Wheatcroft and Cox v Hickman
| Jurisdiction | England & Wales |
| Judgment Date | 03 August 1860 |
| Date | 03 August 1860 |
| Court | House of Lords |
English Reports Citation: 11 E.R. 431
House of Lords
Mews' Dig. ii. 1391; x. 366, 373, 375, 395, 423, 508, 512. S.C. 30 L.J. C.P. 125; 7 Jur. N.S. 105; 3 L.T. 185; 8 W.R, 754; and, below, 18 C.B. 617, 3 C.B. N.S. 523; and sub nom. Re Stanton Iron Coy. 21 Beav. 164. On question as to evidence of partnership, explained in Bullen v. Sharp, 1865, L.R. 1 C.P. 100, and followed and applied in numerous cases, among which it may suffice to refer to Ross v. Parkyns, 1875, L.R. 20 Eq. 335; Pooley v. Driver, 1876, 5 Ch. D. 460; Ex parte Delhasse, In re Megevand, 1878, 7 Ch. D. 515; Badeley v. Consolidated Bank, 1888, 38 Ch. D. 249; Adam v. Newbigging, 1889, 13 A.C. 316; Gosling v. Gaskell (1897), A.C. 575; and see Partnership Act, 1890 (53 and 54 Vict. c. 39), s. 2.
Partnership - Bills of Exchange - Deed of Arrangement with Creditors.
[268] S. W. COX and D. WHEATCROFT, - Appellants; JOHN HICKMAN,- Respondent [June 26, 28; July 6; August 3, I860]. ***** 'fas-Z ^ L J 'f 3/ . [Mews' Dig. ii. 1391 ; x. 366, 373, 375, 395, 423, 508, 512. S.C. 30 L.J. C.P. 125 ; 7 Jur. N.S. 105 ; 3 L.T. 185 ; 8 W.R, 754 ; and, below, 18 C.B. 617, 3 C.B. N.S. 523; and sub nom. Re Stanton Iron Coy. 21 Beav. 164. On question as to evidence of partnership, explained in Bullen v. Sharp, 1865, L.R. 1 C.P. 100, and followed and applied in numerous cases, among which it may suffice to refer to Ross v. Parkyns, 1875, L.R. 20 Eq. 335 ; Pooley v. Driver, 1876, 5 Ch. D. 460 ; Ex parte Delhasse, In re Megevand, 1878, 7 Ch. D. 515 ; Badeley v. Consolidated Bank, 1888, 38 Ch. D. 249; Adam v. Newbigging, 1889, 13 A.C. 316; Gosling v. Gaskell (1897), A.C. 575 ; and see Partnership Act, 1890 (53 and 54 Viet. c. 39), s. 2.] Partnership - Bills of Exchange - Deed of Arrangement with Creditors. S. and S., trading in that name, becoming embarrassed, executed a deed, to which they were parties of the first part ; certain of the creditors1, as1 trustees, of the second part; and the general scheduled creditors (among whom the trustees were named) of the third part. The deed assigned the property of S. and S. to the trustees, and empowered the trustees to carry on the business under the name of the " Stanton Iron Company," to execute all contracts and instruments necessary to carry it on, to divide the net income to be taken among the creditors in rateable proportions (such income to be deemed the property of S. and S.), with power to the majority of the creditors, assembled at a meeting, to make rules for conducting the business, or to put an end to it altogether ; and after the debts had been discharged, the property was to be re-transferred by the trustees to S. and S. Two of the creditors, C. and W., were named among the trustees. C. never acted. W. acted for six weeks, and then resigned. Some time afterwards, the other trustees, who continued to carry on the business, became indebted to H., and gave him bills of exchange, accepted by themselves, " Per proc. the Stanton Iron Company : " Held, that there was no partnership created by the deed, and that consequently C. and W. could not be sued on the bills as partners in the company. Held also, that they could not be sued for goods sold and delivered, there being no 431 VIH H.L.C., 269 CQX V. HICKMAN [i860] distinction upon the question of liability between the bills and the consideration for which they were given. This was an action od three bills of exchange, given by one of the managers of the Stanton Iron Company, for goods supplied to that company. The declaration contained a count in the usual form as against acceptors on each bill, alleging it to have been " directed to the Defendants by and under the name of the Stanton Iron Company; " also counts for goods sold and delivered, and the money counts. The Defendants severed in pleading, each denying the acceptance of the bills; and, as to the other counts, pleading never indebted. For some time previously to the year 1849, Benjamin [269] Smith and Josiah Timmis Smith carried on business at the Stanton Iron Works, in Derbyshire, as iron masters and corn merchants, under the name of B. Smith and Son. In that year they became embarrassed in their circumstances, and a meeting of their creditors took place. Among these were Cox and Wheatcroft. On the 13th November 1849, a deed of arrangement was executed by more than six-sevenths in number and value of the creditors. The parties to this deed were the Smiths, of the first part; Francis Sandars, John Thompson, James Haywood, David Wheatcroft, and Samuel Walker Cox, all of whom were creditors, of the second part; and the general creditors (including those previously named as trustees), whose names were also set forth in a schedule, of the third part. The deed recited a lease from 1846 for twenty-one years to the Smiths, that they were unable to pay their debts, and that it had been agreed that there should