Is a partner or a former partner of a partner able to hold assets acquired with their partner's funds in trust?
British Columbia, Canada
The following excerpt is from Davis v. Ouellette, 1981 CanLII 626 (BC SC):
In my view a partner or a former partner holds assets acquired with his partner's funds in trust. The leading case on the question seems to be Jones v. Foxall (1852), 15 Beav. 388, 51 E.R. 588. That was a case where the sum of £350 was advanced to a firm of bankers on terms that it be repaid on demand or, in any event, upon the death of the settler, and thereafter reinvested for the benefit of the plaintiff. The settler died but the funds were not recovered. Instead, they were employed as part of the capital of a firm in which the defendant was a principal. The defendant admitted his liability to return the funds with interest but that was not accepted.
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