Walji v Jiwa and Co. (C.A. 20/1927.) [1927] EACA 49 (1 January 1927)

## COURT OF APPEAL FOR EASTERN AFRICA.

$\mathcal{L}_{\mathcal{L}}$

## Before SIR T. S. TOMLINSON, C. J. (Zanzibar); PICKERING, J. (Kenya), and GUTHRIE-SMITH, J. (Uganda).

## JIWA WALJI (Appellant) (Original Defendant)

## THE OFFICIAL RECEIVER OF THE BANKRUPT ESTATE OF KANKUBAI ALLADINA GIGA, trading as A. E. JIWA & Co. (Respondent) (Original Plaintiff). C. A. $20/1927$ .

Section 119 of the Bankruptcy Act, 1914—operation of a receiving order against partner who, at the date of the receiving order, had not been identified as being a partner.

Held: - That a secret and undischarged partnership could not defeat the just claim of the creditor, and that the receiving order<br>operated against the partner although the fact of his being a<br>partner was not then known.

The Judgment of the Supreme Court, Tanganyika, was delivered by SIR ALISON RUSSELL, C. J., in Bankruptcy Cause No. 1 of 1926, as follows: $\longrightarrow$

1. On the 31st August, 1926, the following order was made: -

Pursuant to a petition dated the 7th day of July, 1926, against Kankubai Alladina Giga, trading as A. E. Jiwa & Co., on which a Receiving Order was made on the 12th day of July, 1926, and on the application of the Official Receiver, and on reading his report. IT IS ORDERED that the debtor be and the said debtor is hereby adjudged bankrupt.

$2. \qquad$ Thereafter prolonged enquiries took place and as a result of the Public Examination of the debtor and witnesses it is now alleged by the Official Receiver that Jiwa Mulji, who is the husband of Kankubai Alladina Giga, was a partner in the firm A. E. Jiwa & Co., if indeed, he is not the real owner of the business. I am now asked by the Official Receiver to adjudge Jiwa Mulji bankrupt in this bankruptcy as a partner in the firm.

It is objected by MR. WARREN WRIGHT on behalf of $3. \qquad$ Jiwa Mulii that the Court has no power to do this. Moreover. MR. WRIGHT urges that there is no allegation of any fresh act of bankruptcy and that accordingly it is not possible to make Jiwa Mulji a bankrupt in these proceedings.

If I found that Jiwa Mulji was in fact the substantive $4.$ partner in or the real owner of the business of A. E. Jiwa & Co., I should greatly regret to find that the Court had no power now to deal with him in these proceedings.

5. It is to be observed that the adjudication in the bankruptcy was an adjudication against "Kankubai Alladina Giga trading as A. E. Jiwa & Co."

It is possible by section 114 of the Bankruptcy Act for a creditor to present a petition against one partner of the firm without including the other partners. In my judgment, however, it was not intended to do this in this case. The real bankrupt was intended to be A. E. Jiwa & Co., and I consider that the Receiving Order and Order of Adjudication were in fact against A. E. Jiwa & Co., the only partner of which firm who was known being Kankubai Alladina Giga.

By Rule 285 a Receiving Order made against a firm operates as if it were a Receiving Order against each of the partners.

By Rule 288, the Order of Adjudication is not to be made against the firm in the firm's name but against the partners individually.

By section 119, the Court may order the names of persons who are partners of the firm to be disclosed on oath.

No cases have been cited to me, nor have I been able to find any case, whereby a man who is subsequently found to be a partner in a firm has been adjudicated bankrupt as a partner in such circumstances as these, where the proceedings have been against one person by name trading as a firm. MR. WILKIE JOHNSTONE suggests that the matter is so simple that no question arises.

$7.$ Reference may be made to the Case of Lavella and Christmas v. Bcauchamp, 1894, A. C. p. 607, which is a case. in the reverse sense, excluding from the Receiving Order one of the partners of the firm who was an infant. But that is a different matter from adding a person subsequently ascertained to be a partner in the firm which has been made bankrupt.

