Simpson v Chapman
| Jurisdiction | England & Wales |
| Judgment Date | 23 June 1853 |
| Date | 23 June 1853 |
| Court | High Court of Chancery |
English Reports Citation: 43 E.R. 466
BEFORE THE LORDS JUSTICES.
S. C. 20 L. J. Ch. 88; 15 Jur. 714. See Wedilerhtrn v. Wedderburn, 1856, 22 Beav. 117. Questioned, Macdonald v. Richardson, 1858, 1 Giff. 81. See Vyse v. Foster, 1872, L. E. 8 Ch. 317 n.
&U- [154] simpson v. chapman. Before the Lords Justices. June 22, 23, 1853. [S. C. 20 L. J. Ch. 88; 15 Jur. 714. See Wedilerhtrn v. Wedderburn, 1856, 22 Beav. 117. Questioned, Macdonald v. Richardson, 1858, 1 Giff. 81. See Vyse v. Foster, 1872, L. E. 8 Ch. 317 n.] A testator was a member of a partnership at will in a bank, without any provision entitling the executor of a deceased partner to an interest in the goodwill of the concern. The credit, in which the bank was, rendered capital unnecessary, and at the testator's death the property of the concern exceeded its liabilities by a very small amount, the testator's share in which was far exceeded by the balance due from him to the bank on his private account, as a customer. After his death the surviving partners admitted into the firm his son, who was his executor, but who was not admitted into the firm in that character, and the business continued to be carried on without any separation or appropriation of the partnership assets as they existed at the testator's death. In a suit against the executor for the administration of the testator's estate : Held, that he was not accountable to the testator's estate for the profits which he had received as a partner in the bank. These were two appeals from a portion of a decree of Vice-Chancellor Stuart in a suit for administering the assets of a testator named Thomas Simpson, who for some years previously to, and at the time of his death, carried on the business of a banker at Whitby, in co-partnership with John Chapman, one of the Defendants, and Abel Chapman, under the firm of Simpson, Chapman, & Co. The partnership was one at will and had subsisted for several years, but without any articles, the profits being equally divided between the partners, and there being no stipulation as to the share of a deceased partner in the goodwill of the concern. By his will dated the 20th of April 1843, the testator gave all his residuary personal estate (which included whatever interest he bad in the bank) to the Defendants John Chapman, Henry Simpson, and Thomas Brodrick Simpson, in trust for his sons the Defendants, Henry Simpson, Thomas Brodrick Simpson, and the Plaintiff George Simpson, in equal shares absolutely, and the testator appointed John Chapman, Henry Simpson, and Thomas Brodrick Simpson, executors in trust of his will. The testator died on the 26th of May 1843. Thomas Brodrick Simpson did not take an active part [155] in the executorship, but left the administration of the testator's estate to the Defendants, John Chapman and Henry Simpson. The bill contained the following charges :- 4DEO.M.48.M8. SIMPSON V. CHAPMAN 467 That each of the partners in the bank, viz., the testator and Abel Chapman and John Chapman had private current accounts with the firm, in respect of which various sums were from time to time standing to their credit or debit as the case might be, and in respect of which they were treated and considered as ordinary customers of the bank. That each of the partners was entitled to one-third of the assets of the partnership, and liable to the payment of one-third of the liabilities thereof, and that, except such interest in the assets of the bank, neither of the partners had any capital therein. That the value of the assets of the partnership at the testator's death and for some time previously thereto exceeded the amount of all its liabilities by a comparatively small amount, and that, in fact, as the bank was from the well-known wealth of its partners in good credit, it was unnecessary that the partners should retain therein any considerable surplus of assets above its liabilities. That the bank was a bank of issue as well as of deposit, and that the profits of the partnership arose from the employment at interest by way of loans to customers on overdrawn accounts and otherwise, and investment, in other modes, of monies placed in their hands by way of deposit, and of the amount of their notes in circulation. That since the death of the testator the Defendant [156] Henry Simpson had assumed to be and had acted as if he had been a partner in the banking business with John Chapman and Abel Chapman in the place of the testator. That there was at the time of the testator's death a considerable sum of money in the banking-house in cash and Bank of England notes, and that since the testator's death various monies had been received and paid in cash and Bank of England notes in respect of bills of exchange and notes of other bankers, which were the property of the partnership at the time of the testator's death, and in respect of the principal and interest of debts due to the partnership at the time of the testator's death and otherwise. That there had also since the testator's death been received at the banking-house of the said co-partnership various sums of money in cash and Bank of England notes from creditors of the bank at the time of such payments, and by persons who had become customers thereof since his decease. That the cash and Bank of England notes which were in the banking-house at the time of the testator's decease were not in any way set apart or appropriated for the payment of the debts and liabilities of the partnership at the time of his death, but remained in the till or depositories of the said banking-house, and that there were added thereto and mixed therewith the cash and Bank of England notes which were in the course of business received at the banking-house after the testator's death ; and that, in fact, all the cash and Bank of England notes received at the banking-house since the testator's decease had been mixed together in the till or other depositories of the banking-house without any distinction. [167] That the several cheques which had been drawn on the said bank since the testator's death had been paid out of such mixed fund, except so far as they had been paid by notes of the partnership. That such cheques had been paid indiscriminately out of the above-mentioned mixed fund, whether they were cheques on accounts or for sums in respect of which the said co-partnership was indebted in the lifetime of the testator, or were drawn by persons whose accounts with the said co-partnership were overdrawn at the time of drawing such cheques, or by new customers of the bank, or otherwise by way of advance, and not in payment of any liability of the said partnership in the testator's lifetime. That in fact the monies which had been repaid, and which were still due in respect of principal and interest of overdrawn accounts and advances, were to some extent the fruits of the cash and Bank of England notes the property of the partnership at the time of the testator's death, and received in respect of the debts owing to and other assets of the said co-partnership in the testator's lifetime. That the various cheques drawn upon the partnership since the testator's death had been, so far as the persons presenting the same were willing to accept payment in that manner, paid partly by notes of the partnership which were in the banking- 468 SIMPSON V. CHAPMAN 4DE0. M. ft 0.168. house at the time of the testator's death, and partly by the re-issue of notes of the partnership issued in his lifetime, which had been paid into the banking-house since his decease. That such cheques had been so paid indiscriminately, whether they were drawn on accounts or in respect of sums for which the partnership was liable at the time of [158] the testator's death, or on accounts which were at the time of payment of such cheques overdrawn, or for n&w customers, or otherwise by way of advance. That the monies which had been repaid and were now due to the existing partnership...
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