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sum annually out of the proceeds of the underwriting business to the defendant; on further trust, but without prejudice to the defendant's annuity, to pay Sharp the younger an annuity of 500l., and after the continuance for two years of an accumulation of profits of the extent of 3,500l., an annuity of 7501., together with interest on the sum accumulated, and the proceeds and dividends of other the property assigned; on further trust, when the accumulation of profits should have arrived, and for two years continued, at 8,500l., to apply that accumulation to the emergencies of the underwriting business, and the repayment of the defendant of any monies he might have advanced under his guarantee of the 21st of May, 1857; on further trust for all the purposes of a family settlement, and to provide for the intended wife of Sharp the younger, and for his and her children. Previously to the date of the marriage, unless we assume, which there seems no ground for doing, the whole scheme to have been illusory and collusive from its inception, the defendant had no more to do with the carrying on, by himself or his agent, of the underwriting business than Cox or Wheatcroft, in the case of Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125), had in the carrying on of the business of the new firm of the Stanton Iron Company, for the benefit of the creditors of the old firm of Smith & Co. After the date of the marriage, the defendant had as much to do with the carrying on of the underwriting business as the trustees in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125) had in carrying on, by any agents they might employ, the business of the Stanton Iron Company, for the benefit of the creditors of Smith & Co. The business of the Stanton Iron Company, in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.S.) C.P. 125), was the business of the trustees, carried on by them, for objects with which the parties dealing with them had no concern; the trustees were therefore held liable for its debts. In this case the underwriting business had become the business of the defendant and John Donnison, and they, as I think, had become liable for its debts, not because they shared the profits, which one of them did not share, but because it was their business, carried on for them with their funds by Fenn as their agent, in the name of William Sharp the younger, at a salary to be paid to Fenn by himself out of their capital which he held, or out of the profits which he made for them. That the business was carried on in the name of William Sharp the younger, and partly by him, and probably for his ultimate benefit, is, as respects the liability of the defendant, a circumstance wholly immaterial; the material and governing circumstance is, that the business, which before the marriage was carried on by Fenn as agent for William Sharp the younger, he being the owner of all the monies, earnings, profits and emoluments derived from it, was after the marriage carried on by Fenn as agent for and on behalf of the defendant and John Donnison, to whom, by the marriage settlement, all the monies belonging to the business in Fenn's hands, and all the earnings, profits and emoluments of it thereafter to come into his hands, and all the benefit of antecedent arrangements between the defendant Fenn and William Sharp the younger were assigned. The mode of conducting the business and the relation between Fenn who, in fact, conducted it, and William Sharp the younger, were in other respects much changed after his marriage. Before his marriage William Sharp the younger had, or, if he had not (as to which some doubt may arise on the terms of the case), was entitled, under his agreement with Fenn of the 17th of March, 1857, to have an account with a banker, into which the premiums and other monies received by Fenn in respect of the underwriting business were to be paid, William Sharp the younger supplying Fenn with the necessary funds to make all payments and advances in respect thereof. After his marriage William Sharp the younger kept no banking account, Fenn giving him cheques from time to time for the sums which he was allowed to draw i. e., which were drawn for his purposes out of the business, such cheques being paid by Sharp the younger into the defendant's banking account with Messrs. Hankey, on whom the defendant permitted William

