021-SLLR-SLLR-1981-2-THE-MAHAKANDE-HOUSING-COMPANU-LTD.-v.-DUHILAMOMAL-AND-OTHERS.pdf
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THE MAHAKANDE HOUSING COMPANY LTD.
v.DUHILAMOMAL AND OTHERS
COURT OF APPEAL.
SOZA, J. AND SENEVIRATNE, J.
C.A./L.A. 8/78—D. C. COLOMBO 2408/RE.
SEPTEMBER 10.1981.
Partnership—Action against three persons carrying on business in partnership—Death ofa defendant pending action—Clause in partnership deed that death of partner shall notdissolve partnership—Whether right to sue survives against remaining defendants—CivilProcedure Code, sections IS, 393,398.
The plaintiff-company sued three defendants who were carrying on business in partnershipand 1st defendant died pending the action. On an application by the plaintiff under theprovisions of section 393 of the Civil Procedure Code for an order directing that theaction do proceed against the surviving defendants, namely 2nd and 3rd defendants, theCourt on objection taken by these defendants made order refusing the plaintiff’sapplication. It directed the plaintiff to take steps to substitute the legal representative ofthe deceased 1st defendant under section 398(1) in order to proceed with the action.The plaintiff applied for and obtained leave to appeal to the Court of Appeal from thisorder.
Held
The use of the word "alone" in section 393 of the Civil Procedure Code is merelyfor the purpose of indicating that the survivor should be entitled to sue or to be suedindependently without any other party being joined and does not mean that no oneother than the survivor should be entitled to sue or to be sued. The Question in thepresent case was whether the plaintiff has a cause of action against the survivingdefendants alone.
As the cause of action in this case was based on a contract of tenancy between theplaintiff and the three partners of a firm, who were the defendants, the obligations onthe contract are joint and on the death of one, the liability to be sued survives againstthe remaining defendants. The provisions of the partnership deed in this case providethat the death of a partner shall not dissolve the partnership between the survivingpartners and the partnership will be deemed accordingly to continue as between theremaining partners. Although there was provision for the admissioh of the deceasedpartner's widow as a partner, the surviving partners will carry on the partnership untilthen, in view of the provisions of the said deed. A cause of action therefore survivesagainst the 2nd and 3rd defendants alone and the provisions of section 393 of the Civil -Procedure Code will therefore apply. In such a situation the Court must grant permissionto proceed against the surviving defendants andthe order appealed from should thereforebe set aside.
Cases referred to
(11 Sankru Mahto v. Bhoju Mahato, A.I.R., i19361 Patna 508.
Maung Bynung v. Mg. Shew Baw, A.I.R., {19241 Rangoon 376.
Gaianand v. Sardarmal, A.I.R., (1961) Rajasthan 223.
<41 Lilaram v. Tikamdas, A.I.R., (1929) Sind22S.
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Mahakande Housing Co. Ltd. v. Duhilamomal fSoza, J.)
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(5) Bishen Das V. Ram Labhaya, A.I.R., (1916) Lahore 133 (2).
(6 )J(ertdallv. Hamilton. (1879)4App. Cas. 504; 41 L.T. 418; 48 L.J.Q.B. 70S.
Bishop v. Church. (1751) 2 Ves. Sen. 371; 28 E.R. 238.
Burn v. Burn. (1798) 3 Ves. S73.30E.R. 1162.
Beresford v. Browning, (1875) 20 Eq. 564; 24 IV.R. 120.
Re Hodgson. (1885) 31 Ch. D. 177; 55 L.J. Ch. 241; 54 L.T. 222.
Adamalay & Co. y. Asiya Umma, (1924) 2 Times of Cey. L.R. 223.
APPEAL from an order of the District Court, Colombo.
H. W. Jayewardene, Q.C., with C. Ranganathan, Q.C., and Miss P. Seneviratne, for theplaintiff-appellant.
H. L. de Silva, with M. Devasagayam, for the 2nd and 3rd defendants-respondents.
Cur. adv. vult.
September 18,1981.
SOZA, J.
in this case the plaintiff a housing company sued the present 2ndand 3rd respondents naming them as 2nd and 3rd defendantsalong with one Assudamal Duhilamomal named as the 1stdefendant to the action. When the case was pending the 1stdefendant died and the plaintiff then applied under the provisionsof section 393 of the Civil Procedure Code for an order of courtdirecting that the action do proceed against the survivingdefendants, namely, the present 2nd and 3rd defendant-respondents. The 2nd and 3rd defendant-respondents objected tothis application and the Court made order on 14.S.7? refusing theplaintiff's application and directing the plaintiff to take stepsunder section 398(1) of the Civil Procedure Code for thesubstitution of a legal representative of the deceased 1st defendantfor the purpose of proceeding on with the action. From this orderthe plaintiff appeals having earlier obtained leave to appeal.
