South Carolina a partnership creditor has a right to resort either to the partnership property or to the separate property of the partners. He has two funds, and may be compelled by the separate creditors of one of the partners to exhaust the partnership property before he proceeds against that of the individual partner. But the private creditors of a partner have but one fund, and cannot go against the partnership funds beyond the debtor's interest in the balance left, after payment of the partnership debts. In Massachusetts the attachable interest of one of the copartners by a separate creditor is the surplus of the joint estate remaining, after discharging all joint demands upon it; and this necessity creates a preference in favour of the partnership creditors on the application of the partnership property. Upon a dissolution of the partnership each partner has a lien upon the partnership effects as well for his indemnity as for his proportion of the surplus. But creditors have no lien upon the partnership effects for their debts. To render the dissolution safe and effectual there must be due notice of it to the world (a).

solution.

Germany. The partnership is dissolved by the bankruptcy Causes of disof the partnership or of one of the partners, by the death of a partner unless otherwise provided by the contract, by mutual agreement, by the expiration of the time, or by notice of a partner where the time was not fixed. The notice for the dissolution of a partnership for an indefinite duration must be given at least six months before, unless it can be shown that important reasons prevented it. A dissolution may also be granted if it becomes impossible to carry on the business; if the partner has neglected his duties; if he abuses his right to sign for the firm; or misuses the partnership property for his private purposes, or if he becomes incapable of doing what devolves upon him to do. The private creditor of a partner may demand a dissolution of the partnership in order to enforce his claim on the share of the partner, but six months' notice must be given for the purpose. The dissolution of partnership must be enrolled in the register of commerce. A partner who retires from the firm is entitled to a prompt settlement of the affairs, and if that be impossible he may ask a yearly account of the transactions wound up. The retiring partner has no right

(a) Kent's Commentaries, vol. iii., p. 76, 8th ed.

Dissolution before the ap

Rights of liquidators.

to demand a share of the property in goods or other kind, but only an amount of money equivalent to the value of the same. Unless otherwise provided, the winding up of the partnership is entrusted to all the partners. If one of the partners is dead his heir must appoint a representative to act for him. On the request of the partners and for urgent reasons the judge may appoint a manager to wind up the estate. The partners must communicate the name of the liquidators to the Tribunal of Commerce. The retirement of a liquidator must also be communicated to the tribunal. Where there are several liquidators they must all join in all their acts. The liquidators have the right to realise the estate and to pay all claims, and they may sue and be sued on behalf of the partnership. Without the consent of all the partners real estates can only be sold by public auction. After the affairs have been wound up the books and papers of the partnership are left in the custody of one of the partners, or of a third person duly appointed by them. The partners and their executors have always the right to examine and use such books and papers (a).

Italy. The Sardinian Code provided that, in case of dispointed time. solution before the time appointed, the partnership is not considered as dissolved towards third persons till a month after the publication of such dissolution in the Gazette, though the partner may prove that before such month had elapsed the dissolution was known to the party. If the partners do not agree as to the parties who are to act as liquidators the nomination will be made by the tribunal, but till such nomination has been made the managing partners will proceed with it. All the books and papers are to be deposited with the liquidators. The liquidators cannot refer any dispute to arbitration unless specially authorised to do so. At the expiration of the term of the partnership, or at its dissolution, when the act has been inserted in the Gazette, the partners cease to be bound in solidum towards the creditors of the partnership, and each of the partners is only bound for the share of interest he had in the partnership, without prejudice notwithstanding to the action against the liquidating partner for all the undivided fund that he may still have. Where the debt becomes due after the dissolution of the partnership, the prescription

(a) German Code, §§ 123-145.

commences to run only from the day that the debt became due (a). The regulations of the civil code of the Two Sicilies are similar to those of the civil code of France (b).

solution.

solution.

