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Present: Mr. Justice Wood Renton and Mr. Justice Grenier.
ISSAN APPU et al. v. GIJRA
C., Kegalla, 2,632.
Partnership for working a plumbago pit—No notarial document—Actionfor dissolution—Ordinance No. 7 of 1940, ssi 2, 21, and 22.
Section 2 of Ordinance No. 7 of 1840. should not be allowed to beused in suoh a way as to perpetuate and cover a fraud.
HP HE facts are fully set out in the judgment of Wood Renton J.
A. St. V. Jayewardene, for the appellants.—This action must fail,as the alleged partnership, which was for the working of a plumbagopit, was not contained in a notarial document. [Wood Renton J. :You cannot now take that objection. You are estopped by yourconduct. You have admitted the partnership in your pleading, andyou have gone to .trial without taking the objection.] This objectiongoes to the very root of the case. Even under the English Lawwhere the doctrine of part performance is recognized, it has beenheld that an action may not be maintained even on an executedcontract, which was not under seal, where tbe law says that suchcontracts should be under seal (Hunt v. Wimbledon. Local Board,1Young v. Corporation of Leamington*).
The Full Court has held in Ceylon that no action lies for therecovery of damages for breach of a non-notarial agreement toenter on land and prospect for plumbago, and that the doctrineof part performance has not been recognized in Ceylon to the extentto which it prevails in the English Courts of Equity (Perera v.Amarasooriya3).
Pate v. Pate4 does not apply to the present case, as there was nointerest in land involved in that case. Section 22 of Ordinance No. 7of 1840 specially enacts that section 21 must not be construed asexempting any instrument affecting land from the operation ofsection 2. Counsel cited Lindley on Partnership, 6th ed., 88;Supreme Court Civil Minutes, July 1, 1908.
Samarawickrama, for respondents, not called upon.
1 (1878) 4 C. P. Dio. 48.»(1888) 8 A. 0.517.
3 (1909) 12 N. L. R. 87.
* (1907) 11 N. L. R. 254.
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March 15, 1910. Wood Benton J.—
In thin case the plamtifife-respondents sued .the appellants, claim-ing a dissolution oi a partnership, into which they alleged that theyand the defendants had entered for the working of a plumbago pit,and claimed, inter aliat an account of the profits and losses of theundertaking. They alleged that the pit had been worked under theagreement for a certain period, but that thereafter the first, second,and third defendants, who are the present appellants, had refusedto allow them to inspect the books or to take part in the manage-ment of the pit. In their answer the appellants expressly admittedthe existence of the partnership, and said that the pit in questionhad been worked under the agreement constituting a partnershipto January 14, 1908, when operations were stopped on account ofcertain losses incurred, and that on March 15, 1908, accounts werelooked into and finally adjusted between the parties, and that on thatdate the plaintilfs-respondents of their own accord withdrew fromthe partnership. The fourth defendant, who is not an appellant,associated himself in his answer with the allegations in the plaint,and his position need not be further considered for the purposes ofthe decision of this appeal. On the pleadings, as I have alreadysummarized them, parties went to trial on an issue, the burden ofestablishing which was clearly on the appellants. What was the dateof the cessation of partnership—did it terminate in March, 1908?Evidence was adduced on both sides, and the learned District Judgecame, with propriety, to the conclusion that the appellants hadentirely failed to prove that the partnership had been wound upvoluntarily as alleged by the first, second, Mid third defendants. Heordered a dissolution of the partnership, and the taking of an accountof the profits and losses of the plumbago pit from the last accountstated, which, he says, seemed to be in November, 1907. In supportof this appeal, Mr. A. St. V. Jayewardene put before us three points:first, that in spite of the attitude assumed by his clients towardstiie question of the existence of a partnership in their pleadings andat the trial, it- is still open to them to contend that, in virtue of theprovisions of section 2 of Ordinance No. 7 of 1840, the respondents’action must fail, since an agreement for the working of a plumbagopit involves the establishment of an interest in land, and as therehas admittedly been here no notarial agreement, the informal agree-ment referred to in the plaint is of no force or avail in law; in thesecond place, that, as no term was fixed for the duration of thepartnership, it is determinable by a notice -on either side at will;and in the last place, that, in any event, the learned District Judgehas given the respondents in his decree something more than theyasked for.
