SHEWAN, TOMES & CO.
(Continued from Pape 4)
It is perfectly clear upon the outset that there is a distinction between the ordinary winding up realien- tion, generally called liquidation I thick, and a role as a go .concern. The distinction in 10
quoted)."
THE HONGKONG TELEGRAPH.
foreing a деж
contract upon the partuers, which can only be
EXTRA
HONGKONG, SATURDAY, FEBRUARY 21, 1914.
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Mr, Jenkiä:-Pago 10. therefore, and Mr. She was would this connection the principle in fact offer considerably nie and that is after making allow Mr. Sharp-With regard to not got a cent. That in working stande olear briefly in oiroum than the figure just in ficato france for the difference between doe by agreement, and that this I say Mr. Shewan says coord-out that particular proposal. If sances such as these he has a lien Mr. Tomes' share, and we subt the partnere drawings. And uld bring us back to the old ing to the last balance sheet, 31st, you wish to guard against this on the whole of assets for his in that if your Lordship me the that although the property was negotiations for which one shall take it over. ing to the cradit of the above price, and if you fix it at $1,700,- surplus assets for what is due to price--which I don't think your appreciated in the neighbour-
4. prico
41 Denember 1912, there was ar indby playing about with the upset terest, and he has a lion on the responsibility of fixing this upset admited is Chambers to have Now, my Lorda, for the purpose named plaintiff one hundred and 000 and it is takon over by Mr. himself, and your Lordships can Lordships have the jurisdiction bood of three lakhs. My Lords, adopt Mr. S'ade's figure, which Now my Lorde I might just pies the price.
f further examinaiton I will fifty five thousand dollars odd eto." Tomas, your Lordships have fixad not make any order, I submit, to de-you could not reasonably the argument i bave just sub. which will prejudice this vested fix the upst price at my figure, mitted to your Lordship led me was $1,700,000 odd, as the total on to show the difference between well recognised, an ofearly marked of the debts. Yo-Fardahips will these two figures. it is common in speaking of Mr. Shewan I re-vostod lion he has absolutely than what he offered at in pre point, which is
Then if Mr. Showan-of conrso right of Mr. Shewan. In this as against Mr. Shewan, lower away unconsciously into the third that in the case of a sale aa - find it on page of the Chief ground se to the increase of ally speak of either of the partners lien on the payment of the debts pared to give. He has normally equity
a matter of ing concern, instead of liquidating Justice's nutes, and I have no $150,000 by increase of interest I only use Mr. Shawan because 1 and what is due to bim.
the point that your in the ordinary way, exprens p
offerel 8330.000, which is plu Lordships, antler the principles wers to that end must be inserted on to think that is a subst n it was $125,000 and now it is one represent I'm even if Mfr. The President And after that the $1,700,000 debt, which he of the laid down anges, could in the momotantum of association. ially inscenrate figure. It in hundred and fifty thousand od! Showan could rules in cash, this each personally will enjoy a half would take over in that event, not exercise. what is asked. " Upon that point I would justly approximate, of course by accretion of interest.
1 am up et price of $1,700,000 to lay share of the undivided amount. That would be $2,210,000 abom. Supposing your Lordships held relor y ur Lordships t I Palmer From the appellants making this using round figures now my Lord, on the tabla, plus anything up to Mr. Sharp: That is the first I did not suggest taking that that it would be quite proper to page 306, 8th, edition. (C: 8 Tomeu rens his way to make this $325,000 today without good-be just the main in the caga of stand of if it is sold is a going that your Lordships cannot fix the goodwill-if I am right on proposal we presume that Mr. the appreciation of assets is about $150,000 more, the rosult would part of my argument, De L under figure, because my submission i have a sale which would include The Chief Justice: Tao cas)
bid, but I am prepared to say that will placed at $150,000, Mthe sale it Mr. T mes could concern the goodwill is sold er the upset prics at all, but if your the first point, none of the later "of a joint stock Company 2
certainly no bids mado at present Shewan takes $175,000 and Mr. nat hid him; that la lo way that hypothesi. Of course under our Lior Jahips did assume the ropriate arise. That is quite clear. Mr. Sharp Yes, my Lord. throw any light as to how he find Tome: $125,000. The balance Mr. Shewan would got nothing, construction goodwill was on sponsibility it could not be at a My third point is that notwith- Then there is a cage citied in the himself able to make such a bid. Isheet to day shows these amounts M. Shewan would lose and Mfr. Atanding and Mr. Showan would lower figure than such figuros as standing all the points I have Court below-I am not sure who can only assume that Mr. Tornas is standing to the credit of these Tomes would gain-Mr. Shewan get more than what I have imp. I have been indicating ther Mr. Slade did-Spers v.
