HASANALI MAHOMEDALI Vs. ESMAILJI SULEMANJI

JUDGEMENT

(1.) The plaint in this case prays (1) for the administration of the estate of one Mahomedali who died on 18 December 1896, (2) for the setting aside the sale to the first defendant, an executor of Mahomedali s, of Mahomedali's interests in a partnership, (3) for the ascertainment for the true value of that interest at date of Mahomedali's death and for the profits made by the first defendant's use in his business of Mahomedali's moneys, (4) for an account against both defendant 1 and defendant 2, executors of Mahomedali, on the footing of wilful default and (5 & 6) for the appointment of a Receiver to get in assets in the hands of the executors, to pay maintenance thereout to the plaintiffs and to sue the first defendant. The plaintiffs are the minor sons of Mahomedali suing by their next friend Hussanali Jeevabhai.

(2.) The first and second defendants are executors appointed by the will of Mahomedali, executed on the 17 December 1896, the day before his death. The third defendant is Mahomedali's daughter. The fourth is Mahomedali's widow. It is common ground that the deceased Mahomedali and the first defendant were the partners in a wholesale umbrella business, that Mahomedali had an eight annas share therein and that this constituted practically the whole of his estate which in the will is estimated at Rs. 65,000 to Rs. 70,000. The plaintiffs allege that annual profits were Rs. 30.000, that the defendant executors instead of winding it up, realizing the best prices and setting apart the testator's share, made the whole business over to the first defendant at a gross under estimate, the only valuation of stock being made by the son of defendant 1 and nothing being allowed for the goodwill, that profits for the year of Mahomedali's death were understated at little more than a third of their real amount, that stock was undervalued and outstandings which were recoverable were ignored, that a deduction of 5 p. c. was made from the invoice prices wrongly taken as the basis of valuation and that a sum of Rs. 5756-11-0 due from one Nurbhai was among outstandings taken over by defendant 1 and that defendant I had set off a legacy of Rs. 3000 to Nurbhai against this debt and had debited Mahomedali's estate with the balance, that the first defendant had for nearly four years used in his own business Rs. 71,387-4-6 which stood to the credit of the testator's capital account and was therefore liable for all profits thereby made or interest at 9 p. c. with yearly rests on that amount. The plaintiffs admit that on the remonstrances of defendant 2 a sum of Rs. 10,053-13 had been credited to the estate as interest for the use of testator's moneys to October 1900 and Rs. 1000 as for the goodwill, but assert that these arrangements made by the friends of the defendants are not binding on the plaintiffs.

(3.) The first defendant in his written statement denies that the business in question was of great value and that annual profits approached Rs. 20,000 and while he admitted that he had purchased the partnership stock, denied that it had been uuderesti-mated and that the valuation And been made by his own son who he alleged had only assisted in ascertaining the correct figures. The written statement further alleged that the stock had deteriorated in value and could not have been sold at auction without great loss and had been taken over by him at invoice prices after pressure from the testator's family, that neither the stock nor the profits had been underestimated, that the goodwill was of no value and that the business had been carried on by him entirely in his own name after his purchase of testator's share. With reference to the debt due from Nurbhai the first defendant's statement was that as Nurbhai was a brother of the testator the loan made to him out of the partnership moneys was one for which Mahomedali alone was responsible and the legacy had therefore properly been set off against it and the balance properly debited to the estate instead of to the partnership. With regard to the moneys alleged to have been used by him the written statement alleged that for half the partnership debts and liabilities amounting to Rs. 87,395, testator's estate was liable and that this sum must therefore be deducted from the Rs. 71,387-4-G standing to testator's credit.