Portugal.-If no term be fixed each partner may dissolve the partnership by giving notice. If the term is fixed the partnership can only be dissolved before its expiration by the unanimous consent of all the partners. A partnership Causes of disis deemed dissolved before the appointed time if it be proved that its continuance is impossible. The Court may order a dissolution on account of the misconduct of one of the partners, of betrayal of confidence, of the impossibility of carrying on the business, or in consequence of the dissolution promoted by the will of one partner. the will of one partner. The sale of the partnership effects for the private benefit of one of the partners may be a valid ground for dissolution. So the bankruptcy of one of the partners. The dissolution must be inserted in the public register, and published in the local gazette, and a circular conveying information of the fact must be sent to all the correspondents of the house. After dissolution the partners have no Effects of dismore power to bind each other. Unless by special agreement, or by an adverse vote of the majority of partners, the managing partners are intrusted with the winding up of the business. If the joint estate is not sufficient to pay all the debts, the liquidators have a right to ask and to obtain the requisite amount from each partner, according to his share. The private creditors of a partner cannot touch the partnership stock. They can only claim the amount of his share after the settlement of accounts. They are not even allowed to prove their debt against the firm. After the creditors of the firm have been paid, they may then bring forward their claim, except as regards privileged debts. When the same persons establish several partnerships under different firms, in distinct localities, and one of these partnerships fails, the creditors of this firm cannot proceed against the other firms which are solvent till after the creditors of these respective houses have been paid. If the same person is member of different partnerships, composed of different members, and in distinct places, and one of these houses fails, the creditors of such house have only a subsidiary right upon the share that such common partner possesses in the other houses. The re(a) Sardinian Code, §§ 57-68. (b) Two Sicilies' Civil Code, §§ 1720-1745.

Causes of dis solution.

spective creditors of each house must first be satisfied. After liquidation and division, in the want of any stipulation on the subject in deed of partnership, all books and papers are deposited with one of the partners nominated by a majority of votes, and by lot in case of difference of opinion, to be always within reach of the other partners or their heirs in case of need. They will remain with such partner for the whole time prescribed by law for the preservation of books (a).

Spain.-Partnership is dissolved by the expiration of the time or the attainment of the object for which it was constituted. By the entire loss of the capital. By the death of one of the partners, unless the deed provides for its continuation with his representative. By the insolvency of the partnership or of one of its partners. By the will of one of the partners when no time or object was specified, and by lunacy or other causes incapacitating one of the partners. Partnerships by shares are only dissolved by the expiration of the term, the attainment of the object, or the loss of the entire capital. A partnership is not compelled to continue after the expiration of the term. If the partners wish to continue they must have a new deed with the same formalities as the first. In a partnership for an unlimited time a dissolution cannot take place at the request of one partner without the consent of the other. The act of dissolution must be registered in the commercial register of the province. Unless otherwise provided by the deed, the managers of the partnership must act as liquidators for the winding up of the concern. But, if the partners wish it, two or more extra liquidators may be nominated by the majority of votes. The managers must within fifteen days of the dissolution draw up an inventory and balance-sheet. The division of the partnership fund may be made either by the liquidators or at a meeting of partners. If the partners object to the division, they must notify the same within fifteen days. No partner can demand any share of the partnership fund till all the debts are paid. Partners who have lent money to the partnership must be paid first, the same as creditors. The private property of the partners not invested in the partnership can only be attached for joint obligations after the partnership funds are exhausted (b).

(a) Portuguese Code, $$ 693--747.

(b) Spanish Code, §§ 329–352.

CHAPTER IV.

COMMANDITE PARTNERSHIPS.

TORY

TIONS.

As already stated, the English law does not provide for the INTRODUCformation of partnerships consisting of partners, some with a OBSERVAlimited, and some with an unlimited liability, on the principle of the commandite partnerships of France and other states. The English law allows limited liability to companies of seven members and upwards, but all the members have an equal liability whether limited or unlimited. Yet it is submitted that the combination of limited and unlimited liability is founded upon sound principles. It is just and reasonable that those who appear before the world as partners, who manage the affairs of the concern, and who, by their names or by their acts, either as directors or managers, whether of a private partnership or a public company, lead others to trust the firm, should be liable, to the full extent of their property, for any debts which that partnership or company may have contracted. But it seems also just and reasonable that a partner or shareholder who takes no part in the management, and whose name never appears, and who is not likely to deceive third parties in the belief that he is a partner in the concern, should be liable only for the amount he had invested in the concern. This union of limited and unlimited partners is the distinctive principle of commandite partnership, as contrasted with general partnerships called in French "Sociétés en nom collectif," and with companies with limited or unlimited liability in this country.

SECTION 1.

COMMANDITE IN PRIVATE PARTNERSHIPS.

FOREIGN LAWS.

commandite

France.-A partnership en commandite is contracted between What is a one or more partners called commandités responsible to the full partnership. extent of their property, and one or more partners called commanditaires or simple shareholders. Such a partnership is