Third Article.

As to other kinds of Obligations which arise from the Contract of Partnership.

133. It is, moreover, one of the obligations which arises from the contract of partnership, that each of the partners is obliged to allow the others the enjoyment and use of the common property, to which they are entitled according to the regulations and agreements of the partnership; l. 52. § 13. ff. Pro Soc. (Dig. lib. xvii. tit. 2. 1. 52. § 13.)

For example, when at Paris, two neighbours enter into partnership, in order that they may have in common an equipage, each of them is obliged to allow the enjoyment of it to the other in his turn. If on the day when it is my turn my partner had need of it for business which could not be put off, and I had need of it only for business which could easily be put off, I ought to allow my partner to use it, upon condition that I should use it another day when it was his turn. The laws of fraternity and of friendship which ought to exist among partners require this.

It is also one of the obligations which arise from the contract of partnership, that each of the partners is obliged to contribute to the repair and preservation of the common property. They may, nevertheless, discharge themselves therefrom by offering to abandon it. See what has been said suprà, n. 86.

Lastly, one of the principal obligations which each partner contracts by the contract of partnership, is to submit to the distribution of the partnership effects at the termination and dissolution of the partnership. We shall treat of that distribution infrà, in the ninth chapter.

Fourth Article.

Of the Action Pro Socio.

134. From the obligations which arise out of the contract of

H

partnership arises the action pro socio, which each of the partners can maintain against his copartners, in order to compel their fulfilment.

This is a personal action: it passes to the heirs and other universal successors of each of the partners, who can maintain that action; and it may be brought against the heirs and other universal successors of the partners, who are bound by it.

We have seen in the preceding articles who were the objects of that action.

135. That action, with regard to its principal object, namely, the distribution of the capital of the partnership, can only be maintained from the time of the dissolution of the partnership; and it is of that the law says, Actione societas solvitur.

It can be maintained, with regard to particular objects, during the time that the partnership lasts, for instance, against such one of the partners who retains all the profits of the partnership, to make him share it with the others,

135 The proceedings in Equity in partnership' matters are in many respects similar to those under the action pro socio. Stor. Partn. 324. note.

In the first place every application to a Court of Equity by one of the partners for an account against his copartners, must be inade either on a dissolution having already taken place, or upon grounds sufficient for demanding the dissolution of the partnership, and consequently of the distribution of the partnership effects. Stor. Partn. 325.; Coll. Partn. 174. 193.

But a Court of Equity will interfere during the continuance of the partnership, for particular purposes, not contemplating a dissolution or distribution of the effects. It will, for instance, decree the specific performance of an agreement to enter into a partnership for a fixed and definite term (Anon. 2 Ves. 629.; Buxton v. Lister, 3 Atk. 385.; England v. Curling, 8 Beav. 129.); but it will not where no term has been fixed, for such decree would be useless, as either of the parties might dissolve the partnership immediately afterwards. Hercy v. Birch, 9 Ves. 357. It has, however, been suggested by Mr. Swanston, in his learned note to Crawshay v. Maule, 1 Swanst. 513., that in many cases, although the partnership could be immediately dissolved, the performance of the agreement, like the execution of a lease, after the expiration of the term (Nisbett v. Meyer, 1 Swanst. 226.), might be important as investing the party with the legal rights for which he contracted. But even where there has been an agreement for a partnership for a fixed and definite term, the Court cannot enforce it, when the amount of capital, and the manner in which it is to be provided, is undefined, and the mode of carrying on the business is discretionary. Downs v. Collins, 6 Hare, 437.

1. 65. § 15. ff. Pro Soc. (Dig. lib. xvii. tit. 2 . 1. 65. § 15.); and that he may be compelled, for that purpose, to give a short statement of the accounts, as also to allow the enjoyment of the common property, and to contribute to necessary repairs.

136. It is peculiar to the action pro socio, whether it be commenced during the partnership or after its dissolution, that each of the parties, whether the plaintiff or one of the defendants, has a right to demand that the cause and the parties should be sent before arbitrators, to settle all the disputes with regard to the accounts and the distribution of the partnership effects, and generally with regard to all the objects of that action.

For this end, the Ordonnance of 1673, tit. 4. art. 9., provides that all contracts of partnership should contain the clause of submission to arbitration upon all disputes which may arise amongst partners on account of the partnership, and that where that clause has been omitted, it should be supplied.

These arbitrators must be agreed upon, and named by the parties; and in default of one naming them, the Judge will name one for him. Ordonnance of 1673, ibid.

If, before the arbitrators have given their award, one of the arbitrators happens to die, the Ordonnance provides that the party who has named him shall name another in his place, or the Judge, on his refusal. (Art. 10.)

137. When the arbitrators do not agree, they can, without

137 Every dispute between partners on account of the partnership, shall be adjudicated upon by arbitrators. Com. Cod. of France, 51.

There shall be an appeal from the judgment of the arbitrators, or (au pourvoi en cassation) it shall be reviewed by the Court of Cassation, unless there has been a stipulation to the contrary. The appeal shall be heard before the Cour Royale. Ib. 52.

