154-NLR-NLR-V-39-BALASUBRAMANIAM-v.-VALLIAPPAR-CHETTIAR.pdf
Balasubramaniam v. Valliappar Chettiar.
553
Present: Poyser S.P.J. and Keuneman J.
BALASUBRAMANIAM v. VALLIAPPAR CHETTIAR.
S. C. No. 51 (Inty.) and S. C. 286 (F)—D. C. Colombo, 4,520.
Partnership—Parol evidence by way of defence^—Stamps—Failure to supplystamps “ together with " petition of appeal—Interlocutory appeal from anorder admitting or rejecting evidence—Rejection of interlocutory appeal—Does it operate as an adjudication of the points raised in the appeal ?—Ordinance No. 7 of 1840, s. 21.
In an action brought by the executor of a deceased person to recovermoney on the basis of a gratuitous agency between the deceased and thedefendant, the defendant is not precluded by .section 21 of OrdinanceNo. 7 of 1840, from leading parol evidence of a partnership, in contra-vention of the section, in order to exclude the plaintiffs claim.
Silva v. Nelson (3 Browne 75) followed.
A tender of the deficiency in the value of stamps for the interlocutoryappeal five days after the filing of the petition does not regularize thefailure to tender the stamps “ together with ” the petition of appeal,even though the deficiency is made good within the appealable period.
An interlocutory appeal does not lie against the admission or rejectionof evidence only.
The Supreme Court is free to consider the points raised in an inter-locutory appeal rejected for non-compliance with the requirements of
the Stamp Ordinance in the final appeal.
– ^
T
HE plaintiff as the executor of the last will of his father S. M. P. Pillaisued the defendant for the recovery of a certain sum of money on
the footing that the defendant acted as the agent of S. M. P. Pillai inconnection with the purchase and sale of tea and rubber coupons and thatthe sum claimed was the balance, due by the defendant as such agent.The defendant denied that he acted as the agent of S. M. P. Pillai andfurther pleaded that he carried on business in partnership with thedeceased and that the action could not be maintained in the absence of awritten agreement as the capital exceeded Rs. 1,000. At the trial thelearned District Judge held that the defendant was not entitled to leadevidence in proof of the alleged partnership. From this order an inter-locutory appeal (S. C. No. 51) was filed. The trial proceeded and judg-ment was delivered in favour of the plaintiff. The defendant app'ealedfrom this as well (S. C. No. 286).
H. V. Perera, K.C. (with him S. Subramaniam), for plaintiff^respondent.—There is a preliminary objection to the- hearing of theinterlocutory appeal. On the day the petition of appeal was filed,sufficient stamps were not supplied for the decree or order of the SupremeCourt and the certificate in appeal, but they were tendered five days later.In accordance with the decision in Sinnapoo v. Theivanai and another', theappeal should be rejected.
The interlocutory appeal was filed against the order admitting certainevidence. The final appeal is also on the same point. If the interlocutory 1
1 (1937) 39 N. L. R. 121.
554
Balasubramaniam v. Vailiappar Chetliar.
appeal had not been filed, it could have been argued at the final appeal."Here the appellant had the choice of two modes of procedure, he hadelected one and he cannot make use of the other.
[Keuneman J.—Is not there a decision which states that the admis-sibility of evidence should not be the subject-matter of an interlocutoryappeal ?]
Yes, there is such a decision, but every order under the Civil ProcedureCode is appealable.
[Poyser S.P.J.—Let this matter be stayed and let the final appeal beargued.]
F. A. Hayley,. K.C. (with him E. F. N. Gratiaen and J. A. T. Perera),for the defendant, appellant.—In this case the appeal was filed on thefirst day and the necessary stamps were tendered within the appealabletime. The rejection of the interlocutory appeal would not bar the hearingof the final appeal.
