the right of the other parties accounted to, to employ attorneys of their own, upon payment of all costs occasioned thereby. C. P. 574. — The accounting party has a delay of six days after the filing of the contestation to file his answers in sup- |>ort of his account, and the otlier party has a similar delay to file his replications. C. P. 575. — In default of filing the contestations, answers or replications within the delay fixed, the party so in default is held to admit whatever is contained in the document he fails to contest. C. P. 576. — After the issues are completed, the parties pro ceed to trial in the ordinary manner; but the court may, at any time before judgment, refer the case to arbitrators or to a practitioner or an accountant, according to its nature. C. P. 577. — Tlie judgmeht upon the account must contain a computation of the receipts and expenditure, and establish the balance if there is any. C. P. 578. — If the defendant fails to render an .account, the plaintiflf may proceed to have one made out in the manner mentioned in Article 568. 220 Rules as to Effect of Death. RECAPITULATION OF RULES AS TO EFFECT OF DEATH. As the rules regulating the rights- of parties after the death of a partner are contained in different parts of the work, it may be well to recapitulate them here. We have seen that a partnership is dissolved by death (p. 84) ; that the estate of a deceased partner is not liable for debts contracted by the partnership after his death (p. 41) ; that when a partnership is continued in the old firm name, even if it be the name of the deceased partner, his representatives do not, by reason of such continued use of his name, become liable for the debts incurred after the death (p. 38). But the Act as to registration of co-partner- ships requires that a declaration should be filed when and so often as any change takes place in the membership of the partnership ; see p. 168. We have also seen (p. 44) that his estate is jointly liable for the debts of the partnership due at his death, and also severally in a due course of administration, but subject to the prior payment of his separate debts, and also that the representative is entitled to apply to the Court to have the partnership affairs wound up, and the property of the partnership applied first in payment of the debts and liabili- ties of the firm, and second, in payment of what may be due to the partners respectively after the deducting what may be due to them as partners to the firm (p. 90). It will readily be seen, however, that such a winding up may mean a serious sacrifice of the property of the bene- ficiaries. Consequently, the representative often carries on the business in order to avoid such sacrifice ; and, as has been frequently said, a representative who does this finds himself in an unenviable position, because, while he cannot benefit by any profit made, he may find that he is held responsible for losses sustained. The representative in such a case may be carrying on the business properly, />., under authority conferied upon him, or improperly, i.e., without authority. Rules as to Effect of Death. 221 And, moreover, he may be carrying it on properly with re- spect both to the beneficiaries and creditors, or properly with respect to beneficiaries and improperly with respect to creditors, or vice versa. If the representative carries on the business, there being no direction in the will or partnership articles authorizing him to do so, then, if any loss is sustained, he is bound to make it good out of his own pocket both to the beneficiaries and the creditors. If, however, there is a direction in the will or in the partnership articles authorizing him to carry on the business, then he is entitled to be indemnified out of the testator's estate as against the beneficiaries, but not as against the creditors of the testator. If, however, the creditors of testator acquiesce in the carrying on of the business by the representative, he will be entitled to be indemnified as against them also. Dowse v. Gorton, 1891, A. C. 190. Even if there is no direction but the business is carried on for the benefit and with the consent of the beneficiaries and creditors, the representative will be entitled to be in- demnified. In re Brooke, Brooke v. Brooke, 1894, 2 Ch. 600. And the assent may be express or implied from a course of dealing {ib). In any event, however, the repre- sentative should continue a business for the purpose of carry- ing out a contract entered into by the deceased and not completed, and he should also continue it for a reasonable time, if it should be necessary to do so for the purpose of disposing of it to advantage. Williams Exors., 9th Ed., 1689. ' . A creditor may be either a creditor of the deceased or a creditor of the continued business. Speaking generally, a creditor of the deceased is entitled' to look to the estate of the deceased and to call the representative to account for any waste thereof, while a creditor of the continued business is entitled to look to the representative only, and the repre- sentative is personally responsible for debts so incurred. If, however, the representative carries on the business with the 222 Rules as to Effect of Death. consent and for the benefit of the creditors of the deceased then if there be a loss the representative and consequently his creditors, i.e., the creditors of the continued business, are entitled to be indemnified out of the assets of the deceased. Exp. Garland, lO Ves. 120; Exp Edmonds, 4 D. F. & J. 488, p. 498. In dealing with a firm, when one of the partners has died and the representative is carrying on the business, the question often presents itself as to whether such course will discharge the estate of the deceased partner. This really resolves itself into the question as to whether or not such course of dealing will amount to novation. See ante, p. 48. If the creditor wishes to hold the estate of the deceased partner, he should be careful to do nothing which will amount to an election to accept the liability of the firm as reconstituted in substitution for the original liability. This can generally be accomplished by reserving his rights against the estate of the deceased partner in his dealings with the new firm. The mere fact that a creditor continues dealing with the new firm will not, however, amount to a discharge of the deceased partner's estate. Devaynes v. Noble, i Mer. 568, 586. Gough V. Davies, 4 Price 200. SeeLindley Act 45. The beneficiaries of the estate of a deceased partner arc entitled to elect whether they will take profits or interest when the continuing partners have carried on the business with the assets or capital of the deceased partner's estate (p. *88), and the amount due to the estate of a deceased partner is a debt accruing at the date of the death (p. 89). The rules as to administration of assets on the death cf a partner will be found at p. 116. When a partnership has been dissolved by death, any benefit derived from any trans- action concerning the partnership, or from any use of the partnership property either by the continuing partners or the representative of the deceased, must be accounted for (p. 70). APPENDIX. ARTICLES OF PARTNERSHIP Between Two Traders. Articles of Agreement made the day of between (A. B.), of, etc., of the one part, and (C. D.), of, etc., of the other part, whereby it is agreed that: — ■ 1. The parties shall become and be partners under the firm of "(B. & D.)," in the business of , for years from the day of , ^9 , or, until the expiration of months' notice in writing to determine the partnership left by either partner for the other at their place of busi- ness, at any time after the day of ,19 2. The business shall be carried .on in the messuage or shop No. in Street, or such other place as the partners shall hereafter agree on. 3. The capital of the partnership shall be the sum of $ to be contributed by the said (A. B.) and (C. D.) in equal shares. 4. The profits and losses shall belong to and be borne by the said (A. B.) and (C. D.) in equal shares. 5. The said (A. B.) may draw out of the profits, money not exceeding $ each month, and the said (C. D.) may draw out of the profits, money not exceeding $ in each month. 6. The said (A, B.) by whrom the said messuage or shop and premises in which the business is carried on are held during the residue of a term of years from the day of , granted by a lease dated, etc., at a rent of $ , shall Hold the premises in trust for the partnership, and shall be indem- nified by the partnership from the said rent, and from the lessee's covenants and conditions of the lease, and shall be credited in the partnership books with the sum of $ (being the agreed value of the lease) as part of his contribution to capital. 224 Appendix. 7. The said rent, and Jl taxes, rates, repairs, and outgoings, in respect of the said messuage and shop, or other partnership place of business for the time being, or of the business, shall be paid out of the profits, or in case of deficiency of profits, then by the pairtners equally. 8. No apprentice, clerk, :>r servant, shall be taken, em- ployed, or dismissed, without the consent of both partners. 9. All premiums and fees taken with apprentices, or the like, shall be part of the profits. 10. The partners res^oectively shall cause all usual accounts and entries to be kept and made in proper books; and all secuirities and vouchers shall be kept at the place of business, or at the bankers of the partnership, and be open to the in- spection of each partner,, 11. Immediately after each day of in every year, the partners shall take an account and valuation of the effects, credits, and liabilities of the partnership, to be forthwith en- tered in two books, to be signed by the partners, each of whom is to retain one. ,The entries in such books shall be conclusive, except only as to such errors to the amount of $ as shall be complained of within months from such signing. The profits shall be divided as afoiesaid, after the making up of such account. 