Court Opinion

ID: 3841303
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:10:35.687668+00
Date Added: 2024-06-11T07:40:35.523661
License: Public Domain

The following allegations appear in the complaint:
"That on or about May 3rd, 1909, the parties hereto formed a co-partnership for the purpose of owning, operating and navigating a motor boat known as `WOLFF II,' and to said partnership plaintiff contributed the sum of $1500.00 in cash, and said partnership, for the purpose aforesaid, has continued ever since, and now exists between the parties hereto.
"That subsequent to the formation of said partnership, said motor boat was insured against loss by fire *Page 243 
with the National Insurance Company, and subsequent thereto, said motor boat was partially destroyed by fire, on or prior to October 1st, 1910, and defendant, unbeknown to plaintiff, and without his knowledge or consent, collected and received a sum of money upon said policy of insurance, from said National Insurance Company, as insurance loss sustained by said partnership.
"Defendant has utterly failed and refused, and still fails and refuses to account to said partnership, or to plaintiff herein, for said money so had and received, and thereafter, defendant sold or appropriated to his own use, the salvage remaining from said motor boat, and has failed and refused hitherto to account to said partnership, or to plaintiff herein, for said proceeds of said salvage, or any part thereof."
On the theory that the parties were partners in the boat involved, the plaintiff prays for an accounting of the partnership. A demurrer was interposed to the effect that it appears from the complaint that more than six years have elapsed since the plaintiff's cause of suit arose against the defendant, that the court has no jurisdiction of the cause of suit, and that the complaint does not state facts sufficient to entitle the plaintiff to the relief demanded, but this demurrer was overuled. The defendant denies all of the complaint except as stated in the answer. Further answering the defendant alleged:
"That on or about the 3rd day of May, 1909, plaintiff and defendant, as tenants in common, built a motor boat which was named `Wolff II,' and the purpose of the parties was to race said boat particularly at the Astoria Regatta, and other racing events, including Seattle, Washington, and Vancouver, Washington, and plaintiff contributed fifteen hundred ($1500) dollars for a one-half interest in said motor boat, and defendant contributed a like sum in labor and cash, and was to render services as operator and *Page 244 
mechanician in consideration of the prizes hung up for the racing in which said motor boat participated"; and this was expressly admitted by the reply. Coupled with the averment of the answer above quoted is this additional matter:
"and plaintiff was to inherit such glory as would be incident to the winning of the races; and plaintiff was to receive for his sole use, such other emoluments which he could arrange for, other than the prizes obtained from winning races."
This, however, was denied by the reply.
The defendant averred further, in substance, that he insured only his own interest in the boat by a transfer of a policy from another boat owned by himself, and that he collected the insurance which he had thus placed for his individual benefit, that the boat here involved was destroyed by fire and the only salvage from total loss was a six-cylinder motor of no greater value than fifty dollars, which he has in his possession. It is further averred in the answer:
"That more than six years has elapsed since plaintiff's cause of action accrued, if he has any cause of action against defendant, and more than six years has elapsed since said fire, and since the collection of said insurance by defendant."
All of the answer was denied except the part already admitted and except the collection of the insurance averred in the answer. The trial judge made findings of fact, among others as follows:
"On or about the 3rd day of May, 1909, plaintiff and defendant agreed to and did engage in a common venture or enterprise, partaking of all elements of a partnership, for the purpose of constructing, owning, operating and navigating a motor boat known as `WOLFF II,' and the plaintiff advanced and contributed to said partnership the sum of $1500, and *Page 245 
defendant contributed thereto his time, labor and services and certain sums in cash. Said motor boat was to be used, and was actually used by plaintiff and defendant as a racing boat, and plaintiff and defendant jointly owned and operated and navigated the same in regattas and races for the purpose of winning trophies and prizes, and said trophies and prizes so won were divided between the said parties and the expenses incurred thereby in so doing were borne equally by them.
"Said motor boat was insured by defendant but unbeknown to plaintiff against loss by fire, and subsequent thereto said motor boat was partially destroyed by fire prior to October 1st, 1910, and defendant, unbeknown to plaintiff, on said day collected and received as insurance for loss sustained by plaintiff and defendant, the sum of $1,342.80 and the salvage, and said insurance and said salvage were for the common benefit of both plaintiff and defendant."
The court deduced the conclusion that the plaintiff was entitled to have half of the insurance and half of the salvage, entered a decree accordingly, and the defendant appeals.
