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benefit of the firm, he cannot purchase for his own use, and for the purpose of private speculation and profit, articles in which the firm deals, and, if he does so, the profits arising therefrom may be claimed by the copartners as belonging to the firm. 5 Wait, Act & Def. 125. Thus, as said in 1 Bates, Partn. Sec. 306: 'If a partner speculate with the firm funds or credit he must account to his copartners for the profits, and bear the whole losses of such unauthorized adventures himself; and if he go into competing business, depriving the firm of the skill, time and diligence or fidelity he owes to it, so he must account to the firm for the profits made in it. And a managing partner will be enjoined from carrying on the same business for his own benefit.' But the same author says, a little further on, that a partner may traffic outside of the scope of the business for his own benefit. So, also, in Lindl. Partn. 312, the rule is laid down as follows: 'Where a partner carries on a business not connected with or competing with that of his firm, his partners have no right to the profits he thereby makes, even if he has agreed not to carry on any separate business.' 66* * * In view of all the evidence, we are disposed to hold that the only proper result is the one reached by the Circuit Court in its decree, and the judgment of the Appellate Court, affirming the decree, will be affirmed."

Question 592: (1) Was acting as executor by the defendant practicing law requiring an accounting of the fees thereby earned?

(2) Did the Court think the defendant was violating his duty in acting as executor? Why?

(3) If a partner engages in a competing business will his profits be regarded as the profits of the firm?

(4) If he engages in a non-competing business and thereby neglects his partnership affairs will the profits he thereby makes be considered partnership earnings? In such a case would he be enjoined from carrying on such business?

(5) A. uses $500 of the firm money to put into a venture for his own benefit and $500 to put into another venture for his own benefit. In the one he makes a profit of $250. In the

other he loses $250. How much money must A. produce as partnership money?

Case 593. Webb v. Fordyce, 55 Ia. 11.

Facts: See the opinion.

Point Involved: See the first paragraph of the opinion.

ROTHROCK, J.: The sole question contended by appellant in this appeal is whether the defendant should be held liable for such of the partnership funds as came into his hands, and for which he could render no account and as to which he could but testify generally that he did not convert the same to his own use.

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Each checked out the funds of the partnership at will, upon his own check, and it was the duty of each to account to the firm for what he drew out. If the defendant drew checks and obtained the money thereon its expenditure was a matter peculiarly within his own knowledge. The plaintiff was entitled to some showing more than a general statement that the proceeds of the checks were used for partnership purposes. 'All partners having any charge of the business of the firm are bound to keep constantly, regular, intelligible and accurate accounts of all the business, and to give all the partners at all time access to them and to the means of verifying them.' Parsons on Partnership, p. 527.Affirmed."

Question 593: Enlarge upon the duty of the partner to keep accounts and the results from a failure to do so.

§ 589. (Partnerships, Sec. 30.) Right of partner to deal openly with firm.

(The partner may sell to, buy from, and otherwise deal with his partners. He cannot in a strict sense have any contract with the firm as such, for he is a part of the firm. If he sues he must sue the other parties or have an accounting in equity. In dealing with the other members of the firm, he is in the position of a fiduciary and must reveal all pertinent information.)

§ 590. (Partnerships, Sec. 31.) Right of partner to sue firm.

Case 594. Bullard v. Kennedy, 10 Cal. 60.

Facts: Suit at law by an assignee of a partner against his co-partners.

Point Involved: Whether a partner can sue his copartners in a court at law or must go into equity and ask an accounting.

Burnett, J.: "The only question arising in the case is, whether the plaintiff can sue in this form?

"There was nothing in the constitution of this company which regulated the remedies of the shareholders, as between themselves, and, therefore, the general law of partnership must prevail (Coll. on Partn., Sec. 1115). There having been no final settlement of the partnership accounts, and no balance struck, and no express promise on the part of the individual members to pay their ascertained portion of this amount to Sotzen and Goodnow, they could not maintain assumpsit. As they could not sue, it is difficult to see how their assignee could do so. This rule rests upon three grounds:

"1. The technical ground, that a man cannot, at the same time, in the same suit, be both plaintiff and a defendant.

"2. Because it would be useless for one partner to recover that which, upon taking a general account, he might be compelled to refund; and thus a multiplicity of suits be permitted, where one would answer.

"3. The contrary rule would defeat the equitable right of the other partners to set-off their advances against those of plaintiff, and would force them to first pay the amount, and then rely upon the individual responsibility of the partner for a return of his proportion."

Question 594:

(1) Can a partner sue his co-partners in a court at law on a partnership account?

(2) Does the Court suggest any exceptions?

(3) What are the grounds given by the Court?

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§ 591. (Partnerships, Sec. 32.) Right of Partner to

Compensation, Interest, etc.

(1) Right to Compensation.

Case 595. Lindsay v. Stranahan, 129 Pa. St. 635. PER CURIAM: "There is but a single question in this case: Is J. K. Lindsay, the plaintiff, entitled to compensation for his services as a partner? It is conceded that there was no express contract that he should be paid for such services, and there is no principle better settled than that the law will not imply a contract in such cases. The reason is that the partner is but attending to his own affairs. This rule is inexorable; as much so as that between parent and child. Were it otherwise, we might have a contest between the partners upon the settlement of every partnership account, as to the value of their respective services. It is true this principle may work hardship in particular cases; almost every general rule does, but that is a weak argument against the soundness of the rule. When the co-partnership agreement contemplates that one partner shall manage the business, or do more than his share of the work, it is easy to provide for his compensation in the agreement itself; and if no such stipulation is then made, as before said, the law will not imply one. Even where a liquidating or surviving partner settles up the business, it has been repeatedly held that he is not entitled to compensation for doing so, although, in such case, he performs all the service: Beatty v. Wray, 19 Pa. 516, 57 Am. Dec. 677; Brown v. McFarland, 41 Pa. 129, 80 Am. Dec. 598; Gyger's Appeal, 62 Pa. 73, 1 Am. Rep. 382; Brown's Appeal, 89 Pa. 139. "Judgment affirmed."

Question 595: If one partner does a greater amount of work than another, is he entitled to compensation therefor? Why?

(Note: As to right of liquidating partner to compensation; in the above case the Court states that a liquidating partner is

entitled to no compensation although he performs all the services of liquidation. Clearly there could be an agreement for compensation. The partnership act provides: [Sec. 18(f)] "No partner is entitled to remuneration for acting in the partnership business, except that a surviving partner is entitled to reasonable compensation for his services in winding up the partnership affairs.")

(2) Interest on Capital.

(Note: No such right unless agreed, but "a partner shall receive interest on the capital contributed by him only from the date when repayment should be made.")

(3) Interest on Loans and Advances.

(Note: A difference of opinion has prevailed on this point. The prevailing and sounder view is stated by the partnership act "A partner who is the aid of the partnership makes any payment or advance beyond the amount of capital which he agreed to contribute, shall be paid interest from the date of the payment or advance." Sec. 18 (c).)

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