12. No partner shall purchase goods to the amount of $ without the previous consent of the other in writing. 1^3. Either partner deali!\g with, or giving credit of goods or money to, any person after request to the contrary by the other, shall immediately pay to the other the full value or amount of such goods or moi ey as liquidated damages. 14, Neither partner shall, without the consent of the other, compound or discharge any liability to the partnership, or otherwise discharge or diminish any security to the partner- ship, or engage the partnership name on any negotiable or other security, or for any debt, otherwise than in the usual course of business, or make himself liable as bail or surety for ^ny person or on any accommodation bill or note, or policy of insurance, or enter into any wagering contract, or Appendix. 225 assign his share or interest in the partnership, or withdraw his share in the capital, or expose the partnership effects to the danger of being taken in execution, or be concerned out of the partnership in the business of 15. If either partner shall infringe any of the clauses number- ed 8, 10, II, 12, 13 and 14 respectively, or become insane, or enter into any arrangement or composition for the benefit ol his creditors, or shall (without the consent of the other part- ner) make any assignment, either absolutely or by way of mortgage, or declaration of trust of his share and interest in the partnership, or any part thereof, the other partner may forthwith determine the partnership by notice in writing, left at the place of business and may thenceforth continue the business alone, and may advertise notice of the dissolution in the , and, if necessary, sign the name of the in- fringing partner to such notice of dissolution. 16. On the dcaith or bankruptcy of either partner, or on no;ice being given to either partner under clause 15, or by either partner under clause i, his share in the effects may be purchased by the other at a valuation to be made by ar« bitrators or their umpire, as hereinafter mentioned. The price shall be paid by three equal instalments at the respective periods of six, twelve and eighteen calendar months from such death. The payment of such instalments, with interest at the rate of $ per centum per annum for so much of the said price as shall for the time being remain unpaid at the date of payment of each such instalment, and also the indemnity of the retiring partner, or of the executors or administrators of the deceased partner, shall be secured by the purchaser's bond; and if the said (B.) shall be the purchaser, he may, at his option, cause the lease of the said messuage at to be included in such valuation and .purchase. And, on such purchase, the shaire of the retiring or deceased part- ner in the profits, up to the day of dissolution, shall be ascer- tained and paid by the other forthwith. 17. Upon the determination of the partnership by effluxion of time, or upon its determination by any means, if the option given by the last preceding clause shall not have arisen or been ■ ..' I: 226 Appendix. exercised, then, as soon as conveniently may be, a full and general account and valuation shall be taken of the property, assets, and liabilities of the partnership, and the property and assets shall be sodd and realized, and the debts due to the partnership shall be collected and got in, and the moneys aris- ing thereby shall be applied in the first place in discharge of the liabilities of the partnership, and the expenses of and in- cident to the taking of the said account and valuation, and of and incident to such sall'e, realization, and getting in as aforesaid, and in the next place in payment to each partner, or His representatives, of any unpaid profits due to him or them, and Tepayment of his or their share of capital, and the residue (if any) shall be divided between the partners, or their repre- sentatives, in equal shares; and the partners, or their repre- sentatives, shall execute and do all such instruments and things for carrying out the realization and division of the partnership assets, and particularly wild' execute such mutual indemnities and releases as may be reasonable and proper; Provided always, that if the proceeds of the realization shall not be sufficient, after the discharge of the liabilities of the partnership, and of such expenses as aforesaid, and the pay- ment of any such unpaid profits as aforesaid, to repay to the partners, or theiir representatives, their respective shares of capital in fuU, then such shares shall be repaid rateably so far as such proceeds shall extend, and neither partner nor his representatives shall have any claim on the other partner, or his irepresentatives, in respect of the deficiency. i8. If at any time any dispute, doubt or question shall arise between the said partners, or their respective executors or administrators, either on the construction of these presents, or respecting the accounts, transactions, profits, or losses of the business, or otherwise in relation to the partnership, then ever>^ such dispute, doubt or question shall be referred to two arbitrators, or theiir umpire, to be appointed in the usual way, and such reference shall in all respects, as to the mode and consequences thereof, conform to the provisions in that be- half contained in the R. S. O. c. 62, or any statutory modi- Appendix. 227 fication thereof for the time being subsisting ; and so that this submission and ths award may be made a rule or order of Court, on the apphcation of either party to the reference. In witness, etc. ARTICLES OF PARTNERSHIP Between Three Traders, with ordinary Clauses. This Indenture made the day of , 19 , between (A.B.), of, etc., of the first part; (C. D.), of etc. of the second part; and (E. F.), of, etc., of the third part; witnesseth, that each of them, the said (A.B.), (C. D.), and (E. F.), (so far as the covenants, stipulations, and provisions hereinafter con^ tained are to be observed and performed by him, his executors or administratorsij hereby covenants with the oihers of them jointly and sevenilly in manner following, that is to say : — 1. The said (A.B.), (C. D.), and (E. F.), and the survivors of them, shall become and henceforth continue partners in the trade or business of , fdr the term of seven years from the day of the date of these presents, if the said partners or any two of them shall so long live, subject to the provisions here- inafter contained for determining thei said partnership. 2. The said business shall be carr'ied on under the style or firm of "(B-) and (Co.)," in the messuage belonging to the said (A, B.), in Street, in the city of , or in such other pll'ace of business as the said partners shall from time to time agree upon. 3. If on or at any time after the day of , 19 , any partner shall be desirous of retiring from the partnership, he shall be at liberty to gHve to the other partners or partner, or to leave for them or him at the place where the business shall for the time being be carried on, notice in writing of such his desire and of his intention to determine the partnership so far as he is concerned. And the partnership shall, at the expiration of six months after the giving or leaving of such notice, determine accordingiiy, as regards the partner giving 228 Appendix. such notice, subject nevertheless to the provisions contamed in clause 25 of these presents. 4. If any of the said partners shall at any time become in- sane, or become insoltvent, or make or enter into any arrangement or composition, with his creditors, whether statu- tory or otherwise, or shall knowingly do, permit, or omit any act or thing contrary to any of the covenants, stipulations, and provisions herein contained, or if he shall (except with the consent of the other partners or partner, or by reason of sickness or physical injury), absent himself from business for more than days at any one time, or more than days in any one year: Then, and in any of the said cases, the other partners or partner, if they or he shall think fit, shall be at liberty to give to the insane partner, or his committee, or to the partner who shall offend in any of the particulars afore- said (as the case may require), or leave at the place where the business shall for the time being be carried on, a notice in writing desiring him to retire from the partnership, and de- claring the partnership to be dissolved and determined: And the partnership shall, from the time of giving or leaving such notice, or from any other time to be therein specified for the tnirpose, determine accordingly as regards the partner to or for whom such notice shall be given or left, subject neverthe- less to the provisions contained in clause 25 of these presents, and also subject and without prejudice to the remedies of the -respective partners for the breach or non-observance or non-performance of all or any -of the covenants, stipulations, and provisions herein contained. 5. If the partnership shall be determined by notice under either of the preceding articles, the partner giving such notice shall be at liberty to cause a proper notice of the dissolution of the said partnership to be advertised in the , and may, if necessary, sign the name of the partner to whom the said notice shall have been given to such advertisement or notice of dissolutiion. 6. The capital of the partnership shall be the sum of $ , to be contributed by the said partners in the following pro- portions, namely, the sum of $ , being two-fourths thereof, Appendix. 229 by the said (A. B.); the sum of $ , being one other fourth thereof, by the said (C. D.), and the sum of $ , being the remaining fourth thereof, by the said (E. F.) : And they shall respectively be considered as creditors of the partnership in respect of such capital, and shall be allowed interest for the same, after the rate of per centum per annum. 7. The said partners shall be entitled to the net profits of the said business in the proportions following, namely, the said (A. B.) to two-fourth parts; the said (C. D.) to one- other fourth part; and the said (E. F.) to the remaining one- fourth part thereof: And all losses happening in the course of the said business shall be borne by the said partners in the same proportions, unless the same shall be occasioned by the wilful breach of any covenant, stipulation, or provision herein contained, or other neglect or default on the part of either of the said partners, in which case the same shall be made good by the partner through whose breach, neglect, or default the same shall arise. 8. The said (A. B.) shall! be allowed by the partnership the clear yearly sum of $ by way of rent for the messuage in Street aforesaid, so long as the said business shall be carried an therein, but the said messuage shall continue the sole property of the said (A, B.), subject only to be used for the purposes ol the partnership business. 9. As well the said rent as al'l taxes, rates, assessments,^ and other outgoings, which shall become payable in respect of the messuage wherein the said business shall be carried on, the costs of insuring the same, and the stock in trade and fixtures belonging to the partnership from loss or damage by fire, and tlie expense of providing heat and light and of paying the salaries and wages of derks, porters, and ser- vants to be employed in the said business, and of travelling, and all other disbursements and expenses which may be in- curred by the partners respectively in the course of the said business, shall be paid out of the profits of the business, or in case of a deficiency of profits, then by the said partners in the proportions in which they shall be respectively entitled to the net profits of the business. 230 Appendij^. 10. The bankers of the partnership shall be the Bank or such other bankers as die partners shall from time to time agree upon; and all partnership moneys (not required for currelnit expenses) shall be paid into the account of the firm at the said bank at the end of every (lay. Each partner shall be at liberty tO' draw on the part- nership account, but only for the purposes of the partnership, or for the purposes mentioned in the next clause ;hereof, and only by drafts or cheques upon such bankers in the firm name. 11. The partners shall be at liberty, from time to time, to draw out of the said business, for their own use respectively, any sum or sums not exceeding the sums following, that is to say: the said (A. B.) the sum of $ per month; the said (C. D.) the sum of $ per month; and the said (E. F.) the sum of $ per month; such sums to be duly accounted for by them respectively on the taking of every such general annual account as hereinafter directed; and any partner whose drawings shall, on the taking of such account, be found to exceed his share of the net profits and interest on capital accrued to him for the previous year, shall forthwith refund the difiference. 12. No apprentice, clerk or servant, shall be taken or en- gaged, or be employed in or about, or dismissed from, the said business, by any of the partners without the consent of the others of them. « 13. All premiums and apprentice-fees, to be paid with any apprentice or other person to be received into the said busi- ness, shall be considered as part of the profits of the said business, and be divided accordingly. 14. The partners shall be true and just to each other in all their transactions and dealings, and shall, at all times dur- ing the continuance of the partnership, diligently and faithfully employ themselves in the conduct and management of the said business, and the concerns of the partnership. 15. Every partner shall forthwith inform the other partners of all letters, accounts, writings, proposals, matters and things, which shall have come into his hands or knowledge touching the partnership business. : , Appendix. 231 i6. None of the partners shall, during the continuance oi the partnership, without the consent of the other of them, either separately or in partnership with any other person, engage in or carry on, or be concerned or interested, directly or in- directly, in the trade or business of , nor engage in or carry on any other trade or business, nor become nor be a director of any joint-stock company. 17. None of the partners shall transact any business, or enter into any contract or agreement with, or give credit to, or lend or advance any money out of the partnership funds to any person, company, or corporation, after he shall be re- quested by the other partners not to do the same. 18. None of the partners, without the consent of the others of them, shall compound, release, or discharge any debt or duty which shall be due or owing to the partnership, without receiving the full amount thereof; nor sign any instrument, whereby any debt or security shall be in anywise discharged, vacated, or diminished. 19. None of the said partners, without the consent of the others of them, shall draw, accept, or sign any bill of exchange or promissory note, or contract any debt on acco^int of the said partnership, or employ any of the moneys or effects of the partnership, or in any way pledge the credit thereof except in the usual and regular course of business. 20. None of the said partners shall, without the previous consent in writing of the others of them, become bail, surety, or security for any person or persons (or draw, indorse, or accept any accommodation bill or note, or underwrite any policy of insurance, or make or enter into any time-bargain for the sale or purchase of stock in any government security, or expose himself to any other risk or hazard in any gaming transaction). 21. None of the partners shall, without the previous con- sent in writing of the others of them, make any assignment, either absolutely or by way of mortgage, or any declaration of trust of his share or interest in the said partnership, or any part thereof, or withdraw his share of the capital therein or any part thereof. 232 Appendix. 22. None of the partners shall knowingly do or permit any- thing whereby the moneys or effects of the partnership shall be seized, attached, extended, or taken in execution. 23. The partners respectively shall keep or cause to be kept, proper books of account, wherein shall be entered all moneys received and paid, and all contracts entered into, and all business transacted on account of the partnership, and all other matters and things of which accounts ought to be kept, according to the usual and regular course of the said business, and which books of account, together with all deeds, securities for money, letters, and papers belonging to the partnership (except such as shall be kept with the bankers of the partnership), shall be kept at the place where the said business shall be carried on, and shall, at all reasonable times, be open to the inspection of all the partners. 24. As soion as conveniently may be after the day of ,in every year during the partnership, a general account in writing shall be made and taken by the partners of all the moneys, credits, property and effects, and of the debts and liabilities of the partnership ; and of all contracts entered into, and all business transacted on account of the partnership dur- ing the then preceding year, and of all other matters and things usually indluded in such accounts, among persons en- gaged in the trade or business of ; and such account shall be entered in three books, to be respectively signed by the partners, and after such signature, each of the partners shall take one of the said books, and they shall be bound thereby, unless some manifest error shall appear therein within the space of calendar months next after the making up of such account, and be notified by any of the partners to the others of them within that time; and in such case only such error shall be rectified: And on the making up of every such yearly account, all interest which shall become due to the said (A. B.), (C. D.), ior'(E. F.)y for such sum or sums of money as they shall respectively advance and bring into the said partnership, and the yearly allowance of $ to the said (A. B.), for rent, shall, in the first place, be deducted, and the residue of the clear profits of the said business which shall Appendix. 233 have accrued or been gained in the preceding year, shall be divided amongst the partners in the proportions aforesaid. 