Sharp the younger to draw cheques until November, 1859, when the defendant put a stop to his son's drawing cheques. Before the marriage, under the agreement of the 17th of March, 1857, the salary of Fenn was to be paid by Sharp the younger, who alone, under that agreement, was liable to Fenn for it. After the marriage Fenn drew his salary out of the funds of the underwriting business with the sanction and authority of the defendant and Donnison, to whom those funds had been assigned, and to whom Fenn was accountable for them. Add these facts to the fact of the original restriction, which was never relaxed, upon Sharp the younger's taking any risk without the consent of Fenn, and to the fact that Fenn, who before the marriage settlement had held all the monies, earnings, profits and emoluments of the underwriting business which came to his hands as agent for Sharp the younger, held them after the marriage settlement for the trustees of it, and the absolute nullity of Sharp the younger as a principal, though held out as such in the carrying on of the business from the date of his marriage and at the date of the policy sued on will be manifest. His position as between him, the defendant and Fenn was little better than that of an under clerk whose part it was to pretend to be a principal at Lloyd's, and underwrite such policies as Fenn told him to underwrite. We must look at the substance of the new arrangement, and it seems to me impossible, though there was no formal attornment to dispute, that a man who, holding as manager of the business and agent for the owner of it the funds of the business, consents under an arrangement to which the owner of the business is a party to continue to manage the business and to hold the funds of the business in his hands, and which may thereafter come into his hands for a third person as the assignee of the former owner of them, and to take his salary for the future out of those funds, becomes the agent of such third person. There is nothing in the statement before us which renders it necessary, if we affirm the judgment of the Court of Common Pleas, to impute any greater blame to the defendant than the blame which may be thought, under such circumstances to attach to the fact of his defending this action. He had entered into an honourable engagement with the Committee at Lloyd's to supply his son with funds, to meet any losses he might sustain, to the extent of 5,000l., with a promise that he would never let his son stand in want of further aid, if needed; and up to the date of his son's bankruptcy he does not appear to have departed from the spirit and intention of that engagement. If he did not revoke it when the marriage settlement was executed, or give notice to the Committee at Lloyd's of the new arrangement then made, it may be fairly taken to have been because he intended at that time to assume the entire responsibility of the business. He has probably, since his son's bankruptcy, been induced to hope that because the defendants in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125), though they shared in an indirect and exceptional way (as the only means open to them of mitigating a loss already sustained) the profits of the Stanton Iron Company " were held not liable for its debts-the defendant here, though he shared under a voluntary and express agreement to share, and in the plain and ordinary sense of sharing, and with the advantage of an absolute preference and priority, the profits of the underwriting business, might also escape liability. His advisers have not adverted to the fact that the defendants in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125) did not, and that he, the defendant, in this case did, through an agent appointed and paid by him, carry on the business out of the profits which he shared, and which in a very probable state of things, he was entitled to engross when made. In the course of the argument much, as it seems to me, of undeserved disparagement was bestowed upon the case of Waugh v. Carver (2 H. Black. 235) and other cases, decided by learned Judges of the highest authority, in which persons shewn to have been participators in the profits of a business, have, in the absence of countervailing evidence, on account of the great improbability that they to whom a business does not belong should be allowed, by those who have the active

management of it, to take its profits, been held liable for its losses. The judgment of the House of Lords in the case of Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.S.) C.P. 125) was treated as an unexpected manifestation of a concealed or forgotten principle, at length happily discovered and invoked for the correction of an obstinate error. But in the cases which have been thus decried, the doctrine in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125), that the law of partnership is but a branch of the law of principal and agent, does not appear to have been overlooked, nor, as is well explained in that case by Lord Cranworth, has a participation of profits, in determining the question of partnership liability as respects third parties, ever been relied upon except for the purpose of assisting in the inquiry, whether the person benefiting by the profits of a business was, in truth, though not ostensibly, a principal, on whose behalf, by an agent, it was carried on. That the defendant, after his son's marriage, did, in his son's name carry on the underwriting business is, I think, the right inference to be drawn from the facts before us. In this view of them, the case of Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.s.) C.P. 125), expressly recognized as sound by the Court of Common Pleas in the judgment appealed against, is in favour of the plaintiffs, and that judgment ought, in my opinion, to be affirmed.

