Two solicitors having entered into partnership, each of them continued to attend to the business of his former clients, but on the partnership account; and one of the partners having proposed to invest a sum of money belonging to a client in a certain mortgage, the proposal was agreed to by the client, and the money was paid to the joint account of the partnership, at their bankers, for the purpose of the investment. The negotiations for the mortgage were broken off by the proposed mortgagor, but the partner by whom the proposal had been made to the client untruly represented to the client that the mortgage had been effected, and thenceforward continued to pay the interest as if it had actually been done. Although the banking account was kept in the name of the firm, the monies standing to the account belonged exclusively to the partner who committed the fraud ; he alone attended to and had the control of the account, and the fraud was unknown to the other partner. Five years after the receipt of the money from the client the partnership was dissolved ; and ten years after the dissolution of the partnership, the partner who had committed the fraud became bankrupt, and the client, who, from the time of the dissolution until the bankruptcy, had continued to employ him as his solicitor, discovered the fraud. The client then filed his bill against the other partner to recover the money.
Held, that the defendant was originally liable to the Plaintiff for the money received by the firm ; that his original liability was continued, as well after as before the dissolution of the partnership, by the fraudulent representations of his former partner; and that in equity the limitation in bar of the claim did not begin to run in favour of the Defendant until the time when the client discovered the fraud.
That the fraud and misrepresentation of one of the partners entitled the client to relief in equity against the other, not only if the case was one in which the client might have recovered in an action at Law against such other partner, but also if the remedy at law against the other partner was barred by the lapse of time.
Sir James Wigram VC
[1846] EngR 1082, (1846) 5 Hare 542, (1846) 67 ER 1026
Commonlii
England and Wales
Cited by:
Appeal from – Blair v Bromley CA 3-Jul-1847
Held; . .
Cited – Dixon Coles and Gill (A Former Firm) v Baines, Bishop of Leeds and Another CA 20-Jul-2021
Innocent co-trustee not liable for Default
Proceedings were brought by former clients against their former solicitors. One of the partners stole money held in the firm’s client account on behalf of the claimants. The other two partners were entirely innocent of, and in no way implicated in, . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2021; Ref: scu.302977
