Scottish Court of Session Decisions

This action was raised by N. & N. Lockhart, net manufacturers, Kirkcaldy, against John Brown, ironmonger, Lerwick, for payment of £162, 10s. 3d. alleged to be the balance due to them for nets and other goods supplied to a joint adventure of which the defender was a partner.

In 1879 John Brown, the defender, entered into a joint adventure with his brother William Brown, grocer and general merchant in Lerwick, to carry on for their joint behoof the business of owners of fishing boats, which they were to hire out to fishcurers, fishermen, and others. On the 16th of February 1883 William Brown sent the pursuers an order in the following terms:—“Some time ago you sent me your price list of nets, and requesting an order, which I can now send you, and which I hope you will send on as soon as possible. This order is only for one of our six boats, but I wish to get this lot and let our men see them, and then I can order for the rest. As I have had nets which has not pleased our men from other places, and which came to be a serious loss to both our men and ourselves, but as I come to learn you have sent some to our town already which have given satisfaction, so I trust it may be a mutual benefit, so will you please send as undernoted as soon as possible, and oblige.—Yours, &c., William Brown.

6 nets 60 yards 18 score 31 1 2 rows to the yard 45/9 cotton.

12 nets 60 yards 18 score 32 rows to the yard 45/9 cotton.

P.S.—Also cotton lines to rig the same right and left hand, and rigging twine.—W. B.”

Other orders in similar terms were subsequently sent. In answer to these orders the pursuers supplied the goods requested at wholesale prices.

William Brown having become bankrupt, N. & N. Lockhart sued John Brown for the price of the goods so supplied.

The pursuers pleaded—“(1) The said goods having been ordered and sold and delivered on account of the said partnership or joint adventure, the defender is liable in payment of their price. (2) Assuming that the boats for which the goods supplied by the pursuers were furnished or used, were separate joint adventures, the defender, as a partner in each and all of said joint adventures, is liable in payment of the price of said goods.”

The defender denied liability.

Proof was led, the import of which was to the following effect:—The joint adventurers started with one boat in 1879. The largest number possessed by them at any time was six, and at the date at which the order for the goods in question was sent the number possessed was five, William Brown being separately interested in a sixth, in which his brother had no share. There was no written contract between the brothers, but William Brown thus explained their agreement—“The understanding my brother and I had as to supplies for the boats was that I should provide whatever I had in my shops. I was to charge the current prices I was charging to other people. In addition to that I was to have the supplying of the men with provisions, charging in that case also the current rates.” John's evidence on this point was as follows—“The understanding was that he (William) should provide whatever he had in his stores or shops as a general merchant that the boats required, and that I should provide whatever blacksmith work and other things I might have requisite for the boats out of my business; and we were each to charge the regular trade prices of the place—the retail prices. I thought my brother would be able to do

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something in the way of paying for the hulls of the boats, but after the first one I had to pay for all the rest.” The boats were worked on the halfcatch system—that is, the fishermen received half the gross produce as their earnings, and the brothers after paying the expenses of the adventure divided the residue of the other half equally. There was also an agreement with the fishermen employed that when the expenses of building, and fitting out, and working a boat, with interest thereon, had been cleared off, they should become part owners. The brothers supplied the joint adventure with the goods they dealt in at the current rates; William supplying nets, ropes, and such goods; and John the ironmongery goods required. With reference to the question whether William had authority from John to order nets for the joint adventure, John deponed in his examination-in-chief as follows—“The skippers had instructions from me to go to my brother when they required nets. My brother and I were joint adventurers in the boats; we had equal shares. (Q) And it was with your authority and approval that he got the nets for these boats, and handed them over to the skippers, was it not?—(A) Yes, he had my authority to supply the boats with nets. (Q) And you knew that the nets were being got for the boats in that way?—(A) Yes, I knew my brother supplied them. I took nothing to do with getting nets myself unless the skippers came to me having failed to get them from my brother. In these cases I would buy them wherever I could. I charged them to the boat's account.” In cross-examination he explained himself thus—“(Q) In this matter, had your brother authority from you to order from the net manufacturer any special lot of nets for any particular boat?—(A) No, never at any time, and he never asked it. (Q) Was the agreement between you and him simply that he should get the nets as he would get them for his ordinary business, and was he to supply them as he would to any ordinary customer?—(A) Yes. (Q) And did he do so?—(A) Yes.” William, it was proved, did a considerable trade in nets. The yearly amount was not stated, but in his ledger for 1883 there was an account against one customer amounting to £122, 18s. for nets, and he deponed to selling many to fishermen for cash, of which no account appeared in his books. The nets which he ordered and received from the pursuers were unmounted nets averaging about 38s. 6d. in price. The nets supplied to the joint adventure by him were rigged nets, and their average price about 63s. or 64s. On the question whether all the nets, the price of which was sued for, passed to the boats of the joint adventure, William Brown deponed that the “Nellie,” a boat in which he had an interest, but his brother no interest, got some of them, and his assistant Jamieson deponed to having sold some of them to two customers over the counter. The accounts of the joint adventure were kept by John Brown, but each brother kept a passbook of the goods he supplied to the joint adventure, and settlements were periodically come to.

The Lord Ordinary ( M'Laren) on 10th January 1888 pronounced the following interlocutor:—“Finds that the sum sued for is the price of goods supplied to account of a joint trade in which the defender was a partner, and that the price is resting-owing and unpaid: Therefore decerns against the defender in terms of the conclusions of the action, &c.

“ Opinion.—This is an action at the instance of a firm of manufacturers carrying on business in Kirkcaldy, against one of the joint owners of certain fishing boats trading at Lerwick, for the price of nets supplied to the joint adventure.

