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immediately to be executed; and they do differ in this respect, that the profit upon the contract, being to depend upon future events, cannot be correctly estimated in damages where the calculation must proceed upon conjecture. In such a case, to compel a party to accept damages for the non-performance of his contract, is to compel him to sell the actual profit which may arise from it, at a conjectural price (a).”
These observations of Sir John Leach are peculiarly applicable to the case of a partnership, which is a continuing contract, and of which the profits are uncertain, and cannot possibly be estimated at any fixed amount. It is clear, therefore, upon principle, that a bill for the specific performance of such a contract will be sustainable, and it seems singular that no express decision on the subject should have appeared in the reports. A case, however, of this nature, was decided by Sir W. Grant. Upon a bill filed by a partner against his copartners, some time after the business of the partnership had commenced, praying for a specific performance of the partnership agreement by a due execution of the articles in pursuance thereof, it was referred to the Master to settle proper articles of partnership upon the footing of the agreement; and it was ordered that the parties should execute the same. And an account was decreed of all dealings and transactions betweeen the parties ().
Where the plaintiff is contented to take damages, and to relinquish the intention of becoming a partner, he may bring his action of assumpsit for breach of the agreement; but in that case, he must prove, with some degree of particularity, the terms of the intended partnership (c). In a case, however, in which it appeared that the defendant had induced the plaintiff to relinquish the command of an East India ship, by promising to admit him at the ensuing Christmas into a partnership, in which the defendant was engaged, in the room of M., who had retired, and the plaintiff was to have one fourth of the business, undertaking, in the meantime, to procure as many orders as he could; it was held, that this agreement was sufficiently specific to enable the plaintiff to recover damages, although a Court of equity might have declined to compel the specific per
(a) Adderley v. Dixon, 1 Sim. & Stu. 611.
b) Hibbert v. Hibbert, Rolls,
Trin. T. 1807.
(c) Figes v. Cutler, 3 Stark. 139.
formance of it, on the ground that the partnership, when entered into, might have been instantly dissolved (a).
I. 2. This brings us to observe, that a Court of equity has refused to compel the specific performance of an agreement of this nature, in a case where either party might immediately afterwards have dissolved the partnership. Thus, by indentures between Hercy, Birch, and Chambers, reciting, that they had on the 25th of March last commenced copartners in the business of a banker, it was agreed that they should continue to carry on the said business for the term of seven years; and that in case any or either of them should, after the expiration of that partnership, continue to carry on the business of a banker, either alone or in partnership with any other person, until any one or more of the parties to the indenture should have a legitimate or illegitimate son, whom the father should, by writing or by his will, desire to have introduced to the said business, and who should live to attain the age of sixteen, the party or parties to the indenture, who should so carry on the said business of a banker, should take such son, whether legitimate or illegitimate, apprentice for five years; and after the expiration of such apprenticeship should receive him into the partnership then carried on by any of the parties, and admit him to an equal share with the then partners. The business was carried on till the death of Hercy, and afterwards by the survivors. By his will, in pursuance of the power under the articles of partnership, he appointed an illegitimate son to be bound apprentice in 1802, when he would attain sixteen, and afterwards to be admitted into the partnership, according to the articles; and he provided by his will the qualification for that purpose required by the deed. The bill was filed by that illegitimate son, having attained sixteen years of age, against the partners, praying, that the defendants may be decreed specifically to perform the agreement in the said indenture, and take the plaintiff apprentice, and, at the expiration of the apprenticeship, admit him to an equal share of such business, &c. Lord Eldon dismissed the bill, observing, that, even supposing the plaintiff could recover damages at law for the partner's refusal to take him apprentice, yet he was of opinion,
(a) M'Neil v. Reid, 9 Bing. 68 ; 2 Moore & Scott, 89.
that this was such a covenant as a Court of equity could not specifically execute. “No one,” he said, “ever heard of this Court executing an agreement for a partnership, when the parties might dissolve it immediately afterwards (a).”
It is said, that Lord Eldon was not quite satisfied with his decision in Hercy v. Birch (6); and certainly, there are cases where the Court will by injunction inhibit the dissolution of a partnership (c). Where there has been a partnership under articles for a term, and the term has expired, the Court would probably decree the specific execution of the articles ; not, however, with a view of continuing the partnership, but of investing the party applying with certain legal rights under the articles (d). But this can seldom be the object of the suit, where, as in the case before Lord Eldon, no partnership was commenced; and therefore, it may perhaps be laid down as a general rule, that a Court of equity will not decree the specific performance of an agreement to enter into partnership, unless such agreement relate to a partnership for a term (e). And even though a Court of equity will, under such circumstances, make the decree, yet, according to an old case, it will not direct an account of the profits from the time the plaintiff ought to have been admitted, as the amount of such profits might have been recovered at law (f).
When a decree is sought for the specific performance of a partnership agreement not under seal, this being but a parol agreement, evidence may, of course, be given on the other side, that the agreement has been vacated by parol.
