settlement, Gainsborough, one of the partners, died. A bill was then filed by his executor against Stork, the surviving partner, for an account of the partnership dealings, to which the defendant submitted; insisting, however, that in taking the account he ought not to be bound to take the foreign outstanding debts which accrued since the time of the last account to the time of the testator's death, and at most not till those debts should happen to be got in. But Lord Hardwicke was not of that opinion. After observing, that it was very manifest that the intention of the parties was, that their representatives should not be entangled in their accounts after their decease, his Lordship stated it to be his opinion, that, by the plain construction of this indorsement, it only extended to such foreign debts as should be contained in the last-stated account before the death of one of the partners. The indorsement recited the articles, and by those articles only such foreign debts were included as did exist before the last-stated accounts previous to the death of one of the partners. The words relied upon by the counsel for the defendant were, which at such death were due; and from thence it was inferred, that all foreign debts were included which were outstanding at the time of such death. It was indeed true, that, if these words had stood by themselves, they would have included all the foreign debts which were outstanding at the time of such death; but as the indorsement had a reference to the articles, wherein only such foreign debts were included which were outstanding at the time of the last-stated account previous to the death of the partners, these words in it must be construed secundum subjectam materiam.

II. 2. But, secondly, in the construction of partnership articles, it will be necessary to bear in mind three important observations made at different times by Lord Eldon: they are these

1. Partnerships are regulated either by the express contract, or by the contract implied by law from the relation of the parties. The duties and obligations arising from that relation are regulated, as far as they are touched, by the express contract: if it does not reach all those duties and obligations, they are implied and enforced by the law (a).

(a) 15 Ves. 226.

2. Partnership articles are read in a Court of equity as not containing the clauses on which the parties have not acted (a).

3. The transactions of partners are always to be looked at in order that you may determine between them, even against the written articles, what clauses in those articles will not bind them, provided those transactions afford a higher probability, amounting almost to demonstration (b).

And again, in ordinary partnerships, nothing is more clear than this, that although partners enter into a written agreement, stating the terms on which the joint concern is to be carried on, yet, if there be a long course of dealing, or a course of dealing not long, but still so long as to demonstrate that they have all agreed to change the terms of the original written agreement, they may be held to have changed those terms by conduct. For instance, if in a common partnership, the parties agree that no one of them shall draw or accept a bill of exchange in his own name, without the concurrence of all the others, yet, if they afterwards slide into a habit of permitting one of them to draw or accept bills, without the concurrence of the others, a Court of equity will hold that they have varied the terms of the original agreement in that respect (c).

II. 3. The words of covenant at the commencement of a partnership deed, which are usually several as well as joint, and usually extend to all the succeeding stipulations, will be considered in a future section. The more important stipulations have generally reference to the

Nature of the business.-In order to warrant the extension of a partnership to a business, or branch of business not originally contemplated by the parties, the unanimous consent of all the partners is requisite; for it is competent to any individual member of a firm to insist, that the business of the partnership shall be confined to the objects for which it was constituted. And, therefore, Lord Eldon decided, that a joint stock company, formed for the purpose of effecting fire and life insurances, could not, without the consent of all the shareholders, (of whom the plaintiff was one), be extended to marine insurances; his Lordship remarking, that "the Court will restrain particular

(a) 1 Swanst. 469.

(b) 2 Bligh, 297. But see Smith

v. Duke of Chandos, Barnard. 419. (c) Turn. & Russ. 523.

members from engaging other members in projects in which they have not consented to be engaged, or the engaging in which they have not encouraged, assented to, empowered, or acquiesced in, expressly or tacitly, so as to make it not equitable that they should seek to constrain them (a).”

Time of commencement.—Where no time is mentioned for the commencement of a partnership, it will begin from the date of the articles; and at law, parol evidence cannot be received to shew that it was intended to commence at a future period. In a late case this rule was adhered to, although the consequence was to defeat the deed by rendering the partnership illegal (b).

Term of partnership.—Although a precise term be fixed, the partnership will be dissolved, unless there be a stipulation to the contrary, by the death of any of the parties (c). The mode of providing for the continuation of the partnership, notwithstanding the death of any of the parties, will be considered hereafter (d).

Where a partnership for a term is dissolved by effluxion of time, and afterwards the partners continue the business as usual without any new agreement, the latter partnership is a partnership at will. Where, therefore, A. and B. had been in partnership under articles requiring twelve months' notice of dissolution, and the partnership expired by effluxion of time, and the parties continued to trade as before, this latter partnership was held to be dissoluble instanter at the will of either party (e).

