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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> John Geddes v. Archibald Wallace, for Himself and Partners [1820] UKHL 2_Bligh_270 (00 January 1820) URL: http://www.bailii.org/uk/cases/UKHL/1820/2_Bligh_270.html Cite as: [1820] UKHL 2_Bligh_270 |
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Page: 270↓
(1820) 2 Bligh 270
REPORTS OF CASES HEARD IN THE HOUSE OF LORDS, UPON APPEALS AND WRITS OF ERROR, And decided during the Session, 1820.
1 Geo. IV.
SCOTLAND.
ON APPEAL FROM THE COURT OF SESSION, (First Division.)
No. 9
The manager of a partnership concern, having a salary, with a share of the profits, according to a proportion of capital and stock not advanced by him, but assigned by way of nominal interest, (for the purpose of creating an addition to his salary, depending upon the contingency of the success which might be consequent upon his skill and industry,) is not a partner subject to loss in account with the other partners.
In such a case the manager is not liable for loss, although it is expressed in the articles of partnership that the partners (not excepting the manager,) are to be “subject to profit and loss,” and although the manager signed the partnership books, joined in securities given by the partnership, and in most other partnership acts, including the advertisement for a dissolution; because it appeared, from the general structure, and all the provisions of the contract taken and construed together, as well as from the transactions between the parties and the conduct of the other partners, that the provision as to profit and loss was not intended to apply to the manager.
If it were so intended originally, it could not be enforced at the date the suit commenced, because the other partners, upon the dissolution of the partnership, and for many years afterwards, made no mention of the subject, and particularly as in a former suit between them and their manager respecting the amount of his salary, they omitted to make any claim against him as partner for a share of loss; and more especially as the Court below, and the House of Lords on appeal in that suit, estimated the salary on the supposition that
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the manager was entitled to a share of profit as an addition to his salary, without being subject to loss, no mention or claim having been made on that subject, either in the original suit in the Court below, or upon appeal. A partner may be liable for loss as to the creditors of the partnership, and not so as to his copartners.
The most positive expressions as to liability to loss, in articles of copartnership, may be controlled and superseded by transactions between the parties, the conduct of the copartners, and the special circumstances of the case, including non-claim, and inconsistent representations during a protracted litigation, which furnished occasion to make the claim if the right existed.
The transactions between partners may amount to a waiver of a written agreement, or evidence of a new agreement, different from written articles, provided those transactions show a probability, amounting almost to demonstration, that the articles were otherwise intended.
In September 1785, the firm of “The Glasgow Bottlework Company,” having lately purchased the concern in which the appellant was manager, retained the appellant in his situation, and agreed to allow him a fixed salary of 100 l. per annum, with a thirteenth share of the free profits of the trade, not requiring him to advance any capital.
Soon after the establishment of the bottlework company, a proposal was made to them by “Hamilton, Brown, Wallace, and Company,” manufacturers of flint glass at Verreville, Glasgow, to unite into one company; and in June 1786 a partnership was formed, which assumed the denomination of “The Glasgow Glasswork Company.” The nature of the connection between the appellant and this company forms the subject of the present appeal.
The superintendence of the manufacturing department, both of the bottlework and of the flint
Page: 272↓
The new company did not immediately upon their formation execute a written contract of co-partnership. In the mean time the committee held meetings for the purpose of conducting the business, and inserted their resolutions and orders in a sederunt book. The appellant attended them to receive instructions as manager, and subscribed some of the minutes in the book.
Articles of partnership, 1786.
The contract of co-partnery *, which was subscribed by the appellant, declares that the stock of the Glasgow glasswork company was to be 12,000 l.; of which 8,000 l. was to be advanced, and 4,000 l. was to be borrowed. Eight shares were to belong to the partners of the bottlework company; eight shares were to belong to Hamilton, Brown, Wallace, and company; and the appellant was to have one seventeenth share, without advancing any capital.
