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Vanamatti Satteraju Vs. Bollapragada Pallamraju and ors. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in47Ind.Cas.640
AppellantVanamatti Satteraju
RespondentBollapragada Pallamraju and ors.
Cases ReferredHolderneis v. Shackels
Excerpt:
contract act (ix of 1872), section 239 - partnership-sailing vessel, co-owners of--freight and earnings of ship--accounts, claim for, on oasis of partnership, maintainability of. - - which he bad not accounted to the plaintiff. that is clearly stated in all the books and in all the oases. 242, one of the oases relied on by the respondents' vakil, in which ,lord elden's mind was distinctly called to the distinction between the ship and her earnings, he said, i have no doubt that freight is liable to the joint demand. therefore, one see3 that, if a ship is employed under these conditions, it may very well be right that the law should guard the unwilling co-owners from being made co-adventurers in an employment which they did not approve of......a ship in common in no circumstances are partners. the law of england no doubt is that a mere part ownership of a ship does not constitute the relation of a partner. that is clearly stated in all the books and in all the oases. and there is no doubt that section 239 of the indian contract act has tended to import into the law of this country some of the very fine distinctions derived from the law of england, where special reasons of public policy led to the making of these close distinctions between mere co-ownership and co-partnership in regard to the vessels. although it is quite true that the co-ownership in a vessel' does not constitute the relation of partners but merely that of tenants in-common, yet when the ship begins to be put to use, to earn freight, a very different state of.....
Judgment:

1. In this case the plaintiff sued for a decree for the dissolution of his partnership with the defendants and the learned Sub-Judge dismissed the plaintiff's suit on a point taken for the first time in his Court, namely, that the suit was not maintainable as, assuming the facts alleged in the plaint to be true, there was, in law, no partnership.

2. These facts were contained in the 3rd, 4th and 5th paragraphs, Paragraph 3 says that the plaintiff and the 1st defendant entered into an arrangement in or about December 1907 to construct at their joint expense a boat and another smaller boat attached to it, the plaintiff making certain advances towards it, among certain other stipulations which need not be gone into in detail, and agreeing that the licenses, when the boat was completed, should be taken in the name of the 1st 'defendant, that the boats should be plied for hire, that the 1st defendant should keep the accounts and that net profits and losses derived from the user of the boats should be shared equally between the plaintiff and the defendants. Paragraph 4 sets oat the amount advanced by the plaintiff towards the capital and paragraph 5 states that the 1st defendant had been letting the boat for hire and managing the whole business and had earned large sums of money by way of profit from her use, for. which he bad not accounted to the plaintiff.

3. Now, the learned Subordinate Judge, having perused a section in Lord Lindley on Partnership on this extremely difficult subject, apparently has coma to the conclusion that people who own a ship in common in no circumstances are partners. The law of England no doubt is that a mere part ownership of a ship does not constitute the relation of a partner. That is clearly stated in all the books and in all the oases. And there is no doubt that Section 239 of the Indian Contract Act has tended to import into the law of this country some of the very fine distinctions derived from the law of England, where special reasons of public policy led to the making of these close distinctions between mere co-ownership and co-partnership in regard to the vessels. Although it is quite true that the co-ownership in a vessel' does not constitute the relation of partners but merely that of tenants in-common, yet when the ship begins to be put to use, to earn freight, a very different state of things exists. Abbott on Merchant Shipping, Part I, Chapter III, page 132 of the i4th Edition, says this: 'Firstly, co-owners are, as such, tenants-in common of their ship: and, secondly, if they employ their ship in earning freight, or otherwise as a money making machine, they become joint adventurers or partners in the employment,' and for that proposition Green v. Briggs (1848) 17 L.J. Ch. 323: 67 B.R. 1219 is cited. That is a very long judgment of Wigram, V.C' and he cites Holderneis v. Shackels (1828) 8 B. & C. 612and says this: 'The Court distinguished between the ship itself and her earnings; and held in that case that although part owners were tenants-in-common of the ship, they were jointly interested in the use and employment of the ship, and that the law as to earnings must follow the law in partnership oases.' And in Hill, Ex parte (1815) 1 Madd.61, the Vice-Chancellor said: 'There is no lien on the ship because that was not joint property, but the earnings of the ship would have been joint property and liable to the joint creditors, not from any doctrine peculiar to the earnings of a ship, but on the general principles applicable to the joint property of every partnership. If, in this case, the Thames had been employed on a whaling voyage, and the money now at the Bank represented the cargo, no dispute could have arisen. Then is freight, qua earnings, distinguishable from other earnings of a ship, for the purpose under consideration? In the absence of authority establishing such distinction, or a dear principle requiring me to adopt it, I will not admit it'.

4. In Young, Ex - parte (1813) 2 V. & B. 242, one of the oases relied on by the respondents' Vakil, in which ,Lord Elden's mind was distinctly called to the distinction between the ship and her earnings, he said, 'I have no doubt that freight is liable to the joint demand. As to the ship, it stands upon the nice distinction of a tenancy-in common'.

5. And I notice that Lord Lindley points out there are two oases under the English. Law of employment of a ship, one is where she is employed by some only of the total co-owners, which, in English Law, can be done against the will of the re3t. For reasons of publics policy it has been held that the majority of the co-owners of the ship who wish to employ her may force the hand3 of others. Therefore, one see3 that, if a ship is employed under these conditions, it may very well be right that the law should guard the unwilling co-owners from being made co-adventurers in an employment which they did not approve of. With regard to the second case what Lord Lindley. says at page 37 is this: 'Where a ship is employed by all the part-owners, or by some of them, but not against the will of the others, they all share her gross earnings, and contribute to the expenses incurred in obtaining them and in such a case there is little, if any, difference between the account which is taken between the part owners and that which would be taken if they were actually partners.' And similarly Abbott lays it down quite plainly at page 133 that ' each part owner, who does not before the commencement of an adventure effectually withdraw authority from his ooowner3 to sail the ship on his behalf, is liable as a partner for the whole of the expenses of that adventure.' We, therefore', hold that, so far as the earnings of the ship go as regards the freight that she earns, on the allegations in the plaint there exists a partnership between the plaintiff and the defendants, and the plaintiff, if be can prove these allegations, will be entitled to a dissolution of partnership and taking of accounts as regards freight. But he is not a partner but only a co-owner in respect of the actual hall of the ship and he will not be entitled, in any event, to have his prayer granted as regards the sale of the- boat or boats used by the partnership. The preliminary objection on which the learned Subordinate Judge dismissed the case was due to a misapprehension and it must be remanded to him for disposal upon the merits. The appellant will have the costs in this Court. The costs in the Courts below will be costs in the cause.


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