Cunninghames v. Dougal

Desiring to engage in the Maryland tobacco trade, several merchants formed a partnership known as Alexander Cunninghame and Company. These merchants included Alexander Cunninghame, the firm’s managing partner, and James Dougal, the eventual pursuer in this case. After Cunninghame died in December of 1772, a dispute arose over the appropriate treatment of his shares under the partnership agreement. Cunninghame’s heirs (defenders Elizabeth and Barbara Cunninghame) sought to withdraw his shares based on the firm’s most recent balance, which had been completed in July of 1772. However, James Dougal claimed that the heirs were only entitled to any proceeds available after discharge of the firm’s debts. Two factual circumstances colored the parties’ arguments. First, one of the firm’s tobacco stores had been destroyed by fire in April of 1772, but the loss was not included in the July balance. Second, also in 1772, the firm’s factors in America purchased tobacco at a price that could not be recovered in the European market, resulting in a substantial loss. Case documents include correspondence between the firm’s Glasgow partners and its factors in America. (The firm continued under the management of Alexander’s brother William Cunninghame, and after assuming Robert Findlay as a new partner, took the name of Cunninghame Findlay and Company. It went on to became a significant player in the tobacco trade.)