PARTNERSHIP. 2333

II. If the business is continued under paragraph (2b) of this section
the right as against his co-partners and all claiming through them in
respect of their interests in the partnership, to have the value of his in- .
terest in the partnership, less any damages caused to his co-partners by the
dissolution, ascertained and paid to him in cash, or the payment secured
by bond approved by the court, and to be released from all existing liabili-
ties of the partnership; but in ascertaining the value of the partner's in-
terest the value of the good-will of the business shall not be considered.

An. Code, sec. 39. 1916, ch. 175, sec. 39.

39. (RIGHTS WHERE PARTNERSHIP IS DISSOLVED FOR FRAUD OR
MISREPRESENTATION.) Where a partnership contract is rescinded on
the ground of the fraud or misrepresentation of one of the parties thereto,
the party entitled to rescind is, without prejudice to any other right,
entitled,

(a) To a lien on, or right or retention of, the surplus of the partner-
ship property after satisfying the partnership liabilities to third persons
for any sum of money paid by him for the purchase of an interest in the
partnership and for any capital or advances contributed by him; and

(b) To stand, after all liabilities to third persons have been satisfied,
in the place of the creditors of the partnership for any payments made by
him in respect of the partnership liabilities; and

(c) To be indemnified by the person guilty of the fraud or making the
representation against all debts and liabilities of the partnership.

Partners are entitled to sue after they incorporate on a claim accruing prior thereto,
even if the incorporation could be regarded as dissolution of partnership. Berman v.
Littauer, 141 Md. 653.

An. Code, sec. 40. 1916, ch. 175, sec. 40.

40. (RULES FOR DISTRIBUTION.) In settling accounts between the
partners after dissolution, the following rules shall be observed, subject
to any agreement to the contrary:

(a) The assets of the partnership are:

I. The partnership property,

II. The contributions of the partners necessary for the payment of all
the liabilities specified in clause (b) of this paragraph.

(b) The liabilities of the partnership shall rank in order of payment,
as follows:

I. Those owing to creditors other than partners,

II. Those owing to partners other than for capital and profits,

III. Those owing to partners in respect of capital,

IV. Those owing to partners in respect of profits.

(c) The assets shall be applied in the order of their declaration in
clause (a) of this paragraph to the satisfaction of the liabilities.

(d) The partners shall contribute, as provided by section 18 (a) the
amount necessary to satisfy the liabilities; but if any, but not all, of the
partners are insolvent, or, not being subject to process, refuse to contribute,
the other partners shall contribute their share of the liabilities, and, in
the relative proportions in which they share the profits, the additional
amount necessary to pay the liabilities.