Rajasekaram V. Rajaratnam

1958 Present: Weerasooriya, J" and Sansoni, J,

RAJASEKARAM, Appellant, and RAJARATNAM, Respondent

S. C. 515-D. C. Point Pedro, 4323/M

    Partnership-Difference between partnership and co-ownership-Equality of shares of partners not essential-Capital over Rs. 1000-Absence of agreement in writing- Admissibility of parol evidence-Death of partner-Continuation of business by surviving partners-Failure to agree in writing-Effect-Prevention of Frauds Ordinance (Cap. 57), s. 18.

A business cannot be a partnership as well as a co-ownership at the same time.

A partnership may in law exist even if the shares of the partners in the business are not equal. The rule that the shares of partners are equal is only a prima facie one, to be applied in the absence of an express agreement to the contrary or circumstances from which an agreement to the contrary may be implied.

The absence of an agreement of partnership as required by section 18 of the Prevention of Frauds Ordinance will not preclude a partner, as defendant, from adducing parol evidence of the partnership in order to prevent another partner, as plaintiff, from maintaining an action for an accounting or other relief on the false basis that the business is a co-ownership.

Where a partner dies bequeathing his share of the business to one of the surviving partners who subsequently carryon the business with the self-same assets on the basis of a partnership, but without complying with the imperative provisions of section 18 of the Prevention of Frauds Ordinance, it cannot be contended that there is a co-ownership as between the surviving partners.

It cannot be said of a partner that he owns any portion of the assets and goodwill of a particular branch of the business.

APPEAL from a judgment of the District Court, Point Pedro.

S. Nadesan, Q.C., with C. Ranganathan and V. Ratnasa,bapathy, for defendant-appellant.

H. V. Perera, Q.C., with T. Arulananthan, for plaintiff-respondent.

Cur. adv. vult

January 20,1958. WEERASOORIYA, J.-

The plaintiff-respondent and the defendant-appellant are the sons- of one Veeragathipillai who carried on business as a. trader, money-lender and pawn-broker under the name of S. V. at Point Pedro with a branch at Jaffna. In 1929, Veeragathipillai gifted a one-third share in the

business to each of the two sons and the business was thereafter ca: on by the father and the sons under the name of S. Veeragathipillai and Sons, as appears from a declaration dated the 14th October, 1933, signed by them of which P36, D3 and D3A purport to be transla1 and according to which each of them was entitled to, a one-third s in the business. Veeragathipillai died on the 3rd December,1933 leaving a last will which was admitted to probate and under which bequeathed his one-third share in the business to the plaintiff, who some 18 years older than the defendant, Consequent on the death Veeragathipillai, the plaintiff filed the declaration P2 dated the November, 1934, under the Business Names Registration Ordinance (Cap. 120) setting out, as far as was necessary for the purpose of Ordinance, the altered constitution of the business and describe himself and the defendant as the partners of the firm as from the December, 1933.

The evidence shows that until the year 1947 the plaintiff and defendant carried on the business on the footing that the plaintiff entitled to a two-thirds share and the defendant to a one-third s] The plaintiff's case is that it was on the same footing that the bus continued to be carried on until June 1952 when the defendant claimed the sole ownership of the Jaffna branch, of which he was in charge, thus gave rise to the cause of action pleaded in the plaint, which has framed on the basis that the relationship subsisting between the pa in respect of the business is one of co-ownership.

The substantial defense taken by the defendant is that the business carried on by h

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