Clark v Leach
| Jurisdiction | England & Wales |
| Judgment Date | 30 January 1863 |
| Date | 30 January 1863 |
| Court | High Court of Chancery |
English Reports Citation: 46 E.R. 163
BEFORE THE LORD CHANCELLOR LORD WESTBURY.
S. C. 32 Beav. 14; 32 L. J. Ch. 290; 9 Jur. (N. S.), 610; 8 L. T. 40; 1 W. R. 351.
[409] clark v. leach. Before the Lord Chancellor Lord Westbury. Jan. 28, 30, 1863. I[S. C. 32 Beav. 14 ; 32 L. J. Ch. 290; 9 Jur. (N. S.), 610; 8 L. T. 40 ; 11 W. K. 351.] Where a partnership for a term is continued after its expiration without express renewal, although the assumption is that it is continued on the same general footing as before, this only extends to such of the stipulations in the original articles as .are properly applicable to the new contract. And where one of the articles of a partnership for a term provided that either partner might, in the event of specified conduct on the part of the other, dissolve the partnership by notice, and that the latter partner should, in that event, be considered as quitting the business for the ibenefit of the former, this article was held not properly applicable to a continuation of the partnership after the expiration of the term without any agreement for renewal. This was an appeal by the Plaintiff from a decree of the Master of the Eolls declaring that a partnership carried on by the Plaintiff and the Defendant stood dissolved from the 30th of June 1862, and directing accounts of the partnership, as .a partnership at will, upon the footing of such declaration. The case before His Honour is reported in the 32d Volume of Mr. Beavan's Reports (page 14), where the facts are fully stated. The following statement of them is sufficient for the present purpose. By an indenture, dated the 17th of July 1839, and made between the Defendant of the one part and the [410] Plaintiff of the other part, they agreed to be and continue partners as merchants, ship insurance, custom house and general agents, for seven years from the 1st of July 1839 if they should so long live, subject to the provisions thereinafter contained for determining the partnership. These provisions, so far as they are material to the present case, were expressed in the following terms :- " If, contrary to the several agreements hereinbefore contained, either of the said partners shall neglect or refuse to attend the business of the said partnership, . . . then . . . the other of the said partners, if he shall think fit, shall be at liberty to dissolve the said partnership, by giving to the partner who shall offend in any of the particulars aforesaid, or leaving in the premises where the said partnership business shall be carried on, a notice in writing declaring the said partnership to be dissolved .and determined, and the said partnership shall, from the time of giving or leaving such notice or from any other time to be therein specified for the purpose, absolutely cease and determine accordingly, without prejudice nevertheless to the remedies of the respective partners for the breach of non-performance of all or any of the covenants and conditions contained in these presents at any time before the determination of the said partnership; and the said partner to whom the said notice shall be given .shall lie considered as quitting the said business for the benefit of the partner who 164 CLARK V. LEACH 1DE a. 3. &8.411. shall give the said notice, and both the said partners shall join in causing a proper notice of the dissolution of the said partnership to be inserted in the Lmdon Gazette ; and in ease the offending partner shall refuse to join in inserting such notice of dissolution, the other partner shall be at liberty "to cause such notice to be inserted in the London Gazette and such public [411] papers, and give such other notice of dissolution as he in his sole discretion may think fit, and without any concurrence of the offending partner, whose name, however, he hereby authorises, the other partner to affix to any such notice or notices if he think fit." After the expiration of the partnership term in 1846, the business was carried ore by the partners as before, without express renewal of the partnership articles, until the 30th of June 1862, on which day the Plaintiff, referring the Defendant to the partnership articles, and charging him with continued neglect to attend to the business of the partnership, caused a written notice of dissolution to be served upon him, at the same time expressing his desire to exercise an option given by the articles, in the case of a determination of the partnership by such notice as was then being given, of purchasing the Defendant's share of and in the partnership property,, credits and effects at a valuation. The Defendant, in the course of a voluminous correspondence which ensued, disputed the right of the Plaintiff to give such notices, but expressed his willingness to acquiesce in an immediate dissolution on the usual terms of the assets being realised and divided between the parties. The bill was filed for a declaration of the dissolution of the partnership as from* the 30th of June 1862 ; for a liquidation, if necessary, of the partnership affairs on the terms of a certain letter of the 19th of July 1862, to which the Plaintiff alleged that the Defendant had acceded; and for an injunction to restrain the Defendant from acting, as the bill alleged he was doing, in contravention of the rights claimed by the Plaintiff on the footing of the partnership articles, and particularly of [412J that clause of them under which the Plaintiff had assumed to give the notices of the 30th of June 1862, being still binding upon the partners, notwithstanding that the partnership term of years, to which those articles originally had reference, had long since expired. The Master of the Rolls, being of opinion that the clause had no longer any application, declined to grant the injunction sought, and made the decree now under appeal. Mr. Selwyn and Mr. Druce, for the Appellant, citing Cfiurton v, Douglas (Johns. 174) and Burroivs v. Foster (before the Lords Justices, 8 May 1862 ; Keg. Lib. 1862,, A. 941), contended that he was entitled to the relief sought by his bill. It was well settled that in the case of a partnership by deed continued by the partners after the expiration of the original partnership without a new agreement, all the old covenants were infused into the new relation, with the single exception of the covenant for duration; Booth v. Parks (I Molloy, 465); King v. Chunk (17 Beav. 325); Essex v. .Essex (20 Beav. 442, 450); Parsons v. Hayward (31 Beav. 199; S. C. on appeal, 31 L. J. N. S. Ch. 670). And such being the general rule, and the particular clause in the partnership articles in the present case, under which the Plaintiff had assumed to. give the notices of the 30th of June 1862, being one which it was for the common benefit of the parties to have considered as transferred to the new contract after...
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