16 1891, No. 6.] P(('l'tnership. [54 & 55 VICT.

New Zealand.

DISSOLUTION OF PARTNEBSHIP, UD USCONSEQUENCES.

B5. Dissolution by expira,tion or notice.86. Dissolution by death, bankruptey, or charge.il7. Dissolution by illegality of partnership.38. Dissolution by the Oourt.BD. Rights of persons clealing with firm a.gains.t

apparent. members of firm.40. Right of partners to notify dissolutioll.41.· ConMnuingauthorityofpartner&for purposes

of winding up.42. Rights ofpartners as to application of partner­

tlhip property.48. Apportionmen~ of premium where partner­

ship prematurely dissolve(1.44. Rights where partnership dissolved for fraud

or misrepresentation.45. Right of outgoing partner in certain cases to

share pronts made after dissolution.46. Retiring or (1eoeased partner's share to be a

debt.47. Rule for distribution of assets on final seHle·

lUeut of accormts,

A::XALYSlti.26. Prooedure against partnership properly for n.

panner's separate judgment debt.27. Rules a.s to interests and uutieg of partners

subject to gpecial agreement.28. Expulsion of partner.29. Retirement from pa.rtnership at will.ao. Where pa.rtnership for term is continued over,

continuance on old t.erms presnmed.81. Duty of partners to render a.ecounts, &c.a2. Aceountability of partners for priva.te profits.38. Duty of partner not to compete with firm.84. Rights of assignee of share in partnership.

Title.1. Sbort Title.2. Commencement of Act.a. Interpretation.

NA.:J:URE OF l'Aro'NERSllll'.

4. Definition of partnership.5. Rules for determining existence of partner­

ship.6. Postponement of rights of person lending or

selting in consideration of share of profitsin ca.se of insolvency.

7. 1\Ieaning of "firm."

RELaTIONS OF PARTNERS TO PERiiOWS nlilALIKGWItH '!:HEM.

8. Power of partne'r to bind the firm.9. Partners bOUllcl by acts on behalf of firm.

W. Partner using credit of firm for private pur­poses.

11. Effeot or llotitle that firm will not be boundby actsofpa,rtner;

l2. Liability of partners,13. Liability of the firm for wrong".14. lIHsapplica.tion of money or property r'eceived

for or in custody of the firm.15. Liability for wrongs joint and several.16. Improper employment of trust-property for

partnership purposes.17. Persons liable by " holding out..,1.8. Admissions and representations of partners.19. Notice to acting partner to be notice to the

firm.20. Lia.bilities of incoming and outgoing partners.21. Revoeation of eontinuing guaranty by change

in firm.

REUTIOl:\"S OF P.tRTlS'ERS TO ONE ANOTHER.

22. Variation bv consent of terms of partnership.23. Partnership property.24. Property b01.1ght with parGnership money.25. Conversion into personal estate of land heM

as partnership property.

SUPPLJl11rENTAL.

48. Saving for rules of equity and c01l11l10nlaw.40. Act not to apply to special partnerships

£o1'me<1 rmder "The Merca.ntile Law Aet,1880."

50. Repeal.Sehedule.

Tinle.

1891, .:.lo. 6.AN ACT to declare and amend the Law of Partnership.

[4th AUflust, 1891.BE IT ENACTED by the Gene,ra1 Assembly of New Zealand inParliament assembled, and by the anthority of the same, as foIelows :-

54 &55 VICT.J Partnel's7dp. [1891, No. 6. 17

1. The Short Title of this Act is "The. Partnership Act, 1891." Short Title.

2. This Act shall come into operation on the first day of Oommencement ofJanuary, one thousand eight hundred and ninety-two. Act.

3. In this Act, unless the context otherwise requires,- Interpretation." Business" includes every trade, occupation, or profession:" Court" includes every Court and Judge having jurisdiction

in the case.

NA.TURE OF PARTNERSHIP.

4. (1.) Partnership is the relation which subsists between per- Definition ofsons carrying on a business in common with a view of profit. partnership.

(2.) But the relation between members of any company orassociation which is-

(a,.) Registered as a company under "The Companies Act,1882," or "The Mining Companies Act, 1886," or anyother Act of the General Assembly for the time being inforce, and relating to the registration of joint-stock,trading, or mining companies; or

(b.) Formed or incorporated by or in pursuance of any other Actof the General Assembly, or letters pa.tent, or RoyalCharter;

is not a partnership within the meaning of this Act.5. In determining whether a partnership does or does not exist, ~ules !or deterxn1n-

regard shall be had to the following rules :_ mg eXlste~caof'. " • partnership.

