Partnership
1. Gulazam v. Noorzaman and Sabath
Fact: Three parties agreed orally among themselves to form a partnership to engage in the buying
and selling cattle. They also agreed that each would contribute to the partner’s capital and to share
of the profits
Issue: whether there is a partnership exists between the parties
Decision: The Court held that all essential elements including ‘with a view of profit’ were present
to constitute a partnership.
2. Ratna Ammal & Anor v Tan Chow Soo (partnership in the form of syndication)
Fact: The contract was made between the parties for the purpose of selling milk. The respondent
had obtained the registration of trademark in respect of the milk and other dairy product.
Issue: Whether the trademark obtain by the respondent will be vested in into the partnership
Decision: Partnership exist between them but from the agreement, the trademark will remain with
the respondent.
3. Tan Teck Hee v. Cheng Tian Peng
Fact: The partnership consisted of 25 partners
Decision: The court declared that the partnership is not valid and had no right to take legal
proceedings.
Shim Fatt v Leyland Road Bus Co.
Fact: The Plaintiff gave advance money to the defendant; a firm consisted more than 20 partners.
Decision: Plaintiff could not recover the money because a legal action could not be brought against
a void firm.
4. Power of partners
According to Section 7 of Malaysian Partnership Act 1961, it stated that
1) Every partner is an agent of the firm and,
2) his other partners for the purpose of the business of the partnership
3) unless the partner so acting has in fact no authority to act for the firm in the particular
matter, and the person with whom he is dealing either knows that he has no authority or
does not know or believe him to be a partner
In the case of Chan Kin Hue. applying the rule of Section 7 above to this case, the two parties are
presenting the partnership and the firm, if any damage happens, both of the parties are liable unless
no authority given.
5.. Mercantile Credit Co. Ltd. v Garrod [1962]
Fact: Parkin was the active and Garrod the dormant partner in a business mainly concerned with
letting of lock-up garages and repairing cars. The partnership agreement prohibited the buying and
selling of cars but Parkin, without any express authority, sold a car to the credit company so that
it could be let on a hire-purchase contract to a customer. It then appeared that Parkin did not own
the car and the company claimed the £700 paid for it from Garrod.
Held – The firm is liable as the sale of the car to the company was “an act for carrying on in the
usual way of business of the kind carried on by the firm” within the scope of Section 3 of the
Partnership Act 1961.
6. Section 11 of Malaysian Partnership Act 1961 deals with Liability of partners, it stated that joint
liability of partners concerning contracts entered into by the firm with third party.
