Scottish Court of Session Decisions

This was an action at the instance of Mr Robert Ferrier, shipmaster, Glasgow, against Handyside & Henderson, steam agents in Glasgow. The action was brought by the pursuer, as part-owner of the steamship Caledonia, against the defenders as agents of the said steamship, without calling any of the other part-owners except the defenders, who besides being agents are part-owners also. The summons concludes for an account of the whole receipts and disbursements had by the defenders in connection with the Caledonia from the 10th December 1863, when the pursuer became registered owner of the sixty-fourth share of the vessel, and for payment of such sums as shall be ascertained to be due by the defenders to the pursuer. The Caledonia is employed by the part-owners in sailing regularly between the Clyde and New York. The defenders keep a book for the vessel, in which the earnings are entered on one side and the expenditure on the other, which is balanced half-yearly, and audited by one of the part-owners. After each half-yearly audit a dividend is declared among the part-owners, and any balance of profits is carried to a reserve fund. This mode of management has been in constant operation since before the pursuer became a part-owner, and the pursuer has never objected to it, but has regularly received his share of dividends.

The Lord Ordinary ( Barcaple) held that in respect of the acceptance of dividends by the pursuer he was barred from maintaining his action of accounting at his individual instance against the defenders as agents of the Caledonia; reserving to the pursuer any right of action which he may have against the other part-owners of the vessel for an accounting in regard to the profits thereof or along with them, against the defenders as their agents.

His Lordship added the following note to his interlocutor:—

“ Note.—Although this action is directed against the defenders as agents of the vessel, of which the pursuer is a part-owner to the extent of one sixty-fourth share, it is not founded upon any allegation of wrong done by the defenders to the pursuer. It is not suggested that they have dealt with him in any way differently from his co-owners, or that they have been guilty of embezzlement or fraudulent conduct towards the general body of owners. What the pursuer wants is, that an account shall be taken of the profits of the vessel during the time that he has been a part-owner, and that he shall have a rateable share paid over to him. His complaint truly is, that a portion of the profits which have been earned by the ship are retained as a reserve fund in the hands of the agents in place of being divided. The Lord Ordinary thinks that all that is a matter which the pursuer must discuss with his co-owners, and not with the agents of the general body.

“The pursuer founds upon the admitted doctrine that the mere fact of part-ownership does not make the part-owners of a ship partners; from which he deduces a right in each part-owner to raise a several action against the agents to account for his share of the ship's earnings. But where the owners themselves employ the vessel, disbursing the cost and receiving the earnings of each voyage, they are truly partners, or joint adventurers, in that matter; Abbott, 9th Ed. 91. Accordingly, in the cases cited for the pursuer, Owston v. Ogle, 13 East. 538, and Servante v. James, 10 B. and C., 410, where a right was sustained in the co-owners to sue severally the ship's husband or the master, the judgment proceeded on a special agreement, by which these parties were bound to each of the owners. In the present case the objection to the action is much stronger than if it merely rested upon the general principle of law. For a series of years the pursuer has been a party, along with his co-owners, to a systematic mode of managing the joint concern in which they are engaged, which was in existence before he became an owner, and is still adhered to by the general body. He never objected to that system, and he has regularly received half-yearly dividends under it. He may possibly be entitled to bring it to an end, or to have a further accounting and division of the profits. But that is plainly a question in which the other owners are the parties interested, and not the ship's agents, and it is to that end that this action for accounting, and a further payment of by-gone profits is directed. The Lord Ordinary does not think that in any case such an action would have properly laid against the agents; but he thinks it is clearly barred by the pursuer's participation in the system on which the co-owners have carried on their joint concern, as evidenced by his regularly receiving the dividends.

The pursuer makes averments and has led proof to the effect that the defenders have improperly refused him information in regard to the ship. But whatever remedy he may be entitled to in that matter, it cannot be got by an action for accounting and payment, if, as the Lord Ordinary thinks, that is not a competent proceeding by a single part-owner against the agents.”

Page: 291↓

The pursuer reclaimed.

A. Moncrieff and Gloag for him.

Solicitor-General and Watson for defenders.

The Court unanimously agreed with the Lord Ordinary. The reserved fund had been withdrawn and separated. The agents were in no way responsible for any portion of the reserve fund; and, looking to the objects of this action, it could not proceed against them. The proper contradictors were the owners. The agents had accounted for everything for which they were responsible to the pursuer. If the Court were to sustain this action, the result would be that the agents would be liable in an action at the instance of every one of the sixty-four part-owners. As long as the accounts required adjustment, the whole owners must concur. There might be a stage in the accounting when the question of individual payment might arise, but that question was not here.