Present : Mr. Justice Middleton and Mr. Justice Grenier.

PATE v. PATE et al.

D. C, Kandy, 16,307.

Partnership-Capital over Rs. 1,000-Proof-Parol evidence-Executed. contracts-Executory contracts-Ordinance No. 7 of 1840, s. 21.

In an action between partners for an account of the partnership, the capital of which exceeded Rs. 1,000, and which was not constituted by any deed of partnership,-

Held, that the prohibition against parol evidence contained in section 21 of Ordinance No. 7 of 1840 applied only to executory contracts,, and that parol evidence was admissible to prove a partnership already dissolved for the purposes of an action for the settlement of partnership accounts.

D. C, Kandy, 52,568 followed.

APPEAL by the plaintiff and the second defendant from a dismissal of an action for an account of a partnership from the first defendant. The facts sufficiently appear in the judgment of Middleton J.

Sampayo, K.C. (with him H. J. C. Pereira), for the plaintiff, appellant.

Walter Pereira, K.C., S.-G. (with him F. J. de Saram), for the second defendant, appellant.

Bawa (with him Van Langenberg), for the first defendant.

Cur. adv. vult.

July 17, 1907. MIDDLETON J.-

This was an action in which the plaintiff, an alleged partner with the first and second defendants and one McClay, deceased, testator and husband of the third defendant, prayed for an account of the 1 (1871) Vanderstraaten 195.

partnership transaction from the first defendant. The second defendant, admitting the alleged partnership, prayed in reconvention for dissolution and an account as between the partners and from the first defendant. The third defendant admitted that McClay had a J share in the alleged partnership, but pleaded that he had sold his share to the first defendant in February, 1900, and, disclaiming interest, prayed the dismissal of the action.

The learned District Judge dismissed the plaintiff's action, and the plaintiff and second defendant appealed. The third defendant did not appear on the hearing of the appeal. No order or decree appears to have been made on the claim in reconvention by the second defendant.

The undisputed facts were that a syndicate was formed on or about December 24, 1897, by the plaintiff, first and second defendants, and one McClay, to take over the working of the coach line from Matale to Jaffna and Ampulla to Trincomalee, that each member was to contribute Rs. 10,000, and that the plaintiff, who had been working the line before the syndicate took over, was to have his stock-in-trade of coaches, horses, &c, taken over by the syndicate. Each party to be entitled to the profits in equal shares.
No partnership deed was drawn up in writing, and it was pleaded as matter of law by the first defendant that the plaint disclosed no cause of action, inasmuch as it was not alleged that the agreement relied upon was in writing.

The second defendant pleaded that the first defendant had by false representation in October, 1899, induced him to accept an amount equivalent to the capital of Rs. 10,000 he had contributed, and, alleging that he had not on that account ceased to be a partner, averred that the first defendant was stopped from denying it by his admission on a balance sheet sent to the second defendant by him in October, 1900, of the second defendant's status as a partner, and claimed in reconvention.

The learned District Judge decided the question of law by the first defendant against him, and, although he had not appealed on this point, his counsel claimed to re-argue the question before us, and we allowed him to do so under section 772 of the Civil Procedure Code, upon the ground that he was supporting the decree on a ground of law decided against him in the Court below.

It was argued by counsel for the respondent that D. C. Kandy, 52,568, decided by Creasy C.J., Temple and Lawson J.J., and reported at page 195 of Vanderstraaten's Reports, does not con