and that in which another resides; or, 6. By a judgment of dissolution.27 Where there are several members of a partnership, and one of them, even by consent, retires from the firm, this dissolution necessarily severs the copartnership relations of each of its members.28 The two or more members who remain in the firm can not maintain a joint action at law against the member who retired.29 The bankruptcy of one partner ipso facto dissolves the partnership, and the assignee is tenant in common with the solvent partner in the joint stock.30 But the voluntary absence of one partner from the state does not operate as a dissolution of the partnership.31

§ 2626. Dissolution, when partner entitled to. A general partner is entitled to a judgment of dissolution: 1. When he or another partner becomes legally incapable of contracting; 2. When another partner fails to perform his duties under the agreement of partnership, or is guilty of serious misconduct; or, 3. When the business of the partnership can be carried on only at a permanent loss.32 A renunciation of the partnership by one partner will entitle his copartners to dissolve the partnership.33 Violent and lasting dissensions between the members of a firm is ground upon which a court of equity will decree a dissolution.34 So, too, when the whole scheme is found to be visionary, or founded upon erroneous principles.35

§ 2627. Distribution of assets. The filing of a bill by one partner against his copartners for dissolution and account, and praying for an injunction and receiver, does not prevent a creditor from proceeding by attachment, and gaining a priority over other creditors, until a final decree of dissolution and order of distribution.3

27 Civil Code, § 2450. Insanity of partner as effecting a dissolution of the partnership. See Raymond v. Vaughn, 128 Пl. 256; 15 Am. St. Rep. 112.

28 Ross v. Cornell, 45 Cal. 133.

29 Id.; Miller v. Drigham, 50 Cal. 615. For a case depending on special facts, see Eagle v. Bucher, 6 Ohio St. 295.

30 Wilkins v. Davis, 15 Bank. Reg. 60.

31 Burnheim v. Porter, 3 West Coast Rep. 434

32 Cal. Civil Code, § 2452.

33 Id., §§ 2417, 2418.

34 Lafond v. Deems, 52 How. Pr. 41.

30 Adams v. Woods, 9 Cal. 24.

§ 2628. Exclusion of a member. Where a voluntary association for mutual relief excluded plaintiffs from the association, because of their refusal to take an oath not required by the constitution or by-laws, and foreign to the objects thereof, a suit for dissolution might be maintained.37 But where the association, on being advised of its duties, rescinded the resolution, the court will be authorized to refuse the decree.38

allegations. Where the

§ 2629. Joint account transactions complaint alleged that the plaintiff composed one firm and the defendant another, and entered into "an arrangement to transact business in sugars on joint account," and alleged that plaintiffs had shipped to defendants sugar to an amount greater than they had drawn bills against, that defendants had failed and assigned to defendant B., that the assignment was fraudulent and void, and prayed judgment for excess specified, for half of the profits and appointment of a receiver, and other proper relief, it was held, that though inartificial, it was sufficient.3 39 The proper form in such case should allege that this was a partnership transaction; that credit of both parties was involved; that the joint names and credit of two firms, the one as drawers and the other as acceptors, were the means by which they procured the moneys that bought the sugars; that the same were bought on joint account by them as partners in the transaction; that a large amount of sugar and proceeds thereof were on hand; that the joint indebtedness for these sugars was outstanding, and should be paid out of the joint property arising out of the transaction, and that an accounting should be had between the parties, and that an injunction be granted and a receiver appointed.40

§ 2630. Joint-stock association. A portion of the company can not, contrary to the articles of association, dissolve the company at their will and pleasure, but if it is found impracticable to keep the company together, or to prosecute successfully the contemplated enterprise, the court may decree a dissolution and the distribution of its effects.41 A joint-stock association, formed for a definite period, can not be voluntarily dissolved,

37 Gorman v. Russell, 14 Cal. 531.

38 Id.; 18 Cal. 688.

39 Davis v. Grove, 27 How. Pr. 70.

41 Von Schmidt v. Huntington, 1 Cal. 55.

except by the unanimous consent of all the stockholders.42 Where there is nothing in the constitution of a joint-stock company to regulate the remedies of shareholders, the general law of partnership must govern them.43 A voluntary association is not dissolved by the withdrawal of two of its members, upon their objecting to a purchase of land, and refusing to pay assessments, or to co-operate in its business and to participate in its proceedings.**

§ 2631. Jurisdiction agreement for arbitration. A stipulation in articles of partnership, that all matters of controversy shall be submitted to arbitration, does not take away the jurisdiction of equity to decree a dissolution.45

$2632. Receiver. A partner filing a bill for dissolution, and to enjoin the copartnership from continuing the business in the name and on the credit of the partnership, is, nevertheless, not entitled to have a receiver appointed, unless the copartner has been guilty of a breach of duty, or of the partnership contract. The appointment of a receiver is only a means to attain the end contemplated by the plaintiff.47

46

2633. Surrender of franchise. The trustees of a corporation have the power to surrender the franchise, after its debts are paid, and if they should do so without having made any disposition of its property, there being no stockholders or creditors, the personal property of the corporation would vest in the state.48 And so would such real estate as was acquired by the corporation for value, the vendor having no interest in the appropriation of the property to any specific object, and no reversion where the succession fails.49

$2634. Tenants in common of mil). Where the relation of tenants in common in a mill was established between two persons, and it appeared that one had the entire management of 42 Von Schmidt v. Huntington, 1 Cal. 55.

