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Process
When a woman who is a partner in a business marries she drops out of the firm, and the Court will not appoint a judicial factor on the partnership estate. If she wishes to call the remaining partners to account, she must do so by an ordinary action.
Under a petition for the appointment of a judicial factor, the Court will not also grant special powers.
This was a petition at the instance of Mrs Sarah Russell or Russell, wife of Thomas Russel, wine and spiritmerchant, 61 Crown Street, Glasgow, with consent and concurrence of the said Thomas Russell, and of the said Thomas Russell for his own right and interest. The following averments were made in the petition:— The late Thomas Russell, father of the petitioner Mrs Russell, carried on business as a wine and spirit merchant at No. 18 Adelphi Street, Glasgow, up to the date of his death, which occurred on 1st March 1866. On 8th November thereafter, his testamentary trustees exposed the goodwill, fittings, and stock of the said business to sale by public auction, and they were purchased by his two daughters, viz., the present petitioner and her sister Margaret Russell. Besides contributing to the said purchase, the two sisters and their brother each paid £120 towards capital, for the purpose of procuring stock and carrying on the business. The said Thomas Russell received charge of the capital, and the business was conducted as formerly at No. 18 Adelphi Street, Glasgow, under the name of Thomas Russell. No written contract of copartnery was executed. The two sisters and their brother lived in family together until shortly before the petitioner's marriage, which took place on 18th December last, 1873. Since her marriage, the petitioner Mrs Russell, by herself and through her agents, repeatedly made application to the said Thomas Russell, respondent, for a statement of his intromissions and division of the profits arising out of the said business, and the parties have had several meetings to endeavour to adjust matters, but latterly Thomas Russell refused either to give the petitioners access to the business-books of the partnership, or to supply them with a statement of accounts. The petitioners thereupon requested that the business should be wound up, and that their interest therein should be paid out; but the said Thomas Russell, respondent, refused to make any payment whatever to the petitioners, either in name of profit arising out of the business, or on account of the petitioner Mrs Russell's share of the goodwill and stock of the copartnery. The petitioners thus had no share whatever in the business since their marriage, and the business was carried on by the respondents without regard to the petitioner's rights and interests. The license and lease of the premises being in the name of Thomas Russell alone, there was danger of his disposing of the same to the prejudice of the petitioner's claim. The prayer of the petitioners was “to sequestrate the estates of the copartnery carried on in the said name of Thomas Russell, wine and spirit merchant, No. 18 Adelphi Street, Glasgow, and to nominate and appoint such person as your Lordships may think fit to be judicial factor on the estates of the said copartnery, with power to him to enter upon the possession, management, and realisation of the said estates, to balance the books and accounts of the said copartnery, to settle the shares and interests of the three partners therein, and generally to wind up the said copartnery, and with the usual powers; the person to be appointed judicial factor finding caution before extract in common form; and to sequestrate, and to appoint a judicial factor as aforesaid ad interim.” Thomas Russell and Margaret Russell lodged answers, in which they stated that they were willing to hold count and reckoning with the petitioners, and argued that there was no necessity for the appointment of a judicial factor.
The Lord Ordinary granted the prayer of the petition, and appointed a factor “with the powers specially prayed for.”
The respondents reclaimed.
At advising—
The dissolution of a business by the marriage of a female partner has the same effect as if it had been dissolved by the death of a partner. The female partner drops out of the firm just as if she were dead, because she is incapacitated from continuing. She cannot continue in the business without her husband, and she can't bring him into it. The law on this point is well stated in the case of Young v. Collins, 1 M'Queen. The Second Division thought that there were there specialties which prevented the application of the general rule. The House of Lords affirmed the general rule that when a partnership comes to an end the surviving partners are entitled to carry on the business or to bring it to an end. I am, therefore, clearly of opinion that we should refuse the petition.
It is right to observe that I could not, under any circumstances, have agreed to allow the interlocutor of the Lord Ordinary to stand. It is not our practice to grant special powers under an application for the appointment of a judicial factor. If the factor, after enquiry; comes to be of opinion that special powers are required, he must come and apply to the Court in a separate petition.
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As to the merits of the application, I am entirely of the opinion expressed by your Lordship. I think that the fact that the partnership was dissolved by the marriage of the female partner rather than by her death, tells against her application. No one dies willingly, but this lady entered into her marriage willingly. She dissolves the partnership by her own voluntary act. If she desires to call the other partners to account, she can do so by an action of accounting against the parties carrying on the business. She might have done so at once, but there is nothing to prevent her from doing it now. But the law will not sanction the removal of the parties at present carrying on the business by the appointment of a judicial factor.
The other Judges concurred.
The Court pronounced the following interlocutor:—
“The Lords having heard counsel for the parties on the reclaiming-note for the respondents Thomas Russell and Margaret Russell against Lord Craighill's interlocutor, dated 31st October 1874, Recal the said interlocutor; refuse the petition, and decern; find the petitioners liable in expenses, allow an account thereof to be given in, and remit the same when lodged to the Auditor to tax and report.”
Counsel for Petitioners— R. V. Campbell. Agents— J. & R. D. Ross, W.S.
Counsel for the Respondents— Dean of Faculty (Clark) and Maclean. Agents— Morton, Neilson, & Smart, W.S.