26. If either party is unable to do his duty by reason of insanity or imprisonment, or is guilty of wrong-doing, a court will declare the firm to be dissolved; and if the original agreement was a fraud a court will also declare it void from the beginning.

27. Whenever a dissolution is thus decreed or declared an account will be taken by the partners, when requested by any partner. Moreover, a court will order a sale of the effects and distribute the proceeds. Such a decree will also be made when a partner dies or becomes bankrupt.

28. The sale of the entire interest of a partner by order of the court, to pay his individual indebtedness, causes dissolution. A partner may owe a large sum of money outside the partnership for his individual transactions, and his interest in the partnership may be taken by creditors to satisfy their claims. This is by no means an infrequent thing. The dissolution thus caused may be, indeed, unfortunate for the other partners, but it is one of the risks of uniting in the undertaking.

29. The retirement of a partner also causes a dissolution. The law regards the remaining partners as a new firm, even though the name remains unchanged.

30. A retiring partner should give notice by public advertisement of his retirement. It is also said that he should give personal notice, by letter or otherwise, to all who usually do business with the firm. This is not the rule everywhere. After such a notice he is not responsible, even though his name is retained by the other partners in the firm without his consent. Nor is he respon

sible to anyone who has actual knowledge of his retire

ment.

31. A dormant or secret partner is not liable for a debt contracted after his retirement, although no notice has been given by him; for, as he is unknown and cannot add credit to the firm, his retirement does not affect his liability.

32. The property of a partnership is bound for partnership debts, and the creditor of a partner has no claim to partnership funds until the partnership debts are paid. If there be a surplus such a creditor may take that partner's interest therein in payment of his private debt. But what shall be said concerning the individual property of partners? Is that held first for their individual debt? The courts have not always been uniform in their decisions, but the rule best established is that partnership property is held for partnership debts, and individual property for the debts of individual members. If there be a balance of partnership property after the payment of its debts, it belongs to the partners and can be applied to the payment of their individual debts. On the other hand, if there be property left by a partner after paying his individual debts, it may be devoted to the payment of the debts of the firm of which he is a member.

33. Lastly may be considered the effects of dissolution. If caused by the death of a partner the whole property goes to the surviving partners, not, indeed, as their own, but only for the purpose of liquidating the indebtedness of the partnership. If they continue the business with the partnership funds they do so at their own risk, and the representatives of the deceased may require the

return of the capital he invested and also his share of the profits.

34. The survivors are not partners, but simply owners with the representatives of the deceased of the stock or property in their possession. After a dissolution no one has authority to make new contracts in the name of the firm, except as we have already mentioned, in the way of settling its affairs. It is a common thing to provide that on the dissolution of a partnership by mutual consent one partner shall settle the affairs of the concern, collect and pay its debts, and the like, but this will not prevent any person from paying a debt to any other partner due to the firm. If this is done in good faith his release or discharge is valid.

35. A liquidating partner can do many things. He can give renewal notes, make indorsements, and collect money that is due to the concern. He can also revive a debt against the partnership that has become outlawed, because the owner has not collected it within the period fixed by law.

36. After transferring the assets of a firm to any partner or other person for the purpose of liquidating its debts, any debtor who had notice of this would be bound to make payment to such person; and if he paid anyone else he could be required to pay the money over again.

37. An agreement between a liquidating partner and his other partners, whereby he is to take all the property and pay all the debts, though valid between them, has no effect on the rights of third parties. They have a valid claim against the partners, of which they cannot be deprived without their consent. The consent of a

creditor may be inferred, though not from slight evidence.

38. Lastly may be considered the subject of limited partnerships. These are the creations of statute and have been established in many states. A limited partnership may be formed for transacting agricultural, mercantile, mechanical, mining or manufacturing business. The partnership may consist of one or more persons who are called general partners, each of whom is responsible for all the debts. Besides general partners, other persons, called special partners, who are not liable for the debts of the partnership beyond the amount thus contributed by them, may contribute specific sums in actual money as capital. The general partners only are authorised to transact business and sign for the partnership. The persons forming such a partnership are required to make and sign a certificate containing the name under which the partnership is to be conducted, the general nature of the business, the names of all the general and special partners, and also the amount of capital contributed by each special partner, and the period for beginning and ending the partnership.

A special partner may sell or assign his interest with the assent of his partner in writing without causing a dissolution of the partnership. A general partner with the written assent of his partner may also sell and dispose of his interest in the partnership; or on his death his administrator may, in like manner, sell his interest for the benefit of his estate. A special partner from time to time may examine into the state and progress of the partnership and may advise concerning its management,

but he cannot transact any business nor can he be employed as an agent or attorney. Furthermore, the law generally provides that interference in its affairs contrary to law renders him liable as a general partner. The capital of the partnership may be enlarged by increasing the membership of special partners, or by new subscriptions from the old ones.

The law in most states provides that the terms of the partnership must be recorded and published so that the public may have an exact knowledge of its nature; and all renewals or changes must have similar publicity. This is for the purpose of protecting the partners, as well as for the benefit of those doing business with the firm.

IO. CONTRACT OF SHIPPING

1. A ship is personal property.

2. Law relating to registration. 3. Special regulations.

4. Exclusive privileges.

5. How a vessel may be transferred.

6. What passes by the word ship in selling her.

7. When persons are owners who pay in instalments.

8. Part owners.

9. They are not partners.

10. But they may be partners.

11. Majority may direct the vessel's employment.

12. Employment of vessel when part owners are equally

divided.

13. When and to what extent is each part owner entitled to share in the earnings.