mination of the partnership as to him: because whatever interest he possessed is devested out of him, and becomes, by the sale, vested in the vendee of the sheriff, who is tenant in common with the solvent partners (a).

A partnership may likewise be dissolved by the award of arbitrators. It is customary in regular partnerships, to insert a clause in the articles, by which the partners covenant to submit to arbitration any matter or thing which may become the subject of controversy or dispute between them. And although in such cases the arbitrators are usually judges of the parties' own choosing, and proceed in a summary way; yet, if duly authorized, their award is considered final, consequently binding upon the parties, unless there should appear just grounds, either at law, or in equity, to set it aside. And it is a mode of dissolving a partnership very frequent amongst merchants and traders, and is considered a ready method of adjusting partnership claims. In order to empower arbitrators to direct a dissolution, it is not necessary for the parties, submitting to arbitration, to give them an express authority for the purpose, since, if two partners refer all matters in difference between them, and the question of the dissolution be, at the time of the reference, a subject of dispute, the arbitrators may dissolve the partnership (b).

SECTION II.

The Consequences of the Dissolution of a Partnership.

HAVING pointed out the various causes which operate a dissolution of a subsisting partnership, and

(a) Sayer v. Bennet, Mont. on Partn. notes, p. 17. In Fox v. Hanbury, Cowp. 445, Lord Mansfield assumed that a partnership might be dissolved by an execution. (b) Green v. Waring, 1 Blacks. Rep. 475.

likewise the modes by which a partnership may be dissolved, it now remains to be considered what are the consequences resulting from a dissolution, in whatever manner it is brought about. These may be considered, either as they affect a total or a partial destruction of a partnership, a complete annihilation of a firm, or a dissolution merely for the purpose of making an alteration in it, by the retirement of an old and the introduction of a new member. The consequences which particularly ensue a dissolution occasioned by the bankruptcy or the death of a partner we will separately examine.

Where a partnership is, by notice, by death, or by any other mode of determination, actually ended, as regards all the partners, no one of them can make use of the partnership estate in a manner inconsistent with the winding up of the concern. The object of their original association is then terminated, and their power of employing the joint property in the way of trade ceases. The partners cannot create any new obligations, for after a dissolution nothing remains to be accomplished, except the arrangement of the affairs of the partnership, but until they are settled, the connexion between the partners subsists, and in that sense, and until such a settlement take place, the partnership may be said to continue, and the ex-members of the firm may be sued as existing partners (a). From the nature of a partnership, engagements may be contracted which cannot be fulfilled during its existence, exposed as it is to sudden and arbitrary terminations; and the consequence, therefore, must be, that, for the purpose of making good outstanding engagements, of taking and settling all the accounts and converting all the property, means and assets of the partnership, existing at the time of the dissolution, as beneficially as may be for the benefit of all who were partners, according to

(a) Ex parte Williams, 11 Ves. 5. Peacock v. Peacock, 16 Ves. 57. Wilson v. Greenwood, I Swanst. 480. S. C. 1 J. Wilson, 223. Crawshay v. Maule, ibid. 506. S. C. 1 J. Wils. 181.

their respective shares and proportions, the legal interest subsists, although, for all other purposes, the partnership is actually determined (a). The arrangement of the affairs being then the sole object and purpose to be attained after a dissolution, a court of equity will, in all cases, interpose where the conduct of partners is of a description not likely to be attended with such a result. Therefore, if one partner trade with the joint property on his separate account (b), or if he interfere with it otherwise than for the settlement of the joint affairs (c), or if some members of the firm, in closing the transactions, seek to exclude others from a just share in the management (d), a court of equity will appoint a manager or receiver to wind up the concern, and will direct inquiries in what manner it can be wound up most beneficially to those interested (e). But to justify a call for this summary interference, some fraudulent breach of contract or duty must be shown; for a receiver will not be appointed, merely on the ground of a previous dissolution of the partnership having actually taken place (ƒ). In some cases of dissolution by the bankruptcy of one partner, the solvent partner will be enabled to deal solely with the partnership property; and for that purpose will be appointed the receiver of it, but without a salary (g).

