Liability of partners for each other's acts. Private property of partners at any portion of it, for their private debt. They can only claim the share belonging to the partner after the settlement of accounts. The same regulations apply in case of mortgages possessed by creditors on the property of a partner. To the debt due to the partnership, the debtor cannot set off the private debt due to him by a partner (a). Holland. In partnerships in collective names, the partners are bound to the full extent of their property, for the engagements of the partnership. But in partnership not for commercial purposes, partners are not bound in solidum for their social debts (b). Portugal.-Every commercial partner is bound to the full extent of his property for partnership debts. The engagements of the partnership are binding upon all partners. The act of one partner is the act of all. Engagements contracted by a partner not authorised to act on behalf of the company, where the exclusion has been duly published in the deed, would not be binding on the firm, unless they have benefited thereby. A partner may bind the firm even for his own private expenditure, if he borrows in the name of the partnership, but he would not bind the firm for any object foreign to the business of the partnership. An obligation entered into by one of the partners beneficial to the partnership is held as a separate and conjoint obligation. So a bill of exchange drawn upon the firm, and accepted by one of the partners in his own name, is binding on the firm. When a partner draws a bill in the name of the firm for the payment of a debt, part owing by the firm and part by himself, the partnership is only bound to the extent of its own obligation. A bill drawn in the name of the firm by one of the partners, for a private obligation, or for purposes foreign to the business, does not bind the other partners. No partner can bind his co-partners by deed without special authority. Nor can a partner bind his co-partners by a submission to arbitration (c). Spain. The same law prevails as in Portugal. The private property of the partner not invested in the partnership can be tachable only attached for the payment of the obligations contracted by the partnership only after the joint estate of the partnership has been exhausted (d). after the joint estate is exhausted. (a) German Code, §§ 113-121. (c) Portuguese Code, §§ 663-692. (d) Spanish Code, § 352. of unlimited Switzerland: Canton of Lucerne.-In commercial partner- Presumption ships partners are always presumed to be bound in solidum for liability. the engagements of the partnership. Engagements contracted by the managing partners bind third parties towards the partnership, when such management has been entrusted to them by the deed of partnership. Persons who invest capital in a partnership, with a view to participate in the profits and losses, but who do not appear as partners, are only responsible for the sum they have invested. The partners whose names are included in the firm are all bound for all their property. In case of bankruptcy, creditors must first attach the joint capital of the partnership; if such capital is insufficient to satisfy these debts then they may attach the private property of the partners (a). SECTION XV. ARBITRATION CLAUSES. BRITISH LAW. clauses may be enforced. The deed of partnership generally contains a clause to the Arbitration effect that in case any difference shall arise between the parties, and they cannot agree, and determine the same between themselves, then the parties shall nominate and appoint two persons, one to be chosen by each, giving them power to determine such matters by their award in writing under their hands, and in case such persons cannot agree to determine the matter to them referred, within a specific time after the reference, that the same shall be referred to, and determined by, such other person as the two first referees shall for that purpose nominate and appoint umpire in the premises, who shall determine the same by writing under his hand, and the parties shall perform the award or arbitrament made by the arbitrators or their umpire without further trouble. suits to arbi When the deed of partnership contains such a clause to refer Clause to refer all future disputes to arbitration, if any of the partners commence tration. an action at law or a suit in equity against the other parties, the Court may, on application by the defendant, stay all such proceedings (b). (a) Law of 21 October, 1833, §§ 684 -687. (b) Aitken's Arbitration; 6 Week. Rep. 145. Cases of agreement. When arbitrator not appointed. Submission may be a rule of court. Negative clause illegal. Old French law. If, in any case of arbitration, the parties do not, after differences have arisen, concur in the appointment of an arbitrator, or if, where the parties or the arbitrators are at liberty to appoint an umpire, such parties or arbitrators do not appoint an umpire, in such cases the Court may after service proceed to appoint an arbitrator or umpire, with power to act in the reference and make an award as if it had been appointed by consent of all partners (a). When reference is to two arbitrators, one to be appointed by each party, and one party fails to appoint an arbitrator for seven days, the other party may appoint an arbitrator to act alone (b). Every agreement or submission in writing may be made a rule of court, unless a contrary intention appear (c). But although a clause to refer all future disputes to arbitration is now valid and may be enforced, a negative clause that neither party should bring an action before the arbitrator has made his answer is illegal, it being illegal, by any agreement between the parties, to withdraw the decision of the question from the determination of the ordinary tribunals of the country (d). FOREIGN LAWS. France.