KANAITA CHETTY v. WALATHAIT CHKTTYD. (A. Kuriuicr/aht. l.-ifii>
.Partnership—Ordinance No. 1 of 1840, s. 21 (4)—Agreement for rstnhhshinnpartnership—Custom among Nattukotte Chettics—Use of initials—Vilasam—Evidence Ordinance, s. 98.
Where a plaintalleged that the® plaintiff and defendants were
partners in trade, including the purchaseandsale of lands; thatth>'
partners traded under the name and style of " Su. Pa. A. Vee;" and thatthe fifth defendant, Sekappa Chetty, havingbought twoestates,oti
behalf of the partnership, sold them fraudulently to the fourth defend-ant; and where the plaintiffs prayed for a dissolution of the partnership,a cancellation of the deed of sale which conveyed the estates to thefourth defendant, an account of the rents .and profits of the two estates,and a partition or sale of the estates,—
Held that, as the – agreement for establishing the partnership was not;n writing as required by Ordinance No. 7 of 1840. section 21, he couldnot pray for a dissolution of it; that under section 98 of the EvidenceOrdinance he could lead evidence to show that the deed which conveyedthe lands to “ Su. Pa. A. Vee. Sekappa Chetty " meant, according to thecustom of the community of traders to which the parties to the casebelonged, a conveyance to Sekappa Chetty for and on behalf ofthe firm of " Su. Pa. A. Vee," and that the relation of agent andprincipal between the fifth defendant and the other parties to the casebeing thus established, the fifth defendantmaybe ordered toaccount to
his principals for the value of the lands.
Middleton, J.—My view of the latterpartof sub-section4 ofsec-
tion 21 of Ordinance No. 7 of 1840 is that it was intended that theCourts should not enforce any alleged obligations to become or act as apartner, or any agreement in respect of an alleged partnership betweenpersons assuming to be partners without an agreement for partnershipin writing; but that, if persons had acted as partners without an agree-ment in writing, they should not be allowed to take advantage of theirown wrong in escaping accounting for money -received on behalf of theprofessed partnership, on the plea that there was no legal partnership in-the terms of the Ordinance.
It may be said that the trial of this issue must inevitably involve thegiving of parol evidence in support of an alleged partnership; but, evenif it does so, I do not think it would be going further than the latterpart of sub-section 4 of section 21 of Ordinance No. 7 of 1840 wouldpermit.
CTION for dissolution of partnership. The case fbr tKhplaintiffs was that they and the first, second, fourth, and
fifth became partners in toade in 1867, which included the pur-chase and sale of lands ;t that they traded together under the nameand style of “ Su. Pa. A. Vee fjiai the fifth defendant, SekappaChetty, bought two estates by deed of 30th May, 1881, in whichhe signed as “ Su. Pa. A. Vee» Sekappa C-hetty that this form
!' ■■ •;>.•wry
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1003. o! signature meant “ Sekappa Chetty, for and on behalf of theFebruary 26. firm of Su. Pa. A. Vee and that Sekappa Chetty sold the estatesfraudulently to the fourth defendant by deed dated 29th November,1890, and appropriated the proceeds. Wherefore the plaintiffsprayed that the partnership may be dissolved; the deed of 20thNovember, 1890, declared null and void; an account of the rentsand profits of the two estates be ordered; and a partition or sale ofthe said estates decreed.
The District Judge dismissed the action, without hearing'evidence, on the following grounds, namely, that the agreementfor establishing a partnership in 1867, which appeared to refer to a.capital exceeding £100, was not in writing as required by Ordi-nance No .7 of 1840, section 21, and that fraud was not particularlyaverred in regard to the deed of 1890 sought to be declared nulland void.
The plaintiffs appealed. The case was argued in appeal, on18th and 19th December, 1902.
Dornhorst, K.C., for plaintiff, appellants.
Sampayo, K.G,. for second, fourth, fifth, and sixth defendantsrespondents.
Cur. adv. vult.
26th February, 1903. Monckeiff, J.—
The plaint set up a partnership entered into between the firstplaintiff and the first, second, fourth, and fifth defendants, ofwhich the second . plaintiff and the other defendants afterwardsbecame members. It is alleged that these persons traded underthe name, style, firm, and vilasam. of “ Suna Papa AvennaVeena,” lending money and buying, selling, and otherwise dealingwith immovable property.
The plaintiffs say that in 1881 the fifth defendant bought, onbehalf of the partnership, two properties named Tempane andWoodlands. They ask (1) for a dissolution of partnership; (2)that the deed of 29th November, 1890, by which the fifth defendantfraudulently disposed of the two lands to the fourth defendant, bedeclared null and void; (3) for an account of the rents and ,profits of the ttfo lands; (4) for a division and partition, or sale,of the lands; and for s»ther things.
