(1.) On or about 8 January 1920, the respondent Demarco was approached by one Dendrinos to embark on the ventura of buying a yasht. Demarco and the appellant Bianco were well known to each other and Demarco communicated Dendrinos proposal to Bianco. He explained that it was proposed that she capital sum of ? 12,000 was to be contributed by three adventurers, himself, Dendrinos and another, whose name was not at that time known, but who ultimately turned out to be one Gasan, but the rest of the money necessary was to be raised by mortgage. He was himself contributing ?4,000. He then asked Bianco if he would take a portion of his share, to which Bianco answered: "I will take ?2,000," and on 8 January he paid ?2,000 to Demarco. Bianco says he added the words, "and not a penny more." but as that is not admitted by Demarco it can be left out of account. The rest of the money necessary to meet the purchase price was to be raised by mortgagee and the idea was to pay off the mortgages out of freights which at the time were very remunerative. But the proposal as to the purchase of the yacht came to nothing as the yacht was bought by someone else. Dendrinos then turned his attention to acquiring a ship called the "ituna." Nothing was said as to ?12,000. On the contrary the original contribution was to be ?13,000, but the general idea was the same, namely, that the ship should be got by an initial contribution of capital by the same three, Dendrinos, Demarco and Gasan, and the necessary extra money raised by mortgage. This was so far done, but with this change, that before all the mortgages necessary had been raised (for the price of the ship was payable by instalments and therefore ail the money was not needed at once) Gasan and Demarco had quarrelled with and the partnership or co was dissolved, and two of the name of Jackson took the place of Dendrinos. All these arrangements were made without Blanco being consulted in any way, but the fact of the new venture in the "Ituna" was communicated to him and he undoubtedly agreed and acquiseced the fact that the ?2,000 which had been paid for the yacht should be applied to the 'Ituna" venture.
(2.) The "Ituna" was, in fact, on 19 April 1920, and the initial payment was made as follows : Demarco paid ?6,000, Dendrinos ?3,000 and Gasan ?4,000, Barclays Bank advanced ?13,500. Bills for ?12,500 were endorsed by Gasan, in whose name the ship was registered, payable in quarterly installments on the days of 9 July and 9 October 1820, and 9 January and 9 April 1921.
(3.) The "ituna" made several voyages and earned remunerative freights, but not enough in themselves to pay off the mortgages. Then in 1921 the "Ituna" was lost by an explosion. An action was subsequently raised under an insurance policy against war risks and failed. The result was that as the mortgages and the bills had to be met and as the earnings of freight had not gone on long enough to make good the money due, there was a very considerable loss on the venture.