-The French code of commerce provided that every dispute among partners for causes connected with the partnership shall be settled by arbitration; but there was an appeal from the award unless there was a stipulation to the contrary. The appeal was before the royal court. The nomination of the arbitrators might be either by a private or by a notarial deed, by an extra-judicial act, or by the consent given in court. The time when the award was to be given was to be fixed by the parties when they nominated the arbitrators, and if they did not fix it, the same was to be fixed by the judges. In case of refusal by one or several of the partners to nominate the arbitrators, they were to be nominated officially by the Tribunal of Commerce. The parties were to deliver their papers and documents to the arbitrators without any formality of court; and any partner who delayed to deliver such papers was to be summoned to do so within ten days, (a) 17 & 18 Vict. c. 125, ss. 11--17. (d) Lee v. Page, Law Journal, Vol. 30, Ch. 857; Scott v. Avery, 8 Exch. 487; 4 H. L. Cas. 811. unless the arbitrators allowed a longer time for it. If, however, no further delay was granted, the arbitrators might adjudicate upon the documents pro tem. In case of difference of opinion the arbitrators might nominate an umpire, unless the same was nominated in the deed of submission. And if the arbitrators differed in such nomination, the same was to be named by the Tribunal of Commerce. The award made in writing and deposited at the Tribunal of Commerce was rendered executory by an ordinance of the tribunal. These were the provisions of New French the French Code of Commerce, but by the law of the 17th July, 1856, forced arbitration was suppressed; the arts. 51 to 63 of the code were abrogated, and all disputes among partners were made to be within the competence of the Tribunal of Commerce. Yet voluntary arbitration remains, and commercial questions may be submitted to the decisions of arbitrators in the ordinary manner (a). All Italy. The code of the Two Sicilies provided the same mode of settling partnership disputes by arbitration as the French code. Portugal.-All differences for the non-execution of agreements on the part of one of the partners are to be settled by arbitration, and it is forbidden to stipulate otherwise. appeals from the award of the arbitrators are carried to the Tribunal of Commerce. The submission may be by private ct or by deed. In case of arbitration in a place where there exists a tribunal of commerce, the award cannot be confirmed by the president until after it has been reviewed and confirmed by the juries of the tribunal. If the juries of the tribunal do not agree with the award, the president may cite the interested parties to appear before the Court to sign a deed by which they shall declare to submit to the award, to abandon all recourse, and that they simply demand a confirmatory decree, in which case the president will confirm the award of the arbitrators. If the parties or one of them refuse to sign such deed, the president will appoint a time for hearing the case, and will proceed as in case of an appeal in ordinary justice (b). Spain. The same law exists here as prescribed by the French code (c). (a) French Code of Commerce, $$ 15 -63, and Law of 17 July, 1856. (b) Portuguese Code, $$ 48-7760. (c) Spanish Code of Commerce, §§ 323-325. law. Legal rights between copartners for money lent. Non-payment of instalments. Distinct transaction. Balance struck. Not for work and labour on account of the partnership. SECTION XVI. LEGAL AND EQUITABLE REMEDIES BETWEEN PARTNERS. BRITISH LAW. A partner has a right of action against his copartner for money lent for the purpose of launching the partnership (a), for the non-performance of an agreement to pay certain instalments for the formation of a partnership (b), and for the neglect to fulfil a covenant to contribute capital and labour to the joint stock of the partnership. So where a publisher undertakes with an author to publish a work for their joint benefit, an action will lie for the refusal to complete the manuscript (c). An action may be maintained by a partner against his copartner upon any transaction held by special agreement distinct from the ordinary business of the concern (d), where the debt is a separate debt, where a negotiable instrument has been given for value received on partnership account (e), and where a partnership account has been settled and a balance struck (f). When there is a covenant to render accounts at specific periods, an action could be maintained for the nonperformance of such a covenant, and damages may be recovered for breach of any stipulation in the partnership articles. But a partner cannot maintain an action against his copartner for work and labour performed or money expended on account of the partnership (g), nor for a contribution for damages for a loss or negligence affecting the partnership (), nor for contribution for losses and expenses of the partnership so long as the partnership accounts are unsettled (). (a) Ex parte Notley, 1 Mont. & A. (b) Brown v. Tapscott, 6 M. & W. 123. . Stopherd, 2 C. & M. 361; Wilson v. (e) Smith v. Barrow, 2 T. R. 476; Venning v. Leckie, 13 East, 7; Lomas v. Bradshaw, 19 L. J. C. P. 273. (f) Moravia v. Levy, 2 T. R. 483; Foster v. Allanson, 2 T. R. 479; Wray v. Milestone, 5 M. & W. 21; Henley v. Soper, 8 B. & C. 16; Winter v. White, 1 Bro. & Bing. 350; Carr v. Smith, 5 A. & E. N. S. 128. (g) Holmes v. Higgins, 1 B. & C. 74; Smith v. Barrow, 2 T. R. 476. (h) Pearson v. Skelton, 1 M. & W. 504. (2) Brown v. Tapscott, 6 M. & W. 123; Burnell v. Minot, 4 Moore, 342; Holmes. Williamson, 6 M. & S. 158; Edger v. Knapp, 6 Scott, N. R. 712. |