in position to bid the $1,700,000, partners as regards the apprecis would not get a cont. I hope to listed plus half abare of the Lords, there is another point consider that you had power to My made if your Lordships should Syers, 1 Appeal Caana, 174, which though, as a matter of fact, his tion of three lakhs. I refer your have avoided detailed figures an interest in the goodwill. closely related to this which may direct this sale as a going con emphasises in the judgment the last offer for our share was only Lordships to Mr. Deacon's letter far as I can, but these figures The President: If the good, throw further ligbeapon the point carn-then I submit that your
$100,000-that esme point. (Case quoted).
was $250,000 of the 24th. September and Mr. would have to be got from nu ac will Jnd goro?
which I am now submitting to Lordships would not do it having A distinction is clearly made less the admitted difference be- Wilkinson's letter of the 26th. conulant if you are giving precise
Mr. Sharp: thore again between the sale of tween the two partnera, drawings September in page ons of your issue on them. They were before ing with the goodwill, my open clause 15 does not ontemplate are laid down in the authorities. I am not now deal your Lordships. It is that that regard to the principles which the assets and the sale of the con- $150.000 each, which would Lordship's file (Mr. Dacon's letter the Chief Justice. I have beaning was whether goodwill was market restricted entirely to the And the principle underlying cera as a going concern. I would leave $100 000 to be paid in cal, se slownesson the matter, qouted).dealing with their costantinn af included in clano 15 or not. ask your Lordships to consider At present that offer is with on this date the appreciation was the apset price as a going concern. position is that it could be dealt to say that the division of the will not, where it has jurisdiction, My bids of the two partners. That is the priciples in that the Court the working out of their proposed rawa; it not opon. The pro 250,000; it is now about thre This is not our ide. The parties with in this way, and as shown profits between them clearly direct a sale as a going oücern sale as a going concstu. And in posal ie that the upset price shooti lakhe. Ho is there prepared t would be satisfad,
has not been sailed, I shall give indicates that the draftsman does unless it appeare that such a working it out I won't trouble he at least $1,700.00, and we give us so and so and sandston A. the actualisation you authorities which are quite not contemplate an altogether sale will benefit both the partners your Lordships with figures insure that as Mr. Tome causal for it. I don't think we need. Er hypothesi, neuld say independent as to whether it in different market from this mure or all the partnere if there are the roure that they are to. 18 made this proposal, in some way consider the matter to give what would, he proved after comprised in clause 15 or not. extensive and
wider market, many. taken as finally correct, as they in which we are not able to ex$280,000 altogether. But the the debis and the liabilities had You know in o ir' construction Mr It has been common ground that would be found by an auditor; plain to your Lordships, that he paint is that Mr. Deacon's letter been paid. So from two to three Shewer would get not only what is the gool will is of a must about the orediturs? How do The Chief Justice: How but I will put some figures which was able to make a cash bid of states that the appreciation at that laki s surplus, that is the rest indiested, but his interest, what-greater value to the partners than the come in? will demonstrate how unequally this sort. Now Mr. Shewan sprei no had reached 8250, Guo deprecistion of the a-ata, that ever it may be, in the goodwill as anybody al-e, the purchaser of their construction would work. fcally says he cannot. What Mr. Wilkinson replied to shie o ually reliavion of the
M. Sharp-I do not think the business as a going concern your Lordships have any concera Ou page 17 of the Chief Jantics's over the actual value of the assere letter (quote). I am conscious it ebares at the ket price of the There is another aspect of thin would in fact be one of the parties. with them. I think your Lord- notes Mr. Slade put the position might be and ho pute them at a would to a little difficult for your day. There would be after pay proposed rale, my Lorde, as a go. I would refer your Lorishipa to ships to the Chief Justice, and that very ligh figure he would not be Lordships, but I am not going to ment of the debts an amount of ing modern at an apet price. If Mr. Wilkinson letter of the 8th consitue this document. Bul are merely here to position was dealt with in the able to make anything liken ashable you with it unless, to two or three lakhs, I am not able your Lordships should assume of August last, which was cited your Lordships may take it judgment, The position was that bid of $1,700,000. The figurem ke you aware of thery haing to exactly. wo ey on the responsibility of fixing this in Chamber I am told over and the Court should order as hetwoon adhering to is, of course, tiations opened. There are siderabl more than that, I w upret price, on behalf of Mr. over again. It is made perfectly if it is for the Lenefit of the a general proposition that the partners that the upset their figure. Therefore, upon the tiaions; it is difficult deal with that in a moment, and Shewin I submit that that upset clear in that letter of air. Wilkin partners it must be for the price, the minimum price, shon'd assumption that Mr. Tomes some fuituwal of the miter. Then the two or three lakhera in-price must be upon a very dif- on's that a private auction was benefit of creditors because the be the amount of the liabilities how could, he wou'd get the there is the reply to Mr. Wilkia-elnded that in the balance. ferent busia to the oue suggeatert suggested. That was before the partneru ennnot get anything un- of the firm. That proposal. your business lock, stock and barrel son page 7 (letter ra dash o The President: And they cou-by the appellants. I submit that action commsaced. It was to bet the credit ra are paid. "Other Lord hip dealt with on Page 5 of for the upset price. Now this recurity read). The balane sidered goodwill.
