A PARTNERSHIP DISPUTE.

Evening Post, Volume LXXVI, Issue 124, 24 November 1908, Page 8

A PARTNERSHIP DISPUTE.

FLAX'MILL INVOLVED. QUESTION OF MORTGAGES. Mr. Justice Cooper, in the Supreme Court to-day, heard a phase of the longRtanding case Reed v. Simpson. This case arose out of the winding up of a. partnership. The late Dr. Reid, of Palmerston North, entered into partnership with one Simpson in a flaxmill business in 1903. By the agreement of partnership 'Simpson Avas to carry on the business in his own name ; it was" also to be carried on on a, cash basis. Simpson, while manager of tho mill, shipped his flax home to England through A. S. Paterson and Co., of Wellington, merchants. He obtained advances from Paterson and Co., and in February, 1905, gave a bill of sale to that firm for the whole of the chattels comprised in the partnership. He then, applied to Paterson and Co. for a further advance, which was refused. Afterwards he interviewed the flax manager for Levin and Co., of Wellington, and obtained from the firm in question an advance of some £3000, which was used mostly to pay off Puteison and Co. 's mortgage, the balance being used for partnership purposes. 'Simpson gave a bill of sale to Levin and Co. over the partnership chattels for the sum advanced. Meanwhile Dr. Reed, having seen a notice of Simpson's mortgage to Paterson and Co. in the Mercantile Gazette, instituted proceedings for the dissolution of the partnership. A receiver was then appointed. The notice of tho proceedings was actually served on Simpson two days' beforo he obtained tho advance from Levin and Co., but Lovin and Co. had no notice of the proceedings. During the course of the winding up of the partnership company, it was found that Simpson's half of the partnership property was not sufficient to pay Levin and Co.'s debt. Levin and Co. therefore claimed that their mortgage subsisted over the whole of the partnership property, including Dr. Reed's share. The dispute originally came before the Chief Justice, who decided against Levin and Co. An appeal was then made to the Court of Appeal to order a new trial. A new trial took place before Mr. Justice Cooper in July last, when evidence was taken and the points of law to be argued were reserved. Owing to the illness of Mr. C. P. Skerrett, K.C., the case was adjourned from time to time until to-day, when the argument was held on the following two questions :—(1): — (1) Whether Dr. Reed or his representatives were stopped through their conduct in allowing Simpson to have (sole charge of the business, and to carry it on in his name, from claiming as against Levin and Co., the mortgagees, a half share therein. (2) Whether, in tne event of Levin and Co. being successful in establishing their ! claims, they were entitled to mortgagees' COStS as between solicitor and client or not? Mr. C. P. Skerrett, K.C., with him Mr. Gifford Moore, represented Dr. Reed, who died after instituting the proceedings, and -Mr. H. D. Bell, K.C., with him Mr. H. H. Ostler, appeared for Levin and Co. (Left sitting.)