C. R. Nov. 6, 1833. A renewed fat must be taken out by or in the name of a creditor for 1001. Ex parte MAUDE. In the matter of HUDSON. THIS was an application, on behalf of a creditor, for a renewed fiat. Sir George Rose said, a renewed fiat could only be issued upon the petition of a creditor or creditors whose debt would be sufficient to support an original fiat. The Court, therefore, ordered the renewed fiat to issue, if the debt of the petitioner were sufficient, but if not, he was to be at liberty to use the name of any creditor whose debt was sufficient. (a) C. R. Nov. 12, 1833. Ex parte NOTLEY.- In the matter of NOTLEY. IN November 1832, Notley, the petitioner, was about to establish a chocolate manufactory, for which he required capital; and an application was made to Emma Briggs, who agreed to advance 2301., upon the petitioner giving trader, to enable her a bond and warrant of attorney for securing the re If money be advanced to a him to com mence a trade, payment with five per cent. interest. Judgment was of which the lender is to share the profits, it is a good petitioning ere. ditor's debt. Such debt may be proved. (a) 6 Geo. 4. c. 16. s. 20. “If, Q. 1. If the bankrupt re- the commissioners to his certificate, or if he were injured, could he not renew? Q.2. If an assignee is not a creditor, can he not renew? Q. 3. If a creditor for 901. were injured, could he not renew? entered up forthwith, but payment was not to be required until 1837. 1833. Ex parte NOTLEY. of NOTLEY. The petition stated, that Briggs was to have one eighth of the profits to arise from the trade, which the In the matter petitioner then commenced; and that in pursuance of the agreement the petitioner paid to Briggs 5l. per month, from the 7th day of January to the 7th day of July, being the estimated amount of one eighth of the expected profits. The fiat was issued by Briggs upon the debt due to her in respect of the advance. This petition was by the bankrupt, and prayed that the fiat might be annulled, on the ground that the debt upon which it was issued arose out of partnership dealings between the parties. Mr. Montagu and Mr. Lovatt for the petition:- The debt upon which this fiat is attempted to be supported arose out of the partnership, being an advance of capital for its formation. For such was the essence of the contract between these parties. (a) (a) Ex parte Nokes, June 1801, 2 Montagu on Bankruptcy, p. 148. Petition by the bankrupt to supersede the commission, on the ground that there was not a good petitioning creditor's debt. The petitioning creditor was a partner of the bankrupt; the debt was above 100%., but there had been no statement or balance of the accounts. Romilly, for the bankrupt, contended, that, as no action could be maintained at law for this debt, it would not support Mr. Mansfield and Mr. Cooke, Lord Eldon-I do not know of any case, and I am strongly 1833. Ex parte In the matter of NOTLEY. [Sir George Rose :-This appears to be a distinct debt, for which an action might have been brought notwithstanding any partnership. If upon the formation of a partnership one partner advance money to another partner to enable him to embark in trade, it is as distinct as if they were not partners. Here the money was advanced upon security of a bond in the common form, reserving five per cent. interest, and of a warrant of attorney upon which judgment has been entered up.] It is true that in the bond there is nothing respecting partnership, but dehors the bond this agreement for a participation in the profits was made. If, therefore, the money was not advanced as capital, it is clear that the object of the lender was to obtain more than five per cent. interest. The agreement, therefore, either created a partnership or was a usurious contract. [Sir John Cross: -The agreement for participation in the profits may create a joint liability as to third parties, but there is no evidence of a partnership as between themselves. A creditor may insist on the joint liability, but can a debtor turn round and say to his creditor, "although contrary to our contract, yet, as the law makes us partners, you shall not recover your debt." Sir George Rose :- Assuming the fact of partnership to be established, it would only exist as in favour of third parties, whether the advance were as capital or not. But the petition does not allege that it was advanced as capital, being confined to a statement of this being a partnership created by a participation of profits. There are many cases proving that, even as between partners, one may lend a sum to another by which a legal oblito the fact, it was referred to the Master. ner paid all debts, I should think There being some dispute as Windham v. Paterson, 1 Starkie, 144; Matson v. Barber, 1 Gow. 17. gation would be created. In this case there is not only a bond, but a judgment, and although it was not to be acted on until 1837, yet by the bankruptcy that time has, by anticipation, arrived, and the commission is only in the nature of a statutable execution. Then as to usury, how can the party come here to avail himself of such an objection, except upon the equitable terms of paying principal, interest, and costs? Besides, usury is not alleged in the petition.] The only method which one partner has of enforcing rights against another is by filing a bill. If a sum of money is advanced by one person to another, for the purpose of forming a business in which they are to be jointly interested in the profits, it is clearly a debt arising out of the partnership, the very essence of the contract being the formation of a partnership; and such a debt will not support a commission. Windham v. Patterson, 1 Stark. 144. [Sir G. Rose: — There is no express contract for a partnership in this case. If it exist, it is merely by operation of law.] Mr. Swanston, for the petitioning creditor, was not called on. The CHIEF JUDGE: Some disputed facts as to the original agreement are not clearly before the Court; but it is unnecessary to direct any further inquiry as to those facts, if they would not vary the material parts of the case. The undisputed facts are shortly as follow: Briggs advanced the money on a bond and warrant of attorney for securing repayment, with interest at five per cent., in 1837; which money was to be employed by Notley in his trade. It is said, that this is not a good VOL. I. E 1833. Ex parte In the matter of NOTLEY. petitioning creditor's debt, as there was, dehors these written documents, an agreement to share the profits of the trade, and therefore this debt must be considered as arising out of the partnership. But that is not so; it is only when it is necessary to take the partnership accounts to ascertain the amount of the debt that it can be said to arise out of the partnership, so as to deprive the creditor of his legal right. It has been determined that, in the case of a partnership, if there has been an account rendered and a balance struck, the same might be proved under a commission. So it may support a commission. The cases in which the objection of the existence of a partnership has been taken are those in which money is actually brought into the partnership accounts as between the partners, and where it would depend upon taking the accounts whether the sum were due or not. But here the money is to be repaid at all events. It was merely a loan from one individual to another, and therefore it is a sufficient debt to support the fiat. Sir John Cross: or agreement for partnership as between the parties themselves. If A. undertake to give B. a share of profits, as to creditors, both may be liable as partners; but a party cannot say, "by operation of law you are my partner;" there is no ground at law or in equity to entitle this bankrupt so to turn round upon his creditor. But even if there were a partnership, I think this was not a debt arising out of partnership. There is no evidence of a contract Petition dismissed. |