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ance in his hands, from the time the business might have been settled up. Partners are also liable to interest on the sums taken out of the partnership funds." And a partner is entitled to interest on advances to the firm, in the absence of an express agreement to that effect, when it can be collected from the circumstances, or from the usage between the parties, that there ought to be or was intended to be, such a computation of interest.' But where one partner agrees to furnish capital and the other personal services, and each is to receive a definite proportion of the profits of the business, the one furnishing the capital is not entitled to interest on it in the settlement of the partnership matters."

Mr. Lindley observes that the principles upon which interest is allowed or disallowed in taking partnership accounts do not appear well settled. In some cases it has been held that the period of the dissolution is the proper time to make a rest for this purpose."

On this question Judge Story says: "Interest is not allowed upon partnership accounts, generally, until after a balance is struck after a settlement between the partners, unless the parties have otherwise agreed or acted in their partnership concerns."1

But Sanford, V. C., in Beacham v. Eckford,' reviewed all the authorities bearing on the question, and after a full consideration of it came to the conclusion that there is no general rule relating to it, but that the allowance or refusal of interest must depend upon the circumstances of each particular case. And Judge Sharswood, in Gyger's Appeal," adopted the same doctrine, in view of the confidential relation of the parties and the variety and complication of such accounts. 10

Costs.

SEC. 352. With regard to costs, the general rule is that the party, against whom the balance is reported, is prima facie the person to pay them. It has even been laid down that the plaintiff always pays costs where an account turns against him." But Mr. Beames observes, that this passage expresses the rule too largely, for that, although

1 Hite v. Hite, 1 B. Monr. (Ky.) 177. 2 Gridly v. Connor, 2 La. An. 87; see, also, 1 Johns. Ch. (N. Y.) 467.

3 Morris v. Allen, 14 N. J. Eq. 44; see, also, Harvey v. Varney, 104 Mass. 436, as to presumptions against a partner under certain circumstances.

4 Tuft v. Land, 50 Ga. 339.

51 Lind. on Part. 649.

6 Stoughton v. Lynch, 2 Johns. Ch.

209; Hollister v. Barkley, 11 N. H. 501. 'Dexter v. Arnold, 3 Mas. (U. S. C. C.)

289.

82 Sandf. Ch. (N. Y.) 116.

962 Penn. St. 73.

10 See, also, S. C., 1 Am. Rep. 382; Pond v. Clark, 24 Conn. 384; Miller v. Lord, 11 Pick. (Mass.) 11; Dougheller v. Van Nostrand, 1 Hoffm. Ch. (N. Y.) 69. 118 Bro. P. C. 361; 11 Ves. 458.

costs usually follow the event of an account, yet it has been decided by the highest authority that, where the account is intricate and doubtful, there should be no costs; and this remark seems applicable to partnership accounts. And even where a bill filed by a partner for an account is dismissed on a point of law which was previously doubtful, it may possibly be dismissed without costs, if he was morally justified in proceeding. In Sumner v. Powell, the executor of a deceased partner had received from the survivors a joint covenant of indemnity from the partnership debts. Having afterward been compelled to pay partnership debts, he brought his bill for an account and repayment against one of the other partners, the rest having become bankrupt; it was held that, having disposed of his original equity against the firm, he had no equity against this partner severally, the covenant being joint and not several, but the bill was dismissed, without costs.

It is the usual course of the court, where mutual account is decreed, to reserve costs till after the report; but, where a partner is guilty of fraud, or of excluding his copartners from a due proportion of the profits by means of a secret agreement, costs may be decreed against him up to the hearing, and the subsequent costs may be reserved.*

1 Beames on Costs, 12.

22 Mer. 30; and see Jacobsen v. Hennekenius, 5 Bro. P. C. 488.

3 Beames, 12; 8 Bro. P. C. 360.
41 Sim. 63.

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SEC. 358.

Of the rule not to interfere in matters of internal regulation.

SEC. 359.

Injunction and dissolution-instances in which injunction will be granted.

SEC. 360. Partner seeking to restrain must show willingness himself to conform to the provisions of the contract.

SEC. 361. Equity will restrain one from holding out another as his partner against his will.

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SEC. 363.

SEC. 364.

Real or threatened breach of contract must be alleged.
Instances in which equity will restrain.

SEC. 365.

SEC. 366.

Rule in Goodman v. Whitcomb.

Injunction when there are no grounds of dissolution. SEC. 367. Rule in Williams v. Williams.

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SEC. 353. Although, as we have already seen, a court of equity will not interfere to restrain the violation of a particular covenant between partners, yet, where one party has committed such breaches of duty as would warrant a decree for a dissolution, the court will relieve against the future acts of the offender by injunction. Thus, where one partner has involved the partnership in debt, or has himself become insolvent, the court will restrain him from drawing, accepting, and indorsing bills in the name of the firm, and from receiving the partnership debts. So, it will restrain an action

1 Williams v. Bingley, 2 Vern. 278, Mr. Raithby's note; Master v. Kirton, 3 Ves. 74; Lawson v. Morgan, 1 Price, 303; Hood v. Aston, 1 Russ. 412; and see Seaton on Decrees, 306. In Williams v. Bingley, the bill prayed for an

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injunction and dissolution. On motion for a special injunction, “ upon hearing the said affidavit, and the six clerks' certificate, his Lordship doth order that an injunction be awarded to restrain the defendant, Thomas Bingley, from nego

brought by one partner against his copartner, on a separate and private account, upon payment by the latter of the money due into court. So, it will restrain the overbearing and oppression of one partner, or the application of partnership property to a use not warranted by the articles, or an execution against the partnership property for the separate debt of one partner.