No agency had been pleaded in the plaint. No definite evidence hadbeen given of the existence of an agency. It had to be inferred from theaccount books. -The defendant was prevented from leading evidence toprove the existence of a partnership. If the business was a partnership,the plaintiff cannot maintain this action—but the defendant can leadevidence to show the true nature of the agreement—see Silva v. Nelson1.In Pate v. Pate", the Privy Council disagreed with a number of casesdecided in Ceylon on section 21 of An Ordinance to Prevent Frauds and-Perjuries, No. 7 of 1840, but Silva v. Nelson was not considered. Henceit cannot be said to have been overruled. The defendant is not seekingto enforce a contract or agreement, but he is trying to place the truenature of the agreement before Court. In Hussey v. Home-Payne% itwas held that the Statute of Frauds is a weapon of defence' and not ofoffence. The English law is different, but there are parallel cases withrespect to land—see Kiri Banda v. Marikar *.
[Poyser S.P.J.—We like to hear you on the interlocutory appeal now,before you address us on the facts.]
Ramalingam Pillai v. Wimalaratne1 is followed in Attorney-General v.Karunaratne*, but there'' is no decision which has stated that the stampscould not be accepted if tendered within the appealable time. TheStamp Ordinance, 1909, is not very definite. When the document isfiled there is nothing to be stamped, except the petition of appeal. Theother stamps are merely handed over to.be kept till the document comesinto existence. If there is a deficiency of stamps the petition could bewithdrawn and a fresh petition could be filed.
Counsel cited Shah Mukhun Lai v. Baboo Sree Kishen Singh
H. V. Perera, K.C. (with him S. Subramaniam), for the plaintiff, respond-ent.—The Civil Procedure Code provides that a stamped petition of
> (1898) 1 Browne 15.4 (1917) 20 N. L. R. 123.
* (1915) 18 N. L. R. 289 ; (1915) A. C. 1,100.5 (1934) 36 N. L. R. 52.
a (1819) 4 A. C. 311.• (1935) 31 N. L. R. 57.
7 (JS6S) 12 Moore's Indian Appeals 157.
KEUNEMAN J.—Balasubramaniam v. Valliappar Chettiar.
555
appeal must be field. This point was considered in Mathes v. Matties'
If there is a deficiency the document cannot be handed back. Undersections 33 and 34 of the Stamp Ordinance, 1909, the document should beimpounded. Salgado v. Peiris * decides that stamps must be supplied atthe time of filing the petition in insolvency appeals. Further the stampsmust be affixed at the time of the execution. Hence the petition had notbeen properly stamped. Though documents—the decree and the certi-ficate of appeal in the Supreme Court—come into existence later, it was „held in Attorney-General v. Karunaratne (supra) that the stamps shouldbe handed at the time of the filing of the petition of appeal.
[Poyser S.P.J.—The point whether the stamps were handed withinthe appealable time was not considered. The only question was whetherrelief could be granted.]
Under section 756 of the Civil Procedure Code, various things had to bedone from the time of the filing of the petition. He could not state thathe could have waited till the last date allowed. The case of Mathes v.Mathes “ cannot be disinguished.
[Poyser S.P.J.—In this case the interlocutory appeal should not havebeen allowed to be filed.]
There are cases where it was held that if an appeal had not been filed intime his right is barred if the decision goes to the root of the cause—seeThamotherampillai v. Ramalingam.'.
The appellant has taken a certain course. It cannot be said that herelies on the other merely because the former proved abortive.
The case was fought on the basis of an agency. Where a plaintiff comesinto Court alleging a partnership, the defendant can take the benefit ofsection 21 of Ordinance No. 7 of 1840. If third parties claim any benefitunder a partnership, the partnership must be in writing—see Rajaratnamv. The Commissioner of Stamps, which follows Pate v. Pate (supra). If thedefendant says that he is entitled to half the profits, it must be shown inthe writing. If the Legislature says that a fact must be proved in a certainway, it must be proved in that particular way, however hard it may be—see Jdroos v. Sheriff *; Abeyagoonesekera v. Mendis'. Further there is noreference anywhere that the deceased made contributions.
Cur. ado. vult.
