Cooke v Benbow
| Jurisdiction | England & Wales |
| Judgment Date | 10 May 1865 |
| Date | 10 May 1865 |
| Court | High Court of Chancery |
English Reports Citation: 46 E.R. 538
BEFORE TH LORDS JUSTICES.
S. C. 6 N. R. 135.
reports of CASES HEARD and DETERMINED by the LORD CHANCELLOR and the COURT OF APPEAL IN CHANCERY. 1862-65. By J. P. DE GEX, H. CADMAN JONES, and R. HORTON SMITH, Esqrs., Barristers - at - Law. 1871. Vol. III. [1] cooke v. benbow. Before the Lords Justices. May 8, 9, 10, 1865. [S. C. 6 N. R. 135.] A father took his sons into partnership under articles providing that the capital then used by him in the business should be kept in it without allowing interest, and should remain the property of the father, the sons having, during the partnership, a certain share in the profits. The debts due to the business were estimated at .20 per cent, below their nominal amount, but very nearly their full amount was realized. The father drew out of the business large sums, which appeared to have been wholly applied in payment of trade debts due when the partnership was formed. One of the sons brought fresh capital into the business. Held, that in the absence of contract the sons could not claim to treat the difference between the estimated value of the debts due to the business and the amount actually realized as profit, but that the whole amount realized was to be treated as part of the father's capital. Held, also, that the contract was not that the father should keep in the business the moneys employed there when the partnership commenced, and pay aliunde the trade debts then owing, but that the business should be carried on as it stood for the benefit of himself and his sons, and that therefore the payment of the old trade debts was not an improper withdrawal of capital. Held, that if the father had withdrawn capital for unauthorized purposes, he could not have been charged with interest, unless such withdrawal had been fraudulent or grossly excessive. Held, also, that in the absence of contract the son could not claim interest on the capital brought in by him. This was an appeal by the Defendant John Benbow, from an order made by V.-C. Stuart, on further consideration, and on the hearing of a summons by the aame Defendant, to vary the chief clerk's certificate. [2] John Benbow the elder, the testator in the cause, carried on business as a miller. In 1855 he took his two sons, the Appellant and Clifton Benbow, into partnership. By the partnership articles, dated the 6th of March 1855, after reciting that the testator had for many years carried on the business of a miller attheCowley Hall Mills, and that, being desirous as well to relieve himself from part of the labour of conducting the business, as to advance his two sons in the world, he had proposed and agreed to admit them into partnership with him in the business, in the proportions and in manner thereinafter mentioned, it was agreed that the testator and the IDEO. J. *.3 COOKB V. BENBOW 539 two sons should he partner* in the business for six years, from the 1st of January then last; the business to be carried on at the Cowley Hall Mills, without paying any rent to the testator for the use of the premises. The clauses material for the present- purpose were the following :- " That the said J. Benbow the elder shall bring into the said business the whole of the capital, plant and stock-in-trade now and usually employed by him in such business, and shall continue to employ and use such capital, plant and stock-in-trade, or the money to arise by the sale of such stock-in-trade, in carrying on the said business, and for the benefit of the said partnership, during the said term of six years, without any allowance of interest for the use of the same." " That no partner shall employ any of the moneys or effects of the said partnership, or engage the credit thereof, except upon the account of...
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