(1.) Jomt tenancy, tenancy m common, JOlllt property, or partownership does not of itself create a partnership as toanything so held or owned, whether the tenants orowners do or do not share any profits ,made by the usethereof.

(2.) The sharing of gross rettU'ns does not of itself create a part­nership, whether the persons sharing such returns haveor have not a joint or common right or interest in any'property from which or from the use of which the returnsare derived.

(3.) The receipt by a pel'son of a sham of the profits of a; businessis p1'imll facie evidence that he is a partner in the business,but the reoeipt of such a share, or of a payment oon~

tingent on or varying With the profits of 11 business, doesnot of itself make him a pa,r'tller in the business; and, inparticular,-

(a.) The receipt by a person of a debt or otherliquidated amount, by instalments or otherwise, out of theaoOl'uing pronts of a business does not of itself make hima partner in the business, or liable as such:

(b.) A contract fol' the remlmeration ofa servant 01'

agent of a person engaged in a business by a share ofthe profits of the business does not of itself make theservant or agent a partner in the business, or liable assnoh:

(c.) A person being the widow or ohild of a deceasedpartner, and reoehring by way of annuity a portion of thepronts made in the business in \yhich the deceased person

18 1891) No. 6. J Partnership. C54&55VWT.

Meaning of " firm."

Powel' of pa.rtner tobin(l the firm.

Partners bound byaC,ts on behalf offirm.

,vas a partner) is not, by reason only of such receipt, apartner in the business, or liable as such:

(d.) The advance of money by way of' loan to a per~

son engaged or about to engage in any business on a con~

tract with that person that the lender shall receive a rateof' interest varying with the profits, or shall receive a shareof the profits arising from carrying on the business, doesnot of itself make the lender a partner with the person orpersons carrying on the business, or liable as such: Pro­vided that the contract is in writing, and signed by oron behalf of all the parties thereto:

(e.) A person receiving by way of annuity or other­wise a portion of the profits of a business in considerationof the sale by him of the goodwill of the business is not,by reason onlyo£ suoh receipt, a partner in tho business, orliable as suoh.

Postponement of 6. In the event of any person to whom money has been advancedrights of person b £1 h t t' j. • d' th 1 t.elending or selling in Y way 0 oan upon sue a con rac as IS menlJlOne In e as -lore-oonsideration of. going section, or of any buyer of a good-will in consideration of a shareshare of pro:fits lUf th fi·t· f h b . · b' d' d db·. kr t t'case of insolvency. 0 . e pro sot e US111ess, ell1g a JU ge a an up, en er111g

into an arrangement to pay his creditors less than twenty shillings inthe pound, or dying in insolvent ciroumstanoes,the lender of the loanshall not be entitled to reoover anything in respect of his loan, andthe seller of the good~will shall not be entitled to reoover anything inrespect of the share of profits contracted for, until the claims of theother oreditors of the borrower or buyer for valuable oonsideration inmoney or money's worth have been satisfied.

7. Persons who have entered into partnership with one anotherare, for the purposes of this Aot) oalled colleotively a "firm," and thename under which their business·· isoarried on is .oalledthe " firm..name."

RELATIONS OF PARTNERS TO PERSONS DEALING WITH THEM.

8. Every partner is an agent of the firm and his other partnersfor the purpose of the business of the partnership; and the acts ofevery partner who does any act for carrying on in the usual waybusiness of the kind carried on by the firm of which he is a memberbind the firm and his partners, unless the partner so aoting has infaot no authority to act for the firm in the particular matter, and theperson \\1.th whom he is dealing either knows that he has no authorityor does not know or believe him to be a partner.

9. An act or instrument relating to the business of the firm,and done or ex.eouted in the firm~i::tame, or in any other mannershowing an intention to bind the firm, by any person thereto autho­rised, whether a partner or not, is binding on the firm and all thepartners: Provided that this seotion shall not affect ap.y general ruleof law relating to the execution of deeds or negotiable instruments.