May 27, 1938. Keuneman J.—
The plaintiff who is the executor of the last will of S. M. P. Pillai broughtthis action alleging that about March, 1934, the defendant requested thedeceased Pillai to give money and/or hand cheques to the defendant forthe purpose of arranging for the transfer of tea coupons from variouspersons to the said Pillai ; that the said Pillai had given the defendantmoney aggregating to Rs. 51,657.50 for this purpose; that betweenMarch, 1934, and March, 1935, the defendant had purchased tea couponsor entered into agreements to purchase tea coupons for a certain amount;defendant had paid to Pillai or accounted to him for Rs. 28,834; and thatPillai had died on March 11, 1935. On the 1st cause of a'ction plaintiff
(1932) 34 N. It. R. 359.
5 (1938) 11 C. It. W. 15.
(1925) 27 A’. L. R. 231.
’ (1915) 18 N. L. R. 449.
1 (1937) 9 C. It. W. 141.
(1909) 12 N. It. R. 379.
(1937) 9C.L.W 141.
556KEUNEMAN J.—Balasubramaniam v. Valliappar Chettiar.
claimed that Pillai had delivered tea coupons amounting to 6,256 lb. todefendent who sold these coupons and received the sum of Rs. 2,377.28.The 2nd cause of action alleged that defendant had failed and neglectedto deliver certain agreements for purchase of tea coupons to the amountof 172,094 lb., or to account for such agreements or coupons receivablethereunder, and to account for or to pay to Pillai the proceeds of thetransactions relating to certain tea coupons for 192,116 lb. On this countthe plaintiff claimed the sum of Rs. 29,648.54. Alternatively theplaintiff prayed for an accounting.
On July 31, 1936, certain issues were framed which were as follows : —
Did the deceased S. M. P. Pillai advance to the defendant various
sums of money between March 1, 1934, and December 25, 1934.aggregating to a sum of Rs. 51,657.50 for the purpose of pur-chasing tea coupons and for entering into agreements for thepurchase of tea coupons ?
Did the defendant on deceased’s behalf purchase tea coupons and
enter into agreements for the purchase of same with the money. so advanced or out of the sale proceeds of the said tea coupons ?
Did the defendant fail to hand over to the deceased the tea coupons
or. agreements of sale receipts ®
Did defendant fail to account for the sums advanced by the
deceased or for the tea coupons purchased and sold by him or foragreement for the purchase of tea ?
What sum or sums of moneys is due to the plaintiff from the
defendant ?
Were the defendant and the deceased at all times relevant carrying
on business in partnership for the purchase and sale of teacoupons ?._
Was the capital of the said partnership business over Rs. 1,000 ?
Was the agreement between the defendant and the deceased for
establishing the said partnership in writing and signed by thedefendant and the deceased ? Were the transactions referredto in the plaint entered into in pursuance of the said agreementof partnership ?
If so, can .the plaintiff maintain this action ?
Is it open~to the defendant to prove a partnership on parol
evidence ?
Did the deceased deliver tea coupons for 6,256 lb. to the defendant
for the purpose of sale ?
What is its value ?
Although no definite issue was raised on the question of agency, thelearned District Judge appears to have treated the questions raised bythe issue as amounting to an allegation by the plaintiff that the defendantacted as agent for Pillai gratuitously, and both parties appear to haveconducted their cases on that footing, and the appeal was argued uponthat basis.
At an early stags in the proceedings objection was taken by the plaintiffto parol evidence being le.d by the- defendant in respect of issues 6, 7, 8,and 9, and the learned District Judge ruled that parol evidence could not
KEUNEMAN J.—fcalasubramaniam v. Valliappar Chettiar.557
be led on the point. This order was the subject-matter of the interlocu-tory appeal No. 51 and was also questioned in the final appeal No. 286.The trial then proceeded, and in the result the learned District Judgeentered judgment for the plaintiff for the sum of Rs. 4,051.92 as balanceof cash to be returned by the defendant to the plaintiff, and a further sumof Rs. 18,018 as representing the value of tea coupons standing in thedefendant’s name for which he has failed to account to the plaintiff.' Theaggregate of these two sums was Rs. 22,059.92. From this judgmentthe defendant appealed in final appeal No. 286.
