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Of the Right to an Injunction.
ALTHOUGH, as we have already seen (a), a Court of equity will not interfere to restrain the violation of a particular covenant between partners, yet, where one party has committed such breaches of duty as would warrant a decree for a dissolution, the Court will relieve against the future acts of the offender by injunction. Thus, where one partner has involved the partnership in debt, or has himself become insolvent, the Court will restrain him from drawing, accepting, and indorsing bills in the name of the firm, and from receiving the partnership debts (6). So, it will restrain an action brought by one
(a) Ante, p. 162.
was afterwards compromised. The () Williams v. Bingley, 2 Vern. usual form of the order is simply, 278, Mr. Raithby's note ; Master v. " that the fendant be restrained Kirton, 3 Ves. 74; Lawson v. Mor- from entering into any contract or gan, 1 Price, 303; Hood v. Aston, 1 contracts, and from accepting &c. Russ. 412; and see Seaton on De- any bills &c., in the name of the cocrees, 306. In Williams v. Bingley, partnership.” Seaton, 308. Where the bill prayed for an injunction there has been collusion between a and dissolution. On motion for a partner and a third person, an inspecial injunction, “ upon hearing junction may be awarded against the said affidavit, and the six clerk's the latter also. See Jervis v. certificate, his Lordship doth order, 7 Ves. 412. In Master v. Kirton, that an injunction be awarded to re- one N., a debtor of the firm, had colstrain the defendant, Thomas Bing- luded with the defendant K. The ley, from negotiating or accepting bill prayed for an injunction against any bill of exchange or promissory the debtor, to restrain him from paynote, except for partnership pur- ing, and against the defendant K., poses, or doing anything in the to restrain him from receiving the name and firm of the partnership, money. On motion for the inexcept for partnership purposes; junction, it was stated, that since and from receiving and applying the coming in of the answers, the any money belonging to the said partnership between the plaintiff copartnership, except for partner and the defendant J. K. had been ship purposes, until the said de- dissolved, and a deed of dissolution fendant shall fully answer the plain- had been executed by all parties tiff's bill, and this Court make an thereto, and the defendant K. had order to the contrary,” R. L. 1805, assigned over his interest in the B. 51. It is believed that this suit partnership stocks, deeds, monies,
partner against his copartner, on a separate and private account, upon payment by the latter of the money due into Court (a). So, it will restrain the overbearing and oppression of one partner (6); or the application of partnership property to a use not warranted by the articles (c); or an execution against the partnership property for the separate debt of one partner (d).
The mere circumstance that a partner gives a partnership bill for his separate debt, may or may not lay a ground for the issuing of an injunction against its negotiation; for the person who takes it may or may not have some reason for supposing, that his debtor had a right or authority so to use the partnership name. But where it appears that an individual partner, indebted to the partnership, being unable to pay his separate bill holden by his bankers, substitutes for it, by a negotiation with them, a partnership security, made and given without the consent or knowledge of his copartners, and the bankers are aware that it is so given without their consent or knowledge; that is a case which comes within the principle upon which the Court has always been in the habit of inter
securities, and effects, to the plain- payment thereof, or from the action tiffs; and the plaintiffs, by virtue commenced by the said plaintiffs of the power contained in the as- in his Majesty's Court of King's signment from the said defendant Bench, in the name of the said deJ. K., had commenced an action fendant J. K., against the said deagainst the defendant J. N. on the fendant J, N., or the judgment to be said bonds, in the name of the de- obtained in such action, or any fendant J. K.; which action had execution or executions, or other been tried and a verdict obtained proceedings to be had or taken therein against the defendant J.N. therein by the said plaintiffs in the It was therefore prayed “that an name of the said defendant J. K., injunction may be awarded, to re- against the said defendant J. N. ;” strain the defendant J. N. from and it was ordered accordingly. paying to the said J. K. the monies R. L. 1796, B. 428. now due and owing from him upon (a) Gold v. Canham, 2 Swanst. and by virtue of the several bonds, 325. bearing date &c., for securing the (6) Charlton v. Poulter, 1 Ves. two several sums of &c., and in- 429; 19 Ves. 148. terest, or any part thereof; and (c) Glassington v. Thwaites, i that the defendant J. K. may in
Sim. & Stu. 124. like manner be restrained from re- (d) Taylor v. Field, 4 Ves. 396 ; ceiving the same, or any part there- Bevan v. Lewis, 1 Sim. 376. See of; and also, from releasing or dis- post, Book 3, chap. 6, the concluding charging the said J. N. from the section.
fering by injunction (a). Accordingly, in one case, an injunction was granted ex parte, to restrain the negotiation of a bill of exchange by a holder, who had given valuable consideration for it, but who had notice that it had been improperly accepted by a partner of the plaintiffs in the partnership name (6). And in another case, where the holder took the bill after the plaintiff's partner had obtained an injunction, but before the order was drawn up, the Court not only extended the injunction to the holder, but ordered the security to be deposited with the Master, and it was afterwards cancelled by consent (c).
