ALONZO PLATT, for respondent.

BALDWIN, J. delivered the opinion of the court, COPE, J. concurring.

There can be no doubt that one partner may purchase with his own funds and on his own account the interest of his copartner in real estate at public sale, if there be no circumstances of fraud or of a trust apart from this relation, and, so purchasing, hold the property as a stranger might. It is true that partners occupy confidential relations toward each other, but this is in respect to the firm business; but this relation does not forbid one from buying of another, when both have an equal opportunity and means of knowing the value of the property and its condition. The fact that the sheriff's sale is public and open is itself prima facie proof that no advantage is taken; and no reasons of policy exist to restrain bidding by other partners than the defendant, and who would be more disposed to bid, probably, than strangers. If associates in a mining claim are to be regarded as general partners, a point which we do not decide, still we do not think the rule applicable to trustees and cestuis que trust, guardian and ward, which qualifies the right of purchase by the trustee of the cestui que trust, can be held to apply. Generally, one partner has a right to buy the whole or a portion of the interest of his associate at private sale as he might purchase of a stranger, and we can see nothing which should deny or qualify this right in the fact that the sale is made through the instrumentality of the officer acting in this respect for the partner: Gunter v. Laffan, 7 Cal. 588.

But this record presents a different case. The findings of the court are that the plaintiff received some $7,000 of money belonging to the company, and while he had this money in his hands bought up some judgments against the company, using the name of another party, and also a tax title in the same way. This conduct would be grossly inequitable. The charitable inference would seem to be that he made this purchase for the benefit of the company, and therefore, if the company is willing to affirm it as done for the benefit of the concern, the amount of the money paid should be credited to Barnes, on

1

his indebtedness, and the title go to or remain in the company, unaffected by this arrangement. If Barnes paid the judgment against the company, he being one, he would be entitled to recover of his associates contribution for their proportion, but he could not make this payment through the process of an assignment and then enforce the judgment against the company by selling out the property and buying it in, especially if he had in his hands at this time money of the company to a larger amount than that paid by him to take up the judgment. We have looked over the proofs and do not feel disposed to disturb the finding. The decree for the sale of the property seems premature. It is more regular and better that the account should be first taken, showing how the concern stands, what is due and what the assets, before the property is ordered to be sold.

The decree will be modified in this respect, and is affirmed otherwise. The cause is remanded for further proceedings. Each party to pay his own costs in this court.

1 BURDON V. BARKUS.

(4 De Gex, Fisher & Jones, 42. High Court of Chancery, 1862.) Lessee, taking partner, allowed to dissolve at will after accounting. Plaintiff, being the lessee of certain coal seams, worked the upper seams under a partnership arrangement with defendant; and the upper seams becoming worked out, defendant proceeded with plaintiff's sanction to sink a pit to seams lying below, for which work money was borrowed on the firm credit and the expenses were paid and the loan refunded out of partnership funds. When the new pit was finished disputes arose and plaintiff gave notice of dissolution. Defendant insisted that the partnership was to continue during the entire lease, which plaintiff denied. Held, that the burden of proving that more than a partnership at will existed rested upon the defendant, and that in the absence of such proof the plaintiff was entitled to dissolve at pleasure, and that defendant could claim no interest in the seams of coal, but that an accounting had been rightly directed in respect to expenditures already made in sinking the new pit.

This was an appeal by the defendant from a decree of ViceChancellor STUART.

1Crawshay v. Maule, 11 M. R. 223.

In and before the year 1845 the plaintiff was lessee under Lord Ravensworth, of the Team Colliery, at a dead rent of £2,000, for which he was entitled to take 1,200 tons of coal from the lower seams and 210 from the upper; a tentale rent, or royalty, being chargeable for over workings at 258. per ton from the lower seams and 158. per ton from the upper. This lease would have expired in 1852. In 1849 a renewed lease was granted to the plaintiff for twenty-five years from 1st January, 1849. The plaintiff had continuously worked the lower seams, but the working of the upper had, before 1845, been abandoned as unprofitable. Neither of the leases included fire clay or ironstone, but it was customary for the lessees to work them, paying a rent which was afterward agreed on with the lessor.

