MyQuestionIcon

4

You visited us 4 times! Enjoying our articles? Unlock Full Access!

Adjustment in Partner's Capital A/c

X and Y are p...

Question

X and Y are partners of a banking firm. X receives certain securities from a customer for safe custody and puts in the Sate custody of the firm. Y disposes off those securities and applies the money for his own use. Is the firm liable for Ys act?

Open in App

Solution

Solution: Section to which the given problem relates: Section 27.
Decision: Yes.
Reason: The firm is liable for the misapplication of property by a partner if the property was in the custody of the firm
[Leading case: .Devaynes v. Noble].

Suggest Corrections

thumbs-up

0

Similar questions

Q. A,B C, D and E are partners of a banking firm. State the legal position Of firm for the following acts of partners
(a) A borrows money in the name of the firm.
(b) B orders for certain quantity of wine, on the firms letter head.
(c) C receives money from a borrower of a firm and utilised this amount for personal use without informing other partners about the receipt of this money.
(d) .D borrows money on his own credit by giving his own promissory note and utilises subsequently this amount for firms use.

Q. LEGAL PRINCIPLE: Every partner in a partnership firm is liable for the acts of every other partner during the course of business of the partnership firm.
FACTUAL SITUATION: A, a partner in the firm XYZ with another partner B takes loan from a bank for the partnership firm. A misuses the fund for his personal use. B is very resourceful person. Can the bank demand the entire money from B?
DECIDE.

Q. Given below are Legal Principles followed by a Factual Situation. Apply the principles followed by a factual Situation. Apply the principle to it and select the most appropriate answer for question among the four choices given.
LEGAL PRINCIPLES: Every partner in a partnership firm is liable for the act of every other partner during the course of business of the partnership firm.
FACTUAL SITUATION: "A" a partner in the firm "XYZ" with another partner "B" takes loan from a bank for the partnership firm. A misuses the fund for the personal use. "B" is a very resourceful person. Can the Bank demand the entire money from "B"?
DECIDE.

Q. A retiring partner is liable for all acts of the firm __________.

Q. The estate of a deceased partner is liable for any act of the firm done after his death.

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Let’s Settle

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Adjustment in Partner's Capital A/c

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon