Lord Eldon said, the great difficulty he felt arose from not seeing upon what principle he was to interfere in the present stage of the proceedings to deprive the defendants of the possession of the mine, not only as mortgagees, but as partners, and when he must assume that the agreements stated in the pleadings were binding until they had been set aside. If a man is mortgagee of a mine, and the mortgagor comes to complain of mismanagement, the first thing that requires consideration is, what is a mortgagee of a mine to do, or what omission on his part may be called mismanagement? Suppose a person is mortgagee of a mine which is likely to be much improved by a large expenditure, if he were owner, he might speculate for himself as much as he pleased. But can a mortgagee be required to do that? Can he be required to risk his own fortune in speculation, and to incur hazard in an adventure which is ultimately to redound to the benefit of the mortgagor? He apprehended that he cannot, and that at the utmost he is not bound to advance more than a prudent owner. So, taking it as the case of a partnership, with respect to mismanagement, he should like to hear to what expense a partner can be called on to go, if he happens to be a very large creditor of the partnership trade. There must be clear mismanagement, therefore, of a particular and specified nature, if the case was to be put upon that. With respect to the circumstance of the defendant being both mortgagee and partner, it was one which, if the facts were clear, deserved a good deal of consideration. As a mortgagee, he would have certain rights, and if he filled that character only, would be bound to account with the mortgagor in a particular and special manner; and it was no inconsiderable hardship on him, that he must account not only for what he has done, but for what, without his wilful default, he might have made. As a partner, he would not be obliged so to account; and a question might arise hereafter, whether the account should be directed upon the principle of partnership only, or whether a decree could be framed, partly

upon the principle of partnership, and partly, if he might so express himself, upon that of mortgageeship. If a mortgagee chooses to become a partner, the management must be considered with reference to the benefit of the other partner, as well as to the rights of a mortgagor and mortgagee; and it would be difficult to make out that the mortgagee can wholly exclude his partner from interference in the partnership. This was not, however, precisely the kind of motion which ought, at least in the first instance, to have been made, particularly with reference to the agreements (c).

It might have been inferred from some portions of the above judgment, that the mortgagor-partner might have been suffered to take a partial possession of the mines, and to have assumed a part in the general management, without reference to the agreements which had been entered into. But on a subsequent day, the Chancellor, on delivering final judgment, observed, that the original connection between these parties was that of mortgagor and mortgagee; and if a receiver or manager was to be appointed, in other words, if the possession was to be taken from the mortgagee, it must be on such grounds as the Court acts upon in such cases; and if it is not clearly shown, that the mortgagee is fully paid, and that almost by his own admission, the Court will not deprive him of the possession (d). It was said that the mortgage-money must be understood to be paid. But although it might be very questionable whether some of the items in the account would be allowed when the cause came to a hearing, he could not say that nothing was due, and the Court must get to that extent before it could appoint a receiver. If they had been merely partners, and no rights had been created by the relation of debtor and creditor, the case would have been very simple; one partner cannot exclude another from the equal management of the

(c) Rowe v. Wood, 2 Jac. & W. 553.

(d) Quarrell v. Beckford, reported

13 Ves. 377, before Lord Erskine, cited as decided by Lord Eldon, 1 Jac. & W. 649.

concern; and it is the duty of each to keep precise accounts, always ready for inspection, and, in short, to keep good faith towards each other. But whatever might have been their rights under the previous instruments, he was bound to look at the subsequent agreements, and consider them as valid, until they were got rid of by decree. If so, the rules as to partners could not regulate all their rights, because, under the last instrument, they had stipulated that whatever might be their original obligations, they would deal in the terms contained in those agreements. It had been said that the plaintiff quarrelled with those agreements, and was, therefore, not entitled to any benefit from them; but he thought the defendants were bound, without prejudice to the questions in the cause, to let him have the benefit of them, and, therefore, he had a right to have the control of the working part of the mine, until the equities were arranged. At present, he did not see his way to appoint a receiver; but he thought that the plaintiff, subject to the equities which might be ultimately declared between the parties, had a clear right to insist that regular accounts should be kept of all receipts, payments and transactions relative to the mine, and to have constant access for the purpose of inspecting the accounts; and also, that, subject to those equities, he had a clear right to control the working of the mines; and if he was impeded in the exercise of any of those rights, the application to the Court, after the other parties had been apprised of what the Court expected them to do, would be differently treated (e).