it must be an upset price includ-ja private auction in which "our wise I do not think that the your judgment. But I submit money would be straightway ex covered by substantial guarantee ‹ Mr Sharp; Naturally they-con-ing () the liabilities, and it must client and yours" were to be creditors can be heard. Well, that your Lordships cannot do it, usted in the payment of the of the same. They say lator that sillerod good will-there has an include-and I rubmit I shall the only bidders, your Lordsbits cannot fix the uptobrs, leaving, of cours, nothing Mr. Tomea is prepared to accept none. This appreciation of assets allow your Lordships on our own page 43 of the Chief Justice's principle which, so far as I can It is on My Lorde, upon this general set price. And that point will to pay any cash balance standing the figure. I don't suggest that is expressly exculsive of the ap-off-18 we acted in good faith, notes, and Mr. Slade fee is the principle upon which hecome clearer when I ask your to Mr. Shewau's credit or any the figure is absolutely correct-preciation of the goodwill. This because we offered more than speaking of the kind of male con-all the cases have been decided- Lordships cossideration of the surplus, of which, of course, he it is nccepted by Mr. Tomes and tangible asset, the shares which they did it must include (b) plated said it should be a cash that the Court will not in any figuros. Supposing the market claims his half as well. He would this upon the appreciation of that have appreciated The actual the amount standing in the books suction. It is quite clear that event order this particular mode of these abstes-it is get nothing in respect of all these late-$150,000. It was ultim result was ex hypothesi two or to the partners' credit, apart from the procedure contemplated was of sale unless satisfied that it is common ground ta: they are teresie and nothing in reapret tely taken over Fariods, the thres 1-khs this is apart from the goodwill, The amount of (a) that it should be in auction at in the interests of both parties holding share-fell something of the goodwill if the property calculation is thres lakhein total, goodwill of course, Me Tomes was $1,700,000 and (b) is about which practically only the I would refer your Lordshipa fa like ten or twelve per cont. the was based on this upset price. therefore your Lordships have to would have $175,000. we ad two lakhs. And i must include two partners were to be present. Lindley 678 of the present d actual situation would be tha
Mr Sharp: Three lakhs is the deal with the appreciation of the mittedly have $150,000, whilst (c) the value of the goodwill as I do not suggest that if any out-ition, 1912. Your Lordships will there would be a deficit. A round figure since the last balsat of something like three Me Shead would have $25,000, read-about three lakhs, which sider offered to give more he that you have to he satisfied present there is none; the assets since ahr st of 1912. There ap. lakas. Therefore for this up being the bilance. Mr Tomes is wo have offered to pay from the would be excluded, but one or that the mode of sale proposed ale worth something substantially peare to be a little question of pree of $1,700,CO) approximate shown as going $175,000 and tart and (d) it must include, of other of the partoers was to be and opposed in a mode of sale more than the liabilities; but if figures.
amount of the debts and la- Mr Showan $25,000, this is apart esurse, under the valusin such the buyer. there was a fall of on or fifteen The Chief Justice: I remember bil tes, Mr. Tomes would get from goodwill. Therefore naderasts se are not included in the My Lords, a result of this practi--not only one. I would also refer which will benefit all the parties per cent. there would again be a at that time...
not only the whole of this app the surplus, there is a consider balance-sheet; that is our righ alally restricted market. ia view of you to a case which Mr. Alabaster deficit.
