Cox v. Delano, 14 N.C. 89, 3 Dev. 89 (1831)

June 1831 · Supreme Court of North Carolina

14 N.C. 89, 3 Dev. 89

John Cox et al. v. Benjamin Delano.

An agreement between the owner of a vessel and I’ne captain, that each party should pay certain expenses, and divide the freight, with, a power to the captain to invest it on joint account, constitutes a co-partnership.

Assumpsit, tried before Norwood, Judge, at Chowan, on the last fall circuit.

The only question necessary to present, was, whethep the following agreement made the defendant a partner of Samuel Whelden : “ Memorandum of an agreement “ by and between Benjamin Delano, of, &f. and Samuel “ Whelden, of, &c. The said Delano agrees to let a, *£ schooner to him belonging, called, &c. of the burthen, iC &c. to the said Whelden, upon'condition as follows : “ said Whelden to pay. all charges of victualing añu “ manning, together with all other charges which may iS arise on said schooner, as long as he shall have pos-■4i, session of her, excepting such as are hereafter enume- '‘ rated, which are to be paid by the said Delano, viz. a one half the expenses of port charges, one half the ex- “ pense of lights used on board, and the wages of one' seaman. The said Whelden is to return the schooner « -¡yie expiration of six months, in like good order as “ delivered, excepting, &c. The said Whelden is hereby u empowered to invest the proceeds of freight in such “ merchandize, as he may think for mutual interest., “ All profit, over and above the expenses above menti-il oned, to be equally divided.”

One who re-thS srofttsTas his property, is a partner; but it is otherwise if the amount of profits is referred to, the amount of a debt due hum

The presiding judge, thinking that this agreement constituted a partnership between the. defendant and Whelden, a verdict was returned for the plaintiffs, and the defendant appealed.

Hogg, for the defendant,

cited Bixan v. Cooper (3 Wilson 40) Benjamin v. Porteus (2 II. Bl. 590) - Dry v. Bos-iuell (,1 'Camp. S9.7) Wilkinson v. Frasier. (4 Esp. 133. Reynolds v. Topham (15 Mass. 37Ó). •

Gaston, for the plaintiffs,

referred to Mbott on Shipping, c. l.

HeNbeesow, Chief-Justice.

He who shares in the profits, which are nothing but the net earnings, should also shard in the losses, if there be any. The moral right of making gains is based upon this principle. The rule is easily laid down ; the difficulty is in its application. Where a part of the profits themselves is the pro-lmriy of the party, he is then a partner. Where their amount merely ascertains the amount of a debt op c]u^y but they themselves do not belong to the party, J ° 1 f7 there it is not a partnership, w ere there no special contract but the case rested on the facts, part of the earnings would be the property of the defendant. The vessel was his • ho bore part of the expense of navigating her. Whelden gave his services, and the residue of the expense. Independent of express agreement, the profits would go according to the value of that which produced them'; that is, according to, the productive value of the stock. In what particulars has the agreement of the parties varied the case? It has only fixed the ratio of, division, by declaring that each party shall have one half of thte profits, that is, that Wheldcn, who was to act as master of the vessel, was to pay over one half of the freight she carried, to the owner. These expressions, altho’ in form somewhat like making it a debt,’ do not vary the case; for they arise from the fact, that the freight was in the first instance to be received by him who acted as master*. In truth he was to receive and divide, and even pay.

But there is in this contract a clause, which I think puts the matter to rest, to-wit, “the said Whelden is hereby empowered to invest the proceeds of freight in such merchandize, as he may think proper for mutual Interest.” If a part of the freight was-not the property of Delano, why was his consent necessary to invest it in merchandize; or why should he direct about if, if the whole was a mere contract of hiring, and the earnings referred to, merely to fix the price to he paid. It is nothing more than this: Delano furnished the vessel, and was to pay part of the expense of navigating her. Wheldcn was to act as master, and pay the balance of the expenses. Freight was to he sought, and profits made with this combined stock. A loss has been incurred. They who were to reap the profits, must bear the loss.

Pub. CuBIAM. — 3uDGMEtrT AFFIRMED.