Small v Currie
| Jurisdiction | England & Wales |
| Judgment Date | 30 March 1854 |
| Date | 30 March 1854 |
| Court | High Court of Chancery |
English Reports Citation: 43 E.R. 824
BEFORE THE LORDS JUSTICES.
S. C. 2 Drew. 102; 2 Eq. R. 638; 23 L. J. Ch. 746; 18 Jur. 731.
824 SMALL V. CURRIE J DB 0. M. & 0.141. [141] small v. curiue. Before the Lords Justices. March 21, 22, 23, 30, 1854. [S. C. 2 Drew. 102; 2 Eq. R. 638; 23 L. J. Ch. 746; 18 Jur. 731.] Two bankers carried on business under articles of partnership, providing that if at the end of five years, for which the partnership was to continue, either partner should wish to carry on the business, and should not take the share of the other at a valuation, the assets should be realized, the debts paid, and the surplus divided. Simultaneously with the execution of the articles a surety for one of the partners entered into a bond to indemnify the other against all loss in respect of the partnership. The business of the bank was continued by the firm for more than a year after the expiration of the five years. Held,- 1. That by this continuation the surety was discharged. 2. That whether that circumstance would afford a defence to an action on the bond or not, a Court of Equity would restrain the obligee from proceeding in such an action. This was an appeal from the decision of Vice-Chancellor Kindersley, reported in the 2d Volume of Mr. Drewry's Keports, page 102, where the facts are stated from the judgment of the Vice-Chancellor. The following summary of them has been transposed to this place from the judgment of the Lord Justice Turner. In the year 1833 Hylton Jollift'e, the Defendant Currie, and Charles Cotton Butterfield, established a bank at Petersfield. They entered into articles of partnership on the formation of the bank, and carried on the business under those articles and other articles entered into in the year 1839 down to the 20th of August 1842. Butterfield was the managing partner of the bank, and, upon the formation of the partnership, a bond was given by him and by John Lipscomb, as his surety, to indemnify the other partners against any misconduct on his part. On the 20th of August 1842 the partnership of Jolliffe, Currie and Butterfield was. dissolved, and a new partnership was formed between Currie and Butterfield. New articles of partnership were entered into between these two parties. They were dated the 20th of August 1842, were made between Currie of the one part, and Butter-[142]-field of the other part, and contained, amongst other provisions not necessary to be stated, two clauses (the 16th and 17th) in these terms :-That in case either of them the said James Currie and Charles Cotton Butterfield should die before the expiration of the term of partnership, or in case at the expiration or other sooner determination of the partnership either of them the said James Currie and Charles-Cotton Butterfield should retire from the banking business, and the other of them should be desirous of carrying on the same, then the share and interest of the partner so dying or retiring from the business of and in the capital, stock, credits and effects of the partnership might be taken by the other of the said partners at the value which should have been fixed upon the same in the last preceding half-yearly account of the partnership; and as and from the said period of taking such account the interest and liability in respect of profits and loss of such partner so dying or retiring in respect of the partnership should cease, and the amount of the value so fixed as aforesaid of his share and interest should be paid to him, or his executors or administrators, by the other of them within six calendar months after the last-mentioned period, with interest for the same from that period after the rate of 5 per cent, per annum ; and the partner, his executors or administrators, to whom such payments should be made should thereupon make and execute such acts, deeds, assignments and assurances as might be required for effectually vesting the share and interest so purchased as aforesaid in the partner purchasing such share, and for enabling him and them to collect, get in and receive the monies, credits and effects due, owing or belonging to the partnership in respect of such share and interest; and the partner purchasing the share aforesaid should execute and deliver to the other the deceased or retiring partner, [143] his executors and administrators, a bond or bonds in a sufficient penalty for indemnifying the obligee or obligees in the bond or bonds, his or their executors or administrators, against the debts and demands due and owing by or from the partnership; such assignment and bond to be prepared by and at the 5DEO. M. &Q.H4. SMALL V. CURRIE 825 expense of the purchasing partner. That if at the expiration of the term of the partnership, or at any sooner determination thereof, either of them the said James Currie and Charles Cotton Butterfield should be desirous of continuing the business, and should refuse or neglect to purchase the