The contention of the defendant is that the findings of fact and conclusions of law reached by the court are not justified by the pleadings. That, and the effect of the plea of the statute of limitations, constitute the only questions presented for review, because the testimony taken has not been reported to this court. The allegation of the complaint that a partnership was formed is traversed by the answer, and on the other hand the averment that the plaintiff and defendant were tenants in common of the vessel is admitted. Consequently we must treat the case as if the plaintiff had himself stated that they were tenants in common. The situation is not one of mere denial of the complaint. The plaintiff avers the estate of partnership. The defendant denies that estate and *Page 246 
alleges an entirely distinct estate of tenancy in common. The consequences that flow from these two estates are materially different from each other as will be made to appear further on in this opinion.
The allegation of the answer further is to the effect so far as the defendant is concerned, that he "contributed a like sum in labor and cash, and was to render services as operator and mechanician in consideration of the prizes hung up for the racing in which said motor boat participated." There is no dispute, therefore, that so far as the legitimate earnings of the racing craft were concerned, the defendant was to receive all of them for his services as operator and mechanician. The traversed allegation that the plaintiff was to get such other emoluments as he could arrange for is of no concern at this juncture.
First, as to whether the admitted allegation of the answer shows that a partnership existed between the parties: In Flower
v. Barnekoff, 20 Or. 132, 143 (25 P. 370, 11 L.R.A. 149), Mr. Justice ROBERT S. BEAN wrote:
"Partnership and community of interest, independently considered, are not always the same thing, nor is a mere community of interest sufficient, but there must be an agreement to share the profits and losses, and such profits must be shared as the result of the adventure or enterprise, in which both are interested and not simply as a measure of compensation. * * Profits may be, and in fact often are, received as mere compensation in case of service or special agency where the employee has no interest in the business or power as a member of the firm and no interest in the profits, as such, but is employed as a servant, special agent or broker, and is to receive a given proportion of the profits as compensation for his services. In such case the receipt of profits does not constitute a partnership." *Page 247 
The first part of this excerpt is quoted with approval by Mr. Chief Justice McBRIDE in Shebley v. Quatman, 66 Or. 441
(134 P. 68). In Wheeler v. Lack, 37 Or. 238 (61 P. 849), it was said that:
"A partnership has been defined to be a contract of two or more competent persons to place their money, effects, labor, skill, or some or all of them, in lawful commerce or business, and to divide the profit and bear the loss in certain proportions. A mere community of interest is not sufficient, nor will an agreement to divide the gross earnings constitute individuals partners. There must be an interest in the profits as profits, and such profits must be shared as the result of the adventure or enterprise in which both are interested, and not simply as a measure of compensation."
We turn now to Northwest Transfer Co. v. Investment Co.,81 Or. 75 (158 P. 281), where Mr. Justice HENRY J. BEAN, succinctly states the matter thus:
"The agreement entered into between the parties in this case does not establish a partnership between the plaintiff and the defendant Investment Company, for the following reasons: (1) There is no stipulation to share in the profits and losses of the business; (2) There is no community of interest between the parties in the subject matter of the contract; (3) There is no intention manifested by the parties to become partners."
Applying this precept to the case in hand, we have here the admitted allegation that for his services as operator, the defendant was to receive the prizes in the contests in which the motor-boat participated. There is no sharing in the profits. The defendant was to get all of them. Nothing is said in the admitted allegation about sharing losses. All that appears is that they were tenants in common of the motor-boat. Upon such a foundation it was impossible *Page 248 
legitimately to construct a foundation of fact to the effect that the plaintiff and the defendant were partners. The findings of fact must conform to the admissions in the pleadings. Indeed, a fair construction of the court's findings excludes the idea of partnership. Instead of stating directly that the plaintiff and defendant were partners, the finding is that the common adventure was one "partaking of all elements of a partnership," and later on it says that "plaintiff and defendant jointly owned and operated and navigated" the boat. All of these elements point clearly to the conclusion as laid down by our own precedents, that there was no partnership between the parties and that nothing more existed between them except a tenancy in common in the boat employed in racing.