It would be more convenient to deal first with the learned DistrictJudge’s ruling with regard to issues 6 to 9. The evidence which thedefendant proposed to give on this point was m contradiction of theplaintiff’s allegation that the defendant had acted gratuitously as theagent of Pillai. He proposed to prove that the relationship between theparties was one of partnership, and that in virtue of section 21 of Ordi-nance No. 7 of 1840 no action could be maintained by the plaintiff.Objection was taken by Counsel for the plaintiff to any parol evidencebeing led by the defendant to establish the partnership. The learnedDistrict Judge after discussing certain cases ruled that “ the principle tobe deduced from these decisions is that for whatever purpose no parolevidence can be adduced to prove the existence of a partnership-where the-capital exceeds Rs. 1,000 ”.
The learned District Judge depended mainly on the case of Pate v. Pate 'decided by the Privy Council. In that case the plaintiff alleging a part-nership between himself and the defendant brought an action foraccounting. There was no written agreement between plaintiff anddefendant, though the capital exceeded Rs. 1,000. Their Lordshipscons' -red the language of section 21 the relevant portions of which areas follows:—“No …. agreement, unless it be in writing andsigned by the party making the same …. shall be of force and
avail in law for any of the following purposes ….(4) for estab-
lishing a partnership where the capital exceeds Rs. 1,000 ”. The provisohowever permits third parties to sue partners and’ to offer in evidencecircumstances to prove a partnership between' such persons, and permitsparol testimony for the purpose.
Their Lordships of the Privy Council after holding that the word“ establishing ” meant “establishing by proof coram. judice” make thisinteresting comment:“ In their Lordships’ opinion the words ‘ for
establishing a partnership ’ clearly apply to the present case which wasfounded on the allegation of an agreement, not expressed in any writing,of which parol evidence was adduced for the purpose of establishing apartnership as the basis of the suit. The agreement was in their opinionof no force and did not avail in law unless it could be brought within theproviso. They are unable to accept the somewhat unpractical contentionthat ‘ establishing ’ here specially refers to cases (if such there.be) where.the plaintiff seeks to establish his' disputed right to be a partner, and notto cases where the parties have acted as if they were partners in fact andsome dispute has arisen as to their partnership rights or property inter se.”
1 (1915) 18 A L. R. 289.
558KEUNEMAN J.—Bala sub ramaniam v. Valliappar Chettiar.
Now clearly their Lordships were dealing with the case where the suitwas founded on the allegation of partnership, where no written agreementwas produced, and where parol evidence was adduced for the purpose ofestablishing a partnership as the basis of the suit. And the later languageon which great stress was placed must be read in relationship to thesefacts. The passage which was emphasized runs as follows : —
“ Whenever the law enacts that the truth shall be proved by oneform of testimony only, and not by all admissible and available formsthere is peril of doing injustice for the sake of some general good, andeven of enabling some rogue to cloak his fraud by taking advantage of astatutory prescription the policy of which was the prevention of fraud
The present case stands on an entirely different footing. The plaintiffalleges that there was a gratuitous agency on the part of defendant inrelationship to Piljai. The defendant seeks to rebut that allegation, andto prove that the relationship between these persons was one of partner-ship, but that in consequence of the absence of any written agreement,that relationship was of no force or avail at law, and that the plaintiff can-not maintain this action. The defendant cannot be said to found hiscase on the allegation of partnership, nor to make parol evidence the basisof his suit. On the contrary his allegation is that the relationship betweenthe parties was such that it was of no force or avail at law. If a defendantin this position were not allowed to give such evidence, a ready meanswould be available for a dishonest plaintiff so to frame his action as toescape the effect of section 21.
Counsel for the respondent also referred to Rajaratnam v. Commissionerfor Stamps'. In this case the Commissioner had valued the property of acertain deceased. Objection was taken to the assessment on the groundinter alia that a particular business had been wrongly treated as belongingexclusively to the deceased. It was contended that the business was apartnership between the deceased and his two sons. In dealing with thatcontention Soertsz J. said, “ The position that results from the evidencein this case is that there was a business conducted by these parties whichcannot, however, be adduced to a Court of law, as a partnership ‘ of forceand avail ’ because a rule of evidence stands in the way and prevents itfrom being so adduced In that case also the basis of the objector’sclaim was- the partnership, but his claim was not accepted because it wasof no force or avail at law.
