Pierpont v. Lanphere

Mr. Justice Freeman delivered the opinion of the court. The material question presented for determination is whether the arrangement between Lanphere and appellant created as between themselves a partnership, in the land. The bill alleges that the parties entered into an oral agreement whereby they became equal partners in the profits to be derived from the purchase and resale of certain real estate. It is charged that appellant was induced to make the arrangement by false representations of Lanphere that he had arranged to resell most of the property; that it was practically all sold, and that a large profit could be made from the purchase. Conceding that these representations proved untrue or mistaken, even if they be deemed false statements as to matters of- fact, and not mere expressions of opinion by a real estate agent anxious to make a sale, the real question now is, not what induced appellant to make the purchase, but whether it was made by the parties as partners in the purchase of the land and not merely in the profits to be derived from its sale. There is no contradiction in the testimony. The defendant. Lanphere appears to have been incapacitated mentally at the time of the hearing. The testimony in behalf of appellant is to the effect that Lanphere wanted some one to furnish the money to purchase the property, Lanphere to do the work and retail it; and that it was agreed finally with appellant that the latter should furnish the money, to be repaid to him out of the proceeds of sales, with interest at six per cent, and take the title as security, Lanphere to attend to selling and tix prices, the profits to be divided equally. This is said to have been the oral agreement under which the land was purchased December 3, 1890. But it is not the agreement expressed in the written memorandum signed by appellant more than six months thereafter, July 6,1891, which purports to state the exact nature of Lanphere’s interest. By that memorandum appellant states that he has purchased and holds title to the property in question, not that the purchase had been made by the alleged partnership; that he, appellant, proposes to subdivide and Lanphere “ proposes to take said property and handle it; ” and that in consideration of Lanphere’s “ doing so and selling the same” he, the appellant, agrees, after reimbursing himself out of the proceeds, “ to divide any profits realized from the sale thereof equally with said Lanphere.” This clearly does not indicate a partnership in the land and is not consistent therewith. It is an agreement by appellant to compensate Lanphere for selling the land by giving him half of any profits realized from the sale. Appellant testifies that as originally drawn, the memorandum contained the words “ within one year from this date,” as the time within which the land was to be sold by Lanphere. These words were, it is said, stricken out at Lanphere’s request, and the only effect of the evidence is its tendency to show that when the memorandum was drawn, appellant had in mind the idea of limiting the time within which Lanphere could earn a half interest in the profits, to one year; an idea inconsistent, as it seems to us, with appellant’s testimony that the land was held by him as partnership property belonging equally to both. This written instrument must be held to embody the final understanding and agreement between the parties, ivhatever may have been the previous oral propositions or agreements. This principle is so well understood and so universal in its application that it is scarcely necessary to cite authority; but as its applicability in this case is disputed, reference may be made to such cases as Clark v. Mallory, 185 Ill. 227-282, where it is said : “ Intention of the parties is not to be determined from previous understandings or agreements, but must be ascertained from the instrument itself which they execute as their final agreement, otherwise written evidence of an agreement would ámount to nothing;” and Evans v. Hanson, 42 Ill. 234-237, where it is said : “ All anterior negotiations and propositions, as well as guarantees, if made, were merged in the articles of partnership and this receipt.” See also, Coey v. Lehman, 79 Ill. 173-177; Miltimore v. Ferry, 171 Ill. 219-225; Gardt v. Brown, 113 Ill. 475-479. It is urged that the fact the parties were to share profits1 makes them prima facie partners, though nothing be said about losses. “ There is no absolute rule of law that' a participation in the profits renders the participant a partner. It is only a presumption of the law which prevails in the absence of controlling circumstances, but is controlled by them.” Niehoff v. Dudley, 40 Ill. 406-409. While it is not now necessary to show an agreement to bear losses to make one liable as a partner, yet where the sharing in the profits is merely “the measure of compensation for services, or for the use of property or money in the business,” or bv one acting merely as an employe, partnership liability is not thereby created. There must be such a relation between the parties as that “ each of them is a principal and -each an agent for the other.” Fougner v. First National Bank of Chicago, 141 Ill. 124-126. In the present case, according to the written memorandum made by appellant and hence to be taken as expressing his understanding of the relation between the parties, no partnership in the purchase of the land existed. The memorandum was made subsequently to the purchase, and was an independent transaction, even though in contemplation of the parties when appellant made the purchase through Lanphere as agent of the seller. Mayfield v. Turner, 180 Ill. 332-337. Other cases involving a similar state of facts are Stow v. Robinson, 24 Ill. 532; Le Moyne v. Quimbv, 70 Ill. 399-406; see, also, Stevens v. Faucet, 24 Ill. 483. There were no profits, and it is not probable that under present conditions there ever will be. It is not necessary, therefore, to consider what the relations of the parties would have been in that event; but it is conceded that they might have been partners in the profits if there had been a<nv. See Smith v. Gear, 59 Ill. 381; Winstanley v. Gleyre, 146 Ill. 27; Roby v. Colehour, 135 Ill. 300. Appellant seeks an accounting upon the theory that the parties were partners as between themselves in the purchase of the land. Failing to establish this relationship, he is not entitled to the relief sought. No reason appears why Lanphere could not acquire title to the note in controversy without accounting therefor to appellant. The judgment of the Superior Court' must be affirmed.