Vanhousen v. Copeland

Mr. Justice Boggs delivered the opinion of the court: In the brief presented in behalf of appellant it is said: “The controversy arises' over—first, purported verbal agreements claimed by appellees Copeland & McSorley to have been subsequently to February 28, 1888, made between Frank W. Copeland and John H. YanHousen about May 1, 1888, whereby it is claimed that the property should be sold and net proceeds divided equally between the four parties; second, it is claimed by Copeland & McSorley that they were entitled to compensation in the sum of $2500 for their services in the erection' of the building; third, there is a considerable difference in regard to the accounts rendered by appellees Copeland & McSorley and by appellant YanHousen.” As to the first of the controversies, counsel urge the alleged oral agreement is without consideration to support it, and that its effect, if operative, was to divest the appellant of title to an interest in the real estate and it was therefore within the Statute of Frauds, and further, that the alleged agreement was not established by the preponderance of the evidence. Counsel for the appellant concede it was proven the written agreement of February 28, 1888, was changed by a subsequent oral agreement, to the effect that the property, instead of being divided among the parties, should be sold as one property, but arg'ue it was not made to appear, by a preponderance of the evidence, that the proceeds of such a sale should be divided equally among the parties, and therefore insist the master should have divided the proceeds of the sale according to the interest which the parties would have had under the provisions of the agreement of February 28. F. W. Copeland and appellee Mc-Sorley testified in the most unequivocal manner that it was verbally agreed that the parties should share equally in the proceeds of the sale of the entire property, and that the consideration, in part, was the agreement the appellees should pay the appellant $1000, to recompense him for his services in procuring the loan. The appellant contradicted this testimony as to the interest to be had by each in the property, and his contradiction was in some degree supported by the testimony of his son, and to some extent, though but slightly, by that of another witness, and was possibly weakened by the fact it was shown he (appellant) had been convicted and sentenced to the penitentiary for the crime of forgery, or some kindred offense. The testimony of the .appellees was strengthened by the fact no steps were taken, after the completion of the building, to ascertain the cost of the entire building and apportion the same to the separate parts of the building, as contemplated by the agreement of February 28, but, upon the contrary, the building was treated as an entirety, the rents and income were received by the appellant and treated as a gross sum in which all were interested, without regard to the different parts of the building which produced the same. The expenses of janitor service, repairing, papering, changing the fiats into store or business rooms and of conducting and managing the building were also treated as a gross charge against the income in gross. Our view is, the finding of the master upon the point was correct. Nor do we think the oral agreement to be inoperative for the lack of sufficient consideration to support it. It appeared beyond dispute, from the testimony, that the agreement of February 28 was entered into for the reason the parties found it necessary, in order to secure a loan, the title to the property should be in one of their miniber, who should apply for the loan and become personally bound, and the appellant consented that the title to the entire premises might be placed in him and that he would undertake to procure the loan. It was intended and expected an amount substantially equal to the entire cost of the property would be borrowed, and as the indebtedness was to be apportioned on the different lots on which the building stood, the proposed allotment in severalty but gave to each of them property subject to an encumbrance to the amount of its value. The allotment of one-half of the property to VanHousen was to recompense him for the special service on his part attendant upon securing the loan. The master was fully warranted in finding that after the loan had been negotiated the appellant and the appellees concluded it was better, for the interest of all the parties, the building should not be divided into parts, as was contemplated by the agreement of February 28, but should be sold as a whole. The evidence further justified the conclusion reached by the master, that in order to compensate the appellant for his services in getting the loan, and as in lieu of the increased interest in, the property under the February agreement, the appellees agreed they would personally pay him §1000, and that such sum was not to be reckoned as an expense attendant upon the enterprise to be borne in part by appellant, but should be paid to him in full by the three appellees, and that the appellant accepted such sum and abandoned his right under the said written agreement. The Statute of Frauds has no application here. “A partnership is the contract relation subsisting between persons who have combined their property, labor or skill in an enterprise or business, as principals, for the purpose of joint profit.” (17 Am. & Eng. Ency. of Law, p. 828.) Here all the elements necessary to constitute that relation are present. The relation was formed for the purpose of purchasing the lots and erecting the building thereon and renting and managing the same for the acquisition of profits only, in which profits (or losses, if any occurred,) the parties were to share. In equity the' real estate of a partnership, as between the partners, is regarded and administered as personal property and assets and stock in trade of the firm. An oral agreement to form a partnership for the purpose of trading in real estate for profit is not within the Statute of Frauds. The extent of each partner’s interest in partnership lands held, not as land but as partnership stock in trade and for profit, may be shown by parol, whether the legal title thereto is in one or all the partners, and oral agreements between the partners as to their respective interests, as such partners, in real estate constituting the assets of the firm are not void under the Statute of Frauds. Morrill v. Colehour, 82 Ill. 618; Allison v. Perry, 130 id. 9; Roby v. Colehour, 135 id. 300; Speyer v. DesJardins, 144 id. 641; 17 Am. & Eng. Ency. of Law, 948. We are unable to agree with appellant in his second contention, that the master erred in finding Copeland & McSorley were entitled to compensation, in the sum of $2500, for their services in and about the erection of the building. We do not understand appellant denies it was a part of the arrangement between the parties, at the inception of the enterprise, that Copeland & McSorley were to render services as contractors and builders and were to receive compensation therefor, but his insistence is that such compensation was to be paid only in the event the total cost of the building did not exceed the sum of $19,000. Appellant insists the correctness of this proposition is manifested by the agreement signed by the parties under the date of November 3,1887, which agreement is set out in the statement of the case. The situation when this agreement was signed was, the parties had settled, in a general way, the character of the structure to be erected, and agreed that Copeland & McSorley should have charge of the work as contractors and builders, without any definite arrangement as to the amount to be invested in the building. The cost of the building would depend very largely upon the quality of the material used and the manner of its construction, the character of the work, etc.,—matters which, in the absence of any limitations, would be wholly in the control of the contractors and builders. The effect and purpose of the agreement was to serve as a restriction upon the builders by fixing the total sum to be invested in the building. In order it might be clear the contractors were not to be paid the full sum of $19,000 if the building should cost less than that amount, a clause to that effect was inserted, and the reference to the compensation of the builders found in that clause is to the effect that in computing such cost of the building the compensation of the builders and contractors shall be included. Afterwards, as is conceded by all the parties, it was determined to construct a much more expensive building. The master was justified in finding, from the testimony of the parties, that the sum of $2500 was fixed upon by the appellant and the contractors as the amount to be paid said Copeland & McSorley, and that such was the fact seems, so far as this appellant is concerned, to be removed from the range of contention by an item to that effect incorporated in a statement of accounts made and signed by the appellant, upon which he and said contractors concluded a settlement between them. Whether W. L. Copeland was a party to the agreement fixing such compensation of the contractors at $2500 is not important here to consider. He made no complaint to the decree in the superior court and urges none here, and the appellant cannot complain in his behalf. The third contention is, “there is a considerable difference in regard to the accounts rendered by appellees Copeland & McSorley and by appellant, VanHousen.” The truth of this contention cannot be denied. The testimony bearing upon it, as appears from appellant’s brief, occupies 692 pages of the original record. The complaints against the action of the master upon this testimony are in the main too general to aid in their investigation. Wé have examined such objections as are specific enough to enable us to do so, and think none of them well founded. The master seems to have fairly weig'hed and considered the testimony, and arrived, as we think, at correct conclusions upon the points involved. The decree of the Appellate Court is affirmed. Decree affirmed.