A PARTNERSHIP CASE.

Wairarapa Age, Volume XXXI, Issue 3055, 27 November 1908, Page 7

A PARTNERSHIP CASE.

RESERVED MAGISTERIAL JUDGMENT. Yesterday morning Mr W. P. James, S.M., delivered bis reserved judgment at the Masterton Magistrate's Court, in the case of Keeling and Wynn-Wilhams v. Richard C. Leach, heard by him a fortnight ago, the ciaim being by a creditor against a partner retired from a firm which became insolvent. The judgment read: — In the case the plaintiff Company is claiming from the defendant the sum of £59 5s lOd for goods sold and delivered to the firm of Leach and Tunmcliffe during a partnership existing between them. From the evidence it appears that the goods claimed for were ordered and partly delivered dur-ng the partnership. The partners dissolved partnership, and afterwards Tunnicliffe carried on the business. No notice of dissolution was given by Leach, who received £IOO for his interest in the firm when be retired. Some time afterwards the plaintiff Company pressed Tunnicliffe and Leach for payment. The correspondence was carried on between Tunnicliffe and the Company. Tunnicliffe informed the Company that Leach had tetired, and he wa i carrying on the business. Tunnicliffe eventually gave promissory notes to the Company. He satisfied one for £3O, but dishonoured another for the balance. A summons was issued against Tunnicliffe and Leach for the amount due. Only Tunnicliffe was served, and he" consented to judgment. He did not satisfy the judgment, and eventually filed his scned* ule. Then plaintiff Company brought this action against Leach. It was contended by the defendant that plaintiff Company had, by acc ptingTunnicliffe's promissory notes and recovering judgment against him, released Leach, and looked only to Tunnicliffe for payment, and that the transactions with Tunnicliffe had altered Leach's position to his prejudice. Section 3 of the Law Amendment Act, 1904 (now re-enacted in Section 94 of the Judicature Act, 1908), applies to every case of joint P liability, and unless there has been a novation by which Leach has been 'discharged, the plaintiff Company is entitled to recover against him. I 'don't think there is any such novation. There has been no agreement •between the olaintiffgs and Leach to look to Tunnicliffe only, and the taking by plaintiffs from Tunnicliffe of his own promiseory notes is at the ■mo&t only evidence of an intention to Hook to him only (if the promissory notes could be said to be a new security, which I don't think they can, they "don't amount to a security). In Tindiey on Partnership 7th ed. at p. j 287, the law is thus stated:—"lf several persons are jointly liable and . one of them afterwards gives a separate collateral security, e.g., a bill or cheque (note, he calls this oddly enough a security) on which judgment is recovered against him, this will not merge the prior joint liability." So it will be seen that if plaintiffs had even gene the length r of suing Tunnicliffe on his promis- '"-. sciy notes ar.d pot judgment against him, although that would look very like strong evidence of an intention to lock to him and not Leach, yet, even then, the joint liability of Lea"h and Tunnicliffe would not thereby have been merged. I consider that Leach must be held liable. He ought to have protected himself as rf ar as he could by giving notice of the dissolution, though it is possible he did not know of the debt. That, however, is one of the partnership risks. Evans v. Drummond and Read v. White, also the later cases of in re Head, Head v. Head (1893), 3 ch, 426, and in re Head, Bead v. Head, (No. 2), 1894, 2 ch. 236, do not carry the law any farther. There is a claim in the acco' .it for interest amounting to £5 14s Gd, which must be deducted. Judgment for plaintiff for £53 lis lid, and ■ costs £5 13s. Mr P. L. Hollinga appeared for the plaintiff and Mr C. A. Pownall *- for the defendant.