We will now endeavour to explain what is considered as falling under the description of joint property at the termination of a partnership. The joint property consists of the remaining stock which existed at the formation of the partnership, with the additions made to it in the course of trade, either during the continuance of the partnership, or sub

Crawshay v. Collins, 15 Ves. 227. Natusch v. Irving, Appendix, post. (b) Harding v. Glover, 18 Ves. 281.

(c) Crawshay v. Maule, 1 Swanst. 507. S. C. 1 J. Wils. 181. Heathcote v. Hulme, Jac. and Walk. 128.

(d) Wilson v. Greenwood, I Swanst. 481. S. C. 1 J. Wilson, 223.

(e) Crawshay v. Maule, supra.

(f) Harding v. Glover, 18 Ves. 281. Wilson v. Greenwood, supra. (g) Ex parte Stoveld, 1 Glyn v. James, 303.

sequently thereto; for if the trade be carried on by one partner with the joint capital, he must account for the profits he may derive (a). Real estates acquired by the partnership are, as we have seen (b), regarded in no other light than as stock in trade, and consequently they form a portion of the joint fund. Nor, as it has been observed, does it matter that the freehold interest purchased by the firm is conveyed to one partner. Such a conveyance does not alter the nature of the purchase, nor affect the rights of the other partners. The property still continues to form an article of joint stock, and, as such, must be brought into the common fund (c). And where a renewal of the lease of part of the partnership premises is clandestinely obtained by a member of a partnership, dissoluble at pleasure, although it does not follow that all the concerns conducted upon the premises are a part of the joint estate, yet the lease will, on a dissolution, form a portion of the partnership property, because a partner so treating will not be permitted to secure to himself the good-will of the trade, in exclusion of his partners (4). But that only is to be considered as co-partnership property, which belongs jointly to all the partners, whether it arise simply from contributions inter se, or is composed in one part of contributions, and in the remaining part of acquisitions made by, or profits derived from, the use and application of the capital formed by such contributions. A distinct and independent fund belonging to dif ferent, but not to all the individual members of the firm, which is not commensurate with joint property, and does not succeed to the place of it, does not fall within the meaning of, and is not distributable as joint estate if it were so distributable, the partners uninterested in such fund would be relieved from

(a) Brown v. Vidler, cited 15 Ves. 223. Coxwell v. Bromet, cited ib. Crawshay v. Collins, ib. 229. Featherstonhaugh v. Fenwick, 17 Ves. 298. (b) See ante, p. 48. (c) Smith v. Smith, 5. Ves. 189. (d) Featherstonhaugh v. Fenwick, supra. Wilson v. Greenwood, 1 J. Wil

son, 223,

the weight of debt which otherwise they must bear, at the same time, probably, that the separate creditors of the actual owners might have claims against it, and who, therefore, would be entitled to priority of satisfaction. For instance, if one joint owner of a ship insure his share or interest, and a loss happen, the money recovered upon the policy will be separate, and not joint property (a). So, if a partnership consisting of three partners were to sustain an accidental loss, as by fire, and an individual were to make a donation to two of the partners in compensation of their loss, such a gift to the two partners would not render the subject of it partnership property (b). And, in a late case, where it appeared that two American citizens and a French subject, residing at St. Domingo, were in partnership, and were owners of certain ships captured by British cruizers, and that the commissioners appointed under the treaty of commerce concluded in the year 1794 between this country and America, for awarding compensation to American subjects who had suffered losses by capture, for which they could obtain no redress in the ordinary tribunals, had awarded, in compensation of the ships of the partnership captured, certain sums to the two Americans, with express exclusion of the French citizen as an alien enemy, it was determined, that the sums so awarded were not partnership property (c). There the property in the ships was irrevocably lost and gone by the capture and condemnation, and the subsequent bounty to the two being matter of liberality and conciliation, but not of strict legal right, could not be considered as resulting to the benefit of all the partners, without contravening the terms of the grant. If, instead of compensation, restitution of the ships had been ordered, the capture would not, perhaps, have altered the property, because it would have

(a) Ex parte Parry, 5 Ves. 575. And see Ex parte Smith, 3 Madd. 63. S. C. Buck. 149. (b) 2 Swanst. 573. (c) Campbell v. Mullet, 2 Swanst. 551.