Cruikshank v Sutherland: HL 1923

The executors of a deceased partner of the respondents sought relief. The assets had been taken over from an earlier partnership between the parties and had been brought into the accounts of the new partnership at the values at which they had stood in the books of the earlier partnership. The articles required a full and general account of the property, credits and liabilities of the partnership as at 30 April in each year. The accounts for 1915 and 1916 showed assets at book values. Mr Cruikshank died on 27 October 1916. Article 16 said that his estate was to be paid his share in the partnership ascertained by reference to the accounts prepared under article 13 for 30 April next after the death. The question was whether those accounts should be prepared on the basis of book values, or on some other basis.
Held: Lord Wrenbury construed the partnership articles: ‘It is not, I think, disputed – and if it were, I should be of opinion that it could not successfully be disputed – that a full and general account of the partnership property will be an account at which the property will be brought in at its fair value. The articles are wholly silent as to the principle to be adopted in preparing this full and general account of the property – it remains simply that it must be a proper account of the property, whatever that is. What are the values to be attributed to the several assets falls to be determined by the partners by agreement, and – in case of dispute – is a matter for arbitration under clause 21 of the deed. . . . What the value is does not concern us. That is for an arbitrator, if there be a dispute. Your Lordships are concerned only to say what is the principle on which an arbitrator ought to act.’


Lord Wrenbury


(1923) 92 LJ(Ch) 136




CitedCoventry v Barclay 1863
Partners had conducted their practice over many years in a manner inconsistent with the spirit if not the exact letter of their partnership articles. Stock was to be taken every year, and the value entered into the books to be signed off by each . .

Cited by:

CitedNoble v Noble OHCS 1965
A father took his son into a farming partnership. The agreement recited that they agreed that ‘the heritable property should be taken as of the value of eight thousand pounds, but which is burdened with a heritable security for three thousand five . .
CitedIn Re White (Dennis) Deceased; White v Minnis and Another CA 25-May-2000
A family partnership had carried freehold property at its historic cost value in the books, rather than at a market value. After the death of one partner the share came to be valued.
Held: Being a family partnership there was presumption that . .
CitedShaw v Shaw OHCS 1968
‘The authorities to which I was referred, including, in particular, Noble v Noble; Inner House, 28th January 1966 (unreported), and Cruickshank’s Trustees v Sutherland, satisfy me that, as a general principle, where in a partnership it is necessary . .
CitedThom’s Executrix v Russel and Aitken 1983
The court was asked as to how the value of the interest of a deceased partner was to be calculated.
Held: There had been prior dealings at book value as between the partners, and the payment of the deceased partner’s share was restricted to . .
CitedWhite v Minnis and Another ChD 18-Jan-1999
On the dissolution of a partnership, the valuation of assets was to be in accordance with the partnership deed but in the absence of explicit guidance property was to be valued at the date of dissolution and not at an historic value used in . .
Lists of cited by and citing cases may be incomplete.


Updated: 07 May 2022; Ref: scu.238859