Scottish Court of Session Decisions

“ Note.—The only question which I have to decide at present is, whether the interest of the late Walter Macfarlane, who died on 18th October 1885, in the Possilpark estate was at the date of his death heritable or moveable? The pursuer maintains that it was moveable, and thus liable in inventory-duty; the defenders Mr Macfarlane's trustees maintain that it was heritable, and only liable in succession-duty.

There is not, I apprehend, any dispute as to the general law on the subject. In partnership proper a subject in itself heritable, if forming part of the assets of the company for the purposes of their trade, is held to be moveable as regards the interest of each individual partner, the reason being that the right of a partner who is to be paid out, or the representatives of a deceased partner, is not in right to a share of the specific subjects held by the company, but a jus crediti against the company for a share of the whole assets, heritable and moveable. Thus the acquisition of heritable subjects by a company for the purposes of its trade operates conversely, and makes the heritable property so purchased personal quoad the interests of the individual partners.

In this respect joint trade or joint-adventure, which is just a limited partnership, does not, so far as I am aware, differ from proper partnership. It is true that in a few particulars the rules applicable to joint-adventure differ from those applicable to proper partnership, but in other respects Joint-adventure has the same qualities in law as partnership. This is Mr Bell's opinion—1 Bell's Comm. (7th ed.), p. 538 et seq.; and Lord Eldon in Davidsons v. Robertson, 1822, 3 Dow, 218.

In joint-purchase it is otherwise. If there is no contribution for the purpose of joint-profit, there is no partnership, and the rules peculiarly applicable to partnership do not apply. The subjects of the joint-purchase retain their natural qualities quoad the interests of the joint-owners, and do not undergo conversion.

The question raised in the present case falls to be decided mainly, if not entirely, by the terms of the deeds under which the Possilpark estate was acquired and held. On a consideration of those documents I am of opinion (1) that although Possilpark property was acquired partly for the purposes of the old firm of Walter Macfarlane & Company, that estate, in so far as not actually conveyed to Walter Macfarlane & Company, cannot be regarded as an asset of that partnership; but (2) that in so far as not conveyed to Walter Macfarlane & Company the Possilpark estate constituted a separate joint-adventure in which Messrs Macfarlane, Marshall, & Russell were the partners or joint-adventurers. The defenders have a hard task to establish the contrary, because throughout the deeds the concern is called a joint-adventure, and the parties interested in it are sometimes termed partners. But apart from the terms used, the whole scope of the minute of agreement indicates that it was a joint-adventure or limited partnership. This is so clear that I do not propose at this time to examine the agreements in any great detail. In the first agreement, 1st April 1869, after providing that the parties to the joint-adventure should sell to themselves as partners of Walter Macfarlane & Company such portions of the lands acquired as should be found necessary for the purposes of that firm, it was provided, ‘Second, that the remainder of the said land shall be held, and shall from time to time be disposed of, either for prices in cash or under burden of ground-annuals, into which the prices shall be converted, and that at such prices as may be resolved on by a majority of the parties hereto.’ Then by the fifth article it was provided—‘The share or interest of the said parties respectively in all the profits and advantages to be derived from the said ground is hereby declared to be as follows:—That of the said first party 40 one hundredth parts, that of the said second party 30 one hundredth parts, and that of the said third party 30 one hundredth parts.” The proportions here stated were the proportions in which the joint-adventurers were interested in as partners in the estate of Walter Macfarlane & Company. The sixth article provides for the division of profits and the apportionment of losses. The eighth article provides for the payment to the representatives of a deceased partner of the share of such deceaser by six bills of equal instalments, payable at intervals of six months. And the ninth article provides for the paying out of the share or interest of a bankrupt or insolvent partner in the same way.

This deed seems to embody the usual provisions of an ordinary partnership, and in particular provides for the division and apportionment of profit and loss and the paying out of the representatives of a deceased partner with cash. Unless it was materially altered by subsequent deeds, there can be no doubt that under it the interest of a deceased partner was moveable.

The minute of alteration of 27th April 1879 cancelled the eighth and ninth articles of the minute of agreement of April 1869, and provided, inter alia—“Second, On the death, bankruptcy, or declared insolvency of any of the parties to the said agreement, his share and interest in the lands, ground-annuals, and others forming the subject of the joint-adventure between the parties according to the immediately preceding balance-sheet, shall devolve exclusively upon the surviving or solvent parties, but subject always to such surviving or solvent parties paying out (but subject always to the declaration after expressed) by equal instalments at six, twelve, eighteen, twenty-four, thirty, thirty-six, forty-two, forty-eight, fifty-four, sixty, sixty-six, and seventy-two months from the date of such death, bankruptcy, or insolvency, to the representatives of such deceasing bankrupt

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