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or interest in the same or any other property, or by way "of annuity or other payment, or otherwise howsoever, and "whether such benefit or advantage is charged on the property comprised in such deed or, instrument or not; and "in assessing the duties payable in respect of such property no deduction shall be made in respect of such benefit or 'advantage."

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This enactment does not repeal section 7 of the Act of 1891 (No. 30), but must be read as part of it. So read, the exemptions provided for under the Act of 1891, except so far as they are expressly taken away by the Act of 1895, continue. There can be no doubt whatever that ante-nuptial marriage settlements, and conveyances to bonâ fide purchasers for value in money, are still exempt from death duty. The reservation of a rent-charge or an annuity, as in the case of In re Chambers(1), is, however, no longer to be considered as a valuable consideration in money. To make any deed or instrument chargeable with death duty under the Act of 1895, it is, however, necessary to show that it is "a deed or instrument whereby any person directly or indirectly "transfers or otherwise disposes of property to, or for the "benefit of, any person connected with him by blood or marriage." These are the transactions intended to be taxed by the statute, and it is in respect of them alone that the duty is made payable.

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It appears to us to be plain that the deed in the present case is not such a deed. It is not disputed that the deed honestly expresses the real intention of the parties, and that it is not a device to escape the payment of duty. It is a deed of partnership whereby the parties agree to bring into the partnership capital the interests which they respectively take in the property of a deceased person. The scope and aim of the deed is not to transfer or otherwise dispose of the property to or for the benefit of any person, but to establish a partnership, and to provide the capital with which it should be carried on. If this is established, then, even though it might be made to appear that some of the parties have made

(1) 13 N.Z. L.R. 111.

C.A.

1901.

COMMISSIONER

OF STAMPS

V.

GIRLING & Co.

C.A. 1901.

OF STAMPS

a bad bargain, death duty is not payable. It is not pretended that if the parties were strangers in blood death duty could COMMISSIONER be exacted, but it is contended that under the Act of 1895 deeds entered into between persons connected by blood or marriage are in certain cases liable to duty from which similar deeds entered into between strangers are exempt.

GIRLING & Co.

The legitimate deduction from the argument is that every conveyance, transfer, or disposition of property between persons connected, however remotely, by blood or marriage, although for valuable consideration, is taxable as a gift. If this had been the intention, the lengthy elaboration of the language of the section would have been altogether unnecessary. would have been sufficient to have added, after the words "by "blood or marriage," the words "for valuable consideration."

It

We do not think that the appellant's contention can be supported. The question must always be, was the deed a deed of gift? If so it is liable to death duty. If it is a bonâ fide transaction for value, intended to effect some other purpose, it is not so liable.

It remains to be considered whether, by reason of the 28th paragraph of the deed, stamp duty as upon a conveyance on sale or as on a settlement is payable in respect of the shares of Francis Thomas Clarke and Elizabeth Alice Girling.

The 88th section of "The Stamp Act, 1882," provides that "The term conveyance on sale' includes every instrument 66 and every decree or order of any Court or of any Commis"sioners whereby any property upon the sale thereof is legally or equitably transferred to or vested in the purchaser, or any "other person on his behalf or by his direction."

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The whole equitable interest of Francis Thomas Clarke and William James Girling became part of the capital of the partnership under paragraphs 5 and 9 of the deed. It is not argued that stamp duty thereby became payable, and it seems plainly impossible to do so. To so hold would be to hold that stamp duty is payable upon the whole of the capital brought into every partnership. The 28th paragraph of the deed conveys the legal estates of Francis Thomas Clarke and Elizabeth Alice Girling to trustees upon trust for the partnership. Apart.

from this paragraph Francis Thomas Clarke and Elizabeth Alice Girling would have been trustees of their respective shares for the partnership. The only effect of paragraph 28 is to substitute other trustees of the legal estate for them. This is not a conveyance on sale vesting the property upon the sale thereof in purchasers, or in other persons on their behalf or by their direction. The property is not sold, and none of the parties to the deed are purchasers. The deed is not, therefore, liable to duty as upon a conveyance on sale.

