Whitmore v Mason
| Jurisdiction | England & Wales |
| Judgment Date | 19 November 1861 |
| Date | 19 November 1861 |
| Court | High Court of Chancery |
English Reports Citation: 70 E.R. 1031
HIGH COURT OF CHANCERY
S. C. 31 L. J. Ch. 433; 5 L. T. 631; 8 Jur. (N. S.) 278; 10 W. R. 168. See In re Barter, 1884, 26 Ch. D. 519; Mackintosh v. Pogose [1895], 1 Ch. 512; Borland's Trustee v. Steel [1901], 1 Ch. 292.
Bankruptcy. Partnership Deed. Partner's Interest in Mining Lease. Cesser of, on Bankruptcy. Fraud on Creditors.
[204] whitmoee v. mason, from. 18, 19, 1861. [S. C. 31 L. J. Ch. 433; 5 L. T. 631; 8 Jur. (N. S.) 278; 10 W. E. 168. See In re Barter, 1884, 26 Ch. D. 519 ; Mackintosh v. Pogose [1895], 1 Ch. 512; Borland's Trustee v. Steel [1901], 1 Ch. 292.] Bankruptcy. Partnership Deed. Partner's Interest in Mining Lease. Cesser of, on Bankruptcy. Fraud on Creditors. A provision in a deed of partnership that, in the event of the bankruptcy or insolvency of a partner, his share in a mining lease (forming part of the partnership property) shall go over to his co-partners, is void, as being in fraud of the bankrupt laws. This suit was instituted by William Whitmore and others, as assignees in bankruptcy of one, James Herbert Smith, a bankrupt, against James Mason, Maria Herron, Joseph Tarratt, and Charles Barry, who had been partners with Smith down to the time of his bankruptcy in working certain mines in Portugal; and the object of the suit was to have the rights of the Plaintiffs ascertained so far as regarded the interest of the bankrupt under the deed of partnership. By the deed of partnership, which was dated the 30th of September 1859, and made between the Defendant, Mason, of the one part, and the other Defendants and Smith of the other part, after reciting that a company called La Sabina had, in 1858, demised the mines to the Defendant, Mason, for a term of fifty years, subject to certain rents, royalties and covenants, and that the parties to the deed had agreed to enter into a partnership for working the mines and for selling the produce; and reciting that the mines and [205] premises were in fact so demised to Mason in trust for himself and the parties thereto of the second part, in the shares thereinafter mentioned, and for the purposes of the partnership; and that, in pursuance of the agreement for the partnership, the parties to the deed had subscribed £6500 as the capital to be employed in working the mines, and had paid the same into the Bank of London, to the credit of Mason, in the shares following:-i.e., Mason, £3000 ; Maria Herron, 1032 WHITMOBE V. MASON 2 J. & H. 206. £1500; Tarratt, £1000; Smith, £500; and Barry, £500. Mason covenanted to stand possessed of the mines and premises for the full term thereby granted, or for any renewed term thereof, in trust for himself and the parties of the second part, their respective executors, administrators and assigns, in the shares and proportions thereinafter expressed. And the parties mutually covenanted with each other that they would continue co-partners and joint adventurers for six years, for the purpose of working the mines, and for the sale of the produce; that the business of the partnership should be carried on in the name of Mason only; that the shares of the partners in the mines and premises, and in the effects and property to be held or connected therewith, and in all profits and losses which should be received or sustained in the prosecution of the mines, should be distributed and held in manner following (that is to say), there should be considered to be thirteen shares therein, and Mason should be entitled to six, Maria Herron to three, Tarratt to two, Smith to one, and Barry to one of such shares; that the shares of the partners might be sold, mortgaged or partially or absolutely disposed of to any co-partner or other person whomsoever, and such co-partner and other person should upon such sale or disposition become partners ; provided that no such sale, mortgage or disposition should be made without the previous consent in writing of all the other partners thereto. And it was thereby provided that it should be lawful for the partners to withdraw from the [206] partnership upon six months' notice to the co-partners ; and that upon such withdrawal an account should be stated of the profits and losses in respect of the share of such withdrawing partner, and of all that might be due from the partnership to him. And it was thereby expressly declared that in taking such account the withdrawing partner should not be entitled to credit for the value or estimated value of the said lease, grant or concession, or any renewal or extension thereof, but that such account should consist only of the share of such partner in the assets of the partnership other than the value of such lease, grant or concession, subject to its liabilities, and of the share of the capital sunk in...
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