V. From all that precedes, it is evident, that where one partner has a claim upon his copartner for a sum of money due on account of the partnership, but not constituting the balance of a separate account, or a general balance of all accounts, his only mode of recovering the amount is by bill filed in a Court of equity, praying for an account, and usually also for a dissolution. SECTION III. Of the Right to a Dissolution. We have already had occasion to notice, that a partnership for a term may be dissolved before the expiration of the term, by the decree of a Court of equity (a). This must be upon a bill filed by one or more of the partners against the others, shewing a sufficient cause of complaint; and the cause of complaint may consist in the impracticability of the undertaking, or the incapacity or misconduct of the copartners. 1. The impracticability of the undertaking. In Baring v. Dix (b), one partner filed his bill against the other for a dissolution of the partnership, and sale of the partnership premises. The partnership was for spinning cotton by a new invention under a patent, which the plaintiff alleged had been found on many trials impracticable. The defendant refused to consent to a dissolution of the partnership; and Lord Kenyon referred it to the Master to inquire, whether the partnership could be carried on according to the intent of the articles of copartnership, and said, that if the Master should declare that it could not be carried on, he would decree a dissolution of the partnership, and a sale of the premises. The defendant soon afterwards consented to the partnership being dissolved. So, in a very important case, a Court of equity declared the partnership in the Opera House to be dissolved; the conduct of the parties making it impossible to carry it on upon the (a) Ante, p. 73. (b) 1 Cox, 212. terms stipulated. Accordingly the decree was for a sale of the whole concern (a). In a Scotch case noticed by Mr. Bell in his Commentaries, a partnership was agreed upon by three persons for three years, and buildings were erected in prosecution of the design. Two of the three partners finding that still larger advances were necessary, and the event problematical, they were held entitled to dissolve (b). 2. The incapacity of the copartners. Where a partner is of unsound mind, and there is every probability of a continuance of the malady, a Court of equity will relieve the copartner, by dissolving the contract of partnership (c). "If a case arose," says Lord Eldon, " in which it was clearly established, as far as human testimony can establish, that the party is what is called an incurable lunatic, and he had, by the articles, contracted to be always actively engaged in the partnership, and it was therefore as clear as human testimony can make it, that he could not perform his contract, there could be no damages for the breach, in consequence of the act of God. But it would be very difficult for a Court of equity to hold one man to his contract, when it was perfectly clear that the other could not execute his part of it (d). In Sayer v. Bennet (e), where a bill was brought to dissolve a partnership, on the ground of the insanity of the defendant, Lord Kenyon said, "Where there are two partners, both of whom are to contribute their skill and industry in carrying on the trade, the insanity of one of them, by which he is rendered incapable to contribute that skill and industry on his part, is a good ground to put an end to the partnership, not by the authority of either of the partners, but by application to a Court of justice, and this, for the sake of the partner who is rendered incapable, as well as of the other; for it would be a great hardship upon a person so disordered, if his property might be continued in a business which he could not controul (a) Waters v. Taylor, 2 Ves. & Bea. 299. (b) Barr v. Spiers, 2 Bell, Comm. 642. (c) Jones v. Noy, 2 Myl. & Kee. 125; Wrexham v. Huddlestone, 1 Swanst. 504, n. (d) Waters v. Taylor, supra. (e) Mont. Partn. Vol. 1, Append. p. 18; Wats. Partn. 382; 1 Cox, 107. or inspect, and be subject to the imprudence of another." In accordance with the opinion so expressed, his Lordship in that case laid the foundation of a practice which has since been uniformly followed; namely, of referring the question of insanity to the Master, in cases in which the fact of insanity is not sufficiently established at the hearing of the cause. In the particular case before Lord Kenyon, the Master's report appears to have been unsatisfactory, and an issue was ultimately directed, the result of which is not known; but in the recent case of Kirby v. Carr (a), a partnership was dissolved by a decree of the Court of Exchequer, on the authority of the practice as established by Lord Kenyon. In cases of this nature, it is usual to produce evidence of the defendant's insanity at the hearing of the cause, and it should seem, that proof of his having been found a lunatic under a commission of lunacy, is conclusive evidence on which to found a decree for a dissolution (b). But if no commission of lunacy has issued, strict evidence of the defendant's permanent and incurable lunacy must be given at the hearing, if a decree be sought without a reference to the Master; for, as Lord Abinger justly observed in the case of Kirby v. Carr, the bill in these cases proceeds on the ground, that the defendant, being insane, is unable to accept notice of dissolution. He must, therefore, be proved to be insane in the strict sense of the word, and not merely incapable of conducting the affairs of the partnership. 