should be divided between and borne by the partners in the above proportions.

Art. 10. That once in every year during the copartnership, viz., on or about the 5th of July, or as soon after as conveniently might be, the partners should make, cast up, and fully finish between them a true, perfect, and particular rest or reckoning in writing of all their joint stock then in copartnership, and of the value thereof, and of all the gains and produce thereof, and all losses, receipts, payments, dealings, and transactions relating to the copartnership for the year last past before the taking of such accounts, and of all debts owing to and from the joint trade, and of all matters and things belonging thereto.

Art. 11. That every such rest or account should be entered into one book, which book should be signed by all the partners, and that each partner who should require should have a copy of this book; and that such account or rest, when finished and signed in the manner aforesaid, should be binding and conclusive upon all the partners, their heirs, executors, and administrators, and should not be opened, unravelled, or altered unless manifest errors by omissions, wrong charges, or miscastings up should be made to appear therein to the amount of 1000l., within six calendar months. next after finishing such rest or account as aforesaid.

Art. 38. That if upon the death of a partner there should be no person who should be entitled and willing to succeed as a partner to his share in the business (provisions for which purpose were contained in the deed), then the surviving or continuing partners should become the purchasers of such share or shares, and should pay for the same to the executors or administrators

of the deceased partner or partners so much money as the *322 value of the share or shares, according to the last annual account or rest next preceding the death of such partner or partners, together with 57. per cent per annum upon the capital in lieu of the share or shares of the profits of the deceased partner or partners from the time of that account or rest to the time of his or their decease, the payment to be made by instalments and secured by bond in manner provided by the deed.

It appeared to have been the practice of the partnership to make out annually a balance-sheet and valuation of all the capital stock and property of the partnership on the 5th of July in every year,

and for the partners who were present to put a value on the freehold and leasehold premises belonging to the partnership, and also on the fixed plant and machinery.

This valuation appeared to have been made by the same rule and in the same manner from the beginning of the copartnership. The account and valuation thus made was entered in a book kept for the purpose, called "The Rest or Valuation Book."

The partners who attended usually signed this rest-book at the time of the valuation; but as it often happened that some partner or partners was or were unable to attend, it was the practice of the firm to send an abstract or balance-sheet made up or taken from the rest-book to such absent partners for their information, and unless an objection was made, the assent of such absent partners was assumed, and the rest-book was afterward signed by such partner as a matter of course whenever it was convenient to do so.

For three or four years before his death, which happened *323 in the month of September, 1860, Mr. Henry Bevan had been unable through age and infirmity to attend the annual stock-taking and valuation at the brewery.

Abstracts of the rest and valuation for the years 1857, 1858, and 1859, had been duly sent to him, and the rest-book had been afterwards signed by him, as a consequence of his assent to the account included in the abstract. So much was the signature of the restbook deemed a matter of course, that the rest-books for the years 1857, 1858, and 1859 appeared to have been signed by Mr. Henry Bevan at one and the same time, in the year 1859.

At the usual time in the year 1860 the account, rest, and valuation of the property of the partnership were taken in the accustomed manner.

Mr. Henry Bevan and Mr. Hudson Gurney, another of the partners, were unable to attend. An abstract or balance-sheet was made up or taken from the rest-book, and brought by Mr. Charles Bevan, one of the partners, to his uncle, Mr. Henry Bevan, at his private residence on a day in July, shortly after the making of the valuation.

One of Mr. Henry Bevan's daughters was present at the time, and there was no material difference between her evidence for the plaintiff and the testimony of Mr. Charles Bevan, who had been examined for the defendants. Mr. Henry Bevan was well aware that the valuation had been made in the usual manner, but he did

not express any dissatisfaction with it or any desire that it should be altered. He expressed some disappointment * at * 324 the amount of the profits of the year being less than usual,

but there was no sign of complaint or dissatisfaction with the mode of making out the account.

The abstract or balance-sheet was left with him, and he did not at any time during his life, or in any way, intimate to the partners that he desired any alteration to be made.

The valuation book was signed by all the other partners.

Shortly after the death of Mr. Henry Bevan his executors required the accounts of the partnership to be made out from the foot of the last settlement signed by him, and for a valuation of the whole of the partnership property. The surviving partners declined to open the last annual rest, which showed a balance of 152,3027. due to the testator's estate, or the valuation on which it proceeded, and whether this refusal was justifiable was one of the questions upon the appeal.

