Opinion
(June Term, 1831.)
1. An agreement between the owner of a vessel and the 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 copartnership.
2. One who receives a portion of the profits, as his property, is a partner; but it is otherwise if the amount of profits is referred to only to ascertain the amount of a debt due him.
ASSUMPSIT, tried before Norwood, J., at CHOWAN, on the last fall circuit.
Gaston for plaintiffs.
Hogg for defendant.
The only question necessary to present was whether the following agreement made the defendant a partner of Samuel Whelden: "Memorandum of an agreement by and between Benjamin Delano, of, etc., and Samuel Whelden, of, etc., The said Delano agrees to let a schooner to him belonging, called, etc., of the burden, etc., to the said Whelden, upon condition as follows: Said Whelden to pay all charges of victualing and manning, together with all other charges which may arise on said schooner, as long as he shall have possession of her, excepting such as are hereafter enumerated, which are to be paid by the said Delano, (90) viz.: one-half the expenses of port charges, one-half the expense of lights used on board, and the wages of one seaman. The said Whelden is to return the schooner at the expiration of six months, in like good order as delivered, excepting, etc. The said Whelden is hereby empowered to invest the proceeds of freight in such merchandise as he may think for mutual interest. All profit, over and above the expenses above mentioned, to be equally divided."
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.
He who shares in the profits, which are nothing but the net earnings, should also share 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 property of the party, he is then a partner. Where their amount merely ascertains the amount of a debt or duty, but they themselves do not belong to the party, there it is not a partnership. Were 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; he 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 (91) have one-half of the profits; that is, that Whelden, who was act as master of the vessel, was to pay over one-half of the freight she carried to the owner. These expressions, although 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 merchandise 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 merchandise? Or why should he direct about it if the whole was a mere contract of hiring, and the earnings referred to merely to fix the price to be paid? It is nothing more than this: Delano furnished the vessel, and was to pay part of the expense of navigating her. Whelden was to act as master, and pay the balance of the expenses. Freight was to be sought, and profits made with this combined stock. A loss has been incurred. They who were to reap the profits must bear the loss.
PER CURIAM. Judgment affirmed.
Cited: Fertilizer Co. v. Reams, 105 N.C. 297; Sawyer v. Bank, 114 N.C. 16.