Counsel for the appellant depended on the case of Silva v. Nelson Inthis case the plaintiff sued for remuneration on the footing that he wasmanager of a business entitled to salary and a percentage of profits. Thedefendant alleged that a partnership existed between himself and theplaintiff, which he admitted was not supported by a written agreement.The District Judge declined to allow any evidence to be led on this point.Bonser C.J. said in his judgment, “As I understand section 21 of Ordi-nance No. 7 of 1840 it is not open to a person who alleges an agreementof partnership which has not been reduced to writing to prove theexistence of a partnership with a view to make that person liable for thedebts of the partnership or to recover the profits. I do not think the1 (1938) 11 G. h. W. 15.* (1898) 1 Browne 75.
KEUNEMAN J.—Balasubramaniam v. Valliappar Chettiar.559
effect of that section is to estop a person from setting up what theagreement really was. It cannot be competent for one of two partners tosue the other alleging that he was to have a share of the profits, and thenobject to the defendant’s showing that the real agreement was that hewas not only to share the profits but also the losses. That would beunreasonable in the present case
I do not think that the fact that Silva v. Nelson is referred to in Pate v.Pate in conjunction with a large number of cases implies that theirLordships of the Privy Council meant to deal with and overrule theparticular point in question, which was not before them, for decision. Imay also refer to the dictum of Lord Selbourne in Hussey v. Hame-Payne
“ The Statute of Frauds is a weapon of defence not offence
In the circumstances I think that the order of the learned District Judgedisallowing evidence on issues 6 to 9 was wrong.
One further matter remains to be discussed in this connection- Whenthe proctor for the defendant filed the interlocutory petition of appealNc. 51, he tendered stamps for the decree or order of the Supreme Courtand the certificate in appeal, but there was a deficiency in the value ofthese stamps. This deficiency was not made good till five days later butwithin the appealable time. Objection is taken to that appeal on theground that the stamps were not tendered ‘ together with ’ the petition ofappeal, as required by Schedule B, Part 2, Miscellaneous, of the StampOrdinance. A number of authorities were cited in this connectionincluding Attorney-General v. Karunaratne2, decided by a Bench of threeJudges ; and Mathes v. Mafhes ’ where a very similar point was decided.I think we must follow these decisions. It may have made a difference ifthe error was corrected immediately or so shortly after the tendering ofthe petition of appeal as to have formed a part of that transaction. Butin this case there has been a lapse of five days, and I think the due tenderof stamps cannot be. said to have been made together with the petition ofappeal. The interlocutory appeal No. 51 must accordingly be rejected.I do not think however, and no authority has been cited to us to showthat we are precluded from dealing with this point in the final appealNo. 286. The interlocutory appeal, in my opinion, being an appeal againstthe rejection of evidence merely, was in any event wrongly constituted.I have a recollection, and Counsel for the respondent confirms this, thatthe point was decided some years ago that no interlocutory appeal layagainst the admission or rejection of evidence only. The authorityhowever cannot be traced. But in any case the rejection of interlocutoryappeal No. 51, cannot be said to be an adjudication on the points raised inthat appeal, and I think we are entitled to consider those points in thefinal appeal No. 286. The question of costs would however be affected.
If the question of the wrongful rejection of evidence had been the onlypoint in the appeal, the case would have to be sent back for a new trial.But Counsel for the appellant went further and argued that the plaintiffhad failed to establish his cause of action, viz., that the defendant actedgratuitously as agent of Pillai for the purpose of purchase and sale of tea'coupons, and of entering into agreements for tea coupons. As regards 1
1 L. R. (1879) 4 A. C. 311 at p. 320 ;48 L. J. Ch. 846 ; 41 L. T. 1.
» 37 N. L. R. 57.'JC.I, W. 141.
560FOYSER S.P.J.—Balasubramaniam v. Valliappar Chettiar.
this point the learned District Judge held that it was clear from theevidence of Sangaralingam the kanakapillai and of the vakil and fromthe whole course of the transactions that the defendant acted as agent ofPillai gratuitously. It is necessary accordingly to consider that evidence.
