PARTNERSHIP. 2331

(b) By any transaction which would bind the partnership if dissolu-
tion had not taken place, provided the other party to the transaction

I. Had extended credit to the partnership prior to dissolution and had
no knowledge or notice of the dissolution; or

II. Though he had not so extended credit, had nevertheless known, of
the partnership prior to dissolution, and, having no knowledge or notice
of dissolution, the fact of dissolution had not been advertised in a news-
paper of general circulation in the place (or in each place if more than
one) at which the partnership business was regularly carried on.

(2) The liability of a partner under paragraph (1b) shall be satisfied
out of partnership assets alone when such partner had been prior to dis-
solution

(a) Unknown as a partner to the person with whom the contract is
made; and

(b) So far unknown and inactive in partnership affairs that the busi-
ness reputation of the partnership could not be said to have been in any
degree due to his connection with it.

(3) The partnership is in no case bound by any act of a partner after
dissolution

(a) Where the partnership is dissolved because it is unlawful to carry
on the business, unless the act is appropriate for winding up partnership
affairs; or

(b) Where the partner has become bankrupt; or

(c) Where the partner has no authority to wind up partnership affairs,
except by a transaction with one who

I. Had extended credit to the partnership prior to dissolution and had
no knowledge or notice of his want of authority; or

II. Had not extended credit to the partnership prior to dissolution, and,
having no knowledge or notice of his want of authority, the fact of his
want of authority has not been advertised in the manner provided for ad-
vertising the fact of dissolution in paragraph (1bII).
(4) Nothing in this section shall affect the liability under section 16
of any person who after dissolution represents himself or consents to an-
other representing him as a partner in a partnership engaged in carrying
on business.

An. Code, sec. 36. 1916, ch. 175, sec. 36.

36. (EFFECT OF DISSOLUTION ON PARTNER'S EXISTING LIABILITY.)
(1) The dissolution of the partnership does not of itself discharge the
existing liability of any partner.

(2) A partner is discharged from any existing liability upon dissolu-
tion of the partnership by an agreement to that effect between himself,
the partnership creditor and the person or partnership continuing the. busi-
ness ; and such agreement may be inferred from the course of dealing be-
tween the creditor having knowledge of the dissolution and the person or
partnership continuing the business.

(3) Where a person agrees to assume the existing obligations of a dis-
solved partnership, the partners whose obligations have been assumed shall