25. In case of the death or bankruptcy of any of the said partners before the expiration of the partnership term, or if any notice of retirement shall be given by any partner under clauses 3 or 4, then the surviving or other partners or partner (if only one such partner) may, if they or he shall think fit, elect to continue the partnership busi- ness, and in that case each surviving or continuing part- ners or partner shall, within the space of six calendar months next after such death, bankruptcy, or retirement as aforesaid, settle and adjust with the representative or representatives of the deceased partner, or with the trustee of the bankrupt partner, or with the retiring partner or his committee, as the case may require, al accounts, matters, and things relating to the partnership ; and for the purpose of such settlement and adjustment the value of the share of the deceased, or bank- rupt, or retiring partner of and in the property and assets, including the goodwill of the partnership, shall be ascertained by two indifferent persons, one to be chosen by the surviving or continuing partner or partners, and the other by the repre- sentatives or representative of the deceased partner, or the trustee of the bankrupt partner, or the retiring partner or his committee, as the case may require, or, in case of diflference between such valuers, then by their umpire, to be chosen irt the usual manner; and the surviving or continuing partners or partner shall thereupon purchase the said share at such valua- tion, and shall enter into a bond in a sufficient penalty for securing the amount of such valuation to the person or per- sons entitled thereto, by three equal instalments, at the re- spective periods of six, twelve, and eighteen calendar months next after the date of such death, bankruptcy, or retirement as aforesaid, with interest as from that date at the rate of per cent, per annum for so much of the said amount as shall for the time being remain unpaid at the date of payment of each instalment: And also a bond for indemnifying the estate and effects of the deceased, or bankrupt, or retiring partner against the debts and liabilities of the partnership, on having 15 234 Appendix. a proper assignment or assurance executed for vesting in the surviving or continuing partners or partner the share of the deceased, or bankrupt, or -retiring partner, and enabling such surviving or continuing partners or partner to collect and get in all the assets of and debts due to the partnership 26. For the purposes loif valuation, the goodwill of the part- nership shall be deemed to be equal to three years' 'purchase of the average net yearly profits of the said business for the last preceding years, or for the period which shall have elapsed from the commencement of the partnership if less than years. 27. In case the said (A. B.), shall die before the expiration of the partnership term, then the surviving partners or partner (if only one) shall have the option of purchasing from his representative or representatives the messuage in street, , aforesaid, where the business is now carried on, at the price of $ , provided that the surviving partners or partner signify in writing their or his intention of purchasing the said messuage to the representative or representatives of the said (A. B.) within three calendar months after his death ; and in such case the surviving partners or partner shall be entitled to an assignment (to be prepared at their or his expense) of the lease of the same premises for the residue which shall then be unexpired of the said term, subject to the /ent and to the lessee's covenants reserved by and cotnltained in the said lease. 28. No retiring partner shall during the unexpired residue of the partnership term, commence, or carry on, or engage or be interested, directly or indirectly, in the trade or business of , at aforesaid or within a distance of miles therefrom. 29. Proviso for winding up the business on the termination of the partnership, vide ante p. 225, clause 17, mutatis mutandis. 30. In all matters relating to the management and conduct of the partnership business, notwithstanding anything herein contained to the contrary, the decision of a majority (m value) of the partners shall be conclusive and bind all the partners. Appendix. 235 31. Subject to the provision contained in the last preceding clause, if at amy time any dispute, etc., (continue at p. 226, clause 18 of preceding form). In witness, etc. ARTICLES OF PARTNERSHIP I/, Between a Patentee and a person who contributes the capital. This Indenture, made, etc., between (A. B.), of, etc., of the one part; and (C. D.) of, etc., of the other part: Whereas a patent under the seal of the Patent Office, dated the day of this present month of , for the manufacture of a cer- tain machine, invented by the said (A. B.), intituled (" "). has been granted to him for the term of years, from the date thereof: And whereas the said (A. B.) and (C. D.) have agreed to become partners for the purposes, and subject to the covenants and provisions hereinafter contained: And whereas the said (A. B.) and (C. D.) have defrayed the ex- penses of obtaining the said patent in equal moieties: Now this Indenture witnesseth, that each of them, the said (A. B.) and (C. D.) hereby covenants with the other of them in manner fol- lowing (namely): — . I. The said (A. B. and C. D.) shall be partners in the busi- ness of manufacturing and selling the said machines, pursuant to the said patent, for the said term of years, granted by the said letters patent, and for any future term for which the said patent may be extended. 2, The partnership business shall be carried on under the firm of (B. and D.) at aforesaid, or at such other place or places as the said partners shall mutually agree upon. 3. The patent right shall be considered as part oif the part- nership property, and to have been brought into the business as capital by the said (A. B.); and no share or interest therein, or license to use the same, shall be sold, granted or assigned to any person or persons, without the consent lof both the part- ners; and all moneys, benefits, and advantages to accrue from any such sale, grant, assignment, or license, shall be divisable 236 Appendix. between the partners in the same proportions as the profits of the business arc hereinafter directed to be divided. The said patent right shall for the purpotses o/ the business, and of any accounts in relation thereto, be taken to be of the value of $ at the date of these presents, and to become ^ depreciated in value at the rate of $ every half-year. 4. The said (C. D.) shall immediately bring into the business the sum of $ as capital, and shall continue to employ the same in the said business, and for the benefit idf the partnership, during the partnership term, without any allowance of interest for the same; and shall, from time to time, at the request of the said (A. B.) advance and bring into the said business such further sums of money (not exceeding the sum of $ in any one year, nor exceeding, together with the said sum of $ , the total sum of $ ), as shall in the opinion of the said (A. B.) be required for carrying on the same business, being allowed interest on such further advances of per centum per annum out of the profits of the said business, before any division of such profits. 5. The said (C. D.) shall not withdraw the said capital, or sum of $ , or any such further advances as aforesaid, or any part thereof respectively, without the consent in writing of the said (A. B.) first obtained for that purpose. 6. The net profits of the said partnership (after paying there- out t)ie several' outgoings and expenses mentioned in clause 1 1 hereof, and after deducting the interest hereinbefore agreed to be allowed to the said (C. B.), on his further advances of capital), shall, during the first seven years of the said term of years, be divided into three equal shares, whereof two shall belong to and be taken by the said (A. B.), and the other by the said (C. D.) ; and shall during the remainder of the said term, be divided between the said parties in equal moieties. But all Ibsses, at any time incurred in loir about the carrying on of the partnership business, shall be borne by the partners in equal shares. 7. (Clause as to bankers and drawing on the -partnership account at anite p. 230.) See 10, preceding form. 8. (Clause as to montMy drawings, at ante p. 230.) See 11. (■< Appendix. 237 9. (Clause as to taking id engaging apprentices and ser- vants, etc., at ante p, 230.; See 12. ^ 10. (Clause as to apprentice-fees, at ante, p. 230.) See 13. 11. The rent of any workshops, buildings, or lands where the said business shall be carried on, and the octets of all addi- tions to and alterations and repairs of the same, and of pur- chasing and keeping up machinery, utensils, and plant, which may be necessary or proper for carrying on the said business, and all taxes, rates, assessments, insurance premiums, and other outgoings payable in respect of the premises, or of the said business, and the salaries and wages of clerks, workmen and servants, and the expenses of travelling of the partners or their agents on account of the partnership, shall be paid out of the profits of the business, or in case of a deficiency of profit then by the partners in equal shares. 12. The said (A. B.) shall at all times, during the continu- ance of the partnership, diligently and faithfully emplioy him- self in the conduct and management of the said business, and in the concerns of the partnership, unless he shall be pre- vented by sickness or other reasonable cause of excuse arising without his own default; but the said (C. D.) shall not be obliged to attend to the said business, except so far as he shall think proper so to do. 13. (Here insert from the preceding precedents, any clause or clauses which may be required, with regard to the duties of the partners, and the conduct and management of the business.) 14. Neither partner shall, during the continuance of the part- nership, nor for years after its determination, by any means, without the consent in writing of the other of them, lOir of his executors or administrators, divulge to any person not a mem- ber of the firm any trade secret, method of manufacture, or soecial informatiion, employed in or conducive to the partner- ship business, and which may come to his knowledge in the course of, or by reason of this partnership. 