Case Name: Seabrook vs. Rose
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1837-03-13
Citations: 1 Ril. Eq. 127
Docket Number: 
Parties: Seabrook vs. Rose.
Judges: DAVID JOHNSON,
Reporter: South Carolina Equity Reports
Volume: 12
Pages: 127–131

Head Matter:
Seabrook vs. Rose.
Heard before Chancellor Desaussuke, Charleston, January Term, 1830.
The bill is filed by William Seabrook, and others, joint owners of the steam boat or steamer “ William Seabrook,” to have an account from M'Kenzie, also a joint owner, of two shares in said steamer, who acted as the agent of the company at Augusta, and was indebted to the concern for a balance alleged to be due by him to them. The bill states the case fully, with which a copy of the agreement of the parties was filed. 'By this instrument, each of the subscribers agreed to pay one thousand dollars per share, for' as many shares as he took, for tlie purpose of building and fitting up a steam packet for the conveyance of passengers and freight. And it was agreed, “ that no share should be transferred, or assigned, without notice being first given to a majority of the stockholders of the owner’s intention to transfer.”
The bill was taken pro confesso as to M'Kenzie, who was one of the joint owners, and also agent of the company at Augusta, and who it is allowed, is indebted to the company for monies received in the course of the agency. He is insolvent. The creditors of M'Kenzie, and of M'Kenzie & Co., (which includes Merriman,) issued attachments against the property of M'Kenzie as an, abserit debtor.
The answers of Messrs. Rose and Bounell, the attaching creditors, insist upon their rights to a priority under the attachments. They deny that the complainants have a right to retain the amount of the shares of iri' Kenzie in the steam boat, “ Wm. Seabrook,” either under the general doctrine of partner, or, as creditors in pos. session. On the face of the instrument, the contracting parties are to be joint-owneis of the steamer, “ The William Seabrook,” according to their respective shares.
The only feature in the agreement which might vary the contract, is the clause, that no transfer or assignment should be made without notice being first given to a majority of the stockholders, of the owner’s intention to transfer. This does not appear to me, to be such an agreement, as would amount to what is called a limited co-partnership, (even if such were allowed by our laws,) restraining the exercise of any powers which joint owners have over their shares. It is a mere agreement to give notice of an intended assignment. If the part owner should make such transfer without notice, he may be responsible to the other owners, for breach of the contract, but the assignment would be good as to third persons. The case then stands on the general ground of a joint ownership. There is, however, no proof of any assignment, and the creditors of Mr. M'Kenzie are not claiming under an assignment, but under attachments against an absent debtor, owner of certain shares in the steamer Seabrook.
The complainants insist that they are entitled to a lien on the shares owned by M'Kenzie, for the alleged balance due by him to them, áS agent of the joint owners.
1st. On the general principles of co-partnership.
2d, As creditors in possession.
The first may be called a vexed question. The decisions by judges of the highest character have differed. In Doddington vs. Hailet, 1 Ves. 497, the part owners of a ship, filed their bill against the representative of a deceased partner, on the ground, that they had a specified lien upon what should be due to the deceased partner for his share. Lord Hardwicke, upon great deliberation decided that they had such alien, on the ground that a ship may be the subject of parinership as wejl as any thing else.
Mr. Belt, in his supplement to the cases in Vesey, Sr., p, 497, states that the decision, by Lord Hardwicke, in Doddington vs. Hailet, that “ part owners in a ship are partners, and liable in so-lido, for all goods furnished and repairs,” has beeu overruled on great consideration by Lord Eldon, in the case ex parte, Young, 2 Vesey and Bearnes, p. 242. And on examin ng that case, it appears that Mr. Belt is correct in so stating it.
The case ex parte Young, is indeed, precisely the case we are now considering. The petitioners were part owners of a ship, with other persons, two of whom became bankrupt. The bankrupts were also managing owners, and in that character were indebted to the petitioners, and the other owners of the ship, .6287, on balance of accounts, tor >he freight and earnings of the ship, after taking credit for the outfit, amounting to £2'2M, which sum the bankrupts had not paid, and the other owners were obliged to pay it. The petition prayed tho application oí the proceeds of the share of the bankrupts in the ship, freight, &c., towards saiisfaction of the sums due to the petitioners and the other owners.
After an argument by the ablest counsel, Lord'Eldon stated that the difficulr,y in the case, arose from the decision of Doddiugton and Hailet, by Lord Chancellor Hardwicke, which was directly in point. Lord Eldon, at first said, he doubted, though there was great difficulty in the case, and the inclination of his mind was against the doctrine of Lord Hardwicke. But it would be a strong act to reverse a decree made by Loid Hardwicke, which he knew was his most deliberate opinion, after geat consideration ; and there was no decree in Equity contradicting that. Afterwards, in a tew days, Lord Eldon said, that af.er great consideration, he must decide against tho case of Doddingiou vs. Halleit.