His Lordship after discussing the evidence proceeds as follows :
On the whole evidence, I am satisfied that the plaintiff has failed toestablish the gratuitous agency on which he relied, and in the circums-tances his action must be dismissed and the appeal No. 286 allowed withcosts in both Courts. In this case however plaintiff is an executor, andif he has misconceived his claim, and has another claim which can belegally established, I think the right should be reserved to him to bringany action on any ground not decided in this case, and it should be opento the defendant to take any objections he desires to such action. Theinterlocutory appeal No. 51 will however be rejected with costs.
Poyser S.P.J.—
I have had the advantage of reading the judgment of my brotherKeuneman. I agree -with it and there is very little that I desire to add.
In regard to the interlocutory appeal, S.C. No. 51, this must be rejected,for we are bound by the de vision referred to by my brother. The rejectionof an appeal, however, does not operate as an adjudication on any pointraised in such appeal and we can consequently consider the subject-matter of that appeal, namely, the rejection of certain evidence, in thefinal appeal. There is authority for this proposition, namely, the case ofFernando v. Fernando to which my brother referred me.
In that case Bertram C.J. held “ that it was open to the appellant toraise a point by way of appeal against the order of the District Judgefinally disposing of the matter, though he had originally taken the pointas a preliminary objection and though an appeal was lodged against thedecision of the Judge on this objection and that appeal was rejected asbeing out of time ”.
Further, I agree that the interlocutory appeal was in any event wronglyconstituted: The admission or rejection of evidence is, in my opinion, nota ground for an interlocutory appeal. There are obvious reasons whysuch appeals should not be allowed, for if there is to be an appeal on everyquestion raised in regard to the admissibility or otherwise cr evidence,litigation would become interminable. As Bertram C.J. observed in thecase above referred to, “it is contrary to the general principle observedin this Court which discourages appeals against incidental decisions whenan appeal may effectively be taken against the order disposing of thematter under consideration at its final stage
In regard to the final appeal, I, top, agree that the District Judge shouldhave allowed evidence to be led in respect of issues 6, 7, 8, and 9..
Mr. Gratiaen, who appeared in the lower Court for the defendant, madeit perfectly clear what his object was in making the application to leadevidence in regard to the partnership. He stated that his object was notto establish a partnership but merely by way of defence to negative theplaintiff’s allegations that the defendant acted only as -the deceased’sagent.
■ 6 Ceylon Weekly Reporter 202.
Thurairatnam v. Mohideen Pichai.
561
The case of Pate v. Pate1 overruled D. C. Kandy, No. 52,568 (1871) —and cases following that decision'. Silva v. Nelson ’ was referred to in thejudgment as being one of such cases. A passage however, in the judgmentof Bonser C.J. in Silva v. Nelson {supra) which is set out in full in mybrother’s judgment, does not appear to have been specifically referred toin the argument before the Privy Council nor does such passage appear tohave been specifically overruled, and I think Mr. Gratiaen’s applicationin the lower Court should have been allowed.
In spite, however, of the Judge’s rejection of the evidence that theappellant desired to lead, it is unnecessary that the case should go backfor a fresli trial. There is sufficient material before us to enable us todetermine the case. The District Judge has, I think, misdirected himselfin coming to the conclusion to which he did. He has accepted theevidence of the vakil that the defendant admitted that in the tea couponbusiryess he acted gratuitously as agent for the deceased^ut in the rubberbusiness they were acting in partnership. No doubt there must be verystrong grounds for a Court of Appeal to dissent from a Judge of firstinstance on a finding of fact. There are such grounds in this case. Inthe first place, it seems in the highest degree improbable that the defend-ant and the deceased should make forward purchase of rubber inpartnership while in another type of transaction—the purchase of teacoupons—their relationship should be one of principal and agent. Further,the District Judge has not appreciated, in my opinion, the importance ofthe correspondence in the case in regard to this point. The letters towhich my brother has referred in particular D 1, D 3, and D 7 in myopinion prove beyond all doubt that the relationship between the partieswas not one of principal and agent.
therefore, agree that the plaintiff has failed to prove this case, and thathis action must be dismissed with costs on the terms set out by my brother.
Appeal allowed.