Marquard & Co v Biccard and Another

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA and Juta JA
• Judgment Date: 03 May 1921
• Citation: 1921 AD 366
• Hearing Date: 17 March 1921
• Court: Appellate Division

Solomon, J.A.:

In 1916 the plaintiffs were and had been for some years in the employ of the firm of J. D. Marquard & Co. as travellers. The members of the firm were the two defendants and W. W. D. Marquard, who was the senior partner. In August of that year the plaintiffs received an offer of considerably more lucrative employment from another firm of merchants in Cape Town. Their inclination was straightway to accept it, but before doing so they saw the defendant Gert Biccard and informed him of the offer that had been made to them. As he was very anxious to retain their services he tried to dissuade them from leaving the firm, and promised them that, if they would remain in its service, he would try to induce the senior partner to retire, and that in that event they would be taken in as partners. Upon that understanding the plaintiffs decided to remain, and refused the offer which had been made to them. At this time the defendant Melford Marquard was out of the country on active service and did not return till January, 1917. Immediately upon his return he was informed by Gert Biccard of the promise that had been made to the plaintiffs. He was at first opposed to taking them in as partners, but eventually he withdrew his opposition. It was not, however, until May, 1917, that Gert Biccard approached the senior partner with the suggestion that he should retire from the

Solomon, J.A.

business. He did not at all respond to the suggestion at first, but later he was induced to give his consent. At the same time he objected to the plaintiffs being taken into partnership at present, and, as he was leaving a considerable amount of money in the business, his wishes in the matter had to be considered. Eventually it was agreed between him and the defendants, and this was subsequently embodied in clause 7 (c) of the deed of dissolution, dated 23rd July, 1917, that "no new partner shall be introduced into the business without the written consent and approval of the said W. W.D. Marquard or his executors, and no application for the introduction of a new partner shall be made until the expiration of three years from the 1st July, 1917, and even then such an application shall not be made unless the person whom it is desired to introduce shall be in a position to pay a sum of not less than £2,500 into the business as capital."

Thus far there is no dispute between the parties as to the facts, hut from this point there is a distinct conflict of evidence between them. The plaintiffs' case is that when Gert Biccard communicated to them the conditions upon which W. W. D. Marquard was prepared to retire from the business they were by no means satisfied, as they had expected that they would be taken into partnership immediately upon his retirement. A long interview then took place on the 5th June, 1917, between the two Biccards, plaintiff and defendant, and the evidence of the former is that on that occasion a definite agreement was arrived at between them as set forth in paragraph 3 of the declaration, which is to the following effect: "that the plaintiffs should become and be admitted as partners in the firm to the extent of a one-fifth interest to take effect from the 30th June, 1920, as a date three years from the retirement of W. W. D. Marquard, provided that on or about 30th June, 1920:-

(1) plaintiffs should each possess £2,500 as and for his share of capital in the firm's business,

(2) plaintiffs should apply in writing for admission as such partners and the said W. W. D. Marquard should consent thereto."

It is moreover alleged that the defendant Biccard also guaranteed that, should the said W. W. D. Marquard refuse to give his consent, the defendants would pay out to him the amount of capital and interest due to him, so that his consent would no longer be necessary. In entering into this agreement the plaintiff Biccard, it is said, was acting not only for himself but also as agent for

Solomon, J.A.

the plaintiff Ensor, and that on the following day they both met the defendant Biccard and the terms of the arrangement were again discussed and definitely settled between them. Inasmuch, however, as this agreement was not to take effect before the 30th June, 1920, the plaintiffs say that a further arrangement was arrived at between them as to the terms upon which they were to continue in the service of the firm, which were subsequently embodied in a written contract of the 26th September, 1917, the whole object of which was to tide over the period of three years during which no application from them for admission into the partnership could be entertained. Under this agreement the plaintiffs were to continue to draw salaries of £50 per month, and in addition, if at the end of the year it was found that one-fifth of the net profits of the business exceeded the sum of £600, they were to be credited in the books of the firm with such excess. In the result, therefore, they say that though they had to wait for three years before being actually admitted into the firm they were in as good a position during the interval as if they had been partners throughout. The plaintiffs' case in this action is based upon these two agreements, the verbal one of...