15. (Expulsion clause, at ante p. 225). See 4, preceding form, 16. If the said (C. D.) shall die during the continuaince of the partnership, his executors or administrators shall have the op- 238 Appendix. tiom of succeeding to his share in the partnership business and effects , upon giving notice of such intention, within calendar months after his death, provided they shall forthwit? do and execute all such acts and deeds as shall be requisite to subject them tfoi the same lliabiUties and conditions as the de- ceased was subject to in respect or by reason of the partner- ship; But, in such case, the said (A. B.) shall aLome conduct and manage the said business, and the said executors or ad- ministrators shall not be at liberty to intermeddle or interfere in the conduct and management of the partnership concerns, unless expressly requested so to do by the said (A. B), other- wise than by inspecting the books of account belonging to the partnership, and examining into the state of the business, or by assisting in making up and settling the half-yearly general accounts in manner hereinbefore directed. Provided always, that so long as the said (A. B.) shall conduct and manage the said business on behalf and for the benefit of himself and the executors or administrators of the deceased partner, he shall be entitled to deduct and retain out of the profits of the busi- ness, before any division thereof, the yearly sum of $ by equal quarterly payments, as a compensation or salary for his trouble in conducting and managing the same. 17. In case either of the said partners shall retire from the said partnership, pursuant to the fifteenth article hereof, or in case either of the said partners shall die during the continuance of the said partnership, and in case the partner so dying shall be the said (C. D.), then, if his executors or administrators shall decline or neglect to avail themselves of the option given to them by the article lastly hereinbefore contained, then the con- tinuing or surviving partner (as the case may be) shall, within the space of calendar months next thereafter, settle and adjust with the retiring partner, or the representatives of the deceased partner (as the case may be) all accounts, matters, and things relating to the partnership; and the amount of the share of the retiring or deceased partner (as the case may be) in the credits and effects of the partnership, shall be ascertain- ed by valuation to be made by two indifferent persons, one >to be nominated by the continuiiiig or surviving partner and the Appendix. 239 other by the retiring partner, or the executors or administrators of the deceased partner (as the case may be), with power to choiose an umpire in case of their not agreeing in their opinion ; And thereupon it shall be obligatory upon the surviving or continuing partner to purchase, and he shall accordingly pur- chase the said share at the price or value to be ascertained, as aforesaid, and enter into any bond or bonds in a sufficient penalty or penalties fpr securing to the retiring partner, or the representatives of the deceased partner '^as the case may be), the amount of the price or value of such share, by equal in- stalments, with interest alt the rate of per centum per an- num at the respective periods of six, twelve and eighteen calen- dar months next after either of the said partners shall retire or die as aforesaid^ and also a bond or bonds for indemnifying the estate and effects of the retiring or deceased partner (as the case may be)* against the debts and demands due or owing by or from the said partnership, on having a proper assignment or assurance, or assignments or assurances, executed for vest- ing in the continuing lOr surviving partner (as the case may be) all credits and effects due, owing, and belonging to the part- nership, ai d enabling such continuing or surviving partner to collect and get in the same. In witness, etc. DEED OF ASSIGNMENT (Indorsed on or annexed to Articles of Partnership) by one Partner, with the consent of the others, of a Moiety of his Share to a Third Person, who is admitted into the Part- nership. This Indenture, made the day of , between the within- named (or above-named) (A. B.), of the first part; the within- named (or above-named) (C. D.) and (E. F.), of the second part, and (G. H.), of the third part; Whereas ithe said (A. B.), (C. D.) and (E. F.), from the period of the darte and execution of the within written (or above- written) indemiture, down to the present time, have carried on the business of dry goods mer- chanits in partnership, pursuant to the covenants and agree- ments contained in the within-written (or above-written) t'll! 240 Appendix. indenture: And whereas the said (A. B.), with the privity and consent of the said (C. D.) and (E. F.), has con- tracted with the said (G. H.) for the absolute saile to him ol one moiety of his the said (A. B.'s) one-third share of and in the good-will, property, and effects of the said partnership (except the credits thereof) for the price of $ ; and it has been agreed that such moiety shaB be assigned to and vested in the said (G. H.) in manner hereinafter expressed; and that the said several parties hereto shall enter into the covenants hereinafter contained. Now this Indenture witnesseth, that, in pursuance lof the said agreement, and in consideration of the premises, and also in consideration of the sum of $ now paid by the said (G. H.) to the said (A. B.), the receipt of which sum .of $ the said (A. B.) hereby acknowledges, the said (A. B.) (with the privity and consent of the sa)id (C. D.) and (E. F.), 'testified by their severally executing these presents) assigns, and as beneficial owner ootnveys, unto the said (G. H.), his executors, adminis- trators, and assigns, all that one undivided moiety or equal half, part of the one-third part or share of him the said (A. B.) of and in the goodwill of the said partnership business, and the profits henceforth to arise therefrom, and of and in the capital, property, stock and etTectsof the said partnership (except the crediis and sums of money owing to the said partnership, and all securities for the same) ; To hold the same unto the said (G. H.), his executors, admint^tratoTS and assigns abso- lutely; And this indenture also witnesseth that in further pursuance of the said agreement, and in consideration of the premises, they, the said (C. D.), and (E. F.), at the request of the said (A. B.), hereby admit the said (G. H.) into the said partnership established by the within-written (or above-written) indenture, as an acting partner therein, in respect of the one moiety hereby assigned of the one-third share of the said (A. B.) in the said partnership business as aforesaid ; And each of them the said (A. B)., (C. D.), (E. F.), and (G. H.), hereby covenants u-ith the others and each other of them, that they the said (A. B.), (C. D.), (E. F.), and (G. H.), will henceforth become and Appendix. 241 continue partners in the business of dry goods merchants for all the residue now unexpired df the said term of years mentioned in the within-written (or above-written) inden- ture, under and subject to the provisions and stipulations conr tained in the said indenture; and will at all times hereafter faithfully perform and otyserve all and every the covenants, provisoes and agreements contained in the said indenture, so far as the same are nioiw subsisting and capable of taking effect; and that the several rights, shares and interests of the said respective parties, of and in the partnership property, profits, and eftects, held and enjoyed by the said oarties respectively, under and by virtue of the within-written (or above-written) iiidenture, and of these presents, or either of them, shall be subject and liable to the provisions of the said indenture, as fully and effectually, to all intents and purposes, as if the same had been inoorporated with and inserted ija these pres^its. In witness, etc. MEMORANDUM OF AGREEMENT, On admission into a Firm of a new Partner, who brings in additional capital (to be annexed to the Articles). Memorandum of Agreement, made the day of , 19 , between the above-named (A. B.) and (C. D.) of the one part; and (E. F.) of, etc., of the other part; Whereby, in consideration of the sum of $ , now brought in and con- tributed by the said (E. F.) as additional capital of the above- mentioned partnership, it is hereby agreed as follows: — 1. The parties hereto shall, as from the date hereof be and continue partners for the unexpired resMue of the above- mentioned term, subject in all respects to the acmditions, sti- pulations, and provisions of the above-written articles, so far as applicable, and except as varied by the present agreement. 2. The capital of the partnership shall be deemed to be the sum of $ , and to have been contributed by the parties hereto in the shares and proportions following, that is to say, two equal fifth shares by the said (A. B.), two other equal 242 Appendix. fifth shares by the said (C. D.), and the remaining one equal fifth share by the said (E. F.). 3. The profits and losses shall belong to and be borne by the parties hereto in proportion to their respective shares. 4. The said (A. B.) and (C. D.) may draw out loif the profits the sums mentioned in the above-written articles; and the said (E. F.) may draw out of the profits money not exceeding $ in each month. 5. (Add any restriction as to the rights and powers of the new partner, or stipulation as to other matters, which may be agreed upoin.) In witness, etc. . : . DEED OF DISSOLUTION OF PARTNERSHIP \: between three, where one Partner retires and receives a sum of money (secured by the promissory notes of the continuing partners, for his share. ' ' This Indenture, made the day of , 19 , between (A. B.), of, etc., of the one part; and (C. D.), of, etc., and (E. F.), of, etc., of the other part: Whereas the parties hereto have for some time carried on the trade or business of in partnership, under articles of partnership dated the day of , 19 , whereby they are interested in the partnership pro- perty in equal shares : And whereas the said parties hereto are possessed, as part of the partnership property of the several leasehold properties specified in the schedule hereunder written and of certain fixed and moveable machinery, fixtures, and plant; and the partnership prtoperty also includes the moneys, stock-in-trade, materials, good-will and effects used in or be- longing to, and of debts owing to the parties hereto, as such partners as aforesaid; and whereas the said parties hereto have agreed to dissolve the said partnership, so far as relates to the said (A. B.), as from the day of next, and notice of such dissolution has been signed by them respectively in order to its being inserted in the ; and it has been agreed that the said trade or business shall as from and after that Appendix. 