The main legal point established is that an agreement may be valid for establishing a partnership even if certain terms are invalid, and the parties may still be entitled to the benefits and obligations of the partnership.

Lord Chancellor -

This is an appeal from a decree of the Supreme Court of Ceylon affirming a decree of the District Court of Colombo in an action in which the appellant was plaintiff and the respondent was defendant.

By an agreement in writing dated 21st December 1915, the respondent and the appellant agreed to prospect for plumbago at the Pattagoda Mines under the name of the Pattagoda Mining Company. The agreement provided that the respondent " would thereby give over " his interest in the lease which he had taken from the owners of the mine (which had still eight years to run) to the Company ; that the appellant should manage the mine and receive a commission of 2½ per cent, on all transactions ; that the partners should contribute equally to the expenses to be incurred on the pit or pits ; and that they should be entitled to the profits and liable for the losses in equal shares. The agreement was signed by both parties, but the signatures were not attested by a notary or witnesses. The mine was duly worked under the management of the appellant from the date of the agreement until the month of January 1918, when the working was stopped by mutual arrangement.

On 25th January 1923 the appellant brought this action against the respondent pleading the above facts and alleging that he (the appellant) had paid or borrowed money in respect of the business amounting to Rs. 72,857 and was entitled to commission amounting to a further Rs. 1,504 ; and the plaintiff claimed a dissolution of the partnership and payment by the defendant of one-half of those sums or of such sum as might be found due upon an account being taken. The respondent by his written statement admitted that he had agreed to work the Pattagoda plumbago pits under the name of the Pattagoda Mining Company, that the profits and losses were to be divided equally, that the plaintiff was to manage the business for a commission of 2½ per cent., and that the business had been carried on as alleged ; but he pleaded that the agreement of 21st December 1915, on which the plaintiff's action was based, was invalid in law. Issues were framed, which included the following :

1. Is the document containing the agreement between plaintiff and defendant invalid in law inasmuch as it has not been notarially executed and has not been duly stamped ?

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5. Had plaintiff authority to borrow money for the working of the partnership ?

6. Is defendant liable to pay half-share of any of the moneys borrowed by the plaintiff or of the interest due on such loans.

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8. What sum, if any, is due by defendant to plaintiff or by plaintiff to defendant ?

On the trial of the action the District Judge held on issue 1 that the agreement of 2lst December 1915, not having been attested by a notary and two witnesses in manner directed by Cl. 2, Ordinance No. 7 of 1840, was void in law, and without dealing with the other issues dismissed the action with costs. On an appeal by the plaintiff to the Supreme Court of Ceylon, that Court affirmed the judgment of the District Judge, and it is against that decision that the present appeal is brought.

The material provisions of Ordinance No. 7 of 1840 are as follows :

2. No sale, purchase, transfer or mortgage of land or other immovable property and no promise, bargain, contract or agreement far effecting any such, object or for establishing any security, interest or incumbrance affecting land or other immovable property (other than a lease at will or for any period not exceeding one month) nor any contract or agreement for the future sale or purchase of any land or other immovable property shall be of force or avail in law unless the same shall be in writing and signed by the party making the same or by some person lawfully authorized by him or her in the presence of a licensed notary public and two or more witnesses present at the same time, and unless the execution of such writing deed or instrument be duly attested by such notary and witnesses.

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21. No promise