amounts to a new agreement; they have acted on it for ten years, and none of them can now recede from it. Whether the accounts were formally signed and settled or not makes no difference, as they have been acted upon without question for such a length of time, and the profits divided according to them. Jackson v. Sedgwick, (a) Coventry v. Barclay. (b) The decree decides nothing one way or the other. It is not the practice to define by the decree in a partnership suit how the accounts are to be taken, nor does this decree do so; it does not direct the accounts to be taken according to the articles. Interest ought not to stop till the principal is paid. Collyer, Partnership, (c) Ex parte Chippendale, Re German Mining Company, (d) Ex parte Bignold, Re Norwich Yarn Company, (e) Hart v. Clarke. (g)

*170 Mr. Bacon, for John Pilling.

The Attorney-General, in reply.-There is no principle or authority for allowing interest for a period following the dissolution.

Judgment reserved.

August 3.

The Lord Justice TURNER, after stating the facts, proceeded as follows:

The principal question upon this appeal seems to me to be whether the accounts ought to be taken according to the books or according to the articles, for if the accounts ought to be taken according to the articles, and not, as they have been, according to the books, there can, I think, be no doubt that, at least as to the two sums of 150l. per annum, which by the articles are expressly charged upon the father's share of the profits, the certificate cannot be maintained.

It was first contended on behalf of the appellant, that the decree in the cause concluded this question, and that the accounts

(a) 1 Sw. 469.

(b) 33 Beav. 1; S. C. on appeal, 12 W. R. 500.

(c) Page 231 (2d ed.).

(d) 4 De G., M. & G. 19.

(e) 22 Beav. 143.

(g) 6 De G., M. & G. 232, 254.

could not consistently with it be taken otherwise than according to the articles, but I am not of that opinion. I think that the decree has no reference whatever to the mode in which the accounts are to be taken, and that it means no more than that the accounts are to be taken of all dealings and transactions between the parties as copartners under the articles. It certainly is not the habit of the Court, when it directs partnership accounts, to prescribe the mode in which the accounts are to be taken. Such questions properly arise upon the accounts being taken, and it would be attended with the greatest possible inconvenience that the Court should be called * upon to decide such ques- *171 tions at the hearing of causes. Much stronger language, therefore, than any which is to be found in this decree, would be required to satisfy me that the mode of taking these accounts was not open under the decree.

I proceed, therefore, to consider what was the proper mode of taking the accounts, whether to take them according to the books, or to take them according to the articles. This is a question which, in my opinion, depends upon the circumstances of the case. There is no doubt that whatever may be the terms of partnership articles, the partners may by agreement, or by conduct evidencing and amounting to agreement, vary those terms, and the question in all cases of this nature must be, whether they have done so or not. In this case it will be convenient to consider this question, with reference to each of the first three points, which are raised by the appellant's summons to vary the certificate.

I propose, therefore, first to deal with the appellant's contention, that the mills and machinery, and the substitutions, additions, and improvements, ought to have been treated, not as belonging to the partnership, but as belonging to the plaintiff. I do so, because,although this point was not so much discussed or relied upon at the bar as other points in the case, the observations arising upon it tend very much to elucidate the points which were more fully considered and discussed. I do not enter into the question whether, according to the articles, this property would properly have been considered as belonging to the plaintiff and not to the partnership. I assume, as the view most favourable to the appellant's contention on this part of the case, that according to the articles it would properly have been considered as belonging to the plaintiff; but then how has this property been dealt with as between 172

*

these parties?

According to the provisions of the partner

According to the

ship articles the partnership was to be liable in respect of this property for repairs only. There are not, so far as I can find, any provisions in the articles as to substitutions, additions, or improvements, but yet we find that during the whole continuance of this partnership, a period of ten years and upwards, no distinction is made in the accounts between the repairs, and the substitutions, additions, and improvements, but the repairs, substitutions, and improvements are charged in the aggregate against the partnership and not against the plaintiff, and are so charged in accounts which are made the foundation for ascertaining the annual profits of the partnership, and on which those annual, profits were ascertained. and divided between the partners. I confess myself quite unable to reconcile this course of proceeding with the notion that this property was considered by any of these parties as still belonging to the plaintiff. If, indeed, the profits had not been ascertained and divided as above mentioned, there might have been some possible ground for contending that whatever was done as to this property during the continuance of the partnership was open to be set right at the determination of it: but who can believe that these parties went on during so long a period dividing profits ascertained and settled upon the footing which I have mentioned with any such view as this? The appellant, as to this part of the case, relied upon the provision in the articles, that the plaintiff's capital should remain and be his separate property; but even giving this provision the full weight which was attached to it on the part of the appellant, although I am not satisfied that so much weight is really due to it, I do not think that this provision alters the case in favour of the appellant, for the question here is, not what was the meaning of the articles, but whether upon the facts of the case it *173 ought not to be considered that a new and altered agreement was come to between the parties.

