PartnershipSecret profitCourt of Chancery (Rolls Court)

Bentley v Craven

(1853) 18 Beavan 75; 52 English Reports 2918532 min read
The case in brief30-second read
Facts
The parties carried on business together as sugar refiners. Craven, having particular skill in the sugar market, was employed by the firm as its buyer. He purchased quantities of sugar at low prices with his own money and on his own account.
Issue
Whether a partner who supplies goods to his own firm at a profit, without disclosing his interest as seller, is bound to account to the firm for that profit.
Held
He was bound to account. Having undertaken to buy for the firm, Craven placed himself in a position where his duty and his interest conflicted. The profit was made in the very line of business the firm carried on and out of a transaction with the firm itself. The firm was entitled to the benefit of his purchases at cost.
Principle
A partner who sells his own goods to the firm at a profit without disclosing that he is the seller must account to the firm for that profit. A partner cannot make a secret gain out of a dealing with his own firm.
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Facts

  • The parties carried on business together as sugar refiners.
  • Craven, having particular skill in the sugar market, was employed by the firm as its buyer.
  • He purchased quantities of sugar at low prices with his own money and on his own account.
  • He then sold that sugar to the firm at the current market price.
  • He did not disclose to his co-partners that he was himself the seller.
  • On discovery, the co-partners sought to recover the profit he had made.

Issue

  1. Whether a partner who supplies goods to his own firm at a profit, without disclosing his interest as seller, is bound to account to the firm for that profit.

Held

  • He was bound to account. Having undertaken to buy for the firm, Craven placed himself in a position where his duty and his interest conflicted. The profit was made in the very line of business the firm carried on and out of a transaction with the firm itself. The firm was entitled to the benefit of his purchases at cost.

Ratio decidendi

A partner is an agent of the firm and stands in a fiduciary relation to his co-partners. Where he is charged with acquiring goods for the firm, any advantage he obtains in that acquisition belongs to the firm. Non-disclosure is decisive: the firm never consented to his acting as vendor, so it never consented to his taking the margin.

Exam use

How to use it in an answer

  • Primary illustration of S.16(a) of the Indian Partnership Act 1932: a partner must account for any benefit derived from a transaction of the firm or from the use of the firm's property or business connection.
  • Reinforces S.9, the duty to be just and faithful and to render true accounts and full information.
  • Contrast with Aas v Benham 1891: there the venture lay outside the firm's business, so no duty to account arose. Here the dealing was with the firm and in its own trade.
  • Use the phrase "conflict of duty and interest" and note that disclosure plus consent would have cured the breach.

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Citation

Bentley v Craven (1853) 18 Beavan 75; 52 English Reports 29

Reported: (1853) 18 Beav 75; 52 ER 29; leading authority on a partner's secret profit in dealings with the firm; citation and bench checked against Indian Kanoon and reported sources, audit of 12 August 2026. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.