Mr. Sharp. Take the figures the cred taccount of the partners, how much without an accountant include all these things, The Bra constituting this limited 2 Chancery Division 635. It ciation of the amount standing table surplus, we cannot agerlain unter varicus contracts. It must the fact that one of the two part quoted, that of Taylor v. Neats, The President-You mea for hypothetical purposes; take but he would get of course the it would be equally divided others como to $2,300,000, and market-Mr Shewan-has got for was a case cited below but not
them a hypothetical figures goodwill plus any further appre between them. Mr. Sharp: From to day 1912 account. At that time as diation from any outstanding or D,
That ie C. and that is of course plus whatever a the moment officient cash at his upon the particular point I am from the last time day valuation we have seen fram Mr. Wilkin-
partater would valuer might fin i was the approx-command to make this very high lou now, that the mode of sale wag made.
son's letter it required the artiis common ground there were uns Id
undervalued assets which, it retain any
bis light to the imate value of our interesis un bid contemplate 1, would be that must be for the benefit of all ficial support of the goodwill
goodwill. I Gill dor the various contencia which the other partner would presum- parties, not one. I would also which curiously arough it the at $1,700,000 in our pockatement with the authority of ones sy what the figure might be, and grofwill as far less than friend did not quote-Crawshey Bandries e c. Bacus we havde with that under the agres them has. It is difficult to ably get the surplus of the assets refer voor Lordships to a case my same figure $500,000, я more Mr. SharpThat is so. We coincidence of figures; the good pay to them, although we beliv because this question has gt to but it would he well over the their real value because we could and Manle in Swanston 495, understand that a maiter of will which coincidently is three the property as our offers si o be dealt with in that way. Each $2,300,000. Or if the balance not go in for these very high bids. Mr. Alabaster: The Chief fact there has been no substantial akhis also, to produce anything to connive it to be worth aver pirtner would retin his right. sheet was made up on the basia We do not pretend that we cap Justina was of opinion, 60 far as change, but if there was a depre- the oradit if the partners, in or $330,000 for Mr. Tomes' s ro Me Shewan is zin totally of the 1 st balance sheet, bringing pat down cash to this amount, I can gather, that it would be for ciation of ten or twelve per cent. der to show a very heavy foHo we show ur estimations of the hypothesis. As well as his good-would be obtained.
We have offered that different position under the first in the goodwill, the same result though we have made a far the benefit of all parties that it we should have an actual deficit. the goodwill was draggel in the actual value of this business will, he has as well his interest
bigber off r for their interest than should he sold as a going concern, If your Lordships did fix the previous year to artificially eap- which is worth at least $330.00 in this: appreciation he is a ships do assume the responsibility Shewan frankly says he could tam arguing here that it is SIsubmit that if your Lord-they have made for cure. Mr. M. Sharp-Well, my Lorde, upset price-I am speaking now part the balanca sure. Now or we would not have off director and has got nothing of which I don't think your Lord not put up this sum in the neight not to the interests of Mr. Shewan, practically your Lordships shall not ask your Lord hips to would be at an absolute loss as to digst many of these figures. To $330,000, more than this, that that which stands to his credit ships can, of fixing this very bourhood of two millions. Where If you accept that view, then how to fix it. If you had to fix it, show the figures in the propos: 1 the excess worth half $30,000 in respect to the surpina because price, your Lordships are obliged your Lordship are salted to
shows we assume the value of on the books. He has got nothing important matter of the upst fore, my lords, the result is that the arguments of my friend fazi. you would not know where to put by the appreciation of the assets for Mr. Tomos interess in the he did not have $1,700,000 in to do it upon such a basis as order a sale on a market which I'd not distinguish very much be the figure. It must liave some the same result, roughly speaking excess, Excluding reaf wa-have his pocket to pay, or to lay on the taking a fair valuation of the just nowe spoke of as being re-tween the artoare.