Partner tlSin~ credit 10. Where one partner pledges the credit of the firm for a pur­offlrmforpmll.te pose apparently not connected with the firm's ordinary course ofpurposes, b '1 fi . b d 1 h" f: . 11 hUS111ess, t le rm IS not oun, un ess e IS 111 act spema y aut 0-

rised by the other partners; but this section does not affeot anypersonal liability incurred by an individual partner.

64& 55 VWTJ Pa1·tne'J'ship. [1891, No. 6. 19

11. If it has been agreed between the partners that any restric- Effect of notice thattion shall be placed on the power of anyone or more of them to fu:m will not be

. d h fi d' . f h . . bound by acts ofbm term, 11.0 act one m contraventIOn 0 tue agreement IS partner:

binding on the firm "rith respect to· persons having notice of theagreement.

12. Every partner in a firm is liable jointly with the other Lia.bility of

pal·tners for all debts and obligations of the firm incurred while he is partners.

a partner; and after his death his estate is also severally liable in adue course of administration for such debts and obligations as far asthey remain unsatisfied, but subject to the prior payment of hisseparate debts.

13. Where by' any wrongful act or omission of any partner Liability oUhs filmacting in the ordinary course of the business of the firm, or with the for wrongs.

authority of his co-partners, loss or injury is caused to any personnot being a partner in the firm, or any penalty is inculTed, the firmis liable therefor to the same extent as the pa.rtner so acting oromitting to act.

14. In the following cases, namely,- JUisapplication of

(a..) Where one partner acting within the scope of his apparent :~~i;;d~J:~i~~authority receives the money or property of a third person custody of the firm.

and misapplies it; and(b.) Where a firm in the courseofitshusinessreceives· money or

property of a third person, and the money or property soreceived is misapplied hy one or more of the partnerswhile it is in the custody of the firm,-

the firm is liable to make good the loss.15. Every partner is liable jointly with his co-partners and also ~~ability for wrongs

severally for everything for which the fum, while he is a partner JOInt and several.

therein, becomes liable under either of the two last-preceding sections.16. If a partner, being a trustee, improperly employs trust-pro- Improper employ­

perty in the business, or on the account of the partnership, no other ~:;fu~~;t~~~ippartner is liable for the trust-property to the persons beneficially purposes.

interested therein : Provided as follows:-(1.) rrhis section shall not affect any liability incurred by any

partner by reason of his having notice of a hreach of trust;and

(2.) Nothing in this section shall prevent trust-money from being.followed and recovered from the firm if still in its posses­sion or under its control.

17. (1.) Every one who, by words spoken or written, or by COll- Perso~s liable by

duct, represents himself, or who knowingly suffers himself to be "holdmg out."

represented, as a partner in a particular firm is liahle as a partner toanyone who has, on the faith of any such representation, given creditto the firm, whether the representation has or has not been made orcommunioated to the person so giving oredit by or with the know-ledge of the apparent partner making the representation or fmfferingit to he made.

(2.) Provided that where, after a partner's death, the partnershipbusiness is continued in the old firm-name the continued use of thatname, or of the deceas.ed partner's name, as part thereof shall not ofitself make his executors' or administrators' estate or effects liahle forany pal'tnership debts contracted after his death.

20 1891, No. 6.J Partnership. [ 54 &55 VlOT.

Partnershipproperty.

Property boughtwith partnershipmones·

Variation byconsent of terms orpartnership.

Admissions and 18. An admission or :representation made by any partner oon­representl1tions of eerning the partnership affairs Hnd in the ordinary cotITse of its bU8i-partners. . • .::J • t th ~,ness, IS eVluenCe aga111s 13 llrm.Notice to acting 19. Notioe to any partner who habitually aots in the partnershippartner to be notice business of allV matter relating to partnership affairs operates as notic.eto the firm. J • f' f ~ h ~ 't' dbto the firm, except ill the case 0 a rauCl. on t 13 llrm comml te yor

with the consent of that partner.TJi!tbilities of 20. (1.) A person who is admitted as a partner into an existingincou:lng and firm does not thereby become liable to the creditors of the firm forout"'Oln'" partners.. •

" " anythll1g (lone before he became a partner.(2.) A partller who retires from a firm does not thereby cease to

be liable for pa.rtnership debts or obligations incurred before hisretirement.

(3.) A retiring partner may be discharged from any existing lia,..bilities by an agreement to that effect between himself and the mem­bers of the firm as newly con:stituted and the creditors, and thisagreement may be either express or inferred as a fact from the comseof dealing between the creditors and the firm as newly constituted.