It is exceedingly embarrassing to a judge, administering the jus. tice of the country, to find such able and learned chancellors differing in opinion so widely, and indeed, so directly opposite. With much hesitation, 1 should feel myself, however, under such circumstances, at liberty to follow that opinion, which in my judgment, was most consistent with sound principles ; and it does appear to me, that the judgment of Lord Hardwicke is the most so, on the point in question — for I concur with him m opinion, “That a ship may be the subject of partnership as well as any thing else, the hire and earnings thereof, being proper subject fox tradeand letting a ship to freight, as much a trade as any other ,; then it appears plainly to be a partnership among them, and- the ship itself to be part of tho subject thereof.”
i he definition of a partnership seems to include a joint interest in this species of property, as welt as any other kind. Mr. Carey in his Treatise, (in the Law Library,) slates lhat a partnership may be generally defined to he “ a voluntary association of two or more individuals for the purpose of lawful trade, in which each person is to receive and bear his proportional ratio ot profit and loss.’* The interest of each partner in the partnership is his share in tha surplus, hfftr a settlement of the co-partnership accounts: and that interest alone is liable to the separate creditors of each partner — 20 Johns. 611. It does not appear to me, I confess, that there is any solid reason why ships should not be, as Lord Hard-ivicko stated, a subject of co-partneiship. To make that species of property, at d the interests of different persons in it, an exception to the rule, and out ot the reach oí ibe rules and principles applicable to other kinds of petsonal properly, (and in some cases even of real properly,) held m co-partnership, seems to me only ta multiply distinctions and exceptions, in the broad system of princi. pies, and to increase d.ffhulües and litigations.
1 am relieved in some measure from my difficulties in this conflict of authorities and printiples, by the American decisions. Ik Nicoll and Mumiord, 4 Johns. Chau. Hep. S22, it was held by the chancellor, professedly on the later English authorities, — that ship owners were tenants in common, and were not to be considered as partners, nor liable for each other in solido, rior entitled in the settlement of accounts, on the principle of partnership ; the doctrine of Lord Hardwicke, m Dodd.ington and Mallet, being considered as overruled by the modern decisions, and by the universal understanding of the commercial world. But, when (as Chancellor Kent states in his admirable Commentaries, 3 vol. p. 40,) the case of Nic. oil and Mumford, came to be examined in the Courts of Errors, in New York, (20 Johns. Chan Rep. 611,) the doctriue of Lord Hardwicke was considered by the majority of the judges to be the better doctrine, and they decided accordingly, and reversed the des-cree of the chancellor, 'Hie case of Lamb and Durant, in 121 Mass. Rep. 54, was decided on the ground, that vessels as well as other property, might be held in strict partnership with all the control in each partner, incident to commercial eo partnerships.
Even lands may be made the subject oi co-panuership, and subject to the rules applicable' to those connexions. (See 3 Kent’s Com. 39, in which he cites various decisions which establish that.) (See 11 Mass. Rep. 4b9, and 2 Mumford, 387.) Winslow ami Chiffelle, Stale Rep. in Equity in S. C.. (1824,) which decided that in case of a Mill held in co-partnership,' that it was subject to be applied like other partnership property. And even Lord Tenter-den, (see Abbott on Shipping 87,) gives to the ownership of vessels, one of the essential attiibmei of a partnership. Chancellor Kent, (3 v. 89,) considers those decisions as an entire subversion of the equity doctrine, now prevalent in England, This is undoubtedly true, and I am content to bo supported by Lord Hardwicke and the American courts.
The result is, that 1 am of opinion, the complainants are entitled to the relief which they seek by their bill, on this ground — and I am inclined to think also on the ground of creditors in possession, as against the attaching creditors. It is, therefore, ordered and decreed, that it be referred to the commissioner or master to examine the accounts between the parties, and to report whether any sum, and how much, is due by M'Kenzie, as agent, or otherwise, to the copartnership — and that the two shares held by him in the steamer William Seabrook, be held liable for such amount, and the costs of the suit.
HENRY W. DESAUSSÜRE.
Grounds of Appeal.
1. That by the decree, an account is ordered to be taken between A. M'Kenzie, and the owners of the William Seabrook, as partners. Whereas in point of fact there was no agreement of partnership.
2. That the decree declares the attaching creditors of M‘Kenzie, to be entitled to no more than the residuum, that may be coming to' him as a partner in the stock held by the owners of the William Seabrook, after the payment of all such sums as he maybe indebted in to the company. Whereas, seeing that M‘Kenzie is a tenant in common with Seabrook, of two shares in the steam boat, and that Rose has got a lien on those shares by his attachment, it follows necessarily, as a legal conclusion, that Rose is entitled to the money for which those shares may be sold, and that if any account is to be taken, it should be confined to the earnings and disbursements of the boat since the attachment.
PETÍGRU & LESESNE.

Opinion:
Chancellor J. Johnstoií
delivered the opinion of the court.
The court does not feel prepared to give an opinion on the first point discussed, by the chancellor, who tried this cause. The question is not, really, as it has often been conceived to be, whether a ship may be the subject of partnership : for no doubt any species of property, whatever, may be held in partnership. But the ques. tion is, whether a ship, owned in distinct shares, and employed in trade, is, as between the owners, partnership property, or liable to be so regarded by creditors, beyond certain specified limits. On this point the court gives no opinion, because it is entirely satisfied, that the plaintiffs are entitled, as creditors in possession, to the decree they have obtained.
. The motion is dismissed.
J. JOHNSTON.
Petigrtt, for motion.
King, contra.
Filed 13th March, 1837.
We concur,
DAVID JOHNSON,
WM. HARPER,'