48 Bullard v. Kinney, 10 Cal. 60.

44 Troy Factory v. Corning, 45 Barb. 231.

45 Meaher v. Cox, 37 Ala. 201.

46 Wilson v. Fitcher, 3 Stock. 71.

47 Adams v. Woods, 8 Cal. 306.

48 2 Kent's Com. 386; Ang. & Ames on Corp., § 195.

49 People v. Pres. & Trus. of College of Cal., 38 Cal. 166; Bacon v. Robertson, 18 How. (U. S.) 480.

the concern, occasionally paying some of the proceeds to his cotenant, but that no settlement had taken place, it was held, that though there was no partnership shown, it was a proper case for an accounting between the parties.50

§ 2635. Water ditch. A complaint in an action for an accounting, touching the affairs, rents, and proceeds of a water ditch, and for a sale of the property and a division of the proceeds, which first avers in general terms a copartnership between plaintiff and defendants in the ditch, without averring any partnership agreement, and then states that plaintiff acquired his interest in the ditch by the purchase of an undivided interest from other persons than defendants, does not state facts sufficient to constitute a cause of action, either for a dissolution and settlement of the affairs of a partnership, or for a partition.51 The complaint in this case alleging that plaintiff and defendant are members of a joint-stock company, known as the "Miners' Ditch Company; " that defendants exclude plaintiffs from participation in the business or benefit from it; that they have received large sums of money from the same, and refuse to account or pay him anything, etc., entitles plaintiff to a relief by a decree affirming his interest and directing an account.52

§ 2636. Winding up affairs. A partner is always entitled to have the partnership wound up by a sale of all the property, as the best mode of ascertaining its value.53 Where a partnership is liable to be dissolved at the will of either party, the consequence of such dissolution is to throw the winding up of their partnership affairs into a court of equity, unless they agree on the mode of settlement.54 A court of equity will dissolve a partnership when the respondent in a suit for dissolution does not intend to carry out one of the terms of the partnership agreement.55 One party can not, by withdrawing himself from the association before the period stipulated between the parties for its continuance, either dissolve the partnership or extricate himself from the responsibilities of a partner, either 50 Mitchell v. O'Neale, 4 Nev. 504.

51 Bradley v. Harkness, 26 Cal. 69.

52 Smith v. Fagan, 17 Cal. 178.

53 Lyman v. Lyman, 2 Paine, 11.

54 Stevens v. Yeatman, 19 Md. 480.

55 Meaher v. Cox, 37 Ala. 201.

in respect to his associates or to third persons, but the partnership may be put an end to by the act of God, or by operation of law.56 In the voluntary winding up of a joint-stock company, claim made to the liquidator on bank notes and drafts current at the time of the stoppage is a sufficient demand for payment, and interest runs from the date of such claim.5

57

§ 2637. On the ground of assignment by partner. Form No. 608.

[TITLE.]

The plaintiff complains, and alleges:

I. [Allege partnership as before].

II. That on the ... ... day of

18.., at

the defendant A. B., without the knowledge or assent of the plaintiff, assigned and transferred to the defendant C. D., all his interest in said partnership, and all his right, title, and interest to any and all property of said firm. [DEMAND OF JUDGMENT.]

§ 2638. Dissolution by assignment. The assignment of all joint interest in a patent, by one joint owner, is a dissolution of the partnership for working it.58 A partnership is dissolved by the cessio bonorum made by one of the members, and the solvent partner being bound in solido, has a right, but not an exclusive one, to liquidate its affairs.59

§ 2639. Mining partnership. One of the partners in a mining partnership may convey his interest in the mine and business, without dissolving the partnership.60

§ 2640. Sale to stranger. Evidence that a partner sold to a stranger his interest in a stock of goods, belonging to the firm, but not in the notes, accounts, and other assets of the firm, and that the purchaser formed a partnership with the seller's partners, is not sufficient proof of the dissolution of the original partnership. Where one partner retires from business, assigning to the other all his interest in the partnership property, the

61

56 Pierpoint v. Graham, 4 Wash. C. C. 232.

57 In re East of England Banking Co., L. R., 4 Ch. 14.

58 Parkhurst v. Kinsman, 1 Blatchf. 488.

69 Saloy v. Albrecht, 17 La. Ann. 75.

60 Duryea v. Burt, 28 Cal. 569; Skillman v. Lachman, 23 id. 188; 83 Am. Dec. 96; Cal. Civil Code, § 2516.

61 Cody v. Cody, 31 Ga. 619.