Moreover, when a change takes place in a firm, the creditor is not obliged to consent to the carrying over of his account with the old firm to that of the new; he may keep the two accounts separate, and the rule will then be excluded (Simson v. Ingham, 1823, 2 Barn. & Cress. 65; 26 R. R. 273).

This rule, like the other rules relating to the appropriation of payments, is not a rigid rule of law, but depends upon the intention of the parties, expressed, implied, or presumed (Cory Brothers v. Owners of the Mecca, [1897] App. Cas. 286; Hallett's Case, 1879, 13 Ch. D. 696); consequently it will not be applied against a creditor in respect of a fraud, committed on him, of which he is ignorant (Clayton's Case, 1816, 1 Mer. 572; 35 E. R. 781; 15 R. R. 161; Lacey v. Hill, 1876, 4 Ch. D. 537, affd. sub nom. Read v. Bailey, 1877, L. R. 3 App. Cas. 94; see, too, Wickham v. Wickham, 1855, 2 Kay & J. 478; 69 E. R. 870).

Release. When several persons are bound jointly or jointly and severally, a release of one is a release of them all (Bower v. Swadlin, 1738, 1 Atk. 294; 26 E. R. 188; Cheetham v. Ward, 1797, 1 Bos. & Pul. 630; 4 R. R. 741; In re E. W. A., [1901] 2 K. B. 642; and as to torts, Duck v. Mayeu, [1892] 2 Q. B. 511); hence a release of one partner from a partnership liability, whether it arises from contract or tort, discharges all the others. But a covenant not to sue one partner has not this effect (Hutton v. Eyre, 1815, 6 Taun. 289; 16 R. R. 619; Duck v. Mayeu, ubi supra); and a release so drawn as to show that it is intended to enure only for the benefit of the releasee personally is equivalent to a covenant not to sue (Solly v. Forbes, 1820, 2 Brod. & B. 38; 22 R. R. 641; Price v. Barker, 1855, 4 El. & Bl. 760; Duck v. Mayeu, and In re E. W. A., ubi supra). If, however, the debt be in fact released, any attempt to reserve a right of action against other parties in respect of it will be futile (Commercial Bank of Tasmania v. Jones, [1893] A. C. 313).

Novation.-A retiring partner may be discharged from any existing liabilities of the firm by an agreement to that effect between himself and the members of the firm as newly constituted and the creditors, and this agreement may be either express or inferred as a fact from the course of dealing between the creditors and the firm as newly constituted (Part. Act, 1890, s. 17 (3)). The same principle is applicable to the discharge of the estate of a deceased partner.

The difficulty in applying this rule is one of fact, whether such an agreement as is here mentioned has or has not been entered into; the mere retirement of a partner raises no presumption in favour of such an agreement (Lyth v. Ault, 1852, 7 Ex. Rep. 669; Benson v. Hadfield, 1844, 4 Hare, p. 37; 67 E. R. 549). The cases to be found in the books illustrating this rule are very numerous, and their effect may be and has been (Lindley on Partnership, pp. 271 et seq.) stated as follows:

An express agreement by the creditor to discharge a retired partner, and to look only to a continuing partner, is not inoperative for want of consideration (Thompson v. Percival, 1834, 5 Barn. & Adol. 925, overruling on this point, Lodge v. Dicas, 1820, 3 Barn. & Ald. 611; 22 R. R. 497).

An adoption by the creditor of the new firm as his debtor does not by any means necessarily deprive him of his rights against the old firm, either at law or in equity (David v. Ellice, 1826, 5 Barn. & Cress. 196; 29 R. R. 216; Thompson v. Percival, ubi supra; Heath v. Percival, 1720, 1 P. Wms. 682; 24 E. R. 570; Kirwan v. Kirwan, 1834, 2 C. & M. 617;

39 R. R. 861; Blew v. Wyatt, 1832, 5 Car. & P. 397; Gough v. Davies, 1817, 4 Price Ex. 200; 18 R. R. 697; in equity compare Head v. Head, [1893] 3 Ch. 426, with ibid. (No. 2), [1894] 2 Ch. 236; Daniel v. Cross, 1796, 3 Ves. Jun. 277; 30 E. R. 1009; 3 R. R. 94; Sleech's Case, 1816, 1 Mer. 539; 35 E. R. 771; 15 R. R. 155; Clayton's Case, 1816, 1 Mer. 579; 35 E. R. 781; 15 R. R. 161; Palmer's Case, 1816, 1 Mer. 623; 35 E. R. 798; 15 R. R. 171; Braithwait v. Britain, 1836, 1 Keen, 206; 48 E. R. 285; 44 R. R. 56; Harris v. Farwell, 1851, 15 Beav. 31; 51 E. R. 447; Oakford v. European, etc., Ship Co., 1863, 1 Hem. & M. 182; 71 E. R. 80).

