Austen v Boys
| Jurisdiction | England & Wales |
| Judgment Date | 23 June 1858 |
| Date | 23 June 1858 |
| Court | High Court of Chancery |
English Reports Citation: 44 E.R. 1133
BEFORE THE LORD CHANCELLOR LORD CHELMSFORD.
S. C. 24 Beav. 598. See Reynolds v. Bullock, 1878, 47 L. J. Ch. 774. See Lindley on Partnership (6th Ed. 1893), p. 450.
2 DEC. &J. 626. AUSTEN V. BOYS 1133 [626] austen v. boys. Before the Lord Chancellor Lord Chelmsford. May 31, June 2, 12, 23, 1858. [S. C. 24 Beav. 598. See Reynolds v. BttMavfe, 1878, 47 L. J. Ch. 774. See Liudley on Partnership (6th Ed. 1893), p. 450.] Although articles of partnership may be presumed from the dealings of the partners to have been waived, a single instance of departure from them is not a sufficient foundation for such a presumption. Goodwill in general means the chance of being able to keep a business connected with the place where it has been carried on, but it is in this sense inapplicable to the business of solicitors. Where articles of partnership between London solicitors provided that either partner might retire, and that in that case the continuing partners should pay the retiring partner for his share and goodwill the fair marketable value, and the retiring partner should not practise within one hundred miles of the General Post Office, but should use his best endeavours to promote the interests of the remaining partners. Held, that goodwill must be taken to mean only the interest which the retiring partner would have had if he had remained in the partnership till the expiration of it by effluxion of time. This was an appeal from the decision of the Master of the Rolls, reported in the 24th Volume of Mr. Beavan's Reports (page 598). [627] The material facts and documents will be found sufficiently stated in that report and the Lord Chancellor's judgment. the solicitor-general, Mr. Bovill, and Mr. Burden, for the Plaintiffs. Mr. Lloyd, Mr. Sehvyn, and Mr. Hislop Clarke, for the Defendant Mr. Boys. Mr. Rolt, Mr. Follett, and Mr. Rasch, for the Defendant Mr. Tweeclie. The following cases were referred to : - Colyear v. The Countess of Mulyrave (2 Keen, 81), Booth v. Parks (1 Moll. 465), Whittaker v. Howe (3 Beav. 383), Boson v. Farlow (1 Mer. 459), Essex v. Essex (20 Beav. 442), Caiman v. Barrel (1 Ves. jun. 50), Candler v. Candler (Jac. 225), Geddes v. Wallace (2 Bligh, 270), Bunn v. Guy (4 East, 190), Hitchcock v. Coker (6 A. & E. 438), Elves v. Crofts (10 C. B. 241), Cooper v. Watlinytdn (2 Chit. 451), Kemble v. Kean (6 Sim. 333), Litmley v. Wagner (1 De G. M. & G. 604), Const v. Harris (T. & R. 496), Peacock v. Peacock (16 Ves. 49), Dartiey v. J-Hiitaker (4 Drew. 134). the lord chancellor. In this case a bill has been filed against the Defendants, who had been in partnership with the Plaintiff as attornies and solicitors, praying to have the usual accounts of the partnership taken upon its dissolution ; [628] that the value of the Plaintiffs share in the business and goodwill thereof may be ascertained and declared pursuant to the provisions of the tenth and eleventh paragraphs of certain articles of agreement of the 24th of July 1846, reckoning the same as a continuing business and not as terminating on the 1st of September 1853 ; that Defendants may be decreed to pay to Plaintiff whatever sum shall be found due on taking such accounts, together with interest thereon from the 1st of September 1853, and that all proper directions may be given for winding up the concerns of the co-partnership. The partnership in question had been preceded by other partnerships, under which, first, Mr. Hale, now deceased, and afterwards Mr. Boys the Defendant and Mr. Austen the Plaintiff, were successively introduced into the business by Mr. John Hopton Forbes, who may be regarded as the founder of the connection between the parties. At the time when Mr. Austen the Plaintiff became a partner, the firm consisted of Messrs. Forbes, Hale & Boys, and by articles of agreement between them and himself, of the date of the 15th of August 1838, reciting that Mr. Forbes proposed to retire from the business, and to withdraw his name from the same on the 1st of September 1839, and to introduce his relation Mr. Austen as a partner with Messrs. Hale and Boys from that day, it was agreed that the name of Mr. Austen should be introduced into the firm from the 1st of September 1838, but that he should not be 1134 AUSTEN V. BOYS 2 DE O. & J. 629. considered as a partner until the 1st of September 1839, and from that day Messrs. Hale, Boys and Austen agreed to become partners for the term of seven years. This agreement contains a clause that has an important [629] bearing on the question between the parties. It is the 8th clause, and is in these words :-" That the said Matthew Hale, Daniel Boys and Frederick Lewes Austen hereby severally agree with the said John Hopton Forbes at any future time to article Alexander Forbes Tweedie, if requested, before he attains twenty-one, and to admit him when out of his articles, if competent and well conducted, to such a share of the business as shall be agreed upon between his guardians and the then continuing partners, and, in case of difference, to such a share as shall be settled by arbitration to be fair." This clause bound all the parties during the subsistence of that partnership to admit Mr. Tweedie to a share of the business, subject, of course, to the various stipulations contained in the partnership agreement. The power reserved to Mr. Forbes to introduce Mr. Tweedie to a share in this partnership was not exercised during its continuance down to the 1st of September 1846 ; but on the 24th of July 1846 fresh articles of partnership were entered into by all the