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ANIS JOSEPH HALABY
V.
NEIF JOSEPH HALABY AND ANOTHER
THE WEST AFRICAN COURT OF APPEAL, HOLDEN AT ACCRA, GOLD COAST
17TH DAY OF MARCH, 1951
2PLR/1951/30 (WACA)
OTHER CITATION(S)
2PLR/1951/30 (WACA)
(1951) XIII WACA PP. 180-183
LEX (1951) – XIII WACA 180-183
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BEFORE THEIR LORDSHIPS:
BLACKALL, P.
LEWEY, J.A.
COUSSEY, J.
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BETWEEN:
Suit No. 248/49
ANIS JOSEPH HALABY – Plaintiff-Appellant
AND
1. NEIF JOSEPH HALABY
2. MESSRS. CASSLETON ELLIOTT & COMPANY AS ADMINISTRATORS OF THE ESTATE OF THE LATE RAFIK JOSEPH HALABY – Defendants-Respondents
AND
Suit No. 11/50
NEIF JOSEPH HALABY – Plaintiff-Respondent
AND
1. ANIS JOSEPH HALABY
2. MESSRS. CASSLETON ELLIOTT & COMPANY AS ADMINISTRATORS OF THE LATE RAFIK JOSEPH HALABY – Defendant-Appellants
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ORIGINATING COURT(S)
Appeal from the Supreme Court, W.A.C.A. CIV.APP.25/50.
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REPRESENTATION
E. O. Asafu-Adjaye with K. Adumaa-Bossman, H. V. A. Franklin, Akufo Addo — for the Appellants
E. P. Cawston — for the Respondent
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ISSUE(S) FROM THE CAUSE(S) OF ACTION
COMMERCIAL LAW – PARTNERSHIP:- Presumption all partners hold in equal shares – Basis of – Evidence required to rebut presumption – Necessity to examine evidence charging a deceased partner with the greatest care
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CASE SUMMARY
The issue on this appeal was what were the respective shares of the partnership between the appellant, Anis Joseph Halaby, and his two brothers, of whom one was dead. The appellant, A. J. Halaby, claimed that the partners held in equal shares while the respondent, Neif Joseph Halaby claimed much the larger share for himself. The evidence of the said respondent as to the shares rested mainly on his oral testimony, and he also relied on his assertion that in an earlier partnership subsisting between himself and the deceased partner he subscribed the whole capital. Respondent’s Counsel argued that the trial Judge’s finding of fact should not be disturbed.
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DECISION(S) OF THE WEST AFRICAN COURT OF APPEAL
Held (allowing the Appeal) that:
1. The presumption is that partners share equally. The trial Judge had misdirected himself on the onus of proof in that, although he had appreciated the presumption, he had not correctly directed himself as to the degree of proof required to discharge that onus. In such circumstances a finding of fact can be disturbed.
2. Further, that where an attempt is made to charge a deceased person, the evidence ought to be looked at with great care, and the mind of the Judge ought to be first of all in a state of suspicion.
The shares of all the partners were equal.
Cases referred to:
(1) Mensah v. Nyarku & Fosu, W.A.C.A. CIV.APP.64/49.
(2) In re Moulton Grahame v. Moulton, 22 L.T.R. 380.
(3) Jackson v. Collins, (1862), 54, E.R. 1289.
(4) Hill v. Wilson, 8 CH.APP. 1872/3, 900.
(5) Gandy v. Macaulay, (1876), CH. 9.
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MAIN JUDGMENT
The following Judgement was delivered:
BLACKALL, P.
The question at issue in this appeal is what were the respective shares of the partnership between the appellant Anis Halaby, respondent Neif Halaby, and their brother Rafik Halaby on the 15th June, 1949, being the day on which Rafik was murdered.
Anis claimed that each partner had an equal share. Neif in his evidence stated:-
“If we one day came to share the profits and dissolve the partnership. Anis would take 10 per cent of the profits. Rafik would take 20 per cent, myself would take 20 per cent, and the other 50 per cent would be regarded as my share to be added to the capital.”
On the face of it, this is rather a peculiar arrangement, but in cross-examination the respondent said that in effect it meant that he was to get 70 per cent. The learned Judge accepted that view. Neif’s evidence was unsupported by any agreement as to the shares, but it is submitted by the respondent that this Court should not disturb the trial judge’s finding of fact.
In the recent case of Mensah v. Nyarku & Fosu (1), where a like submission was put forward, I cited the following passage from In re Moulton-Grahame v.Moulton (2):-
“This Court is aware of the weight properly attributable to the opinion of the Judge who has heard and seen the witnesses. But if it should appear that there was a misapprehension on the part of the Judge as to what the antecedent presumptions were, and where the onus of proof lay, it may seriously affect the weight of his opinion as to the credibility of witnesses.”
I propose to apply that principle in dealing with this appeal.
What, then, were the antecedent presumptions? The general principle is stated in 24 Halsbury’s Laws of England (2nd ed.) at p. 460, paragraph 880 –
“Subject to any agreement, express or implied, the rule is that partners share equally in capital and profits and contribute equally towards losses, whether of capital or otherwise. The rule of equality may be negative by the terms of the contract or by the course of dealing with it.”