And it will certainly not do so if, by expressly reserving his right against the old firm, he shows that, by adopting the new firm, he did not intend to discharge the old firm (Bedford v. Deakin, 1818, 2 Barn. & Ald. 210; Jacomb v. Harwood, 1721, 2 Ves. 265; 28 E. R. 172).

And by adopting a new firm as his debtor, a creditor cannot be regarded as having intentionally discharged a person who was a member of the old firm, but was not known to the creditor so to be (Robinson v. Wilkinson, 1817, 3 Price, 538; 18 R. R. 659).

But the fact that a creditor has taken from a continuing partner a new security for a debt due from him and a retired partner jointly, is strong evidence of an intention to look only to the continuing partner for payment (Evans v. Drummond, 1801, 4 Esp. 89; Reed v. White, 1804, 5 Esp. 122; cp. In re Head, Head v. Head, [1893] 3 Ch. 326, with ibid. (No. 2), [1894] 2 Ch. 236).

And a creditor who assents to a transfer of his debts from an old firm to a new firm, and goes on dealing with the latter for many years, making no demand for payment against the old firm, may not unfairly be inferred to have discharged the old firm (Ex parte Kendall, 1811, 17 Ves. Jun. 522; 11 R. R. 122; Hart v. Alexander, 1837, 2 Mee. & W. 484; 46 R. R. 666; Brown v. Gordon, 1852, 16 Beav. 302; 51 E. R. 795; Wilson v. Lloyd, 1873, L. R. 16 Eq. 60). But the small number of cases in which relief has been refused, compared with those in which it has been granted, shows that the leaning of the Court is strongly in favour of the creditor.

To this statement it should be added, that if a partner retires from a firm, and his copartners agree to indemnify him against its liabilities, so that as between themselves he becomes a surety only for such liabilities, and this is known to a creditor, the late partner will, like any other surety, be discharged, if the creditor deals with the continuing partners, without the consent of the late partner, in such a way as to prejudice his rights against them (Rouse v. Bradford Banking Co., [1894] A. C. 586; Oakley v. Pasheller, 1836, 4 Cl. & Fin. 212; 7 E. R. 80; 42 R. R. 1; Overend, Gurney & Co. v. Oriental Financial Corporation, 1874, L. R. 7 H. L. 348).

Judgment. If a joint creditor of a firm obtains judgment in an action brought against one or some of the partners only, he loses his remedy against the other partners, although he did not know of their existence, and the judgment remains unsatisfied (Kendall v. Hamilton, 1879, 4 App. Cas. 504; King v. Hoare, 1844, 13 Mee. & W. 494; 67 R. R. 694; Hammond v. Schofield, [1891] 1 Q. B. 453; as to a married woman, Hoare v. Niblett, [1891]1 Q. B. 781; and as to partners by estoppel, Scarf v. Jardine, 1882, 7 App. Cas. 345; but when the first action has been brought on a bill of exchange, see Wegg Prosser v. Evans, [1895] 1 Q. B. 108; overruling Cambefort v. Chapman, 1887, 19 Q. B. D. 229). So, too, if all the partners are sued in the same action and judgment by consent is obtained

against one of them (M'Leod v. Power, [1898] 2 Ch. 295). This rule, however, does not apply in favour of partners who were out of the jurisdiction when the first action was brought (Wilson, Sons & Co. v. Balcarres Brook Steam. Co., [1893] 1 Q. B. 422, and 19 & 20 Vict. c. 97, s. 11); nor in relief of the estate of a deceased partner (ante, p. 427; In re Hodgson, 1885, 31 Ch. D. 177). And if, in an action against several partners, judgment is entered up against one of them under Order 14, or in default of appearance, the action may continue and judgment be recovered against the others (R. S. C., Order 14, r. 5; Order 13, r. 4; Weall v. James, 1893, 68 L. T. 515; Pirn v. Coyle, [1903] 2 Ir. R. 457). With respect to obligations which are joint and several, such an obligation, if arising ex delicto, is extinguished by a judgment recovered against any one of the persons obliged (Brinsmead v. Harrison, 1872, L. R. 7 C. P. 547); but if arising ex contractu or out of a breach of trust, it is not extinguished unless such judgment be satisfied (Blyth v. Fladgate, [1891] 1 Ch. p. 353; Lechmere v. Fletcher, 1833, 1 C. & M. 623; 38 R. R. 688; King v. Hoare, 1844, 13 Mee. & W. 494; 67 R. R. 694).