The article, by which this arrangement is made, is expressed thus: “Third, In the said capital stock of 12,000
l. sterling, the
partners shall be interested
in the profit or loss in the following proportions; viz. the partners under the firm of Glasgow bottlework company eight seventeenths; and the partners under the firm of Hamilton, Brown, Wallace, and company, eight seventeenth
_________________ Footnote _________________ * To avoid repetition, some of the provisions of the articles of copartnership, which are stated by the
Lord Chancellor in moving judgment, are omitted here.
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The ninth article provided, that “the company's books shall be balanced upon the 31st day of December yearly, and docqueted in three months thereafter, beginning the first balance upon the 31st day of December 1787, when the company's free stock shall be ascertained, which shall then, and yearly thereafter, be subscribed by a majority of the partners in point of interest; and which docqueted balance shall be held good and probative for and against all parties concerned.”
The fifteenth article declared, that “although, by this contract, the said John Geddes is admitted a partner, and holds one seventeenth share in this company, yet it is expressly declared and understood to be under the conditions and restrictions more particularly specified in an agreement of this date, made and entered into between him and the company, and to which all the parties hereto bind and oblige themselves to conform.”
The contract, towards the close, contains the following declaration:
“That although, by the eighteenth and eleventh articles of the foregoing contract, certain rules and regulations are laid down for the payment of the shares of deceasing or bankrupt partners, yet, notwithstanding thereof, it is specially covenanted and agreed to by the whole parties hereto, that the stock or interest in this co-partnery of deceasing or bankrupt partners shall not be paid to their executors or creditors by this company, but that the same shall fall and devolve upon the remanent partners, of whichever
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of the said Glasgow bottlework company, or Hamilton, Brown, Wallace, and company, they may respectively be partners; which respective companies shall be entitled to hold and enjoy the said shares, and settle with the executors or creditors of such deceasing or bankrupt partners, according to the rules of their own co-partnery.”
The agreement, stated in the fifteenth article of the contract, was drawn up, but not signed by the appellant or the other partners.
This agreement, among other things, provided, 1st, “That the said John Geddes shall take the management and direction of the business of the company, for which he shall be allowed the sum of 100 l. sterling yearly out of the company's stock during his management, besides his one seventeenth share of the profits or loss arising from the business, if any be, as likewise the house usually occupied by the company's manager, and coals and candles for his family: 2d, In consideration of which the said John Geddes shall devote his whole time and attention to the affairs and business of the company, and keep such regular books and accounts as necessarily belong to the business of his department, and which shall be open to the inspection of the partners at all times; that he shall likewise engage or cause to be made all the pots necessary for the business; and in short, he hereby engages to do whatever else may be required of him for the interest and advantage of the company: that he shall at all times subject himself to such orders and regulations as a majority of the partners in
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Part of the appellant's duty originally as manager, was to keep the books personally; but in September 1787, the minutes of the committee of management state, that as the appellant had too much to do, it would be expedient to get a man “who would take charge of the mercantile part of the business, such as the writing of letters, making out invoices, taking care that orders were properly and expeditiously executed,” &c. so as to leave the appellant full leisure to attend to the manufacturing part of the business. In pursuance of this resolution, a clerk was employed to keep the books and attend to the mercantile part of the business, as an assistant to the appellant.
In the balance book of the company, where the balance sheets of each year were entered and docqueted, were docquets dated 15th April 1789, 12th March 1790, 17th March 1791, and 3d April 1792; the three last were signed by the appellant, and express that the partners then “examined the books of the Glasgow glasswork company, kept by John Geddes,” &c.
The capital consisted of buildings, tools, and stocks of manufactured glass, belonging to the two former companies, which were purchased or taken by the united company, according to inventories and
Page: 277↓
When the stock of the company was fixed, and the inventories and valuations made, accounts were opened in the ledger for the shares of stock belonging to the different parties interested. The plan being that the bottlework company and the flint glass company should rank as creditors on the funds and profits or losses; eight seventeenths of the stock were entered in a stock account to the Glasgow bottlework company; eight seventeenths to the flint glass company, Hamilton, Brown, Wallace, and Co.; and the remaining one seventeenth to the appellant.
A stock account was opened for him at the first valuation, crediting him with one seventeenth share of the stock, which then was 625 l. This sum was not advanced by Mr. Geddes, though credited to him in the stock account; there was therefore a second account opened, viz. a common stock account current, in which the preceding share of stock was stated to his debit.
