COURT OF APPEAL.

New Zealand Times, Volume XXXIV, Issue 5656, 16 May 1879, Page 3

COURT OF APPEAL.

Thursday, May 15.

(Before -• their Honors the Chief Justioe, Mr. Justice Johnson, Mr. Justice Richmond, Mr. Justice Gillies, and Mr. Justice Williams).' TROUTBECK V. RICHARDSON AND ANOTHER.

Motion for decree removed into the Court of Appeal out of the Supreme Court, under a Judge’s order." Upon the’ pleadings, as provisionally' amended yesterday, for the purposes of the argument, the leading facts appeared to bo as : follows i—The plaintiff and the late Thomas Richardson, of Petane, Hawke's Bay, on thel 27th April, 1875,' entered into a deed of. cp-paarthership, in connection with their business as .graziers and sheep farmers, -The deed recited that the ' parties had for many years 'carried on their co-partnership business, and were entitled as co-partners to the lands,' stock,: and other property mentioned in the

schedule to the deed. The parties stipulated that they would carry on the business for the period of two years from the date, of the deed for their joint and mutual benefit. But the clause in the deed upon which the real controversy turned was the following ; Anri further, that in case of the death of either of the said co-partners during the said term, the said copartnership shall bo thereby dissolved, and the survivor shall, within a period of nine months from the date of such death, have the option of becoming the purchaser of the co-partnership property, as specified in the schedule hereunder written, for the p ice or sum of £IO,OOO. And further, that in .case of a sale to tiie said survivor, he shall bo allowed a period or credit of five years for the payment of the purchase money, upon giving to the executors or administrators of the deceased co-partner security upon the property so purchased for the amount of the purchase money, with interest thereon at the rate of £0 per cent, per annum. '

The full period of two years was acco.nplighed, and the co-partnership was afterwards continued without any new agreement being entered into. Mr. Richardson left New Zealand for England on 20th August, 1876, and died there on 19th November, 1877', about seven months after the expiration of the stipulated term of two years. On thel6tb January, 1878, the plaintiff gave the defendants, who were the executors of Thomas Richardson, notice in writing of their intention to purchase the deceased’s share in the copartnership property at the price of £IO,OOO. The right -of the plaintiff to buy was disputed in a letter dated 14th February, written by Mr. Cornford, of Napier, as solicitor to the defendants. On the 16th August, ,1878, the plaintiff delivered another written notice, wherein he claimed to purchase at the price of £SOOO. The questions now argued were (1.) Whether the plaintiff was entitled to purchase at all after the expiration of the term of two years ; and (2.) -Whether the price payable under the deed was £IO,OOO or £SOOO in respect of the deceased's share. Some disputed questions of fact arising upon the defendants’ pleas were for the time being shelved by consent, and the statements raising them were struck put, with leave to restore them hereafter, if necessary.

The Attorney-General (Mr. Stout) and Mr. Martin Chapman for the plaintiff, and Mr. Maoassey and Mr. W. B. Edwards for the defendant.

. The Attorney-General contended that the main question was similar to one which often arose between landlord and tenant after the expiration of the term, originally created. Upon what conditions does the tenant hold ? Mr. Justicb Johnston Is not the principle this, that if the parties continue after the efflux of time it is implied that they are taken as by contract to go .on as before ?

Mr. Justice Williams: This is not a term of the partnership, but a stipulation applicable to something to be done: after the termination of the partnership, .The Attorney-General ;: The clause only applies to a case of death. After: reading the clauses in the deed already quoted he contended I that' the ; expression! “partnership term” applied to the duration of the copartnership relations, whether during a stipulated period or afterwards, and whether any: new agreement was entered into or not. “Bindley on Partnership ” ! (3rd ed.)' 807. In King v. Chuck (17 Beavau 325) the Court held that executors as co-partners must be t iken to have carried on business as to winding up as before. : , ' The Chief Justice ; Here the property is of fluctuating value. The Attorney-General cited Essex v. Essex (20 Beav), Booth y. Parks ,(1 Molloy), in support of his contention that all the terms of a copartnership for a particular term : were infused into a succeediug partnership at will, save tho stipulation with respect to the duration of the term. In : Essex v. Essex, the Master of the Rolls said,; “ the case seems like a tenant holding over after tho end of his term.” ■ • ■