Nine issues were framed; but no evidence was heard, and theJudge dismissed the action with costs, (1) because the agreementfor a partnership being oral did «not meet the requirements of
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Ordinance No. 7 of 1840, section 21; (2) because, in the absence of 1803.any allegation of fraud, the plaintiffs could not attack a notarial Febr*nry 26-instrument executed in 1881 by means of parol testimony of an Moncbeiff,.oral agreement affecting immovable property made in' 1867. The- J-Judge also referred to a similar case, D. C., Kurunegala, 898,decided by him. That case was not before us; we sent for it andfind that the judgment was affirmed on appeal on the ground thatthe action was prescribed.
Proviso (4) of section 21 of No. f of 1840 relieves the rule'which requires that an agreement* for establishing a partnership,the capital of which exceeds £100, must be in writing and signedby the party making the same or by some person 'lawfullyauthorized thereto. Transactions by, or the settlement of anyaccount between, partners may be proved by parol testimony. Itis possible to conjecture, but I find it difficult to say, what theconcluding words of the proviso mean. 1 hesitate to say that thiscase can be proved by parol evidence.
The Judge’s second reason seems to be founded on- a mistake.
As I understand the case, the plaintiffs do not seek to’ attack thedeed of 1881, but to set it up for.their own benefit. The questionis whether they can do so.
It was urged, on the authority of a familiar principle, that theplaintiffs should be allowed to open up the facts with a view toshowing what really occurred. But in Silva v. Nelson, cited from1 Browne 76, all that Bonser, C.J., said was, that when one issued upon an alleged oral agreement he is at liberty to show whatthe real agreement was. The same principle will be found inNatchia v. Fernando (1 Browne,. 396), where Bonser, C.J., andBrowne, J., allowed the defendant to give evidence showing thereal terms of an oral agreement “ by way of defence only and notof claim.” As it would seem, the principle is restricted, and canonly be applied by way of exception or defence to a claim. Itremains for the Full Court to say what our position is here withregard to resulting trusts and trusts arising from the. operation oflaw.
The plaintiffs, however, say that the fifth defendant is styled'
Ana Lana Kana Nana Sekappa CKetty in his proxy, whereas inthe notarial deed of the 30th May, 188J, by which he boughtthe lands, he appears under the style of SunA Pana AvennaVeena Sekappa Chetty. They say that the, initials or vilasampreceding his name in tl^at deed, and in the deed by which he soldthe property in 1890, indicate-*-when translated or interpreted—that he bought only as their accredited agent, and that theythemselves with others were the real vendees. The 98th section
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of the Evidence Ordinance admits evidence “ to show the meaning
ofnot commonly intelligihle characters, oftechnical.
local, and provincial expressions, of abbreviations, and of wordsused in a peculiar sense.” I see no reason why the plaintiffsshould not be allowed to prove the meaning of these terms, if themeaning is relevant. I assume that we are bound by Meera Saibov. Silva, 4 N. L. B. 229, and that agency may be proved withoutshowing a notarial or written appointment.
What does the vilasam mean? Is it merely descriptive, or doesit mean that the plaintiffs (among others) bought "the landsthrough the fifth defendant, who was their agent duly authorizedthereto?« Of course he signed only the deed by which he sold,but the two deeds may be read together. Withers, J., in hisjudgment in D. C., Kandy, 10,146, filed in this record, says, inreference to a Supposed purchase of land by A. B. C. MuttappaChetty: —
‘‘.It was pressed upon us thatthis is a form of latent
ambiguity which may be explained by oral evidence directed tosatisfy the Court that the actual purchaser was the principal,A. B. C., and not the agent, Muttappa Chetty. But is not thisbegging the question? There is no ambiguity about the matter.The purchaser so named is Muttappa Chetty. the agent of A. B. C.He is the purchaser and no other; the title is in him.”
The learned Judge may be correct in his assertion, but, with allrespect, I think there is at least an apparent ambiguity. I find adifficulty which does- not appear to have troubled him. Inordinary transactions which do not relate to the conveyance ofland, the principal is the party represented by the vilasam.The oft-quoted passage in Mr. Lawson’s judgment in No. 42,165,D. C., Colombo (see Meyappa Chetty v. Chittambalam, 2 Browne396; and Bank of Madras v. A. B. S. V. B. Weerappa Chetty, 4S. C. C. 70), is to the effect that “A. Ru. Su. Veiy. R. Muttu RamanChetty ” would mean, according to common usage, ‘‘ Ana RunaSuna Veiyana Rana & Company, by their attorney or agent orrepresentative, Muttu Ramen.”