It is equally plain that the deed is not a settlement within the meaning of "The Stamp Act, 1882." The meaning of the words "deed of settlement " is defined by the schedule to that Act. The first definition plainly refers to settlements properly so called. The second definition provides for the case of a person in whom property is vested constituting himself a trustee for others by means of a declaration of trust executed by him. This deed does not fall within either definition. A deed of partnership is not a settlement, nor, if the conveyance had been carried into effect by a separate deed, would that deed have been a settlement.

We hold, therefore; that the judgment of His Honour the Chief Justice in the Court below was right, and the appeal is dismissed, with costs on the lowest scale as ou a case from a distance.

Appeal dismissed.

Solicitor for the appellant (the Commissioner of Stamps): Crown Solicitor (Wellington).

Solicitors for the respondents (W. B. Girling & Co.): Skerrett & Wylie (Wellington).

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S.C.

HEARING. CHRISTCHURCH.

1900.

Aug. 23, 24, 25, 29.

MARTIN, J.

C.A. 1900.

Oct. 25, 26; December 22.

[IN THE COURT OF APPEAL.]

GIBSON v. TYREE.

Partnership-Liability of Partner to account for Benefit obtained-Competing
Transaction "The l'artnership Act, 1891," Section 32.

T. was managing partner in New Zealand of G. & Co., wholesale leather-merchants. Certain debtors of the firm assigned their estate to trustees, of whom T. was one, for the benefit of their creditors. The deed of assignment gave each of the trustees the right to purchase the assigned property. T. became the purchaser of the whole estate on his own behalf, through the agency of a third person. He resold, making a considerable profit. The stock, being in small lots, and mixed, was not in itself suitable for G. & Co.'s business, but, when made up with goods that they had in stock, could have been sold by them in their ordinary course of business.

Held (Conolly, J., dissentiente), That T. must account to his partners for the profits made on the resale, (per Stout, C.J.) on the ground that the resale competed with the firm's business, and (per Williams, J.) on the ground that T.'s right to purchase existed for the benefit of his firm, and that the transaction came within section 32 of The Partnership Act, 1891."

APPEAL from a decision of Martin, J.

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In the year 1896 Gavin, Gibson, & Co. were wholesale leather-merchants, carrying on business in Australia and New Zealand. The respondent (defendant in the Supreme Court) was the managing partner of the New Zealand business. The appellants (plaintiffs in the Supreme Court) represented the other partners of the firm. Toomer Bros., of Christchurch, boot-manufacturers, being then debtors of the firm, and having suspended payment, assigned their estate to trustees for the benefit of their creditors. The trustees were the respondent, as representing his firm, and an official of the Bank of New Zealand, as representing the bank, which was the largest creditor. The deed of assignment provided that either of the trustees might become the purchaser of the assigned estate. The respondent became the purchaser on his own behalf,

through the agency of a third person, and his name was not disclosed as the purchaser. He resold part of the estate, consisting of boots, leather, and grindery, to one Pannell, a bootretailer, at a considerable profit. The stock so resold was in small lots, and mixed, and was not in itself such as the respondent's firm would in the ordinary course of business have handled, but, when supplemented by goods that the firm had in stock, could have been sold by them as their ordinary stock. The partnership deed provided that leather and grindery should be bought in Melbourne, The appellants asked that the respondent be ordered to account for the profit made by him on the resale to Pannell.

The action was tried before Martin, J., at Christchurch, on the 23rd, 24th, and 25th of August, 1900, and on the 29th of August His Honour gave judgment for the respondent, holding that in the resale to Pannell the respondent was not competing with his firm, the goods not being suitable to go into an ordinary warehouse like Gavin, Gibson, & Co.'s, or such as an ordinary warehouse would have sold, and having been bought by Pannell not as his ordinary stock, but as a job line to be sold as bankrupt stock on premises away from his usual shop, and in conjunction with the remains of another bankrupt stock that he was selling.

From this decision the appellants now appealed.

[In the action the appellants also claimed that the respondent should account for the profits made by him in carrying on a competing business as the Excelsior Boot-manufacturing Company (Limited). On this claim judgment was given in the Supreme Court for the appellants, and the respondent now cross-appealed; but, as the questions involved wholly depended on the determination of questions of fact — viz., whether there was actual competition, and whether the business was carried on with the knowledge and consent of the other partners the case on this head is not reported.]

Hosking and Beswick, for the appellants:

The utmost good faith is due from a member of a partnership to his partuers. He must not obtain a private benefit at

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