Huffman v. Ross

Huffman v. Ross

In the absence of notice to a third party of a partner's retirement, the retired partner remains liable for firm obligations incurred by third parties who reasonably relied on the apparent partnership; the retiring partner bears the burden of proving he gave notice or that circumstances imparted knowledge of retirement; because no finding of notice was made, the appeal was allowed and a new trial ordered.

Citation
[1926] SCR 5
Parties
Plaintiff Appellant: C. L. Huffman; Defendant Respondent: G. H. Ross
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
10 December 1925
Procedural Posture
Contract (partnership) / Appeal to Supreme Court of Canada From Appellate Division of Ontario
Outcome
Appeal allowed; judgment of the Appellate Division reversed; new trial ordered.
Legal Topics
Retirement of Partner, Notice to Third Parties, Liability of Retired Partner, Burden of Proof, Partnership Act S.37
Source Language
English
Contract Partnership Bankruptcy Retirement of Partner Notice to Third Parties Liability of Retired Partner Burden of Proof Partnership Act S.37

Case Brief

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Parties

C. L. Huffman

Plaintiff Appellant

G. H. Ross

Defendant Respondent

Procedural Posture

Contract (partnership) / Appeal to Supreme Court of Canada From Appellate Division of Ontario

Legal Issues

  1. 1 Whether a retired partner is liable to persons who dealt with the firm after retirement without notice
  2. 2 Whether the onus of proving lack of knowledge of retirement rests on the plaintiff or on the retiring partner to prove notice
  3. 3 Whether presenting a claim in the bankruptcy of the firm constituted an election to forego claims against the retired partner

Ratio Decidendi

In the absence of notice to a third party of a partner's retirement, the retired partner remains liable for firm obligations incurred by third parties who reasonably relied on the apparent partnership; the retiring partner bears the burden of proving he gave notice or that circumstances imparted knowledge of retirement; because no finding of notice was made, the appeal was allowed and a new trial ordered.

Court Disposition

Appeal allowed; judgment of the Appellate Division reversed; new trial ordered.

Orders

  • Judgment of the Appellate Division reversed
  • New trial ordered