MOTUTAPU WILL CASE.

Auckland Star, Volume XXXVI, Issue 289, 4 December 1905, Page 2

MOTUTAPU WILL CASE.

APPEAL COURT DECISION. IN FAVOUR OF APPELLANT. (By Telegraph. Press Association.! WELLINGTON, this day. Judgment was delivered in the case, Eeid v. Hesketh, in the Court of Appeal this morning. This was a case arising upon the terms of a deed of partnership entered into in 1880 between the appel- I lant, James Reid, and his late brother, John Reid, as cattle farmers at Motutapu and elsewhere. The deed of partnership contained a clause under which, on the death of either partner, the surviving partner \va9 to have the option oi purchasing the interest of the deceased partner in the partnership property if the same should be free from encumbrances at or for the price of £10,000; or, in case the said partnership property should be subject to any encumbrances., at or for the said sum Jess the amount of the principal of such encumbrances and any then accrued interest thereon. John Reid. one of the partners, died in 1899, and the appellant, James Reid, as the surviving partner, gave notice to the respondent as executor of John Reid, exercising the option of purchase of the partnership. The property was, at the date of the partnerShip deed and at the date of the death of John Reid, subject to a mortgage for £4000. The interest of John Reid himself was not subject to any special encumbrance created by him. Respondent, as executor of John Reid. claimed that the clause of the partnership deed giving option of purchase to the surviving partner must be read as providing for deduction from the price of £10,000 only if the interest of the deceased partner should be subject to some separate encumbrance, and that, there being no such separate encumbrance, appellant was bound to pay the full sum of £10,000. Respondent as executor sued appellant in the Supreme Court at Auckland, and Mr. Justice Edwards upheld this view, and gave judgment for the full amount of £10,000. Appellant appealed from this decision to the Court of Appeal, and the majority of that Court, consisting of the Chief Justice, Mr. Justice Williams and Mr. Justice Denmston, gave judgment reversing the decision of Mr. Justice Edwards, and holding that appellant was entitled to deduct from the £10,000 the _*_*? amount of the mortgage for -4000 existing upon the partnership property as a whole. Under this judgment the appellant pays £0000 only. Mr JusIXZl X Z ?T V and Mr - Justice Chapman dissented from the judgment, of the majoritj of the Court, and concurred in the fW. U „ by Ml '- Justice Edwards. Costs were allowed on the highest scale, £B0 in rt a ß ma r dista °cc, and costs Chntl Supreme Court, a 9 agreed. Mr. Chapman for respondent, obtained leave be ?iiT. t0 t,U ' PrlV >- Co ™ ci1 ' terms lo be sealed on further application.