In December 1788, upon a balance of the books, there was an apparent profit of 1,475 l. 10 s.; but the balance book states, that as no allowance had been made for bad debts, and as the buildings were stated rather high, the company ordered a deduction to be made from the valuations of the whole, to the amount of 2.626 l. This made a loss on the balance of 1788, of 1,151 l. 5 s. 10 d.; and Mr. Geddes' one seventeenth of that loss, 67 l. 14 s. 5 d. is charged to his debit, but he did not sign the docquet, although he acquiesced in the arrangement.
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28th Sept. 1790.
Minutes in company's sederunt book as to shares, and profit and loss.
On the 28th of September 1790, a minute was entered in the sederunt book, dividing the shares into eighty-five parts, and mentioning the number of shares opposite to the names of each of the partners. Mr. Geddes' share is entered thus: “To John Geddes 5–85ths.” His name is entered on the list like those of the other partners, after which the minute proceeds as follows: “In which proportions we declare ourselves to be interested, and to draw profit or suffer loss accordingly; and in case of the death or bankruptcy of any of the partners, the share of such deceased or insolvent partner shall fall in and belong to the company in general, agreeable to the manner as specified in the contract of co-partnery, in every respect, except in belonging to the particular company to which said partner originally belonged, which is hereby in so far altered. In witness whereof, &c.”
This minute was signed by the appellant.
1790. March 12, Minute as profit then made.
In 1790 the books were balanced. They showed a supposed profit of 1,055 l. 4 s. 4 3⁄4 d.; and the docquet at this balance, which was also signed by the appellant, is in the following terms. “At Glasgow, the 12th day of March 1790: We subscribers, all partners in trade, buildings, and other effects contained in this and the other books belonging to the concern carried on under the firm of The Glasgow Glasswork Company, as kept by our partner, Mr. John Geddes, and the clerks under him; having examined the said account books and inventories, as made up to the 1st day of January last, find the same to be fairly stated, and brought to a balance, and that the profit for last year amounts to 1,055 l.
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1792, April 3d.
Docquet immediately prior to the dissolution of the company.
The docquet entered immediately before the dissolution of the company, which is also signed by Mr. Geddes, was to the following effect: “At Glasgow the 3d day of April 1792: We, James Dunlop, &c. and John Geddes, all merchants in Glasgow, and partners in the business carried on here under the firm of the Glasgow Glasswork Company having examined the books of the said company (kept by John Geddes) from the 1st day of January 1791, to the 1st of January last, find the same to be fairly entered and stated, and brought to a balance as above, and on the thirteen preceding pages: that the capital of the company amounts to 11,166 l. 10 s. 5 d. sterling, which belongs to the partners according to their respective shares, narrated in sederunt dated the 28th day of September 1790. That the property and debts belonging to the company amount to 23,387 l. 1 s. 8 d. sterling, the debts due by the company amount to 11,778 l. 1 s. 6 d. and the neat profit for said year to 442 l. 9 s. 9 d. sterling. We hereby order that 53 l. 9 s. 7 d. of the sum gained be applied to the credit of
Page: 280↓
In the year 1792, the Dumbarton Glasswork Company having made an offer to purchase the whole buildings and property of the company, it was resolved to accept of the offer, and to dissolve the company as at December 1792.
The minute agreeing to dissolve the company, is signed by Mr. Geddes as well as the rest of the partners. The advertisement published in the Gazette and other newspapers, with the subscription of the partners, intimating the dissolution of the company, had the appellant's name subscribed to it as a partner, and the minute of sale by the Glasgow to the Dumbarton Company was signed by Messrs. Wallace, Warrock and Geddes.
