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A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.?
Most Upvoted Answer
A, B and C are partners in a firm carrying on money leading business. ...
Liability of C in a Money Lending Firm
Introduction:
A, B and C are partners in a money lending firm. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell the jewellery and misappropriate the money. C, being a sleeping partner, has no knowledge of this sale. D files a suit against all three partners.
Liability of C:
C can be held liable for the actions of A and B in misappropriating the money from the sale of D's jewellery. This is because, as a partner in the firm, C is jointly and severally liable for the acts of his co-partners in the course of business.
Joint Liability:
Joint liability means that all partners are responsible for the debts and obligations of the firm. In this case, A and B sold the jewellery and misappropriated the money. Since they did so in the course of business, they are liable for the loss caused to D. As a partner in the firm, C is also jointly liable for the loss.
Several Liability:
Several liability means that each partner is personally responsible for the debts and obligations of the firm. In this case, A and B are personally liable for the loss caused to D. However, since C is a sleeping partner and has no knowledge of the sale, he may be able to claim a defence of innocent misrepresentation or fraud.
Conclusion:
In conclusion, C can be held liable for the loss caused to D as a result of the actions of A and B. However, he may be able to claim a defence of innocent misrepresentation or fraud, depending on the circumstances of the case. It is important for partners in a firm to be aware of their joint and several liability and to take steps to protect themselves from the actions of co-partners.
Introduction:
A, B and C are partners in a money lending firm. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell the jewellery and misappropriate the money. C, being a sleeping partner, has no knowledge of this sale. D files a suit against all three partners.
Liability of C:
C can be held liable for the actions of A and B in misappropriating the money from the sale of D's jewellery. This is because, as a partner in the firm, C is jointly and severally liable for the acts of his co-partners in the course of business.
Joint Liability:
Joint liability means that all partners are responsible for the debts and obligations of the firm. In this case, A and B sold the jewellery and misappropriated the money. Since they did so in the course of business, they are liable for the loss caused to D. As a partner in the firm, C is also jointly liable for the loss.
Several Liability:
Several liability means that each partner is personally responsible for the debts and obligations of the firm. In this case, A and B are personally liable for the loss caused to D. However, since C is a sleeping partner and has no knowledge of the sale, he may be able to claim a defence of innocent misrepresentation or fraud.
Conclusion:
In conclusion, C can be held liable for the loss caused to D as a result of the actions of A and B. However, he may be able to claim a defence of innocent misrepresentation or fraud, depending on the circumstances of the case. It is important for partners in a firm to be aware of their joint and several liability and to take steps to protect themselves from the actions of co-partners.
Community Answer
A, B and C are partners in a firm carrying on money leading business. ...
Yes because sleeping partner will be liable to third party for the acts of the firm.
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A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.?
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A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.?.
A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C are partners in a firm carrying on money leading business. D, a customer, deposits his jewellery with the firm for safe custody. A and B sell this jewellery and misappropriate the money C, being a sleeping partner, have no knowledge about this sale. Now, D files a suit against all the three partners. Can C be held liable? Give reasons.?.
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