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Liabilities of Partners

partner, firm, liable, debts, partnership and ordinary

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LIABILITIES OF PARTNERS. General Rule. If an act is done by one _partner on behalf of the firm, and it can be said to have been necessary for the carrying on of the partner ship business in the ordinary way, the firm will prima facie be liable, although in point of fact the act was not authorized by the other partners ; but if the act cannot be said to have been necessary for the carrying on of the partnership business in the ordinary way, the firm will prima facie, not be liable ; 10 B. & C. 128; 14 M. & W. 11. As to rea son for such liability, see Powers, supra.

Agreements inter se. No arrangement be tween the partners themselves can limit or prevent their ordinary responsibilities third persons, unless the latter assent to such arrangement; 2 B. & Ald. 679 ; 3 Kent 41; Winship v. Bank, 5 Pet. (U. S.) 529, 8 L. Ed. 216 ; 3 B. & C. 427. But where the creditor has express notice of a private arrangement between the partners, by which either the power of one to bind the firm or his liabil ity on partnership contracts is qualified or defeated, such creditor will be bound by the arrangement ; Baxter v. Clark, 26 N. C. 129 ; Bromley v. Elliot, 38 N. H. 287, 75 Am. Dec. 182 ; Bailey v. Clark, 6 Pick. (Mass.) 372 ; Livingston v. Roosevelt, 4 Johns. (N. Y.) 251, 4 Am. Dec. 273 ; 5 Bro. P. C. 489.

Attachment. A partner's interest in a firm is liable to attachment by his creditors ; 7 C. B. 229 ; Moody v. Payne, 2 Johns. Ch. (N. Y.) 548 ; Morrison v. Blodgett, 8 N. H. 252, 29 Am. Dec. 653 ; but one partner cannot main tain an attachment against the firm of 'which he is a member ; Newsom v. Pitman, 98 Ala. 526, 12 South. 412.

Contribution. A partner's contribution tq the capital of his firm is a partnership debt for the repayment of which each partner is liable on an accounting and after payment of debts ; Whitcomb v. Converse, 119 Mass. 38, 20 Am. Rep. 311. Failure of a partner to pay his contribution in full does not entitle his co-partner to exclude him from the busi ness without a dissolution ; Hartman v. Woehr, 18 N. J. Eq. 385.

Debts. Each partner is liable to pay the whole partnership debts. In what propor tion the partners shall contribute is a mat ter merely among themselves ; 5 Burr. 2613. Universally, whatever agreement may exist among the partners themselves, stipulating for a restricted responsibility, and however limited may be the extent of his own sepa rate beneficial interest in, and however nu merous the members of, the partnership, each individual member is liable for the joint debt; 5 Burr. 2611; Gill v. Kuhn, 6 S. & R. (Pa.) 333 ; Gardner' v. Conn, 34 Ohio St. 187. In Louisiana, ordinary partners are not bound in solido for the debts of the partner ship ; La. Civ. Code, art. 28; though com mercial partners who deal in personal prop erty are bound in solido; a partner is bound for his share of the partnership debts, cal culating such share in proportion to the num ber of partners, attention to the pro portion of the stock or profits each is enti tled to ; id. art. 2873. In equity, partner ship debts are regarded as both joint and several ; Greene v. Butterworth, 45 N. J. Eq. 738, 17 AU. 949.

An incoming partner is not liable for the debts of the firm incurred before he became a member, unless he assumes them by agree ment ; Babcock v. Stewart, 58 Pa. 179; Wright v. Brosseau, 73 Ill. 381; Rohlfing v. Carper, 53 Kan. 251, 36 Pac. 336; Ringo v. Wing, 49 Ark. 457, 5 S. W. 787; Smith v. Millard, 77_ Cal. 440, 19 Pac. 824. But a retiring partner remains liable for the out standing debts of the firm; 4 Russ. 430.

Dormant partners. Dormant partners are, when discovered, liable with those who are held out to the world as partners, upon contracts made during the time they participate in the profits of the business ; 1 Cr. & J. 316; Etheridge v. Binney, 9 Pick. (Mass.) 272 ; Winship v. Bank, 5 Pet. (U. S.) 529, 8 L. Ed. 216; Mitchell v. Dall, 2 Harr. & G. (Md.) 159 ; Schmidt v. Ittman, 46 La. Ann. 894, 15 South. 310; 5 Ch. Div. 458 ; Win. L. Allen & Co. v. Davids, 70 S. C. 260, 49 S. E. 846.

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