share of the other of them quitting the business or dying, and pay the value thereof in manner aforesaid, then a general rest or account should be made and taken of the partnership stock, credits and effects, and the stock and effects should be converted into money, and the credits collected in, and out of the money to arise from the stock, credits and effects all the debts and demands justly due and owing by or from the partnership should be in the first place fully paid and satisfied; and the surplus or residue of the monies should be forthwith divided between the said partners, their executors or administrators, according to their respective rights and interests. Upon the formation of this new partnership a joint and several bond of even date with the articles was also given by Butterfield and Lipscomb, as his surety, to Currie. The condition of this bond contained the following recitals:- " Whereas by articles of agreement indented bearing even date with the above-written obligation, and made between the said James Currie, of the one part, and the above Charles Cotton Butterfield, of the other part, each of them the said James Currie and Charles Cotton Butter-[144J-field, for himself, his heirs, executors and administrators, hath covenanted and agreed with the other of them his executors and administrators mutually and reciprocally, in manner therein mentioned, and hereinafter in part recited, that is to say, that the said James Currie and Charles Cotton Butterfield shall be and continue partners together in the business of bankers for the full term of five years to be computed from the day of the date of the now reciting indenture and of the above-written obligation, and that the said business shall be carried on, under the firm of Butterfield & Co., in the messuage or dwelling-house in which the same is now carried on, situate at Petersfield aforesaid, or at such other place or places as the said partners shall mutually agree upon for that purpose, to be carried on with such capital to be advanced, in such shares, and with such participation of profits, as in the said articles mentioned, and which said articles of agreement contain various covenants and clauses for regulating the conduct of the said partnership business and other matters relating thereto. And whereas the said James Currie consented to become a partner in the said business at the instance and request of the said Charles Cotton Butterfield and John Lipscomb, and under an agreement on the part of the said Charles Cotton Butterfield and of the said John Lipscomb, as the surety of the said Charles Cotton Butterfield, to indemnify the said James Currie, his heirs, executors and administrators, in manner hereinafter expressed." The condition itself was thus expressed:-" If the said Charles Cotton Butterfield and John Lipacomb, or one of them, their or one of their heirs, executors or administrators, do and shall with and out of their or either of their or any of their proper monies from time to time, and at all times hereafter keep harmless and indemnified the said James Currie, his heirs, executors and administrators, from and against all accounts, reckonings, claims and demands, [145] actions, suits and other proceedings, and all sum and sums of money, costs, losses, damages and expenses to which he or they or any of them shall be subject or liable by reason or in consequence of any breach, non-observance or non-performance by the said Charles Cotton Butterfield, his executors or administrators, of all or any of the covenants, stipulations and agreements expressed and contained in the said recited articles of agreement on the part of the said Charles Cotton Butterfield, his executors or administrators, to be observed or performed, or by reason or in consequence of the bankruptcy or insolvency of any of the correspondents, customers or debtors of the said partnership, the infidelity, default or neglect of any of the clerks, agents or servants of the said partnership, or by reason or in consequence of any act, matter or thing in anywise relating thereto respectively, or any other matter or thing whatsoever in anywise relating to the said partnership, or to the concerns thereof and arising without the act or default of the said James Currie." The partnership between Currie and Butterfield expired by effluxion of time on the 20th of August 1847. The business of the bank was not then wound up, but was carried on (whether for the purpose of winding up was one of the questions in the cause) up to the 3d of April 1849, when it was dissolved by notice in the Gazette. It 826 SMALL V. CUREIE 5DE 0. M. & 0.146. did not appear that any arrangement as to the assets or debts of the firm was made between Currie and Lipscombe on the occasion of this dissolution. The business, however, was not then wound up. It was carried on by flutterfield alone until sometime in the month of July 1849, when he absconded and became bankrupt. In the meantime Lipscombe had died. He died in the month of...
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