Williams v. Lawrence — 47 N.Y. 462

Majority

p. 462

John S. Williams et al., Appellants, v. Alexander M. Lawrence et al., Respondents.

Headnote

Where tenants in common of a ship employ her in a series of voyages and lettings of the vessel for hire upon joint account, the earnings and expenditures upon, and in respect to different voyages going into general account, it is a particular or quasi partnership for the general employment of the vessel, and the different voyages and adventures are connected together, and parts of the trade or business carried on by the owners as partners.

An assignee, therefore, of the interest of one of the joint owners in a particular voyage or adventure can take only the interest which his assignor has in the earnings of the vessel after the adjustment of the partnership accounts.

(Argued February 2, 1872;

decided February 13, 1872.)

Appeal from judgment of the General Term of the Supreme Court in the first judicial district, affirming a judgment entered upon the report of a referee in favor of defendants.

On the 20th day of December, 1859, Howes & Co., who were owners of one-half the ship “Wanderer,” then under a charter to the Peruvian government to go to the Chincha Islands, take' on a cargo of guano, and carry the same to Hampton Eoads, assigned to the plaintiffs all their interest in the said charter, and in the freight to be earned under the same, to be applied, when received by the plaintiffs, to the payment of a demand they held against Howes & Co., as ship’s husbands, for supplies before that time furnished the “Wanderer.” This indebtedness at the time amounted to $15,000.

The freight was earned under the charter after the assignment, and amounted to $11,074.13 net. This money was

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deposited with Charles L. Benedict, one of the defendants, to be disposed of according to the rights of the several parties to be established.

The other defendants represent the ownership of the other one-half of the ship, held in unequal shares.

The action was brought to recover, under the assignment from Howes & Co., the one-half of the fund in Hr. Benedict’s hands.

The defence interposed was, that, at the time of the assignment to plaintiffs, Howes & Co., as part owners and ship’s husbands, were indebted to their co-owners on account of prior voyages, performed in the three preceding years, in an amount exceeding the half of the net freight realized under the Peruvian charter.

Howes & Co., as ship’s husbands, did the business of the ship for account of all the owners; managed and controlled the vessel and her employment, paid her bills and received her earnings, and attended to the disbursements of the ship. On that account they were indebted to the owners of the ship, on the 20th of December, 1859, $27,037.32.

The referee sustained the defence, and held that the freight earned by the last voyage was subject to an accounting between the part owners for all previous voyages, and that, as such accounting would show a balance against Howes & Co. to an amount greater than one-half the net freight in question, the plaintiffs got nothing by their assignment, and were not entitled to recover. The case is reported below, 53 Barb., 320 .

Samuel Sand for appellants.

Part owners of a vessel are tenants in common; not joint tenants or partners. (Abbott on Shipping, 107; 4 Johns. Ch. R., 522; 3 Kent’s Com., 151.) Each voyage is independent, and no claim growing out of the balance of accounts upon one, gives the lien upon the debtor’s interests in a subsequent voyage. (Nicoll v. Mumford, 4 J. Ch., 522 ; Abbott on Shipping, 110, 111.) A valid charter for any voyage may be repudiated by part owner. (3 Kent’s Com., 156 ; Abbott on Shipping, 99, 100.)

p. 464

No copartnership existed as to the vessel. (3 Kent’s Com., 155; French v. Backhouse, 5 Burr., 2727; Turner v. Burrows, 8 Wend., 144 ; Bell v. Humpries, 2 Starkins R., 345; Abbott on Shipping, 106, 107; Abbott, 107; Hooper v. Lusby, 4 Campb., 65.)

F. Q. Benedict for respondents.

Part owners of a ship, as to the earnings, disbursements and profits of the business of the ship, are, to all intents and purposes, partners, and the earnings are partnership property. (Abbott on Shipping, 147 [5th Am. Ed.]; ex parte Christie, 10 Vesey, Jr., 105; Nicoll v. Mumford, 4 Johns. Chy. Rep., 522; S. C., 20 Johns. Rep., 611 ; Doddington v. Hallett, 1 Vesey, Sr., 497.) Plaintiffs took subject to all the rights and equities existing between the parties. (Mangels v. Dixon, 189 L. & E., 82.)

