(HIGH COURT OF JUSTICE)

AHMED MOHD. HASSAN EL SAWAHLI vs. EL HAG ALl ABU KHALIL

(HACJ /CS/303/1956)

Principles

·  Partnership -- purposes of partnership frustrated by refusal of license —— automatic dissolution of Partnership.

A partnership entered into for a specific purpose is automatically dissolved if th, authorities refuse to give any necessary licenses for the purpose in question.
 

Action

The facts are fully set out in the judgment.

Advocates .Y Nigm…………….. for the plaintiff

Abdin Ismail………………………. for the defendant.

M.Y. Hashim, D.J. By an agreement dated 2 December 1955 the plaintiff and the defendant entered into partnership in order to set up a restaurant on premises owned by the plaintiff’s father and let to the plaintiff at a monthly rent of L.S.29.450 m/ms. In the partnership agreement it is stated that each of the partners is to pay L.S.250 for the purchase of furniture and utensils. The defendant is to take the management of the restaurant and to receive a monthly wage of L.S. The net profits after the deduction of expenses are to be divided equally.

By 28th. February the restaurant was ready to open, so another agreement was made between the parties, in which the defendant admitted the receipt of L.S.250 being the plaintiff’s share of the cost of furniture and utensils, and the defendant agreed to pay to the plaintiff a monthly rent of L.S.4o as from the 1st. March 1956. In default of payment of the rent due or the wages of the servants of the concern, the defendant undertook to deliver to the plaintiff the whole premises and to repay him the sum of L.S.250 but the furniture and utensils should then become the sole property of the defendant.

It seems that the authorities refused to issue a licence to the partners for a restaurant and a mere licence to serve sandwiches was issued in the defendant’s name. The defendant continued using the premises on this basis till the commencement of this action on 29th. April 1956 for the dissolution of the partnership, an account of profits, and recovery of the sum of L.S.250 The defendant flatly denies the existence of the partnership, and alleges that the premises were let to him by the plaintiff’s father, and that the plaintiff was merely collecting rent on behalf of his father. This issue was disposed of by earlier proceedings between these parties in which it was held that the plaintiff is the defendant’s landlord. (See CS /519/1956).

The document above mentioned proves the existence of the partner ship and the later agreement proves the payment of the L.S.250 by the plaintiff to the defendant, in furtherance of the partnership. The failure to obtain the licence owing to the disapproval of the authorities automatically dissolved the partnership. The parties should be restored to their previous positions, and the defendant should repay the sum of L.S.250

Order Accordingly.