SHEWAN TOMES & CO.
Partnership Dispute Appeal
In the original action the plaintiff was Charles Alexander Tomes, merchant, and the defend- ant Robert Shewan, merchant, The claim was sa followe:
up.
3. Payment to the plaintiff of
the sum found to be due to him
on the taking of such account.
4. The appointment of a Ra ceivor.
5. Copta.
BOW
THE HONGKONG TELEGRAPH.
I
EXTRA
HONGKONG, FRIDAY, FEBRUARY 13, 1914.
sense of
sum of.
B10
Bre
that seeing the partuer was so Trigo aud Hunt, which is reported or otherwise which tend to make plantiff, I say that according to present case in which it is admit it is to be ascertained and is restricted in all these respects, in 1836 Appeal cases at page 7. it permanent,
the dissolution of the In the January number of the Law goodwill of the business.".
constitutes the the last balance sheet of the said led that either partner is free to exactly the same. partnership had come, the Court Reporta Lord Heratholl there
firm made up to December 31, continue the business. on Dissolution Action. (Continued from yesterday).
was bound to hold he had no examined the whole of the autho-ia continuity of being as the same to the credit of the above named question is whether the, good will
The legal meaning of goodwill | 1912, there was then standing
The President:-Fourteen in interest in the goodwill;
Mr, Alabaster The whole absent? Yesterday the Full Court,
rities, some of,, which The President Thint is the discussed, and he says that Lord Lordship what it consists of insum of $156,227 and some partner would be able to bid for default; refusing to go on, absence. were huainosa and shall show your plaintiff with the said firm the shall be sold. Of onarse either in one absence; absence by Mr Alabaster:Yes, con- of Appeal, consisting of Sir Havil- plaintiff ? land de Sanemarez, president,
Eldon's was not wide enough--this case, and that in this case, add cents.ond to the credit of it and possibly be able to asses from the Colony is different. the Chief Justice, Sir W. Rees plaintiff.
Mr. Alabaster-That is the page 19, 1890 Appeal Cases. I am to use the words of Lord Mac-myself with Davies, and the Pulsne Judge to follow the argument; the little later on in the argument.
Bm unable afraid I must refer to this case a Naughton it was the very sap and the
the same. firm the value batter thun Mr Justice Gompertz, heard the partner may be restricted in o′′e
life of Shewan lowes and Co. which respective credits were sure it at the auction. That and it is necessary therefore if $23,113.15, outsiders and be more likely to general principle provides for
an These are exceptions which the motion of appeal, in which Char-hundred respects which may be mentioned in Court ?
The Chief Justice-Was this I would refer your Lordships arrived at in the said balance oase decidad clearly what the law they intend these provisions to les Alexander Tomes in the up-stipulated between him and the
page 100 of the filo, Mr. Tomes sheet by taking the agreed value is and also gives us/authority to apply they should be expressly pellant and Robert Shewan the other
Mr. Alabaster:-No, I do not fallidavit of November 11. Mr. of the goodwill in the said basi-say that assste alone is sufficient inserted because respondent, that
partner, but how can think any of the cases I have cited Tomes in the affidavit says:neas at $300,000. The copy of to the Court be that follow he is restricted in so far were mentioned in the "The
they moved by counsel on behalf of one of his principal rights, as to Court below. I will deal with Tomes and Co. and their succes shown to me."
said firm of Shuwan the said balance sheet has been property
convey goodwill. That exceptions from the general law. the appellant for an order that which there was no stipulation? several cases, that there
and effects. the judgment dated the 20th, day I confess I am unable to see it. except what my learned. friend which I would ask Your Lord-find that Mr. Tomes is worth alter v the Leas Hotel 1902, adopting the argument of Mr. takon In onsidering why they were If you take ogether are sufficient to convey inserted I think the Chief Justice are, aqrs."
