DEATH OF PARTNER. Subject to any agreement between the partners, every partnership is dissolved as regards all the partners by the death of any partner. (See Section 33, Partnership Act, 1S90, under PARTNERSHIPS.) The death of a limited partner does not dissolve the partnership.
If the firm's account is overdrawn and the banker desires to retain his claim against the estate of the deceased partner, the account should be stopped and a new one opened for future transactions, otherwise all sums paid to credit will release the deceased's estate to the amount of such credits, and all debits will form a fresh debt against the new partnership. When a fresh arrangement is made by the new firm with the banker, the debt on the old account should be paid off by a cheque signed by all the partners in the new firm, and the partnership securities, if any, for the old account should be deposited for the new account and a fresh memorandum of deposit, or other document of charge, given by the partners in the new firm.
On the death of a partner, the account should also be broken where a guarantee is held from a third party, until fresh arrange ments are made with the firm and with the guarantor, unless the guarantee specially provides that it shall not be affected by any change in the partnership. (See Section IS,
Partnership Act, 1890, under PARTNERSHIPS.) if the firm's account is in credit the banker need not break the account, though the surviving partners may, for their own con venience, desire to open a new account. When that is done and the balance has to be transferred. it should be drawn by cheque. Usually, however, the old account is simply continued with the name of the deceased partner dropped out of the ledger heading, the date of his death being noted against his name. The surviving partners have power to deal with any balance on the partnership account.
Cheques signed by a partner on the firm's account, and not presented for payment till after his death, should be paid, unless the account is overdrawn and his estate is to be held liable, in which case the cheques should be returned " partner dead." M the death of a partner , it has been held • In re BOUM', BOUille V. BUIl•ne, 1906, 1 Ch. 113: that the surviving partner may mort gage the landed property belonging to the partnership, and the mortgagee may sustain his claim against the personal representa tives of the deceased partner, unless he had notice that the money advanced was for an improper purpose. (See 'ARTS E RSHI Ps.