and Quarry Co. v M'Kean, &c. Feb. 14, 1907. LANARKSHIRE. Watson; and the question for consideration is whether the Springburn Brick fact of M'Kean having practically the sole control of the operations can thereby be held to be a joint adventurer with Watson. It is singular that in the agreement there is no Sheriff BALFOUR. Obligation on the part of Watson to repay the money to M'Kean, with the exception of the one sum of interest of 10 per cent. At the same time, the agreement shows that M'Kean is the dominus in the transaction, and holds the reins in his hands. Two cases were referred to as bearing on the point, the first being M'Cosh v Brown & Company's Trustees, 1 F. H.L. 86, in which it was held that Mr. M'Cosh was a partner in a joint adventure or partnership. That, however, was a very special case. M'Cosh had only a right to the stock in the partnership through a man called Donald Brown, whom he had chosen to make his manager of the concern; but he had a right at the end of three years to appropriate the whole of the capital that he had advanced, or any part of it that remained, and he had also a right to the profits that had accrued upon it, set apart in a suspense account during the continuance of the three years, and at the end of that period the right to it did not pass to another partner named unless with M'Cosh's consent and goodwill. The Court accordingly held that M'Cosh, from the very outset of the adventure, was the leading partner in it, and that he so remained in the state the adventure was in at the time the action was raised. That case, of course, is quite different from the present case, because M'Cosh had a right to the profits of the adventure, and he was held to be the leading partner in it. The next case is Stewart v Buchanan, 6 F. 15, in which it was held that Buchanan had not advanced money by way of loan to the company in question, but that the money was paid out by Buchanan in implement of his obligation to provide fittings for the premises, to make them suitable for the business to be carried on there, and the whole of the fittings were the property of Buchanan, and were part of the subjects let along with the premises in which the company carried on its business, which premises were the property of Buchanan. It was held in that case that Buchanan was the sole partner, and that the business was his business, and that a man Saunders only occupied the position of Buchanan's salaried servant, and that the arrangement between Buchanan and Saunders was a device to protect the pursuer from the consequences in the event of the business not succeeding. In that case Lord Moncreiff said that the receipt by a person of a share of the profits of a business does not make him a partner; neither does it make and Quarry Co. v him a partner if, after having advanced money in loan, he LANARKSHIRE. stipulates for a certain amount of control over the business Springburn Brick in order to secure the debt; but these are important ele- McKean, &c. ments in deciding whether there is partnership or not. Feb. 14, 1907. Now, in this case we have a strict and almost exclusive Sheriff BALFOUR. control by M'Kean over the adventure, but, on the other hand, the agreement, disposition, and back letter show that the adventure was really Watson's, and that the money was advanced by M'Kean on loan to Watson. It is not at all uncommon for a lender of money under the circumstances which existed here to stipulate for control over the business in order to secure the debt, and M'Kean has gone very far in stipulating for his control over Watson's business. At the same time, I cannot say that the control which he stipulated for made him a joint adventurer with Watson, and this is certainly a different case from either of the two cases to which I have referred. I have, therefore, resolved to hold that M'Kean is not a partner with Watson under the agreement and relative documents. The agreement is a slipshod document, but it shows distinctly enough that the £350 was a building advance by M'Kean to Watson, and this is also instructed by the back letter granted by M'Kean. Although the bricks, the price of which is sued for, were furnished to Watson and invoiced to him, and on 4th April, 1906, Watson accepted a bill drawn by the pursuers for the amount of the account sued for, this does not settle the question of M'Kean's liability. It is also a fact that Watson got from M'Kean wages at the rate of £2 5s. a week, but the real question is whether by stipulating for the strict control which M Kean had over the business he made himself liable as a partner, and I do not think that this can be said of M'Kean, looking to the documents in the case. D. D. B. The pursuers appealed to the Sheriff (GUTHRIE), who issued the following interlocutor: GLASGOW, 29th May, 1907.-Having heard parties' pro- May 29, 1907. curators in the appeal, and considered the cause, adheres sheriff GUTHRIE. to the interlocutor of 14th February last; finds the appellants liable in the expenses of the appeal, and decerns. W. GUTHRIE. Note. It would perhaps contribute to the soundness of business methods in the building trade if the defender M'Kean could be held in law responsible for the payment of the pursuers' account. Mr. Gemmill's able argument, however, fails to convince me that the interlocutor of Sheriff Balfour is wrong, and for this simple reason, that this case differs from Brown's Trustee v MCosh and and Quarry Co. v May 29, 1907. LANARKSHIRE. Stewart v Buchanan, in respect that M'Kean has not under Springburn Brick the agreement or back letter any direct interest in the M'Kean, &c. profits of the adventure. His only concern is that his advances and interest should be paid, and if at the end of Sheriff GUTHRIE. the day a profit should have been made over and above these, it would have gone entirely to Watson. Although since the case of Cox v Hickman, and under the Partnership Act, 1890, sharing in profits is not sufficient per se to make a man a partner, yet it remains an indispensable element of the partnership relation (Lindley, B. i., c. 1; Smith's Mercantile Law, p. 10; Bell's Principles, sec. 351; Partnership Act, 1890, sec. 1 (1)). Here M'Kean could not touch the profits, but had merely a security for advances. The two cases referred to by the Sheriff-Substitute, and relied on by the appellants, were decided on the ground that the lender was really interested as a partner or principal in the profits of the business. W. G. No. 84. Hughes v Car July 31, 1907. For pursuers-Mr. WM. GEMMILL (Messrs. CARRUTHERS & For defender M'Kean-Mr. STUART GIRVAN, Glasgow. GEORGE HUGHES, Pursuer; THE CAR AND GENERAL INSURANCE CORPORATION, LIMITED, Defenders. Arbitration Arbiter unnamed-No person indicated— Insurance policy-Arbitration (Scotland) Act, 1894, 57 & 58 Vict. cap. 12, sec. 1.