Wedderburn v Wedderburn
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1855 |
| Date | 01 January 1855 |
| Court | High Court of Chancery |
English Reports Citation: 41 E.R. 16
HIGH COURT OF CHANCERY
S. C. 2 Keen, 722; 8 L. J. Ch. (N. S.), 177; 3 Jur. (O. S.), 596. For subsequent proceedings, see 2 Beav. 208; 17 Beav. 158; 18 Beav. 465; 22 Beav. 84. As to the position of executors dealing with trust money in business, see Turner v. Trelawny, 1841, 12 Sim. 61; Lord Provost: of Edinburgh v. Lord Advocate, 1879, 4 App. Cas. 839. As to opening an account long closed, see Allfrey v. Allfrey, 1849, 1 Mac. & G. 93.
[41} wedderburn v. wedderburn. Nov. 10, 11, 13, 14, 1837; Nov. 9, 1838. [S. C. 2 Keen, 722; 8 L. J. Ch. (N. S.), 177; 3 Jur. (O. S.), 596. For subsequent proceedings, see 2 Beav. 208; 17 Beav. 158; 18 Beav. 465; 22 Beav. 84. As to the position of executors dealing with trust money in business, see Turner v. Trelawny, 1841, 12 Sim. 61 ; Lord Provost: of Edinburgh v. Lord Advocate, 1879, 4 App. Cas. 839. As to opening an account long closed, see Allfrei/ v. Allfrey, 1849, 1 Mac. & G. 93. By articles -of partnership, between three persons, it was stipulated that, in ease of the death of any one of them, the partnership should cease on a certain subsequent day, and the property of the partnership be then divided between the surviving partners and the executors of the deceased partner. One partner, by his will, directed all his property to be converted and invested for the benefit of his children, and appointed his co-partners his executors, and died, leaving his children all infants. The two surviving co-partners, having proved the will, had the property of the partnership valued, and then proceeded to continue the business under- a new firm, and debited the new firm with the value of the testator's share of the partnership property, but did not otherwise execute the directions either of the articles or of the will. Held, that this transaction must be treated as a nullity so far as the children's interests were concerned. The executors of a testator, who were also his surviving partners, and had continued to employ his share of the partnership capital in trade, held answerable for a proportionate share of the profits of the trade, notwithstanding that the capital of the partnership at the time of the testator's decease consisted only of debts due to the partnership. Degree of weight to be attached to deeda of release executed by cesluis que trust within a few days of their respectively coining of age, when such releases profess to proceed upon the examination of complicated accounts. The bill stated that an account had been made out, shewing that a certain sum was due to the Plaintiff, and it alleged that the Defendants set up that account and the payment of the balance as a final settlement. The bill charged the contrary, 1 MY. SCR. 42. WEDDERBURN 'II WEDDERBURN 17 and that much more was due to the Plaintiff, as would appear if certain accounts were rendered. A deed of release had, in fact, been executed by the Plaintiff at the time of the payment of the balance in question ; but the bill made no mention of it. As this deed of release acknowledged the receipt of certain sums, it could not be wholly set aside; but the Court was of opinion, under the circumstances of the case, that it did not deprive the Plaintiff of his right to the accounts which, he sought. Semble, that the proper form of the decree in such a case is to declare that the Plaintiff is entitled to the accounts, notwithstanding the provisions of the deed of release; but a decree which directed the accounts without noticing the deed of release, was not considered to require alteration. Between cestui jue trust and trustee, no lapse of time will preclude the account from the commencement of the trust in a case in which the relation of trustee and cesttii qua tnutt continues, the transactions between them are not closed, and the delay of the claim is attributable to the trustee not having given to his cestui que trust that information to which he was entitled, and accounted with him in such manner as he ought. Difficulties of enforcing in Chancery a cextui que trust's light (however clear) to participate in profits of a trade carried on in part with the trust fund. The facts of this case, and the terms of the decree made upon the hearing at the Rolls, appear very fully in the third [sic] volume of Mr. Keen's Reports [2 Keen, 722] ; [42] and they are also stated by the Lord Chancellor in his judgment. The Defendants appealed to the Lord Chancellor against the whole decree, except that part which directed the usual accounts of the personal estate of David Webster; and the Appellants further submitted that the decree, so far as related to David Webster's estate, was defective, inasmuch as it did not direct that if, in taking the accounts of that estate, and of the administration of it, the Master should find any account settled, he was not to disturb or unravel the same. Mr. Knight Bruce, Mr. Kindersley, and Mr. Colville, in