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between the representative of a deceased partner and the surviving partner. However, in the case of Hartz v. Schrader (a), where the bill was filed by the administrator of a deceased partner against the surviving partner, and a motion was made before answer to restrain the defendant from disposing of the joint stock, and receiving the outstanding debts, and for a receiver, and the affidavit stated, according to the information and belief of the deponent, “that the defendant is in embarrassed circumstances and at present imprisoned in Newgate for a separate debt, and now expends the joint stock or the monies received by him for the outstanding debts in the maintenance of himself and his family, and not in discharge of the debts due from the partnership;” Lord Eldon made the order for an injunction, but refused it as to a receiver.
Where all the partners are dead, and a suit is instituted between their representatives, a receiver will be appointed as a matter of course. For, as Lord Kenyon observed, “where there is a copartnership there is a confidence between the parties, and if one dies, the confidence in the other partner remains, and he shall receive; but where both are dead, there is no confidence between the representatives, and therefore the Court will appoint a receiver (6)."
It should seem that Courts of equity will sometimes empower the receiver to sue for debts due to the partnership, upon motion founded on affidavits that the suit will probably be attended with success (c). But in a case in which one partner, in a suit against his copartner, moved that the receiver might file a bill against the agent of the partners, Lord Eldon refused the motion to the extent prayed for, but directed a reference of the Master,'to inquire whether the proposed suit was beneficial to the parties (d). In all
' urgent cases a receiver and manager may be moved for on affidavit before answer (e).
(a) 8 Ves. 317; 2 Hov. Supp. 106.
(6) Phillips v. Atkinson, 2 Bro. 272.
(c) Estwick v. Conningsby, 1 Vern.
118; Dacie v. John, M-Clel. 575.
(d) Musgrave v. Medex, 3 Ves. & B. 167.
(e) i Swanst. 475.
Of the Pleadings in Equity between Partners.
HAVING already considered the equitable rights between partners, we have necessarily noticed the various kinds of relief which may be prayed for by a bill filed between them in a Court of equity. We have seen that a bill will lie for the specific performance of a partnership agreement (a), for the enforcement by injunction of the rights of a partner under a series of breaches of covenant committed by his copartner (6), for an account under a particular breach of covenant (c), for a dissolution and general account of the partnership (d), and, concurrently with the relief last mentioned, for a sale of the partnership effects (e), for an injunction from receiving the partnership monies, and negotiating the partnership securities (f), and for a manager or receiver (g).
To these various heads of equity, may be added those which arise in cases of fraud in mutual partnership transactions. Thus it has been held, that a person who has been induced by fraudulent representations to enter into partnership, may file a bill for a return of the premium (h), or for an account and receiver (i), and that the partnership may be declared void.
(a) Ante, p. 164.
(1) Per Lord Eldon, Tattersall v. Groote, 2 Bos. & P. 131; Pillans v. Harkness, Colles, P. C. 442; Hamil v. Stokes, Daniel, 20; Evans v Bicknell, 6 Ves. 174.
(i) Ex parte Broome, 1 Rose, 71. Lord Erskine, however, was of opinion, that such a question would be more properly tried at law in an action for damages; and at all
events, that if the fraud charged by the bill was not most fully made out by evidence, the bill should be dismissed with costs. His Lordship accordingly, adopted that course in Clifford v. Brooke, 13 Ves. 132. Upon this case Mr. Hovenden observes, that its circumstances are distinguishable from those alleged in Ex parte Broome, and that, though in the last-named case a bill was sustained on the ground of fraud, the relief there prayed was not merely satisfaction for money advanced, but the prayer was extended to other relief, of a nature which a Court of equity alone could
So, it seems clear, that in many cases a bill may be filed by one partner for the delivery up of a false instrument executed by the other partner, on which the partnership might be sued, even though unsuccessfully, at law (a). Lord Thurlow, however, refused to extend this doctrine to the case of a promissory note, alleged to have been made in the name of the firm after the dissolution of partnership. The bill prayed that the note might be delivered up to be cancelled, or the plaintiff's name erased. Lord Thurlow said, that in decreeing such relief, he must determine that, wherever one party hath an instrument upon which he cannot maintain an action at law, he must be decreed to give it up; and that the bent of his inclination was against laying down the rule to this extent (6).
I. 1. To a bill for an account of partnership transactions, all the partners should be parties (c). To a bill filed for payment of a share in a partnership adventure, all the parties having shares must be parties (d). In a bill filed by a partner in respect of a fraud committed against him by his copartner and a third person, the latter should be joined as a defendant, if relief is sought against his acts; as where it is necessary that he should deliver up a fraudulent instrument (e), or that he should be restrained from paying money to the fraudulent partner (f), or from indorsing and negotiating a partnership bill which he has fraudulently taken from such partner (9). In
give. 2 Hov. Supp. 327. In Clifford v. Brooke, the prayer seems to have been for mere satisfaction of the sum advanced.
(a) See Jackman v. Mitchell, 13 Ves. 581 ; Mayor of Colchester v. Lowten, 1 Ves. & B. 244.
(6) Ryan v. Mackmath, 3 Bro. 15. And it should seem that upon the same principles a Court of equity will refuse an injunction to restrain the use of the partnership name after the dissolution. In both cases & successful defence may be made at law. Opinions on this point appear to differ. See D. Sir Samuel Romilly, arg. 13 Ves. 585 ; D. Sir John Leach, 3 Russ. 432,
line 3; and the case of Hodgson v. Murray, 2 Sim. 515 ; 3 Sim. 283; Hawkshaw v. Perkins, 2 Swanst. 543.
