Oakford v European and American Steam Shipping Company
| Jurisdiction | England & Wales |
| Judgment Date | 12 May 1863 |
| Date | 12 May 1863 |
| Court | High Court of Chancery |
English Reports Citation: 71 E.R. 80
HIGH COURT OF CHANCERY.
S. C. 9 L. T. 15. See Swire v. Redman, 1876, 1 Q. B. D. 545; Rouse v. Bradford Banking Company [1894], 2 Ch. 59; [1894], A. C. 586.
Partnership. Retiring Partner. Surety.
80 OAKFORD V. EUROPEAN AND AMERICAN IH.&M.182. [182] oakford v. european and american steam shipping company (limited). May 12, 1863. [S. C. 9 L. T. 15. See Swire v. Redman, 1876, 1 Q. B. 1). 545 ; Rwise v. Bradford Banking Company [1894], 2 Ch. 59; [1894], A. C. 586.] Partnership. Retiring Partner. Surety. Where a member of a firm which is under a continuing contract retires with an indemnity, the continuing partners are his agents for carrying on the contract; and although after notice of the retirement the retiring partner is in a sense a surety (on the principle of Oakeley v. Pasheller) that authority will not be extended so far as to discharge him from the contract by reason of acts of the continuing partners fairly within the scope of their authority in carrying out the contract. Continuing partners under such a contract (which, inter alia, gave the firm the power of appointing an arbitrator in case of dispute) entered into an agreement by which they waived a very doubtful point of construction on the original contract, and referred differences to arbitrators, one of whom was selected by themselves instead of by the firm as constituted at the date of the contract. Held, that this was not such a variation of the original contract as to discharge the retired partner. The Defendants were a joint stock company, constituted under the Joint Stock Companies Act, 1856, arid at the date of the next-stated agreement the Plaintiff was a partner with J. li. Croskey and J. H. Wolff, in the firm of Croskey & Co. The company agreed with the General Screw Steam Shipping Company for the purchase of eight ships, at a price in cash amounting to £6, 12s. 6d. per share on all the shares in the General Screw Company, and the shareholders in the latter company had the option offered to them of taking £G, 12$. (id. per share on the amount of their shares in cash, or if they should assent to take payment in shares of the European and American Company, then to take payment at the rate of £9 of new shares for every share held by them in the General Screw. The difference between the cash payment of £6, 12s. 6d. and the share payment of £9 was the bonus of £2, 7s. 6d., hereinafter referred to. On the 8th of April 1857 an agreement was entered into between the Defendant company and the firm of Croskey & Co., who had already been acting on behalf of the company. This agreement recited that the company had purchased the eight ships, and had agreed with Croskey & Co. to undertake the management of the vessels on the terms therein set forth ; and it was agreed, among other stipulations, as follows:- 1. "That such sums as the directors may think fit shall be laid out and expended on the said ships, so as to make the same fit for the purposes of the undertaking; after [183] which an account shall be made up, including the first cost of the vessels and tho cost of their first repair and equipment, and the cost of taking them to the port of their first outward destination, which shall be considered as the capital account." 2-11. These clauses provided for the management of the ships by Croskey & Co., who were to receive the earnings and provide for the expenses, and to render accounts of their outlay and receipts. 12. This clause provided for the remuneration of Croskey & Co. as follows :-Out of the earnings of the ships was to be deducted, first, working and other specified expenses, costs of repairs, a sum of £1000 per annum for a boiler fund for each ship, insurance expenses, " together with the sum of £5 per cent, per annum on the capital, to be ascertained as aforesaid, less the boiler fund to be set aside as a depreciation fund; ajid in case the balance of the said earnings shall be insufficient to pay the said company a dividend after the rate of £6 per cent, on the amount of capital embarked, to be ascertained as aforesaid," then Messrs. Croskey were not to receive any payment 1H. &M. 184 STEAM SHIPPING COMPANY (LIMITED) 81 out of the earnings, except an allowance of £500 a year for offices and clerks, and the brokerage on insurances; "but if the balance of such earnings, after such deductions as aforesaid, shall be more than sufficient to pay the said company a dividend after the rate of £6 per cent, on the said capital," then the said company were to pay or allow to Croskey & Co. one moiety of the excess in each year, provided that in such calculation no deduction should be made for the said allowance of £500 a year, nor on account of certain expenses of management which were to be borne and paid by the company. 13. This clause provided that Croskey & Co. were to make all repairs which the directors should consider necessary. [184] 14. This clause provided that the agreement should continue in force for three years from the date, and for such further time as the net profits should admit of a dividend of £6 per cent...
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