Sim v Sim

• Jurisdiction: Ireland
• Judgment Date: 16 April 1861
• Date: 16 April 1861
• Court: Rolls Court (Ireland)

Rolls.

SIM

and

SIM.

Irving v. YoungENR 1 Sim. & St. 333.

Dawson v. DawsonENR 1 Atk. 1.

Johnson v. Curtis 3 Br. C. C. 266.

pitt v. Cholmondely 2 Ves. 565.

Gray v. Minnethorpe 3 Ves. 107.

Lord Hardwick v. Vernon 4 Ves. 411.

Drew v. Power 1 Sch. & Lef. 182.

HarveyENR 3 Sm. & G. 176.

v. Short 2 Ves. 239.

Darthez v. Lee 2 Y. & Col. Ex., 5.

Summer v. ThorpeENR 2 Atk. 1.

Dawson v. DawsonENR 1 Atk. 1.

Johnson v. CurtisUNK 3 B. C. C. 266.

Taylor v. HaylinUNK 2 B. C. C. 310.

Pitt v. CholmondleyENR 2 Ves. sen. 566.

Blagrave v. RouthENR 2 Kay & Johns. 509.

Drew v. Power 1 Sch. & Lef. 192.

Chambers v. Goldwin 9 Ves. 265.

Blagrave v. RouthENR 2 Kay & J. 523, 529.

M'Namara v. BlakeUNK 11 Ir. Eq. Rep. 527.

