and any property thereafter acquired by the partnership belongs to all of the partners in a species of joint tenancy, peculiar in itself, best described by the words "tenancy in partnership." The incidents of such a tenancy are that each partner has a right to possess such property for partnership purposes, but for no other purpose without the consent of his partners. Hence, he has no interest in specific property which he can assign or which his creditors can seize or in which his surviving relatives can claim dower or curtesy or other allowance; but his interest in the partnership may be seized for debt and passes to his estate, as hereafter shown.

The "partner's interest in the partnership is his share of the profits and surplus, and the same is personal property."

"31

Example 7. In the case put above the share of A in the partnership is not any specific property although he may have originally owned it. But it is his share of the capital and surplus (if any). If the above concern is insolvent, A may of course have a liability instead of an

asset.

The interest of the partner in the partnership is of the nature of personal property, although the partnership assets may be real estate.

PART III.

MUTUAL RIGHTS AND OBLIGATIONS OF

PARTNERS.

CHAPTER 4.

RIGHTS OF PARTNER IN MANAGEMENT OF FIRM.

Sec. 26. PARTNER'S RIGHT TO BE ACTIVE PAR TICIPATOR. Each partner has impliedly the right, in the absence of contrary agreement, to represent the firm and take an active part in its management.

A partner being a part owner, has a right to participate in the management of the business. If he has a minority interest this does not deprive him of his right to participate or to represent the firm. He is a joint owner of the business and may sit in its councils, and has a right to be consulted. "All partners have equal rights in the management and conduct of the partnership business." 32

The express agreement may of course regulate the extent of his participation.

Sec. 27. RIGHT OF MAJORITY TO GOVERN. A majority of partners can override the will of a dissentient minority only in cases affecting the ordinary conduct of the partnership. If the action contemplates a material departure from the ordinary matters of the partnership it cannot be carried out against the will of any dissenting member.

32. Ibid., Sec. 18 (8).

In the ordinary routine of partnership business, the majority governs (in the absence of express agreement otherwise).33 But the majority cannot under the scope of the business conducted, change its character, enter into unusual expenditures, or in any way materially modify the existing order of partnership affairs.

Even where it may be conceded that the majority may govern, they must act in the utmost good faith. They must consult the minority and protect the rights of that minority.

The rule as stated in the Uniform Partnership Act 34 is as follows:

"Any difference arising as to the ordinary matters connected with the partnership business may be decided by a majority of the partners; but no act in contravention of any agreement between the partners may be done rightfully without the consent of all the partners."

Sec. 28. GENERAL RULE OF CONDUCT OF PARTNER. It is the duty of each partner to display absolute good faith toward the other partners and take no secret advantage or profit from the partnership nor restrict its profits by competition.

The position of each partner is one of trust to his associates. Each partner has impliedly undertaken that he will devote his attention to the success of the partnership unhampered by secret influences that tempt him to put anything in the way of its success. He must, then, deal openly with his partners. He must not compete with the partnership, but must ever and in all things display the utmost good faith, as one in whom the trust and confidence of another has been reposed.

33. Markle v. Wilbur, et al., 200 Pa. 457. 34. Sec. 18 (h).

Sec. 29. PARTNER CANNOT OPPOSE HIS OWN INTERESTS TO THOSE OF FIRM. A partner will not be allowed to oppose his own interests to those of the firm. Therefore he cannot compete with firm, traffic with its funds, buy from or sell to it, nor acquire interests adverse to the firm, except upon the consent of the firm.

(1) General statement.

As a result of the rule that a partner cannot oppose his own interests to those of the firm, the subsidiary considerations follow which are set forth in this chapter.

(2) Partner cannot compete with firm.

A partner need not devote all his time and energy to the business unless that is his contract. It may have been understood between the partners that but a small part of the time of one of them should be given to the firm. Indeed, a partner may simply devote capital with no understanding that he shall give any of his time to the conduct of the partnership business. But in any event he must not compete with the firm without its consent. For, manifestly, the temptation. would be to draw to himself the trade that otherwise might go to the firm, and which in fact, he should strive to bring to the firm.35

In the event of competition a court will issue an injunction and also make the offending partner account for his earnings in the competitive business.

To what extent a partner has a right to engage in businesses which do not compete depends upon the facts of his agreement in each case. If he has agreed to give all of his time to the firm, or a specified portion of it and vio

35. Metcalfe v. Bradshaw, 145 Ill. 124.

lates his agreement, this is merely a breach of his contract for which the other partners may have damages, but there is no right to an accounting for the profits thus obtained.36

(3) Acquisition of interests adversely to firm.

A partner who acquires any interest which is adverse to the interest of the firm will be adjudged to hold such interests for the benefit of the firm or his co-partner. Whatever, by reason of his position of trust he should do for the firm's benefit, will be regarded, if done, as done for the firm's benefit, although nominally and according to his own intentions he did it for his own sake.

Example 8. Pl. and Deft. entered into a partnership to operate Hoffman House in New York. The partnership was to end by its terms May 1, 1871, at which time also the lease was to expire. In 1869, defendant acquired the renewal of the lease in his own name, contending that as the partnership also was to expire on that day, his interest was not adverse to the firm. Held by the court that the partner's acquisition of the lease gave him an advantage whereby he could prevent the realization by the firm upon its dissolution of the full value in the sale of the business to a successor, and that such interest so acquired was for the benefit of the firm.37

Sec. 30. RIGHT OF PARTNER TO DEAL OPENLY WITH FIRM. A partner may deal openly with the firm.

Any member of a firm may deal openly with it, buying or selling, lending it money, or making any sort of contract

36. Idem.

37. Mitchell v. Reed, 61 N. Y. 123.