PIGOTT, B.-This case comes before the court of error by way of appeal from the judgment of the Court of Common Pleas; and the question raised by it is, whether the defendant is liable on a policy as a partner with his son, in whose name it was underwritten for 100l. The facts are stated, and the Court is at liberty to draw any reasonable inferences from them. The effect of them seems to be as follows: On the 17th of March, 1857, the defendant, through Fenn, an underwriter, got his son admitted as a member at Lloyds', upon a promise made to Fenn, to place at Fenn's disposal 5,000l., and further aid, if necessary. In May in the same year there was an agreement made between Sharp junior and Fenn as to the mode of carrying on the business. It contained ten heads of agreement, the material effect being that policies were to be subscribed in the name of Sharp junior, but the entire business was to be transacted by Fenn at his counting-house in the same way, and to the same extent only, as he acts on his own account. For these services Fenn was to be paid 300l. a year, and Sharp junior stipulated that no risk was to be taken by him without the consent of Fenn. In May, 1857, three letters passed between Lloyd's Committee, Fenn and Sharp senior. They shew that Lloyd's Committee were anxious to be assured that Sharp junior really had the 5,000l. Thereupon the defendant agreed with Fenn "to hold" that sum for his son, as freely available for his underwriting account"; and Fenn informed the Committee that he had the 5,000l. for the use of the son, with a further assurance of more funds, if necessary." And in November, 1858, it was agreed by Fenn and Sharp junior to extend the business by "writing double." "In consequence of this arrangement (it is said) Sharp junior wrote to Sharp senior (the defendant) a letter, dated the 1st of January, 1859, agreeing, in consideration of his guarantie of 5,000l., to pay him an annuity of 5001. (with a possible increase at the end of three years in case the business proved profitable to an extent mentioned), and stating, in conclusion, that in no case is Sharp senior to be considered a partner. On the 2nd of July, 1859, there was a further agreement between Sharp junior and Fenn, whereby Fenn's agency was to be continued till December, 1870, with power reserved to Sharp junior to put an end to it after December, 1864, by six months' notice. In August, 1859, on the marriage of Sharp junior, there was a deed of settlement executed, of which the defendant and John Donnison were made trustees. It recites the before-named agreement, and provides that "all the earnings, profits and emoluments now in Fenn's hands, or which should thereafter come into them, are thereby assigned to the trustees; a power of attorney to them to sue and give discharges for the same being added.” And Sharp junior thereby also directs and orders Fenn and other his agents

for the time being in the business to pay all the monies, earnings and profits to the trustees. The trusts are, first, to pay Sharp senior's annuity under the agreement of the 1st of January, 1859, and next to pay Sharp junior an annuity of 500l.; then to invest the profits till they amount to 3,500l., and remain at that for two years; then to pay Sharp junior 7501. instead of 5001. per annum; and, further, to accumulate the profits till they amount to 8,500l., and remain at that amount for two years; then to re-assign the profits to Sharp junior. There is also a power to pay off the 5,000l., with further trusts for the benefit of Sharp junior's family. Sharp junior covenants also with the trustees, in case Fenn should die, to appoint immediately another competent person to act in the same capacity; after this Fenn continued to act as agent in carrying on the business. Sharp junior had no banker; Fenn, in fact, received and paid, all monies, giving Sharp junior cheques from time to time, which were taken by him, and paid into the defendant's banking account at Messrs. Hankey & Co.'s, defendant allowing him to draw cheques on his bankers till November, 1859, when he put a stop to his son's power of drawing cheques. On the 22nd of December, 1859, the plaintiffs' policy was underwritten by Fenn's clerk in Sharp junior's name, and in February, 1860, he stopped payment. The case does not state whether any part of the guaranteed 5,000l. still remains in the hands of Sharp senior.

Upon these facts, we are asked if the defendant is liable on this policy as a partner with his son. The principle of law applicable to the case is stated in Cox v. Hickman (8 H.L. Cas. 268; s. c. 30 Law J. Rep. (N.S.) C.P. 125), in the very clear judgment of Lord Cranworth, thus: "The real ground of liability (as a partner) is, that the trade has been carried on by persons acting on his behalf (that is, of the person sought to be made liable), so that he would stand in the relation of principal towards the persons acting ostensibly as the traders, by whom the liabilities have been incurred, and under whose management the profits have been made." Now, applying the exposition of the law of partnership to the facts of the present case, I find that the contract in question is made by Fenn in Sharp junior's name; and the question therefore is, whose agent was Fenn; or, in other words, although apparently acting for Sharp junior alone, was he really acting for both the Sharps? Now, the facts shew that the machinery was originally designed by Sharp senior; that he set Fenn in motion to treat with Lloyd's Committee for the son's admission there; that he found the whole capital, and was to provide more if necessary; that he tied up the actions of Sharp junior by the agreement between himself and Fenn, so that the son might be truly said to be in leading-strings as regards any management of the business. So far the defendant had planned only the future conduct of the business. But then in the course of it we find that he is actively taking some, though it may be a slight, part. For instance, it would be necessary that application should be from time to time made to him, as capital was wanted by Fenn. He would have to satisfy himself of the necessity of these advances, and to make them. Then, as he is expressly to receive all the proceeds under the settlement, and did so, in fact, at his bankers' from the commencement, this would necessarily involve him to some extent in the accounts of the business. But beyond this it is clear to my mind that the effect of the indefinite promise to give further aid beyond the 5,000l. would be to keep in his own power a large control over the business and the agent; for, having regard to the large profits which were calculated upon in the settlement, it is manifest that further capital would be required, and the defendant's promise of further aid, being of the very vaguest kind, would be of no real binding obligation in law. When, therefore, further capital was wanted, it would rest with the defendant to advance it or stop the business. But beyond all these facts the defendant, by the marriage. settlement, is the first (after deducting the agent's salary) to be paid out of the profits, and by possibility might engross them all. Now this, though alone not the perfect test of partnership, yet it is still to be taken into consideration as one circumstance with others; and in Lord Cranworth's judgment he says