In my judgment, however, the Order of Adjudication $8.$ having been made (in what I hold to be) in effect against A. E. Jiwa & Co., there is power to make an order of adjudication against any person who is subsequently found in fact to have been a partner in the business, under Rule 288 of the Bankruptey Rules. I find nothing there to prevent the order of adjudication being made at any time on the ascertaining of the facts.

9. I hold, therefore, that should I find that Jiwa Mulji is a partner in the firm, I can on the application of the Official Receiver adjudge him bankrupt in these proceedings.

A further Judgment by SIR ALISON RUSSELL, C. J., reads as follows: -

In my previous Judgment of 2nd August I have held that should I find Jiwa Mulji to be a partner in the firm of A. E. Jiwa & Co., I could adjudge him bankrupt in these proceedings.

2. A perusal of the public examination of the debtor Kankubai Alladina Giga and of Jiwa Mulji satisfies me that not only was Jiwa Mulji a partner in the firm but that he was the predominant partner if not the owner of the business. Kankubai is illiterate and states that she does not know when she started business in Tanga. She did not know how long she carried on business at Tanga, or when she shifted to Muheza. She does not know if she put in any capital in the business. She never had any money to put in it. She does not know to whom the shop belongs. She did everything through her husband to whom she granted power of attorney. Her husband was trading; only her name was kept on the shop. Jiwa Mulji says his wife told him she wanted him to open a shop. I am quite unable to accept any of Jiwa Mulji's statements when he alleges that his wife gave him instructions.

I find that Jiwa Mulji is a partner in the firm of A. E. $\cdot \ \ 3.$ Jiwa & Co. I adjudge him bankrupt in these proceedings.

The debtor appealed, in forma pauperis, on the following grounds: $-$

That the order made by the learned Chief Justice is bad in $law.$

Wright for appellant.

Official Receiver not represented.

SIR T. S. TOMLINSON, C. J.—This is an appeal from the High Court of Tanganyika and raises a point upon which there appears to be no authority. The only ground of appeal in the memorandum is that the order made was bad in law. We are not therefore concerned with the various findings of fact and must accept them as conclusive.

In July, 1926, a bankruptcy petition was presented against-Kankubai Alladina Giga trading as A. E. Jiwa & Co., and on July 12th, 1926, a Receiving Order was made against the debtor. On 31st August, 1926, an Order of Adjudication was made against Kankubai Alladina Giga trading as A. E. Jiwa & Co. About a year later it was found that Jiwa Mulji, the husband of

Kankubai, was a partner in the firm and an order adjudicating him a bankrupt was made on August 9th, 1927. Against this order Jiwa Mulji now appeals.

Under section 119 any two or more persons being partners, or any person carrying on business in a partnership name, may be proceeded against in the name of the firm, and it appears to me to be immaterial for the purposes of the section whether the firm consists of one or more persons provided that proceedings are taken against the firm. The Court below has held that the proceedings were in fact against the firm and the receiving order was therefore also against the firm. Now B. R. 285 provides that a receiving order against a firm shall operate as if it. were a receiving order against each of the persons who at the date of the order is a partner in the firm.

There is nothing in the rule to suggest that the receiving order shall operate only against such persons who are known at that time to be partners in the firm, and I can see no reason why the order should not operate against a person who up to that time had continued to conceal the fact of his being a partner. LORD ALVERSTONE, L. C. J., in his judgment In re Wenham, 1900, 1 Q. B., at p. 705 states: "It does not matter for this purpose whether the creditor knew of the dissolution or not but it would be a strange thing if a secret dissolution could put an end to the right of the partnership creditor.". It seems to me that it would be equally strange if the converse proposition were to hold, that a secret and undischarged partnership should defeat the just claim of the creditor. In my view the receiving order operated against Jiwa Mulji although the fact of his being a partner was not then known. The two cases cited in argument-that of Beecham Bros., 1894, 1 Q. B. 1, and In re A Debtor, 7 B. & C. 119, do not appear to be in point as both are concerned with irregularities in the proceedings leading to the receiving order. In this case the receiving order as against the firm is good and the question is as to how far it operates against the appellant.