then parties for a further term of seven years from the 1st of September then next. This agreement contained the two clauses referred to in the prayer of the bill as the 10th and llth paragraphs, and which are as follows :- " 10. In case of the death of any partner, the partnership to go on till the 1st of September then next following, and the partnership to be then determined as to that partner, and the partnership property, such as the house, books, furniture, &c., to be valued, and the surviving partners or partner to pay off to the representatives of the deceased partner his share of such valuation on such 1st day of September, or else pay interest thereon till paid at the rate of six per cent. [630] The surviving partners are also to pay to such representatives, on such 1st day of September, a. sum equal to half of what a retiring partner would be entitled to as the value of his share of the business on such 1st day of September, with interest till paid at five per cent., upon the same principle as is laid down in the llth article of this agreement. The surviving partners must also open fresh accounts from such 1st day of September succeeding the date of the death, and wind up the partnership business and accounts, and pay over to the representatives of such deceased partner his share of the outstanding profits and assets, as quickly as possible without injuring the business or interests of the surviving partners or partner; and all deeds and papers, &c., to belong to the surviving partners or partner; and the style of the firm to remain the same as at present, if desired, notwithstanding the death of any partners or partner. "11. Power for any partner or partners to retire, and in that ease the surviving partners or partner to pay such retiring partner or partners for his or their interest and share and goodwill in the business the fair marketable value thereof, by equal annual instalments, with interest at five per cent, from the time of such retirement till paid, but such retiring partner or partners not to practise, either directly or indirectly, within 100 miles of the General Post Office, and use his best endeavours to promote the interests of the remaining partners." And the 13th article was, "This agreement to be subject to the 8th article of the existing partnership agreement with reference to Mr. Alexander Forbes Tweedie." It was insisted on the part of Mr. Boys, that the effect of that clause was to bring every stipulation of the articles into subordination to the eighth article of [631] the agreement of the 15th August 1838. On the part of the Plaintiff, it was contended that it merely provided for the introduction of Mr. Tweedie to the partnership, subject to all the provisions contained in the articles which might not be found inapplicable to the new state of things, consequent upon his becoming a partner. All that it is necessary for me to observe, in passing, upon these different views is, that the partnership of 1846 was subject to the provision contained in this eighth article, precisely in the same manner as the agreement of the 15th of August 1838 was, and that if nothing more had taken place than the admission of Mr. Tweedie to the partnership in the terms of this article, merely by agreeing to the share of the business he was to have, or having it settled by arbitration, and the question had been confined to the agreement of the 24th of July 1846, without the effect of the memorandum of September 1849 having to be considered, whatever difficulties might have arisen in adjusting the rights of the parties, under the tenth and eleventh 1DE G. & J. 631. AUSTEN V. BOYS 1135 clauses, they would have been bound by the contract into which they deliberately entered. This observation may be found to have some effect upon the argument arising out of the state of things produced by the memorandum of September 1849. The partnership having been thus formed, it continued to be carried on till the death of Mr. Hale on the 21st of September 1848, and upon that event happening, it is alleged by the bill, that the value of his one-third share was calculated pursuant to the eleventh article, at half a retiring partner's share in perpetuity, and at two years' purchase, and that the Plaintiff and the Defendant Daniel Boys paid to or secured to Mr. Hopton Forbes and Mrs. Catherine Hale, as...
To continue reading
Request your trial
-
Clark v Leach
...the goodwill of the partnership business, and with respect to which question Wedderlwrn v. Wedderburn (22 Beav. 84) and Austen v. Soys (2 De G. & J. 626) had been referred to, affirmed the decision of the Master of the Rolls, and dismissed the appeal with costs. English Reports Citation: 5......
-
Dr. Samrath Singh Cheema v 1. Dr. Stephen Jones and Others
...way of novation or implied variation of the terms of the April Agreement. In this regard, Mr Tatton-Brown relies upon obiter dicta from Austen v Boys (1857) 24 Beav 598 per Sir John Romilly MR as follows: "There is no doubt, that if two partners take in a third partner, without specifying t......
-
Cotas v Williams and Another
...- 4); Cruttwell v Lye (17 Ves. Jun., 335; 34 E.R. 129, at p. 134); England v Downs (6 Beav. 269; 49 E.R. 829, at p. 832); Austen v Boys (2 de G. & J. 626; 44 E.R. 1133, at p. 1136); Trego v Hunt (1896, A.C. 7, at p. 16). Usufructs are valued for sale - cf. Act 29 of 1922, sec. 12 - but such......
-
Smith v Everett
...right to a share in the goodwill, which had never been purchased by or ceded to him ; Mmris v. Moss (25 L. J. Chanc. 194); Austen v. Boys (24 Beav. 598). That the goodwill of the business of a country banker was inseparable from the right to issue notes and the place of business, both of wh......