In this case, 5 persons entered into partnership for 7 years and agreed to share the profits and losses equally. They further agreed that if any one of them died before the expiry of the said period of 7 years, the others would continue the business and pay the share of profits of the deceased to his executors. On the death of one of the partners the survivors continued the business. The executors of the deceased, who did not actually take any part in the management of the business, were paid 1/5th share of profits made since the death of the deceased. The plaintiff sued the executors of the deceased to make them liable in respect of a contract entered into by the surviving partners after the death of the deceased.

The court held that in order to constitute partnership, there must be an agreement, express or implied. In the absence of it, the executors can’t be said to have become partners, merely byreceiving profits. There was no evidence whatsoever to establish a contract of partnership between the executors and the surviving partners; there was no mutual agency between them. Thus, the executors could not be made liable.