Garner v Murray: a case of misunderstanding

Houghton, Keith
December 1983
Accountancy;Dec1983, Vol. 94 Issue 1084, p86
Trade Publication
The article looks how the ruling on the dissolution of partnership case Garner versus Murray has been misunderstood by accountants for more than 70 years. The case concerned three partners: Garner, Murray and Wilkins. In 1900, the three agreed to form a partnership to trade as cloth merchants. They agreed to make certain capital contributions, however, it seems that not all amounts were paid. They made no specific as to how profits were to be shared, therefore, s 44 of the English Partnership Act 1890 required them to share profits equally. After only a few months of trading, Garner became dissatisfied and wanted to cease operations and dissolve the partnership. He took a legal action to do and this was not defended by either Murray or Wilkins. The firm was dissolved at June 30, 1990 and Murray and Wilkins were ordered to pay Garner a total £2,600. Murray challenged this order. There followed a series of claims and counter-claims. The exact financial circumstances of the partnership become difficult to follow among these various allegations. Using the data from original case it has been demonstrated that accountants have misapplied the case by excluding the uncollectable debt of an insolvent partner from the deficiency of the assets and including it in the ultimate deficit.


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