dealing and regard for the interests of the firm which are required of trustees.15 § 403. -While engaged in closing up the business, the surviving partners may exercise such powers as are reasonably necessary to accomplish that purpose; and though no contract which they may make will directly bind the representatives or estate of the deceased partner, yet, if the liability was properly incurred, the survivors may reimburse themselves out of the partnership assets, and, in case of a deficiency, have a claim for contribution from the estate of the deceased partner.16 Thus 15 A surviving partner so far occupies the position of trustee, that he cannot be permitted to make gain for himself at the expense of the estate of a deceased partner. Little v. Caldwell (1894), 101 Cal. 553, 36 Pac. 107, 40 Am. St. R. 89; Galbraith v. Tracy (1894), 153 III. 54, 38 N. E. 937, 46 Am. St. R. 867, 28 L. R. A. 129, Burd. Cas. 257; Russell v. McCall (1894), 141 N. Y. 437, 36 N. E. 498, 38 Am. St. R. 807, Burd. Cas. 256; Dewey v. Chapin (1892), 156 Mass. 35, 30 N. E. 223, Burd. Cas. 255; Joseph v. Herzig, supra. He cannot buy of or sell to himself without the consent of the representatives of the deceased partner. Denholm v. McKay (1889), 148 Mass. 434, 19 N. E. 551, 12 Am. St. R. 574. But he is not incompetent to buy from the representatives of the estate of the deceased partner. Valentine v. Wysor, supra. See, also, Clark v. Fleischmann, supra; Sternburg v. Larkin (1897), 58 Kan. 201, 48 Pac. 861, 37 L. R. A. 195. Must give full information if he deals with the representatives. Welbourn v. Kleinle (1900), 92 Md. 114, 48 Atl. 81; Tennant v. Dunlap (1899), 97 Va. 234, 33 S. E. 620. If he misappropriates the assets, equity will give relief. Russell v. McCall (1894), 141 N. Y. 437, 36 N. E. 498, 38 Am. St. R. 807. He is bound to keep accurate accounts and to keep the representatives of the deceased partner informed of all that properly concerns them. Heath v. Waters (1879), 40 Mich. 457. 16 The contracts made by the surviving partner bind himself only, if any one, though he may by stipulation limit liability to goods pledged. If he properly incurs such a liability, he may pay it out of the assets, or pledge assets for its payment, (see Durant v. Pierson in next note). He may be sued personally upon such liabilities. In case of deficiency in the partnership assets to reimburse him, he may have contribution from the estate of the deceased partner. He can ordinarily not make such claim until he has completed the administration of the partnership affairs. See generally Blakely v. Smock (1897), 96 Wis. 611, 71 N. W. 1052; Logan v. Dixon (1889), 73 Wis. 533, 41 N. W. 713; Gleason v. White (1867), 34 Cal. 258; Hanna v. Wray (1874), 77 Pa. 27. For the amount of his claim after settle they may sell, mortgage or pledge the property, borrow money,17 ment and exhausting of partnership assets, he may prove as an individual creditor against estate of deceased partner, pari passu with other individual creditors, it is held in Olleman v. Reagan (1867), 28 Ind. 109. [Compare In re Ruby (1897), 24 Ont. App. 509]. Subject to their priority, says Uniform Partnership Act, Sec. 40 (i). Undoubtedly, it might have been held in these cases that the surviving partner had an authority coupled with an interest which would have made it irrevocable by the partner's death. (See Blodgett v. American Nat. Bank (1881), 49 Conn. 9; Laughlin v. Lorenz (1864), 48 Pa. 275, 86 Am. Dec. 592). But that is not the way in which the matter has been developed. Persons dealing with the surviving partner are, of course, ordinarily charged with notice of his situation and restricted authority. The partnership creditor who obtains judgment against the survivor may levy upon the partnership property and the property of the surviving partner, but not upon the separate property of the deceased partner. His remedy as to the latter is in equity, as will be seen post, § 411. As to levies upon the partnership property, by attachment or execution, see Roach v. Brannon (1879), 57 Miss. 490; Krueger v. Speith (1889), 8 Mont. 482, 20 Pac. 664, 3 L. R. A. 291; Stampfle v. Bush (1913), 71 W. Va. 659, 77 S. E. 283. 