to the rights of the defrauded partner which will be found in the footnote.58

§ 374. Dissolving in equity.-Many causes, however, may exist which will justify a dissolution of the firm which would not suffice to render the partnership void ab initio.

Of the causes for which a court will thus decree a dissolution several examples may be given. The courts of law, it may be noticed, have no jurisdiction for this purpose, and the relief can be sought only in equity. The grounds for the intervention of the court are usually acts occurring since the formation of the partnership, but they may be acts or events preceding its formation. The occasion for seeking a dissolution in a court of equity arises usually only in those cases in which it was to continue for a definite term not yet expired, because, as has been seen, a partnership at will merely is ordinarily dissolvable at any time by the mere act of the parties.59

The fact that the articles provide for dissolution upon notice given by one partner to the other does not prevent an application to a court of equity for dissolution.60

§ 375. Causes for dissolution-Fraud.-Fraud in the creation of a partnership, as has been seen, may be a sufficient ground for a rescission of the contract, but it may also be treated as a reason for decreeing a dissolution.

58 Sec. 39. "Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of one of the parties thereto, the party entitled to rescind is, without prejudice to any other right, entitled

(a) To a lien on, or right of retention of, the surplus of the partnership property, after satisfying the partnership liabilities to third persons, for any sum of money paid by him for the purchase of an interest in the partnership and for any capital or advances contributed by him; and

61

(b) To stand, after all liabilities to third persons have been satisfied, in the place of the creditors of the partnership for any payments made by him in respect of the partnership liabilities; and

(c) To be indemnified by the person guilty of the fraud or making the representation against all debts and liabilities of the partnership." 59 See ante, § 351.

60 Adams V. Shewalter (1894), 139 Ind. 178, 38 N. E. 607.

61 See Oteri v. Scalzo (1891), 145 U. S. 578, 12 Sup. Ct. 895, 36 L. ed.

§ 376. Insanity or incapacity of partner.-The insanity or other physical incapacity of one partner, while not usually sufficient of itself, as has been seen, to terminate the partnership as matter of law, will, if of such a character as to permanently disable the partner afflicted from performing the duties of the partnership, be sufficient ground for decreeing a dissolution.62

§ 377. - Misconduct of a partner. The misconduct of one partner (not the one praying for relief), if of such a kind. and degree as to render the further prosecution of the partnership inexpedient, injurious or impossible, may be ground for decreeing its dissolution. Courts will not interfere upon every disagreement between the partners, nor "enter into a consideration of mere partnership squabbles," 63 but they will interfere where the misconduct of one partner or the dissension between the parties is so serious as to endanger the prosperity of the firm or destroy the confidence which must exist between partners. Thus, abandonment of the business by one partner, his persistent violation of the articles, excluding his copartner from participation, repudiating his interest, dishonesty, gross misconduct, habitual drunkenness, and the like, have been held sufficient.64

§ 378. Must not be misconduct of partner seeking dissolution.—But the partner who is himself at fault will not be

824; Rosenstein v. Burns (1882), 41 Fed. 841; White v. Smith (1897), 63 Ark. 513, 39 S. W. 555.

62 See Barclay v. Barrie (1913), 209 N. Y. 40, 102 N. E. 602, 47 L. R. A. (N. S.) 839, and note, Ann. Cas. 1913 D 1143; Raymond v. Vaughn (1889), 128 Ill. 256, 21 N. E. 566, 15 Am. St. R. 112, 4 L. R. A. 440; Jurgens v. Ittmann (1895), 47 La. Ann. 367, 16 So. 952, Burd. Cas. 558; Sayer v. Bennet (1783), 1 Cox 107; Whitwell v. Arthur (1865), 35 Beav. 140; Jones v. Noy (1833), 2 M. & K. 125.

68 See Cash v. Earnshaw (1872),

66 Ill. 402, Gilm. Cas. 605; Gerard v. Gateau (1876), 84 Ill. 121, 25 Am. Rep. 438, Mechem's Cas. 460.

64 See Seighortner v. Weissenborn (1869), 20 N. J. Eq. 172; Rosenstein v. Burns (1882), 41 Fed. 841, Burd. Cas. 557; New v. Wright (1870), 44 Miss. 202, Mechem's Cas. 319; Moore v. Price (1896), 116 Ala. 247, 22 So. 531; Groth v. Payment (1890), 79 Mich. 290, 44 N. W. 611; Cottle v. Leitch (1868), 35 Cal. 434; Holladay v. Elliott (1879), 8 Oreg. 84; Harrison V. Tennant (1856), 21 Beav. 482; Essel v. Hayward (1860), 30 Beav. 158.

permitted to make use of his own misconduct to secure a dissolution. "A party who is the author of the ill-feeling between himself and his partners," said the court in one case,65 "ought not to be permitted to make the relation he has induced the ground of a dissolution of the partnership. His conduct may have been taken with a view to that very result, and it would be inequitable to allow him advantage from his own wrongful acts. It would allow one partner, at his election, to put an end to his own deliberate contract, when the other had been guilty of no wrongful act or omission of duty."

§379. Irreconcilable discord.-Even though both parties are at fault-and often without attempting to appraise their respective demerits-it may be found that such a condition of irreconcilable discord and dissension has developed between the partners as to make any reasonable and successful prosecution of the business impossible; and the court may decree a dissolution on that ground.66

§ 380. Impossibility of success. So, though there be no misconduct, if the further prosecution of the partnership with profit or success has become impossible or impracticable, if its purpose or object has become unattainable, if it is found that the scheme or theory upon which the partnership was based was illusory or erroneous,-in these and like cases the court may decree its dissolution, as it is not to the advantage of any one that the business should be continued under such circumstances.67

§ 381. — Under Uniform Partnership Act. The provisions of the Uniform Partnership Act are substantially the same as those already existing under the general law,68 and it is assumed

65 Gerard v. Gateau (1876), 84 Ill. 121, 25 Am. Rep. 438, Mechem's Cas. 460. See, also, Fairthorne v. Weston (1844), 3 Hare 387.

66 See Singer v. Heller (1876), 40 Wis. 544; Whalen V. Stephens (1901), 193 Ill. 121, 61 N. E. 921. 67 See Rosenstein v. Burns (1882), Mech. Part.-21

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41 Fed. 841, Burd. Cas. 557; Holladay v. Elliott (1878), 8 Oreg. 84; Willis v. Chapman (1896), 68 Vt. 459, 35 Atl. 459; Jennings v. Baddeley (1856), 3 K. & J. 78.

68 Sec. 32 (1) "On application by or for a partner the court shall decree a dissolution whenever:

that they would be subject to the same qualifications, e. g., that the partner by or for whom the application is made shall not be the one guilty of the misconduct.

This Act also provides for dissolution by decree of court on the application of the purchaser of a partner's interest,69 under conditions which doubtless represent existing law.

§ 382. Receivership in these cases. As has already been seen,70 dissolution by judicial decree offers also the occasion in many cases for the appointment of a receiver, and other forms of incidental relief.

§383. In general.-The formation of a partnership, as has been seen, results in the creation of a relationship between the parties by virtue of which they acquire certain rights and privileges, and come under certain duties and obligations, with respect of one another; and also confer upon each other certain authority to enter into business relations with third persons by which all of the partners are to be bound. If now this relationship is to be broken up, it is obvious that notice of that fact (where not self-evident or otherwise declaratory) should be brought home both to the partners themselves and also to the third persons who have been invited to rely on the authorities resulting from it. There must be considered, therefore, the necessity of notice: I. To the partners themselves; and II. To non-partners.