on this subject, "A right to participate in profits affords cogent, often conclusive, evidence that the trade in which the profits have been made was carried on in part for and on behalf of the person setting up such a claim. What, then, is the fair inference to draw from the foregoing facts? I think it is clearly that the defendant is not a mere mortgagee of the profits, but a large sharer in them, with a control over the business, and, as I think, having a further interest, that he had, in fact, a twofold interest, one consisting in the capital embarked and the return of 10l. (and possibly more) per cent. thereon; the other the object of advancing his son by establishing a business as underwriter, ultimately for the son's benefit, without incurring in course of doing so a risk of loss through his son's inexperience. Further, it seems to me that the son's position throughout points to the same conclusion. For if the defendant is not a partner, it follows that the son is the only principal, a supposition very difficult to reconcile with the following facts, viz., he would be a sole principal yet not intrusted with either possession or disposition of a shilling of the entire capital of his business. Then, even assuming that he had nominated the agent Fenn, he is bound to him for a long term of years without the power of displacing him. He contracts with his own agent that he will not incur a risk in his own business without that agent's consent, a term evidently imposed upon him by his father, it not being for the benefit of the other contracting party. The result of the whole seems to me to be that by a circuitous mode Fenn has been placed by the defendant in a position to carry on this business with an intention on the defendant's part, doubtless, to allow his son to participate in the profits of it for a term, and ultimately, when established, and himself repaid, then for the benefit of his son altogether. I do not in coming to this conclusion find it necessary to impute fraud to the defendant. The utmost to be urged against him is, that he has endeavoured (if the law will permit it) to carry on a business without making himself responsible for its losses as a partner. But (invoking again the language of Lord Cranworth) this is no reason for holding him not to be liable, if on strict principles of mercantile law he is so." The difficulty mainly consists in the nature of the business and the form in which the question is presented to the Court. But on the whole it seems to be only a proper use of the power of drawing reasonable inferences to say, as a matter of fact, that this business does appear to have been carried on on behalf of both the defendant and Sharp junior, and consequently that there is a partnership, with all the ordinary consequences of that relationship. I therefore think that the judgment of the Court of Common Pleas should be affirmed.

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BLACKBURN, J.-This was an action on a policy of insurance against the defendant as underwriter. The policy was actually underwritten in the name of the defendant's son. The question in the cause is, whether the defendant was a partner in the underwriting business carried on in his son's name, so as to make him liable to third persons on contracts made in the course of that business. On the trial a verdict was taken by consent for the plaintiffs, subject to a special case, as part of which it was agreed that the Court might draw any reasonable inferences of fact. The Court below have determined the question in favour of the plaintiffs. The case is brought before the Court of Exchequer Chamber under the 32nd section of the Common Law Procedure Act, 1854, by which this Court is required to give the same judgment as ought to have been given in the Court below, and to draw any inferences of fact which the Court below ought to have drawn. And in the fulfilment of this duty I have come to the conclusion that the judgment below ought to be reversed, as I think that the defendant is not shewn to have been a partner in the business carried on in his son's name. The case of Cox v. Hickman (8 H.L. Cas. 268; c. c. 30 Law J. Rep. (N.s.) C.P. 125), being a decision of the House of Lords, the ultimate Court of appeal, overrules all earlier authorities inconsistent with that decision, and so far as the judgment goes fixes the law in this country. We are not bound by all that is said in the course of a judgment of the House of Lords, but that which appears to