I would propose to say a few words in regard to each of these pointsin turn. It is quite clear, in my opinion, that to allow the appellantsat this stage to set up section 2 of Ordinance No. 7 of 1840, after
lesan Appuv. Gurd
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Mar. 15,1S10 their admissions in the pleadings, and their acceptance of the issueon which the case proceeded to trial, would be tantamount toRenton J. permitting them to perpetrate a fraud upon the respondents, andlssan~Appu unless there is clear affirmative authority compelling us to upholdv. Oura the plea with which I am now dealing, I for one will take no partin giving effect to it. In support of his argument on .this point,Mr. Jayewardene referred us to two classes of authorities: in thefirst place, a series of English decisions, of which Hunt v. WimbledonLocal Board,1 approved of by the House of Lords in Yotmg v.Corporation of Leamington,2 may be taken as examples, in which ithas been held that the provisions of section 174, sub-section (1), ofthe Public. Health Act, 1875, enacting that every contract made byan urban authority, whereof the value or amount exceeds 50 pounds,shall be in writing and sealed with the common seal of such authority,is obligatory, and not merely directory, and applies to an executedcontract, of which an urban authority have had the full benefit andenjoyment, and which has been effected by their agent duly appointedunder their common seal; and in the next place, to the decision of.the Supreme Court in Perera v. Amarasooriya 3 in which it w'as heldthat no action will lie for the recovery of damages for breach of aninformal agreement to enter on land and prospect for plumbago,and that the doctrine of part performance has not been recognizedin Ceylon to the extent to which it prevails in the English Courtsof Equity.
In my opinion, none of these decisions support Mr. Jayewardene’.sargument on the point now before us. In the English cases, whichwere decided under section 174, sub-section (1), of the Public HealthAct, 1875, it was expressly pointed out that the ratio decidendi turnedon the language of that section itself. In the case of Young v.Corporation of Leamington, Lord Blackburn in the House of Lordsexpressly said that he was not giving a decision which ran counterto the recognized doctrine of English Courts of Equity that corpora-tions might be liable quasi ex contractu to pay a fair price for work andlabour and material of which they had had the benefit even underinformal contracts. As regards the local case, it is pointed out byHis Lordship the Chief Justice and by Mr. Justice Middleton, inPerera v. Amarasooriya, that the appellants might well have beenentitled to recover damages for dolus mains, if, as was not the case,an express issue .of fraud had been raised and tried in that action.There is nothing in the case of Perera v. Amarasooriya to conflictwith the earlier and numerous and clear decisions of the SupremeCourt in such cases as Gould v. Innasitamby* decided by Mr. JusticeMoricreiff and Mr. Justice Middleton, and Ohlmus v. Ohlmus* decided •by Mr. Justice Wendt and Mr. Justice Grenier, that section 2 of
> (J878) 4 O. P. Div. 48.3 (1909) 12 N. L. R. 87.
3 (1883) 8 A. C. 517.* (1904) 9 N. L. R. 177.
‘(1906) 9 N. L. R. 183.
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Ordinance No. 7 of 1840 should not be allowed to be used in such a Mar. 15*1910way as to perpetrate and to cover fraud. In the former of these two ^>ODeases, Mr. Justice Moncreiff used language which appears to me to Renton J.be directly applicable, of course mutatis mutandis, to the circum- je$an Appustances before us. “ The question, " he said “ is not one of enforcing v. Quraan agreement which is not according to law, but whether a defendantis to be allowed to pleaff Hie Statute of Frauds in order that hemay dishonestly keep the property of another man, of which hegot possession by refusing to return it when required. ” I wouldhold that Mr. Jayewardene’s first point fails.
[His Lordship then proceeded to discuss the other points raised bythe appellant, and dismissed the appeal.]
I am entirely of the same opinion, and have nothing to add.
ISSAN APPU et al. v. GURA