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S. Varada Chettiar Vs. P. Duraiswami Mudaliar - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1936Mad673
AppellantS. Varada Chettiar
RespondentP. Duraiswami Mudaliar
Cases ReferredFrench v. Styring
Excerpt:
- - 400, in my opinion clearly were payments towards the capital of the partnership which both the partners were liable to pay under the agreement......and then run it in partnership for a profit to themselves. therefore, the view taken by the full bench with regard to this question was correct, but that does not end the matter because there still may be a remedy which the plaintiff is entitled to pursue in the court of small causes nevertheless. i was referred to one english casein french v. styring (1857) 140 er 455. the facts of that case were as follows : a and b being joint owners of a race horse, it was agreed between them that a should keep and train and have the general management of the horse, conveying him to and entering him for the different races : that 35 sh. per week, should be allowed for his keep; and that the expenses of keep, etc., should be borne jointly by a and b and the horse's winnings be equally divided.....
Judgment:
ORDER

Beasley, C.J.

1. This was a suit by the petitioner in the Court of Small Causes claiming an amount of money from the respondent in the following circumstances: It is alleged in the plaint that on 1st June 1931 it was agreed orally at Madras between the plaintiff and the defendant that each of them should contribute the sum of Rs. 700 and purchase a motor bus under the hire purchase system and also run it between Madras and Periapalayam or such other places as might be agreed to from time to time, the necessary permits, licenses, etc., being obtained in the name of the defendant. It was further agreed that the monthly net profits realised by such plying were to be shared by the plaintiff and the defendant in equal shares. In pursuance of this agreement the plaintiff paid Rs. 305 towards the purchase of the motor bus in question. The plaintiff's case was that half of this sum, namely Rs. 152-8-0, represented his contribution towards the capital of the partnership, and the other Rs. 152-8-0 the defendant's contribution towards his share of the capital; in other words, the plaintiff advanced to the defendant his share in the capital of the partnership in this initial payment. Subsequently a further payment of Rs. 400 was made to the defendant and the plaintiff's case was that the defendant did not utilise it for the purpose of the partnership, but utilised it for his own purposes. The defendant denied the agreement as to the shares to be contributed, and set up the case that the plaintiff was to contribute the whole of the capital.

2. The learned trial Judge, after taking evidence, accepted the plaintiff's version with regard to this argument and disbelieved the defendant's and his finding of fact must be accepted. He gave a decree to the plaintiff for Rs. 726 with costs. It is not necessary for me to go into the details of that amount. The case then went up on a New Trial Application to the Full Bench of that Court which held that there was a partnership, that the plaintiff's remedy was by a partnership actions claiming dissolution of partnership and accounts and that accordingly the Small Cause Court had no jurisdiction to entertain any such claim. The Full Bench ordered the plaint to be returned to the plaintiff for presentation to the proper Court having jurisdiction. Before me it was argued for the petitioner that the partnership was only to commence after the motor bus had been purchased and when it commenced to ply for hire, and that up to that time the agreement was merely an agreement for co ownership, that is to say, an agreement to become the co-owners of the motor bus, and subsequently having become the co owners of it to run it for hire. No doubt there is plenty of authority in support of such an. argument, but each case must be dependent upon its own facts. The most important question of all is what is the effect of the agreement alleged. In my view it was from the start an agreement of partnership. It was a co-adventure between the plaintiff and the defendant. They were to be partners in this concern. They were in partnership to buy the motor bus and then run it in partnership for a profit to themselves. Therefore, the view taken by the Full Bench with regard to this question was correct, but that does not end the matter because there still may be a remedy which the plaintiff is entitled to pursue in the Court of Small Causes nevertheless. I was referred to one English casein French v. Styring (1857) 140 ER 455. The facts of that case were as follows : A and B being joint owners of a race horse, it was agreed between them that A should keep and train and have the general management of the horse, conveying him to and entering him for the different races : that 35 sh. per week, should be allowed for his keep; and that the expenses of keep, etc., should be borne jointly by A and B and the horse's winnings be equally divided between them. A having paid all the expenses of the keep and management of the horse, and there being no winnings to divide, it was held that, even assuming that this agreement constituted a partnership between A and B (which the Court, dissenti-ate Cockburn, J., thought it did not) A was entitled to recover from B a moiety of the disbursements made by him on account of the horse as being in the nature of an advance of capital for B. I regard this case as a case very strongly supporting the alternative argument presented to me on behalf of the petitioner here accepting the view of the Full Bench of the Small Cause Court that there was a partnership. Nevertheless what is the position ?

3. The position is-and with regard to this I have no doubt whatever-that the plaintiff contributed the half-share of the defendant to the partnership, that is to say, advanced him his half-share. It is quite true that the total amount of Rs. 1,400 was never paid, but both sums paid by the plaintiff, namely Rs. 305 and the later sum of Rs. 400, in my opinion clearly were payments towards the capital of the partnership which both the partners were liable to pay under the agreement. The former sum was for the purpose of getting that which the partnership had agreed to get, namely the motor bus, and the later payment was also for that purpose. I should regard all necessary expenditure incurred for the purpose of putting the bus on the road and of running it: such as obtaining its registration and also the license to run it as capital of the partnership. What the plaintiff did therefore was to advance to the defendant his share in the sum of Rs. 705 and to that extent, namely half of it, he is entitled to recover that amount from the defendant. I regret very much that in view of the Full Bench decision which I accept, that there was a partnership, he is unable to recover any larger amount because it seems to me that the defendant acted most improperly towards the plaintiff but such consolation as the plaintiff can derive from my acceptance of this alternative contention, he is entitled to get. The order of the Full Bench must, therefore, be set aside, and substituted therefor there will be decree in favour of the plaintiff for Rs. 352-8-0 with costs here and before the Full Bench.


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