be an assignment by them to the parties of the second part., as trustees on behalf of the creditors,, to have and hold the premises for the term of the lease, the machinery, etc., and all the estate, etc., subject to the powers and provisions thereinafter contained. The trusts were then enumerated, and, in substance, .they were to carry on the business under the name or style of " The Stanton Iron Company," with power to do whatsoever was necessary for that purpose, and to pay the net income, after answering all expenses; which net income was always to be deemed the property of the two Smiths, among the creditors of the Smiths. And provision was made for the meetings of the creditors; and, at any such meeting, a majority in value of the creditors present was.tO' have the power to make rules as to the mode of conducting the business, or to order the discontinuance of it. And when all the debts had been paid, the trustees were to hold the trust estates, etc., in trust for the two Smiths. The deed contained a covenant by the parties [270] executing it, not to sue the Smiths for existing debts. Coi never acted as trustee; and Wheatcroft resigned six weeks after the execution of the deed, and before the goods for which the bills were given had been supplied ; no new trustee was appointed in the room of either. The business of the company was carried on by the three other persons named as " parties of the second part." In the course of it goods were supplied by Hickman, who, in March, April, and June 1855, drew three bills of exchange in respect thereof. The first of these bills, which was; the same in form as those afterwards accepted, was in these words: " Grafton Iron Ore Works, Blisworth, 10 March 1855. " 300. " Four months after date pay to my order, in London, three hundred pounds, value received. John Hickman." " To the Stanton Iron Company, near Derby." The acceptance was in the following form: " At Messrs. Smith, Payne and Co., London. Per proc. The Stanton Iron Company.-James Haywood." The cause was tried in 1856 before the late Lord Chief Justice Jervis, when a verdict was found for the Defendants; but on motion on leave reserved, the verdict was entered for the Plaintiff (18 Com. Ben. Rep. 617). The case was taken to the Exchequer Chamber, when three judges, Justices Coleridge, Erie, and Crompton, were for affirming the judgment of the Common Pleas, and three other judges', Barons Martin, Bramwell, and Watson, were for reversing it.* The judgment therefore stood, and was afterwards brought up to this House. * 3 Com. Ben. Rep., N.S., 523. The case was also before the Master of the Rolls (nom. Re Stanton Iron Company, 21 Beav. 164) under the Winding-up Acts, when 432 COX V. HICKMAN [i860] VIII H.L.C., 271 [271] The Judges were summoned, and Lord Chief Baron Pollock, Mr. Justice Wightman, Mr. Justice Williams, Mr. Justice Crompton, Mr. Baron Channell, and Mr. Justice Blackburn attended. The Attorney-General (Sir K. Bethell, Mr. Milward was with him), for Wheatcroft: -The claim against the Appellants proceeds on the ground of a supposed partnership among the creditors of the Smiths in the Stanton Iron Works. There was none. The measure of the interest of each creditor who signed the deed is the amount of his debt. That interest is limited and defined. Yet the Court below has held that each creditor, although having only this defined interest, becomes a partner in the company and incurs an indefinite liability. That doctrine cannot be supported. It is contrary to all the principles of partnership. The facts here do not give any right to Hickman to maintain this action, for if he had heard that Cox and Wheatcroft had been named in the deed as trustees, he must have heard at the same time that Cox never acted in that character, and that Wheatcroft resigned the trust. The trustees who acted in the business are the only persons liable on these bills. The ownership of the property here never was changed at all. The trustees were by the deed to have possession of it for a certain time, but the property itself remained that of the Smiths, to whom it was to be restored if all the debts should be paid. The joint creditors, who are in fact incumbrancers, have the power to say whether the arrangement shall continue; but that amounts to no more than saying that the security given for their debts be put an end to. It is said that the man who participates in carrying on a trade is a partner in it; that is so under ordinary circumstances, but not under such circumstances [272] as exist here. If these trustees had found, upon the estate leased to the Smiths, and of which they were in possession for a time, a lode of mineral producing 100,000 in a year, the creditors would not have participated therein as partners; they would have got their debts paid a little earlier. The property would still haye been that of the Smiths. If they had been partners, the creditors might put the whole into their own pockets; as persons to be satisfied under that deed they had no...