Revocation of 21. A continuing guaranty given either to a firm or to a thirdoontinuing ,guaranty person in :re~mect of the transactions of a firm is in the absenoe ofbJ Cha;tl"e In firm. J: k d f· ' . b" agreement to the contrary, revo -e as to uture transactIOns y any

ohange in the constitution of the firm to whioh, or of the firm inrespeot of the transaotions of which,the guaranty was given.

RELATIONS OF PARTNERS TO ONE ANOTHER.

22. The mutual rights and duties of partners, whether ascel'­tained by agreement or de-fined by this Act, may be va.:ried by the con­sent of all the partners, and suoh consent may be either express orinfeIl'ed from a course of dealing.

23.(1.)AJ1propertyand rights and .. interests .. in propertyoriginally brought into the partnership stock, or acquired, whether bypurchase or otherwise, on account of. the firm, or for the purposesand in the course of the partnershIp business, are called in this Aot" partnership property," and must be held and applied by the partnersexclusively for the purposes of the lIR.rlnership, and in accordancewith the partnership agreement.

(2.) Provided that the legal estate or interest in any land whichbelongs to the partnership shall devolve according to the nature andtenure thereof, and the general rules of law thereto applicable, but intrust, so far as necessary. for the persons benefioially interested in theland under this section.

(3.) Where co-owners of an est~te or interest in any land notbeing itself partnership property are partners as to profits made bythe use of that land or estate. and purchase other land or estate outof the pl'Ofits to be used in .like manner, the land or estate so purchasedbelongs to them, in the abseneo of an.a,greement to the contrary, notas partners, but as co-owners for the same respective estates andinterests as are held by them in the land or estate first mentionecl atthe date of the purchase.

24. Unless the contrary intention appears, property hought ,,'itllmoney helonging to the firm is deemed to have been bought onaccount of the firm.

'54& 55 VWT.] P{f,rine/t'shiJp. [1891, No. 6. 21

25.vVhere land has become pal.'tnership property, it shall, unless Conversion intothe contral'V intention appears be treated as between the partners personal estate or

• ~J' . . land held as pa.rt-(including the representatives of a deceased partner), and also as nership property.

between the heirs of a deceased partnel' and his executors or adminis-trators, as personal and not real estate.

26. (1.) After the commencement of this Act a writ of execution Procedure against

shall not. issue against any partnership property except on a judg- ~:~~~;~~ a,

ment agamst the firm. :partner's sepal't\te(2.) The Supreme Court, or a Judge thereof, may, on the appli- Judgment debt.

oation by summons of any judgment creditor of a partner, make anorder charging that partner's interest in the partnership property andprofits with payment of the amount of the judgment debt and interest'thereon, and may by the same or a subsequent order ap . a re-ceiver of that partner's share of profits (whether already eclared oraccruing), and of any other money which may be coming to him inrespect of the partnership, and direct all accounts and inquiries and,give all other orders and direotions which might have been diI:ectedor given if the charge had been made in favour of the judgmentoreditor by the partner, or which the circumstances of the case mayrequire.

(3.) The othel' partner or partners shall be at liberty at any timeto redeem the interest charged, or, in case ofa sale being directed, topurchase the same.

27. The iIIterests of partners in the partnership property, and Rules a~ to interests

th.eir right~ and duties in relation to the p~tn~rship, shall be deter- =:t~:r~~~~j(lOt tommed, subJect to any agreement express or Imphed between the pa1't- special agreement.

ne1's, by the following rules :-'(1.) All the partners are entitled to share equally in the capital

and profits of the business, and must contribute equallytowards the losses, whether of oapital or otherwise, sus­tained by the firm.

(2.) The firm mllst 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 thepreservation of the business or property of the firm.

(3.) A partner making, for the OBe of the partnership, anyactual payment or advance ond the amount of capitalwhich he has agreed to subscribe is entitled to interestat the mte of five per centmn per annum from the d.ate ofthe payment or advance.

(4.) A partner is not entitled, before the ascertainment ofprofits, ts> interest on the capital subscribed by him.

(5.) Every partner may take part in the management of thepartnership business.

(6.) No partner shall be entitled to remuneration for acting Inthe partnership business.

(7.) No person may be introduced as a partner without the con­sent of all existing pal·tners.