Those are the worda the goodwill at $300,000 you goodwill. is cited in the case of was misled unconsciously into of January, 1014, of Hie Honour It was not expressly stipulated Mr. Jenkin will deal with, but I ships to underline-contractual $155,000 and Mr. Sherran is Chancery, page 332. It was bold Potter in the court below which the Chief Justice on the bearing that he would not have the good will try to leave none undealt with, relationships with this Compras, worth $23,000, but if you take that property was anfficient to was not speelfically dealt with by of the summons dated 4th, will, and therefore he, the judge,Page 10 quoted.) I will tako. sure the general meñoger of several the goodwill away, or take it as include goodwill of a basiness. Mr. Slede. Did the words property October 1913, and the order (if must hold that the ordinary rule paragraph in Justice Warring companies, and the firm have nothing, then Mr. Tomes is worth think I love made my point and effects convey goodwill?. No, any) signed pursuant thereto, bo of dissolation followed, which one reversed and that it may be was that the partner is entitled to Trigo and Hunt, goodwill on to say what has passed in con- and hopelessly insolvent so your case, because it down, not follow all tinuing partner should take over
judgment. According valuable assets. adjudged that the appellant is if he insists to have the enle meant
Then he goes $5,000 and Mr. Shewan is heavily here, but I will refer to one other the object was to ensure the con- entitled t› have the business of of the
the whole advantage nection with other people and says Lordship must lean against that the casos which were cited against the property at the price fixed in business 08 A the firm of Shewan Tomes and concorn. I have no other can got by continuing the goodwill agree to a piecemeal realisation that horrible result.
going whatever it may be which a person that these other people do not construction which would have is and that is the case which the preceding clause of the Company sold as a going con- which states the general prin-uf abusiness cern; and for an order that the ciple more clearly than that, so represent to the outside world he great loss would be ensured and depreciation.
if entitled to of the assets of the flim, whereby Mr. SharpThen there is so which was made very much I think, was unconsciously led to
shall explain afterwards. It is agreement. respondent pay to the appellant have mentioned that,
The Chief Justice, the coste occasioned by this op
was carrying on the business. The CheJustice:-Ware there
the general managerships and
f, Hall Hall. It was not fol-regard that as a common ground peal, and for such farther or any articles?
The Puisuo Judge: What agencies be lost. There would my point, it deals with a year ago in Stewart v Gladstone but adopted it at page-I think he Mr. Alabaster If you take towed in Reynolds v Bullock and of argument. It was not. He other order as the Court may
cases are you reading from now.? he a scramble, for it in I don't know what the deprecian show that you can disting adopted it at page 4 of the judg Mr. Alabaster-Ia that case it think fit.
Mr. Alabaster Hill and the popular wasstated oxactly what happened. Fieres, I shall go back to Tri-word by contractual relationships might be a depreciation this upon at all it is in my favour
the tion of the shares is, but there ish it and if it can be relied ment at the paragraph beginning no articles?
Tao President: There were go and Hunt. Legal good-which would entitle them and month.
will means continuity of the their successors. This they would
The Presidentu what point deed, fast paragraph on page 4 on the proper construction of the
have been articles, but there was se, not a scramble for as much
Mr. Alabaster:-There may business as the
Mr. Alabaster continued-]{ same basin-lose.
they got the goodwill of this
re you dealing with Hall v. Hall? of the notes. I submit what the no articlo on that potat. Then what was obtainablo. First accessore mean to goodwill?..
The Chief Justice:What do business, the right the purchaser with the case because Hall Mr. Potter's argument "was, in Mr. Alabaster-Inm desling jadge had in mind in adopting 1. That the partnership bean was restricted in tremendous they had the popular meaning. tween the plaintif sad the de-waye had the point which I am and that I should think would articles of the Rope, Manufactur valuable firm if he could pay for Equity, page 73. I don't think or
would get is the one thing worth Hall was quoted against us and this one, the death, voluntary Mr. Alabaster: Those are the baving; ho would have a very m quoting 47 Law Journal ret'rement, continual absonce, fendant under the style of Showan, making is that I am establishing be this:-A. B. and C. each ing Company; the firm of the goodwill, and it was not anal and Hall was understood ing partner must buy the Tomes and Company be wound the general law, and I say to carry on a separate business, C Shewan Tomes and Company insolvent firm with sticks and nd I shall venture to" quote business including the goodwill bankruptcy the continu- 2. That an account be taken be express provisions showing Et for
defeat the general-law there must holds the agency for the Far and their successors in business furniture and shares that were as of the partnership dealings be- you what the arrangement is.
two British Com-shall hold in their own right a not worth anything, owing to and shall explain it in a dif was not the intention in this case, tween the plaintiff and the de-
pies-that's C's goodwill. O certain number of shares which liabilities having to be paid for. ferent part of my
an existing authority at a valuation. That however fendant.
