Goldstein v. Nathan , 158 Ill. 641 ( 1895 )

Mr. Justice Phillips

delivered the opinion of the court:

Two questions are .presented and discussed as arising on this record: One, the indefiniteness of the agreement between the parties; and the other, the application of the Statute of Frauds to the facts in the bill stated. The latter proposition will be first considered.

Section 2, chapter 59, of our Statute of Frauds and Perjuries, (Starr & Curtis’ Stat. p. 1192,) provides: “No action shall be brought to charge any person upon any contract for the sale of lands, tenements or hereditaments, or any interest in or concerning them, for a longer term than one year, unless such contract, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized in writing, signed by such party.”

The averment of the bill is, “that, the parties being so possessed of and owning said lots severally, on June 1, 1890, the complainant proposed to the defendant that they should make a joint venture or partnership in reference to said two lots, and that they should participate in the net proceeds to be derived from the sale of them; that one of said lots should be sold in a very short time and the other lot should be held longer,” etc. The right of each party to this agreement has been severally acquired to each separate lot, the title to which was held in severalty at the time of the alleged agreement. By the terms of the agreement the rights acquired, by virtue of the deed, by the appellee to his lot were sought to be qualified and limited. By this agreement, in consideration of appellant agreeing to divide with appellee the profits made by appellant on the sale of his lot, appellee was to divide with appellant the profits on his lot when sold. The contract was executory. Both sales were made, and it is sought to enforce the agreement as against appellee. The contract was not in writing. The agreement affected real estate the title to which had been acquired by appellee before the agreement. If the appellant had any interest in the lot it was by virtue of the agreement relied upon, and was by parol, and would be within the statute. It is clear that an interest acquired in the land of another by a parol agreement is within the statute. This proposition is not controverted by the appellant, but it is urged that an agreement for a partnership for the purpose of dealing and trading in lands for profit is not within the statute, and the fact of the existence of the partnership and extent of each party’s interest may be shown by parol. In this connection it is insisted, that, it appearing from the bill that the lots have been sold, nothing remains but to account for the profits, and it is denied the Statute of Frauds in any way controls the question.

It is true that a partnership may exist for the purpose of dealing in lands for profit, and the existence of such partnership, and the extent of the interests of the respective partners, may be shown by parol. (Speyer v. Desjardins, 144 Ill. 641; Traphagen v. Burt, 67 N. Y. 30; Chester v. Dickinson, 54 id. 1; Getty v. Devlin, id. 403.) There is a wide distinction, however, in an agreement for one to become interested in the profits of certain land already purchased and owned by another, and an agreement to share in the benefits to be derived from lands to be thereafter acquired. Where lands are purchased by a partnership and paid for with the moneys thereof, or acquired as partnership property in the usual course of business of such partnership, a court of equity may treat such real estate as partnership funds, and, as a consequence, as personal property. This rule grows out of the nature of the partnership relation, and is rendered necessary for the purpose of doing justice between the parties, or between the firm and others doing business and having dealings therewith. (Black v. Blade, 15 Ga. 445.) In this case, the land was not purchased by appellant in the name of appellee and the purchase money furnished by appellant. It is not a case of a purchase of lands paid for out of partnership funds and a deed taken to appellee. No partnership funds existed. There was therefore no resulting trust in appellant, and whatever interest he is alleged by the bill to have acquired was by virtue of his contract. The lot was owned by appellee at the time of the contract and paid for by his money, and any interest in the land or the proceeds growing out of the alleged contract can not be severed and made to apply to the profits as distinct from the land itself. If the appellant acquired an interest in appellee’s lot by virtue of his contract, it attached upon the contract being made. If such interest attached and the land had not been sold, the appellant would have been entitled to his moiety therein. Had appellee died before sale, and appellant had an interest in the lot, he would have the right to sell and wind up the partnership affairs. It is only by having acquired an interest in the lot that he could have acquired an interest in the proceeds of the sale. We hold, that where two separate owners of real estate, purchased by their separate funds, enter into a co-partnership with reference to a sale thereof, by a parol contract, such contract is within the Statute of Frauds. McCormik’s Appeal, 57 Pa. St. 54; Vose v. Strong, 144 Ill. 108; Smith v. Burnham, 3 Sum. 435.

We hold that the averments of the bill setting forth the purchase price and selling price of the lots, and that the net profits derived from the sale were to be participated in by the parties, are sufficiently definite averments to authorize a finding by an interlocutory decree and a reference for an accounting between the parties. The Statute of Frauds, however, presents an insurmountable obstacle to the relief prayed for by appellant.

It was not error in the Appellate Court to affirm the decree of the circuit court of Cook county. The judgment of the Appellate Court is affirmed.

Judgment affirmed.