(8.) Any difference.arising as to ordinary matters connected withthe pal'tnership business may be decided by a majority of

22 1891, No. 6.] Pa1rtnership. [54& 55VlOT.

Expulsion ofpartner.

Rights of assigneeof share inpartnership.

Where partnershipfor terll1 iscontmued over,oontinuance on oldtel"ll1S presumed.

the paxtners, but no change may be made in the nature ofthe partnership business without the oonsent 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 bemore than one), and every partner may, when he thi11ksfit, have acoess to and inspect and copy any of them.

28. No majority of the partners can expel any partner unless apower to do 80 has been oonferred by express agreement between thepartners.

Retirell1ent frOl"ll 29. (1.) "Vhere no fixed term has been agreed upon for thepartnership at will. <.luration of the partnership, any partner may determine the partner-

ship at any time on giving notice of his intention so to do to all theother partners.

(2.) Where the paJ:tnership has originally been constituted bydeed, a notice in writing, signed by the partner giving it, shall besufficient for this purpose.

30. (1.) Where a partnership entered into for a fixed term iscontinued after the term has expired, and without any express newagreement, the rights and duties of the partners remain the same asthey were at the expiration of the term, so far as is consistent withthe incidents of a partnership at wilL

(2.) A continuance of the business by the partners, or such ofthem as habitually acted therein dming the term, without any settle­ment or liquidation of the partnership affairs, is presumed to be acontinuance of the partnership.

Duty of partners to 31. Partners are bound to render tl'ue accounts and full in·render acoounts, &0, formation of all things affeoting the partnership to any partner or his

legal representatives.Accountability.of 32. .(1.) Eve:rypartiieriiitist aoCOt1.l1t ... to the firm. for any benefitpartners for pXl\'ate derived by him without the oonsent of the other partners from anypronts. •

transaotion conoerning the partnershIp, or from any use by him ofthe partnership, property, naJ11e, or business oonnection.

(2.) This section applies also to transactions undertaken aftel'a partnership has been dissolved by the death of a partner, andbefol'e the affairs thereof have been oompletely wOltnd up, either byany surviving partner or by the representatives of the deceasedpartner.

Duty of partner 110t 33. If a partner, without the consent of the other partners,to compete with oarries on any business of the same nature as and competing withfirm. that of the firm he must account for and pay over to the firm all

profits made by him in that business.,34. (1.) An assignment by any partner of his share in the

partnership, either absolute or by way of mortgage, does not, asagainst the other partners, entitle the assignee, during the con­tinuance of the l)artnership, to interfere in the management oradministration of the partnershipbnsiness or affairs, or to requireany account of the partnership transactions, or to inspect the partner·ship books, but entitles the assignee only to receive the share ofprofits to whioh the assigning partner would otherwise be entitled.and the assignee must accept the account of profits agreed to by thepartners.

54 &55 VICT.] Partnership. [1891, No. 6. 23

(2.) In case of a dissolution of the partnership, whether asrespects all the partners or as respects the assigning partner, theassignee is entitled to receive the share of the partnership assets towhich the assigning partner 'is entitled as between himself and theother partners, and, for the purpose of ascertaining that share, to anaccount as from the date of the dissolution.

DISSOLUTION OF PARTNERSHIP AND ITS CONSEQUENCES.

35. Subject to any agree~ent between the partners, a partner- Dissolution byship is dissolved- exp!ration or

(a.) If entered into for a fixed term, by the expiration of that notice.

term;(b.) If entered into for a single adventure or undertaking, by the

termination of that adventure or undertaking;(c.) If entered into for an undefined time, by any partner giving

notice to the other or others of his intention to dissolvethe partnership.

In the last-mentioned case the partnership is dissolved as fromthe date mentioned in the notice as the date of dissolution, or, if nodate is so mentioned, as from the date of the communication of thenotice.

36•.. (1.) .. Subject· to any agreement· between .the ·partners, .eVel'y Dissolution bypartnership is dissolved as regards all the partners by the death 01' deathh, ba.nkruptcy,

or 0 arge.bankruptcy of any partner.

(2.) A partnership may, at the option of the other partners, bedissolved if any partner suffers his share of the partnership propertyto be charged under this Act for his separate debt.

