Wood v. Gauld

Wood v. Gauld

Interpreting the partnership articles as a whole, where intention is shown the surviving partner has the right to acquire the deceased partner's interest; the value of that interest is to be determined by ordinary valuation of the partnership assets (not simply by reference to a prior annual balance sheet), and...

Source-derived case information.

Citation
(1916) 53 SCR 51
Parties
Appellant: William A. Wood; Respondents: John Gordon Gauld and Others; Interested Party: Estate of William Vallance
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
21 February 1916
Procedural Posture
Appeal / Supreme Court of Canada on Appeal From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal allowed in part; judgment of the Appellate Division reversed in part.
Legal Topics
Dissolution of Partnership, Survivor's Right to Purchase Deceased Partner's Interest, Goodwill as Asset, Valuation of Partnership Assets, Effect of Annual Balance Sheet, Arbitration Clause
Source Language
english
Contract Partnership Dissolution of Partnership Survivor's Right to Purchase Deceased Partner's Interest Goodwill as Asset Valuation of Partnership Assets Effect of Annual Balance Sheet Arbitration Clause

Source-derived case record

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Parties

William A. Wood

Appellant

John Gordon Gauld and Others

Respondents

Estate of William Vallance

Interested Party

Procedural Posture

Appeal / Supreme Court of Canada on Appeal From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether the surviving partner had a right (or option) to take over/purchase the deceased partner's interest under the partnership articles
  2. 2 Whether goodwill of the business is an asset to be included in valuing the deceased partner's interest
  3. 3 Whether the value is fixed by the prior annual balance sheet (31 Jan 1913) or determined by valuation at the end of the financial year following death

Ratio Decidendi

Interpreting the partnership articles as a whole, where intention is shown the surviving partner has the right to acquire the deceased partner's interest; the value of that interest is to be determined by ordinary valuation of the partnership assets (not simply by reference to a prior annual balance sheet), and goodwill is to be included as part of the assets for that valuation, subject to arbitration where the articles provide.

Court Disposition

Appeal allowed in part; judgment of the Appellate Division reversed in part.

Orders

  • Appeal allowed in part.
  • Judgment of the Appellate Division of the Supreme Court of Ontario reversed in part.