"Although partnership property has many of the characteristics of cotenancies, yet the interests of the partners in the firm property is sui generis. A mere tenancy in common does not create a partnership and a partnership will not be implied from the joint ownership or joint purchase of land, even when accompanied by an agreement to share the profits and losses of selling it, yet tenants in common may become partners like other persons where they agree to assume that relation towards each other. * * A partnership is distinguished from both a joint tenancy and a tenancy in common by the means and by the result of its creation. The means of its creation necessarily involves an agreement between the parties, whereas neither a joint tenancy nor a tenancy in common need rest on any agreement. The result of its creation is a relation between the parties whereby each is the agent of the other, with authority to manage and dispose of the firm's property, and to make all contracts within the scope of the business in which the firm was designed to engage. No such a result arises from a joint tenancy nor from a tenancy in common." 20 R.C.L. 806. *Page 249 
Ordinarily each partner may sell or pledge all the partnership property in the usual course of business, even without the knowledge or consent of the other partners: Hembree v.Blackburn, 16 Or. 153 (19 P. 73). Tenants in common hold their interests by title independent of each other and each may trace his title to a different origin. Neither one can affect or bind the title of the other by any act of his own. Even if he essays to convey the whole estate the conveyance will operate only to pass the title to his own share. His grantor becomes only a new tenant in common with the remainder of the original holders: Le Vee v. Le Vee, 93 Or. 370, 382 (181 P. 351, 183 P. 773). The admitted relation between the parties here is that of tenants in common and by that standard only can we adjudicate their dispute.
We come now to the question of insurance. The allegation of the complaint is that the motor-boat was insured by a certain company and afterwards was destroyed by fire. In whose interest and for whose benefit the insurance was effected is not stated. It does not appear that the plaintiff had any interest in the insurance. It was perfectly legitimate for the defendant to insure his own interest in the boat. Indeed, so far as tenants in common of property are concerned, neither one has any insurable interest in the part owned by the other. The rule is thus stated in 38 C.J. 1008.
"One who is a part owner of a vessel, cargo, or other property may protect his own interest by insurance, and the same is true of one who is otherwise interested with others in a marine adventure; but a part owner or person partly interested has no insurable interest in the shares of the other part owners or persons interested. This rule of course does not prevent one part owner from insuring for the others if his act is authorized or ratified by them, or from *Page 250 
protecting by insurance on his own account any interest he may in fact have, by reason of advances or disbursements made or liability assumed with respect to the other shares."
In the instant case there is no pleading that there was any agreement or authorization that the defendant should insure the boat for the interest of both of the tenants in common. Indeed, it is said in the complaint that the defendant "unbeknown to plaintiff and without his knowledge or consent, collected and received a sum of money upon said policy of insurance." And the court has found "that said motor-boat was insured by defendant, but unbeknown to plaintiff, against loss by fire." It is thus stated by Mr. Justice McILVAINE, in Knight v. The Eureka Fireand Marine Insurance Co., 26 Ohio St. 664 (20 Am. Rep. 778):
"A part-owner of the vessel has no authority, by reason of the joint ownership, to insure the interests of other owners; hence, a policy taken upon the whole vessel in his own name, without previous authority or subsequent ratification by other owners, is invalid, except as to the interest of the part-owner procuring it."
See, also, Sawyer v. Freeman, 35 Me. 542; Graves v.Boston Marine Insurance Co., 2 Cranch, 419 (2 L. Ed. 324, see, also, Rose's U.S. Notes); Murray v. Columbian Insurance Co., 11 Johns. 302; Finney v. Warren Insurance Co., 1 Met. (Mass.) 16 (35 Am. Dec. 343).
Under the circumstances of the admitted tenancy in common, of the right of any such tenant separately to insure his own interest in the vessel, that he has no insurable interest in the part belonging to the other tenant, and lastly, that the complaint does not state that the plaintiff had an interest in the policy issued, that pleading is insufficient in its statement of facts *Page 251 
to authorize a recovery of money collected on the insurance policy. The plaintiff cannot reap insurance where he has not shown a premium, and make that fact to appear in his complaint.
Moreover, the findings of fact to the effect that the defendant collected the insurance on October 1, 1910, coupled with the other fact appearing in the record that the suit was not commenced until May 12, 1922, sustains the defendant's plea of the statute of limitations. If part of the insurance money belonged to plaintiff as a tenant in common of the boat, a cause of action immediately arose in his favor when and if the defendant collected the fund. For such a right, the remedy of the plaintiff by action at law was plain, speedy and adequate. There is nothing to indicate in this case, according to the pleadings, or, for that matter, by the findings of fact, that any fiduciary relationship or trusteeship existed between the parties. The time within which the plaintiff was authorized to bring action for his share of the proceeds of the insurance as for money had and received expired long prior to the commencement of this suit.
The decree of the Circuit Court should be reversed.
REVERSED. REHEARING DENIED. MOTION TO RECALL MANDATE DENIED. *Page 252