C.A. 1900. GIBSON V. TYREE. 66 the expense of the firm, and he must share with his partners any benefit in which the firm in honour and conscience is entitled to participate: Lindley on Partnership(1). He must account for benefits derived from any transaction "concerning the partnership" or from any competing transaction: "The Partnership Act, 1891," sections 32 and 33. The statute does not abrogate the common law on the subject, and must be read in the light of previous decisions: Section 48, Preface to Pollock on Partnership(2). A very high standard of conduct in partnership relations is required: Story on Partnership(3); Blisset v. Daniel(4); Burton v. Wookey(5). If a partner purchases articles belonging to the special trade in which his firm is engaged he must account for the profits he makes: Story on Partnership(6). The sale to Pannell was in rivalry with the firm. It consisted of colonially made boots, leather, and grindery, in all of which the firm dealt. It was a sale to a customer of the firm, and actually did compete with the firm's business. It is sufficient that it was a competing transaction. The question is wholly whether the goods were such as the firm sold. That the goods were not suitable for the firm's warehouse or were inferior in quality has nothing to do with the question. The question is whether the respondent made a profit. The firm had previously dealt in bankrupt stocks. The test is not whether the respondent could have compelled the firm to take over the purchase. A partner using information obtained in the course of the firm's business for a purpose within the scope of the partnership business, or for a purpose which would compete with the business, must account for profits made by him: Aas v. Benham(7); Dean v. MacDowell(8). There was no consent or acquiescence of the other partners. The onus is on the respondent to show conclusively that all facts were brought to the knowledge of his partners, and that their conduct amounted to a release or accord and satisfaction: De Bussche v. Alt(9). H. D. Bell and Stringer, for the respondent: This transaction does not come within section 32 of The Partnership Act, 1891." It is not a transaction "concerning "the partnership." It is not a competing transaction within section 33. If the respondent had the right to purchase he had the right to sell. The bankrupt stock was already in competition, and the question is whether the respondent was the one person prevented from purchasing. As trustee he was acting for the creditors, not for his firm. He was bound to get the best price, and was therefore bound to create a competition with the firm. His duties as trustee were paramount. If he could have bought for his firm he would have had to account for the profit. But the purchase was not within the scope of the firm's business; and that is the test. The evidence was overwhelming that the goods were not suitable for the business. The respondent could not have properly bought them on behalf of the firm. He could not have compelled his partners to enter into a speculative purchase such as this. He was entitled under the deed of assignment to buy, and it is admitted on the pleadings that the firm consented to the deed. He could therefore buy, and he could not buy for the firm. His right to buy was therefore on his own account. And, being entitled to buy, he must be entitled to sell. The test is whether the subject-matter of the transaction is a property or interest of the partnership: Selborne, L.C., in Cassells v. Stewart(1); Glassington v. Thwaites(2); Fuller v. Duncan(3); Dean v. MacDowell(4); Aas v. Benham(5). The sale to Pannell, being a single transaction, does not come within section 33 of "The Partnership Act, 1891," which only applies to the carrying-on of a competing business. The respondent's liability, therefore, depends on the transaction coming within section 32. It must therefore be shown to be a transaction" concerning the partnership." This transaction was not within the scope of the partnership business. Hosking in reply. (1) 6 App. Cas. 64, 73. (2) 1 Sim. & St. 124. (3) 7 T. L.R. 305. Cur. adv. vult. (4) 8 Ch.D. 345, 354. (5) [1891] 2 Ch. 244. C.A. 1900. GIBSON V. TYREE. C.A. 1900. GIBSON บ. TYREE. STOUT, C.J.: — The plaintiffs complain of that part of the judgment of the Supreme Court which refused to make a decree ordering the defendant, Alfred Tyree, to account to his partners for the share of the profit he made in the sale of boots, shoes, leather, and grindery bought from Toomer's stock to Mr. Pannell. The appeal turns on fact — viz., whether the purchase from Toomer and sale to Pannell were of goods in which the plaintiffs were dealing. It cannot be denied that it was the same class of goods— viz., colonial boots, leather, and grindery. It is true that the partnership deed provided that leather and grindery should be bought in Melbourne, and therefore such a purchase might be said not to be a purchase on behalf of the firm. This does not, however, conclude the matter, for it cannot be contended that the defendant could have bought leather and grindery in New Zealand, and sold such goods so bought in competition with the firm. The fact is, however, that the firm had bought bankrupt stocks. The evidence