No compensation

and to be indemnified thereby for all losses and risks which he necessarily incurs on its behalf.

NOTE.-Pothier on Partnership, pp. 127-130; Croxton's Case, 5 De G. & Sm., p. 432; Sedgwick's Case, 2 Jur. (N. S.), p. 949; Chippendale's Case, 4 De G., M. & G., p. 19.

2413. A partner is not entitled to any compensa

for services tion for services rendered by him to the partnership.

to firm.

NOTE.-Bennett vs. Russell, 34 Mo., p. 524; Crawshay vs. Collins, 15 Ves., p. 226; Coursen vs. Hamlin, 2 Duer, p. 513; Caldwell vs. Lieber, 7 Paige, p. 483; Bradford vs. Kimberly, 3 Johns. Ch., p. 434; Franklin vs. Robinson, 1 id., p. 165. An agreement for compensation may, however, be made.-Paine vs. Thacher, 25 Wend., p. 450. In Griggs vs. Clark, 23 Cal., p. 427, it was held that it is the duty of each partner, during the partnership, to devote himself to the interests of the firm without compensation, unless there is an express agreement to the contrary. Also held, that if the partnership is dissolved by death, and the survivor expends his time and labor in the care and management of the partnership property, by which its value is enhanced, he should receive compensation for the same, to be deducted out of the profits arising from the enhanced value of the property. But he should receive no compensation for merely winding up the affairs of the partnership.

Renuncia

tion of future profits

from

liability.

ARTICLE IV.

RENUNCIATION OF PARTNERSHIP.

SECTION 2417. Renunciation of future profits exonerates from liability. 2418. Effect of renunciation.

2417. A partner may exonerate himself from all future liability to a third person, on account of the exonerates partnership, by renouncing, in good faith, all participation in its future profits, and giving notice to such third person, and to his own copartners, that he has made such renunciation, and that, so far as may be in his power, he dissolves the partnership and does not intend to be liable on account thereof for the future.

NOTE.-The provisions of this and the following section are intended to enable a partner, who is unable to procure an immediate dissolution of the firm, to escape from further entanglement. They are certainly new in so far as they relate to special partnerships, but may not be as regards general partnerships.-See Skinner vs. Dayton, 19 Johns., pp. 513, 538.

renuncia

2418. After a partner has given notice of his Effect of renunciation of the partnership, he cannot claim any tion. of its subsequent profits, and his copartners may proceed to dissolve the partnership.

CHAPTER II.

GENERAL PARTNERSHIP.

ARTICLE I. WHAT IS A GENERAL PARTNERSHIP.
II. POWERS AND AUTHORITY OF PARTNERS.

III. MUTUAL OBLIGATIONS OF PARTNERS.

IV. LIABILITY OF PARTNERS.

V. TERMINATION OF PARTNERSHIP.

VI. LIQUIDATION.

VII. OF THE USE OF FICTITIOUS NAMES.

ARTICLE I.

WHAT IS A GENERAL PARTNERSHIP.

SECTION 2424. General partnership, what.

partner

ship, what,

2424. Every partnership that is not formed in General accordance with the law concerning special or mining partnerships, and every special partnership, so far only as the general partners are concerned, is a general partnership.

NOTE. For special partnerships, see Secs. 2477 to 2510; for mining partnerships, see Secs. 2511 to 2520.

13-vol. ii.

ARTICLE II.

Power of majority of partners.

Authority

of

partner.

POWERS AND AUTHORITY OF PARTNERS.

SECTION 2428. Power of majority of partners.

2429. Authority of individual partner.
2430. What authority partner has not.

2431. Partner's acts in bad faith, when ineffectual.

2428. Unless otherwise expressly stipulated, the decision of the majority of the members of a general partnership binds it in the conduct of its business.

NOTE.-Such decision is binding in the due course of the business (Kirk vs. Hodgson, 3 Johns. Ch., p. 400; Kent vs. Jackson, 2 De G., M. & G., p. 49; 14 Beav., p. 367; Byron vs. Met. Sal. Omn. Co., 3 De G. & J., p. 123), and in nothing else.-Natusch vs. Irving, Gow on Partn., p. 398; Bagshaw vs. Eastern Union Railw. Co., 7 Hare, p. 114; 2 Macn. & G., p. 389; Simpson vs. Denison, 10 Hare, p. 51; Const vs. Harris, Turn. & R., p. 496; York & N. Mid. Railw. Co. vs. Hudson, 16 Beav., p. 485; Hodgkinson vs. National Live Stock Ins. Co., 5 Jur. (N. S.), pp. 478, 969; 3 Kent's Com., p. 45; Collyer on Partnership, Sec. 197; Parsons on Partnership, p. 229. But the rule stated in the text does not apply to mining partnerships.-Duryea vs. Burt, 28 Cal., p. 569; see this Code, Sec. 2520.

2429. Every general partner is agent for the partindividual nership in the transaction of its business, and has authority to do whatever is necessary to carry on such business in the ordinary manner, and for this purpose may bind his copartners by an agreement in writing.