14 Feb. 1793. Minute after the dissolution of the company.
10 July, 1798. His answer.
Immediately after the dissolution of the company the books were balanced on their prior transactions, when it appeared that there were nearly 19,000 l. of debts owing to, and upwards of 11,000 l. owing by, the company. Supposing the debts good, the loss upon the balance for that year would have been 2,766 l. 7 s. 3 d. which the partners by their docquet ordered to be applied to the debit of the different partners stock accounts, according to their respective
Page: 281↓
This minute was not signed by the appellant. Some time elapsed after the dissolution of the partnership, while the partners were employed in winding up their affairs. After the debts due to and from the company had been settled, it ultimately turned out that there was such a defalcation of funds, from the failures of persons indebted to the company, and other causes, that the partners, when interest was calculated on their respective balances, were subject to a loss.
In 1798, Mr. Archibald Wallace, one of the respondents, transmitted to the appellant a statement of accounts between him and the company, in which the appellant's share of loss is placed to his debit.
The appellant on the 10th July 1798, returned an answer, in which he said, that the company were considerably in debt to him; and in a subsequent part of his letter he adds, “I have nothing to do with the losses of the late Glasgow glasswork company. If they think otherwise, they must take what measures they can for making their claim effectual.”
Page: 282↓
During the period of his connexion with the Glasgow glasswork company, the appellant had occasionally drawn from the company's funds small sums for his subsistence. After he had quitted the service of the company, some further payments were made to him in liquidation of his allowances; but no conclusive settlement was made. The company insisted, that he had overdrawn the sum to which he was entitled; and that upon making up the books, it appeared that he was debtor to the company to the amount of 650 l. 11 s. 2 d. being for payments made to him, after he quitted their service.
The claim which the company thus made against the appellant, to refund the money so paid to him, rested upon an assertion, that the appellant was entitled to no higher salary than 100 l. per annum. The appellant offered to consent to an adjustment of the amount of his salary by reference to arbitrators, which was accepted by the respondents, and two persons with an umpire were named.
The bond of arbitration submits all pleas, claims, and debates, “and debateable matter whatever, presently subsisting between the said Glasgow glasswork company and the said John Geddes, for whatever cause or occasion, previous to the date hereof; and particularly, without prejudice to the said generality, a claim made by the said John Geddes upon the said parties or partners of the said Glasgow glasswork company, for a certain sum of money to be allowed him for his management of the company's affairs, and extra trouble while he superintended their works, to the decree arbitral of,” &c.
Page: 283↓
15 June, 1795.
In the pleadings under the submission, the claims of the parties were confined to two points; first, a claim for adequate salary on the part of the appellant; and secondly, a counter claim for advances made in cash and goods by the company to the appellant, after he quitted their service. These advances, after extinguishing a salary of 100 l. per annum, left a surplus of 602 l. 9 s. 8 d. In a letter to their law-agent at Edinburgh, the company say, “the difference between the company and Mr. Geddes is chiefly, if not solely, a claim of salary for additional trouble.”
The submission having expired without a decree, the parties had recourse to a court of law. The company raised against the appellant an action in the Court of Session in Scotland, in the name of Mr. Hamilton, one of the partners, as attorney for the rest, concluding for payment of 650 l. 11 s. 2 d. with interest from 31st December 1792, the date at which the books were balanced. The above sum was the alleged surplus received by the appellant over and above the salary for six years and a half. The appellant raised a counter action against the company, concluding for payment of 911 l. 3 s. This action was founded on the claim of the appellant to be entitled to salary at the rate of 275 l. per annum.
After the cause had been brought into court, the appellant, in a letter to one of the partners, proposed a new reference, which was at last agreed to, and the arbitrators named and appointed.
July 23, 1798.
In this second submission, the claims of parties stood as before. Archibald Wallace, acting for the
Page: 284↓
The company in their pleadings further insisted, that in their books they had given credit to the appellant at the rate of 100 l. per annum, and that the
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By an interlocutor, dated November 13th 1798, Lord Craig, (Ordinary) found the appellant entitled to salary, at the rate of 120 l.
Interlocutor of Lord Ordinary, 13 Nov. 1798.
Both parties lodged representations to the Lord Ordinary against that judgment.
Interlocutor, 11 June, 1800.
The Lord Ordinary having adhered to his judgment, both parties presented petitions to the whole court, and the case was remitted to persons acquainted with this branch of business, to report their opinion upon the merits of the appellant's claim for salary. The following judgment was afterwards pronounced:
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The appellant acquiesced in this judgment; but the company presented a reclaiming petition, which was refused; whereupon the company appealed to Parliament.