—A clause in a policy of insurance to the following effect, viz. :— If any difference or dispute of any kind whatsoever shall arise between the assured and the corporation, the same shall be referred to arbitration in accordance with the provisions of the Arbitration Act, 1889, or the Arbitration (Scotland) Act, 1894, as the case may be, and an award given in favour of the assured in such an arbitration shall be a condition precedent to any right of action against the corporation in respect of such difference or dispute," held to be a valid clause of reference, and action by the insured sisted till an award should be procured. The following was the interlocutor of the SheriffSubstitute (BALFOUR), which was acquiesced in: - GLASGOW, 31st July, 1907.-Having heard parties' proSheriff BALFOUR. Curators and considered the case, finds that the arbitration clause in the policy of insurance founded on is binding on the parties, and sists the action until the matters in dispute between the parties shall have been determined by arbitration in terms thereof. D. D. BALFOUR. Note. This is a curious question, arising under the Arbitration (Scotland) Act, 1894. The pursuer is insured The Hughes v Car and General Insurance Corporation, Limited. under a policy of insurance with the defenders (No. 7/1 of LANARESHIRE. process), and he is met by the defenders with the clause of reference in the policy which is said to bar the action. clause is as follows, viz. :-" If any difference or dispute of any kind whatsoever shall arise between the assured and the July 31, 1907. corporation, the same shall be referred to arbitration in Sheriff BALFOUR. accordance with the provisions of the Arbitration Act, 1889, or the Arbitration (Scotland) Act, 1894, as the case may be ; and an award given in favour of the assured in such an arbitration shall be a condition precedent to any right of action against the corporation in respect of such difference or dispute." It will be observed that that is a simple reference to arbitration in accordance with the provisions of the Arbitration Act, 1889, or the Arbitration (Scotland) Act, 1894, and the question is whether the Arbitration (Scotland) Act, 1894, applies to the present case. The first clause in the Act provides that an agreement to refer to arbitration shall not be invalid by reason of the reference being to a person unnamed, or to a person to be named by another person, or to a person merely described as the holder for the time being of any office or appointment. It appears to me that the clause of arbitration in the present policy falls under that clause. The second and third clauses of the Act do not apply to the present case, because the second clause applies to an agreement to refer to a single arbiter, and where the parties to an agreement to refer refuse to concur in the nomination; and the third clause applies to the failure of one party to nominate an arbiter, where there is an agreement to refer to two arbiters. In the one case (the second clause) there is an agreement to refer to one arbiter, and in the other case (the third clause) there is an agreement to refer to two arbiters, and the Court has power to appoint in both of these cases. Here, however, there is no arbiter appointed, either a single arbiter or two arbiters, and it is simply an agreement that differences or disputes shall be referred to arbitration. There have been two decisions on the subject in the Court of Session, the first being Douglas & Co. v Steven, 2 F. 575, which dealt with the case of a contract containing a provision that any dispute should be referred to arbitration in the customary manner of the timber trade. A proof was allowed, and it was proved that the most usual mode of arbitration in the timber trade was by a reference to two arbiters and an oversman, and the Court held that the parties must have had that mode in view, and that the reference was therefore equivalent to a reference to unnamed arbiters, and was accordingly valid under sec. 1 of the Arbitration Act. The next case is M'Millan & Son v Hughes v Car and General July 31, 1907. LANARKSHIRE. Rowan & Co., 40 S.L.R. 265. In that case a petition under the Act was presented to the Court for the appointment of an arbiter. The parties to a contract had agreed to refer disputes to arbitration, and there was no provision as to the way in which the arbitration was to be carried Sheriff BALFOUR. out, and one of the parties refused to proceed to arbitration; and the Court held that it had no jurisdiction under the Act to name an arbiter or arbiters, as the contract provided simply for reference to arbitration, and not for reference either to a single arbiter or to two arbiters, and the contract was neither an agreement to refer to a single arbiter so as to let in sec. 2, nor was it an agreement to refer to two arbiters so as to let in sec. 3. The result of these two cases is that an agreement to refer to arbitration without naming arbiters is valid under the first section of the Act, but under such an agreement the Court cannot appoint one arbiter or two arbiters under secs. 2 and 3 of the Act. I may refer to the judgment of Lord Moncreiff in M'Millan's case, where he says that "probably the effect of the 1st section of the Act of 1894 is to render such an arbitration clause valid, and it may be that the petitioners may be able, with the aid of that enactment, to compel the respondents to go to arbitration.” It is not for me to say what steps the parties ought to take to carry out the arbitration, but it is sufficient for the present case to say that, according to these authorities, the arbitration clause is valid under the 1st section of the Act, and the parties must consider what steps have to be taken to have the arbitration carried out. D. D. B. No. 85. LANARKSHIRE. Nimmo v Munro. For pursuer-Mr. J. D. CAMPBELL (Messrs. BORLAND, KING, For defenders-Mr. JAMES M. LAIRD (Messrs. CRAWFORD & JAMES NIMMO, Pursuer; WILLIAM MUNRO, Defender. -Held that one member of a class of traders had In a municipal contest in Govan, the defender, who was a candidate, adopted and circulated among the electors a leaflet imputing to certain persons convictions for adulteration of food supplied by them, among whom the pursuer was included, though none of them were named. The circumstances are fully explained |