The arbitrators are nominated by an act under private signature; by a notarial act; by an extrajudicial act; by a consent given in a Court of Justice. Ib. 53.

The time for the award is fixed by the parties at the time of the nomination of arbitrators; and if they do not agree as to the time, it shall be fixed by the Judges.

Ib. 54.

In case of the refusal of one or more of the partners to nominate arbitrators, the arbitrators shall be nominated by the Tribunal of Commerce. Ib. 55.

the consent of the partners, take a third; and if they cannot agree in their choice, the Judge will name one. (Art. 11.)

The arbitrators can give their judgment on the documents and (memoires) written statements or pleadings of the parties in their absence. (Art. 12.)

These sentences ought to be (homologueés) registered at the consulate, when the partnership is a trading or banking partnership; if not in the ordinary jurisdiction. (Art. 3.)

The parties produce their documents and memoranda, without any legal formalities, to the arbitrators. Ib. 56.

The partner who delays to produce the documents and memoranda, shall be summoned to do so within ten days. Ib. 57.

The arbitrators, according to the exigency of the case, can extend the time for the production of documents. Ib. 58.

If the time be not extended, or if the extended time have expired, the arbitrators adjudicate upon the documents and memoranda produced. Ib. 59.

In cases of distribution (of the partnership effects) the arbitrators nominate an umpire, if he has not been nominated by compromise. If the arbitrators cannot agree in their choice, the umpire is to be nominated by the Tribunal of Commerce. Ib. 60.

The adjudication of the arbitrators must (motivé) set forth its grounds. It must be deposited with the registrar of the Tribunal of Commerce. It is rendered executory without any modification, and transcribed in the registers, by virtue of an order of the president of the Tribunal, who is bound to issue it, without any reserve, within three days from the deposit with the registrar. Ib. 61.

The above-mentioned provisions are applicable to the widows, heirs, or assigns of partners. Ib. 62.

If minors are interested in a dispute on account of a commercial partnership, the tutor cannot renounce the right of appeal from the award of the arbitrators. Ib. 63.

In England a Court of Equity will not decree specific performance of a covenant to refer disputes to arbitration (Price v. Williams, cited 6 Ves. 818.; Street v. Rigby, 6 Ves. 818.; Wilks v. Davis, 3 Mer. 507.); and a plea of an agreement to refer to arbitration would not constitute a valid objection to a bill, either for discovery or relief (Wellington v. Mackintosh, 2 Atk. 569.; Street v. Rigby, 6 Ves. 815., overruling Halfhide v. Fenning, 2 Bro. C. C. 336.); nor will the Court substitute the Master for the arbitrators; "for this," observed Sir J. Leach, M. R., "would be to bind the partners contrary to their agreement." Agar v. Macklew, 2 S. & S. 418.

It seems to be doubtful how far an action will lie at law for breach of such a covenant (Kill v. Hollister, 1 Wils. 129.), or, at any rate, how other than nominal damages can be obtained (2 Bos. & Pull. 136.). Covenants, however, to refer to arbitration may be made effectual by naming a sum as liquidated damages, to be paid by the party refusing to submit to arbitration. Street v. Rigby, 6 Ves. 818.; Astley v. Weldon, 2 Bos, & Pull. 346.

EIGHTH CHAPTER.

The different Modes in which a Partnership is dissolved. 138. A PARTNERSHIP is dissolved in the following ways: 1. The expiration of the time for which it has been contracted; 2. The extinction of the thing or the completion of the business which constituted the object of the partnership; 3. The death natural or civil of one of the partners; his insolvency; 4. lastly, The wish of being no longer in the partnership.

138

§ I. As to the Expiration of the Time.

139. When the partnership has been contracted for a Partnership is dissolved,

1st. By the expiration of the time for which it was contracted.

2nd. By the extinction of the object, or the completion of the business.

3rd. By the natural death of one of the partners.

4th. By the civil death, interdiction, or embarrassment of one of them.

5th. By the desire expressed by one only, or more of them, no longer to continue in partnership. Civ. Cod. of France, 1865.

139 The prolongation of a partnership for a limited time can only be proved by writing accompanied by the same formalities as the contract of partnership. Civ. Cod. of France, 1866.

As to the formalities requisite in commercial partnerships, see Comm. Cod. of France, 46. 49.

According to our law a partnership for a limited time terminates at the expiration of that time. It is not, however, necessary, as in the French law, if the partners are desirous of continuing the partnership, though it may be advisable, to signify their intention of prolonging it by any instrument or writing, executed with the same formalities as the original contract. The question, however, arises, when parties carry on the partnership business after the expiration of the time for which it was contracted, upon what terms is it to be considered as carried on? It has been decided that a presumption arises, in the absence of all acts and circumstances to vary and control it, that it is intended to be a new partnership upon the same terms as the original partnership, but for an indefinite period, and therefore determinable immediately at the will of any of the partners, although under the original partnership contract, notice of a dissolution was requisite; and the mere fact of there being unexpired leases of the premises, or contracts subsisting with workmen or others, is no sufficient ground for any presumption that the new partnership is intended to last either until the expiration of the leases or the completion of the contracts Featherstonhaugh v. Fenwick, 17 Ves. 299. 307.