The present dispute must be resolved by interpreting section393 of the Civil Procedure Code. According to this section if thereis more than one defendant and any one of them dies during thependency of the suit and if the right to sue on the cause of actionsurvives against the surviving defendant or defendants alone thecourt shall on application being made by way of summaryprocedure make an order to the effect that the action do proceedagainst the surviving defendant or defendants. The question thenis does the cause of action survive against the surviving defendantsalone. Much of the argument that was advanced on behalf of the2nd and 3rd defendants-respondents revolves round the rights of
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succession to the dead defendant. The question, as I see it, shouldbe resolved not so much by considering the rights of succession tothe dead defendant but rather by considering whether the cause ofaction survives, in other words, by considering whether the causeof action as formulated in the suit is so affected by the death ofthe deceased defendant that it cannot be prosecuted against thesurviving defendants alone. Our section 393 was borrowed fromsection 362 of the old Indian Procedure Code No. XIV of 1882.In the Indian Code of Civil Procedure (1908) the parallel provisionis Order 22 Rule 2 which reads as follows:
"Where there are more plaintiffs or defendants than one, andany of them dies, and where the right to sue survives to thesurviving plaintiff or plaintiffs alone, or against the survivingdefendant or defendants alone, the Court shall cause an entry tothat effect to be made on the record, and the suit shall proceedat the instance of the surviving plaintiff or plaintiffs, or againstthe surviving defendant or defendants".
It will be seen that the Indian provision and ours are essentiallysimilar. The Indian provision has been analysed in several cases.In the case of Sankru Mahto v. Bhoj'u Mahato{ 1) Mohamed Noor,J. (with whom Macpherson, J. agreed) formulated the test thatshould be applied very succinctly at page 549:
"The test whether a right to sue survives in the survivingplaintiffs or against the surviving defendants is whether thesurviving plaintiff can alone sue or the surviving defendantscould alone be sued in the absence of the deceased plaintiff ordefendant respectively".
The language of section 393 of our Civil Procedure Codejustifies the adoption of the same test. No doubt the word 'alone'is there in this section for the sake of emphasis. The meaningsought to be achieved by this word 'alone' is that the survivor if aplaintiff should be entitled to sue independently without theaddition of any other party or if a defendant be liable to be suedindependently without any other party being joined. It does notmean that none else than the survivor should be entitled to sue orbe liable to be sued. If authority is needed for this interpretationit will be found in the cases of Maung Byaung v. Mg. Shew Baw{2)and Gajanand v. Sardarmal{3). It may be added that the word'survive' so far as it concerns the parties to the suit is not used in
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section 393 of the Civil Procedure Code in any technicalsense, but .in the ordinary sense of 'outlive'—Lilararh v.Tikamdas (4).
In the case before us the question is whether the plaintiff hasa cause of action against the surviving defendants alone. It must beremembered that the plaintiff is dominus litis. By virtue of section15 of the Civil Procedure Code he may at his option join asparties to the same action all or any of the persons severally orjointly and severally liable. In a suit founded upon joint andseveral liability the right to sue survives against the survivorwhere.of the array of defendants one dies. Thus where in apartnership under Indian Law one of the partners dies before theinstitution of the suit the remaining partners can be sued. Hencewhat difference would it make if the suit was instituted againstall the partners and one of them died when the action was pending?The suit can go on against the remaining partners—see theobservations of Bhandari J. in Gajanand v. Sardarmal (supra) atp. 227 (col. 1). In the case of Bishen Das v. Ram Labhaya(5) itwas held that the liability of joint tortfeasors is joint and severaland consequently on the death of one the cause of action survivesagainst the other. The same can be said of the liability of joint-contractors and joint trustees in breach of their trust. A fortiorithe principle will apply where the liability is joint only.
The case we have before us concerns a partnership. By section 3of the Civil Law Ordinance (Cap. 79) which deals with theintroduction of the law of England into Sri Lanka it is stipulatedthat the law to be administered regarding ail questions or issueswhich have to be decided in Ceylon (as Sri Lanka was thenknown) from the date on which the Ordinance came intooperation, that is, 1st July, 1853, with respect to the law ofpartnerships, should be the same as would be administered inEngland in a like case, at the corresponding period, if such questionor issue had arisen or had to be decided in England unless otherprovision has been enacted to be operative. We do have aPartnership Ordinance (Cap. 83) in Sri Lanka which is mainlyconcerned with providing that certain classes of persons shouldnot be regarded as partners. It does not affect the provisions ofsection 3 of the Civil Law Ordinance that the law of partnershipobtaining in Sri Lanka is the English law.
