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which he specified, and he ascertained the amount of those profits (a). At the final hearing of the cause Lord Eldon held, that the assignees were entitled to three eighths of the profits, from the bankruptcy of Noble until the final adjustment of the partnership affairs of Collins, Noble, and Boughton. Lord Eldon—“In this particular case, I take it to be established by the Master's report, and by the other documents before me, that, whether you call it stock, or whether you call it capital, the materials, with which the business was carried on after the bankruptcy of Noble, consisted in fact of the patents, the leasehold property, the tools and utensils, &c., of the old partnership, and were materials, which, though of course admitting of fresh supplies, were, as to what I may call the substratum of stock, alike the property of Noble, Boughton, and Collins, at the bankruptcy. And I cannot bring myself to think, that, if it be clearly made out that a business is carried on with the property which belonged to a deceased partner, for instance, by the surviving partner, and no particular circumstances occur to vary the rule, the mere accident of one man surviving the other can authorize him to say, 'I shall carry on the trade by the application of the funds of the partnership, at the hazard of the funds of the partnership, and I shall have the whole of the profits, and you shall have no share of them. It is clear, upon what is before me in this case, that the patents of Noble and Collins were, in truth, part of the partnership property; that, whether those patents were worth anything or nothing to the world, they were the media through which the parties procured the contracts with Government; that these contracts were made in the name of Collins, Noble, and Boughton, and, when the payments on account were made by Government, they were made by bills payable to Collins, Noble, and Bough. ton; that the contract went on for several years, producing fruits, which I consider fruits of the partnership property; and that all the property which belonged to the partnership at the bankruptcy of Noble, was employed in carrying on the trade afterwards. It appears to me also to be quite clear, that Noble had an interest in the partnership, and that a sum would have

(a) At one period of the cause it was referred back to the Master to state, not only what was capital, but

what was Collins' stock in trade at the time of the bankruptcy. 1 Jac. & W. 270.

been found coming due to him, even if the account had been taken immediately after the bankruptcy (a).”

In the preceding case it appears that Noble had drawn and indorsed various notes and bills in the name of the firm for his private accommodation, which Collins had been obliged to pay. Hence, at the time of the bankruptcy, Collins had increased, and Noble had diminished the actual balance due to them respectively, on the adjustment of all accounts. Nevertheless, the profits accruing after the bankruptcy were calculated both for Collins and for Noble, according to their respective original shares of three eighths; the proportion of the profits of the one not being increased, and that of the other not being diminished. This result seems accordant with the general principle before

(a) The decree, as far as is mate- have been made, and three eighth rial to the present point, was as fol- parts of such further profits as should lows:—“ That, having regard to all appear to have been made; and it the circumstances of this case, the was declared, that what, upon taking three eighth parts or shares of Mark the account thereinbefore directed, Noble in the partnership ought to should appear to be coming due to be considered as continuing, not- the plaintiffs, on the account of the withstanding and after his bank- profits already made and not satisruptcy; and it was ordered, that fied, and also of the profits of which the Master should inquire and state the account had not been taken, and to the Court what profits had been which was thereinbefore directed, made by carrying on the said busi- and of any interest that might be ness since the date of his last report ordered to be paid in respect thereof, of profits made therein; and that was to be paid to the plaintiffs, or the Master should inquire and state, one of them, by the defendant Colhow much of the profits reported lins; and it was further ordered, to have been made by his former that the partnership patents, and report, and of the profits which what remained in specie of the he should find to have been made capital and stock in trade, should since his said last report, had been be sold to the best purchaser or made in each and every of the seve- purchasers that could be gotten for ral years in which such profits had the same; and such sale was to be been made; and the consideration of with the approbation of the Master, interest upon what profits should in case the parties should differ; appear to have been made was re- and it was declared, that the plainserved, till after the Master should tiffs were entitled to three eighth have made such report; and it was parts of the proceeds of such sale; declared, that the plaintiffs, as assig- and the Master, in taking the said nees, were entitled to three eighth accounts, was to make the defendant parts of the profits which had been all just allowances for money exalready reported by the Master to pended in carrying on the trade."

stated (a), that the stock is only to be employed in augmentation of the trade for the mutual benefit of the partners. Lord Eldon at first inclined to think that these advances were not even to be considered in the light of loans from the partnership to Noble, but as transactions between Collins and Noble in their individual characters.

Where a sum is advanced as a loan to an individual partner, his profits are first answerable for that sum; and if his profits shall not be sufficient to answer it, the deficiency shall be made good out of his capital; and if both his profits and his capital are not sufficient to make it good, he is considered as a debtor for the excess (6).