The Chief Justice: Theses and his goodwill is never property shall entitle them to be So that in fact applies exactly to this, I submit, is a articles of the partnership do not sol. These two companies at general managers of the Com- this business--as Lord McNaugh athority on our whole case and the way it had been.
argument. because if it had been the clause include the goodwill in the songe tone have to find now agents, pany
strong would not have been drafted in that the property to be sold was one goes to A and the other to entire charge of and supervisión continuoce of the business is the
and they shall take ten says "The asp of life in then the meaning of property and a going concern. Reading the B. A and B then have between of
Alter the tiffia adjourn- article as a whole, it requires the them the constituent portions of they aro to receive a handsome in this document which calls for general law is and also that if reached was that the learned the business for which goodwill." That is the true word hade so far is on what the raid:-The point which I had Fects. The point that I havement, Mr. Alabistor continuing realisation of auctionable assets as C'e goodwill, but they have not remuneration. the first step to selling the basis legal goodwill because neither ware lost this would have to be words that call for construction; partners you have to specially judgment, het paragraph, had
If the goodwill construction. 6. Further and other relief.
There are other you wish to confer special rights Chief Justice at page 4 of his iness as a going concern. That can say, I am C's successor in deleted. The action was disraissed by would be a violation of the Chief Justice in Chambersarticles.
the business. That is the distinction
there are certain questions dealt ovide for them. Also as to apparently adopted the construc The President: The successors with in the judgment and what was the meaning of thetion put upon the article 15 and on January 26, bat general liberty
between the popular conception are the people who continue to those Mr. Alabaster:Your Lord- something you can scramble for the business? was given to apply on the ship, in the judgment, if I may The legal conception is the con-
property and
eff four words that came up for bearing upon other articles put. ects. Now the learned Judge on fiscussion. The meaning of upon it by Mr. Puiter at page 5 say so, decided to arrive at the inuity of the business under the one thing which would entitle the general law, I shall cite some have dealt with, and now I come was that the previons articles
Mr. Alabastor:Yes... That is page 5 of his judgmont deals with | goodwill, property and effects of the judge's notes, and Mr. C. G. Alabaster and Mr. true legal object of the parties another name, but the right to the purchaser to these. That is oases of goodwill, property and to the statement. F. O. Jenkin, instructed by Mr. Ishould arrive at the same, but say it is the same business. Wilkinson of Messrs. Wilkinson shall show it by 8. different
what it means and the fact that effects; we need not consider and Grist, appeared for the ap-
The Puisde Jadge--A.B. and these things are the sap and the stock
deuit expressly with the oase of The President: In which case death, bankruptcy, voluntary pollant, and Mr. E. H. Sharp,
C are a firm 7
or assets because cores the word effects? The Chief Justice :-Although
lifo of the business Mr. Alabaster:-No, different shown; when the business started Property
is they
retirement, and absence from the K.C., and Mr. Eldon Potter, in-expressed the opinion that the different firms, persons carrying in 1896 we have a valuation stated goodwill, prima facit, and effects my argument at which we can the language of→
"mentioned. not
Mr. Alabaster: The first one. oolouy.. I submit if the earlier structed by Mr. J. Scott Harston, words.
and effects mear I have now reached the stage of articles be taken in the light of of Messrs, Deacon, Looker, Deacon were not intended to mean goodwill is
property and effects" on business. U. dies and his in the judgment. Then at page mean goodwill. a fortiori, both probably inquire why and Haraton for the respondent. goodwill, there would be nothing lost-he disappears-runs away in the supplementary agreement
not sold-it is 71 of the file, the second valuation, together.