To continue reading
Request your trial
- Momentum Productions Pty Ltd v Lewarne
-
Canada Deposit Insurance Corp. v. Canadian Commercial Bank, [1992] 3 SCR 558
...v. Smith (1775), 2 Wm. Bl. 997, 96 E.R. 587; Waugh v. Carver (1793), 2 Hy. Bl. 235, 126 E.R. 525; Cox v. Hickman (1860), 8 H.L.C. 268, 11 E.R. 431; Ex parte Taylor; In re Grason (1879), 12 Ch.D. 366; In re Stone (1886), 33 Ch.D. 541; In re Hildesheim, [1893] 2 Q.B. 357; In re Mason; Ex part......
-
Elbow River Marketing Limited Partnership v. Canada Clean Fuels Inc. et al., 2012 ABQB 277
...of National Revenue, [1998] 2 S.C.R. 298; 229 N.R. 58; 163 D.L.R.(4th) 385, refd to. [para. 77]. Cox and Wheatcroft v. Hickman (1860), 11 E.R. 431; 8 H.L. Cas. 268, refd to. [para. Sproule v. McConnell, [1925] 1 D.L.R. 982; [1925] 1 W.W.R. 609 (Sask. C.A.), refd to. [para. 82]. Green v. Har......
- Momentum Productions Pty Ltd v Lewarne
-
Receivership
...of a partnership between them, make a creditor liable as if he were a partner, the case law suggests that in practice this is unlikely. 14 11 ER 431, (1860) 8 HL Cas 268. 15 Cox v Hickman 11 ER 431, (1860) 8 HL Cas 268 at 306–307 per Lord Cranworth. 192 Law of Insolvent Partnerships and Lim......
-
Formation and Expansion
...the existence of a partnership was indicated by a number of factors, including the use of the same number by HMRC on 14 Cox v Hickman (1860) 8 HL Cas 268. 15 Pooley v Driver (1877) 5 Ch 458. 16 Rees v Dartnall [2009] EWHC 3923 (Ch), [2009] All ER (D) 244 (Feb). 17 Chahal v Mahal and Deol [2......
-
Table of Cases
...Cove, Debtor (No 83 of 1988), Re [1990] 1 WLR 708 85 Cowell v Quilter Goodison Co Ltd [1989] IRLR 392 12, 576 Cox v Hickman 11 ER 431, (1860) 8 HL Cas 268 191, 192 Croftbell Ltd, Re [1990] BCC 781 112 Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949 215, 237 Cupit, Re [1996] BPIR 56......
-
Table of Cases
...[2013] EWHC 1292 (Ch), [2013] All ER (D) 222 (May) 51 Cox v Coulson [1916] 2 KB 177, 85 LJKB 1081, 60 Sol Jo 402, CA 15 Cox v Hickman (1860) 8 HL Cas 268, 9 CBNS 47, 30 LJCP 125 16 Croft v Day (1843) 7 Beav 84, 49 ER 994 22 Cruickshank v Sutherland (1923) 93 LJ Ch 126, 128 LT 449, [1922] Al......