VANAMATI SATTIRAJU Vs. BALLAPRAGADA

JUDGEMENT

(1.) In this case the plaintiff sued for a decree for the dissolution of his partnership with the defendants, and the learned subordinate judge dismissed 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 are contained in the 3rd, 4th and 5th paragraphs. Paragraph 3 says that the plaintiff and the 1st defendant entered into an agreement 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 licences, 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 the net profits and losses derived from the use of the boats should be shared equally between the plaintiff and the defendant. Paragraph 4 sets out the amounts advanced by 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 had 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 come to the conclusion that people who own a ship in common in no circumstances are partners. The law of England is no doubt 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 cases 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 vessels. Although it is quite true that 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. Abbot on Merchant Shipping, Part I,. Chap. III, page 132 of the 14th Edn, 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 (1818) 17 L.J. Ch. 328. is cited. That is a very long judgment of Wigram, V.C. and he cites Holderness v. Schakel (1828) 8 B. & C. 612 : 3 Mood. & Rule 25 and says this : "The court distinguished there 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 cases." And in exparte Hill (1815) 1 Madd. 61 : 56 E.R. 24 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 principle 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 clear principle requiring me to admit it, I will not adopt it."