1824. Baldwin v. Lawrence.

BALDWIN U. LAWRENCE.

1824, 26th February.--Partnership.-Parties.

Bill by three of the partners in a numerous trading company claiming certain privileges under the articles of copartnership, against the members of the committee for managing the commercial concerns of the company, dismissed, because it was not filed by the plaintiffs on behalf of themselves and the other partners not members of the committee.

The court will not bind all the partners in a trading company, as to the construction of the articles of partnership, upon a point of general interest, in a suit by some of the partners against a committee for the management of the commercial concerns, not otherwise authorized to represent the partnership.

IN 1804, several persons residing in and near Birmingham agreed to form a company or copartnership for the purpose of supplying themselves with cop per. For effectuating this purpose, they executed certain articles of partnership, dated the ist of February, by which, after reciting that the article of copper had become of increasing importance to the town of Birmingham, and having opened to it fresh sources of trade and manufacture unknown prior to the establishment of any copper smelting company there, and the increased demand for the article having rendered the supply to the trade of the town both irregular and precarious, insomuch that it had of late been subjected to great disappointment, injury and loss, and the parties thereto being desirous of removing, as far as in their power, all such inconveniences, and of contributing towards a due and regular supply of copper to the town [*19] of Birmingham and its neighborhood, and of promoting and extending their general trade and consequent prosperity, each of the persons whose names were thereunder written and seals affixed mutually covenanted with the others, that the parties thereto should be co-partners in the trade and business of purchasing copper, and other metals and ores, and of smelting the same; and have power to manufacture the metals so bought or smelted into such forms and states as might be found best adapted to the trade, interest and advantage of the co-partnership; and that the trade should commence from the 17th of October then last, and be carried on under the firm of The Crown Copper Company; and upon a capital or joint stock not exceeding 100,000. and that the same should be divided into one thousand shares, of 100l. each; and that no partner should hold more than twenty such shares, unless the same should come to him by marriage, marriage-settlement, bequest or succession and also that proper buildings, works and conveniences should be bought or erected, and the joint trade carried on in such places as the committee for the time being, to be appointed as was thereinafter mentioned, should deem proper; and also that the committee should have power to purchase, rent or contract for any lands containing coals, or for the erecting works, engines, mills and other buildings, or for the making of wharfs or quays, or to purchase, rent or contract for any coal-mines or ores; and to convey, assign and set over such lands, and dispose of the coals, minerals or ores to be obtained there

1824Baldwin v. Lawrence.

from, in such manner as should appear to the committee most likely to conduce to the benefit of the copartnership: and also to provide such vessels [*20] *as might be deemed necessary for the use of the co-partnership; and

to export coals or other commodities, and to import ores, minerals or other commodities, in such ships or vessels as from time to time should be deemed necessary for the benefit of the copartnership: and also that each of the parties, for cach share he should possess in the joint trade, should, every year during the copartnership, take from the co-partnership, at the current price and time of credit to be affixed by the committee, so much copper, not exceeding one ton, or of other metals, the amount whereof should not exceed the value of one ton of copper at that time, as the committee for the time being should deem proper; and that, for the managing the partnership concerns, a committee of twenty-one of the parties thereto, (no one of them having less than four shares) should be chosen by the parties at large in manner therein mentioned; and that any five committee-men, when regularly met, should be competent to act as a committee, and that the major part of the committee for the time being assembled should have power to bind the whole, and that the committee should appoint and remove the clerks, agents and servants of the copartnership, (except the treasurer and banker) and manage the concerns of the copartnership, and have the entire power of buying in and selling out all the articles in which the partnership should deal, and should see that due entries were made by the clerks in the partnership books, of all their receipts and payments, and dealings and transactions on account of the copartnership; and that the committee should meet once a month at the least, when the treasurer

should produce all accounts relative to the concern for the inspection [21] of the committee, who should *at the same time examine the clerk's