NOTE. This authority extends no further.-Wilkins vs. Pearce, 5 Denio, p. 541; Sandilands vs. Marsh, 2 B. & Ald., p. 673; see Brettel vs. Williams, 4 Exch., p. 630; Dickinson vs. Valpy, 10 B. & C., p. 128; Ricketts vs. Bennett, 4 C. B., p. 686; Ex parte Chippendale, 4 De G., M. & G., p. 19; Harman vs. Johnson, 2 El. & Bl., p. 61; Brown vs. Kidger, 3 H. & N., p. 853; Rich vs. Davis, 6 Cal., p. 141; Pierce vs. Jackson, 21 Cal., p. 636. Thus he cannot submit a partnership claim to arbitration.-Harrington vs. Higham, 13 Barb., p. 660; Stead vs. Solb, 3 Bing., p. 101; Karthous vs. Ferrer, 1 Peters, p. 222; Jones vs. Bailey, 5 Cal., p. 345.

authority

has not

2430. A partner, as such, has not authority to do What any of the following acts, unless his copartners have partner wholly abandoned the business to him, or are incapable of acting:

1. To make an assignment of the partnership property or any portion thereof to a creditor, or to a third person in trust for the benefit of a creditor or of all creditors;

2. To dispose of the good will of the business;

3. To dispose of the whole of the partnership property at once, unless it consists entirely of merchandise; 4. To do any act which would make it impossible to carry on the ordinary business of the partnership; 5. To confess a judgment;

6. To submit a partnership claim to arbitration; 7. To do any other act not within the scope of the preceding section.

NOTE.-Unless the partners have wholly abandoned the business.-Kemp vs. Carnley, 3 Duer, p. 1.

Subd. 1.-To the contrary is McClellan vs. Remsen, 36 Barb., p. 622, founded upon the decision in Mabbett vs. White, 12 N. Y., p. 442; see, also, Parsons on Partnership, p. 172, where the cases bearing upon this point are collated and examined. As the Code settles the law and denies the existence of the authority, it would not be profitable to examine at length the cases in which the question has been considered.

Subd. 2.-A sale of the good will of the business would prevent it from being carried on, and therefore it would seem clear that such a sale is beyond the scope of a partner's authority.

Subd. 3.-To the contrary is Mabbett vs. White, 12 N. Y., p. 442; an unfortunate decision, from which Denio and Johnson, Judg., dissented, and which is opposed to the whole current of the best cases, especially the late English decisions. See, nevertheless, Arnold vs. Brown, 24 Pick., p. 89; Mills vs. Barber, 4 Day, p. 430; Anderson vs. Tompkins, 1 Brock, p. 456.

Subd. 4.-See dissenting opinion of Denio, J., in Mabbett vs. White, 12 N. Y., p. 442. This rule was emphatically asserted as to corporations in Abbot vs. American Hard Rubber Co., 33 Barb., p. 578; and has quite as much application to partnerships.

Partner's

acts in bad

in effectual.

Subd. 5.-The principles of the common law, which operated to disable a partner from binding his copartners by specialty, also incapacitated him from binding them by a voluntary confession of judgment; nor can such partner, by virtue of his implied power, authorize a third person to confess a judgment against the firm.Green vs. Beals, 2 Caines, p. 254; McBride vs. Hagan, 1 Wend., p. 335; Waring vs. Robinson, 1 Hoff. Ch., p. 524; Crane vs. French, 1 Wend., p. 311; Gerard vs. Basse, 1 Dall., p. 119; McKee vs. Bank of Mt. Pleasant, 7 Ohio, p. 175; Remington vs. Cummings, 5 Wis., p. 138; Hull vs. Garner, 31 Miss., p. 145; Sloo vs. State Bank of Ill., 1 Scam., p. 428; Barlow vs. Reno, 1 Blackf., p. 252; Harper vs. Fox, 7 Watts & S., p. 142; Overton vs. Tozer, 7 Watts, p. 331; Morgan vs. Richardson, 16 Mo., p. 409; Binney vs. Le Grand, 19 Barb., p. 592. It would seem that a judgment so confessed should be binding upon the partner making the confession.-Green vs. Beals, 2 Caines, p. 254; Crane vs. French, 1 Wend., p. 311; but see Chapin vs. Thompson, 20 Cal., p. 681, and Jones vs. Bailey, 5 Cal., p. 345.

Subd. 6.-It was held in Jones vs. Bailey, 5 Cal., p. 345, that one partner cannot bind the firm by a submission of partnership matters to arbitration, but that such submission would be good against the partner agreeing to it.-Parsons on Partnership, p. 184. Subd. 7.-See note to Sec. 2429.

2431. A partner is not bound by any act of a faith, when copartner, in bad faith toward him, though within the scope of the partner's powers, except in favor of persons who have in good faith parted with value in reliance upon such act.

NOTE. It is not certain that independent of the Code this would be the law, but that it ought to be, is certain. Partners occupy a position of mutual trust, and should be governed by all the rules governing trustees, unless plainly inapplicable.-See Croughton vs. Forrest, 17 Mo., p. 131; Dob vs. Halsey, 16 Johns., p. 34. "The first and highest duty which partners owe to each other is that of perfect good faith."-Nicholson vs. Janeway, 1 Green, N. J., p. 285. "In the Roman civil law the 'societas' of merchants for trade, and of husband and wife, were considered closely analagous, and in many respects governed by the same principles."-Parsons on Partnership, p. 233. For an example of bad faith