Question

In which of the following case Garner v. Murray rule is NOT applicable?
1. Only one partner is solvent
2. All partners are insolvent
3. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options giiven below :-

• A. 1 Only
• B. 1 & 2 only
• C. 3 only
• D. 1, 2 & 3

Answer 1

The correct option is D 1, 2 & 3

Garner Vs Murray rule states that only one partner being insolvent other solvent pays the loss in capital ratio.

As per this statement, all the options are not under Garner Vs Murray rule.

The first option is not applicable because in this case only one partner is solvent and there must be at least two solvent partners.

The second option is again not applicable because here partners are insolvent and there is no partner to pay the loss of insolvency.

The third option doesn't go with the rule because the firm has used its own methods for insolvency rather than using Garner vs Murray rule.