of Mr. Cabena is that the firm had bought Suckling's stock-this before Mr. Tyree was a partner part of Lightband & Allan's stock, and one or two small stocks since." If Mr. Tyree had therefore bought this part of the bankrupt stock of Toomer for the firm, it could not have been said that he was buying stock of a kind that had not been previously bought by the firm. - Reference was made to a letter of the firm, dated the 21st of October, 1893, in which it was stated that the Melbourne firm considered one thousand pounds' worth of stock as a fair stock of colonial boots. There is no evidence that that sum was kept to as the maximum value of stock in colonial boots, nor that the purchase of the goods Pannell bought would have exceeded the £1,000. The price of the lot Pannell bought was about £1,700, and, if the boots and shoes were bought at 14s. in the pound, the value bought was £713 10s., and that included some stock. The main argument urged was that, because some of the stock was in small lots, and mixed, it was not such a stock as would go into an ordinary warehouse. It may be that an ordinary warehouse would not buy bankrupt stock. The evidence here is that this bankrupt stock, mixed with goods that Gavin, Gibson, & Co. had in stock, could have been sold by them as their ordinary goods; and Mr. Pannell says that he bought goods from Gavin, Gibson, & Co. to sort up his stock. Further, he said, "Gavin, Gibson, & Co. had the goods which "would fit in with Toomer's stock and make it complete." This is the evidence of a witness called by the defendant, unconnected with the dispute, and the witness who had the best knowledge of the stock, for it is the evidence of Mr. Henry Pannell. It was argued that the provision of the deed of assignment from Mr. Toomer to Messrs. Tyree and Virtue gave Mr. Tyree permission to become a purchaser of Mr. Toomer's stock, and that the provision in this deed, as this deed was assented to by Gavin, Gibson, & Co., varied in this respect the duty that Mr. Tyree would have otherwise had towards his partner. The deed had this proviso: " Provided always, and it is here 66 by expressly declared and agreed, that any and every trustee "of these presents may, notwithstanding his position as trus"tee, bid or tender for and buy any of the lands, tenements, "and hereditaments, stock-in-trade, goods, debts, and effects subject to the trusts of these presents whenever any such "trust property is put up for sale by public auction or public tender, and any such sale shall not be impeached or im"peachable on the ground that the purchaser was a trustee of 'these presents." 66 The deed was signed by Mr. Alfred Tyree in the firm's name. Instead of this clause being evidence of a consent to allow Mr. Tyree to buy for himself, it seems to me to have been put in so that two of the large creditors, the Bank of New Zealand and Gavin, Gibson, & Co., might protect their own interests, and it was therefore put in so that Mr. Tyree might by a purchase protect the interests of Gavin, Gibson, & Co. The fact that he did not purport to tender in his own behalf, but got Mr. O'Brien to do so, and did not inform his partners, is evidence that he did C.A. 1900. GIBSON V. TYREE. C.A. 1900. GIBSON V. TYREE. not view this proviso in the deed in the same light as his counsel. It was further urged that, assuming that this sale of Toomer's stock to Pannell did compete with Gavin, Gibson, & Co.'s business, yet it was not Mr. Tyree's act that led to such competition. The fact that there were goods for sale is no excuse for Mr. Tyree's act. Suppose a cargo of leather and grindery was landed in Christchurch and had to be sold, that would not have permitted Mr. Tyree to start in competition with his partners in the leather and grindery business; and the fact that he was a trustee for sale of the Toomer estate did not permit him to buy and sell in competition with his firm. Nor do I assent to the contention that he could not have bought for the firm. I see nothing in the partnership articles, and, the way they have been interpreted by the firm -for bankrupt stocks had been purchased on various occasions to have prevented Mr. Tyree buying the goods he sold to Mr. Pannell for his firm. On these grounds I am of opinion that the plaintiffs' appeal should be allowed. WILLIAMS, J. :- I have arrived at the same conclusion as His Honour. Alfred Tyree was the managing partner in New Zealand of the firm of Gavin, Gibson, & Co. Messrs. Toomer Bros., who were debtors to the firm of Gavin, Gibson, & Co. in the sum of about £340, executed a deed of assignment for the benefit of their creditors. This deed was executed on behalf of Gavin, Gibson, & Co. by Mr. Tyree. Mr. Tyree was appointed by this deed one of the two trustees to whom the estate of Messrs Toomer was assigned. The deed gave the right to either of the trustees to purchase the assigned property. Mr. Tyree purchased the assigned estate on his own behalf through the agency of a third person, and his name was not disclosed as the purchaser. He resold, making a considerable profit. The question is whether he is liable to account for his profit to Mr. Frank Gibson, who at the time of the transaction was the only other partner with Mr. Tyree in the firm of |