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Frederick Prideaux.

Prideaux's forms and precedents in conveyancing : incorporating Wolstenholme's forms and precedents with dissertations and notes on its law and practice (Volume 2) online

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the partnership give the whole or any part of his share in the '—^

said business, and the profits thereof, to any son of his [who paXrt°"^

may become a duly qualified ], and may introduce such son InSusT^^"^

into the firm to the extent of the share given to him as aforesaid "^^^ ^'^- '
and in such case the introduced partner shall thenceforth durin-^
the residue of the period hereby fixed for the subsistence of the
partnership carry on the said business in partnership with the

sai<i (father) and {other partner), or the said (other

partner), as the case may be, for the residue of the said period
upon and subject to the like terms and conditions as are herein

contained with regard to the partnership between the said

(jather) and (other partner), or as near thereto as circum-
stances will permit [save that the introduced partner shall be
bound to devote the whole of his time to the said business
and diligently employ himself therein, and shall not have the

power hereby given to the said (father) of determining

he said partnership by notice or of introducing a son into the
business].

(2) The introduced partner shall at his own expense, and to the
reasonable satisfaction of the other partners, execute a deed
binding himself to comply with the aforesaid terms and condi-
tions, with such variations (if any) as the circumstances may
render necessary. -^



(0 Where a partner has power to introduce a son into the business the
other partners cannot object to his nomination if the nonainee accepts '
Byrne v. Betd, 1902, 2 Ch. 735 ; 71 L. J. Ch. 830. ^ '



1054



(forms) partnership.



No. 53.

Power for any
partner to
introduce a
son by Will.



Option may
be given
successively.



If nominee
takes no active
part in
management,
allowance to
be made to
otlier partners.



(1) Any partner may by Will or codicil nominate one of his
sons of full age to succeed on his death to his share of the
partnership assets and the capital and future profits thereof,
and the person so nominated shall [if and when Ije becomes a

qualified ] have the option of succeeding to the same share

upon signifying such option to the surviving or other partner
or partners within six calendar months next after the death of

the testator [or within calendar months after he becomes

qualified as aforesaid, which last happens], and the person
succeeding as aforesaid shall be and become a partner in the
firm in the place and in respect of the share of the testator upon
the same terms and conditions and in the same manner as the
testator if living would have been and remained a partner
therein, or as near thereto as circumstances will permit, and he
shall, if required so to do, execute a proper deed to the reason-
able satisfaction of the other partners or partner, binding
himself to observe the said terms and conditions accordingly.
But if the person so nominated as aforesaid shall not signify his
option to succeed to such share as aforesaid within six calendar
months after the death of the testator, then and in such case
he shall be deemed to have declined to succeed thereto, and the
nomination made by the Will of the testator shall be void and
of no effect.

(2) The said option may be given to any sons of the testator in
succession, provided that the same shall either be refused or
accepted within the time aforesaid.

[(2a) In case no person so nominated shall be qualified as
aforesaid within eighteen calendar months from the death of the
testator, the nomination shall be void.]

(3) If any person admitted into the partnership under the fore-
going provision shall be unable or unwilling to take an active
part in the management of the business, then and in either of
such cases the other partner or partners may take upon himself
or themselves the entire management of the said business, and
in such case such annual sum shall be allow^ed to the last-
mentioned partner or partners for his or their additional trouble
out of the share of the admitted partner in the profits of the said
business as shall be agreed between the partners, or (in case of
difference) as shall be determined by arbitration under the provi-
sions for that purpose hereinafter contained.



DISSOLUTION, RETIREMENT, AND EXPULSION. 1055

(4) If any partner dies without having nominated a son to Ordinary
be his successor as aforesaid, or if the person or persons so to^appiyTf
nominated dechne to succeed to his share as aforesaid, then and «»» ^loes not

' succeed to a

in any such case the share of the partner so dying shall, as from share,
his death, be subject to the provisions as to sale and valuation
hereinafter contained.



Section IX.

DISSOLUTION, RETIREMENT, AND EXPULSION.