In the absence of any evidence to the contrary, the presumption therefore is that partners are equally entitled to the profits and equally liable to bear the losses. (Jackson v. Collins (3).) Lastly, it is stated in Lindley on” Partnership,” 9th Edition, p. 435:
“In the event of a dispute between the partners as to the amount of their shares, such dispute, if it does not turn on the construction of written documents, must be decided like any other pure question of fact; and it has been decided that if there is no evidence from which any satisfactory conclusion as to what was agreed can be drawn, the shares of all the partners will be adjudged equal.”
And at page 436 the learned author states:-
“Whether partners have contributed money equally or unequally, whether they are or are not on a par as regards skill, connection, or character, whether they have or have not laboured equally for the benefit of the firm, their shares will be considered as equal, unless some agreement to the contrary can be shown to have been entered into.”
The burden of proof therefore lies on the party who alleges that the shares are unequal, and he must adduce evidence to the contrary, express or implied. Let us now see how Jackson, J., approached this case. He rightly stated in his judgment that “the onus lay upon Neif to discharge the presumption that the shares in the partnership were not equal ones”. But he appears to have lost sight of that presumption when he came to deal with the evidence, for he later asked himself the question, “Does the documentary evidence tend to corroborate the evidence of Anis or that of Neif?” That seems to indicate that the view he took was this:
“I have these two stories before me and if the evidence tends to corroborate Neif he must succeed.”
With deference to the learned Judge, I do not think that is a correct conception of the burden of proof. I think the onus was upon Neif to satisfy the Court beyond reasonable doubt that the agreement which he stated existed did in fact do so.
I now pass to the circumstances which the trial Judge regarded as tending to corroborate the evidence of Neif. He said very little about the firm’s books and other documentary evidence except to remark that the manner in which the accounts were maintained by Rafik tended to corroborate the evidence of Neif. He does not explain why he reached this conclusion which, in my view, is not supported by the evidence. The other circumstances which the learned Judge regarded as supporting Neif’s evidence seems to be these. First, that Anis was a young man without experience or capital, and secondly that in the previous partnership between Neif and Rafik the capital was subscribed wholly by Neif.
With regard to the first of these points, I need only say that it is not supported by Lord Lindley’s dictum about inequality of contribution. As to the partnership between Rafik and Neif, the evidence upon which the trial Judge relied was that of Neif himself. Now, this is a claim against the estate of a deceased person, and it is necessary to bear in mind the principles which the Courts follow in such matters.
In Hill v. Wilson (4) James, L.J., said:-
“The evidence given is the parol evidence of the maker of a promissory note as to a conversation alleged to have taken place between himself and the person to whom the note was given, that person being dead. Even if such evidence be legally admissible for any purpose, the interests of mankind, in my opinion, imperatively require that, unless corroborated, it should be wholly disregarded.”
And in Gandy v. Macaulay (5), Brett, M.R., observed that:-
“When an attempt is made to charge a dead person in a matter in which, if he were alive he might have answered the charge, the evidence ought to be looked at with great care; the evidence ought to be thoroughly sifted, and the mind of any Judge who hears it ought to be, first of all, in a state of suspicion.”
I can discover no indication of this frame of mind on the part of the learned trial Judge in this case, for he appears to have accepted without demur everything that Neif said, even where there was nothing whatever to support it.
Mr. Franklin for the appellant has drawn attention to several matters in connection with the documentary evidence which he contends support the case for the appellant and contradicts that of the respondent. Perhaps the most outstanding feature is that over a period of years the partners were assessed equally for income tax purposes. The respondent, in dealing with this, told the Court that the letters were written by his brother Rafik, though he admitted he had authorised Rafik to make their income tax returns. But he tried to give the impression that he really knew very little about the matter. For my part it would take a lot to convince me that this astute Syrian trader took only a passing interest in his income tax assessment. Jackson, J., in dealing with this point came to the rescue of the respondent by suggesting that it would be to the advantage of the firm to falsify their returns by showing the partners’ incomes as equal. That is true if their shares were equal. But the respondent’s case is that they were not, so I confess I find it difficult to understand why, if Anis’ income amounted to only 10 per cent of the profits he would be willing to pay income tax on one-third for the benefit of his brother who enjoyed 70 per cent of the profits. Mr. Franklin invited attention in this connection to a certain contract where there was a profit of £200 and a letter (Exhibit ” B “) informing the Income Tax Commissioner that Neif and his brothers shared equally in it.
I do not think I need say anything further about the documentary evidence except this, that the documents in the case in my opinion lend no support whatever to the respondent’s story that he was entitled to 70 per cent of the profits. On the contrary, it does so far as it goes support the case for the appellant. In my view, therefore, the respondent failed to discharge the burden of proof cast upon him, and this being so, the trial Judge should have adjudged that the partners shares were equal. For these reasons I think the appeal should be allowed.
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LEWEY. J. A.
I agree and have nothing to add.
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COUSSEY, J.
I also agree that the appeal should be allowed.
Appeal allowed.
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