11Misapplication of money or property received for or in the custody of the firm

11 Misapplication of money or property received for or in the custody of the firm

11 Misapplication of money or property received for or in the custody of the firm

(1) In the following cases involving the partners of a firm other than an incorporated limited partnership, namely—

(a) Where one partner acting within the scope of the partner’s apparent authority receives the money or property of a third person and misapplies it, and

(b) When a firm in the course of its business receives money or property of a third person, and the money or property so received is misapplied by one or more of the partners while it is in the custody of the firm,

the firm is liable to make good the loss.

(2) In the following cases involving general partners in an incorporated limited partnership—

(a) where one general partner acting within the scope of the general partner’s apparent authority receives the money or property of a third person and misapplies it,

(b) when an incorporated limited partnership in the course of its business receives money or property of a third person, and the money or property so received is misapplied by one or more of the general partners while it is in the custody of the incorporated limited partnership,

the incorporated limited partnership is liable to make good the loss.

s 11: Am 1994 No 32, Sch 3; 2004 No 8, Sch 1 [23] [24].