The law of England on partnerships is to be found mainly inthe Partnership Act of 1890 of that country. The liability of
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partners for debts and obligations arising in contractu and forwrongs ex delicto is stipulated to be joint by sections 9 and 12respectively of this Act. But tortious liability can be severalunder the circumstances set out in sections 10 and 11 of theAct but these do not arise for consideration at this stage and neednot detain us. In respect of debts and obligations ex contractu theestate of a deceased partner can by the provisions of s. 9 beseverally liable in the due course of administration but onfy so faras they remain unsatisfied and subject to the prior payment of hisseparate debts. The principle that every partner in a firm is liablejointly with the other partners for debts and obligations arising incontractu became established after the decision of the House ofLords in the case of Kendall v. Hamilton (6). At the same time bya long series of cases notably Bishop v. Church (7), Burn v. Burn(8), Beresford v. Browning (9) and Re Hodgson (10), which are inno way affected by Kendall v. Hamilton it became accepted that acreditor of a firm who sues the surviving partners and recoversjudgment against them can yet obtain payment of his demand outof the assets of a deceased member of the firm—see Lindley onPartnership 12th Ed. (1962) pp. 237 to 239. It is these principlesthat are embodied in section 9 of the English Partnership Act,1890 which runs as follows:
"Every partner in a firm is liable jointly with the otherpartners, and in Scotland severally also, for all debts andobligations of the firm incurred while he is a partner; and afterhis death his estate is also severally liable in a due course ofadministration for such debts and obligations, so far as theyremain unsatisfied, but subject in England or Ireland to theprior payment of his separate debts."
In the instant case the cause of action is based on a contract oftenancy between the plaintiff and the three partners of the firm of
W.Lalchand & Co. The obligations on the contract are joint andaccordingly the liability to be sued on the death of one of thepartners survives. Further the partnership deed No. 111 of14.11.1955 marked X annexed to the affidavit of 4.5.72 of the2nd and 3rd defendants puts matters beyond controversy. Inclause 15 of annex X it is provided that the death or retirement ofany partner shall not dissolve the partnership between thesurviving or remaining partners. The general law is that on the deathof one of several partners the partnership stands dissolved—see thecase of Adamalay & Co. v. Asiya Umma (11). But it is always open
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to the partners to have their own agreements regarding thecontinuance of the partnership upon the death of one.of thepartners. Hence by a valid stipulation in clause 15 of Deecl X it isprovided that if one partner dies the partnership will be deemedto continue as between the remaining partners. By clause 17of the same document in the event of the death of the 1stdefendant the surviving defendants were obliged to admit hiswidow as a partner. Until the admission of the 1st defendant'swidow as a partner, and we are not told that she has been soadmitted, the surviving partners will carry on the partnership inview of clause 15. In the written submissions which have beenfiled on behalf of the 2nd and 3rd respondents it is stated thatthese premises were occupied for the purpose of carrying on thepartnership business—see the undated submissions of the 2ndand 3rd respondents appearing at folio page 90 of the originalrecord. It is here stated that the tenancy of the said premises hasbeen treated both by the plaintiff and the tenants as an asset ofthe partnership business and it was submitted that the tenancy ofthe premises is in the law an asset of the partnership business.
In this state of the facts before this Court it is clear that thepartnership is today being carried on between the survivingpartners, that is, the 2nd and 3rd defendants alone in accordancewith clause 15 of the deed of partnership marked X. The causeof action therefore survives against the 2nd and 3rd defendantsalone.
To my mind section 2(4) and section 36 of the Rent Act, No. 7of 1972, become relevant only in a case when the 1st defendant'sheirs-at-law so far as the contract of tenancy goes have to bedetermined. For the matter before us these provisions areirrelevant, and need not be discussed. However this is not to saythat I agree with the analysis of these provisions by the learnedtrial Judge.
The plaintiff's application to proceed against the 2nd and 3rddefendants on the basis of the cause of action surviving as againstthe 2nd and 3rd defendants alone is entitled to succeed. In thissituation it is obligatory on the court to grant permission to theplaintiff to proceed against the surviving defendants. We thereforeallow this appeal. We set aside the order appealed from and make
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order that the action do proceed against the surviving 2nd and 3rddefendants. The 2nd and 3rd defendants will pay the costs of thisappeal to the plaintiff.
SENEVIRATNE, J.-l agree.Appeal allowed.