17 Thus in Durant V. Pierson (1891), 124 N. Y. 444, 26 N. E. 1095, 21 Am. St. R. 686, 12 L. R. A. 146, Mechem 's Cas. 525, the court say: "When a partnership is dissolved by the death of a partner, the survivor is entitled to the possession and control of the joint property for the purpose of closing its business, and to that end and for that purpose he may, according to the settled principles of the law of partnership, administer the affairs of the firm, and by sale, mortgage, or other reasonable disposition of the property, make provision for meeting its obligations. He may, for that purpose, borrow money, and give a valid pledge of the copartnership property for its repayment. Williams v. Whedon, 109 N. Y. 333, 4 Am. St. R. 460; Emerson v. Senter, 118 U. S. 3, 8; Fitzpatrick v. Flannagan, 106 U. S. 648; Butchart v. Dresser, 4 DeGex, M. & G. 542, 10 Hare 453; In re Clough, Bradford Commercial Banking Co. v. Cure, L. R. 31 Ch. Div. 326." See, also, Barton v. Lovejoy (1894), 56 Minn. 380, 57 N. W. 935, 46 Am. St. R. 482; Peoples Bank v. Wilcox (1904), 136 Mich. 567, 100 N. W. 24; Kenney v. Howard (1896), 68 Vt. 194, 34 Atl. 700, Burd. Cas. 271; In re Bourne [1906], 2 Ch. 427, 3 Br. Rul. Cas. 569 and note. Survivor may assign choses in actions belonging to the partnership, as well as dispose of the tangible property. See Lindner v. Adams County Bank (1896), 49 Neb. 735, 68 N. W. 1028, Mechem's Cas. 523, Burd. Cas. 262. Notice of dishonor to charge the partnership may be given to the survivor. Slocomb V. DeLizardi and repay it out of the assets, or make an assignment for the benefit of creditors.18 They ordinarily may and should complete the executory contracts into which the firm had entered, 19 and for this purpose have the authority, in the manner above stated, to purchase materials, employ assistance or make such other incidental contracts as the case reasonably requires.20 (1869), 21 La. Ann. 355, 99 Am. Dec. 740. 18 Although there has been a little doubt about the right of the survivor to make an assignment for the benefit of creditors, the weight of authority undoubtedly sustains it: Fitzpatrick V. Flannagan (1882), 106 U. S. 654, 27 L. ed. 211; Emerson V. Senter (1885), 118 U. S. 3, 30 L. ed. 49, Burd. Cas. 253; Williams v. Whedon (1888), 109 N. Y. 333, 16 N. E. 365, 4 Am. St. R. 460; Patton v. Leftwich (1889), 86 Va. 421, 10 S. E. 686, 19 Am. St. R. 902, 6 L. R. A. 569; Breen v. Richardson (1883), 6 Colo. 605, Gilm. Cas. 410; in the absence of a statute expressly or by implication forbidding: Shattuck V. Chandler (1889), 40 Kan. 516, 20 Pac. 225, 10 Am. St. R. 227, Mechem's Cas. 363; State v. Withrow (1897), 141 Mo. 69, 41 S. W. 980. See also Hewitt v. Hayes (1910), 204 Mass. 586, 90 N. E. 985, 27 L. R. A. (N. S.) 154. Cannot give preferences in Colorado; Salisbury v. Ellison (1883), 7 Colo. 167, 2 Pac. 906, 49 Am. Rep. 347. 19 The liability of all the partners, including the estate of the deceased partner, for existing obligations is, of course, in the ordinary case, not terminated by the death, (see Davis V. Sowell (1884), 77 Ala. 262; Mason v. Tiffany (1867), 45 Ill. 392; McGill v. McGill (1859), 59 Ky. (2 Metc.) 258; Winter v. Inness (1838), 4 Myl. & C. 101; Devaynes v. Noble (1831), 2 Russ. & M. 495); though, as will be seen (post, 411) the method of enforcing it is altered. Contracts, however, depending upon the continued existence of a particular person would usually be terminated by his death. See Hughes v. Gross (1896), 166 Mass. 61, 32 L. R. A. 620, 43 N. E. 1031; Burd. Cas. 296, 55 Am. St. R. 375; Tasker v. Shepherd (1861), 6 H. & N. 575; Schlau v. Enzenbacker (1914), 265 Ill. 626, 107 N. E. 107, L. R. A. 1915 C 576; Clifton v. Clark (1904), 83 Miss. 446, 36 So. 251, 102 Am. St. R. 458, 66 L. R. A. 821, Mechem's Cas. 1010. Contracts between two firms having some members in common, one of whom has died (thereby dissolving both firms), are held not to be within this rule for completing performance. Oliver V. Forrester (1880), 96 Ill. 315, Mechem's Cas. 1004. There may be contracts, e. g., wholly executory contracts for work involving long time, much expense and great risk wherein it would doubtless be rather the part of prudence to endeavor to procure a cancellation on fair terms. 