books and accounts; and that a person appointed by the committee should sign them; and that it should be lawful for the committee to borrow upon the credit of the joint trade any sum not exceeding 401. on each share, whenever it should appear to them that such moneys could be employed by them in doing the acts which they were thereby authorized to do for the benefit of the co-partnership; and that each of the party should pay his share of such sums of money not exceeding 1007. for the whole upon each share he should hold in the joint trade, and that, when calls should have been made to the amount of 40%. on each share in the copartnership, or money should have been borrowed to that amount by the committee, the committee for the time being should call a general meeting of the partners, when the whole state of the affairs belonging to the copartnership should be laid before the meeting; and, if any of the parties thereto should wish to decline having any further concern in the joint trade, it should be lawful for him, within one month after such meeting, to withdraw his name therefrom, on executing a release of his or her share therein, and paying a proportionate share of the debt or debts contracted by the copartnership, which the cash in hand and effects belong

1824. Baldwin v. Lawrence.

ing to the co-partnership, should not be sufficient to pay; and also that, on or before the last Wednesday in June in every year, or oftener, if the committee should see fitting and necessary, or one-fourth in value of the holders of shares in the copartnership should desire it, a general meeting of the partners should be held, and the state of the affairs of the partnership should be laid before them by the committee, and the sense or opinion of the general meeting should be taken upon the same, and the resolutions and determinations of the major part of them thereupon should be final and conclusive; and that, [*22] at such general meetings, the accounts of the partnership should be laid before them for their examination and allowance; and that, at such meetings, it should be determined what dividends should be made upon the profits of the joint stock and trade; and that all bills, notes, checks and receipts on behalf of the partnership, should be drawn and signed by the treasurer of the partnership; but if no treasurer should be appointed, then by three or more of the committee; and that no individual, merely as a partner, without an appointment in pursuance of the deed, should intermeddle with the cash or effects of the partnership; and that no partner should sell any share or interest in the joint trade to any person, unless the person to whom the same should be sold should enter into such covenants with the partners for the time being in the joint trade, or their committce, for the peformance of all the covenants, clauses and things therein contained, and every alteration and addition then made or to be made therein or thereto, by virtue of the power therein contained, in the same manner as the person selling the same ought to do or have done, and as the person to whom the same should be so sold ought to have done in case he had originally been a partner in the joint trade, and had executed the articles, as, by the partners for the time being, or their committee, should be lawfully required; and that, in case of the death or insolvency of any of the partners, his legal representative or assignee should be considered a partner in the joint trade, and should hold and dispose of the share of such person, subject to the terms, covenants and conditions of the articles; and also that it should be lawful for three parts in four of the whole partners in value in the joint trade, at any public meeting, to dissolve the joint trade or copartnership; and also that, if at any time during the continuance of the copartnership, [*23] any question should arise between any of the partners and the rest of the company collectively concerning the joint concern or any therein contained, the same should be referred to two indifferent persons, one to be elected by the committee, and the other by the party with whom such question should arise, within one month after the same should so arise; and, in case such two persons could not agree within one month after such reference, then the same should be determined by an indifferent person, to be chosen by the two first referees, who should determine the same within twenty days next after he should be appointed; and whatever order, award or determination the said

1824. Baldwin v. Lawrence.

referees, or the umpire, should make, each of the parties covenanted to perform and keep without any further suit or trouble whatsoever.

The bill was filed by three of the partners against the members of the committee; and, after setting forth some of the provisions of the articles of copartnership, it stated that the number of the other partners was very large, but what was their number, or who they were by name, the plaintiffs were unable to state, because the articles of copartnership were in the possession of the defendants, who refused to permit them to have access thereto : that no treasurer had ever been appointed to the company, and that there was no person or officer appointed by the articles to sue or be sued in respect of the concerns of the company that the defendants represented the copartnership, and were competent to protect its rights and interests. The bill prayed, that the plaintiffs might be declared to be entitled to the inspection, at all seasonable times, of all

the deeds, books, accounts, writings and documents belonging to the [*24] company; and that they might be permitted to inspect the same at all seasonable times, and to take extracts therefrom.

