SortMyLawSchool | Header Banner
SortMyLawSchool | Header Banner
  1. Home
  2. / Subject
  3. /Partnership

TRIMBLE V. GOLDBERG (1906) AC 494 (PC)


TRIMBLE V. GOLDBERG (1906) AC 494 (PC)

FACTS

  • Goldberg, Trimble, and Bennett formed a partnership on February 10, 1902, with the objective of purchasing and reselling properties owned by Hollard, including 5,500 shares in the Sigma Building Syndicate.They decided that profits and losses would be shared equally among the partners.
  • Trimble with Bennett's involvement purchased the stands on Government Square for £110,000 without informing Goldberg.
  • Goldberg later learned of Trimble and Bennett's independent purchase and filed a lawsuit in June 1904, claiming entitlement to a share of the benefits from the purchase.
  • While Goldberg's claim that Trimble was mandated to purchase the stands on the partnership's behalf was dismissed, the Court of Appeal upheld Goldberg's right to share in the benefits of Trimble and Bennett's independent purchase based on general partnership principles. 

ISSUE

  • Whether the Plaintiff/Respondent is entitled to share in the profits made by the Appellants.

JUDGEMENT

  • The purchase was held “not within the scope of the partnership” despite the fact that the Appellant got to know about it while doing partnership business or that it was a similar transaction as that of the partnership.

LEGAL ANALYSIS

  • The purchase was not within the scope of the partnership. The subject of the purchase was not part of the business of the partnership, or an undertaking in rivalry with the partnership, or indeed connected with it in any proper sense
  • A claim to share in the profits of the forbidden purchase would not have been warranted.
  • Lord Blackburn in one of the earlier cases observed that it is advisable in a partnership as a matter of prudence and on other grounds that all matters be above board. But in the present case, there was no legal duty on Trimble or Bennet to tell Goldberg what they were doing unless he had a right to take part in the speculation if he chose to do so.
  • In Cassels v. Stewart, Reid sold his interest in the partnership to Stewart without informing Cassels, breaching the partnership agreement. The court dismissed Cassels' appeal, finding no proof of a mandate for the purchase and holding that Stewart's secret acquisition of benefits violated good faith.
  • Lordships cannot stand with the decision in Cassels v. Stewart as there was at least close connection between the partnership and the partner’s purchase.

COMMENTARIES RATIO

  • The rule enunciated in the sub-section will not, however, apply to the case of a personal transaction of a partner which is not within the scope of partnership, and is not shown to be in rivalry with or in any way injurious to the business of the firm.