24a II day be carried on by the said (C. D.) and (E. F.), in' partner- ship without the said (A. B.); and that they shall have for their own use and benefit all the third equal part or share and interest of the said (A. B.) of, and in the said business and / the partnership property aforesaid, and that they the said (C. D.) and (F.. F.) shall take upon themselves all the debts and liabilities of the partnership which were outstanding on the said • day of , 19 , and shall pay to the said (A. B.) the net value of his share as it stood on that day: And whereas a general account and valuation have been, taken and made of the property, assets, and goodwill, and liabilities of the partnership, whereby it appears that the net value of the share of the said (A. B.), as it stood on that day, after providing for the liabilities of the partnership then outstanding is of the sum of $ , and it has been agreed that the payment thereof . by such instalments as are hereinafter mentioned shall be se- cured by the promissory notes of the said (C. D.) and (E. F.) in manner hereinafter appearing; and that thereupon the said^ (A. B.) shall assign to the said (C. D.) and (E. F.) aM the share and interest of him the said (A. B.) of and in the property, assets, and goodwill of the pantmershiip : And whereas the said (C. D.) and (E. F.) have alsioi agreed to indemnify the said (A. B.) against the debts and liabilities due or owing from the partnership in manner hereinafter mentioned: Now this Indenture witnesseth, that, in pursuance and part performance of the hereinbefore recited agreements, and in consideration' of the premises, they the said parties hereto hereby declare that the said partnership between them shall be determined and stand dissolved as from the said day of 19 , and that the same and the hereinbefore mentioned articles lof partner- ship and every clause and thing therein contained shall 'hence- forth cease and be void. And this Indenture also witnesseth, that, in pursuance and further performance of the hereinbefore mentioned agreements, and in consideration of the sum of $ being the amount so agreed to be paid to the said (A. B.) for or in respect of the property, assets, and goodwill of the said business) to the said (A. B.) now paid, ot- to the satisfaction of the said (A. B.) secured to be paid to him 244 Appendix. by the said (C. D.) and (E. F.) by three several pr Tiis<=ory notes, under their hands, and respectively bearing even dates with these presents, for the payment of the sum of $ each (making together the said aggregate sum of $ ), the first of such promissory notes becoming due at the expiration of two calendar months, the second at the expiration of four ^alendar months, and the third at the expiration of six calendar months next after the date of these presents, (the receipt of which three several promissory notes the said (A. B.) hereby acknow- ledges), he the said (A. B.) assigns and transfers unto the said (C. D.) and (E. F.) their executoirs, administrators, and assigns, all that the one equal undivided third part or share, and all other the part, share, and interest of him the said (A. B.) of and in all and singular the several leasehold premises specified in the said Schedule hereunder written, and of, and in all the fixed and moveable engines and machinery, pliant, moneys, stock in trade, contracts, goodwill, profits, effects, property, matters, and things of the said partnership, or dH. them the said parties hereto, by virtue thereof, and also of and in all and every such credits and sums of moneys as are now outstanding, due or owing to them the said parties hereto on account of their said partnership; Tiol have, receive and take the pre- mises hereby assigned unto the said (C. D.) and (E. F.), their executors, administrators, and assigns, for their own absolute use and benefit ; absolutely discharged from any lien or claim nrt respect of the three several promissory notes hereinbefore mentioned, or any of them; and for the consideration aforesaid, .and for the more eflfectually enabling the said (C. D.) and (E, F.), their executors, administrators and assigns, to receive and recover the said several credits and effects of the said partnership, he the said (A. B.) hereby irrevocably appoints the said (C. D.) and (E. F.), their executors and administrators, his lawful attorneys in the joint names of the said (A. B.), (C. D.), and E. F.) or otherwise, but for the exclusive benefit and at the cost and risk of the said (C. D.) and (E. F.), their executors or administrators, to demand, call in and receive from all persons whom it may concern all and singular the credits, moneys and effects of the said partnership, and to give effectual Appendix. 245 receipts and discharges for the same respectively, and to use all such remedies or proceedings for recovering and getting in the said credits and effects respectively as may be deemed expedient ; and for afl or any of the purposes aforesaid, from time to time to appoint a substitute or substitutes, and such substitution at pleasure to revoke, and generally to do whatso- ever shall be requisite for giving to the said (C. D.) and (E. F.), their executors or administrators, the full benefit of the assign- ment hereby made. And the said (A. B.) hereby covenants with the said (C. D.) and (E. F.) in manner following, that is to say (covenants by retiring partner that he has not con- tracted any debts, nor incumbered his share, for further assurance ; and not to receive or release debts, etc. And in further pursuance and performance of the hereinbefore recited agreement, and in consideration of the premises, they, the said (C. D.) and (E. F.) do hereby jointly and severally covenant with the said (A. B.), that they the said (C. D.) and (E. F.) or one of them, or the heirs, executors, or adminis- trators of them or one of them will, etc., within calendar months from the date hereof pay and discharge all the debts and liabilities of the said partnership, and will at all times hereafter effectually keep indemnified the said (A.B.), his heirs, executors and administrators, and his and their estate and effects against all actions, proceedings, costs, dam- ages, expenses, claims and demands in respect thereof, and also against all costs, damages and expenses by reason of any action or proceeding which may be brought or instituted by the said (C. D.) and (E. F.) or either of them, their or either of their executors or administrators, in the name or names of the said (A. B.), his executors or administrators, by virtue of the power or authority hereinbefore contained, or of any act, matter or thing in relation thereto. And this Indenture lastly witnesseth, that in further pur- suance and performance of the hereinbefore recited agreerrient, and in consideration of the premises, each of them the said (C. D.) and (E. F.) hereby -releases and discharges the said (A. B.), his heirs, executoirs, administrators, and assigns; and 246 Appendix. he the said (A. B.) hereby releases and discharges the said (C. D.) and (E. F.) and each of them^ and the heirs, executors, administrators, and assigns of them, and of each of them (but subject and without prejudice to the covenants contained in these presents) from all actions, proceedings, claims and de- mands, which they the said releasing parties respectively, or either of them, or their or his executors or administrators, now have or has, or hereafter may have, against the others or other of them, their or his executors or admlinistrators, by reason of the above-recited partnership, or any other matter or thing relating thereto. In witness, etc. , ■ DECLARATION OF CO-PARTNERSHIP. p. 162. I Province o( Ontario, County of (occupation) (occupation) We, of in and of in hereby certify I. That we have carried on and intend to carry on trade and business as at in partnership, under the name and firm of (or, I or we) the undersigned of in hereb)^ certify that I (or we) have carried on and intend to carry on trade and business as at in partnership with C. D. of and E. F. of (as the case may be). That the said partnership has subsisted since the day of 1900. Appendix. 247 3. And that we (or, I or we) and the said C. D. and E. F. are and have been since the said day the only members of the said partnership. Witness our hands at ;'. '' this day of 19 '■ R. S. O. Cap. 152, Schedule A. The Nova Scotia, British Columbia and North-West Ter- ritories forms are substantially the same as the above. The Manitoba and New Brunswick Acts give no corres- ponding forms. CERTIFICATE OF LIMITED PARTNERSHIPS. p. 133. We, the undersigned, do hereby certify that we have entered into co-partnership under the style or firm of (B. D. & Co.) as (Grocers and Commission Merchants), which firm consists of (A. B.) residing usually at and (C. D.) residing usually at as General Partners ; and (E. F.) residing usually at and (G. H.) residing usually at as Special Partners. The said (E. F.; having contributed ($4,000) and the said (G. H.) ($8,000) to the Capital Stock of the said Partnership. vAtt The said Partner ship commenced on the day loe of 19 and terminates on the day of • 19 Dated this day of 19 • in ave on • (Signed) A. B. C. D. E. F. ind 3e). Signed in the prese L. G. H. :nce of me, ) M. \ Notary Public. ) boo. R. S. O. Cap. 151, Schedule. 