(c) Thomas v. Leigh, 2 Vez. 312; Longe v. Younge, 2 Sim. 369; Mitf. Pl. 164; Story, Eq. Pl. chap. 4, sect. 167. Calvert on Parties, chap, 3, sect. 19.
(d) Ireton v. Lewis, Rep. temp. Finch, 96.
(e) Ryan v. Mackmath, 3 Bro. 15.
(f) Master v. Kirton, 3 Ves. 74. See Alsager v. Rowley, 6 Ves. 748; Duf v. East India Comp. 15 Ves. 198.
(9) Hood v. Aston, 1 Russ. 412.
a bill by partners against a copartner, to have the benefit of a fraudulent transaction clandestinely committed by the latter, not only they who were partners at the time of the fraud and have since retired, but they also who have become partners since the fraud, should be plaintiffs, if they share by agreement the stock, profits, and benefits of the old partnership (a). And generally, all persons who have such an interest in the matters in litigation, as that their rights may be affected by the decree, should strictly be parties to the suit (6). Hence, when partnership stock is standing in the name of one of the defendant partners, the Governor and Company of the Bank of England must be made parties to the suit, in order that they may be restrained from transferring the stock (c). So also, where the bill prays for an injunction to restrain execution against the partnership effects, the sheriff should be made a party (d).
When a partner, plaintiff or defendant, becomes bankrupt pending a suit between them for an account, the suit becomes defective, and the assignees must be brought before the Court by supplemental bill (e).
When a partner, plaintiff or defendant, dies pending a suit between the partners for an account, the suit becomes to that extent defective, and can only be continued by a revivor as to the representatives of the deceased party (f).
After the bankruptcy of a partner, a bill for an account may be filed by the assignees against the solvent partners (9), or their representatives (h) and the bankrupt part
(a) Fawcett v. Whitehouse, Russ. (e) If, upon the bankruptcy of & M. 143.
one of several plaintiffs, the cause (6) Lubé, Equity Pl. 282. The be not proceeded with, the defendexceptions seem to be, where the in- ant may obtain the usual order to terest of the party is very remote, dismiss for want of prosecution. or his rights depend upon the es- Caddick v. Masson, 1 Sim. 501. tablishment of prior claims, or there () Lubé, Eq. Pl. 285; Boddy v. is already before the Court a person Kent, 1 Mer. 364; Fallowes v. Wilcompetent to protect them. Ibid. liamson, 11 Ves. 306. And see Mitf. Pl. 165.
(9) 1 Swanst. 471. (C) Vulliamy v. Noble, 3 Mer. (h) 2 Mer. 119. In West v. 593; Toulmin v. Copeland, 6 Price, Skip, a cross bill was filed by the 405; Scott v. Bank of England, 2 assignees of Ralph Harwood against Younge & Jerv. 327.
Skip and the execution creditors of (d) Bevan v. Lewis, 1 Sim. 376. the partnership. The bill prayed
ner (a). Generally speaking, the bankrupt himself cannot file a bill relating to his estate after the bankruptcy (6). But it is evident that there may be exceptions to this rule. Thus, upon the bankruptcy of a firm, it seems clear that any one of the bankrupts may file a bill against a creditor and the assignees for an account, provided there be specific charges of fraud on the part of the creditor, and of collusion on the part of the assignees, and likewise of a refusal by the latter to institute a suit against the creditor for the benefit of the plaintiff (c). It has likewise been laid down, though the point was not expressly decided, that a bankrupt may file a bill for an account and an injunction to restrain proceedings at law, without making his assignees parties to the suit. In the case which gave rise to this opinion, an action had been brought against the bankrupts by certain persons claiming to be creditors, but who it seems had had partnership dealings with the bankrupts, and who, as alleged by the bankrupts, would have been found indebted to them on a balance of the accounts. To a bill filed by the bankrupts against the plaintiffs at law for a discovery, an account, and payment of the balance, an injunction and
“That the said defendants may ac- the residue of the said bankrupt's count with and deliver to the plain- estate and effects, over and above tiffs the possession of the said part- what would satisfy such demands, nership brewhouse, utensils, stock, may be applied to satisfy the plaindebts, and effects of or belonging to tiffs, and other the joint creditors the bankrupt's estate, and may ac- under the said commission; and count for and pay to the plaintiffs that in the meantime and whilst all such money, notes, and effects, such accounts shall be taken, the as they or the said receiver have or plaintiffs may be at liberty to sell hath received by and out of the and dispose of, receive, and get in same, that so they may be sold, all such the said bankrupt's estate disposed of, or applied to or for the and effects; and that the said rebenefit of the plaintiffs, and of such ceiver may deliver over to the other creditors of the said bankrupt, plaintiffs all the said bankrupt's who have already proved their estate and effects, which came to debts, or shall seek relief under the his hands, custody, or power as resaid commission; or in case any of ceiver of the said partnership esthe defendants have a right to a tate”-and for general relief. R.L. priority to the plaintiffs and the 1748, B. 618. rest of the said bankrupt's joint (a) See next page. creditors, and to have a satisfaction () Co. B. L. 513, 7th ed. Tarleof any of the said defendants' de
ton v. Hornby, 1 You. & Col. 172. mands, then, that an account may (c) Benfield v. Solomons, 9 Ves. be taken of such demands, and that 77. But see 3 Madd. 158.