If the words do not by common usage bear the same meaningin the selling and purchasing* of land, if they are in this caselAerelv' descriptive of the purchaser Sekappa Chetty, their thejudgment of Withers, J., is an authority for us. But in order tosatisfy ourselves we must send the case' back that the Judge mayframe an issue, take evidence, and find whether the meaning putin ordinary transactions by cofnmon usage upon an individualname to which a vilasam is prefixed, is or is not also attached h>vcommon usage in the case of buying and selling land. If it is not
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so attached, there is an end of the contention; but, if it is so 1 SMS-attached, I see no reason at present why the relation at least of February 26.principal and agent should not be taken to have existed between Moncreikf,the plaintiffs and the fifth defendant for the purpose of thistransaction only. In that case I imagine that parol evidence-might be given on an accounting of the extent of the fifth defend-ant’s obligation to the plaintiffs. If the plaintiffs were the true-buyers, the fifth defendant has committed a fraud in selling thelands and appropriating the proceeds. The plaintiffs allege thathe sold in fraud of their rights. The* principle followed in Davisv. Whitehead (1894), 2 Ch. 133, that .the Statute of Frauds was notmade to cover fraud, would seem to apply.
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According as the District Court Judge finds, he will determinewhether there is any necessity for trying other issues. The costsof appeal will be costs in the cause.
I have had the advantage of reading my brother’s judgment, withwhich I practically agree.
1 think that the plaint is bad in seeking the dissolution of apartnership which cannot be orally proved. My view of thelatter part of sub-section 4 of section 21 of Ordinance No. 7of 1840 is that it was intended that the Courts should not enforceany alleged obligations to become or act as a partner, or anyagreement in respect of an alleged partnership between personsassuming to be partners, without an agreement for partnership inwriting; but that, if persons had acted as partners without an•agreement in writing, they should not be allowed to take advan-tage of their own wrong in escaping accounting for moneyreceived on behalf of the professed partnership, on the plea thatthere was no legal partnership in the terms of the Ordinance.In the case before us, if there was ever any professed partnership,it must have practically terminated by act of .the parties in 1892',when the first action was brought (see paragraph 5 of the plaint).
1 see no objection, however, to the plaintiffs claiming to vindicatetheir title to these two estates either,,as joint owners with the fifthdefendant or as his principals. Their position in the case peems„to me to depend on the meaning of the vilasam or initials before
the name of tlie fifth defendant in the deed of 1881.*
In the case of promissory notes signed in this fashion the Courtshere have held that it means by (ommon usage " So and so &Co,” by their attorney or agent. What meaning has it in a deedof conveyance of landed property? In. my opinion these are
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1003. abbreviations or words used in a peculiar sense which may beFebruary 26. interpreted by parol evidence according to section 98 ol the Evi-Mxddlbxon, dence Ordinance. It is not necessary, according to Meera Saibo v.
Silva, 4 N. L. B. 229, for the plaintiffs to prove the existence of anotarial deed or a written appointment to show the agency of thefifth defendant. I think an issue should be settled to be proved byoral testimony as to the meaning according to common usage of thevilasam preceding the fifth defendant’s name in the deed. If thevilasam proves to be descriptive only of the fifth defendant, then,according to the decision of Mr. Justice Withers, the fifth defen-dant will be the legal owner, amd would have an undoubted rightto transfer to the fourth defendant.
If, on the other hand, it appears that it means a number ofpersons amongst whom the plaintiffs are included by their agent,the fifth defendant, then the plaintiffs’ rights will be susceptible ofadjustment by accounting. It may be said that the trial of thisissue must inevitably involve the giving of parol evidence insupport of an alleged partnership; but, even if it does so, I do notthink it would be going further than the latter part of sub-section4 of section 21 of Ordinance No. 7 of 1840 would permit.
To hold this also does not to my mind appear to conflict with thedecision at p. 195 of – Vanderstraaten, as the plaintiffs do not seekto uphold or enforce the continuance of a partnership, but 'tocompel the fifth defendant to account for money alleged to havebeen received by him while acting as a member of a professedpartnership.
Any other material issues consequent on the ascertainment ofthe meaning of the vilasam can be settled by the District Judgeif necessary.
Considering the form in which the plaint has been drawn, thecosts of this appeal should, in my opinion, abide the event of theaction.
KANAPPA CHETTY v. WALATHAPPA CHETTY