Contracts between the members of a firm and third parties, and which were subject to the partnership contract, but which were expressed to be personal and incapable of assignment, were still held on trust for the partnership, and renewals made before a winding up of the partnership were also held in trust. The benefit of a non-assignable contract may be ‘property’ for the purposes of the Partnership Act 1890.
Morritt LJ stated: ‘The question whether, in the terms of section 20 of the Partnership Act 1890 an asset is ‘brought into the partnership stock or acquired . . on account of the firm . . or for the purposes and in the course of the partnership business’ does not depend on whether it is assignable at law. In both Ambler v. Bolton . . and Pathirana v. Pathirana . . the asset was inalienable. In both cases the inalienable asset had been acquired by the individual partner in his own name during the subsistence of the partnership but was still treated as acquired on account of the firm. In my view, it would make no difference if the asset had been acquired before the commencement of the partnership but the partner in question was required by the terms of the partnership to bring it into the common stock. The reason is quite simply that partnership property within section 20 of the Partnership Act 1890 includes that to which a partner is entitled and which all the partners expressly or by implication agree should, as between themselves, be treated as partnership property. It is immaterial, as between the partners, whether it can be assigned by the partner in whose name it stands to the partners jointly.’
Judges:
Morritt LJ
Citations:
Times 09-Feb-1999, [1998] EWCA Civ 1794, [2000] Ch 291, [2000] 1 BCLC 607, [1999] EMLR 402, [1999] 1 Lloyds Rep 588, [1999] 3 WLR 276, [1999] 2 All ER 218
Statutes:
Jurisdiction:
England and Wales
Citing:
Appeal from – Don King Productions Inc v Warren and Others ChD 13-Apr-1998
Where partnership terms required benefit of all contracts to be assigned to the partnership, this included unassignable personal contracts which were to be held in trust for partnership, unless stated otherwise.
Lightman J said: ‘The existence . .
See Also – Don King Productions Inc v Warren King and Another (No 2) ChD 18-Jun-1998
An application for a Mareva injunction made ex parte was exceptionally justified when a partner failed to explain unaccounted for receipts after a full opportunity had been given, and there was no logical or innocent basis for the concealment of . .
Cited by:
See Also – Don King Productions Inc v Warren King and Another (No 2) ChD 18-Jun-1998
An application for a Mareva injunction made ex parte was exceptionally justified when a partner failed to explain unaccounted for receipts after a full opportunity had been given, and there was no logical or innocent basis for the concealment of . .
Cited – Ultraframe (UK) Ltd v Fielding and others ChD 27-Jul-2005
The parties had engaged in a bitter 95 day trial in which allegations of forgery, theft, false accounting, blackmail and arson. A company owning patents and other rights had become insolvent, and the real concern was the destination and ownership of . .
Cited – Barbados Trust Company Ltd v Bank of Zambia and Another CA 27-Feb-2007
The creditor had assigned the debt, but without first giving the debtor defendant the necessary notice. A challenge was made to the ability of the assignee to bring the action, saying that the deed of trust appointed to circumvent the reluctance of . .
Lists of cited by and citing cases may be incomplete.
Company, Contract
Updated: 27 November 2022; Ref: scu.145273