Mr. Justice Richmond; Suppose a tenant for a term of years with a right to purchase the reversion at a stipulated price during tho term, would you say that by a mere holding over the tenant could get the benefit of the purchasing clause after the expiration of the terra ? The Attorney General,; This.is a purchase on'the happening of a particular event, namely, the death;of pee of the. co-partners. The case of Ciokson v. Oookaon (8 Sim), before Vice-Chancellor Shadwell, ; which might be relied on by the defendants, must be treated as overruled. It .was doubted in:“Lindiey on Partnership,” and treated as bad law ■in “ Story-on Partnership.”

• Mr. Justice, Richmond : Oookson v. Cook son has been, doubted on the question of conversion of realty into personalty.

The Attorney-General : It has also been doubted on the other question.- ;

Mr. Justice Johnston : What’s the .difference in principle between the death within two years, as.in-.the present case, and buying within ; ttventy-fbur years, as in Cooksou v. Oooksonl Mr. Justice Williams : In Essex ,v. .Essex the property was specific and stationary. Are you sure you are right m'coritending that the property affected by the. purchasing danse here is limited to what appears in the schedule ? My impression is that the whole of the copartnership property is affected ; and that the schedule merely specifies the property which then existed.

The Attorney-General, further commented on Essex v. Essex. : i Mr. Justice Richmond : The difference after all is between terms applicable to current management, and stipulations relating to the dissolution and. winding up of the co-partnership concern. The reasoning of the Master of the Rolls does not help us much. ■ The Attorney-General cited and commented upon Hogg v; Hogg. 35 Lavs Times (n.b.), 794, before Vice-Chancellor Bacon, and Woods v. Lamb, 35 L.J. (Oh'.), 309, where it was held that a partnership having, been continued be- > yond the limit of the original term, a special clause relating,to the winding up of the business could not be taken as incorporated into the terms of a partnership at will. He further cited Hurnffraji v. Fothergill, L.RiT Eq., 573, in support of the view that Courts favor rights of : pre-emption, although not rights of expulsion. Then as to the notices to purchase, the plaintiff was entitled to take up one or other of two positions. If entitled to purchase at £IO,OOO, the notice' given on 16th January, 1878,- was in due.time. If entitled to purchase at £SOOO, the notice-given bn 16th August, 1878, was within nine months of the deceased’s death. ; ' ; "■ 1 • The Chief Justice : Not'within nine luaar months.

The Attorney-General contended that this was, a mercantile , contract, and the term “ mouth” must be taken, to mean a calendar month.! But. at all events if the second notice failed, the first held good. - Mr, Chapman followed on the same side, and reviewed some of the cases cited, and quoted' Clark v. Leach (1, De G., J. and 5.,)in order to show the distinction which had been recognised between stipulations of >n ordinary and exceptional character. Penal clauses such as those giving powers of expulsion would not be implied by the mere con- , tinuanoe at will of a partnership after the ex piration of a term in which such powers might have been exercised., Then, with regard to the notices, if the plaintiff was entitled to buy at £SOOO be was not to be divested of his right merely because he had erroneously claimed to purchase at £10,000.. The giving of one notice was not a waiver or withdrawal of the other. | ; Mr. Justice Williams : Does the first notice constitute a binding contract on which the plaintiff could have been sued ? Could he have backed out of it 1 ■

Mr. Chapman urged that at all events if the second notice was not good the first was, and that it was in no way prejudiced by the second notice whether given in time or not. Mr v Macassey for the defendant, and the Attorney-General was briefly heard in reply, but we have not space for their arguments in this issue:

The, Court took time to consider its judg' ment.