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Will enjoin negotiation of bills, when.

SEC. 354. The mere circumstance that a partner gives a partnership bill for his separate debt may or may not lay a ground for the issuing of an injunction against its negotiation, for the person who takes it may or may not have some reason for supposing that his debtor had a right or authority so to use the partnership name. But where it appears that an individual partner, indebted to the partnership, being unable to pay his separate bill holden by his bankers, substitutes for it by a negotiation with them a partnership security, made and

tiating or accepting any bill of exchange or promissory note, except for partnership purposes, or doing any thing in the name and firm of the partnership, except for partnership purposes; and from receiving and applying any money belonging to the said copartnership, except for partnership purposes, until the said defendant shall fully answer the plaintiff's bill, and this court make an order to the contrary." R. L. 1805, B. 51. It is believed that this suit was afterward compromised. The usual form of the order is simply," that the defendant be restrained from entering into any contract or contracts, and from accepting, etc., any bills, etc., in the name of the copartnership." Seaton, 308. Where there has been collusion between a partner and a third person, an injunction may be awarded against the latter also. See Jervis v. White, 7 Ves. 412. In Master v. Kirton, one N, a debtor of the firm, had colluded with the defendant K. The bill prayed for an injunction against the debtor, to restrain him from paying, and against the defendant K, to restrain him from receiving the money. On motion for the injunction it was stated that since the coming in of the answers the partnership between the plaintiff and the defendant JK had been dissolved, and a deed of dissolution had been executed by all parties thereto, and the defendant K had assigned over his interest in the partnership stocks, deeds, moneys, securities, and effects, to the plaintiffs; and the plaintiffs, by virtue of the power

contained in the assignment from the said defendant J K, had commenced an action against the defendant J N on the said bonds, in the name of the defendant J K, which action had been tried and a verdict obtained therein against the defendant J N. It was, therefore, prayed "that an injunction may be awarded, to restrain the defendant J N from paying to the said J K the moneys now due and owing from him upon and by virtue of the several bonds bearing date, etc., for securing the two several sums of, etc., and interest, or any part thereof, and that the defendant JK may in like manner be restrained from receiving the same, or any part thereof, and also from releasing or discharging the said J N from the payment thereof, or from the action commenced by the said plaintiffs in his Majesty's Court of King's Bench, in the name of the said defendant JK, against the said defendant J N, or the judgment to be obtained in such action, or any execution or executions, or other proceedings to be had or taken therein by the said plaintiffs in the name of the said defendant J K, against the said defendant JN," and it was ordered accordingly. R. L. 1796, B. 428.

1 Gold v. Canham, 2 Swanst. 325. 2 Charlton v. Poulter, 1 Ves. 429; 19 Ves. 148.

3 Glassington v. Thwaites, 1 Sim. & Stu. 124.

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Taylor v. Field, 4 Ves. 396; Bevan v. Lewis, 1 Sim. 376.

given without the consent or knowledge of his copartners, and the bankers are aware that it is so given without their consent or knowledge, that is a case which comes within the principle upon which the court has always been in the habit of interfering by injunction. Accordingly, in one case, an injunction was granted ex parte, to restrain the negotiation of a bill of exchange by a holder who had given valuable consideration for it, but who had notice that it had been improperly accepted by a partner of the plaintiffs in the partnership name. And in another case, where the holder took the bill after the plaintiff's partner had obtained an injunction, but before the order was drawn up, the court not only extended the injunction to the holder, but ordered the security to be deposited with the Master, and it was afterward canceled by consent.'

When partnership has been dissolved.

SEC. 355. Where a partnership has been dissolved, and any of the quondam partners attempt to carry on the business for their own benefit, the court will interfere by injunction. And if an account has been finally settled between the parties, and one partner is indemnified by the other from the debts of the copartnership, then, if the indemnified partner be afterward compelled to pay a partnership debt, he may retain money of the other partner of an equal amount, subsequently coming into his hands, although such money be paid on the separate account of the other partner. Hence, upon payment of the money into court, he may obtain an injunction to restrain all proceedings at law by the other partner to recover the money so retained."

When a stranger purchases the interest of one partner in a firm, the firm is thereby ipso facto dissolved, and the destruction of the partnership in that way does not invest the remaining partner with the rights of surviving partner, and a court of equity will, upon application of the purchaser, alleging improper conduct on the part of the remaining partner, appoint a receiver and enjoin the remaining partner from collecting the debts due the company or otherwise disposing of the partnership effects, and if the defendant demurs to the bill, or moves to dissolve the injunction, the allegations of the bill are to be taken to be true.'

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'Per Lord Eldon, 1 Russ. 415.

2 Hood v. Aston, 1 Russ. 412.

3 Jervis v. White, 7 Ves. 413.

4 De Tastet v. Bordenave, Jac. 516.

5 Gold v. Canham, 1 Ca. Ch. 311; 2

Swanst. 325; Fran. Max. 36.

Ballard v. Collison, 4 W. Va. 32; Martin v. Van Schaick, 4 Paige's Ch. (N. Y.) 479; Wolbert v. Harris, 3 N. J. Eq. 605.

'Peatross v. McLaughlin, 6 Gratt. (Va.)64; McClelland v. Kincaid, id. 352,

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