Phillips, J.:— This is a suit on a pronote executed by one partner (defendant 1) in favour of another partner (plaintiff), and it has been dismissed by the District Judge on the ground that the partnership is still subsisting and that the debt should be included when the accounts are finally settled. I think he is wrong in his view of the law, for the correct principle has been enunciated in Karri Venkatareddi v. Kollu Narasayya(1) that if the account sought is in respect of a matter which, though arising out of the partnership business or connected with it, does not involve the general taking of accounts the Court will as a rule give the relief sued for, and will now a days refuse to interfere only in those cases in which a partial settlement would work injustice to the other partner.
2. In the present case the business of the partnership has practically ceased, no transaction having taken place since the settlement of accounts which resulted in the plaint promissory note.
3. All that is being done is the collection of outstandings. There can therefore be no injustice to defendant 1 in enforcing his liability for the suit amount, for there is nothing more due to him and his share of the stock-in-trade is in his hands. I therefore think that plaintiff is entitled to a decree upon the plaint note. Apart from this view of the case it is questionable whether defendant 1 can evade his liability under the negotiable instrument unless he can show that is a nullity. In this second appeal plaintiff does not press his claim against defendants 2 to 4. He will therefore have a decree against defendant 1 and the family property of defendants 1 and 5 with costs throughout, but the second appeal is dismissed against defendants 2 to 4 with costs.
Krishnan, J.:— I agree to the order proposed by my learned brother. This is a suit on a negotiable instrument and unless that instrument can be treated as an escrow or nullity, the maker is bound to pay according to its tenor, and the fact that the maker is a partner of the payee is no defence under the Negotiable Instruments Act 26 of 1881. There is no ground here to treat the loan as an escrow as it was executed for money found due on a settlement of account. Even apart from the note the plaintiff has a cause of action on the settlement itself; the fact that there may be an unsettled account between the parties is insufficient to restrain a suit on that cause of action: see observations in Ramanath Gagoi…Plaintiff, v. Pitambar Deb Goswami…Defendant, .(2) and the English cases cited there. The rules governing such actions are laid down in Karri Venkatareddi v. Kollu Narasayya . It is only if the taking of a partial account works an injustice that such partial accounts will be disallowed even when there is no settlement of account. In the present case there is no likelihood of the taking of any further accounts reducing in any way the liability of defendant 1 for the suit amount. In these cicumstances it seems to me that the bare fact that the firm has not been formally dissolved yet is no answer to plaintiff's suit, even treating it as a suit on the settled account. The firm has stopped business and the parties have settled their liabilities inter se.
4. The note being found to be genuine and there being no ground that it was not for full consideration, plaintiff is entitled to a decree as sued for against defendant 1 and his family property. I would therefore reverse the decree of the lower Courts as against defendants 1 and 5 and give plaintiff a decree as sued for with costs throughout against defendant 1 and his family properties. Defendant 5, though not a maker of the note, is defendant 1's son and it was not urged that the family property in his hands was not liable. This second appeal is not argued against defendant 2 to 4 and I agree it should be dismissed with costs against them.
S.N/R.K
5. Appeal dismissed.