37. A partnership is in every case dissolved by the happening of Dissolution byany event which makes it unlawful for the business of the fum to be ~~~f:~it~?fcarried on, or for the members of the firm to carry it on in partner- IS lp.

ship.38. On application· by a partner the Court may declare a disso.. Dissolution by the

lution of the partnership in any of the followillg cases :_ Oourt.

(a.) When a partner is found lunatic by inquisition, or is shownto the satisfaction of the Court to be of permanentlyunsound mind, in either of which cases the applicationmay ·be made as well on behalf of that partner by hiscommittee or next friend or person haYing title to inter­vene as by any other partner:

(b.) When a partner, other than the partne1' suing, becomes inany other way permanently incapable of performing hispart of the partnel'ship contract:

(0.) When a partner, other than the partner suing, has beenguilty of such conduct, as, in the opinion of the Court,regard being had to the nature of the business, is calculatedto prejudicially affect the carrying-on of the business :

(d.) When a partner, other than the partner suing, wilfully orpersistently commits a breaoh of the partnership agree­ment, or otherwise so conducts himself in matters relatingto the partnership business that it is not reasonablypracticable for the other partner 01' ptl.rtl1ers to carry 011

the business in partnership with him:

24 1891., No. 6.] Pal'tnership. [54& 55VIOT.

Rights of plll:Sonsdealing with firmaga.inst appa.rentmembers of :firm.

Apportionment ofpreminm wherepal:tnel"Ship prema­turely dissolved.

Rights of partnersas to application ofpartnershipproperty.

(e.) When the business of the partnership can only be carried onat a loss:

U:) Whenever III any case circumstances have arisen which, inthe opinion of the Oourt, render it just and equitable thatthe partnership be dissolved.

39. (1.) Where a person deals with a firm after a change in itsconstitution he is entitled to treat all appaJ.'ellt members of the old firmas still being members of the firm until he has notice of the change.

(2.) An advertisement in the Gazette shall be notice as to personswho had not dealings with the firm before the date of the dissolutionor change so advertised.

(3.) The estate of a partner who dies, or who becomes bankrupt,01' of a partner who, not having been known to the person dealingw'ith the firm to be a partner, retires from the firm, is not liable forpartnership debts contracted after the date of the death, bankruptcy,or retirement respectively.

Rig.ht o~ partn.ers to 40. On the dissolution of a partnership or retirement of anotify dIssolutIOn. partner any partner may publicly notify the same, and may require

the other partner or partners to concur for that purpose in all necessaryor proper acts, if any, which cannot be done without his or their con­currence.

Continuing 41. After the dissolution of a partnership the authority of each~~;r:~:Yf~!pur- partner to bin~ the firm,_ and the. other ri~hts a~d obligations of theposes of winding up. partners, colltmue llotwlthstandmg the dlssolution so far as may be

necessary to wind up the affairs of the partnership, and to completetransactions begun but unfinished at the time of the dissolution, butnot otherwise :

Provided that the firm is in no case bound by the acts of apal'tner who hag become bankrupt; but this proviso does not affectthe liability bfany perS6lJ.\Yhb has'· after the bankruptcy representedhimself or knowingly suffered himself to be l'epresented as a partllerof the bankrupt,

42. On the dissolution of a partnership every partner is entitled,as against the other partners in the firm, and all persons claimingthrough them in respect of their interests as partners, to have theproperly of the partnership applied in paymel1t of the debts andliabilities of the firm, and to have the surplus assets after such pay­ment applied in payment of what may be due to the- partners respec­tively aftf:\r deducting what may be due from them as partners ofthe firm; and for that purpose any partner, or his representatives,may, on the termination of the partnership, apply to the Court to windup the business and affairs of the fi~.

43. Where one partner has paid a premium to another on ente1'­ing into a partnership for a fixed term, and the partnership isdissolved before the expiration of that t.erm otherwise than by thedeath of a partner, the OOUli may order the repayment of thepremium, or of such part thereof as it thinks just, having regard tothe terms of the partnership contract and to the length of timeduring which the partnership has contillued, unless-

(a.) The dissolution is, in the judgment of the Oomt, wholly orchiefly due to the misconduct of the partner who paid thepremil..1l11, or

54& 55 Vrc:r.] Partnership. [1891, No. 6. 25

(b.) The partnership has been dissolved by an agreement con­taining no provision for a return of any part of thepremium.