The order of adjudication must under B. R. 288 be made against the partners individually, so that whatever may be said with regard to the form of the adjudication against Kankubai Alladina Giga trading as A. E. Jiwa & Co. there seems to me to be no objection to an order of adjudication against Jiwa Muji individually as a partner in the firm of A. E. Jiwa & Co. against which there is a valid receiving order outstanding. In my opinion the appeal should be dismissed with costs.

SHERIDAN, $J.-A$ difficulty I have had in this appeal is that the original petition—assuming it to have been presented against the firm rather than an individual partner-was not served in accordance with the Rules under the Bankruptcy Act. It was

served on Kankubai personally at Tanga where she resided and not at the place of business of the firm at Muheza. This defect is something more than formal, and in fact in the case of The Debtors (No. 807/1922) In re (Bankruptcy and Winding-up Cases Vol. vii, page 119) it was held by LORD STERNDALE M. R., and SCRUTTON, L. J., to be an incurable defect outside the powers of section 147. Assuming that the receiving order in this case was made against the firm, it was probably invalid on the ground of bad service and could, had there been an application in the matter, have been set aside. Can we, however, seeing that there has been no application to set aside the receiving order made by MR. JUSTICE GOWER, declare it an invalid receiving order? I do not think so. For the purpose of this appeal we should, I think, take the wording of the receiving order reading "Kankubai Alladina Giga trading as A. E. Jiwa & Co." and endeavour to construe it. The learned Chief Justice held that this should be read as a receiving order made against the firm of which Kankubai was a partner. It is always difficult to discover what Counsel means when he appeals against a Judgment or order as being bad in law as is the case here. I think I am correct in saying that this Court has on many occasions adversely commented on grounds of appeal couched in such vague language.

The finding of the learned Chief Justice may in my opinion be interpreted as that a receiving order was made against the firm under Rule 285 and that the order of adjudication was against the partner of the firm known at the time. I have been unable to find any authority for holding that a partner subsequently discovered to have been a partner at the time of the order of adjudication cannot be added and there being such authority would be a matter for regret. Counsel for the appellant readily conceded that apart from the point discussed the appeal had no merits. I am of opinion that the order of the Court below is right. I would dismiss the appeal.

GUTHRIE-SMITH, J.—This is an appeal from an order of CHIEF JUSTICE RUSSELL of Tanganyika. On 12th July a receiving order was made against K. A. Giga, trading as A. E. Jiwa and Co., followed by adjudication on 31st August. In the course of his investigation the official receiver disclosed that Mulji Jiwa the husband of $K$ . A. Giga was a partner of the business. Application was made to the Court by the official receiver and it was ordered that Mulji Jiwa be adjudged bankrupt. That is the order under appeal. The relevant legislation is section 119 of the Bankruptey Act and Nos. 285 and 288 of the Rules. Rule 285 provides that a receiving order against a firm shall operate against each partner, and Rule 288 that an adjudication shall not be made in the firm's name but against each partner individually. In my opinion there was no receiving order against. a firm. The words. "trading as A. E. Jiwa" are descriptive merely and do not imply that there was any intention to make a firm bankrupt. Further a firm cannot as such commit an act of bankruptcy and no partner can be made bankrupt without proof of an act of bankruptcy by him personally. Hogg $v$ . Bridges, 8 Taunt 200. Ex parte Blain, 12 C. D. 522. Again service of a petition on one partner will not support a receiving order against the other partner and the receiving order cannot be worded so as to include them—re A. Debtor, 1912 I. L. J. County Court Rep. The bankruptcy proceedings against Mulji Jiwa are therefore void and must be set aside with costs in both Courts.