Revens v. Lewis

In Doddington v. Hallet, 1 Ves. Sr. 497, Lord Hardwicke held that part owners in a ship were to bo considered partners and joint owners, though they wore, in fact, the tenants in common: and that the distribution of the assets of one of them, being insolvent, was to tie made as if joint property, and to be applied first to tlie joint delns. and to be treated as partnership property, chargeable with all debts for which either owner was liable on account of the ship. This case was expressly overruled by Lord Eldon, in the case of Ex parte Young, 2 Ves. & B. 242; 2 Rose, 78, note, who held that a ship stood upon the nice distinction of a tenancy in common. He ruled again, in the case of Ex parte Harrison, 2 Rose. 70, that tlie owners of a ship were not interested in it as joint tenants, but as tenants in common, and that the bankrupt’s share passes to the creditors under the bankruptcy, without being liable, specifically, by way of lien, to the claims of the other part owners, in respect of their disbursements and liabilities for tlie ship. So, also, in tlie case of Ex parte Gibson, 1 Mont. Partn. 102, note, it was held that a bankrupt's interest in the moiety of a vessel was his separate property, and not held by his assignees, for the purpose of paying the joint creditors of the ship.

This doctrine of a distinct separate property in a vessel between part owners, as tenants in common, seems to have had countenance from Lord Loughborough, in the case of Ex parte Parry. 5 Ves. 575, where one joint owner of a ship insured on his own account and became a bankrupt. It was held that though the cargo and proceeds of the voyage were joint property, the produce of the insurance on the ship which was lost was separate property. And perhaps we may say, with Sir Arthur Piggot. that it is the universal understanding in the commercial world, and especially among ship owners, that part owners of a ship-are not partners. He said that the case of Doddington v. Hallet was never acted upon, and the English usage is doubtless our usage upon this point.

In Doddington v. Hallet, supra, the bill was founded on an agreement between the plaintiffs and one Hall, authorizing the latter to contract for the building of a ship, and for fitting out, managing, and victualling her, with an agreement to pay proportional shares according to their interests. The part owners . claimed, against Hall's representatives, a specific lien upon what was due to Hall for liis share, on account of the money the plaintiffs had paid to the tradesmen, in fitting, etc., the ship, and that the administrators should not run away with it as part of the general assets for all the creditors. Lord Hardwicke. after premising that the case stood as though Hall himself was before the court, no one having a specific lien on Hall’s share in the ship, went on to say that it must be admitted that a ship might be a subject of partnership as wrell as anything else, the use and earnings thereof being a proper subject of trade. He said it was a partnership among them, and the ship itself to be part of the subject thereof, which was to be let to freight to the company, it being their method of trading. The foundation of this partnership stock was the ship itself, which must be employed, and the earnings and profits to arise. That undoubtedly all the persons subject to the agreement are liable in solido to the tradesmen who fitted it out, and the agreement for the proportional shares is as between themselves. which is the case of all partnerships. He said that if it had been agreed that a brew house should be part of the partnership stock (which often happened), the case of the brew house being used in the partnership trade, if workmen do work in the brew house every *559partner would be liable to that, and that brew house must be brought into the partnership account; and if more was due to one partner than another, all the share of the partnership stock, consisting of the lease of the brew house as well as the other effects, are liable to that account. He went on to observe that if . the share of one partner had been assigned, if it stood on the head of general equity, he should be of opinion that if the purchaser had notice of the partnership, he would be subject to it; and he decreed for the plaintiffs.

Lord Hardwicke perfectly understood the distinction between a tenancy in common, such as owners of different shares in a ship have among themselves, and a joint tenancy, as between partners of the goods and stock in trade. He meant to decide, and did decide, that a subject which ordinarily may be held as a tenancy in common may, by the acts of the parties, become to be held in joint tenancy. And the facts of the agreement to build the ship at their joint expense, in proportion to their shares, and the agreement to fit her out, manage. and victual her for the service of the East India Company formed, in his judgment, such a community of interest as to constitute that a partnership transaction, in relation to those subjects, and thus a specific lien was acquired by those who contributed more than their shares, against the share of the one who contributed less than his proportion.

This case derives strong confirmation from the case of Smith v. De Silva. Cowp. 469, in which it was decided, upon an issue out of chancery, that the interest of part owners in a ship, and in tile profits and loss of an adventure undertaken by their mutual consent, is not affected by the bankruptcy of one of them taking place after the commencement of the voyage, although he has not paid his full share of the outfit. Lord Mansfield, in giving the opinion of the court, held that if the other partners had been obliged to discharge the amount of the notes which remained unpaid at the time of the bankruptcy, the assignees must have allowed the other partners the full sum paid for the bankrupt, and would have come against them only for the balance due to him, if any. Mr. Abbott, in commenting upon this case, says it seems to have been considered that part owners of a ship might have a lien on each other's shares of a ship, as partners in trade have on each other's shares of their merchandise. And in the third edition of his treatise (page 94) he says: “It is true, indeed, that as long as the ship continues to be employed by the same persons, no one of them can be entitled to partake of the profits, until all that is due, in respect to the part he holds in the ship, has been discharged.” And again, after citing the case of Doddington v. Hallet, without a word of disapprobation, on page 9G. he says: “This usage, or course of trade. I apprehend to be to charge the assignee or purchaser in account for the outfit and other expenses incurred in respect of the voyage of which he is entitled, in consequence of his purchase, to share the profits, which can only be the voyage in prosecution at the time of the purchase: but not to carry back the charge as against him to the expense of any antecedent adventure, from which he can derive no profit.”