ASSIGNMENT OF SPECIFIC CONTRACT

CASE COMMENT

SUBMITTED TO- SUBMITTED BY-

ASSISTANT PROFESSIOR Shri Krishan Choudhary
Dr. Mr. Alok Kumar Roll No. 15

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 CASE COMMENT: MILES V. CLARKE1
SHRI KRISHAN CHOUDHARY2

Abstract-
The following assignment will be commenting on the case of Miles v/s Clarke. Firstly,it will
begin with introducing the case, the it will let know about the issues involved in the case
followed with analysis and conclusion.

Introduction-
The judgement passed in this case by the court has spurred up the debate on what are the assets
of partnership firm and how those assets will be divided among the partner at the time of
dissolution of firm. This resulted into the discussion over the Section 483 and 48(b)4 of Indian
partnership Act. The following case is partnership action in which the issues on the writ. At the
time of the pleadings when the matter came to be dealt with in this court were two and as
follows-
 First, weather there was a partnership or not.
 Secondly, if there was a partnership, what are the assets of the partnership.
The defendant minded to start a business in commercial and fashion photography. In june1948,
he entered into a lease whereby the property, which consisted of two squash racquets courts,
dressing-rooms, and so forth, was demised to him for a period of seven years from midsummer,
1948, at a rent of £400 a year. There the defendant started to carry
on a photographic art or craft, but he employed persons to carry out the photographic work for
him. At the beginning he made a very considerable loss. In January, 1950, after some earlier
approaches which were ineffective, he applied to the plaintiff to see whether he would come
into business as a partner. Plaintiff had good connection in this particular work. from
about the beginning of April he attended there as a full-time occupation and brought with him
his own considerable connection. He took photographs of such subjects and such models as

1
Miles v. Clarke [1953] 1 ALL ER 779
2 LL.B. 5 year (HPNLU) 2016-2021
3 Indian partnership Act,1932
4 Indian partnership Act,1932

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the defendant on his side should provide. The upshot of it was a very successful business.
The plaintiff’s faithful clients followed him, and brought their work to him. The business is
now in the hands of a receiver, after the partnership quarrel, in a flourishing condition. They
agreed that the profits, if there should be any, should be shared equally.
There also appears to have been an agreement reached that the plaintiff should draw
£125 a month on account of his share of the profits.
The court held that what terms were these people partners? The only answer one can
give is that they were partners on the terms that they shared the profits between them.
What more? It is said, and I think rightly, that, even though there was no further
agreement, one must assume that the stock-in-trade, such as stocks of film, was put into
the pool and cannot be taken out again, but must become part of the partnership assets.
That is not denied. There remain, however, more important items. The first is the
lease and the second is the plaint which may be worth £2,000. It is said with force
by counsel for the plaintiff that those two classes of assets were put forward throughout
as being brought in as part of the assets of the intended association, and, the plaintiff
having come into the business on that footing, it would be inequitable now to deny
him a right to share in those assets. It is said on the other side that it is not necessary
to assume any further agreement between the parties, but one need only say that
everything that belonged to one of them at the beginning of the partnership still belonged
to that one at the end, and that the law will not make any imaginary agreement between
the parties, it being ascertained as a fact that there was no agreement. In my judgment,
no more agreement between the parties should be supposed than is absolutely necessary
to give business efficacy to that which has happened, and that, I think, is the only safe
way to proceed.5

ANALYSIS –
Now the time has changed multi national companies exist. There is term investor emerged. A
investor is who one has the capital share in the company. A share holder also shares the profit
of the company and losses too. This concept can be dealt with help of limited liability
partnership Act.6 In this case what did you invest and what do get may be different
Because it works with market not with company’s value. The judgement contended that

5 Miles v. Clarke [1953] 1 ALL ER 779

6 limited liability partnership Act, 2003
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 “everything that belonged to one of them at the beginning of the partnership still
belonged to that one at the end”. In Indian context the section 48(b)7 of deals with it.
Section 48 (b) States that:-

48. Mode of settlement of accounts between partners.—In settling the accounts of a firm after
dissolution, the following rules shall, subject to agreement by the partners, be observed:—

(b) the assets of the firm, including any sums contributed by the partners to make up deficiencies of
capital, shall be applied in the following manner and order:—
(i) in paying the debts of the firm to third parties;
(ii) in paying to each partner rateably what is due to him from the firm for advances as distinguished
from capital;
(iii) in paying to each partner rateably what is due to him on account of capital; and
(iv) the residue, if any, shall be divided among the partners in the proportions in which they were
entitled to share profits.
The section lays down the principal of application of assets in a partnership firm.
Firstly, the assets of the firm, includes capital invested by partner. Secondly any good used for
business of firm which contributed by the partner. At the end assets of the partnership firm also
include the stocks purchased under name of the firm.
In the following case it is also discussed what actions will result into a partnership where the court
held that even though don’t have any agreement referring to their partnership but they shares the
profit earned by the business. On the other section 48 of Indian partnership Act gives a idea about a
partnership firm in Indian context.
The section 4 of Indian partnership Act, states as follows:-
Definition of “partnership”, “partner”, “firm” and “firm name”.—’’Partnership” is the
relation between persons who have agreed to share the profits of a business carried on
by all or any of them acting for all. Persons who have entered into partnership with one
another are called individually “partners” and collectively a “firm”, and the name under
which their business is carried on is called the “firm name”.
In this not only profit and loss are concerned. The partnership must be the result of
agreement. The purpose of forming the is to carry on a business. The business is to be
carried on by all or any of them acting for all9.
This is a partnership firm in Indian context.

7 Indian partnership Act, 1932

8 Indian partnership Act, 1932
9 CST V. K. Kelukutty, (1985) 4 SCC 35

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CONCLUSION-

The motto of the court to settlement between Miles and Clarke. The court didn’t
imposed any illusionary agreement and determined the partnership by the sharing of
profit and agreement to withdraw certain amount as share of profit.
Later the court made a inquiry about what are the assets of firm. Then concluded if any
goods and amount belongs to someone that still belongs to that person. On the other
hand the stocks which are purchased under the name of the firm will be distributed
among the partner according to their shares.
On the overall, the judgement still fit into the concept and considerable in the cases in
India. Even though this is not a binding case on the Indian curts.

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BIBLIOGRAPHY-
1) Indian partnership Act, 1932
2) Limited liability partnership Act, 2003
3) Indian contract Act, 1872

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