*

Then, secondly and thirdly, as to the interest of 47. per cent per annum having been allowed to the plaintiff, without the depreciation being taken into account, and as to the two sums of 1501. being charged against the business, I again assume that, according to the articles, these charges were erroneous; but what has been already said applies even more strongly to these items, for the question upon them would necessarily arise de anno in annum, and yet the profits were de anno in annum divided, without any deduc

tion being claimed in respect of the first of the items, or any objection being made as to the second of them. The appellant relied, as to all the points to which I have adverted, on the accounts not having been settled and signed; but the question here is not whether there were signed and settled accounts, but whether there was a new agreement. For the reasons above appearing, I am satisfied that the only safe conclusion is, that there was such new agreement, and that the agreement was, that the property should be dealt with as it was dealt with in the books, and not as it was dealt with in the articles. It may be as well, perhaps, to add, that unless there was such new agreement, I do not see how the appellant became entitled to the interest of 41. per cent per annum upon his capital, which has been allowed him in the accounts, for I do not find any provision in the articles for such an allowance to him.

There remains, then, only the question as to the allowance of the interest subsequently to the dissolution, and my opinion upon this point is, that the partners having come to an agreement for the allowance of interest, that agreement was properly considered to continue in force until payment of the principal. I think, therefore, that the appellant's case wholly fails, and that this appeal ought to be dismissed, and with costs.

174

THE LORD JUSTICE KNIGHT BRUCE. I am of the same opinion.

*Ex parte ARCHIBALD COCKBURN, HENRY SMITHES, * 175 and JOHN BLACK.

In the Matter of JOHN BENJAMIN SMITH and THOMAS LAXTON, Bankrupts.

1863. November 11, 12, 18. December 12. 1864.

March 5. April 13.

Before the Lord Chancellor Lord WESTBURY.

To the validity, under the Bankruptcy Act, 1861, § 192, of a composition deed executed by a single member of a dissolved firm after the dissolution, objection was taken on the part of creditors of the firm, on the ground that the joint creditors were insufficiently represented in the computation of the

majority of assenting creditors required by the statute. Held, that the objection could not be entertained in the absence of evidence showing the existence of joint estate at the date of the execution of the deed, and that the onus lay upon the objectors to produce such evidence.

An assignment of a debtor's estate and effects is not necessary for the validity of a composition deed under the 192d section of the Bankruptcy Act, 1861, but to render such a deed binding on non-assentients, they must stand under the deed in the same situation and with the same advantages as the assentients. A composition deed purported to be made between a debtor of the first part, certain creditors whose names and seals with the amounts of their debts were set forth in a schedule, and who executed the deed of the second part, and all other (if any) the creditors of the debtor of the third part. It recited that the executing creditors had agreed to accept a composition of three pence in the pound on their debts and to release the debtor. It witnessed, that in consideration of the composition paid to the executing creditors and of the covenant thereinafter mentioned, the executing creditors released the debtor from the debts placed opposite to their names. It further witnessed, that the debtor covenanted with the parties of the second and third parts to pay on demand to all his creditors the above composition, unless it should have been already paid. Held, that the deed placed the assentients and nonassentients in a position of undue inequality, and that on this ground the deed was not binding on the latter.

THIS was an appeal from an order of Mr. Commissioner FANE annulling a joint adjudication of bankruptcy against the respondents John Benjamin Smith and Thomas Laxton, on the ground of their having respectively executed deeds of composition with their respective creditors.

Messrs. Smith & Laxton had carried on business in partnership

as wine-merchants, and during the subsistence of this part176 nership, viz., on the 10th of November, 1862, they had

become jointly indebted on their acceptance at six months' date to the appellants Messrs. Cockburn & Company in a sum of 1957. 3s.

The partnership was dissolved in November, 1862, and on the acceptance arriving at maturity on the 13th of May, 1863, it was dishonoured.

On the 19th of May, 1863, a trader debtor summons was served on behalf of the appellants upon the respondents, and resulted in the commission of acts of bankruptcy on the part of the latter on the 24th of June, 1863, by reason of their failing to pay, secure, or compound for the amount of the debt which had been admitted by them on the 7th of the same month.

In the interval between the 7th and the 24th of June (viz., on