Two or more persons owning a ship hold the

same as tenants in common, and not as partners, unless they chance to be general partners, and have the ship as a part of their partnership property, and for partnership purposes. But there may be a special partnership between them in respect to the ship, or particular voyages and adventures in its employment and use. And whenever a general partnership, embracing the ownership of the vessel and the business in which she is engaged, or a particular partnership either in respect to the ship or a particular voyage or adventure exists, all the rules applicable to ordinary partnerships apply, and the rights and liabilities of the copartners are the same as in mercantile or other business copartnerships. (Mumford v. Nicoll, 20 J. R., 611; S. C., 4 J. C. R., 523; Merritt v. Walsh, 32 N. Y., 685 ; Julio v. Ingalls, 1 Allen R., 41.) When there is a particular or quasi partnership either in-respect to fitting out and furnishing a ship, or in respect to a particular voyage or adventure between owners in common, and who are not general partners, their accounts and dealings in respect to other ships or other and entirely distinct voyages and adventures with the same ship, cannot

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be brought together into one general account so as to defeat the claim of an assignee of one of the common owners of a share of the net proceeds of the one voyage or adventure by applying the same to the payment of balances due upon the other dealings, or of a general balance. The rule as stated in Nicoll v. Mumford (4 J. C. R., 528) is in substance that when one joint owner assigns his interest in the freight and cargo of a particular voyage, the other owner who has got possession of the proceeds of such freight and cargo is not entitled to be allowed and paid out of them any claims he may have against his co-owner arising from distinct voyages and adventures in which they were concerned together, in the same or other vessels, they not being general partners in trade, and there being no connection between the different transactions or voyages. The earnings, one-half of the net of which the plaintiffs seek to recover as the assignees of Howes & Co., were of a particular voyage under a charter made abroad by the master representing the owners. The referee has not found that there was no connection between that voyage and the others, the earnings of which were received and retained by Howes & Co.

The charter,, and the employment under it, would, from the whole ease, appear to have been in a course of a continued employment of the vessel by the owners, one of a series of voyages and letting of the vessel for hire, a business of earning money by means of the vessel rather than a distinct and independent transaction. Howes & Co. were the ship’s husband, freighting and chartering her as occasion offered for the joint account of all the owners, and the accounts show that the earnings and expenditures upon and in respect to different voyages went into general account rendered from time to time. So that the particular or quasi partnership was for the general employment of the vessel in the carrying of freight for hire under the charge of Howes & Co. as ship’s husband, and the different voyages and lettings were connected together and parts of the trade or business carried on by the owners of the vessel as partners.

p. 466

The distinction which takes the property in ships and vessels out of the ordinary rules of joint ownership of goods and merchandise is well established, and may not be departed from, but the owners of a ship holding and owning it, as tenants in common, may become partners, as common carriers of goods upon that ship, with all the rights and liabilities incident to that relation, and the rule which regulates the rights of owners in common of vessels, in their use and employment, ought not to be extended upon any refinement, so as unnecessarily to complicate the law of partnership. In all the cases cited from the courts of this State, stress is laid upon the fact of there being no connection between the several voyages as necessary to exclude the several joint owners from the rights of partners as to all. The plain inference from the findings of the referee is that the defendants and Howes & Co. were partners in the freighting of the Wanderer during the joint ownership, as a single and continued business upon the settlement of which a large balance is due the defendants for moneys received by Howes & Co. in the course of that business. It follows that the plaintiffs, as assignees of Howes and Co., took only the interest which the latter had in the earnings of the vessel after the adjustment of the partnership accounts, and the referee has found that there was nothing due Howes & Co. or the plaintiffs upon this principle from the earnings under this charter party.

There is no pretence that the advances to Howes & Co. by the plaintiffs were for the joint account of the owners of the vessel, or upon any account which would give them a lien upon the vessel or her earnings as against the defendants.

The judgment should be affirmed.

All concur.

Judgment affirmed.