(a) Hercy v. Birch, 9 Ves. 357; the partnership was for a term; 2 Hov. Supp. 174.
but, from the particularity of the (6) 1 Madd. Chan. 411, note (x). provisions there stated, we may con
(c) Ibid. and see Chavany v. Van jecture that it was. There was an Sommer, 3 Wooddes. Lect. 416, n.; agreement amongst the partners, Ramsbottom v. Parker, Madd. & that in case of the death of either Geld. 5.
of them, they would execute a deed (d) Ibid. and see Gow. Partn. in favour of the executor of the per110. As to specific performance so dying, so as to constitute after term expired, see Mortimer v. him a partner, upon giving his bond Capper, 1 Bro. C. C. 156; Wil- to perform the articles of partnerkinson v. Torkington, 2 You. & Col. ship. Upon a bill for the specific 726.
performance of this agreement it (e) In the anonymous case in the was decreed as prayed. Exchequer, mentioned in 1 Madd. (f) Anon. 2 Vez. 630. Sed qu. Chan, 411, it does not appear that
I. 3. Where the agreement to enter into articles is itself a deed containing covenants on both sides, an action will lie on any of these covenants; but the success of such action will depend on the question, whether the covenant on which it is brought was the first to be performed, and has been broken before the covenants on the other side were to be executed (a). In the case of Walker v. Harris (6), an action of covenant on an agreement for a copartnership between the plaintiff and defendant was held maintainable under the following circumstances. The plaintiff being in trade, and possessed of the lease of a house, agreed to take the defendant into partnership, and also to assign over to him a moiety of the interest in the house, “to commence from and after the 29th day of September then next, on the terms and conditions following: that is to say, the said Joseph Harris shall pay to the said Elizabeth Walker, on or before the 29th day of September next, the sum of £300, as a premium or fee to be admitted into the said partnership: it then provided, that the stock should be valued by two persons, one chosen by each of the parties; and that the defendant should advance a sum equal to the value of the stock; and after some other covenants, that proper articles of copartnership should, as soon as convenient, be made out. The first breach of this covenant assigned in the declaration was, that the defendant had not paid the sum of £300 on the day limited, although the plaintiff was willing to take him into partnership. The defendant pleaded, first, that no articles of copartnership had ever been made; second, that the half interest in the premises had not been conveyed to him. To both these pleas, the plaintiff demurred, and the Court allowed the demurrer, being of opinion, that the covenant of the defendant was precedent to the other, and was broken before the other was to be executed.
(a) See 1 Wms. Saund. 320, n. davit, that he has brought his action (4).
against the defendant for damages (6) 1 Anstr. 245. Where there for not taking him into partnership, is no previous covenant, so that the pursuant to a deed in the possesplaintiff can only bring his action sion of the defendant; and likewise on the articles themselves, of which that he, the deponent, has neither he has not the possession, he may copy nor counterpart. Morrow move for leave to inspect the part- v. Saunders, 1 Brod. & Bing. nership deed, stating, by his affi- 318.
II. 1. To proceed to the consideration of the partnership articles—In doing which it may be observed, in the first place, that they are subject to that general rule of law by which, where the purpose of the parties is distinctly recited or mentioned in the instrument, the words which seem of general extent are confined to the declared intention of the parties (a). Thus, in the case of Gainsborough v. Stork (6), it was provided by the articles, “ that, if either of the parties should die during the fourteen years intended for the partnership, and after an account passed between them, then the surviving partner should take to his own use all the goods, ready money, and things, which, on the last casting up before such death, should happen to be in stock between them, and should pay or satisfy to the executors or administrators of the deceased partner so much money as the share of such deceased partner amounted to at the time of such last account made.” Afterwards, they made an indorsement on the articles to the following effect :—The preceding clause of the articles was in the first place recited ; it was recited likewise, that, in case of the death of either of the parties, there would be, in all probability, debts outstanding due to the partnership at New England and other parts beyond seas, and that by reason of such debts proving bad, and the variation of the exchange in New England and other parts, the surviving partner might be much damaged by accepting such debts according to the making up of such last account on the foot of the articles; therefore, for preventing such loss to the surviving partner, in case of the death of either of the parties before the end of the copartnership, it was agreed between them, that, in case either of them should die before the expiration of the partnership, the surviving partner should not be accountable or liable to pay the executors of the deceased partner for any outstanding debts in New England, or any other parts beyond sea, which at such death were due to the joint trade, otherwise than as the same effects should from time to time be gotten in and received by the surviving partner, and then only for the share thereof of the partner so dying. After this indorsement had been executed, two successive accounts were settled, and nine months after the latter
(a) See 1 Fonbl. Trent. Eq. 440; Gallant, 1 P. W.315, notes. Ognel's case, 4 Rep. 48; Copeman v. (6) Barnard. 312.