The President:It comes, tɔ Mr: Alabaster, continuing his to prevent the goodwill being perhaps, but the constituent of 1898, there are only three ag-say menne, you mean includes
clantes were inserted. The President-When you
this, that the Chief Justice has address paid :-
The President: Are you en- held on the point that you have The partise o.rried on the busi-
portions of his goodwill are reements-that is two years later;
titled to do that P." ess of stockbrokers under a if I may, if I may adopt a simile, gots balf and B. gets half, between these two partners. It cases.
Mr. Alabaster :--I would rather, scrambled for by A and B. A. and you will see the agrosment ont word to convey it in ordinary mean on the construction of the that the goodwill cannot be taken
Mr. Alabaster-It is a suffici-
got to read the agreement as a Mr. Alabaster-I don't mean whole and the result would be greement which contained try to arrive at the mark which is but neither can say, we have the washers agreed, that the price that effects include goodwill is understood you can't go outside of the agreement. mention of goodwill until the time indicated by the sailing instruc-man's goodwill, and even if A got should be $50,000 instead of referred to in the judgment. It ist. Why were they inserted by
The case which decides tocument. On the other haul,; being included in the terms for which the partnership tions by a different channel than both he could not say be bad the $25,000, so that in two years it a case to David and Matthews, the skilled draughtsman nud all those articles is that in the was constituted expired, and that by which your Lordship good will though he had the whole had doubled.
Mr. Alabater.The object of ho business was oarried on as decided to reach the point. I can And as this caes was argued in
1800, Chancery, page 378. I am examined? The point I want first events partnere at will upon the con-hen deal with the judgmentou the the court below, I think wrongly later again by the next, 1906 property and effects, and that is clause 15 states the general prin-continuing partner must abide by It was further raised eight years going to cite three cases of or make is the draughtsman in for in the earlier clauses, the provided itions of partnership as applio argument broaching thisquestion. argued, as it seemed to me that agreement, page 73 on the file one of them. There was also aciple for the information of his the valuation. He has fixed the ble Hill died and Fearia Now the word which I consider of every body seemed to think that onducted the business and ob moat importance in these partner- good will was something that could will shall be $300,000 Hongkong word there, was effects, to mention in the other clauses 11,12,13 and and if you look at the articles if it The agreed value of the good-provision by an appraiser. The whole clients, the partners, and prices which he has to take it ained the permission of the ship articles is there in the first be scrambled for was the popular currency" and that in the event of goodwill. The whole judgment 14 states the exceptions that had been intended that that should tock Exchange committee to section of this judgment. I am meaning and not the legal mean of the death of either partner the is so important that as I am not enoral principle which conferr hatho object the draftsman would se the name of the firm. He reading from the judgment the ing that was taken and that is business shall be carried on by the going to read many coace. I willed the rights in certain events on bare added in this one as has been ccounted for Hill's capital bat words on which the greatest one of the reasons think the succeeding partner until the next road that. (Quoted Lord Justice the continuing partner, the other frequently done "Shall take it over solined to pay anything for stress is laid by the learn- judgment was so decided. Then succeeding annual balance sheet Romer's judgment.) It is disoleing removed either by death, at a valuation." The word "shall" oodwill. He had carried on edudge.. I consider one of the the Judges in the Trigo and Hunt and the interest of such dead part-lution between living partners. asiness on his own account and most important words in this case deal with the meaning of nor shall be decided on that date, rged that there was no such judgment is the word goodwill. g. odwill. I refer to McNaughthe value of the goodwill being ae business is sold and is bought by was inserted for two reasons-(A)
bankruptcy or retirement from should have been used, The Chief Justice: If the the Colony. Fifteen taken alone ing as goodwill in a Stock Now there was no argument as ten's judgment pago 23 and 24. stated. On this point, I must read one partner, the other partner because the draughtsman intend-ticles, which red, it should be The President-In article 157- xchange business, and if there for as i
such a thing it was not Judge's notes as to what was what the "goodwill means must Shewan's in reply. It is on pige business.
can understand the He says "I agree in substance that Mr. Tomes affidavit and Mr. certainly enold not set up a rivaling to deal with the matter would taken at a valuation. A draftsman.