Mr BharpMr Potter sail he regard to the secertained value of is attained, ne on the 1912 bal- $330,030 of a balance. We offer table he had to let his interest go actual goodwill. There is an-stricted to two bidders, but on a Mr Potter:-I did the assets which would have to be ance sheet, with the aid of theed $330,000, payable $180,000 for, less than it was worth. Now other way of looking at the same market which I could more truth- Recortained for the purpose of goodwill, the assets have appr reaching that upset price. Sup-ciated. The appreciation, ia di- down, cash, and the balance over Mr Shewan's interest, rights as a point which I think is equally fully speak of as restricted to one judgment the Chief Justice bad. Mr Sharp-I did not read the posing they and depreciated fon vided between the partners and poriod which they themselves partner, were rights which were important. Inasmuch as Mr. bidder, and your Lordships are Mr. Potter mays they were not per cent.which is nothing in the the result is, roughly spent ingred I say, to the suisfaction of dish'ion and those rights, can take over Mr. Tomes' share at an to alone can bid. It will there- did not gather the Chief Justice ggested should basis youre actually veated at the time of the Shewan has in fact offered to asked to fix na upset price which dealt with in the judgment. I For East-would your Lordships the same in the 1912 bilance Mr. Stabb of the Hougkong Bick not be I enbmit, your Lordships, an sotaally higher figure than fora ba that your Lordships are erarately considered it was un- then fix it? No, you could not do sheet so far as the cradit of the or the manager of the Chartered ignored because if it be true Me this, we submit that your Lord-ixing the actual price of this necessary in view of bis decision Bach a thing. If your Lordships partners is concerned without the Bank or a gentleman appointed Tomes is able to put this one ships coud nut in view of that, business. If we go int figures as to the clauses, 44 put it at a high figure there would aid of the goodwill. That is to by the Chamber of Comin-sea for million add on the table and Mr. es against Mr. Shewan- bo no sale. If your Lordships ay, adopting the goodwill the
which Mr. Showan cannot reach The President -You offered and there are only two bidders, not adopt Chitty's language etc. The President I regret I can- put it too low, I should say that figures in Mr. Showan's affidavit the purpiss-o-alt then sitting Shewan in nut in that happy which ever partner is in the posi-a read by the other side on the with the Chief Justice. Then it position. I can only assume this a bigher som than indicated ?Mr. Showan is out of it and your Mr Sharp: That is sperking tion to make a high cash bird-8th. October 1913-taking those was reduced from three lakhs to from the proposal coming from two millions?
Lordships are directing that the generally my Lord, Ithink that and it runs to a very high figure figures; they would now have to practically estimated car vaius to assume this, it is the abol-will understand that the taking fixed by yourselves which we tell directed to the interest of Mr
twa lakhs. That is how we have the other side. I am asking you Mr. ShopYour Lordships business shall be sold at a
figure passage does not deem specially $1,700.000 being mentioned be modified in view of this appre-f the serplus of these ass ste over ately vested rights of Mr. Shewan over partner does not put down your Lordships beforehand we Showan; that is what I am now the result would be that the cintion, very largely. My friend the liabilities. We have offered as partner, vested on the dissolu- cash for the liabilities because the osanot offer, although we have arguing. It cannot possibly be, partner who could not provide Mr. Alabaster related to part them that much for their interest. tion and are rights which your purchasing. this very large amount of carh has graph 5, 8th. Otober, 1913.
partner takes alle od considerably more for Mbut it might be in the interests of lost his interest,
We submit, The Chief Justine: What page? con'd not efford $1,700,000 cash, cannot allow Mr. Shewan to lose for
On this hypothesis, if Mr. Shown Lordships cannot izooe and you over the liabilities. Supposing Tomes interest thist he has cffered Mr Tomes, not in the interest of apeaking practically as well as
Mr. Sharp I don't know be which is what they ask than he because if that is the case, Mr. ment that Mr. Shewan has only the last offer, after asking am now putting is not to the in- equitably, that your Lordships cause our copy ie not the same as would get but the pit prica Tomes is able to make this bid, $320,000 cash in his ckot, bst all allowances, is $80,000. We torost of Mr Shewan.
Bike of nrge- for ours. The difference between Mr Shawan, This mode of eslo I could not intervene to fix the upent price at all, as it would be Jean delays 8th October, which was given in the past, certainlly Mr: Showan is not. duas moren 000. Bo put might more than his last offer, 0,00 The Prime Judge Mr. She
second affidavit,
There would be nothing left Your Lordships will remember in this $1,700,000. By he more his last offer tour or the party whoever hap
prico
when ?
The President And therefore the Court would not be able to make the order?
e.ch
2
the
ran
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