Report No. 69
Partnership, Tenancy and Agency
The continuance of human affairs which formed the basis of the presumption of life in section 107 provides, in part, the basis for another presumption. Under section 109, when the question is whether persons are partners, landlord and tenant, or principal and agent, and it has been shown that they have been acting as such, the burden of proving that they do not stand, or have ceased to stand, to each other in these relationships respectively, is on the person who affirms it.
The provision in section 109 really consists of two parts. In the first place, it provides that, if parties have been acting as partners etc. then the burden of proving that they do not stand in that relations is on him who so asserts. Secondly, the burden of proving that they have ceased is on the person asserting. The first part, in effect, creates a presumption of the existence of a relationship from the de facto action. The second part creates a presumption of the continuance of that relationship.
51.2. A tenancy or a partnership or other state of things continues until the contrary is proved.1 That is the gist of the second aspect. In fact, as the judicial decisions as to joint Hindu families show, such a presumption could be made in respect of other relationships also. According to Phipson,2 the presumption of continuance from previous existence is to be found in many cases in different branches of law. For example, there will be a presumption of continuance of sanity, insanity, marriage etc. Thus, what the section enacts is a specific illustration of a very wide rule. Incidentally, it may be noted that the section confirms the previous law on the subject.3
1. Obhoy Churn v. Hari Nath, 381 ILR 8 Cal 72 (79).
2. Phipson Evidence, (1963), p. 292.
3. Rungo Lal v. Abdool Guggoor, 1878 ILR 4 Cal 314 (317) (Garth, C.J. and McDonnel, J.).
51.3. English law as to the three relationships.s-
The three relationships specifically mentioned are (a) partnerships, (b) tenancy, and (c) agency. The law is substantially the same in England as to all these relationships. When the existence of a relationship or state of things is proved, the law presumes that it continues till the contrary is shown or some other presumption arises. This general rule has already been mentioned. In particular, a partnership,1 agency,2 tenancy,3 or other similar relation, once shown to exist, is presumed to continue till it is proved to have been dissolved.
1. (a) Clark v. Alexander, 8 Scott NR 161. (b) Brown v. Wan, (1895) 1 QB 390.
2. Smout v. ilbery, 10 M&W 1.
3. Picket v. Packham, LR 4 Ch App 190.
So, when a partnership was admitted to exist in 1816, it was presumed to continue in 1838.1-2 In an American case-Coopers case3-a partner brought an action on a note. It was contended that the plaintiffs were not partners. It was proved that three years prior to the action they were partners. It was held that the presumption was that they continued to be so. From the same presumption of a continuance of things once shown to exist, it follows that after expiration of the term limited by the articles of partnership, it is prima facie presumed that such of the provisions of the articles as are not inconsistent with a partnership at will continue to apply.4 This presumption has been made the subject of positive enactment in India.5
1. Clark v. Alexander, 8 Scott NR 161, and see Anderson v. Clay, 1 Stark 404.
2. Cooper v. Dedrick, 22 Barb 516 (Amer), cited in Lawson's Presumptive Evidence, p. 175.
3. American and English case law is taken from Woodroffe.
4. Taylor Evidence, Section 196 and cases there cited.
5. See the Indian Partnership Act.
51.5. Rebuttal of presumption.-
This presumption will be rebutted and a contrary one raised, if it is shown that annual accounts between partners ceased on a certain date and a final balance was then struck. If after this, some of the partners carried on the business with interference from the others,1 it means that the partnership had already been dissolved.
1. foopoody Sarayya v. Lakshmanaswamy, 1913 ILR 36 Mad 185 (PO).
51.5A. Landlord and tenant.-
In regard to landlord and tenan.- who are expressly mentioned in the section-it is pertinent to point out that under section 116 of the Transfer of Property Act, 1882, when a tenant holds over after the expiration of his lease he does so on the terms of the lease, on the same rent and on the same stipulation as were mentioned in the lease.
51.5B. Agency.- As to the relationship of agency, there are no special comments.
51.6. No need for change.- The above discussion does not disclose any need for amendment of the section.