But where a partnership is prolonged under the circumstances just mentioned, all the covenants of the old partnership, with the exception of that for duration, are infused into the transactions of the new partnership (f), and even a covenant for duration for the same length as the former partnership may be implied from circumstances. Thus in a case where the term limited by the articles for the continuance of a partnership expired, and one of the partners resident in America being desirous of renewing the connexion, transmitted to his copartner

(a) Natusch v. Irving, Gow, Partn. Appen. 407. See ante, p. 129. (b) Williams v. Jones, 5 B. & C.

108.

(c) Ante, p. 74.

(d) Post, p. 147.

(e) Featherstonhaugh v. Fenwick, 17 Ves. 298.

(f) Per Sir A. Hart, 1 Molloy, 466.

in London the articles, with an indorsement of the renewal of them for a similar term, and the copartner continued to discharge his former duties as a copartner without any charges for commission, but never sent any formal renewal of the articles; it was held in America that the partnership continued for the term stated in the indorsement, and was not determinable at any time, at the will of either of the parties (a).

Style of firm.-Where the members of a partnership contract by covenant, that the firm shall be A., B., C., and D., it is a breach of that covenant for A. to sign those instruments to which the covenant refers in the name of A. & Co. So, also, strictly speaking, it is no less a breach of that covenant for D. to sign his own name, adding "for self and partners (b)."

Shares to be advanced.-If any share is to be advanced by instalments, this is debitum in præsenti solvendum in futuro; and therefore the partner admitted upon these terms is a debtor to the partnership for the unpaid instalments. In a case, where a sole trader agreed, in consideration of a sum payable by instalments, to take two persons into partnership with him for a term of eighteen years, and became bankrupt five months after the commencement of the partnership, when only one instalment was due; it was nevertheless held, that the two persons having bought the right of becoming partners, and having received the consideration for their money, the bankrupt's assignees were entitled, at the respective periods, to receive the whole of the remaining instalments (c).

Several rights in real property, &c.-Where there is real property, fixtures, &c., it is sometimes covenanted, that each party shall have a several right therein. It may be observed, that, upon the bankruptcy of the firm, the several interests in the real property so circumstanced will be distributable to the separate creditors of each partner respectively (d).

Profits to be distributed.-The profits are usually proportioned to the shares. But where an agreement constituting a partnership is silent as to the amount of the shares of the respective parties, it seems to be the rule in England, to consider them as entitled to the profits equally (e).

Personal duties of partners.-Under this head may be classed the various duties of partners, which are usually contained in the articles, but which necessarily arise from their connexion; such as the employing themselves diligently, being faithful to each other, the not borrowing money on the partnership account, &c.

And here it may be remarked, that Courts of equity cannot in general, from the nature of the subject, compel the performance of such of these duties as are of a positive nature, and must, therefore, in case of the breach of any of them, leave the parties to their remedy at law. But Courts of equity will interfere by injunction to restrain the breach of negative duties between partners, even in cases where, if the relation of partners did not exist, they might refuse to interfere on the principle of not giving partial relief (a).

It seems scarcely necessary to remark, that the implied obligations between partners are so strong, that no inference can be raised in favour of payment of a salary to any partner for the discharge of his duties (b).

Keeping of proper books, &c.—It is usually not only provided, that proper books of account shall be kept, but that they shall be open to the inspection of all the partners. This, like many other of the rights declared by the articles, is no more than the legal right of a partner in all cases. If a partner receives monies, and does not enter the receipts in the books, or if he does not have them open to the inspection of the partners, it is a ground of serious complaint (c).

Not exercising the same trade on separate account.-In partnership engagements, a covenant that the partners shall not carry on for their private benefit that particular commercial concern in which they are jointly engaged, is not only permitted, but is the constant course (d). But a covenant not to practise on the partner's separate account does not extend to prevent him from canvassing for future business (e).

If several persons enter into partnership, under a stipula

(a) Kemble v. Kean, 6 Sim. 335; Kimberley v. Jennings, Id. 340.

(b) Franklin v. Robinson, 1 Johns. Ch. R. 157. See ante, p. 130.

(c) Per Lord Eldon, 1 Jac. & W. 593.

(d) Morris v. Colman, 18 Ves. 438; Universities of Oxford & Cambridge v. Richardson, 6 Ves. 706.

(e) Coates v. Coates, Madd.. & Geld. 287.