Where a partnership has been dissolved, and any of the quondam partners attempt to carry on the business for their own benefit, the Court will interfere by injunction (d). And if an account has been finally settled between the parties, and one partner is indemnified by the other from the debts of the copartnership, then, if the indemnified partner be afterwards compelled to pay a partnership debt, he may retain money of the other partner to an equal amount, subsequently coming into his hands, although such money be paid on the separate account of the other partner. Hence, upon payment of the money into Court, he may obtain an injunction to restrain all proceedings at law by the other partner, to recover the money so retained (e).
Upon the death of a partner, occasions will arise for injunctions between the survivors and the representatives of the deceased. Thus, where an agreement is entered into with one partner for a lease to that partner alone, but the lease is in fact for the benefit of the partnership, upon the death of the partner with whom the contract was made, the Court will grant an injunction to restrain his executor from disposing of the lease when granted, except for partnership purposes ($). On the other hand, upon motion by the representatives of a deceased partner, an injunction will be granted to restrain the surviving partner from bringing ejectment, upon his title as surviving lessee of the partnership premises (g).
(a) Per Lord Eldon, 1 Russ. 415.
(d) De Tastet v. Bordenave, Jac. 516.
(c) Gold v. Canham, 1 Ca. Ch.
311; 2 Swanst. 325; Fran. Max. 36.
(f) Alder v. Fouracre, 3 Swanst. 489.
(9) Elliot v. Brown, 3 Swanst. 489, n.
I. 2. It seems clear, that a Court of equity will sometimes award an injunction against one partner, without dissolving the partnership; perhaps even where the delinquency of that partner is not sufficient to warrant a dissolution. At any rate, it certainly seems to have been held, that a Court of equity will restrain the gross personal misconduct of a partner, without compelling a dissolution of the partnership before the expira-tion of the term. In Charlton v. Poulter (a), a bill was filed by Richard Charlton, senior and junior, partners in a brewery, charging great misconduct by the defendant, the third partner, in disobliging and turning away the customers, prevailing on the servants to leave the brewhouse, assaulting and obstructing them, causing them to quit their service, locking up the books, retaining as servants (without the plaintiffs' consent) bruisers and boxers who obstructed the trade, threatening to ruin the trade, and refusing to account. The bill prayed, that, at the end of the partnership, the stock and utensils might be valued, and that the defendant might be compelled to receive one third part of the value, and for an injunction restraining the defendant from any act to the obstruction or damage of the trade. On motion after answer for an injunction, it was ordered, that the defendant be restrained from using force, either by himself or any other person or persons, to the obstruction or interruption of the brewing trade in question, and from removing or displacing any of the servants hired or employed by the partners, or the major part of them, in carrying on the trade, without leave of the Court; and from carrying away or removing out of the counting-house belonging to the partnership any partnership books or papers relating to the said trade; and upon the plaintiffs' submission, it was further ordered, that the plaintiff's be restrained in like manner.
The opinion, that a partner's misconduct may be restrained by injunction, without the necessity of a dissolution, is sanctioned by Lord Eldon in the case of Goodman v. Whitcomb (). The parties in that case being partners in the business of carpet manufacturers, the bill was filed for a dissolution of the partnership, and the usual accounts. One of the grievances stated in the bill was, that the defendant had sold goods at an
(a) 19 Ves. 148, n.
(6) 1 Jac. & Walk. 592.
under price, and exchanged others for household furniture, which he had appropriated to his own use. Lord Eldon said, that trifling circumstances of conduct were not sufficient to authorize the Court to award a dissolution. It was stated, that the defendant had exchanged carpets for household furniture; that, perhaps, might be an improper act; but still, there might be a thousand reasons why the Court should not do more than restrain him in future from so doing; more particularly, as it was stated by the answer, that he did it because he thought it the best thing that could be done.
I. 3. A Court of equity, however, will be reluctant to award an injunction against a partner, unless there be grounds for a dissolution; and in many cases such a course would be attended with obvious inconvenience to the parties (a). And cases may arise, where an injunction cannot with propriety be granted, whether the parties do or do not contemplate a dissolution of the partnership, and even though the party against whom the injunction is sought may have acted contrary to the spirit of the partnership arrangements. Thus, two persons agreed to work a coach from Bristol to London, one providing horses for a part of the road, and the other for the remainder. In consequence of the horses of one having been taken in execution, the other provided horses for that part which had been undertaken by the first. He afterwards persisted in providing horses for the whole journey, and claimed the whole profits. Upon a motion for an injunction to restrain him from so working the coaches, Lord Eldon refused the injunction. “It is difficult,” said his Lordship, “to understand how such a case can be the proper subject of the jurisdiction of this Court by injunction. If I enjoin the defendant from bringing horses to convey the coaches between the limits in question, I must enjoin the plaintiff from not bringing horses there. I cannot restrain the defendant, unless I have the means of assuring him that he shall find the plaintiff's horses ready. I should otherwise enjoin him from doing that which if he omits to do, he will be liable to actions by every person whom he has undertaken to convey from Bristol to London (6).”
(a) Marshall v. Colman, 2 Jac. & Walk. 266.
(6) Smith v. Fromont, 2 Swanst. 330. In this case Lord Eldon said,