Jagadisa Aiyar vs Kuppusamy

The proposition of law to which the District Judge refers as laid down by Lord Justice Lindley is as follows :- ""If one partner paid money of his

own to his co-partner, in order that it might be applied by him for some specified partnership purpose, and it was received for that purpose and no

other and was misapplied, an action lay for the recovery of such money; for ex-hypothesi, it never was the money of the firm, and the duty of the

partner who received that money was either to apply it as agreed or to return it in tact. (Lindley on Partnership 6th Edition, p. 558). This

proposition is based mainly on Wright v. Hunter, 1 East. 20 but there are also many other decisions which proceed on the same principle. The

passage quoted above is to be found in a note on the law as it stood before the Judicature Act, and it will be seen on referring to the main body of

the chapter in Lord Justice Lindley''s work to which the note is appended, that the old rule that a decree for an account between partners will not

be made, save with a view to the final determination of all questions and cross claims between them and to a dissolution of the partnership, must be

regarded as considerably relaxed, although it is still applicable where there is no sufficient reason for departing from it, and the learned author then

proceeds to instance several cases in which accounts relating to certain transactions are permitted to be brought without a dissolution of the

partnership, (Lindley, 6th Edition, p. 467). Reference may also be made to illustration (b) appended to Section 258 of the Contract Act where an

instance is given of a case in which an action can be brought by the firm against, one of the partners to account for a certain sum of money received

by him, without bringing a suit for dissolution of the partnership. Under the law as it stands at present in England and also in India, it appears that

such an action may be brought where the circumstances of the case are such as to render it equitable to allow such a suit to be preferred. The

present case appears to us to be clearly such a case. We accordingly set aside the decree of the District Judge and send back the appeal to him

for decision according to law. Cost will follow the result.