In the printed cases of the company presented to the House of Lords, as appellants, in that case, the second reason of appeal is in these words: “The manager, as a partner, has a share of the profits; and, when the two glasswork companies were united in 1786, there was conferred on him a greater proportion of those profits than upon the other partners.” It was added, they, “made Mr. Geddes's emoluments to a certain extent to depend upon their trade being profitable or not; for they made him a partner entitled to a share of
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The fifth reason of appeal declares, that Mr. Geddes (then manager) had a share of profits as a partner without capital, “which he accordingly received as the salary due to him.”
26 March 1805.
The judgment of the Court of Session was affirmed in the House of Lords, and the cause returned to Lord Craig, Ordinary, to adjust the accounting between the parties. The appellant put into process a state, showing, that in terms of the final interlocutors of the Court of Session, affirmed in the House of Lords, he was creditor of the company to the amount of 401 l. 3 s. of principal, and he claimed interest on the arrears of his salary.
A new litigation now commenced in the form of objections, answers, replies, and duplies. Disputes were raised about the mode of charging interest, &c. and the company now brought forward a claim which had formed no part of their former pleadings, that Mr. Geddes must be liable for a share of losses sustained by the company many years before, to an extent sufficient to extinguish his claim of salary, and to turn the balance against him.
Interlocutor of Lord Ordinary, 13 May, 1806.
On the 13th of May 1806, Lord Craig, Ordinary, pronounced the following interlocutor:
“Having considered the foregoing objections for Gilbert Hamilton, and the other partners of the late Glasgow glasswork company, defenders, with the answers thereto for John Geddes, pursuer, replies, and duplies,—Finds, that an interest account must be stated between the parties, giving each of them interest on the sums they shall appear to
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be in advance; and, with regard to the plea of compensation for alleged loss, finds it too late to insist on this claim in the present process; and, before answer as to the other points of the cause, remits to Mr. Claud Russell, accountant, to examine the books of the company, and vouchers, and to report his opinion thereanent quam primum”
Interlocutor, June, 1815.
The action about the salary, after much further litigation, terminated in favour of the appellant, by a judgment, in June 1815 for his salary, with expenses.
Nov. 1808. New action for loss.
In the meantime, in consequence of Lord Craig's interlocutor, refusing to allow the new claim for loss to be intermingled with the original action about salary, the company, in November 1808, brought a new action, concluding against the appellant for payment of a share of alleged losses said to have been sustained by the company. The sum of 512 l. 9 s. was claimed as the appellant's share of loss to January 1798, with interest from that date, and a further claim was made for posterior losses.
The appellant, on his part, raised a counter action, concluding for an accounting and payment of the share of profits due to him by the company, upon the supposition that he was entitled to receive a share of profits during those years in which no loss occurred.
The action, at the instance of the company, was brought in the name of Mr. Hamilton, one of the partners of the company; upon whose death, Mr. Wallace, another partner, became the pursuer. This second action also depended before Lord Craig, by whom a remit was made to an accountant, to inquire
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Feb. 19, 1814.
First interlocutor appealed from.
The actions about profits and losses, which had been conjoined, being remitted, upon the death of Lord Craig, to Lord Gillies, as Ordinary, he pronounced the following interlocutor: “Having heard parties procurators—Finds, that Mr. Geddes is liable in his share of the loss as a partner of the Glasshouse company; but that no part of the expenses incurred in the process, at his instance, for salary, falls to be stated as a part of the loss, but that the same must fall entirely upon the other partners.”
Mar. 11, 1814.
Second interlocutor appealed from.
Against this interlocutor, the appellant presented a short representation, upon which the following interlocutor was pronounced: “The Lord Ordinary having considered this representation, which does not state the merits of the case—Refuses the desire thereof, and adheres to the interlocutor complained of.”
Dec. 20, 1814.
Third interlocutor appealed from.
Afterwards, this interlocutor was pronounced: “The Lord Ordinary having again considered the representation, with the answers thereto—Refuses the desire of the representation, and adheres to the interlocutor complained of.”