In 1845 the defendant was colliery agent to the plaintiff, and in that year a verbal agreement was entered into between them for working the upper seains and the ironstone and fire clay in partnership. One of the questions in the cause whether this partnership was to last during the whole tern; but it is sufficient to say that the court did not consider that an agreement to that effect was proved.

was

in

About the year 1857 the coal in work in the upper seams being nearly exhausted, the defendant, having the mana gement of the concern, proceeded to sink a new pit called The Meadow Pit, for the purpose of reaching other coal. Moneys were borrowed for the purpose of sinking this pit, and profits of the partnership colliery were applied in sinking it, and payment of the moneys borrowed for that purpose. plaintiff was fully aware of the pit being in the course of be ing sunk, and frequently saw the work during its progress; it was not shown that he ever made any objection to it, and the court considered the effect of the circumstances to be that he sanctioned it. This pit was finished, or nearly so, when

the bill was filed.

The

Disputes having arisen between the parties, the plaintiff, on the 13th of August, 1858, served the defendant with a notice to dissolve the partnership, which notice the defendant refused to accept, insisting that the partnership was to continue long as the lease. On the 24th of August the plaintiff filed

his bill for a dissolution.

as

On the 13th of December, 1861, Vice-Chancellor STUART made a decree which was in part to the following effect: Declare the partnership desolved from the date of the decree.

Declare that the defendant is not entitled to any interest in the seams of coal comprised in the lease of 13th May, 1849. Order the following accounts and inquiries:

1. An account of all dealings and transactions between the plaintiff and the defendant as copartners.

2. An account of the credits, property and effects of and now belonging to the said copartnership.

3. An inquiry whether, having regard to the terms of the partnership and to the purposes for which the works at the pit called The Meadow Pit were erected, made and formed, and are now used and capable of being used, and the circumstances under which the expenses of the said works were discharged and defrayed, any and what sum ought to be allowed in respect of such expenses.

4. An inquiry whether, having regard to the state of the stock and plant of the said partnership and to the purposes for which it is capable of being profitably used by the plaintiff, the same ought to be valued as the stock and plant of a going concern, or on any and what other footing; and it is ordered that the same be valued according to the result of such inquiry.

Adjourn further consideration.

Mr. BACON and Mr. MARTIN, for the plaintiff, in support of the decree.

Mr. MALINS and Mr. HовHOUSE, for the defendant.

The Lord Justice TURNER, after stating at length the cases made by the pleadings, and stating the decree, proceeded as. follows:

The defendant has appealed from this decree, and we have now to dispose of the appeal. In proceeding to do so, I think it right in the first place to observe that, in my opinion, the vice-chancellor's decree was well calculated to do substantial justice between the parties, and that both of them would, in

my judgment, have done well to abide by it; but as they have not thought proper to do so, there is no other course open to us than to dispose of the case according to what, in our judg. ment, are the strict legal rights of the parties. In determining those rights the first question is, what were the terms of the partnership agreed upon between these parties for working these upper seams, for it is not disputed that there was a partnership agreed upon between them for that purpose. The parties are, however, in direct conflict as to the terms of the partnership, the plaintiff alleging that there never was any agreement for partnership otherwise than at will, and the defendant. alleging that there was an agreement for working in partnership during the whole term of the plaintiff's interest in the seams under his then present or any future lease. It will be sufficient, however, to consider whether the agreement as alleged by the defendant is proved, for, if not, the plaintiff must, it would seem, have been at liberty to dissolve the partnership. The Statute of Frauds is relied upon by the plaintiff in answer to the defendant's case; but whatever the agreement may have been, it has been part performed, and we are bound therefore, as far as may be possible, to ascertain what the agreement was. In considering that question it is to be observed that the onus probandi rests upon the defendant, not only because the agreement is set up by him, but because the plaintiff has the legal interest in these seams, and the effect of the agreement alleged being to constitute the plaintiff a trustee for the defendant, it must, of course, rest upon the defendant to prove that trust. Whether in strictness he ought to be permitted to adduce and avail himself of such proof without having filed a cross-bill to assert the title so alleged by him, I do not stop to consider, the plaintiff not having insisted upon that objection; but I think that the plaintiff must at all events be considered to stand in the same position as he would have stood in if a cross-bill had been filed, and to be entitled, therefore, to all the benefit to which he would have been entitled if what is contained in his affidavits had been stated in an answer to such a bill. Looking, then, at this part of the case, with reference to these considerations, how does it stand? The defendant's case rests primarily upon the statements contained in his answer and affidavit, but these statements are met by counter statements not