failure of the business itself. So, if he has been induced to enter into the partnership contract through the deceit of his copartner, he may withdraw whenever the fraud practiced upon him becomes known. In neither case is he required to continue in the firm until the partnership expires by limitation of time, but is at liberty at once to ask for a dissolution and a winding up of the affairs of the partnership. * * *

Demurrer overruled.

CHILDERS et al. v. NEELY.

(Supreme Court of Appeals of West Virginia, 1899. 47 W. Va. 70, 34 S. E. 828, 49 L. R. A. 468, 81 Am. St. Rep. 777.)

Bill by J. M. Childers and another against S. H. Neely. Judgment for plaintiffs, and defendant appeals.

BRANNON, J. Childers and Ramey filed a bill in equity in the circuit court of Tyler against Neely, praying that a partnership between them be dissolved, an account taken "of all its accounts, dealings, and transactions whatever," and that a manager be appointed to take charge of the property. The business was oil production. * The decrees made a partial account, decreed its balance against Neely, and denied him further participation in the partnership, and he appealed.

*

* *

The bill demanded a dissolution. It showed abundant cause, and the evidence shows abundant cause, of dissolution. The bill charges that the plaintiffs and Neely made a settlement to a certain date, but that they had been unable to get Neely to make a settlement since then; that he was violent and abusive, had threatened them with violence, and declared he would have nothing more to do with them; that he would not contribute to expenses; that bills remained unpaid; and that because of the unsatisfactory condition of the business, and the "disagreements, dissensions, and disaffections between the partners, the property and business were suffering." The evidence shows these disagreements and dissensions. Thus, it was plain that the business was hopeless of success and prosperity, and the interests of all parties demanded absolute dissolution at the hands of the law. Reconciliation, harmony, and success were utterly beyond hope. * * * Therefore the court should have decreed dissolution absolute, and directed an account of the partnership, and wound it up. But it decreed no dissolution, but, on the contrary, suffered the partnership still to subsist, and, indeed, go on in the sole hands and management of Ramey, excluding Neely therefrom, and decreed that the settlement by the commissioner should only apply to its date, leaving it open to future account. The decree perpetuated the injunction, forever prohibiting Neely from participation in the business, and provided that when he should pay $487.15 found due from him, and costs, the injunction should cease.

* * *

If ever there were cases which, by bill and proof, called for dissolution and final account, not partial, this is one. And besides the showing of bill and proof, a petition for rehearing alleged that Ramey had sold the boilers. The evidence so shows. This would charge Ramey to credit of Neely. There was partnership property in Ramey's hands. There could only one adequate relief be given,-dissolution, sale of the property entire, and full account. But no provision was made for dis

solution, sale, or full account,-only a partial settlement and decree against Neely for the sum found by it. The bill alleged that the property could not be divided in kind. If the injunction applied to property belonging to the firm, on which a lien rested for the other partners, it would be proper to continue it until final account and decree. * * * But Neely's share of the oil was his separate property. And I do not see why he should, without cause, be excluded from participation, letting Ramey have sole control. A receiver, impartial between them, was proper, under the circumstances.

* * *

Therefore we dissolve the injunction, reverse the decree, overrule the demurrer to the bill, and remand for further proceedings as herein. indicated, and further according to principles governing courts of equity in such cases.

SECTION 6.-EFFECT OF ASSIGNMENT OF A PARTNER'S INTEREST

Uniform Partnership Act, Section 27. (1) A conveyance by a partner of his interest in the partnership does not of itself dissolve the partnership, nor, as against the other partners in the absence of agreement, entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership business or affairs, or to require any information or account of partnership transactions, or to inspect the partnership books; but it merely entitles the assignee to receive in accordance with his contract the profits to which the assigning partner would otherwise be entitled.3

(2) In case of a dissolution of the partnership, the assignee is entitled to receive his assignor's interest and may require an account from the date only of the last account agreed to by all the partners.

HAWORTH v. JACKSON.

(Supreme Court of Oregon, 1916. SO Or. 132, 156 Pac. 590.)

Action by J. Brooks Haworth and another against Frank A, Jackson and others. From an order dismissing the suit as to defendants Jackson and Burpee and decree dismissing it as to defendant Manning. the plaintiffs appeal.