The defendants, by their answer, admitted that the articles were in their possession; that no treasurer had ever been appointed; and that there was not any person or officer appointed by the articles to sue or be sued in respect of the concerns of the company; and that the company consisted of one hundred and ten persons: they said that they had been induced to believe that the plaintiffs and the other partners, who were not members of the committee, were entitled, at the times when general meetings of the partners were hell, and at no other times, to have access to and the inspection of such state only of the partnership affairs, and the accounts and documents of the partnership, which by the articles were directed to be laid before the partners at their general meetings: and that they had refused the plaintiffs access to those books for the purpose that the committee might not be impeded in managing the copartnership concerns by the interruption of a numerous body of individual proprietors using such access; and also for the purpose of preventing improper disclosures to other establishments of the like description, or to traders in or manufacturers of the like wares as those used or manufactured by the company, of the confidential affairs of the concern, to its prejudice; and that the committee were the more induced to do so, because the plaintiffs were, at the time of their application to inspect the books and papers of the concern, large proprietors in the Rose Copper Company, which was formed for carrying on the like business, and for the like purposes as the Crown Copper Company, and a rival to the same: that, if they were required by the order of the court to permit the plainthe deeds, books, papers and writings belonging to the they might, when so required, have ceased to be upon › have the custody of those documents, and, consequently, at order; wherefore they submitted that all the partners n made parties to the suit, and they claimed the same benefit as if they had taken it by way of demurrer or plea; and they

1824. Baldwin v. Lawrence.

then mentioned the names of the other partners, to enable the plaintiffs to make them parties to the suit.

*Mr. Hart, and Mr. Farrer, for the plaintiffs :--The power assumed by these defendants of preventing the partners from inspecting the partnership accounts, is unreasonable and inconsistent with several of the provisions of the articles of copartnership: for, suppose a partner has it in contemplation to avail himself of the privilege given him by these articles of withdrawing from the partnership, is he to rely implicitly upon the account which the committee may choose to give him, and, without further information on the subject, to decide whether he will continue in the trade, or give up all that he has embarked in it? Is a partner to be prevented from knowing how many bills of exchange have been signed by the committee, to which he is liable? The clause which enables a partner to sell his share, can never be acted upon, if he is to be kept in that state of ignorance which this committee contend for; for who will enter into any contract for the purchase of the share when he can obtain no information as to the subject of the purchase? There is not a word in the articles from which it can be inferred that it was intended that the partnership accounts should be kept by the committee. If they were to be entrusted to any person, it was to the trea

surer.

The committee are invested with *powers inconsistent with [*26] the keeping of the accounts; and it was clearly the intention of the parties to these articles, to keep the transacting of the business of the partnership separate from the keeping of the accounts.

Mr. Heald, and Mr. Gardner, for the defendants.

The Vice-Chancellor intimated an opinion, that the plaintiffs, according to the true construction of the partnership articles, were not entitled to the relief prayed. But he held that the court could not bind all the partners as to the construction of the articles, upon a point of general interest, in a suit in which three only of the partners were plaintiffs, and the committee for management of the commercial concerns, who were not authorized otherwise to represent the partnership, were the only defendants: and he dismissed the bill. He said that the question would have been different if the plaintiffs had filed this bill on behalf of themselves and all other the shareholders, not members of the committee, praying for the inspection of books in the custody or power of the committee.[1]

He distinguished this from that of an individual not being a partner, but claiming against a numerous partnership or club, and who might file a bill against a few of the partners or members only.(a)

(a) Cockburn v. Thompson, 16 Ves. 321; Meux v. Maltby, 2 Swanst. 277; Weale v. West Middlesex Waterworks Company, 1 J. & W. 358; and Weld v. Bonham, post, 91.

[1] Where it appears upon the face of the bill that there will be deficiency in the fund in question, and that there are other creditors or legatees who are entitled to a rateable distribution with the plaintiff, and who have a common interest with him, such creditors or legatees should be made