1920 Present : De Sampayo J. and Dias A.J.

PETER v. COORAY.

117-D. C. Colombo, 53,071.

Agreement to advance money to toddy renter in consideration of getting share of the profits - Is agreement a violation of the Excise Ordinance ?

Defendant, who had purchased toddy rents, entered into an agreement with the plaintiff to pay him two-fifths share of the profits in consideration of plaintiff advancing to defendant moneys whenever required for the purpose of the business. The business was to be carried on by the defendant, and was to be under his sole control and supervision.

Held, that the agreement was void in law.

THE facts appear from the following portion of the judgment of the District Judge :-

The plaintiff avers in his plaint that the defendant purchased from Government the privilege of selling toddy from October 1, 1917, to September 30,1918, at Hettiyawatta, Marshall street, Modera, Lansiyawatta, and Timbirigaspitiya. That at defendant's request he advanced a sum of Rs. 9,000 for the purpose of carrying on the business, and the defendant agreed to give him two-fifth share of the profit and that a sum of Rs. 4,200.76 is due to him, as a sum of Rs. 10,501.90 was earned as profits.

The defendant denies his liability, and alleges that the agreement is bad in law; that the rents of the toddy taverns referred to in the plaint were purchased by his son Patrick Cooray; that he signed the agreement X as agent of his son Patrick Cooray; and that there were no profits.

According to the evidence of the plaintiff the defendant told him a few days before the sale that the rents of the toddy taverns referred to in the plaint were to be sold, and after the sale the defendant told him

he had purchased the rents, and asked him to advance him (defendant) money from time to time to carry on the said business. Plaintiff agreed to advance the money in consideration of his receiving a two-fifths share of the profits, and at his request the defendant signed document X. Subsequently, the plaintiff learnt that the rents had been purchased by defendant in his son's name.

The plaintiff advanced defendant from time' to time Rs. 15,000 to Rs. 20,000. In September, 1918, it was found that the defendant owed plaintiff Rs. 9,000. This amount was secured by nine promissory notes, which are the subject of other actions.

The evidence of Lewis Perera makes it clear that the rents of three of the taverns were purchased by or in the name of defendant's son, Patrick Cooray, and two in the name of one B. A. Fernando. On these facts the defendant contends that plaintiff cannot maintain the action against him as he did not purchase the privilege of selling the toddy at the taverns in question.

I have no doubt, however, that Patrick Cooray and B. A. Fernando were the defendant's nominees, and that the rents were purchased for the defendant. The defendant admitted that he found the money for Patrick Cooray.

This view is supported by the document X signed by the defendant. It runs as follows :-

" Five shares of the following five toddy taverns : Hettiyawatta, Marshall street, Modera, Lansiyawatta, Timbirigaspitiya.

"Two shares to Mr. J. R. Peter.

"One share to Mr. J. Cooray.

"Two shares to Patrick. Mr. Peter should look into all and be responsible for the transaction."

I have no doubt that the defendant made the agreement deposed to by the plaintiff.

Even if the defendant did not himself carry on the business of selling toddy at the taverns in question, he is, in my opinion, liable on his agreement; but on the evidence it appears to me that Patrick Cooray was merely the defendant's agent, and I find on the first issue that defendant did carry on the business of selling toddy at the taverns in question.

As regards the fifth issue, too, I find that the defendant was the real purchaser of the taverns, and he is liable, although his name is not on record, as the purchaser, and I answe