248 Appendix. The Manitoba, British Columbia and North-West Ter- ritories forms are substantially the same as the above. The New Brunswick and Manitoba forms are contained ift the body of the Act, and there is no form given in the Nova Scotia Act. FIRM INDEX BOOK p. 174- Style of Firm. Abbott, Black (Sr-Co.... Bernard, Green &> Jones. Cook (Thomas) (Sr* Co.. Dadson, William Name of Persons Composing Firm. Dick &> Co Dow (Wm.) 6* Sons.... George Abbott, John Black, Edward Cok John Bernard, Edward Gieen, John Jones Thomas Cook, James Wilson William Dadson, Thr mas Jones, Robert Watson, William Wilber force. James Johnson Richard Dick William Dow Date of Filing Declaration. loth Feb., 1871 12th Feb., 1871 14th Feb., 1871 14th Feb., 187I lUh May, 1872 19th May, 1872 R.S.O., C. 152, Sec. 14, Schedule C. INDIVIDUAL INDEX BOOK, p. 175- Name op Individital. Style of Firm of which a member. : ' ~tr Date of Filing Declaration. Abbott, George ...;.... Black, John Bernard, John' Cook. Edward Abbott. Black artner not liable for debts incurred by partnership after 41 Nor for continued use of name 38 Notice of. need not be given.. 41 Recapitulation of rules as to ef- fect of 220 See "Civil Death" DEBTS Liability of partners for firm, extent of 44 Quebec law 57 Payment of Interest on, by share of profits 15 ALPHABETICAL INDEX. 253 PAGB DEBTS— Continued. Right of partners to have firm debts paid 90 Separate, of partner, charging orders for 66 Share of deceased partner a debt due from rtrm 89, 90 Due to partner and partnership, payment of '78 DEED Execution of, by partners.. .. 37, 38 DISCHARGE Effect of, after assignment.. ,. 75 DISSOLL'TION Assets, final distribution on .. 94 Bv retirement of partner 83 By the eHiux of time (Quebec) 9(i By expiration of term 83 By the extinction or loss of the partnership property (Que.) 96 By banlcruptcy or insolvency of one of the partners 84 Quebec 97 By bankruptcy (Quebec) 97 By death 84 Quebec 97 By assignment of share .. .. mil, 72, 73 For immoral conduct of partner 85 Quebec 99 By business becoming unlawful or Impossible 84 Quebec 100 By civil death of one of part- ners (Quebec) 98 By notice S3 By Interdiction of one of part- ners 98 By the Court 84, 85 By the will of one or more of the partners (Quebec) 99 By charging order, in certain Provinces 84 By marriage of female partner (Quebec) 100 By seizure of partner's share at instance of one of his cre- ditors 84 Quebec 100 By accomplishment of object for which formed 83 Quebec 97 Simulated (Quebec) 100 Rights of partners when dissolv- ed for fraud 86 Rights of partners after disso- lution 86, 87, 88 Quebec '..... 102 From what date takes effect.. 83, 85 Effect of. as to third parties f Quebec) 102, 105 Effect as to partners themselves (Quebec).. .. 105 Service of writ after 196, 199 Lunacy as ground for 84 Quebec 98 Notice of, should be given.. .. 40, 41 Quebec 106 Co-partner may be compelled to give 86 What is sufficient 41 Lien of partners on M Good-will sold on 91 Premium, return of, on 98 PAGB Right to carry on similar busi- ness after (Quebec) Ill Rules for settling accounts on 93, 94 Action to account and for par- tition of assets (Que.) 106 "When partner does not with- draw his capital 88 Appointment of liquidator after dissolution (Que.) Ill Right of creditors against appa- rent partners not affected by 40, 41, 42, 43 Quebec 103 Exception (Quebec) 103 DORMANT PARTNER 48 Quebec 61, 103 DOWER None in partnership lands 65 ELECTION Of partners to dissolve in case of charging order 84 Of representative of deceased partner to profits or interest.. 88 EQUALITY Of shares presumed 67 EQUITY Rules of and Common Law pre- served where act in force.. .. 94 ESTATE Of deceased partner not liable by estoppel for debts contract- ed after death 38 Liable jointly and severally for partnership debts 44, 45 Entitled to profits maue with capital of deceased partner, or to interest 89 Entitled to lien on assets 90 ESTOPPEL Partnership by.. ..38, 39, 40, 41, 42. 43 EVIDENCE (see Proof) Admi.ssions of partner, how far binding on co-partner 47 EXECUTOR Not liable for debts contracted after death 89 Entitletl to interest or propor- tion of profits 89 When entitled to Hen on assets 90 EXECUTION See Practice EXPIRATION Of term continuation of partner- ship after 70 Dissolution of partnenship by.. 83 EXPULSION Of partners 69 FIRM NAME, after dissolution ^Que.) UO FIRM See Partnership FORMS Certificate of formation of limit- ed partnership 133 Same under New Brunswick Act 147 Affidavit of publication of certi- ficate in New Brunswick .... 148 Continuing certificate under New Brunswick Act 149 Declaration of partnership In Quebec 187 Articles, general form 223, 227 254 ALPHABK'IICAL INDEX. FAQS FORMS— Continued. Articles. Patentee and person contributing capital 235 Assignment of sliare to new partner 233 Agreement admitting new part- ner 241 Deed of dissolution 242 Declaration of co-partnership.. 24G Certificate of limited partnership 247 Firm index book (Ont.) 248 Individual index book (Ont.) .. 248 Declaration of dissolution of partnership 240 FRAUD Liability of partners for fraud of co-partners 46, 47 Partnership contract rescinded on ground of 86 GENERAL, COMMERCIAL. PART- NERSHIPS in Quebec 29 GAZETTE Notice of dissolution to be pub- lished in 40, 41 Any partner may insert notice of dissolution 86 GOOD-WILL Sale of 91 Effect of 92 Vendor of, when postponed in case of bankruptcy 15 Part of the assets of the part- nership 91 How disposed of, on dissolution 91 Quebec 110 Continuing partner entitled to without payment 91 Valuation of 92 Receiving portion of profits as consideration for sale, effect of 15 GROSS RETFRNS Effect of sharing 14 GUARANTY Effect on, of change in firm .. 18, 19 Right of partner to give 36 Continuing revoked hv change in firm 18, 19 HOLDINC^ OUT Continuing deceased partner's name is not 88 When constitutes partnership 38. 39, 40. 41, 42, 43 When person held out is sup- posed to be a partner.. .. 40, 41 When person held out known not to be a partner.. .. 41, 42, 43 Quebec doctrine as to "hold- ing out" 61 By continuing partner of bank- rupt co-partner 87 HUSBAND AND WIFE Cannot form partnership (Que.) 26 Cai>acity of married woman to enter into partnership 113 Quebec 26 ILLEGALITY Dissolution of partnership for .. 84 IMPLIED POWERS Of partner.. 31. 32. 3.3. 34. 35. 36, 87, 38 IMPUTATION OF PAYMENTS re- ceived by partners and part- nerships 78 FAGB INCAPACITY Ground for dissolution 84 INDEMNIFICATION Right of partners to 67 Quebec Law <9 And see Addenda. INFANTS 114 Quebec; see Minors INSANITY A ground for dissolution 84 INSOLVENCY OF PARTNERSHIP Consequences of, to the partners In .a certain Quebec case .... 75 Administration of assets on in- ' solvency 115 And see Addenda. INSPECTION Of books, right of partners to 68 INTERDICTED PARTIES Incapacity of, in Quebec 25 INTEREST On advances 67 On capital 67 Quebec law 76 Prescription of action to recover 76 JOINT TENANCY Does.not of Itself constitute a partnership 14 JOINT AND SEVERAL Liability of partners generally joint 44, 45, 46 Liability for torts Joint and sev- eral 46, 47 See Limited Partnerships JUDGMENT Against one partner extinguishes debt against others 44, 45, 191 Exception, see Addenda, See Pr&ctice, Execution. LAND How held by partners 63,64 Treated as personality, when to be 64, 65 Partnership, dower in 65 Partner's authority to borrow money on 34 Right to vote on partnership .. 65, 66 Sale of. by one partner 37, 65 LIABILITY OF PARTNERS JOINT 44, 45, 46 In case of torts, joint and sev- eral 46, 47 In Quebec 57 Estate of deceased partner Joint- ly and severally liable 44 Breach of trust 47 Money misapplied 46, 47 To account for profits improper- ly made 70, 71 Of apparent partners till notice of retirement 41 Of incoming and outgoing part- ners 49 et seq. Of nominal partner who holds himself out as partner 38 Quebec doctrine of "holding out" 61 LIEN OF PARTNER 90 LIMITATIONS. STATT^TE OF ., 115 LIMITED PARTNERSHIPS 12S Formation of.. 129. 130, 145, 146, 154, 155 General and special partners, liability of, authority, etc. 130, 131, 146, 164. 156 ALPHABETICAL iMJEX. iJOO 67 79 114 84 75 115 CS 67 67 76 76 14 63.64 64, 65 65 34 65. 66 37. 66 45. 46 46. 47 57 44 47 46 47 70 71 41 et seq. 38 t 61 90 115 12S 154, 165 PAOB LIMITED PARTNERSHIPS— Continued. Certificates of.. .. 133, 131. 146. 154. 155 Filing of 134, 136, 146, 147 Partnership not formed until filed or acknowledged 135, 136. 14G, 156 Renewal or continuance, cer- tificates of.. .. 137, 138, 149. 156 Dissolution, certain alterations operate as 138. 152, 156 Not to take pJace till notice filed 143, 144. 152, 158 Name or style of partnership .. 139, 150. 157 General partners, actions by and against 139. 151. 157 Special partners 130. 131. 132 Restrictions as to dealing with capital .... 140, 141. 151. 157 Must contribute share in cash 130, 131, 136, 146, 154 Rights of 141, 142, 151, 157 Must not Interfere in man- agement of business 132, 141, 142, 151, 157 Postponed to other creditors 142, 152, 158 Ontario, Manitoba, British Co- lumbia, North-West Territo- , ries and Quebec 129 New L answick 145 Nova Scotia 154 LIQUIDATOR Appointment of, after dissolu- tion. Que Ill LOAN In consideration of share of pro- fits 16 Lender postponed in case of bankruptcy 15 Contract for, to be in writing and signed 15 Partner lending to firm entitled to interest on 67, 68, 69 LOSS Business carried on at, ground for dissolution 85 Distribution of !M Partner's share equally 67, 68 Quebec sO LUNACY Ground for dissolution S4 MANDATE 62, SI MANAGEMENT OF BUSINESS OF PARTNERSHIP 69 Quebec Law 80. 81 MARRIED WOMEN 113. 114 Capacity of. to enter Into con- tract of partnership 26. 113 Registration by. in Quebec. .. 