In substance, the plaintiffs declare that they and the defendant Manning associated themselves together and purchased an auto truck con

8 Lewis' Note to Section 27 (1).-In re the subject of this paragraph, see George, 153; Beale's Parsons, §§ 106, 305, 306; Story, §§ 272, 377, 308; Bates, § 158-168, 931-933; Lindley, 397 et seq., 620; Jas. Parsons, § 175; Collyer, 151, 161; Kent. 59. These authorities on the whole state that the mere assignment dissolves the partnership. Many such assignments, however, are merely by way of collateral security for a loan, the assigning partner in no wise intending to end the partnership relation. If he neglects his personal relation the other partners may dissolve the partnership under section 31 of this act. But the mere fact of assignment, without more, should not be said in all cases to be an act of dissolution. The change in the exist ing law follows a similar change of the English law embodied in section 31 of the English Partnership Act.

tracting to pay $3,815 for the same. The sum of $1,975 was paid in cash. The remainder was to be paid in four equal installments of $460 each. With this as a commencement, they formed a partnership according to a certain written agreement, which recites that the title to the property remained in the original owner, the Packard Company, until the full purchase price should be paid. They say they carried out all the stipulations of this contract, but that the defendant Manning misappropriated moneys to himself belonging to the partnership, did not keep full or true accounts of the moneys received from the earnings of the machine, and has failed to divide the profits of the business; that, although he was permitted to handle the moneys of the concern and pay therefrom its liabilities, he allowed the last installment of $460 to remain unpaid, and the plaintiffs were compelled to assume the payment of the note therefor then in the hands of the defendant Jackson. They charge the latter with knowledge of their interest in the property, and that he, well knowing that they had both a legal and equitable interest therein, "without any notice to the plaintiffs or either of them, attempted to execute an alleged and pretended transfer of the said auto truck to the defendant Herman S. Burpee, in order to cheat and defraud the plaintiffs, without any right either in law or equity so to do, and without in any way giving the plaintiffs or either of them a right to pay or redeem the same, and without taking any action either in law or equity seeking to enforce the ownership of the said truck or the equitable lien upon said truck." They further aver that they are ready, willing, and able to pay $315, principal and interest thereon, which they say is the balance due on the last installment mentioned. They tender that amount into court for the benefit of Jackson or the owner and holder of the purchase price note. They pray for a decree dissolving the partnership between themselves and Manning; that they be adjudged to be the owners of the truck subject to any claim which Manning or his assignees may have in the same; that the $315 tendered be declared to be full payment of the purchase price of the truck which is to be thereby freed from any lien on account thereof; and that the defendants and each of them be enjoined from claiming any interest in the same.

BURNETT, J. As between the plaintiffs and Manning, this is a suit to dissolve the partnership and for an accounting concerning the affairs thereof. * *

*

The sale of Manning's interest to Armstrong worked out a dissolution of the partnership, and it was not necessary that the consent of the plaintiffs be obtained; "for what a man hath that also can he sell." "In most jurisdictions, in this country, although not in England, a partner may work a dissolution of the firm by withdrawing or selling his share in the partnership or by selling the entire firm's property without the consent of his copartners." 30 Cyc. 653.

This rests upon the doctrine that, while a partner may thus withdraw from the firm, he cannot force upon his former associates a new one without their consent. All that remains is the obligation to account to the original partners concerning the transactions of the late firm.

* * *

It is so ordered.

CHAPTER V

EFFECT OF DISSOLUTION UPON THE RELATIONS OF THE PARTNERS BETWEEN THEMSELVES

Section

1. Effect, as Between the Partners, of a Dissolution Not Caused by the Act, Bankruptcy, or Death of a Partner.

2. Effect, as Between the Partners, of a Dissolution Caused by the Act, Bankruptcy, or Death of a Partner.

3. Liability of a Partner to His Co-Partners for Wrongfully Causing a Dissolution.

4. Power of the Partners to Wind up the Partnership Affairs.

5.

Rights of Partners After Dissolution with Respect to the Disposition of Partnership Assets.

6. Relations of the Partners After Dissolution upon Their Election to Continue the Business.

7.

Right of a Partner Who has Wrongfully Caused a Dissolution.

8. Right of a Partner Who has Rescinded a Partnership Contract for Fraud.

SECTION 1.-EFFECT, AS BETWEEN THE PARTNERS, OF A DISSOLUTION NOT CAUSED BY THE ACT, BANKRUPTCY, OR DEATH OF A PARTNER

Uniform Partnership Act, Section 30. On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.

Section 33. (1) (a) Except so far as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution terminates all authority of any partner to act for the partnership, with respect to the partners, when the dissolution is not by the act, bankruptcy or death of a partner.

SECTION 2.-EFFECT, AS BETWEEN THE PARTNERS, OF A DISSOLUTION CAUSED BY THE ACT, BANKRUPTCY, OR DEATH OF A PARTNER

Uniform Partnership Act, Section 30. On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.