(1) If a partner dies or becomes bankrupt, the partnership No. 54
shall be dissolved so far only as regards that partner



/v" " ' Partnership

(2) If a partner suffers his share of the partnership property to not to be
be charged within the meaning of the Partnership Act, 1890, for dissolved by
his separate debt, the partnership may at the option of the other ruptcy, Wcy,
partners be dissolved so far as regards that partner only. &c., ofone

1 • 1 n partner; the

(3) If the partnership shall be dissolved by the Court under other partners
section thirty-five of the said Act on account of the lunacy, of aUorney"^^
incapacity, or misconduct of a partner, the dissolution shall take

effect so far only as regards that partner unless the Court shall
otherwise determine.

(4) If a partner retires or is expelled from the pnrtnership
under any power herein contained, the partnership shall be
dissolved so far only as regards that partner.

(5) In each of the aforesaid cases the outgoing partner, in
consideration of the covenants by the other partners herein
contained, hereby irrevocably appoints the other partner [or
partners and eacli of them] to be his [attorneys or] attorney
for the purpose of getting in and assuring the share or interest
(whether legal or equitable) of the outgoing partner in the
partnership assets (including goodwill, if any) in manner herein-
after provided, and of getting in and compelling payment of any
book or other debts of the firm, and of giving notice to the
customers or clients of the firm of the change in the firm,
including the usual notice in the London Gazette, and for the
purposes aforesaid the [attorneys or] attorney, in his name and
on his behalf and as his act and deed or otherwise, may sign,
seal, dehver, execute, or give any conveyance, assignment, receipt,



1056



(forms) partnership.



Application of
the purchase-
money of the
share of the
outgoing
partner.



release, covenant, or other disposition, notice, advertisement, or
other instrument (w).

(6) In every such case as aforesaid all purchase-money or other
consideration attributahle to the share of the outgoing partner
shall ultimately be accounted for to the representatives, trustee
in bankruptcy, committee or receiver in lunacy, or to the out-
going partner as the case may require, but no purchaser or other
person or corporation dealing in good faith for money or money's
worth with the continuing partner [or partners] shall be con-
cerned to see as to the application of such purchase-money or
consideration.



No. 55.

Power for any
partner to
deternuno
partnorshij) if
no profits
made.



If upon taking the annual account it shall appear that the
partnership business has not been carried on during the then
preceding year so as to produce a profit, after allowing to each
partner interest at the rate of i'5 per cent, per annum on the
amount of his capital for the time being in the business, any
partner may at any time within one calendar month from the
time of taking the account give notice in writing to the other
partners or partner of his desire that the partnership shall
determine, and in such case the partnership shall cease and
determine immediately upon the service of such notice :

Provided always, that if the annual account for any year shall

not be signed by the partners before the day of in

that year, the question whether or not the business has in that
year produced profits after allowing interest as aforesaid shall be
referred to a chartered accountant as a single arbitrator under
the provisions of the Arbitration Act, 1889 ; and if the arbitrator
shall find that the business has not produced profits after allowing
interest as aforesaid, then the notice to determine the partnership
may be served at any time within one calendar month after the
date of such finding.



No. 56.

Power for a
jiartner to
retire by giving
notice.



Irrevocable
power of
attorney.



(1) If any partner shall be desirous of retiring from the firm at

the end of the or any subsequent year of the partnership term

and shall give to the other [partners or] partner at least six calendar
months' notice (expiring on or before the day fixed for taking
the annual account) to that effect, then the partnership shall

{ii) If this form is not used the irrevocable power of attorney can be
added later if required. If desired, separate persons may be named as
attorneys.



DISSOLUTION, RETIREMENT, AND EXPULSION. 1057

as regards only the partner giving such notice determine as from
such account day.

(2) The j^ower of attorney hereinbefore conferred shall apply
in any such case.



(1) If any partner shall make, draw, accept, or indorse any bill Nq. 57.
of exchange or promissory note, or give any security in the



name of the firm (except on account of the partnership business, partner in
and carrying on of the same in good faith), or shall suffer his eveiits^(t').
share of the partnership property to be charged within the
meaning of the Partnership Act, 1890, for his separate debt (.r),
or shall fail to account for money received by him in respect of
any partnership transaction after being required so to do by the
other partners or any of them, or shall act in other respects
contrary to the good faith which ought to be observed between
partners, or shall become incapable or unfit by reason of lunacy
-or otherwise to take his part in the management of the partner-
ship business, then and in any of such cases the other partner
[or partners] may, by notice in writing given to him or (in the
case of lunacy or unfitness) to his committee or receiver in
lunacy, expel him from the i^artnership as from the date of the
service of the notice, but so that if the expulsion shall be on
account of any breach of duty the notice shall be given within
three calendar months after the discovery thereof. And if any
question shall arise whether a case has happened to authorise
the exercise of this power, such question shall be referred to
arbitration under the power for that purpose hereinafter con-
tained [and if the matter is decided in favour of the outj^oinff



