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other way, it would seem that a new firm is created. But a provision or agreement that the death of a partner shall not operate as a dissolution prevents its having that effect and the original firm is continued as such, and does not exist as a new firm. The agreement for continuance, especially in case of the death of a partner, must be express, clear, and certain in its terms. Such an agreement cannot be established by inference merely.""

In the absence of a previous agreement for continuance, a provision in a testator's will that the partnership shall be continued after his death will not effect a continuance, without the consent of the other partners both to the continuance and to the substitution of the executor as partner and the consent of the executor himself." A provision in the articles, or an agreement between the partners, that in the death of one of them his executor or personal representative, or some other person, shall be entitled to the place of a deceased partner in the firm, with the capital of the deceased partner in the firm business, or some part of it, binds the surviving partner to admit the executor, or other personal representative, or the nominee of the deceased partner, but does not bind the latter to come in. He has an option to come in or not, and a reasonable time within which to elect. If he come in, he comes in as a partner, with all the rights and liabilities of a partner, and becomes personally liable for debts contracted in the business. The reason of the personal liability thus imposed upon him is that he has of his own volition engaged in the business as a principal, and is a contracting party. If he act in compliance with the testator's directions, he will be entitled to indemnity out of the estate of the latter to the extent of the fund embarked by him in the business, and no further.

On the other hand, a stipulation in partnership articles, that upon the death of a partner his capital shall remain in the business until the expiration of the prescribed term of

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6711 S. & R. (Pa.) 41 (1824); 115 N. Y. 328 (1889).

68 77 Mo. 594 (1883).

69 77 Mo. 594 (1883); 89 N. Y. 619 (1882); 48

N. J. Law 129 (1886).

the partnership, is binding as well upon the estate of the deceased as upon the surviving partner. Under such a provision, the executor is not admitted into the management of the business. The control of the business is with the surviving partner. The executor cannot withdraw the capital of the deceased partner without subjecting the estate to liability to suit, nor can he exercise the control of a partner in the conduct of the business. In this situation, none of the reasons for the liability of a partner exist as against him. Consequently, where by the articles of partnership, or agreement, a new member is brought into the firm on the death of a partner, as, for example, an executor or trustee, firm creditors, becoming such after the partner's death, have the personal liability of the admitted member of the firm as an additional security; but, where by the articles or agreement the capital only of the deceased partner is continued in the firm without any partner being added, such creditors have only the liability of the surviving partner, by whom the business is carried on, and the security of that part of the estate of the deceased partner which is left in the business."°

A testator may render his whole estate liable for the payment of firm debts contracted after his decease in the continuance of the partnership business; but, unless he do so clearly and explicitly, and in such a manner as to exclude any other reasonable inference, he will be deemed not to have intended such a result. A mere power to carry on the testator's trade, or to continue his business in a firm of which he was a partner, without anything more, will be construed as an authority simply to carry on the trade or business with the fund already invested in it at the time of the testator's death, and to subject that fund only to the hazards of the trade, and not the general assets of the estate. The property already embarked in the business is the trade fund, unless it appear from the will that the executor was authorized to use the general assets in the business." In the absence of express provisions, authority to an executor to

70 48 N. J. Law 129 (1886).

71 115 N. Y. 328 (1889).

continue in a partnership entitles him to continue only upon the same terms and with the same partners as before;" and will not enable him to engage in business without the scope of the partnership, though such business were carried on during the lifetime of the testator." A provision that the executor shall continue a specifically designated existing interest in the firm does not authorize him to use, in the business, any other funds of the estate, nor to use any property which he may receive in his official character, to raise funds for that purpose." But it does authorize, him to continue it by means of the property, capital, stock, and effects which were embarked and employed therein at the time of the death of the testator. That part of the testator's property, both real and personal, which is engaged in the business and which is reasonably and fairly necessary to the full accomplishment of his scheme, must be understood as intended when he speaks of the continuance of the business and of his interest in the firm."