3. The misconduct of the copartners. Lord Thurlow once said, that as to misbehaviour in one of the partners, he did not see what line could possibly be drawn, and what degree of misconduct was to be held a sufficient ground for dissolving the partnership (c). And certainly, a Court of equity will not dissolve a partnership on slight grounds; as, for instance, because one partner may have conducted himself towards the other in an overbearing and insulting manner. "The Court," to use Lord Eldon's expressions before adverted to, "having no jurisdiction to make a (a) 3 You. & Col. 184. (c) Liardet v. Adams, 1 Mont. (b) Milne v. Bartlett, 3 Jurist, Partn. 112. 358. separation between them, because one is more sullen or less good tempered than the other (a)." So, again, want of prudence or ability on the part of the person seeking relief, is no just ground for a dissolution; as, where he has made larger advances of capital than he is bound to do, and has received none of the profits (b). However, it may with safety be laid down, that not only wilful acts of fraud and bad faith, but gross instances of carelessness and waste in the administration of the partnership, as well as exclusion of the other partners from their just share of the management, so as to prevent the business from being conducted on the stipulated terms, are sufficient grounds for the dissolution of the contract by a Court of equity (c). So also, it seems clear, that a habit on the part of one partner of receiving monies and not entering the receipts in the books, or not leaving the books open to the inspection of the other partners, whether such conduct arise from a fraudulent intent or not, is good ground for a dissolution (d). So, if a partner in a banking house allows a customer to overdraw, and by way of security takes bonds from the customer, executed to himself separately and not to the firm, this is such misconduct as will warrant a Court of equity in decreeing a dissolution (e). And although this relief will not be administered for mere defects of temper in some of the parties, yet violent and lasting dissension seems to be a ground upon which a Court of equity will decree a dissolution; as where the parties refuse to meet each other upon matters of business, a state of things which precludes the possibility of the partnership affairs being conducted with advantage (f. And it has been laid down, that though the Court stands neuter with respect to occasional breaches of agreements between partners, which are not so grievous as to make it impossible for the partnership to continue, yet when it finds that (a) Goodman v. Whitcomb, 1 Jac. & W. 592. See Wray v. Hutchinson, 2 Myl. & Kee. 235. (b) Goodman v. Whitcomb, supra. (c) See Marshall v. Colman, 2 Jac. & W. 200; Goodman v. Whitcomb, 1 Jac. & W. 592; Chapman v. Beach, Id. 594; Norway v. Rowe, 19 Ves. 148; Waters v. Taylor, 2 Ves. & B. 304. (d) Goodman v. Whitcomb, 1 Jac. & W. 593. (e) Master v. Kirton, 3 Ves. 74; R. L. 1796, B. 428. (f) De Berenger v. Hammell, 7 Jarm. Conv. p. 26. the acts complained of are of such a character that relief cannot be given to the parties except by a dissolution, the Court will decree a dissolution, though it is not specifically asked (a). SECTION IV. Of Account between Partners. THE account which a Court of equity (b) decrees between partners is usually consequent upon a dissolution; and Lord Eldon was inclined to hold that it must depend upon a dissolution. Thus in Forman v. Homfray (c), a bill filed by one partner against the other prayed payment by the defendant of certain sums alleged to have been taken by him out of the partnership funds, or that an account might be taken of the copartnership dealings, and that an injunction might be granted, restraining the defendant from receiving the partnership monies, &c. The prayer did not extend to a dissolution. The defendant having put in his answer, a motion was made by the plaintiff that the defendant might be ordered to pay into Court, or into the cash of the copartnership, a sum of 1478l. 14s. 6d., admitted in his answer to be due from him to the copartnership concern. Lord Eldon refused the motion, observing, that he did not recollect an instance of a bill, filed by one partner against the other, praying for an account merely, and not a dissolution-proceeding on the foundation that the partnership was to continuc. If a partner could come here for an account merely, pending the partnership, there seemed to be nothing to prevent his coming annually (d). (a) Per Sir L. Shadwell, 4 Sim. 11. (b) For some particulars as to the action of account, which is now fallen into disuse, see Co. Litt.172. a.; 11 Rep. 38 a; Brownl. 24; Hutton, 133; Cro. Car. 116; 2 Bulstr. 256; 2 Lev. 126; 1 Ld. Raym. 340; 11 Mod. 187; Willes, 208; 2 Vez. 388; 3 Wils. 73; 1 Marsh. 115; 3 Dowl. (d) Forman v. Homfray, 2 Ves. & B. 329. |