Wakilii

Lakha and Others Standard Bank of South Africa Ltd (Appeal No. 38 of 1927)

East African Court of Appeal · [1927] EACA 1 · 1927 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the Court of Appeal for Eastern Africa, which affirmed the High Court of Zanzibar judgment enforcing a mortgage against partnership property
Decision
Appeal dismissed; mortgage enforceable against partnership property including minors' shares

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Privy Council held that a guardian had power to admit minor sons to the benefits of a partnership, and while minors could not be made personally liable for partnership obligations, their shares in partnership property were liable. The Court held that the managing partner had power under section 251 of the Contract Decree to execute a mortgage binding the firm. The widow's right to maintenance under Khoja custom did not give her a specific interest in any particular item of family property and was subject to general dealings with the estate by those in charge.

Outcome

Appeal dismissed; mortgage enforceable against partnership property including minors' shares

Facts

Bhaloo Lakha, an Ismailia Khoja, carried on business as a clove merchant in Zanzibar under the style Lakha Velani & Co. In 1913 he executed a deed of gift of all his property to his six sons and made a will appointing his eldest son Mahomedali as guardian of his minor children. He died in 1916, leaving six sons (two of whom were minors) and a widow. The business was carried on by three adult sons. In 1919 an equitable mortgage was executed in favour of the Standard Bank, and in 1921 a formal mortgage deed was executed by Husein Bhaloo Lakha, one of the managing partners, in the name of the firm. The mortgage covered a house in which the business was conducted. When the business encountered difficulties, the Bank sued to enforce the mortgage. The two sons who were minors at their father's death and the widow appealed.

Issues

  1. Whether a guardian had power to bind minor sons by admitting them to the benefits of a partnership.
  2. Whether minor partners' shares in partnership property were liable for the obligations of the firm.
  3. Whether the minors validly repudiated the partnership upon attaining majority.
  4. Whether the mortgaged house was part of the partnership assets.
  5. Whether a managing partner had power to execute a mortgage binding the firm under section 251 of the Contract Decree.
  6. Whether a widow's right to maintenance under Khoja custom gave her a specific interest in partnership property.

Orders

  • Appeal dismissed.
  • No order as to costs (appellants proceeding in forma pauperis).

Rules and key headnotes

Family Law — Partnership — Guardian's Power — Admission of Minors to Partnership Benefits
A guardian has power to bind minor sons by admitting them to the benefits of a partnership where such admission is for their benefit, and the guardian decides that the business should be carried on rather than wound up.
Contract Law — Partnership — Minor Partners — Liability for Partnership Obligations
Where minors are admitted to the benefits of a partnership under section 247 of the Contract Decree, while they cannot before attaining majority be made personally liable for the obligations of the firm, their shares in the partnership property are liable to the obligations of the firm.
Contract Law — Partnership — Repudiation by Minor — Requirements of Public Notice
A notice by former minor partners stating they are not responsible for liabilities of the firm does not constitute valid repudiation of the partnership under section 248 of the Contract Decree where it does not expressly repudiate the partnership itself and is not given within a reasonable time of attaining majority.
Contract Law — Partnership — Managing Partner's Authority — Power to Execute Mortgage
Under section 251 of the Contract Decree, a managing partner has power to execute a mortgage of partnership property so as to bind the firm where such act is necessary for or usually done in carrying on the business of the partnership.
Family Law — Khoja Custom — Widow's Right to Maintenance — Nature of Interest
By Khoja custom a widow is entitled to maintenance out of the estate, but she has no specific interest in any particular item of the family property and her rights are subject to the general dealings with the estate by those in charge.
Family Law — Succession — Khoja Family — Application of Hindu Law
Khojas in matters of simple succession and inheritance are governed by Hindu Law within certain strict limits which are not to be extended, but Hindu rules governing an ancestral family business cannot be applied where the business was not an ancestral family business.

Legislation cited (6)

  • Contract Decree (Zanzibar) s.247
  • Contract Decree (Zanzibar) s.248
  • Contract Decree (Zanzibar) s.251
  • Transfer of Property Decree
  • Registration of Documents Decree
  • Majority Decree Cap. 57

Cases cited (1)

  • Asan Kani v Somarsundaram (1908) 31 Madras 206

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Lakha and Others Standard Bank of South Africa Ltd (Appeal No. 38 of 1927) [1927] EACA 1 (1 January 1927)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.