In every case of the continuance of a partnership after death, third persons having notice of the death are bound to inquire how far the agreement or authority to continue it extends, and what funds it binds; and, if they trust the surviving party, or the executor, beyond the reach of such agreement, authority, or fund, it is their own fault, and they have no right to complain that the law does not afford them any satisfactory redress." The executor must account for his share of the profits of the business as assets of the estate." Where an executor is directed to continue in the partnership business, and the beneficial interest in that portion of the estate is given to one for life, with remainder to others, the beneficiary for life is entitled to receive all the testator's share of the profits for those years in which profits are made, without liability to contribute to the restoration of capital impaired by losses in other years."

72 101 U. S. 320 (1879). 7383 N. Y. 51 (1880).

74 101 U. S. 320 (1879).

75 38 N. J. Eq. 266 (1884).

762 How. (U. S.) 560 (1844).

77 15 Ohio St. 251 (1864).
78 26 Ch. Div. (Eng.) 672 (1884).

A court of equity may direct the continuance of the business of a firm after the death of a partner for the benefit of his children, if the surviving partners consent," but this will render liable for subsequent debts only that part of the estate actually embarked in the partnership."

7. Effect of Dissolution. - The dissolution of a partnership at once revokes the implied authority of each partner to act as agent for the firm and for his copartners, and to incur liability on behalf of the firm, except so far as may be necessary to wind up its affairs. They are no longer partners, but merely tenants in common of the partnership property." Besides, dissolution revokes express authority given to a partner to do certain specified acts on behalf of the partnership, as it does the authority of any other agent." An authority by a firm carries with it an implied limitation of its existence, its duration being necessarily confined to the continuance of the partnership by which it was created. There is, in this respect, no difference between a power granted by the firm to a partner and one granted to a third person. When the firm is dissolved, the power is as effectually revoked as it is by the death of a person who has created an agency for the transaction of any kind of business.

A dissolution does not, however, immediately put an end to the existence of the partnership and the prosecution of its business. From the nature of the transactions of men, and from the uncertainty of the time when one may die, or the partnership be dissolved in some other way, contracts may be made, and engagements entered into, which are not complied with at the dissolution; and for the purpose of making good those engagements, the partnership must have a legal continuance, though determined for any other purpose, as between the partners."* But under what particular

circumstances, and by what particular engagement, it will be

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so continued, and to what effect, even after the death of one partner, is not easy to define.

The rights of the partners as to matters previously occurring are not affected by a dissolution, unless there be an express agreement to that effect; and their liabilities to third parties in respect of such matters cannot be affected, even by agreement among themselves, though such an agreement may create a right to reimbursement from the other partners. As a general rule, a surety to or for a firm undertakes to be responsible to or for it only so long as its membership remains the same;" and, consequently, any change in the membership, whether by death, withdrawal, or the addition of a new partner, puts an end to the obligation of the surety, and will not be responsible for subsequent acts or liabilities." But a mere change in the firm name will not discharge a surety; and, if it appear from the contract of suretyship that subsequent changes in the firm were contemplated by the parties, the surety will remain liable during the period specified by the contract, in spite of changes in the firm membership."

Where one partner sells his entire interest to another, the sale extinguishes all claims between the seller and the firm, but does not affect any individual claims between the partners." Where one partner sells his interest to the remaining partner or to the firm, if there be more than two partners, the purchaser usually assumes the indebtedness of the firm, that is, promises to pay it. Such a promise need not be in writing." The parties occupy the relation of principal and surety, the purchaser being the principal, and the seller the surety, and the former is bound to indemnify the latter for any liability of the firm that he may be called upon to pay." Where a partner sells his interest to a stranger, who is admitted into the firm, and the seller occupies the relation of a surety for the firm debts to the extent of the assets, the

84 17 Ill. 565 (1856).

85 11 U. C., C. P. 208 (1862).

86 70 Mo. 524 (1879); 10 B. & C. (Eng.) 122

(1829).

87 111 Ind. 272 (1887); 55 N. Y. 270 (1873).

88 77 Pa. 143 (1874).

895 N. J. Eq. 477 (1846).

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