The defender John Brown and his brother William Brown were the chief owners of the fishing boats, the only other owners being the fishermen who worked the boats, and who according to custom received each a small share in the boat which he assisted in working, in order that he might have an interest in the safety of the boat and an inducement to maintain it in good repair.

It is in evidence that the defender kept the accounts of the joint trade, but that his brother William Brown took the chief part in the ordering of nets and fishing gear for the boats and provisions for the men. William Brown kept a shop at Lerwick from which he supplied the boats with provisions, and the defence is that the nets were supplied by William Brown in his capacity of tradesmen; that he ordered nets from makers on his credit as a tradesman, passed them into his stock, and from that stock supplied such quantities of nets and other gear as might be necessary for the purposes of the joint trade. Hence it is argued there is no contract relation between John Brown and the manufacturers who supplied the material which eventually went into the fishing concern.

I am of opinion that this defence is more ingenious than sound.

It does not appear to me that the case raises any substantial question depending on the differences between joint trade and partnership. The chief difference of course is that in a proper partnership the acting partner has a universal power to bind his co-traders for goods ordered on account of the firm, and therefore it is not necessary that a manufacturer or wholesale merchant suing for the price of his goods should prove that the goods were in fact applied to the purposes of the partnership trade. In an action against a defender who is not sued as a partner but as a joint trader it is, if not in every case strictly necessary, yet in all cases very material to the cause of action to inquire whether the goods supplied were of the description covered by the agreement for joint trade, and whether the goods were in fact applied to the purposes of the joint trade. In the present case the evidence satisfies me that both questions must be answered in the affirmative, and it does not satisfy me that there is any substance or reality in the defence that the nets were purchased by William Brown in his capacity of private trader and supplied to the joint adventure upon a separate and independent contract of sale.

The chief witnesses to facts were the defender and his brother. Their evidence, which is perhaps more copious than necessary for the purposes of the case, deals largely with the history of the joint trade and the manner in which it was carried on. A considerable part of this evidence relates to matters which are not in dispute, and which do not call for observation from me.

But when these witnesses come to speak of the particular transaction their evidence is

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evidently coloured by the argumentative view of it, which they have perhaps persuaded themselves is well founded; and it is my distinct impression that their statements on this subject cannot be accepted without large reserves.

1. It is evident that William Brown had authority to order nets and fishing gear for the joint trade.

2. In his first letter to the pursuers William Brown stated that he was in want of nets for ‘our six boats,’ and gave what he professed to be a trial order. I understand that there were then only five boats belonging to the joint adventure, but there had been another which was disposed of. No other meaning has been suggested as applicable to the expression ‘our six boats,’ and I read this as an order for nets on account of the joint trade.

3. Other orders were given at short intervals extending over a period of six months, and in the absence of any distinguishing direction I consider that the pursuers were entitled to treat these as orders for the account of the owners of the six boats.

4. The defender has failed to prove that the nets supplied by the pursuers were in fact applied to other purposes than that of the joint fishing trade.

5. The defender has shown that his brother did to some extent supply nets in the course of his business as a general dealer, but it is not likely that William Brown would order nets of the value sued for on the chance of disposing of them, and without reference to a specific order.

6. The defender kept the accounts of the joint trade, and I think that there was a certain duty cast on him to see that the obligations of the fishing adventure were duly met. In a question with creditors of the adventure he was not justified in shutting his eyes to their claims and treating the obligations of himself and the other owners as matters which only affected the accounting between himself and his brother.

7. The nets of the fishing adventure were stored in a store belonging to the defender, and were insured in the joint names of himself and his brother. When the store and its contents were destroyed by fire the defender recovered £1200 from the insurance company for the value of goods stored (chiefly nets), and divided this money among the joint adventurers, apparently without making any inquiry as to whether the makers of the stored property had been paid.

This action on the part of the defender may no doubt be represented as being consistent with his view that the nets were supplied by his brother, and that he had no individual responsibility to the makers. But it is also consistent with the supposition that the two joint traders, one of whom was a man of means, and the other impecunious, had arranged to divide the money which ought to have been applied in meeting their trade obligations, and to relegate the payment of the debts of the undertaking to the chapter of accidents.

There are other points in the evidence on which comment might be made, but I think I have said enough to indicate the grounds of my opinion, which is, that the defender is responsible in law and in equity for the debt sued on.”

The defender reclaimed, and argued—The interlocutor of the Lord Ordinary should be recalled, because (1) William Brown had no authority to order the goods in question on the credit of the joint adventure or of the defender; (2) The joint adventure never got the benefit of the transaction between the pursuers and William Brown, the goods received by it being different goods and charged at a different price from those supplied by the pursuers to William Brown; (3) some of the pursuers' goods were sold to other customers; (4) the price of the goods supplied by each of the brothers was credited to them in account with the joint adventure, and the account annually balanced and settled. The contract of the pursuers consequently was with William Brown alone, and the defender was not liable under that contract— White v. M'Intyre, January 12, 1841, 3 D. 334; Lockharts v. Moodie, June 8, 1877, 4 R. 859.

The pursuers and respondents argued—The defender was justly indebted in the sum sued for. The correct view of the evidence was that William Brown ordered these goods for the purposes of the joint adventure, which he had authority to do. The principle of the judgment in Lockharts v. Moodie would thus apply. The goods were supplied on the faith of the joint adventure, and were in rem versum of the joint adventure. There was here a disclosed joint adventure, and consequently the onus lay on the defender of proving that the goods were not used by the joint adventure—Bell's Comm. (7th ed.) ii. 539.

At advising—