(r) Where a i)artner gives notice of dissolution under such a power as
given in the text, the notice is valid though it does not specify the cause of
complaint: Green v. Howell, 1910, 1 Ch. 495. A power to expel a partner
for scandalous conduct detrimental to the business was held exercisable,
where a partner was convicted for travelling without a I'ailway ticket :
Carmichad v. Evans, 1904, 1 Ch. 486 ; 73 L. J. Ch. 329. Again, where the
power extends to professional misconduct and a partner is a party to self-
puffing advertisements he may be exiDelled : Clifford v. Timms, 1908, A. C.
12 ; 77 L. J. Ch. 91.

{x) See s. 33 (2). Where a partner mortgages his share the mortgagees
are entitled to an account on dissolution : s. 31 (2) ; Bonnin v. Neame, 1910,
1 Ch. 732 ; 79 L. J. Ch. 388.

P. — VOL. II. 67



1058



(forms) partnership.



No. 58.

Outgoing
partner not to
practise or
carry on
business
within a cer-
tain area (y).



Covenant not
to practise
within a
certain area.



Not to be
interested in a
business.



partner the notice of expulsion shall remain valid, but he shall
be a^varded damages against the other partner or partners].

(2) In each of the afore.said cases the outgoing partner in
consideration, &c. {continue power of attorney as in Form No. 54).

[Or (2) The power of attorney hereinbefore conferred shall
ai^ply in any such case.]

(1) No partner who retires or is otherwise discharged from
the firm under any of the provisions hereof, or under any order of
the Court, or under the general law, shall at any time after his

retirement or discharge practise as a (solicitor, or plnjsician,

surgeon or apothecarn, dc.) [or carry on or be concerned or
interested {z), either directly or indirectly, as principal, agent,
director, manager, partner shareholder, or otherwise in any busi-
ness of a nature which might in any way compete with any business

for the time being carried on by the firm] , within a radius of

miles from {zz), nor solicit any client [customer, patient] of

the firm ; and if he commits a breach of this provision he

shall pay to the other partner or partners the sum of £

for every calendar month or part of a calendar month during
which he so practises [or carries on or is concerned with any
such business] by way of liquidated damages, and a further sum

of £ for every client [customer, patient] solicited by him or

by any person on his behalf.

(2) A COVENANT to the effect aforesaid may be inserted in any
deed of dissolution or other instrument executed in connexion
with such retirement or discharge.

[y) A covenant not to practise within a given area may not be broken
where the covenantor practises within the prohibited area but in such, a
way that the covenantee suffers no damage : Stivell v. Wright (1906), 50
Sol. J. 223. Acting as manager to another firm within the district con-
stitutes a breach of the covenant : Bohertson v. Willmolt (1909), 25 T. L. E.
681. Any covenantee may sue for breach : Palmer v. Mallet (1887), 36 Ch.
D. 411 ; 57 L. J. Ch. 226.

(2) A covenant not to be "interested " in a business in a given area does
not prevent the covenantee from becoming a servant at a fixed salary in a
similar business : GopJiir Diamond Co. v. Wood, 1902, 1 Ch. 950 ; 71 L. J. Ch.
550. The covenant may not jDrevent the wife of the covenantor from carry-
ing on business within the area : Smith v. Hancock, 1894, 2 Ch. 377 ; 63
L. J. Ch. 477 ; where a firm comprises several businesses, see Cori/ v.
Harrison, 1906, A. C. 274 ; 75 L. J. Ch. 714.

(zz) A breach is not committed if clients living within the radius are seen
in an office outside it: IVoodbridge v. Bellamy (1910), o5 Sol, J, 204.



DISSOLUTION, RETIREMENT, AND EXPULSION. 1059

(1) Upon the death of any partner, or upon any person No. 59.
ceasing to be a partner, the share of such deceased or out- upon death
going partner in the partnership business, including his capital j^aiikiuptcy,
therein and in the stock-in-trade and assets thereof, shall, as a partner, '
from the time of his death or his ceasing to be a partner, be pirtn'^rs"to
purchased by and belong to the remaining [partners or] partner, 'i"|^e^'oi® ^"^
and if more than one in equal shares [or in shares proi3ortionate dissolve the
to their then shares in the business], and [they or] he shall take
upon [themselves or] himself all the i^artnership debts and
liabilities as from the same date, and the partnership shall be
continued between the remaining i:)artners, if more than one,
under the provisions of these presents.

