2776 ARTICLE 73A

An. Code, 1924, sec. 39. 1912, sec. 39. 1916, ch. 175, sec. 39.

39. (Rights Where Partnership is Dissolved for Fraud or Misrepre-
sentation.) Where a partnership contract is rescinded on the ground of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, 1924, sec. 40. 1912, sec. 40. 1916, ch. 175, sec. 40.

40. (Rules for Distribution.) In settling accounts between the part-
ners 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.

(e) An assignee for the benefit of creditors or any person appointed
by the court shall have the right to enforce the contributions specified in
clause (d) of this paragraph.

(f) Any partner or his legal representative shall have the right to en-
force the contributions specified to clause (d) of this paragraph, to the
extent of the amount which he has paid in excess of his share of the
liability.

(g) The individual property of a deceased partner shall be liable for
the contribution specified in clause (d) of this paragraph.

(h) When partnership property and the individual properties of the
partners are in the possession of a court for distribution, partnership cred-
itors shall have priority on partnership property and separate creditors on