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Gopi Vs. Kassa Mal - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Judge
Reported in(1887)ILR9All120
AppellantGopi
RespondentKassa Mal
Excerpt:
partnership - partners--accounting--suit by partner to recover from co-partner share of losses and advances. - cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees working in schools which are established and..........are to be taken periodically, and that these accounts are to form the basis of the profit and loss account between the partners themselves. that is all that was meant by this provision in the contract before us. again, mr. conlan contended that the words 'take the loss to the extent of my share from me' mean that kassa mal was to pay over in such circumstances that an action might be brought during the pendency of the partnership for any loss. i do not agree with this. i think the words mean this: one man was to provide the capital of the concern. by way of extra precaution he thought it should be made apparent that if the expenses exceeded the profits, he should not bear the whole loss, and when an ultimate settlement was arrived at these expenses should be taken into account. the.....
Judgment:

John Edge, Kt., C.J.

1. In this case the plaintiff, who is the widow of one Nanak Chand, sued the defendant in respect of certain alleged losses of a partnership concern, and to recover a moiety of moneys expended in advances made to indigo cultivators by Nanak Chand on behalf of the partnership. Now, it is only under exceptional circumstances that partners can bring such actions against their co-partners, except when the action is for a dissolution of partnership, in which case they may claim an account and payment over of moneys that may be found to be due to them on the account being taken. So far as I am aware, actions between partners, which involve the taking of partnership accounts prior to dissolution, are almost unheard of.

2. Our attention has been directed by Mr. Conlan to two oases, the first of which is Brown v. Tapscott, 6 M. and W., 179. I have not seen the report of that case, but it is cited in Lindley on Partnership, vol. ii., p. 913. In that case 'several persons agreed to share the profits arising from running a steamer between London and Ramsgate. One of them was to charter and have the management of the boat, and each agreed to pay (sic)10 per cent, on the amount of his subscription, and such further instalments, in proportion to their respective subscriptions, as might be necessary if the earnings of the boat were not sufficient to defray her expenses, which, in fact, they were not. The partner to whom the management of the boat was entrusted paid all the expenses incurred by running her, and sued one of his co-partners for the share which he ought to have contributed towards paying such expenses. The plaintiff obtained a verdict, and the Court refused to disturb it, although the Court was of opinion that the plaintiff and the defendant were partners: for it considered that an action would clearly lie on the promise by the defendant to contribute to a common fund for defraying the expenses of the boat.' In that case there was a specific agreement that if the earnings were not sufficient to cover the expenses, each partner should provide the necessary funds indefinite proportionate shares. Also there was appointed as manager a person who sued really; for money expended by him as the agent of his copartners. It was held that an action lay for breach of the promise to provide contributions. With regard to that case it is not necessary for me to say more than that, in my opinion, the principle of it does not apply to the present case. The suit there was for breach of an undertaking to provide definite funds for the carrying on of the partnership.

3. The second case referred to by Mr. Conlan was Helme v. Smith, 7 Bing. 709, where it was held that a part owner and managing owner of a ship, who, as ship's husband, had incurred the expense of the outfit of the ship for several voyages, could maintain an action against his co-owner for a proportionate contribution due to him in respect of the management of the vessel. I do not think that cases relating to the managing owners of a ship have any bearing on the question whether one partner is competent to sue another. The part owners of a ship are not, properly speaking, partners at all. They are partners only in the sense that they have certain undivided shares in a specific chattel. It may or may not be that they are partners quoad a particular adventure which the ship undertakes upon a particular voyage, and as such liable to the public. This would depend upon the facts in each case; but it has never been suggested, so far as I am aware, that a part owner, who is also the managing owner, could not maintain an action for contribution in respect of the money necessarily expended by him as such managing owner. He is the person appointed by the co-owners to have the management for the benefit of all concerned. Under these circumstances I am of opinion that the cases which I have referred to do not apply.

4. Mr. Conlan has asked us to put upon this contract a construction which, in my opinion, it does not bear. He says that the contract, dated the 4th July 1881, was one by which, so long as this business continued, there were to be definite partnerships between these persons only for the period ending at each November. In other words, that there was to be a partnership for one year certain--so far I agree with him--and at the end of that year another partnership ending at the next November, and again another ending at the November following. He has asked us to regard this action in this way, so as to avoid the difficulty he would have in contending that his client can bring this action for an account, and recover a share of the losses and expenses without asking for a dissolution, because his contention is that in each year there has been an actual dissolution of partnership. This appears to me to be a most violent construction to put upon the agreement, and one to which the agreement, upon the face of it, is diametrically opposed. It is true that it is provided that there is to be a contract of partnership for a year certain, but the contract was not to be determined at the end of the year unless the partners then wished to separate their shares; so that the partnership was only one which could be determined in any November upon the parties then agreeing to a dissolution. It comes to this, that the parties agree there shall be no dissolution before November year, and if in the future any dissolution is desired, it shall take place only in the November of the year.

5. I therefore place a different construction upon the contract from that contended for by Mr. Conlan. The learned Counsel then says, it is peculiar that under this contract his client should have to provide the whole of the working capital. The explanation of this appears to me to be that this property belonged to Kassa Mal, who was owner of the concern, whatever it was worth, and it was agreed that Nanak Chand should become a partner, and be entitled to a moiety of the assets at the time of starting the partnership. Then Mr. Conlan says the case is an exceptional one, because Nanak Chand was to have all the indigo and the management of the business. I think that this is not by any means an exceptional state of things, but one to be expected in cases where one partner has no interest except a share in the original plant; and that it is only natural that the man who is to provide the working capital should keep in his own hands the power of making the contracts out of which profit or loss to the concern may arise. This is what it was agreed Nanak Chand might do. Then Mr. Conlan argues that the words 'and take the loss to the extent of my share from me' amount to a covenant, on behalf of Kassa Mal, to pay at the periodical settlements his amount of the loss. I do not think that the words mean this. In the first place, I do not think that the part of the agreement providing for the taking of the account was intended to be read as providing for the taking of the accounts for the purpose of Kassa Mal paying up any losses which might then be ascertained. The stipulation is of a kind which is usual in partnership contracts, namely, that accounts are to be taken periodically, and that these accounts are to form the basis of the profit and loss account between the partners themselves. That is all that was meant by this provision in the contract before us. Again, Mr. Conlan contended that the words 'take the loss to the extent of my share from me' mean that Kassa Mal was to pay over in such circumstances that an action might be brought during the pendency of the partnership for any loss. I do not agree with this. I think the words mean this: One man was to provide the capital of the concern. By way of extra precaution he thought it should be made apparent that if the expenses exceeded the profits, he should not bear the whole loss, and when an ultimate settlement was arrived at these expenses should be taken into account. The provision only expresses what is implied in every partnership agreement, namely, that the partners must contribute to payment of the losses of the concern. I have never heard of an action being held maintainable between partners upon an implied agreement that the partners are to contribute to the losses where dissolution of partnership is not claimed.

6. Under these circumstances I am of opinion that the plaintiff is not entitled to an account, and therefore that this part of his claim must be dismissed and the appeal allowed.

7. There is one other observation I have to make regarding the claim as to the outstanding loans to cultivators. It appears to me that upon this point Mr. Conlan is in this difficulty. If he argues that these loans should be regarded as capital, then that is what his client agreed to provide, because Kassa Mal had no money with which to furnish capital as appears by the agreement. If he argues that they should be taken into the profit and loss account, it is obvious that there is no November in which there could be taken an account of profit and loss including them.

8. For these reasons I am of opinion that the action must be dismissed, and this appeal allowed with costs.

Brodhurst, J.

9. I concur.


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