44. Where a partnership contract is rescinded on the ground of Rights where

the fraud. or misrepre~ent~tioIl;of one o! t~e parties thereto,. the ~i:st~~~~rfra.udparty entItled to rescmd IS, wIthout preJudice to any other rIght, or misrepresents,.entitled- tion.

(a.) To a lien on, or right of retention of, the surplus ofthe part­nership assets, after satisfying the partnership liabilities,for any sum of money paid by him for the purchase of ashare in the partnership and for any capital contributedby him, and is

(b.) To stand in the place of the creditors of the finn for anypayments made by him in respect of the partnershipliabilities, and

(v.) To be indemnified by the person guilty of the fraud ormaking the representation against all the debts and liabili­ties of the firm.

45. (1.) Where any member of a firm has died or otherwise Right of outgoingceased to be a partner, and the surviving or continuing partners CarlY partn~~certa.in

on the business of the firm with its capital or assets without any final ;~~ftts mada:~ftersettlement of acco:untsasbetweenthe firm and theontgoing .partner dissolution.

or his estate, then, in the absence of any agreement to the contrary,the outgoing partner or his estate is entitled, at the option of himselfor his representative, to such share of the profits made sinoe the dis-solution as the Court may find to be attributable to the use of hisshare of the partnership assets, or to interest at the rate of fi \Te percentum per annum on the amount of his share of the partnershipassets.

(2.)· PI'ovided that where by the partnership contract an optionis given to surviving or continuing partners to purchase the interestof a deceased or outgoing partner, and .that option is dulyexel'cised,the estate of the deceased partner, or the outgoing partner or Irisestate, as the case may be, is not entitled to any further or othershare of profits; but if any partner assuming to act in exercise of theoption does not in all material respects comply with the termsthereof he is liable to acconnt nnder the foregoing provisions of thissection.

46. Subject to any agreement between the partners, the amount Retiring ordue from surviving or continuing partners to an outgoing partner deceased partner's

th t t ' f d d,.,J.· l. f h t' share to be a debt,or e represen a Ives 0 a ecease pauner, m respecu 0 t e ou -going or deceased partner's share, isa debt accruing at the date ofthe dissolution or death.

47. In settling acoounts between the partners after a dissolution Rule for distributionof partnership the following mles shall, subject to any agreement, be ~:t:::::o~nalobserved:- accounts.

(a.) Losses, inoluding.Iosses and deficiencies of capital, shall .be. paid first out of profits, next out of capital, and lastly, i.f

necessary, by the partners individually in the proportionin which they were entitled to share profits.

(b.) The assets of the firm, including the sums, if any, contri­buted by the partners to make up losses or deficiencies of

26 1891, No. 6.] Pa/rtnership. [54 &55 VWl'.

oapital, shall be applied in the following manner andorder:-

(1.) In paying the debts and liabilities of the firmto persons who are not partners therein :

(2.) In paying to eaoh partner rateably what is duefrom the firm to him for advanoes as.distinguished fromoapital:

(3.) In paying to eaoh partner rateably what is duefrom the firm to him ill respeot of oapital :

(4.) The ultimate residue, if any, shall be dividedamong the partners in the proporlion in which profits aredivisible.

SUPPLEMENTAL.

Sa.v~ng for rules of 48. The rules of equity and of oommon law applioable to parlner­iqUlty a.nd oommon ship shall oontinue in force exoept so far as they are inoonsistentaw. with the express provisions of this Aot.Aot ~ot to apply ~o 49. This Act shall not be deemed to affeot the provisions of6peo11.1 partnershIps "The JYIercantile Law Act 1880" relating to speoial partnershipsformed under" The ... . .., ... , . .. ,Mercantile Law exoept in SO far as the general law relating to partners may beAot, 1880." deolared by the last-mentioned Act to be applioable to speoial part­

nerships.Repeal. 50. The Aots mentioned in the Sohedule to this Act are hereby

repealed to the extent therein mentioned.

Sohedule. SCHEDULE.

ENAOTMENTS REPEALED.

1880,N6. 12.-"The Mercantile-Iiawact, 1880:" !ri- :part, namely; s6i5tionforty-two and sections fifty-three to fifty-six, both inclusive.

1885, No. 4.-H The Mercantile Law Act 1880 Ameudment Act, 1885," Thewhole Act.

WELLINGTON: Printed under authority of the New ZeeJ.ana Gover.nment.by G:mORGE DIDflBUror, G"v6rm.nanfl Printer•....,.1891.