20. The confirmed lunacy of an active partner is sufficient to induce a court of equity to decree a dissolution, not only for the purpose of prote,cting t,he lunatic, but also to relieve his copartners from the difficult position in which the lunacy places them. See 1„Cox, Ch. 107 ; 1 Swanst. Ch. 514, note ; 2 Mylne & K. 125 ; 6 Beav. Rolls, 324 ; 1 De Gex, M. & G. Exch. 171 ; 2 Kay & J. Ch. 441 ; Collyer, Partn. t 292; 3 Kent, Comm. 58 ; Watson, Partn. 382 ; 3 Younge & C. 184 ; Bisset, Partn. 83. The same may be said of ' every other inveterate infirmity, such as palsy, or the like, which has seized upon one of the partners and rendered him incom petent to act where his personal labor and skill were contracted for. Pothier, Partn. n. 152 ; 3 Kent, Comm. 62 ; •Collyer, Partn. 295.
But lunacy does not itself dissolve the firm, nor do other infirmities. 3 Kent, Comm. 58; Story, Partn. t 295 ; 3 Jur. 358 ; Bisset, Partn. 85. It is, however, contended.by Mr..
-- • Justice Story and by Parker, C. J., that a clear case of insanity ought to effect that result. Story, Partn. 2g5 ; 10 N. H. 101. The co.irt does not decree a dissolution on the ground of lunacy except upon clear evidence that the malady exists and is incurable. 3 Younge & C. 184 ; 2 Kay & J. 441. A tem porary illness is not sufficient. 2 Ves. Sen. Ch. 34 ; 1 Cox 107 ; 1 Lindley, Partn. 182, 183. A dissOlution by the court on the ground of insanity dates from the decree and not from a prior day. 1 Phill. 172 ; 2 Coll. 276 ; 1 Kay & J. 765 ; 1 Lindley, Partn. 183.
21. A partnership dissolved by the death of one of the partners is dissolved as to the whole firm, 7 Peters, 586, 594 ; Chitty, Contr. 1860 ed. 285, note ; and the reason given for this rule is applicable not only to dissolution by death, but to every species of dissolution. Collyer, Partn. a 113, 116, 117, 118 ; Pothier, Partn. n. 146 ; Story, Partn. a 317, 318.
The partnership quoad third persons—in other words, the liability of partners quoad third persons--cannot be dissolved without notice to them that the partnership no longer exists. Actual notice must be brought home to persons who have been in the habit of dealing with the firm ; but as to all persons who have had no previous dealings with the firm, notice fairly given in the public news papers is deemed sufficient. Collyer, Partn. a 532-534. This notice is necessary to ter minate the aping of each partner, and, con sequently, his power to bind the firm. I Lindley, Partn. 261, 324 ; 1 Younge & J. 227 ; 1 Stark. 164 ; 7 Price, Exch. 193 ; 1 Campb. 402 ; 10 East, 264.
ft is not necessary to give notice of the re tig ement of a dormant partner from the firm, it the fact of his being a partner be unknown tu all the creditors of the firm: if it be known to some, notice to those must be given, but that will be sufficient. Collyer, Partn. a 120,
536 ; I Esp. 89 ; 1 Carr. & K. 580 ; 1 Mete. Mass. l9 ; Barnew. & Ad. 11 ; 4 id. 179 ; 5 B. Munr. Ky. 170 ; Chitty, Contr. 1860 ed. 287 and note ; 5 Cow. N. Y. 534 ; 1 Lindley, Partn. 326.
22. Notice of the dissolution is not ne cessary, in case of the death of one of the partners, to free the estate of the deceased partner from further liability, Collyer, Partn. 120; Story, Partn. a 162, 336, 343; 3 Kent, Comm. 63 ; 3 Mer. Ch. 614 ; 17 Pick. Mass. 519 ; Bisset, Partn. 103, 104 ; nor is notice, in fact, necessary in any case where the dissolution takes place by operation of law. Collyer, Porta. 538 ; 3 Kent, Comm. 63, 67 ; 15 Johns. N. Y. 57 ; 16 id. 494.
Effect of dissolution. The effect of disso lution, as between the partners, is to terrui nate all transactions between them as part ners, except for the purpose of taking a gene ral account and winding up the concern. 1 Penn. St. 274 ; 3 Kent, Comm. 62 et seq. As to third persons, the effect of a dissolution is to absolve the partners from all liability for future transactions, but not for past trans Notions of the firm. Collycr, Partn. 121 ; Story, Partn. ch. 15 ; 3 Kent, Comm. 62 el seq.; 2 Cush. Mass. 175 ; Pothier, Partn. n. 155 ; 3 M'Cord, So. C. 378 ; 4 Munf. Va. 215; 5 Mas. C. C. 56 ; Harp. So. C. 470 ; 4 Johns. N. Y. 224 ; 6 Cow. N. Y. 701 ; 41 Me. 376.
23. It is said that a firm, notwithstanding its dissolution, continues to exist so far as may be necessary for the winding up of its business. 11 Ves. Ch. 5 ; 15 id. 227 ; 16 ic/. 57 ; 2 Russ. Ch. 242. The power of the partners subsists for many purposes after dis solution: among these are—first, the comple tion of all the unfinished engagements of the partnership ; second, the conversion of all the property, means, and assets of the part nership existing at the time of the dissolu tion, for the benefit of those who were part ners, according to their respective shares ; third, the application of the partnership funds to the payment of the partnership debts. Story, Partn. 326 ; Chitty, Contr. 1860 ed. 288 ; 3 Kent, Comm. 57 ; 17 Pick. Mass. 519. But although, for the purposes of winding up the concern and fulfilling engagements that could not be fulfilled during. its existence, the power of the partners certainly subsists even after dissolution, yet, legally and strictly speaking, it subsists for those puiposes only. Gollyer, Partn. 119 ; 15 Ves. Ch. 227 ; 5 Mann. & G. 504 ; 1 H. Blackst. 156 ; 3 Esp. 108 ; 4 Mees. & W. Exch. 461, 462 • 10 Hare, Ch. 453 ; 4 DeGex, M. & G. Exch. '542.
Whether a dissolution of a partnership is per se a breach of a contract by the firm to employ a person in their service is question able. 3 Hurlst. & N. Exch. 931. See FIRM ; PARTNERS ; PROFIT.