310 CHANCERY REPORTS. 1861. Rolls. .gIld v. SIM. Feb. 8, 9, 13, (In, the Rolls). 16. April 16. No precise In November 1843, the petitioner, Alexander Sim, sen., and the form is neces- respondqnt, Alexander Sim, jun., entered into partnership, as corn- sary to consti- tote a stated merchants. The terms of the partnership were, that the petitioner and settled partnership was to be entitled to one-sixth, and the respondent to five-sixths account. An account of the profits. The business of the firm was carried on at Glasgow, drawn up in the handwrit- in Scotland, and at a place called Colooney-mills, in the county of ing of one partner, A, Sligo, in Ireland, until September 1848, when a new arrangement eight years after the dis- was entered into, by which the petitioner was to be entitled to solution of the one-third of the profits. The petitioner alleged that the new partnership, stating the as- arrangement was entered into by way of concession to him, in sets of the firm at the order to induce him not to press for a dissolution of the part time of the dis solution, and nership, and payment of his share of the profits. The respondent taking the ex cess of the alleged that the arrangement was entered into as a favour to the assets over the original eapi- petitioner, who was about to be married. The partnership was tal, as repre senting the carried on on the new terms from the 18th of September 1848 balance of pro fit over loss until the 18th of. September 1849, when the petitioner entered on the several tr, into a partnership with Andrew Hozie. On the occasion of the transactions, and stating the dissolution of the partnership, an account was drawn up, and signed amount drawn out by each by the partners on the 17th of September 1849. On the same partner, and the amount day, the following letters were written by the respondent:- coming to each, and in " Colooney, 17th of September 1849. which ac count A, after " GENTLEMEN-I accept of your offer for the lease of Dromahair giving credit for various mills, &c., on the terms mentioned on the other side ; and, with payments made to him reference to my letter to your Mr. Alexander Sim, jun., of this by his co partner, B, after the dissolution, struck a balance against himself, and which account was assented to by B-Held, a stated and settled account, though some debts due to the partnership were omitted as uncertain. A party seeking to impeach or surcharge and falsify a stated and settled account must state the fraud or error on which he relies, in the petition. If a partnership be admitted, the books are admissible in evidence, in taking the account of the partnership transactions ; but the books of A are not admissible against B to prove a partnership, if it be denied. CHANCERY REPORTS. 311 date, regarding his interest in the business carried on in my name here and at Glasgow, since 4th of November 1843, I hereby agree, in consideration of his said interest not being settled up at present, to advance, by cash or by my acceptance, or otherwise, an amount not under 2000, as the same may be required by you, to enable you to carry on the business at the said mill. " I am yours, respectfully--ALEX. Sm." " Say 2000. " Messrs. Alex. Sim, jun., and Andrew Hozie." " Colooney, 17th of September 1849. " have this day placed to the credit of your account in my books the sum of 1 000 sterling, being to account of your interest of one-sixth in the business carried on in my name here and in Glasgow, from 4th of November 1843 to 18th of September 1848 ; and your interest at one-third in the same firm, from 18th of September 1848 to this date. I engage to have all the books connected with the busiÂÂness brought up and balanced with the least possible delay; and when the remaining sum due you is ascertained, it 'will be placed to the credit of your account. It is understood that you give every assistance in your power in having the accounts here and elsewhere brought to a close, and that you have no further interest in said business from this time henceforth.* " I am, Sir, your obedient servant-ALEXANDER Srm." " To Mr. Alex. Sim, jun." On the 1st of September 1857, a further account was drawn up by the petitioner, in his own handwriting, by which a balance was found to be due by the petitioner, of 35. 5s. 9d. The accounts set out the assets of the firm, consisting of stock on hands, debts, &c., existing at the date of the accounts respectively, and contained a debtor and creditor account ; and a balance was struck. The accounts were very long ; but, for the purpose of this report, the result of them is sufficiently explained in the judgment of the Master (infra, p. 312, note), and in the judgment of the MASTER OF THE ROLLS. The petition was filed in the month of March 1860.. It prayed for an account of the partnership which, was carried on from 1843 and 1849 ; and also of another partnership entered into 312 CHANCERY REPORTS. between the petitioner and the respondent in 1859. It did not in any way refer to the accounts of 1849 and 1859, or make a case to surcharge and falsify any item therein. The matter having been referred to Master Litton, under the 15th section of the Chancery Regulation Act, the petitioner, by his discharge, relied on the accounts of 1849 and 1857, as stated and settled accounts.. As to the transaction of 1859, the defence made by the discharge was, that there was no partnership, and that the petitioner, merely acted as the respondent's agent ; and in support of it produced a letter written by the petitioner, on the 3rd day of August. The only evidence of the partnership produced by the petitioner was the books containing the transactions in respect of which the partnership was alleged to exist. The Master, by his decretal order, dated the 20th of December 1860, declared that the petitioner was entitled to an account of the partnership from its commencement, on the 4th of November 1843 until its dissolution, on the 18th of September 1849 ; and that he was also entitled to an account of the dealings and transactions in relation to the limited partnership in 1859.* • The Master delivered the following judgment:-" The authorities which have been relied on by the respondent (and all the leading authorities upon the subject have been cited) quite establish the propositions upon which his Counsel have relied :- " Firstly ; viz., that, if an account be otherwise settled, the reservations of an item or items for further arrangement or discussion will not take from it its character of finality, or prevent it from being considered as a settled account. " Secondly; that an account, once admitted, cannot be opened, on the ground that no party had adequate means of ascertaining whether it was erroneous or not, without charging specific acts' of fraud. " Thirdly ; that, when persons have mutual dealings, signing the account is not necessary to make it a stated one ; but keeping it any length of time, without making an objection, will suffice. " Fourthly ; that, if a merchant keeps an account by him for two years, without objection, it is considered as a `stated account.' " The question then is, whether the accounts which have been settled, or which are relied on as settled accounts by the respondent, being the exhibits Nos. 1 and 2, come within these principles, and whether they are governed by them ? I am of opinion that they do not come within these principles, and are not governed by them. In my opinion they do not present a partnership account at all ; nor do they affect to present a partnership account. "A partnership account, purporting to be a final settlement between the partÂÂners, to be complete, must contain, firstly, the capital account ; secondly, the profit and loss account; thirdly, the balance account ; fourthly, a separate account CHANCERY REPORTS. 313 From that order the respondent appealed. The statements in the . petition and discharge are fully stated in the judgment of the MAS TER OF THE ROLLS. Mr. F. W. Walsh and Mr. Richey, for the petitioner. Mr. Brewster, Mr. Hemphill and Mr. Dowse, for the respondent. For the petitioner it was contended, in support of the Master's order, that neither of the accounts of 1849 or 1857 was a stated and settled account, and that it was not necessary, therefore, either to notice them in the petition, or to state any ground for surcharging for each of the partners, showing what cash and goods each has drawn out of the concern during the period of the account. No. I should show the capital in hands at starting ; No. 2 (showing the net profits) should be added to No. 1. No. 3 (showing the net amount of property, over liabilities, at date of closing) should be precisely equal to the amount of Nos. 1 and 2. But the exhibits Nos. 1 and 2 profess to be merely an abstract of the balances found in the books at the date of closing the partnership ; therefore, even if correct, forming only one ingredient in the items of which a partnership account must of necessity be composed. No such account can possibly be correct, unless thoroughly tested by the combination of the above-named three accounts. But, on referring to the books, I find that, if the books are correct, these exhibits are manifestly and palpably...