Purdon v Muller

• Jurisdiction: South Africa
• Judgment Date: 13 February 1961
• Citation: 1961 (2) SA 211 (A)

Purdon v Muller
1961 (2) SA 211 (A)

1961 (2) SA p211

Citation	1961 (2) SA 211 (A)
Court	Appellate Division
Judge	Steyn CJ, Van Blerk JA, Ogilvie Thompson JA, Botha AJA and Van Winsen AJA
Heard	November 30, 1960; December 1, 1960
Judgment	February 13, 1961

Flynote : Sleutelwoorde F

Partnership — Essentials of — Nature of — Partner cannot invoke forfeiture clause unless contract honoured by him — Practice — Pleadings — Particulars — When to be requested — Series of interrogatories — When not permissible.

Headnote : Kopnota

Where Pothier's four requirements for a partnership are shown to be H present the Court will find a partnership established unless such a conclusion is negatived by a contrary intention disclosed on a correct construction of the agreement between the parties.

Partnership is a contract uberrima fides and that connotes that a partner wishing to invoke against his co-partner the stringent provisions of a summary cancellation and forfeiture clause contained in the partnership agreement must at least himself be honouring the terms of that agreement. The equitable principles of our law do not permit a partner, who is himself repudiating his partnership obligations towards his partner, to enforce against that co-partner a forfeiture clause such as one which provides that failure or

1961 (2) SA p212

neglect to perform a duty will render him liable to summary cancellation and resultant forfeiture.

While it is fundamental that a party should be adequately apprised of the case he has to meet, the ingenious inquisitor should not be permitted, under the guise of a request for further particulars of a pleading, in effect to submit a series of interrogatories to the opposite party.

A Where a trial Court had found that a partnership had existed between the appellant and the respondent and it had ordered the appellant to furnish accounts which were in his possession, and after debate thereof to pay the respondent his half-share of the profits, in an appeal,

Held, that the order had been properly made.

The decision in the Eastern Cape Division in Purdon v Muller, 1960 (2) B S.A. 785, confirmed.

Case Information

Appeal from a decision in the Eastern Cape Division (DE VILLIERS, J.P.). The facts appear from the judgment of OGILVIE THOMPSON, J.A.

W. G. Trollip, Q.C. (with him D. Reichman), for the appellant: The C contract was one of employment and not of partnership. The contract contains provisions opposed to the concept of a partnership. Further, certain provisions one would have expected to find had this been a partnership agreement, are absent. They are an agreement to share losses, any provisions from which the right of respondent to represent appellant is to be inferred, a right vested in respondent to terminate, D if appellant is in breach; cf. Walker v Hirsch, 27 Ch. at pp. 463 - 5, 469, 472 - 3; Feinberg v Kaplan and Kaplan, 1913 W.L.D. 48; Halsbury (Simonds' ed.), vol. 28 para. 938; Ross v Parkyns, 20 Eq. at p. 336; Halsbury ubi cit. para. 935; Wulfsohn v Taylor, 1928 T.P.D. at p. 103; Hart v Pickles, 1909 T.H. 250; Venter v Livini, 1950 (1) SA E at p. 527; de Villiers v Smith, 1930 CPD at p. 222; Blismas v Dardigan, 1951 (1) SA at pp. 146, 147; Truter v Hencke, 1923 CPD 43; Els v Bruce, 1923 E.D.L. at pp. 386 - 7. In any event, if the contract was not clearly one of employment, it is capable of being so construed and it is therefore at least ambiguous. The Court may therefore look to the surrounding circumstances; see Delmas Milling Co., F Ltd v du Plessis, 1955 (3) SA 447. It may also look to the conduct of the parties after the agreement was entered into; see Shill v Milner, 1937 AD 110; Breed and Another v van den Berg and Others, 1932 AD 282. The imposition by respondent of conditions constituted a refusal to plant; see Odendaal v du Plessis, 1918 AD at pp. 475, 478. G As to the claim for an order declaratory of a partnership, for the reasons advanced, the relationship between the parties was not one of partnership. Alternatively, if the agreement was lawfully cancelled and respondent forfeited all his rights, the dispute is academic and no order should therefore be granted; see Ex parte van Schalkwyk, N.O., 1952 (2) SA at p. 411; Ex parte Morris, 1954 (3) SA at pp. 153 - 4. H The Court a quo erred in pronouncing dicta as to what factors should be taken into account in valuing the amount of compensation under clause 11. This was not an issue on the pleadings and is one that when it does arise would have to be determined by arbitration; see Whitfield v Phillips, 1957 (3) SA at pp. 345 - 6. Appellant would only be obliged to render an account for the profits in question if the agreement expressly or impliedly compelled him to do so; see Auerbach v Sunbeam Neon Light Co., 1938 CPD at pp. 476, 477; Maitland Cattle Dealers (Pty.), Ltd v Lyons, 1943 W.L.D.