20 See Little v. Caldwell (1894), 101 Cal. 553, 36 Pac. 107, 40 Am. Upon the death of the sole surviving partner before the estate is closed, his powers and liabilities pass to his administrator or executor.21 The right of the survivor to compensation has already been referred to in a previous section.22 The fact that the surviving partner was a dormant one, or even that he is insolvent, is held not to affect his right to wind. up the partnership affairs, as above stated; but under the Uniform Partnership Act the survivor may not act if he has become bankrupt.23 The Uniform Partnership Act provides that "on the death of a partner his right in specific partnership property vests in the surviving partner or partners, except where the deceased was the last surviving partner, when his right in such property vests in his legal representative. Such surviving partner or partners, or the legal representative of the last surviving partner, has no right to possess the partnership property for any but a partnership purpose. 24 § 404. Where there are several survivors.-Where there are two or more survivors their respective rights, powers and duties in the field of closing up the business are, as were their rights, powers and duties in the field of carrying it on before the dissolution, ordinarily equal.25 Either one, for example, may re St. R. 89; Calvert v. Miller (1886), 94 N. C. 600, Mechem's Cas. 1002; Oliver v. Forrester (1880), 96 Ill. 315, Mechem's Cas. 1004; Andrews v. Stinson (1912), 254 Ill. 111, 98 N. E. 222, Ann. Cas. 1913 B 928; Remick v. Emig (1866), 42 Ill. 342; Rust v. Chisholm (1881), 57 Md. 376; Condon v. Callahan (1905), 115 Tenn. 285, 89 S. W. 400, 112 Am. St. R. 833, 1 L. R. A. (N. S.) 643, 5 Ann. Cas. 659; O'Connell v. Schwanabeck (1889), 76 Mich. 517, 43 N. W. 599; Miller v. Hoffman (1887), 26 Mo. App. 199. Small purchases, incident to closing up, or calculated to promote the sale of the residue of the assets, may be justi fied under this rule, while general purchases to enable the business to be continued would not be. Oliver v. Forrester, supra; Andrews v. Stinson, supra; Big Four Implement Co. v. Keyser (1916), 99 Kan. 8, 161 Pac. 592, L. R. A. 1917 C 166. 21 Galbraith v. Tracy (1894), 153 23 Sec. 35 (3) (b); Sec. 37. 25 See Davis v. Sowell (1884), 77 Ala. 262. ceive payment of a debt due to the partnership, or make payment of a debt due from it.26 They would have equal rights to the possession, and equal duties as to the disposition, of the assets.27 Neither one could bind the other personally by a new contract made in the firm name or otherwise, without the latter's consent; 28 but if it were an expense properly incurred in closing up the business, it could be paid out of the assets, and, in case of a deficiency, the other survivor would be liable for contribution of his pro rata share, as would also the estate of the deceased partner. They may, as between themselves, and often do, arrange that one of them shall act instead of all of them in closing up the affairs, but this would not of itself enlarge the authority of that one.29 § 405. Statutory changes in some States. In a number of states, for example, Kansas, Maine, Missouri, New Mexico and Washington, statutes have made a more or less radical change in the situation of the surviving partner. These statutes commonly provide that the partnership estate shall be administered. by the representative of the deceased partner unless the survivor, within a time limited, applies for administration and gives a bond provided for by the statutes.30 § 406. Uniform Partnership Act.-The Uniform Partnership Act makes no specific provision respecting administration by 26 See Davis v. Sowell, supra. 27 See Davis v. Sowell, supra. 28 See Marlett v. Jackman (1861), 85 Mass. (3 Allen) 287, Ames' Cas. 551, Burd. Cas. 547; Jenness v. First Nat. Bank (1879), 40 Mich. 347; Matteson v. Nathanson (1878), 38 Mich. 377; Bass Dry Goods Co. v. Granite City Mfg. Co. (1902), 116 Ga. 176, 42 S. E. 415. 29 See Bass Dry Goods Co. v. Granite City Mfg. Co. supra. (Here one survivor alone acted in closing up, and the other served as his agent. Held, that the one who acted was liable to a third person for a contract made by his direction through the one serving as his agent). 30 See Shattuck V. Chandler (1889), 40 Kan. 516, 20 Pac. 225, 10 Am. St. R. 227, Mechem's Cas. 363; Bass v. Emery (1883), 74 Me. 338; Shaw, et al. Appellants (1889), 81 Me. 207, 16 Atl. 662; Easton v. Courtright (1884), 84 Mo. 27; Dow v. Simpson (1912), 17 N. Mex. 357, 132 Pac. 568; State v. Neal (1902), 29 Wash. 391, 69 Pac. 1103. A somewhat similar statute exists in Illinois; also one in Louisiana. |