M'Kinlay v. Campbell

Subject_1 Accounting Subject_2 Joint-Adventure Subject_3 Profits Subject_4 Construction. Facts: B was the tenant of certain slate quarries for which he agreed to pay either a fixed rent or a royalty of half the free profits he might make on his works, manufacture, or trade under the lease, after deducting interest on capital advanced by him and generally all expenditure which he might be put to in carrying out the fair and reasonable purposes of his lease.

A entered into an agreement with B, by which B bound himself to pay to A “one-half of the tenant's share of profits under the lease,” under deduction of a fixed annual salary to B for management.

B kept a store at the quarry, in premises falling within the lease, at which he sold to his workmen at retail prices coal and fodder which he had purchased at wholesale prices. He did the same with dynamite, and also made a charge for sharpening the men's tools, it being a term of their contract of service with him that they were to defray these charges out of their own pockets. The amount due by each workman for these articles was in practice deducted from his wages.

During the currency of the lease B sent A yearly states of the working of the quarry, together with his half-share of the profits of the quarry (but not of the store), and A granted receipts therefor.

In an action raised by A against B for an account of his intromissions with the profits of the store, the proof disclosed that A had been aware that B was carrying on the store and making a profit, and that B had more than once pointedly called A's attention to the fact that the store was purely a private concern of his own, and that A had nothing to do with it.