It was said arguendo in Brown v. De Tastet (c), that cases of the greatest hardship had occurred, flowing from the doctrine supposed to be established by Crawshay v. Collins; that it was supposed, that if the representatives of a deceased partner could establish a balance of the smallest amount against the survivor, they were entitled to a participation in the profits, and, as a consequence, to an inspection of the books, and an account of all the concerns of the partnership; that an immediate settlement was often impossible; and where there were outstanding transactions, the surviving partner could not at once ascertain whether the balance was in his favour or against him; and he was left in doubt whether he was carrying on the trade for the benefit of himself or for that of others, who might start up at a distance of time, expose all his affairs, and involve him in the utmost vexation. Lord Eldon seemed to admit the force of these observations, but thought that such results arose from unavoidable necessity. He observed—“But it is asked, will you say that in all cases where there is a partnership, such is to be the consequence of carrying on the business, that the profits shall be divisible in the same way as if the partner had not died, or had not become bankrupt? I say, no: I do not mean to say that it will be so in all cases; but on the other hand, I will not deny that it may be the law in some cases. The general principle, I should say, ought to be this: that as it is quite competent to the parties to settle the accounts, and to mark out the relation between themselves as

(a) Beecher v. Guilburn, ante, p. 129.

(6) 2 Russ. 347.
(c) Jac. 292

creditors or debtors, so where there is a non-settlement of the account, (though a settlement may sometimes introduce great hardships and difficulties), yet those who choose to employ the property of another for the purposes of their trade, exposing it to all the risks of insolvency or bankruptcy, have no right to say, that the account shall not be taken, if it can be taken without incurring difficulties which might embarrass the house to such an extent as to make it unjust to demand it.”

VIII. 2. In the particular class of cases which we have just considered, it seems clear, particularly where the partnership has been continued for any length of time since the death of a partner, that the survivors should be allowed something in regard to their skill and personal services. This is matter peculiarly for the consideration of the Master, and will be one of those just al. lowances which the decree usually directs him to make to the parties--the extent or necessity of which the Court does not usually settle beforehand, it not being in the ordinary course for the Court to say, in the first instance, what is a just allowance (a).

Where, however, by articles of copartnership the children are to succeed to the share of their parent, the surviving partner is not entitled, unless the articles say so, to an allowance for his management, time, or labour in carrying on the trade. For as he has agreed that the partnership shall continue beyond the death of his copartner, his management after that event is in fact voluntary (6). But he will be allowed expenses bond fide incurred since the death of his copartner, under an erroneous belief that he was the sole proprietor (c).

VIII. 3. Where the partnership is dissolved by the bank. ruptcy of one of the partners, the accounts of the partnership will be taken in the bankruptcy (d).

IX. 1. Where the partnership is dissolved by the death of a partner, the accounts of the partnership may be taken in a suit

(a) Jac. 294. The Court, at least, of the Master to the equity in queswill decline to take this course in tion. Ibid. an order made upon exceptions not (6) Burden v. Burden, 1 Ves. & referring to the particular point; B. 170. though perhaps, in an original de- (c) Ibid. cree, it would direct the attention (d) Post, Book 4, chap. 2.

by the survivors against his executors, or vice versâ ; or even in a suit against the executors by the separate creditors of the deceased partner.

In cases of the last description, the suit being instituted for the administration of the effects of one partner only, it has been objected, that the copartners, his creditors, ought not to be allowed to prove, in such a suit, the balance due to them on the partnership account; because, except under particular circumstances, they could not have maintained an action at law for the amount. An objection of this nature was made by the Master, in a case where Houston, who had been a partner in a banking-house, and had also been a separate trader, died, and the bankers claimed to prove the balance due to them from Houston in a suit instituted by his separate creditors against his executors. The Master objected to the proof, on the ground that the partnership including Houston could not at law have sued Houston in his separate capacity ; but Lord Eldon overruled the objection. He said—“There is nothing more clear than that, where an account is decreed, the equitable creditors have a right to be satisfied; and that no distribution of assets can take place, until the accounts of all the creditors of every description have been gone into. Generally speaking, it is the duty of the Master to meet all the difficulties that may arise in the discharge of this office. In some way or other he must so provide as that all the accounts, both legal and equitable, shall be fully taken; so that the fact of Houston's having been a partner in the house, however it may alter the nature of his debt, is of no weight at all with reference to the right of the claimants to have their account taken (a).

It appears, therefore, that the claims of surviving partners against the estate of the deceased partner, are to be treated in the same manner as the claims of the other creditors. And it may happen that the surviving partners are specialty creditors of the deceased; in which case they will take all the benefits of specialty creditors in general. Thus, where one partner retired, and the remaining partner covenanted to pay the partnership debts, and to indemnify the retiring partner against them, and died without having performed his covenant, and the covenantee was compelled to pay a portion of the debts, the

(a) Paynter v. Houston, 3 Mer. 302.

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