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Issues: Partnership agreement terms, liability of partners for losses, burden of proof in a partnership action
Partnership Agreement Terms: The appeal arose from a partnership action where the plaintiff and three defendants were involved in a partnership that was facing losses. The plaintiff filed a suit for winding up the partnership, alleging unequal shares among the partners. The defendants admitted the partnership but denied liability for losses. The terms of the partnership agreement and the liability of each partner for losses were key issues in the case. Liability of Partners for Losses: The matter was referred to the Official Referee for taking accounts, with the question of partners' liability for losses reserved. A preliminary decree stated that all partners were interested in assets and profits equally, although this was not explicitly mentioned in the pleadings or issues. The Official Referee's report supported the plaintiff's claim of unequal shares in profits. The defendants did not press their objections, leading to a decree that losses should be borne as per the plaintiff's claim. The burden of proof regarding the sharing of losses in a partnership was a central point of contention. Burden of Proof in a Partnership Action: The Court analyzed Section 253(2) of the Contract Act, which presumes equal sharing of profits and losses in the absence of a specific agreement. The plaintiff alleged unequal shares in profits, which the defendants did not contest. The Court held that partners sharing profits in certain proportions should also share losses in similar proportions unless a specific agreement states otherwise. Citing legal precedents, the Court emphasized the principle of community of profit involving a community of loss in partnerships. As the defendants failed to provide evidence to the contrary, the burden of proof rested on them, leading to the dismissal of the appeal and affirming the judgment in favor of the plaintiff. In conclusion, the judgment upheld the principle that partners in a partnership should share losses in proportion to their shares in profits unless a different agreement is proven. The burden of proof lies on partners contesting the sharing of losses, and failing to provide evidence may result in a judgment in favor of the partner alleging unequal sharing of losses.
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