1961 (2) SA p213

at p. 19; Zabow v Mauerberger, Ltd., 1936 CPD at p. 207; Vervall v Naested, 1924 S.R. 109. Express provision is made in clause 3 (c) that respondent and not appellant is to keep the books of account and all such vouchers, accounts and records as are necessary. The principle A expressum facit cessare tacitum applies; see Barnabas Plein & Co v Sol Jacobson, 1928 AD at p. 28; Wessels Law of Contract in South Africa (2nd ed., para. 1950); du Plessis v Nel, 1952 (1) SA at pp. 537, 539. As the person managing the farming activities (whether as partner or not), it was respondent's duty under clause 3 (c) and/or B Common Law to prepare and render accounts to appellant, not vice versa; see Voet, 17.2.11 (Gane's translation vol. 3); Schorer, n. 406; Maasdorp, p. 621; Tshabalala v Tshabalala, 1921 AD at pp. 317 - 8, 327; Silver v Silver, 1934 NPD 396.

T. M. Mullins, for the respondent: If the land in question was governed by the terms of the agreement, the question whether there was a breach C of the agreement or not depends on the ipsissima verba of the agreement and other principles governing the relations of partners or parties to a contract in the nature of a partnership; see Lindley Partnership (11th ed., pp. 494 - 5); Bowen v Daverin, 1914 AD at pp. 637 - 8. As to the principles determining the existence of a partnership, see Bamford Partnership, pp. 14 - 5; Rhodesian Railways D and Others v Commissioner of Taxes, 1925 AD at p. 465; V v de Wet, N.O., 1953 (1) SA at p. 615; Davison v Auret, 22 S.C. at pp. 14 - 15, 16 - 17, 27. As to appellant's argument that the fact that respondent received a monthly wage from 1st July, 1952, to 30th June, 1954, negatived the existence of a partnership, this was correctly rejected by the Judge a quo on the principle of Ellis v Joseph Ellis & E Co., 1906 (1) K.B. 324. Appellant's argument based on the silence of the agreement as to losses, was also properly rejected; see Dickinson & Brown v Fisher's Executors, 1916 AD at p. 394; Voet, 17.2.8; Bamford, op. cit. p. 13. This is not a case where, in so far as the terms of their agreement are concerned, one party was obviously subordinate to F the other; cf. S.A.L.J. (1960, pp. 409 - 10). The cases where an agreement has been found to be one of employment, have all one or more distinctive attributes of master and servant relationship; see Truter v Hancke, 1923 CPD 43; de Villiers v Smith, 1930 CPD 219; Feitelberg v Kaplan & Kaplan, 1913 W.L.D. 48; Hart v Pickles, 1909 G T.H. 244; Wulfsohn v Taylor, 1928 T.P.D. 99; Venter v Livini, 1950 (1) SA 524; Blismas v Dardigan, 1951 (1) SA at pp. 146 - 7. The principles of partnership apply to joint ventures where all the essentials of partnership are present; see Langermann v Carper, 1905 T.H. 251; Bester v van Niekerk, 1960 (2) SA at p. 784; Feitelberg's case, supra. One partner cannot give instructions to another partner as H to a servant; Ellis' case, supra. In the absence of agreement to the contrary, each party has a right to take part in the management of the partnership business; see Lee & Honoré, Obligations, para. 474; Munro v Ekerold, 1949 (1) SA at p. 589. It was in fact appellant who was in breach of his obligations under the agreement and while he was in default he could not penalise respondent for a breach not going to the root of the agreement; see Lindley, op. cit. pp. 389 - 90, 572 - 3, 690. A partner claiming an account from a co-partner must himself be

1961 (2) SA p214

ready and willing, and must offer, to render accounts of his own administration; see Bamford op. cit. p. 27; Voet 17.2.11. Clauses in a partnership agreement providing for dissolution or expulsion in the event of breach are strictly construed; see Lindley, op. cit. pp. 516 - A 7, 690 - 1. A delinquent partner may not strictly be entitled to notice of his breach; see Lindley pp. 517 - 8. But a partner who is himself in default by denial of the existence of the partnership and breach of his obligations under the agreement, cannot in good faith complain if the other partner demands performance as a pre-requisite to the latter undertaking additional obligations; see Lindley p. 692. It is B open to question whether respondent's actions amounted to a breach of clause 10. He continued performing his other duties in terms of clause 10, and if the parties were partners, appellant had no power to instruct respondent as to how he was to perform those duties; see Lindley p. 508.

Trollip, Q.C., in reply. C

Cur. adv. vult.

Postea (February 13th).

Judgment

D Ogilvie Thompson, J.A.:

Appellant unsuccessfully sued respondent in the Eastern Cape Division for an order declaring that a certain written agreement executed by the parties on 16th April, 1953 (which I will call 'the contract') was, by reason of respondent's breach thereof, lawfully E terminated and cancelled by appellant as from 6th November, 1958. For convenience, I hereafter refer to appellant and respondent as Purdon and Muller...