The conclusions to be drawn from the above important case seem, therefore, to be, that partners standing in the previous relation of mortgagor and mortgagee, with respect to mines, may enter into an agreement which may be construed to control the legal consequences of that relation, and which may entitle the mortgagor-partner to contract and direct the working management of the mine; but that,

(e) Quarrell v. Beckford, reported 13 Ves. 557, before Lord Erskine,

cited as decided by Lord Eldon, 1 Jac. & W. 649.

in the absence of any such agreement, or if it cannot be supported as a binding contract, a partner will, in the capacity of mortgagee, be entitled to retain the full possession of the mine, and the entire management of the concern. In this situation he will not only be responsible, as a partner, for the proper conduct of the adventure, but he will assume the more serious situation of a mortgagee in possession.

When one partner only assigns his shares in mortgage, the mortgagee cannot, as in the last case, become entitled to the possession and control of the whole mine; for there are others who have interests in the concern, upon which the mortgagee has no claim. But he may demand and take possession of the shares mortgaged, and unless restrained by the particular stipulation of the partnership deed or agreement, he will thus become a partner in the concern. If the assignment should produce a dissolution, he may be constituted the member of a new firm. In either case, he will be entitled to all the rights and privileges which might have been claimed and exercised by the mortgagor. In case of mismanagement or misconduct by his co-partners, he may demand the appointment of a manager from the Court (f).

III. By the general law of partnership, a partner will, in many instances, be entitled to an injunction against his partner; as when the latter has become insolvent, and is receiving the partnership debts (g), or when his conduct is overbearing and oppressive (h), or when he applies partnership property to uses not warranted by the agreement (i), or when there is an execution against the partnership property for a separate debt (k), or when a bill of exchange has been improperly accepted, in order to prevent its nego

(f) Bentley v. Bates, 4 You. & C. 182; 9 L. J., N. S., Exch. Eq., 30. (g) Williams v. Bingley, 2 Vern. 278.

(h) Charlton v. Poulter, 1 Ves.

429; 19 Ves. 148.

(i) Glassington v. Thwaites, 1 Sim. & Stu. 124.

(k) Taylor v. Field, 4 Ves. 396; Bevan v. Lewis, 1 Sim. 376.

tiation (1). A Court of Equity will sometimes grant an injunction under circumstances which may not call for a dissolution (m).

In the case of mines, an injunction will, of course, be obtainable, where the grievance is of a nature which may bring the complaining party within the ordinary rules of relief. But it would seem to be quite clear, that in no case would the Court proceed by injunction to restrain the actual operations of a mine. The consequences of such a step might be fatal to all parties, and the appointment of a manager would sufficiently remedy any cause of complaint which would arise to demand the interference by injunction. Even in cases where the title is disputed, the Court is reluctant to continue an injunction which has been obtained, for preventing the opening of a mine, and, it may be safely asserted, that if a mine has been actually worked for a length of time, and is in working condition, the Court would never interfere by so summary a proceeding (»). In the case of Field v. Beaumont, it was observed by Lord Eldon, that to stop the working of a coal mine was a serious injury (o). The same observation is true with respect to

almost all mines.

IV. The remedy of account between partners is usually decreed by the Court upon a dissolution. It is hardly yet settled whether, in general partnerships, a partner can obtain a decree for an account without praying for a dissolution. Lord Eldon seems to have been of opinion that he cannot (p), and there have been contrary decisions on the subject (q). It is said, few occasions can arise in which it is desirable to apply for an account only, and not for a dissolution. In mining transactions, however, it may often

(1) Hood v. Aston, 1 Russ. 412. (m) Charlton v. Poulter, 19 Ves. 148, n.; Goodman v. Whitcomb, 1 Jac. & W. 592.

(n) Grey v. The Duke of Northumberland, 13 Ves. 236; 17 Ves. 281. See Chap. II.

(o) 1 Swanst. 208.

(p) Forman v. Homfray, 2 Ves. & B. 329; Marshall v. Colman, 2 Jac. & W. 266.

(9) Knowles v. Haughton, 11 Ves. 168; Harrison v. Armitage, 4 Madd. 143; Loscombe v. Russell, 4 Sim. 8.

D D