[(2) Provided always, that if the surviving or continuing
[partners or] partner shall, within six calendar months from
the death of the late partner or the time when the outgoing
partner shall cease to be a partner, give to his personal
representatives, trustee in bankruptcy, or committee or receiver
in lunacy, or to the outgoing partner himself (as the case may
require) notice in writing stating the intention of the surviving
or continuing [partners or] partner to wind up the partnership
affairs, instead of purchasing the share of the late or outgoing
partner as aforesaid, then and in such case the partnership
affairs shall be wound up as if the partnership had at the date
of the death of the late partner, or at the time when the outgoing
partner ceased to be a partner, determined by effluxion of time.]

[(3) This clause shall take effect subject and without prejudice
to any valid exercise by the late partner of his testamentary power
to nominate a son to succeed to his share.]

(4) The foregoing powers of attorney shall apply in any of
the cases aforesaid.

(1) If the partnership shall be dissolved by the death or No 60.
bankruptcy of a partner, or by reason of his having suffered Option for
his share to be char>];ed within the meaning of the Partnership '-o'ltniumg

° o I partners to

Act, 1890(a), for his separate debt, or shall be dissolved by the purchase share

/~i -I J • ,1 • n pji 'Tji "^1.1°^ deceased or

Court under section thirty-nve oi the said Act on account of the outgoing
lunacy, incapacity, unfitness or misconduct of a partner, or if ^^^^ "*^^'
any person shall otherwise cease to be a partner under any pro-
vision herein contained, then and in any of such cases the other

(a) See s. 33 (2).

67—2



1060



(forms) partnership.



[partners or] partner may purchase the share of the deceased or
outgoing partner in the partnership^ assets including his capital
upon giving to his personal representative, trustee in bankruptcy,
or committee or receiver in lunacy, or to the outgoing partner
himself (as the case may require) a notice in writing to that
effect at any time within three calendar months from the time
of his death or his ceasing to be a partner, and the purchase
shall take effect and relate back to the same time, and the other
[partners or] partner exercising such option shall be exclusively
liable for the partnership debts and lial)ilities from the same
time, and the purchased share shall be taken by them (if more
than one) in shares proportionate to their then shares in the
business.

(2) If the said option is not exercised within the time afore-
said, the partnership business shall be wound up as if the
partnership had at the date of death or cesser determined by
effluxion of time.

[(B) This clause. Sec. (coiitiuur as in Just Forni).^
(4) Thk foregoing powers of attorney shall apply in any of
the cases aforesaid.



No. 61.

Provision for
ascertaining
purchase-
money for
share of
deceased or
outgoinj^
partner by
vahiatiou (h).



(1) Thk purchase-money for the share of a deceased or out-
going partner shall be the net value thereof after providing for
the debts and liabilities of the firm on the day on which the
purchase takes effect, and in estimating such value the good-
will of the business shall [not] be taken into account.

(*2) If the parties shall be unable to agree as to the value
of the said share, the same shall be ascertained by two
independent valuers, one to be appointed by the representatives,
trustee in bankruptc}', committee or receiver in lunacy of the
deceased or outgoing partner, or by the latter himself, as the
case may require (hereinafter called the Vendor), and the other
by the other [partners or] partners (hereinafter called the
Purchaser), or by an umpire to be appointed by the two valuers
before they proceed to business, and if the Vendor or Purchaser
shall fail to appoint a valuer for fourteen days after being

{b) It is generally fairer to arrange for a valuation than to rely on the last
annvial account. If the Coiu't enforces a power to purchase a share which
is exercised, it will fix the valuation if necessary : Dinham v. Bradford (18(39),
L. E. 5 Ch. 519 ; and see Hordern v. //., 1910, A. C. 465. The goodwill must be
taken into account unless the clause provides to the contrary.



DISSOLUTION, KETIREMENT, AND EXPULSION. 1061

called on so to do by the other, or shall appoint a valuer who
shall refuse to act, the valuer appointed by the other party
shall make a final valuation alone.