192 MERCANTILE LAW AMEl'TD- MENT ACT 55, 56 MINING PARTNERSHIPS 118 In Quebec, are unknown as a distinct class 29 Other than coal (B.C.) 120 Limited Liability (B.C.) 128 Placer Mining (B.C.) 124 Mining partner concealing gold or silver MONEY PAoa Misapplication of. by partners.. 4b Property bought with partner- ship 64 MORTGAGE Of share in partnership.. .. 71, 72, (3 Of assets of 34, 37 139 178 110 110 33, 34 146 182 47 164. 156 MINORS Incapacity of. in Quebec. 12f7 24 86 41 41 NAME Of limited partnership . Of persons composing firm must be on bill heads in Nova Scotia Person lending liable as part- ner 38. 39, 40, 41, 42, 43 Partner who has furnished, can take it back (Que.).. Right to use firm name after dissolution (Que.) NEGOTIABLE INSTRUMENT Right to bind co-partner by.. NEW BRUNSWICK Limited partnerships Registration of partnerships.. .. See various headings. NOTICE Of breach of trust, liability of partner having To acting partner binds copart- ners 47, 48 When partnership may be dis- solved by 69, 70, 84 Of dissolution Should be given 40, 41 Co-partners may be compel- led to give What is sufficient.. ... .. .. Not necessary in case of death NOVATION.. .. 48, 49, 60. 51 And see Addenda. NOVA SCOTIA Names of partners must be on bill heads 173 Arbitrations on dissolution.. 179, ISO Guarantee to, or on behalf of firm to be in writing 180. 181 See various headings. PARTICIPATION IN PROFITS Effect of Effect of. in Quebec PARTICULAR PARTNERSHIPS in Quebec PARTNERSHIP AT WILL Termination of 69. 70 PARTITION Quebec ^08 (See Administration of Assets on Insolvency). PARTNERSHIP Definition 11, 12 QueOjec 17, 21 In Quebec is regarded as a moral entity 18 Effect of this doctrine In Manitoba Act British Columbia Act Different kinds of partnership (Que.) What constitutes 12 et seq Estoppel by. (See Estoppel.) Capacity to enter into 113 Quebec 24 In commandite 16, 17, 180 Commencement and duration of (Que.) 23 15 19 27 19 74 11 12 27 25ti ALPHABETICAL INDtX. FAQB PARTNERSHIP— Continued. Holding out, by 38 et seq. Holding out, Quebec doctrine.. 61 Terms of, when continued with- out new agreement 70 Limited. (See Limited Partner- stiips.) Effect of participating In pro- fits 15 Quebec 19 Assignment of share in .. .. 71 et seq. Assignment of, if assets consist in land must be in writing.. 13 Registration (See Registration of Partnerships) Payment to 35 Quebec 78 To deal in land may be formed by parol 12 Liability, nature of 44 to 47 Liability In Quebec..' 57 Joint, not joint and several.. .. 44 Except in case of torts 46, 47 Dissolution 88 et seq. (See Dissolution.) Variation of terms 63 Property of 63, 64, 65 Quebec 78 What Is 63, 64 Land to be deemed person- alty 64, 65 Powers of partners to dis- pose of 37 Charging order on 67 Rights of partners In 67 et seq. Managements of business of.. .. 69 Quebec Law 80 Proof of (Que.) 23 PARTNERS Who may be 113 In Quebec 24 Who are not 13, 14, 15 Participation In profits does not alone constitute 13, 14, 15 Participation in profits under Quebec Law 19 Estoppel by 38, 39, 40, 41, «, 43 Relalions of partners to third persons In Quebec 66 Right to bind co-partners.. 30 et seq. Generally 32 In Quebec B7, 102 By negotiable Instruments.. 33 Execution of deeds 37 Giving of guaranty 36 By taking security 34 Borrowing money 34 Pledging credit for purposes apparently not connected with firm business 81, 82 Effect of discharge after assign- ment Is to restore to partners exercise of their personal rights 7B Retiring, transferring liabilities to new firm.. ..48, 49. 50. 51. 52, 53, 54 Creditor dealing with retired, who has become suretv.. 52, 53, 54 Rights of partners in partner- snip property J7 Quebec TO Notice, retiring should give 40, 41, 86 Notice to, when notice to firm 47, 48 Taking part in management.. .. 89 PAau Holding out 38, 39, 40, 41, 42, 43 Quebec doctrine 61 Infant, liability of 114 Interest in addition to damages allowed for non-contribution of capital (Quebec) 76 Interest, when allowed in ac- counts between vj, 67, 68, 69 Quebec Law 76 Incoming and outgoing 41, 48, 49, 50, 51, B2, 53, 54, 55, 56 Private business carried on by (Quebec) 77 Indemnification and reimburse- ment of partner; by partner- ship (Quebec) 79 Association of third parties by partner (Quebec) 82 Seizure of partner's share may dissolve partnership 34 Quebec 100 Powers of, after dissolution (Quebec) 102 Shares of, charging order against In Manitoba, British Columbia and North-West Territories.. 66, 67 Remuneration of, for winding up 69 Liability, joint 44, 45, 46 Liability in Quebec 57 Liability for causing dissolu- tion (Quebec) "105 Liability for torts joint and sev- eral 46, 47 Partner cannot be expelled by majority 69 Lien of 86, 00 Damages caused by fault of partner (Quebec) 79 General. (See Limited Partner- ships). Special. (See Limited Partner- ships). Debts of, on Insolvency. (See Bankruptcy and Insolvency.) Majority to decide gg Cannot rank on separate estate of co-partner ug Cannot be expelled by co-part- ners except by agreement.. .. 69 New, cannot be brought in ex- cept by consent of all 68 Entitled to Indemnity 67 Effect of Statute of Limitations 115 See Partnership, Limited Part- nership, Mining Partnerships, Practice, Dissolution. PAYMENTS Imputation of. received bv part- ners and partnership (Que.) .. 78 PRACTICE (Ontario) Partners Actions by and against .... 198 Appearance by 200 To apTsar Individually .. 200 Person having control, nerd not .appear 201 Ma^ enter under protest 20 Dl.<»closure of names by.. .. 193, 19B Service upon 196 Execution against 201 Execution against. Infant .. 202 Severing In defence 200 PAQB •il, 42, 4a 61 ^ , 114 3S >n 76 c- >7, 68, 69 76 54, 55. 56 jy 77 ie- jr- 79 by itt ay 84 • • 100 n 102 Inst 3la s.. 66 . b"7 ' up 69 44, 45 , 46 57 ►lu- 105 ev- .. 46, 47 by 69 . .. 86. DO of 79 ler- ler- 36 V.) «8 ate 116 irt- 6» ex- 68 67 ons 115 irt- Ips, ALPHABETICAL INDEX. 257 irt- trol. ■test 78 198 200 aoo 201 20 193, 19R 196 201 202 200 FAOB PRACTICE— Continued. Firm _^ Appearance by *^ Service upon *^ Agent, when may be served tor ^^ Attacliment of debts due by 202 Manager, wlien may be serv- ed for 196 Dissolution, service after.. 196, 199 Action between, and one of its members 203 Person carrying on business in name ottier than his own 203 County Courts Jurisdiction of ^ Division Courts 206 Receiver, when appointed ^o Service on bad 199 PRACTICE (Manitoba and British Columbia.) Partners „,. Action by and against -Jiu Appearance by, British Co- lumbia 216 Disclosure of names by.. .. 209, I'lO Service upon 211 Execution against "13 Firm ^ ^ British Columbia 215 Action by and against.. .. 210 Service upon 211 Execution against 213 Dissolution, service after 210 Agent or manager, service upon 211 - Person carrying on business in name indicating more than one person 212 Execution See Partners, Firm. /: PREMllM M PRESC'RIPTION of action to re- cover interest, to which part- ner is liable in certain cases.. 76 PRESCRIPTION of actions to ac- count and for partition (Que.) 107 (See Statute of Limitations.) PRINCIPAL AND SFRETY Notice to creditor that partners occupy position of 62, 53, 54 Knowledge by creditor that re- tired partner has become surety .^2 Continuing guaranty 64 Surety entitled to have security assigned to him 66 PRIVATE BUSINESS Carried on by partner 77 PROFITS Partleipation in, does not alone constitute partnership .. 13, 14, 16 .. tffl PROPERTY What constitutes partnership 11, 63, 64 Rights of partners in partner- ship 67, 68. 69 Rigiit to v(jte on partnership .. tJ6 Quebec Law as to partnership property 73 What the word "property" com- prises (Quebec) 74 Rig-hts of third persons against (Quebec) ]04 Partition (Quebec) 108 RECEIVER Appointment of 208 REGISTRATION OF PARTNER- SHIPS (See also "Limited Partnerships) Declaration of 169, iga Form and requisitions as to filing 162 Time of flling 163. ls2. 1S3 In case of change in part- ners 163, 183 Allegations in, not contro- vertible by partners 164, 165 Signers of, to be deemed partners 164, 165 Dissolution of partnership, de- claration of 166, 166, 188 Actions against partners when no declaration Hied 16S, 169 Manner of proving partnership in New Brunswick 186 Persons trading under ftrm name to file declaration 169, 170, 171 Penalty for non-compliance T> ■ . ., .. 1^1' 1^2, 173, 184 Registration, mode of, index books.. ..173, 174, 175, 176, 177, 183, 184 Associations for maufactur- Ing cheese, excepted in Ontario 177 Act providing for— In Ontario 158 In British Columbia 189 In Manitoba 169 In North-West Territories .... 169 In Nova Scotia 159 In New Brunswick 182 In Quebec Declaration for registration 186 Form of declaration 187 Effects of registration 188 Effects of non-registration.. 189 Penalties for* non-registra- tion and their recovery.. ,. 190 Registration by married wo- men 192 258 ALPHABETICAL INDEX. PAOO REIMBURSEMENT AND INDEM- NIFICATION OF PARTNERS 67 Quebec Law 79 SECURITY Partner has power to accept .. 34 But not if liability attached.. .. 34 SEPARATE ESTATE Partner cannot rank on, of co- partner 115 SERVANT Remuneration by share of pro- fits, effect of 14 SHARE Assignment of, by partner ., 71, 72, 73' Of partner, charging order on.. 6b Seizure of, may cause dissolution 84 Quebec UK) Partition of shares (Quebec).. .. 110 SHARES Partner binding co-partners to accept 34 Partition of (Quebec) HO PAOS STATUTE OF FRAUDS Agreement to aslgsn share in partnership within 13 Agreement for partnership to deal in land not within 13 STATUTE OF LIMITATIONS.. .. 115 (See Prescription.) UNIVERSAL PARTNERSHIPS in Quebec 27 VALUATION of Partnership Pro- perty (Que.) 109 WARRANTY Partner subject to, where part- nership evicted of thing part- ner contributed 73 WIDOW Of deceased partner receiving portion of profits as annuity, effect of ^ 14, 15 See Dower. WINDING-UP A PARTNERSHIP Remuneration of partner for ser- vices in 69 PAOB u u 115 27 109 78 14, 15