Mar. 2, 1815.
Fourth interlocutor appealed from.
The appellant submitted these interlocutors to review of the court (first division), by petition; on
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Feb. 9, 1816.
Fifth interlocutor appealed from.
A new petition, and additional petition, were presented by the appellant; on advising which, the following judgment was pronounced:
“The lords having resumed consideration of this petition and additional petition, and advised the same, with the answers thereto, and excerpts from the books of the Glasgow glasswork company, for both parties—Refuse the desire of the said petition, and adhere to their former interlocutors.”
Against these several interlocutors, the appeal was presented.
For the appellant.
For the respondents.
In the course of the argument the Lord Chancellor observed, that, when the stock account was first opened, the appellant was debited and credited for the same amount, or supposed value of stock, viz. 625 l.; and asked, whether he was charged in subsequent accounts on the same principle? and whether it was a substantial credit, or only for the purposes of calculation? At first (he remarked) it clearly was so merely; and he put the further question, When afterwards the partnership credited the appellant with five eighty-fifths of the stock, whether they debited him, per contra, in the same fraction?
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The Court of Session, in the former case, computed the salary on the supposition that the appellant was to have a share of profit as a partner, which appears from the dicta of Lords Balmuto and Balgray. The declaratory clause provided, that on the decease or bankruptcy of any of the partners, their shares should devolve to the partnership to which they originally belonged, and of which the deceased or bankrupt parties were partners, paying an equivalent to their representatives. Now Geddes was no partner in either of those partnerships. Suppose he had died within six months, what could his representatives have claimed? In the former case my opinion was, that he was entitled to l. a-year only as salary, and to no further remuneration, upon the ground that he claimed and was entitled to a share in the profits; nothing having been suggested or contemplated as to losses.
Motion for judgment, 24 July.
The question in this cause is, whether the Lord Ordinary and the court were right or not in finding that Geddes was liable, under the circumstances of the case, for his share of the loss as a partner. I observe, that when the judgment of the court was given, it was
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In a case, in which the question is, whether Geddes was a partner, and not only a partner with respect to the world, but in what relation he stood as a partner with reference to this co-partnery, it is not immaterial to observe, that though he is unquestionably a partner to some purposes, yet he is treated, in the very description
Page: 293↓
Page: 294↓
These articles further provide, that “in the said capital stock of 12,000 l. sterling, the partners shall be interested in the profit or loss in the following proportions; namely, the partners, under the firm of the Glasgow bottlework company, eight seventeenths; and the partners, under the firm of Hamilton, Brown, Wallace, & Co. eight seventeenth shares; and the said John Geddes one seventeenth share.” Under this clause, which is the third article in the bond of co-partnery, it is insisted, that Geddes was to be liable to loss as well as profit; and this is the clause upon which, in addition to docquets arid entries in the books of the company, &c. the Court
Page: 295↓
Page: 296↓
The fifteenth clause is expressed in these words, “although, by this contract, John Geddes is admitted a partner, and holds one seventeenth share in this company, yet, it is expressly declared and understood, to be under the conditions and restrictions more particularly specified in an agreement of this date, made and entered into between him and the company, and to which all the parties hereto bind and oblige themselves to conform.” It is quite clear, from this fifteenth article, that Geddes was to be, in some sense, a qualified partner; in what sense and with what qualifications is to be collected from an agreement of even date; and, it will be in your recollection, that there was an instrument which Geddes firmly denied to be an agreement of even date, which the other parties asserted to be an agreement of even date, and the substance of which I shall have occasion to state.
This bond of co-partnership being executed, and this unexecuted agreement, either being or not being the agreement, meant to be referred to by the fifteenth article, the parties go on dealing in partnership from 1786 to 1792. It is undoubtedly to be looked at as a circumstance of evidence, that in several instances Geddes's name is put into securities given by the company as a body. He, acting as one of the partners in the partnership, is unquestionably a partner with respect to all the rest of the world; and from the circumstance of his joining in the securities,
Page: 297↓
Similar difficulties run through the whole deed.