(3) The purchase-money so ascertained to be the value of the
said share shall be paid by the Purchaser to the Vendor by
four equal instalments at the expiration of six, twelve, eighteen,
and twenty-four calendar months respectively, from the day on
which the purchase takes effect, with interest on the instalments
for the time being remaining unpaid at the rate of £6 per cent,
per annum.

(4) The Purchaser shall by deed covenant to pay the said
instalments and interest and to keep the Vendor and the
estate of the deceased or outgoing partner fully indemnified (c)
against the debts and liabilities of the firm.

(5) The Vendor shall at the request and cost of the Purchaser
do and execute all acts, deeds, and things necessary or proper
for vesting the share so purchased in the Purchaser and for
enabling the Purchaser to get in the outstanding credits and
assets of the firm.

(6) The powers of attorney hereinbefore conferred shall be
exercisable hj the Purchaser for giving eftect to the provisions
of this clause, including (if necessary) the appointment of a
valuer on behalf of the Vendor (d).

(7) The purchase-money for any such share may, under the
said powers of attorney or otherwise, be apportioned between
any of the items purchased.

(1) The purchase-money to be paid for the share of a deceased No. 62.
or outgoing partner to his representatives, or trustee in bank- rpj^^ jjj.^ ^
ruptcy, committee or receiver in lunacy, or the outgoing partner reference to

1 • IP 1 • /I • P 1, ? , T7 1 X the last annual

himself, as the case may require (hereinafter called the Vendor), account (e).
by the other [partners or] partner (hereinafter called the
Purchaser) shall be as follows : —

(i.) If the deceased or outgoing partner shall have died or

(c) The purchaser of a pai'tnership share must personally indemnif j- the
vendor against the partnership liabilities : Dodson v. Downey, 1901, 2 Ch. 620 ;
70 L. J. Ch. 854.

{d) See Form No. 54.

(e) This Form should be used in partnershijis between persons in a pro-
fession, but not in the case of trading partnerships where the value of the
stock-in-trade, &c., may vary to a large extent.



10G2 (forms) partnership.

ceased to be a partner before the day of next (the

first annual account clay), then a sum equal to the capital brought
in by him into the partnership as hereinbefore mentioned, with

interest on such sum at the rate of M per cent, per annum

from the commencement of the partnership until the day of his
death or of his ceasing to be a partner as aforesaid, such interest
to be in lieu of any share of profits during that period.

(ii.) If the deceased or outgoing partner shall have died or
ceased to be a partner on an annual account day in any year,
then such a sum as by the annual account shall he found to be
the net amount or value of the said share on such account
day.

(iii.) If the deceased or outgoing partner shall have died or

ceased to be a partner on any day later than the day of

next (first annual account day), and not being any subse-
quent annual account day, then such a sum as by the annual
account shall be found to be the net amount or value of the
said share on the account day(,/') immediately preceding his
death, or the day of his ceasing to be a partner as aforesaid,

with interest on the same sum at the rate of £ per cent, per

annum from the same account day up to the day of his death or
of his ceasing to be a partner as aforesaid, such interest to be
in lieu of any share of profits during the same period.

(2) The interest payable under this clause in lieu of profits
shall be paid on demand, and the purchase-money payable here-
under shall be paid by four equal instalments, at the expiration
of six, twelve, eighteen, and twenty-four calendar months
respectively from the death of the late partner or from the time
of the outgoing partner ceasing to be a partner as aforesaid,
with interest on the amount for the time being remaining
unpaid at the rate of £b per cent, per annum, computed from
the same time.

(3) The Purchaser shall by deed (continue as in sub-clause (4)
of last Form).

(4) The Vendor shall (continue as in sub-clause (5) of last
Form).



Goodwill. (./' ) Unless goodwill is expressly mentioned, no allowance will be made in

respect of it where the price of the retiring partner's share is based on the
last annual profit and loss account : Scott v. S. (1904), 89 L. T. 582.



DISSOLUTION, RETIREMENT, AND EXPULSION. 1063

(5) The powers of attorney hereinbefore conferred shall be
exercisable for giving effect to the provisions of this clause (./)



Online LibraryFrederick PrideauxPrideaux's forms and precedents in conveyancing : incorporating Wolstenholme's forms and precedents with dissertations and notes on its law and practice (Volume 2) → online text (page 118 of 138)