EBER B. WARD, SURVIVOR, &C., OWNER OF THE STEAMBOAT DETROIT, APPELLANT,
v.
CHARLES THOMPSON
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The Supreme Court held that a written agreement between the owner of the steamboat Detroit and Charles Thompson was a contract of partnership in the vessel's earnings rather than a charter-party, and therefore the admiralty court lacked jurisdiction over the dispute. The Court affirmed the dismissal, establishing that admiralty courts have no jurisdiction over partnership disputes involving ships, which must instead be pursued in courts of chancery or common law courts depending on the nature of the claim.
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Mr. Justice GRIER delivered the opinion of the court.
The articles of-agreement containing the contract, which, is the subject matter of this suit, are denominated in the libel a charter-party of the steamboat Detroit to respondent. The answer denies that he had chartered the vessel, and-alleges that the writing declared on is a contract of partnership, and not a charter-party. The Circuit Court agreed with the respondent -as to the construction of the contract, and consequently dismissed the bill.
A court of admiralty takes, cognizance of certain questions between part owners, as to the possession and employment of the ship, but will not assume jurisdiction in matters of account between them. (Orleans v. Phœbus, 11 Peters, 175.) It is not disputed that a contract of partnership in the earnings of a ship comes within the same category. If the party desires an account, his remedy is in a court of chancery. If his complaint be for a breach of some independenl covenant, he should seek his remedy in a court of common law.
A charter-party is defined to be “ a contract by which a ship, or some principal part thereof, is let to a merchant, for the conveyance of goods on. a determined voyage to one or more places.”
A contract of partnership is where parties join together their money, goods, labor, or skill, for the purposes of trade or gain, and where there is a community of profits.
The only characteristics of a charter-party to be found in this contract are, that the subject of it is a ship, and that libellants are owners. There is no letting or hiring of the ship to. the respondent for a given voyage, to be employed by him for his own profit. On the contrary, the Wards contributed a steamboat, to be put into a line for freight and passengérs, which has also a contract for carrying the mail. Thompson contributes the good will of an established line, together with his care, skill, and experience. He is to have the general management of the business, and the selection of the officers and crew; but the clerk, or receiving and disbursing agent, is to be appointed by the Wards, and to be under their control.
The receipts of the steamer are to be applied'—
1st. To pay expenses.
•2d. Insurance.
3d. Six thousand dollars to Ward.
4th. Three hundred to Thompson.
5th. The balance of the profits to be equally divided. Here we have everything necessary to constitute a partner* ship:
1st. The parties have joined together to carry on a certain adventure or trade, for their mutual profit — one contributing the vessel, the other his skill, labor, and experience, &c.
2d. There is a communion of profits, on a fixed ratio.
Of such a contract, a court of admiralty has no jurisdiction.
The decree of the Circuit Court is therefore affirmed, with costs.
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Commissioner of Internal Revenue v. Tower, 327 U.S. 280 (U.S. 1946)…tner, the burden rested upon the respondent to produce sufficient evidence to convince the Tax Court that the Commissioner’s determination was wrong. Welch v. Helvering, 290 U. S. 111; Commissioner v. Heininger, 320 U.S. 467, 475. Ward v. Thompson, 22 How. 330, 333, 334; Meehan v. Valentine, 145 U. S. 611, 618. What would be the effect foi tax purposes should taxpayers after holding themselves out as a partnership later challenge the existence of the partnership, is a question not here presented. See Hig…
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Commissioner of Internal Revenue v. Culbertson et ux., 337 U.S. 733 (U.S. 1949)…ined7 — to a particular form of business organization. A partnership is, in other words, an organization for the production of income to which each partner contributes one or both of the ingredients of income — capital or services. Ward v. Thompson, 22 How. 330, 334 (1859). The intent to provide money, goods, labor, or skill sometime in the future- cannot meet the demands of §§11 and 22 (a) of the Code that he who- presently earns the income through his own labor and skill and the utilization of his own ca…
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Lusthaus v. Commissioner of Internal Revenue, 327 U.S. 293 (U.S. 1946)
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- The Steamboat Orleans v. Thomas Phœbus, 11 Pet. 175 (U.S. 1837)