Mr. Alabaster The other ar archasable. There was an offer the legal meaning of goodwill. depend on the character and seven and is dated October 4. Eell but this was refused. Mr. First of all I might mention that nature of the business to which it Mr. Tomes affidavit paragraph 5 his own business knowledge and agreement between them. He about way. What he has done is
Mr. Alab:stor:He could use and
the general principle would deal with it like that. He ustice Warrington said that the legal meaning differs from the itached." Gonerally speaking,paragraph 6 says that it is to trade in his own name, but he would have to tell them what to say that he shall be at liberty aleo. the particular would not deal with it in a round. ccording to Trigo and Hunt, popular moaning. Before I can it means much more than Lord be sold as a going concern. could not say "I on the successor was to happen if the thing goes to do so; in other words what they 306 Appeal Cases, page 7, proceed with my argument I must Eldon took it to mean in the Paragraph 5-I have a bodwill meant the whole try to show that there is a particular case in which goodwill standing in my credit with the
sum of Shewan, Tomes and Co.'. Ivantages whatever they might distinction, and that the legal appeared actually before him said firm of Shewon Tomes and not use the name of Shewan, Tomes tells the law. Fifteen taken does not have under the general over and if the thing provide for in the article is to give The Chief Justice:Ho could comes which a person might meaning is a true one, and what The goodwill was the sap of life Co. which I and the defendant and Co.
an end; be the continuing partner what he bentitled to by the legal meaning is one must of a business; that which the carried ntinuing to carry on the busi- give in this case.
alone. establishes In fact in the business would yield, or any in
on in copartnership as and being entitled to repre- Court below a popular meaning fruit it bas-the advantage what $140,000 or
Mr. Alabaster-As regards principle of the law that on a chase, if he likes. He hes no the general law, an option, a right to pur equal shares, of the English part of it he dissolution without an agreement right to purchase under the at to outsiders that he was was the whole argument. The ever it might be to the repata-exceer of the sum standing to the Chinese name is concerned it con- will expressly, but the goodwillwords "shall be at liberty" he thereabouts in might not, but as far as the it is not necessary to state good-cederal law, but by nee of the rrying on the old business. It general impression of the prin- tion of the connection of the firm credit of the defendant and I tinues with the business and has if saleable must be sold, Clauees has the right which he may ex a said under the rules of the ciple dealt with by those arguing which might have been built up verily believe if the business no relation either with Shewan or 11 to 14 provide for the excoperaise if he likes-if the fixed ook Exchange it would not was that goodwill was a thing by years of honest work or lavish ceased on October 31, 1913 and Tomes, ve a purchaseable value bo- that could be sorambled for, as expenditure of money. Showing the same is not sold as a going Mr. Sharp-Obviously they altogether and the other four right to purchase conferred by use they would not be able to will show your Lordships. again the popular ides of good concern but liquidated and wound would not be entitled to use it.
tional cases. There are only five price anita bit. Ho has got the e the name except with the per- That, I submit to begin with, is will as it was. The constituent up piece meal it would not realise Mr. Alabaster-They would must be dealt with because right to refuse to purchase con Bsion of the Stock Exchange
deal with the special cases and the article and the correlative mmittee, and they would there is a distinction between the the right to represent it as the sum of $140,000. Mr. Showin's the name of Kea Cheung, but defeated. Eleven is death
wrong meaning. Therefore portions of the logal meaning is suficient for me to receive the not be entitled to scramble for otherwise their objects would be ferred by the article, if the price
hb erally authories the surviving legal meaning and the popular same business, and Lord Here- reply to iner to hold the name. An- moaning as in shown by the chell says practically the same on
that affidavit they could scramble for Shewan bankruptcy and twelve is how to of death, bankruptcy or or does not suit him. In her case was Pawsby. Arm- judgment of Lord Herschel in thing in page 17. "The connection 11 of the file enya - With The Chief Justice :-There is voluntary ratirement, going right law
10 and or they could for Tomos, d ong, in 180, D.
arrive at it in olevan thirteen is retirement under 608. In what is the leading case on the of the firm together with the regard to paragraph six of the 11 case Mr. Justice Kay said meaning of goodwill; the case of gircumstances whether by habit andarit of the above named dents of either partner and the on this osse; and
He had no stination between the way that what has happend take
Bummons.
page
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sold.
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