Scottish Court of Session Decisions

This was an action brought by Glass, formerly a partner of the firm of John Haig & Company, against the said firm and against Haig, the sole remaining partner, for a count and reckoning as to the affairs of the Company at 29th May 1873, when it was dissolved by the bankruptcy of the pursuer, who was at the date of this action reinvested in his estate. The said company had been formed for the purpose of working a seam of limestone and fireclay on the estate of Nellfield under a lease acquired by the firm. A claim was made by the pursuer to have certain machinery and plant valued, and also the pit-sinkings in use at the time of the dissolution. The claim was resisted on the ground that the machinery and plant should be valued as for a winding up, and not as for a going business, and that the claim for the value of the pit-sinkings was a claim for prospective value, which was excluded by the following clause of the contract of copartnership:—“ Sixth,In the event of the bankruptcy of either party, the partnership shall be dissolved, and the lease shall be the property of the solvent partner; the balance belonging to the bankrupt shall be ascertained; and the solvent partner shall give bills for the amount, by equal instalments at six, twelve, and eighteen months. Neither the bankrupt nor his creditors shall have any claim to the prospective value of the lease.”

The Lord Ordinary pronounced the following interlocutor:—

“ Edinburgh, 11 th January 1877.—The Lord Ordinary having considered the cause, Finds that the defender is bound to account for the machinery and plant at its value for use at tlie pit: Finds that the pursuer is not entitled to make any claim for the value of pit-sinkings: And with these findings remits to Mr T. Chalmers Hanna, chartered accountant, to take an account of the copartnery, and to report; with power to him to call for the production of all necessary writs and documents

Note.—In December 1871 the defender became tenant of a coal-field under a lease which endured for thirty-one years. On 22d April 1872 he entered into a contract of copartnery with the pursuer in order that the lease might be worked on joint-account, and it was declared that the copartnery should endure as long as the lease.

The sixth article of the contract provides that in the event of the bankruptcy of either party the partnership shall be dissolved, and the lease should be the property of the solvent partner, the balance belonging to the bankrupt should be ascertained, and the solvent partner should give bills for the amount by equal instalments at six, twelve, and eighteen months; and that neither the bankrupt nor his creditors should have any claim to the prospective value of the lease.

In May 1873 the estates of the pursuer were sequestrated, and the lease in consequence became the property of the defender. The pursuer was in December 1874 reinvested in his estates, and he now sues the defender for an accounting in relation to the copartnery.

The pursuer does not dispute that the copartnery came to an end by his sequestration; but he contends that in settling his interest under it the lease should be valued as a going concern, and that he is entitled to have a value set on the pit-sinkings. The defender, on the other hand, contends that the valuation should proceed as on a winding-up, and that the pursuer has no claim for the value of the pit-sinkings.

Both parties were desirous that the Lord Ordinary should decide the principle on which the interest of the pursuer should be settled. This he was willing to do as far as possible, but he wished that the parties should endeavour by mutual admissions to prepare the case for final judgment. Unfortunately they have not been able to agree. But they concurred in asking the Lord Ordinary to dispose of the following points on the record as it stands.

With respect to the machinery and plant, the Lord Ordinary is of opinion that it should be valued as for use at the pit. The defender took it over and used it. The Lord Ordinary therefore thinks that the defender is bound to pay for it, not at its value for breaking up or removal, but at its value for use.

But he thinks that the pursuer is not entitled to make any claim for the value of pit-sinkings. The pursuer does not maintain that he can claim repayment of the moneys contributed by him for the purpose of sinking pits. He claims only the value of the pit in so far as available for the output of minerals. To the Lord Ordinary this seems to be a claim for the prospective value of the lease—a claim which is excluded by the contract.”

The pursuer reclaimed.

The defender was not called on.

At advising—