Statutes of Limitation.-Lastly, the liability of a partner, or of the estate of a deceased partner, may be barred by the Statutes of Limitation. For information on this subject the reader is referred to Darby and Bosanquet on The Statutes of Limitations, and Hewitt on the same subject. Here it will be sufficient to notice, that since the Mercantile Law Amendment Act, 19 & 20 Vict. c. 97, s. 13, an acknowledgment of a debt in writing by an agent has the same effect in taking the case out of the statutes as such an acknowledgment by the principal; hence it is apprehended that an acknowledgment in writing by one partner, during the continuance of the partnership, will be regarded as an acknowledgment by the firm, and (notwithstanding sec. 14 of the Act) a part payment by a partner will probably be regarded as a part payment by the firm (see Watson v. Woodman, 1875, L. R. 20 Eq. p. 730). But after a dissolution a part payment or acknowledgment by a continuing or surviving partner will not prevent a retired partner (ibid., 721), or the executors of a deceased partner (Thompson v. Waithman, 1856, 3 Drew. 628), from availing themselves of the statute, unless the continuing partner has, in fact, authority from his late partner to make such acknowledgment or payment on his account (In re Tucker, [1894] 3 Ch. 429).

3. RELATION OF PARTNERS TO ONE ANOTHER.

The mutual rights and duties of partners are generally regulated, to a certain extent, by special agreement, which usually assumes the form of partnership articles. Any question arising between partners as to their mutual rights and liabilities which is provided for by special agreement must be decided by such agreement; but if it be not provided for, recourse must be had to the general law relating to this subject (Smith v. Jeyes, 1841, 4 Beav. 505), which, for the most part, is now contained in the Partnership Act, 1890, ss. 19-31. These rights and duties, whether ascertained by agreement or defined by the Act, may be varied by the consent of all the partners, and such consent may be either express or inferred from a course of dealing (ibid., s. 19, and Const v. Harris, 1824, Turn. & R. 496; 24 R. R. 108; England v. Curling, 1844, 8 Beav. 129; 50 E. R. 51; 68 R. R. 39; Coventry v. Barclay, 1864, 3 De G., J. & S. 320; Geddes v. Wallace, 1820, 2 Bli. 270; 4 E. R. 328; 21 R. R. 66).

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(1) Conduct of the Partnership Business.-Subject to any agreement. between the partners, every partner may take part in the management of the partnership business (Part. Act, 1890, s. 24 (5)), even if he has mortgaged his share therein to one of his copartners (Rowe v. Wood, 1822, 2 Jac. & W. 553; 37 E. R. 740; 22 R. R. 208; see, too, Part. Act, 1890, s. 31). A partner is not entitled to remuneration for services rendered to his firm (ibid., s. 24 (6); Thornton v. Proctor, 1792, 1 Anst. 94; 3 R. R. 558; Robinson v. Anderson, 1855, 20 Beav. 98; 52 E. R. 539), except, perhaps, for extra work or trouble imposed upon him through the wilful neglect of the partnership business by his copartner (Airey v. Borham, 1861, 29 Beav. 620; 54 E. R. 768). When a partner has died or retired, and his former partners have continued to carry on the business for his and their benefit, the continuing partners will, if profits are derived from the carrying on of the business (In re Aldridge, [1894] 2 Ch. 97), and in the absence of any special reason to the contrary (as when they are executors of the deceased partner, Burden v. Burden, 1813, 1 Ves. & Bea. 170; 12 R. R. 210; Stocken v. Dawson, 1843, 6 Beav. 371; 49 E. R. 869; 63 R. R. 116), be entitled in the final settlement of accounts to some compensation for their trouble (Brown v. De Tastet, 1821, Jac. 284; 37 E. R. 858; 23 R. R. 59; Featherstonhaugh v. Turner, 1858, 25 Beav. 382; 53 E. K. 693; in a case of lunacy, Mellersh v. Keen, 1859, 27 Beav. 236; 54 E. R. 92; as to a partner who is a receiver, Harris v. Sleep, [1897] 2 Ch. 80; and Davy v. Scarth, [1906] 1 Ch. 55).

Any difference arising between partners as to ordinary matters connected with the partnership business, and unaffected by any special agreement, may be decided by the majority (Part. Act, 1890, s. 24 (8)). The decision of the majority, to be binding on the minority, must be arrived at in good faith and for the benefit of the firm. Every partner has a right to be consulted, and to express his views and have them considered (Const v. Harris, 1824, Turn. & R. 525; 24 R. R. 108; Blisset v. Daniel, 1853, 10 Hare, 493; 68 E. R. 1022). If in such matters the partners are equally divided, it seems that those who forbid a change must have their way-in re communi potior est conditio prohibentis (and see Donaldson v. Williams, 1833, 1 C. & M. 345; 38 R. R. 613; Clements v. Norris, 1878, 8 Ch. D. 129).