Another question arose upon an item of 51,133l. 68. 1d. in the balance-sheet, under the head "Sinking Fund," which was not entered in the accounts as capital or profits, but was set apart to meet contingent losses, and the question was, whether executors were entitled to a share of so much of this fund as might not ultimately be required to cover contingent liabilities. The fund was thus described by Mr. Arthur Kitt Barclay, one of the witnesses: "The sinking fund is a varying fund each year. It is an estimated fund, in which salaries to clerks, losses, and other contingencies are included to be provided for; as, for instance,

we might receive* advice of an adventure being unprofitable. * 325 It is an amount of a portion of the balance of the year left undivided, to meet the payments before mentioned, the amounts of which were uncertain or contingent."

The bill was filed by the executors against the surviving partners, and sought a declaration that the testator's estate was not bound by the rest of the 5th of July, 1860, and prayed that the partnership accounts might be taken from the foot of the last settled accounts, and that the share of the testator might be ascertained and paid.

The Attorney-General (Sir ROUNDELL PALMER), Mr. Selwyn, and Mr. Speed, for the appellants. According to the articles, there

ought to have been on each settlement of accounts a valuation, and although a partner actually present at the settlement might agree in substituting something else for a valuation, by signing an account made upon that footing, yet neither the articles nor the usage of the firm authorized any substituted valuation not so agreed to. The executors are consequently entitled to have a valuation. [They referred to Blisset v. Daniel, (a) Jackson v. Sedgwick, (b) and Pettyt v. Janeson. (c)] With respect to the sinking-fund, there is nothing to deprive the executors of their title to the testator's share of it.

Sir Hugh Cairns, Mr. Amphlett, and Mr. Hoare, for the respondents. The mode of valuation adopted had by usage become * 326 the rule of the partnership, and was substituted * for the original contract if the two were inconsistent, which, however, we do not admit. The last settlement was in accordance with the usage, and was acquiesced in by the testator. As to the sinking-fund, it was an estimate, and on the testator dying within the year without nominating a successor, it is by the articles conclusive, nor can the executors interfere with the affairs of the firm, the principle of the articles being to prevent such interference.

The Attorney-General, in reply.

Judgment reserved.

December 10.

THE LORD CHANCELLOR.-The first question is, whether the practice which has existed throughout the duration of this partnership of fixing the value of the permanent property of the partnership is consistent with the words of the 10th article. It is contended by the plaintiff that the language of the 10th article requires and directs that a regular valuation should be made annually by surveyors or persons of skill of all the lands, buildings, and fixed property belonging to the partnership; and that the mode adopted could not have been followed consistently with the articles if any partner had objected to it.

I am of opinion that the mode which has been uniformly followed of acting on the 10th article is not inconsistent with the meaning of

(a) 10 Hare, 493.

(b) 1 Swanst. 460.

(c) 6 Madd. 146.

the words of that clause, and further, that if it were inconsistent with that meaning, yet as it is the mode and practice of making valuations which was followed by the partners in this brewery concern for many years before and down to the formation

* of the partnership of 1831, and has ever since been fol- * 327 lowed without deviation or objection, it is a practical construction of the 10th article, which is valid and binding upon all the partners, and must be accepted as the rule of this partnership. For if the usage, which on this subject has been uniform and without variation, be not strictly in accordance with the written articles, it becomes evidence of a new agreement by the partners, and is as binding as if it had originally been clearly prescribed by the articles. This is a well-established doctrine in the law of partnership as administered by this Court.

But then a question arises whether this usage or practice has been followed with respect to the valuation of July, 1860. It appears from the evidence that the valuation made in every year and entered in the valuation book has been signed by all the partners. Even if all the partners were not actually present at the prescribed time for making the valuation, yet the entry of the valuation in the book was afterwards signed by those who were absent. It is contended, therefore, by the plaintiff, that the valuation of 1860, not having been signed by Mr. Henry Bevan, is not a binding valuation, even according to the usage, and is not effectual for the purposes of the 38th article.

But I think it is not necessary for the due observance and execution of the 10th article, either taken by itself or in connection with the usage, that every single partner should be present and actually participant in the work of making the valuation. Many cases might occur in which that would be impossible; and if the actual presence of every partner were held to be necessary, great inconvenience might in many cases arise from the postponement of the valuation. Until the valuation was made *328

there could be no final ascertainment and distribution of profits for the preceding year.

I am of opinion, therefore, that a valuation made in accordance with the custom by the partners present on the partnership premises at the prescribed time would be a good and binding valuation for all the purposes of the articles, if it was afterwards accepted or assented to by the absent partner or partners.