Section 33. (1) (b) Except so far as may be necessary to wind up partnership affairs or to complete transactions begun but not then finished, dissolution terminates all authority of any partner to act for the partnership, with respect to the partners, when the dissolution is by such act, bankruptcy or death of a partner, in cases where section 34 so requires.

Section 34. Where the dissolution is caused by the act, death or bankruptcy of a partner, each partner is liable to his co-partners for his share of any liability created by any partner acting for the partnership as if the partnership had not been dissolved unless,

(a) the dissolution being by act of any partner, the partner acting for the partnership had knowledge of the dissolution, or (b) the dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy.1

1 Lewis' Note to Section 34-This section relates only to a partner's liability to his co-partner, where a co-partner, after dissolution, caused by the act of one of the parties or by the death or bankruptcy of a partner, makes a contract in the course of partnership business.

As worded, where the dissolution has been caused by the act of one of the parties, if the partner acting is subject to a liability to third persons, he can call on his co-partners to contribute towards this liability to the same extent as if there had been no dissolution, provided he had no knowledge of the dissolution, at the time of the act. Mere notice, not producing knowledge, would not be sufficient. This provision makes certain that which is now uncertain. Thus A., B., and C. are partners. A., in accordance with his right, or in contravention of the agreement between the partners, declares a dissolution of the partnership. B., subsequently, makes a contract, for the partnership in ignorance of the dissolution. B. under this act would have the right to call upon A. and C. to assume their share of the burden. The Commissioners believe that to relieve A. and C. of this duty to B., B. ought to have more than "notice" as "notice" is defined in section 3, supra. "Notice" should be, it is submitted, sufficient in all cases where the fact to be notified is an ordinary business fact, as notice to third persons of the dissolution of a partnership. But it is not customary for partners to dissolve a partnership at a time not previously specified, without consultation with their copartners. Such dissolution may or may not amount to a breach of partnership contract; but, in any event, if done without consultation, it is out of the ordinary course. This fact should not deprive the partner of a right to terminate a relationship which must necessarily depend on mutual good will and confidence; but if the partner so terminating wishes to show that he should not be required by his partners to be liable, for his share of the loss due to a partnership contract thereafter made by them, he should be able to prove that they had "knowledge" that he had dissolved the partnership at the time they made the contract.

Clause (b) makes a change in the law. Beale's Parsons, §§ 309, 310, 318, 342, 343, 351; Mechem, §§ 245, 258, 259, 260, 261, 266; Collyer, §§ 102, 103, 30 Cyc. 653, 670; Story, §§ 265 et seq., 319, 334, 336; Bates, 570 et seq.; Conyngton, §§ 53, 72; Burdick, 56; Shumaker, §§ 119, 120; 3 Kent. Com. 53. At present, where the partnership is terminated by operation of law-i. e., by death, bankruptcy, by being unlawful, or by decree of court-every person "must take" notice of such facts. This statement is made generally and includes the partners. As to the partners, to whom only this provision relates, the Commissioners agree that they must not expect relief if the partnership or the business is unlawful, or if they have actual knowledge or notice of dissolution by decree of court; but the Commissioners do not believe that the partners do have actual knowledge or should "take notice” of the death or of the bankruptcy of any one partner. In the case of the death, to hold that a partner acting for the partnership bona fide, in ignorance of the death of one of his co-partners, must assume the entire liability, even though all other partners are ignorant of the death of the partner, and even though such deceased partner was entirely inactive, and may have resided at any distance from the actual place of business, is entirely unjust to the acting partner or partners. The rule of the common law has been modified as to the law of agency. Story on Agency (1882) 598; Cassiday v. MeKenzie, 4 Watts & S. (Pa.) 282, 39 Am. Dec. 76 (1842); Civ. Code Cal. § 2356; Rev. Code Dak. 1877, §§ 1150, 1151; Rev. Code Md. 1878, p. 388, art. 44, § 31; Saunders' Rev. Civ. Code La. 1909, § 3032; Gen. Stat. S. C. 1882, § 1302; Kent, Comm. 646; Mechem on Agency, § 245; Blackwood Wright (2d Eng. Ed.) on Principal and Agent, 332 et seq.; English Conveyancing Act (1881) § 47; English Bankruptcy Act (1883) § 38. See Lindley, 240 et seq. The Commissioners believe that the partnership law should follow this modification. What has been said of the death of a partner applies also to the bankruptcy of a partner. If there are a number of partners, and one of them becomes