Relation of partners to one another.—The mutual rights and duties of partners are usually defined by an agreement between the parties. This agreement need not be under seal, nor is even a simple written agreement necessary to constitute the partnership relation. If, however, there is no agreement under seal or in writing, then the mutual rights and duties of the partners must be ascertained from the Partnership Act. And whether there is a special agreement or not, the terms and conditions of the partnership can always be varied by the consent of all the partners ; and such consent may be either express or inferred from a course of dealing. In the absence of any provision, express or implied, as to the proportions in which the partners share in the business, the law presumes that they share equally between them (Peacock v. Peacod).
Partnership property.—The partnership property includes all "property and rights and interests 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. It must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agteement. The legal estate or interest in any land which belongs to the partnership devolves, how ever, according to its nature and tenure, and the general rules of law applic able thereto ; but it so devolves in trust, so far as necessary, for the persons beneficially interested in the land, that is to say-, the partners and their legal representatives. In Scotland the same rule applies to any heritable estate which may form part of a partnership property. In some cases there will be found an estate or interest in land which is not partnership property but belongs to co-owners who are partners as to profits niade by the use of that land or estate. There the land or estate naturally belongs to its owners as co-owners as distinguished from partners ; and so will any other land or estate they subsequently purchase, unless there is an agreement between them to the contrary. All property bought with money belonging to a firm is taken to have been bought on account of the firm, unless the contrary intention appears. Where land or any heritable interest therein has become partnership property it is treated as between the partners, unless the contrary intention appears, as personal or movable and not real or heritable estate ; and this is so as between partners and their legal representatives and heirs.
Procedure against partnership property for a partner's separate judgment debt.—This procedure, specially introduced by the Act, is not applicable to Scotland, but it applies in the case of a cost-book company as if the company were an ordinary partnership firm. In the first place it is pro vided that a writ of execution shall not issue against any partnership property except on a judgment against the firm. The Act then pro ceeds:— The High Court, or a judge thereof, or the Chancery Court of the county palatine of Lancaster, or a county court, 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 or a subsequent order appoint a receiver of that partner's share of profits (whether already declared or accruing), and of any other money which may be coming to him in respect of the partnership, and direct all accounts and inquiries, and give all other orders and directions which might have been directed or given if the charge had been made in favour of the judgment creditor by the partner, or which the circumstances of the case may require. The other partner or partners shall be at liberty at
any time to redeem the inte7est charged, or in ease of a sale being directed, to purchase the same.
Rules as to interests and duties of there is a written agreement of partnership these rules, extended or modified perhaps accord ing to the circumstances of the particular case, should always be incorporated therein. I3ut where there is no such agreement, and no inconsistent agree ment can be iniplied between the parties, and subject to such agreement as may exist, then the interests of partners in the partnership property and their rights and duties in relation to the partnership are determined by the following rules :— (1) All the partners are entitled to share equally in the capital and profits of the business, and must contribute equally- towards the losses whether of capital or otherwise sustained by the firm. (2) The firm must indemnify every partner in respect of payments made and personal liabilities incurred by him — (a) In the ordinary and proper conduct of the business of the firm ; or, (b) In or about anything necessarily done for the preservation of the business or property of the firm. (3) A partner making, fOr the purpose of the partnership, any actual payment or advance beyond the amount of capital which lie has agreed to subscribe, is entitled to interest at the rate of 5 per cent. per annum from the date of the payment or advance. (4) A partner i, not entitled, before the ascertainment of profits, to interest on the capital subscribed by- hini. (5) Every partner may take part in the management of the partner,:hip business. (6) No partner shall be entitled to remuneration for acting in the partnership business. (7) No person may be introduced as a partner without the consent of all existing partners. (8) Any difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but no change may be made in the partnership business without the consent of all existing partners. (9) The partnership books are to be kept at the place of business of the partnership (or the principal place, if there is more than one), and every partner may, when he thinks fit, have access to and inspect and copy any of thein.