No change may be made in the business of the partnership without the consent of the partners (Part. Act, 1890, s. 24 (8); Natusch v. Irving, 1824; Gow on Partnership, 3rd ed., App. p. 398; Lindley on Partnership, p. 356; Const v. Harris, ubi supra); nor may any person be introduced as a partner without such consent (Part. Act, 1890, s. 24 (7)). No majority of partners can expel any partner, unless a power to do so has been conferred by express agreement between the partners (ibid., s. 25; Wood v. Woad, 1874, L. R. 9 Ex. 190; Blisset v. Daniel, 1853, 10 Hare, 493; 68 E. R. 1022). A power of expulsion, when it exists, is always construed strictly; no expulsion under it will be effectual unless the partners have acted strictly in accordance with the power and with perfect good faith, and the delinquent partner should be given an opportunity of explaining his conduct (Clarke v. Hart, 1858, 6 H.LC. 633; 10 E. R. 1443; Stewart v. Gladstone, 1879, 10 Ch. D. 626; Labouchere v. Wharncliffe, 1879, 13 Ch. D. 346; Barnes v. Youngs, [1898] 1 Ch. 414; and Andrews v. Mitchell, [1905] A. C. 78. As to damages, see Wood v. Woad, ubi supra).

(2) Duty to observe Good Faith.-Partners are bound in all their

dealings with each other to observe the utmost good faith, and to act for the benefit of the common body. Good faith requires that a partner shall not obtain a private advantage at the expense of the firm; hence every partner must account to the firm for any benefit derived by him, without the consent of the other partners, from any transaction concerning the partnership, e.g. from purchases or sales on behalf of the firm (Bentley v. Craven, 1853, 18 Beav. 75; 52 E. R. 29; Dunne v. English, 1874, L. R. 18 Eq. 524; Carter v. Horne, 1728, 1 Abr. Ca. Eq. 7; 21 E. R. 832), or from any use by him of the partnership property, name, or business connection (Part. Act, 1890, s. 29; Gardner v. McCutcheon, 1842, 4 Beav. 534; 49 E. R. 446; 55 R. R. 154; Russell v. Austwick, 1826, 1 Sim. 52; 57 E. R. 498; 27 R. R. 157). So, too, if a partner obtains in his own name a renewal of a lease of the partnership property, the new lease will be treated as part of the assets of the partnership (Featherstonhaugh v. Fenwick, 1810, 17 Ves. Jun. 298; 34 E. R. 115; 11 R. R. 77; Clegg v. Fishwick, 1849, 1 Mac. & G. 294), whether his partners knew of his intention to obtain the new lease or not (Clegg v. Edmonson, 1857, 8 De G., M. & G. 787; 44 E. R. 593; secus as to the purchase of the reversion of a lease which is not renewable either by custom or contract; Bevan v. Webb, [1905] 1 Ch. 620). This rule applies not only between partners, but also between persons who have agreed to become partners (Fawcett v. Whitehouse, 1829, 1 Russ. & M. 132; 39 E. R. 51; 32 R. R. 163), and to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs have been completely wound up (ibid., s. 29 (2); Clements v. Hall, 1857, 2 De G. & J. 173; 44 E. R. 954; Alder v. Fouracre, 1818, 3 Swans. 489; 36 E. R. 947; 19 R. R. 256). Moreover, in order that a partner may retain any benefit from a transaction concerning the partnership, he must not only have disclosed to his partners the fact that he was interested in that transaction, but also the extent of his interest (Dunne v. English, ubi supra; Imp. Mercantile Credit Association v. Coleman, 1873, L. R. 6 H. L. 189).

If a partner, without the consent of the other partners, carries on any business of the same nature as, and competing with, that of the firm, he must account for and pay over all profits made by him in that business (Part. Act, 1890, s. 30; Lock v. Lynam, 1854, 4 Ir. Ch. 188). He is not bound to account for any profits made by him in a business which does not compete with that of his firm (Trimble v. Goldberg, [1906] A. C. 494; Aas v. Benham, [1891] 2 Ch. 244; Dean v. MacDowell, 1877, 8 Ch. D. 345), though he may be restrained from using the partnership name or property for such business (Aas v. Benham, ubi supra; Glassington v. Thwaites, 1822, 1 Sim. & St. 124; 57 E. R. 50; 24 R. R. 153), or from carrying it on, if he has agreed not to do so. (3) Partnership Property.-The expression "partnership property" denotes everything to which all the partners are entitled as partners; persons may be entitled to property jointly or in common and may also be partners, yet that property may not be partnership property (Morris v. Barrett, 1829, 3 Y. & J. 384; Part. Act, 1890, s. 20 (3)). Whether any particular property is or is not partnership property depends upon the agreement between the partners, and, in the absence of any express agreement, upon the circumstances under which it was acquired.

All property originally brought into the partnership stock, or subsequently acquired, whether by purchase or otherwise, on account of the