support of the appeal. the solicitor-general [Rolfe], Mr. Jacob, and Mr. Koe, in support of the decree. Mr. Knight Bruce, in reply. The following cases, in addition to those mentioned in the report of the hearing at the Rolls, were referred to upon the question of the length of time which had elapsed, viz. : Smith v. Clay (3 Bro. C. C. 639, n.), Townse-rul v. Tmvnaend (1 Cox, 28), Banney v. Mulgard (1 Cox, 145), Beckfonl v. W(ule (17 Ves. 87; see p. 97), Hickex v. Cooke (4 Dow, 16). Nov. 9. the lord chancellor [Cottenham]. Although the papers in this case are voluminous, and the questions of great importance, the facts, so far as [43] they appear to me necessary to be considered, lie in a narrow compass ; and the points to be decided are :- 1. What was the effect of the arrangement of 1801 ? 2. What were the rights of the Plaintiffs independently of that arrangement ] 3. What was the effect of the several deeds executed by the Plaintiffs'? 4. What ought to be the effect of the time that has elapsed 1 5. If the Plaintiffs are entitled to what they ask, what ought to be the form of the decree ? 1. As to the arrangement of 1801, the facts are simply these. The testator, David Webster, had been engaged in partnership with John Werlderburn and David Wedderburn, under a deed of 1796, for seven years from the 1st of May 1796, if the three should so long live, in which deed very special provision is made for settling the account with the estate of any one of the partners who might die during the continuance of the partnership. It is thereby provided, that the partnership shall be considered as continuing up to the 1st of May after the death of any partner; but that, after such death, nothing shall be done by the survivors to prejudice or affect the estate of the deceased, or his interest in the joint stock; that within three months from the 1st of May after the death, the account between the survivors and the estate of the deceased partner shall be made out, so as to shew the share and interest of the deceased, and shall be signed by his executors and the surviving partners; that as soon as conveniently may be after such settlement, [44] all the debts due by the firm 18 WEDDEBBURN V. WEDDERBUBN 4 MY. & OR. . shall be paid, and that thereupon a partition and delivery shall be made of all residue of the joint property, including a partition of all debts due to the firm; and the representatives of the deceased partner are to have the right to use the names of the survivors to compel payment of the debts assigned to them. It appears that John Wedderburn and David Webster, who had carried on the business before David Wedderburn was admitted into partnership with them, were possessed of certain shares in ships, and it has been assumed that such shares constituted part of the joint stock aud partnership property ; but I do not find that to have been the case, and, on the contrary, I think it appears that these shares were the separate property of each partner, although, no doubt, the possession of such shares was considered as beneficial to the joint trade; and the deed therefore provided that David Wedderburn should purchase one-sixth share in the ships from John Wedderburn and David Webster, and that, in the event of the death of either of them during the co-partnership, he should purchase from the representatives of the deceased such further shares in the ships and other property as should be equal to his then share in the continuing business; but those shares were, as I collect, registered in the names of the individual partners, and therefore could not, according to the case of Ex parte Yallop (15 Ves. 60), be considered as part of the partnership estate, aud I do not find that there was any intention that they should be so considered. David Webster died in March 1801, and appointed his wife and his two partners, John Wedderburn and [45] David Wedderburn, executors of his will; but the two latter alone proved. By this will, the children of David Webster were entitled to certain interests in his property; but I do not find that it contained any directions as to the mode of settling the account with the surviving partners. It however directed his executors to convert his shares of ships and other property into money as soon as might he after his decease, and to invest the proceeds for the benefit of his family. Some stress was laid, in argument, upon the fact of the testator having appointed his partners his executors; and no doubt that appointment proves the testator's confidence in them and in the prosperity of the business in which he had been engaged; but that the testator should have been desirous of conferring upon them that office is much less matter of surprise than that they should have accepted it, assuming, what I see no reason to doubt, that they intended to act with the most perfect honour and integrity towards the family of their deceased partner. Had the representatives of the testator not been his surviving partners, their duty...
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