Without entering into particulars, I observe, that there was an end of this partnership about the year 1792, and it is reasonable to suppose, that, in the year 1792, when the partners were about to dissolve all connection with each other, they should have contemplated the obligations they were under to each other, and the demands they would have on each other.
The law, as I apprehend, is, that the transactions of partners are always to be looked at, in order that you may determine between them, even
Page: 298↓
The first demand in any tenable form, that he should be liable to loss, was made in a suit instituted in the Court of Session, in Scotland, in the year 1807, that is fifteen years after this partnership was dissolved, and in the mean time, he was suing them
Page: 299↓
The first intimation of a claim upon him was in the year 1798, six years after the partnership was dissolved, when one of the partners wrote a letter to him, insisting that he was liable to losses in partnership. He wrote in answer: I was not a partner in capital, I am not liable. With that exception, they did not make a demand upon him, in a form in which he could resist it, until the year 1807, fifteen years after the partnership was dissolved; it appearing that, in the mean time, there were statements made out of the different proportions of the various shares, (amounting, I think, in the whole to eighty,) in which persons were supposed to have an interest in the stock, and his name never occurred in any one of them.
Now it is true, that during the existence of the partnership there are to be found docquets, there are to be found statements, and there are to be found writings, from which you would infer that he was a partner, both for profit and for loss. But looking at the whole of these entries, as he had no interest whatever in the capital, it is as impossible that many of those entries can refer to him, though he was a partner, as it is that some of those clauses in this instrument of co-partnery could refer to him. He was a partner capable of being dismissed at any time; he was a partner having no right to draw out any part of the stock, for he had
Page: 300↓
In the course of dealings among men, there are a great many things done, some with more, some with less, regularity; some with more, some with less, irregularity; and men, before they quarrel, are much too apt to suppose they shall be set right easily when they happen to quarrel; but I wish to ask this question: How happened it, that if this partnership was dissolved in 1792, no special demand should be made upon the appellant, I say special demand, till 1807? fifteen years afterwards. The reasons they attempt to give in this case appear to me the most futile and ridiculous possible: They say, so long as the amount of his salary could not be ascertained, they had no reason to talk about losses; then, I ask, why did they, in the letter of 1798, talk about losses; and what signifies it, whether it was ascertained, if they had a single demand, which would extinguish, or pro tanto extinguish, that salary. It appears to me utterly impossible that that could be the reason on which they acted; but besides, they impute to him the receiving, as he actually did receive, some sums of money after he left the
Page: 301↓
The case has difficulties and peculiarities upon the bond of co-partnery itself. It has many difficulties and peculiarities with respect to an agreement, which is referred to by the fifteenth article of the bond of co-partnery; one of the parties having contended that a certain paper, unexecuted and unsigned, is that agreement; which is denied by the other party, the appellant. It is undeniable on the face of this bond of co-partnery itself, that he was to be, in some qualified sense, a co-partner; but then it is said, as this deed was never executed, he must be taken to be a partner in the sense in which other persons were; I say, that is impossible from some other parts of that deed of co-partnery; and with respect to the docquets and entries to which I have been referring, they admit of this explanation: that they must be taken to apply to those partners, and those partners only, who had part of the stock belonging to them, and who were to be dealt with, in case of bankruptcy or death, according to principles which do not apply to this person.
I say further, that if you had found unequivocal proof in the transactions, during the partnership, that he was to be considered a partner, liable to his share of profit and loss; supposing the articles,
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It is, therefore, on the ground of the subsequent transactions that I entertain the opinion very confidently, (I must say, at the same time, very humbly differing from the majority of the Court,) that no jury in this country could have been brought to find this man a partner on this suit, instituted in 1807; and therefore I move the House,— To find that Mr. Geddes ought not to be considered, as between him and his partners, as a partner liable to any share of loss; and, with that finding, to remit the cause to the Court of Session, to do in it what is right and consistent with that finding.
24 July 1820.
The Lords find the Appellant ought not to be considered, as between him and his partners, as a partner liable to any share of loss; and with this finding, it is ordered that the cause be remitted to the Court of Session, to do as is just and consistent with this finding.
