Toothe v. Kittredge, (1895) 24 SCR 287

Supreme Court of Canada

Toothe v. Kittredge, (1895) 24 S.C.R. 287

Date: 1895-03-11

R.M.C. Toothe (Plaintiff) Appellant;

and

A.H. Kittredge (Defendant) Respondent.

1894: October 24; 1895: March 11.

Present: Sir Henry Strong C.J., and Taschereau, Gwynne, Sedgewick and King JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Statute of Limitations—Partnership dealings—Laches and acquiescence—Interest in partnership lands.

A judgment creditor of J. applied for an order for sale of the latter’s interest in certain lands the legal title to which was in K. a brother-in-law and former partner of J. An order was made for a reference to ascertain J.’s interest in the lands and to take an account of the dealings between J. and K. In the master’s office K. claimed that in the course of the partnership business he signed notes which J. indorsed and caused to be discounted but had charged against him, K., a much larger rate of interest thereon than he had paid and he claimed a large sum to be due him from J. for such overcharge. The master held that as these transactions had taken place nearly twenty years before K. was precluded by the Statute of Limitations and by laches and acquiescence from setting up such claim. His report was overruled by the Divisional Court and Court of Appeal on the ground that the matter being one between partners and the partnership affairs never having been formally wound up the statute did not apply.

Held, reversing the decision of the Court of Appeal and restoring the master’s report, that K’s claim could not be entertained; that there was, if not absolute evidence at least a presumption of acquiescence from the long delay; and that such presumption should not be rebutted by the evidence of the two partners considering their relationship and the apparent concert between them.

APPEAL from a decision of the Court of Appeal for Ontario affirming the judgment of the Divisional Court by which the master’s report in favour of the plaintiff was set aside.

[Page 288]

The facts of the case sufficiently appear from the above head-note and the judgment of the court.

Gibbons Q C. for appellant.

Fraser for respondent.

The judgment of the court was delivered by:

THE CHIEF JUSTICE.—I am of opinion that the master’s report should have been confirmed.

The plaintiff is a judgment creditor of Johnston. Johnston and Kittredge were in partnership some twenty years ago. The partnership business was never formally wound up, but it was so substantially, and this was done as far back as 1883. All debts were paid in equal proportions by the partners, and there are no assets except three judgments against one Crawford, and some lands in the village of Wiarton and township of St. Vincent. To enforce payment out of Johnston’s interest in these lands the appellant has taken the present proceedings. In these lands Johnston and Kittredge are interested in equal moieties. The property is still subject to an old mortgage on which $2,000 remains due, which is to be paid by Kittredge, Johnston having paid his share.

Johnston and Kittredge are brothers-in-law. They were in partnership in a land, oil and general speculation business in Strathroy. They had no capital. Funds were raised by means of discounts through Johnston, who was himself carrying on a banking business in Strathroy; he indorsed Kittredge’s notes and procured them to be discounted in some of the banks at Strathroy. Johnston kept the books. Now Kittredge brings forward a claim against Johnston’s interest in these lands, first raised after the lapse of some twenty years, that he was defrauded by Johnston who charged him in the partnership accounts more for

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discount than he really paid to the banks; that whilst in fact Johnston only paid 7 per cent discount he charged 10 or 12 per cent, contrary to agreement and in fraud of his partner. Kittredge had access to the books (see the evidence of Cuddy) and it must be assumed he inspected them before they finally settled the business by paying the debts in equal shares and agreeing to a division of what assets remained.

I do not think this claim ought now to be entertained. There is evidence of acquiescence, at all events a presumption of acquiescence, from the long delay. Should we consider that presumption sufficiently rebutted, especially considering the relationship and apparent concert between the parties, by the evidence of the defendant Johnston himself, who thus seeks to defeat the claim of his brother-in-law’s creditors, and by that of Kittredge who is giving evidence for himself? I think not. I refer again to Cuddy’s evidence as disclosing circumstances which strengthen the presumption from lapse of time.

The witnesses were examined before the master but he never adjudicated as to the credit due to them, the report being founded on acquiescence and the statute of limitations. The evidence, in the absence of any finding by the master, is in my judgment wholly insufficient to establish such a claim as that which Kittredge has propounded and which therefore for that reason alone fails.

I entertain a strong opinion that the master was right as to the acquiescence, and also as to the statute of limitations^[1], and that his report should be restored.

There is no necessity for taking the partnership accounts; the evidence shows these were long since settled by the mutual arrangement of the parties.

[Page 290]

I am of opinion that we should allow the appeal, discharge the order of the Court of Appeal, and restore and confirm the master’s report with costs to the appellant in this court and in both the courts below.

Appeal allowed with costs.

Solicitors for appellant: Gibbons, McNab & Mulkern.

Solicitors for respondent: Fraser & Fraser.