Crane v. Clemens

Mr. Presiding Justice Freeman delivered the opinion of the court. It is contended in behalf of the administratrix that the contract of January 2, 1893, represents only a loan of money, that it is usurious on its face, and that the lender has already received “more than the principal and a fair amount of interest.” In behalf of appellee it is claimed the agreement and understanding of the parties was that the money was to be employed by the deceased as a part of the capital invested in his extract business, and that appellee was to share in the profits of that business as a partner on equal terms with the deceased, the latter guaranteeing that her share of the profits should not be less than fifteen per cent, on her investment. By the agreement of January 2, 1893, the deceased guaranteed a net profit to appellee of not less than 15% per annum, “said interest or profit” to be paid as stated; and it was further agreed that the deceased could use the money either in his business or otherwise as he might elect. While the language of the agreement may be susceptible of several constructions as suggested by counsel, yet if its intent and meaning are made clear by extrinsic evidence showing its purpose and the interpretation or construction placed upon it by the parties themselves, it should be given effect in accordance with the intention thus ascertained. Whalen v. Stephens, 193 Ill. 121; Curtis v. Hawley, 85 Ill. App. 429. Looking first at the correspondence-which preceded and accompanied the agreement we-find the deceased acknowledging receipt February 14,. 1891, of the first $1,000 sent him by appellee, with the statement, “Now that we are partners I will just simply say that I will do my utmost to make you feel' satisfied with this world. ’ ’ There can be no misunderstanding of this language. The parties appear to have agreed upon a partnership of some kind which, as subsequently appears, was in the extract business carried on by the deceased, appellee having then invested in it $1,000. In January following the deceased acknowledges another remittance from appellee, stating that he thinks it best to give her a certificate' showing helms the money, which certificate he encloses, saying “I will do my best for you and remit the profit at the same time I remit the profit on the other $1,000. ” Apparently therefore the partnership as between themselves continues, appellee’s investment then becoming $2,000. In November, 1892, this is increased by an additional sum of $4,550, making in all $6,550. The deceased sends a receipt dated November 28, 1892, for the additional sum “to be used by me in such manner as to realize her the largest profitable income,” adding that the receipt so sent “will do until you get the other $350 in, and then I will give you one writing to cover the entire $7,000.” That receipt does not appear therefore to have been intended to indicate any change in the partnership relation. Subsequently the deceased appears to have sent to appellee an agreement, of which under date of January 16, 1893, she complains, as not stating correctly the agreement between them as she understands it, and which she refuses to sign, saying that she is convinced they “are laboring under a misunderstanding. I thought all the time you expected to use my money in your business and would give me such profits as it realized. Didn’t you remember me saying before I sold my business I would sell if you would let me put the money in your extract business- the same as you had the $1,000 and you said you would, and as you could not make any change in the business until the first of the year, you would use what money I sent you to the best advantage until that date; then I understood you was to put it in your business and give me papers to that effect. I don’t understand your writing about having it out on 90 days time -when I expected it to go into your business Jan, 1st. When you write the agreement I would much prefer you would say the money was in the business and state a per cent, that it will not fall below; in fact just duplicate the agreement for the 1000, only have it for 6000. (I will just leave the 1000 as it is, as it has one more year to run, and in case I should need the money in one year it will be due at that time.) Have the article for 6000 drawn up for a period of eight years as Claude will be 21 then and he can take this care off of you.” To this the deceased replied; “I will answer your letter by first saying that I understood that I was and I expect to use your money for your benefit in the extract line.” He then proceeds to explain why he sent the agreement which appellee rejected, saying that if he gave her “an ordinary partnership paper” then in case of Ms death appellee might have trouble and delay in getting back her investment. He tells appellee that her percentage of the profits will be as large as his, and while he don’t expect it to fall so low as 15% it might do so under unexpected trade conditions, but he expects.it to “go to 25% or 30% before 5 years as the business is growing and the quality of the extracts ar.e making new trade continually.” Appellee replied under date of January 20, 1893, and after expressing confidence in the deceased said: “Regarding the agreement I think you know from my last letter what I want. * * * I would prefer the agreement written as the one is for $1000, giving me an interest in your business for a certain length of time, but as you probably have my last letter before this you will know just what I want. ’ ’ Three days later appellee acknowledges receipt of an agreement, saying that she is “pleased with the agreement,” sorry that she “troubled you so much about it,” returns it signed, and says that she will destroy the others which she has not signed. Nothing appears in the written agree-men dated January 2, 1893, so far as we can discover, inconsistent with the previous correspondence in which both parties state the understanding and agreement to be that appellee’s money was to be used for her “benefit in the extract line,” the two to share equally in the profits. The agreement as written permitted the deceased to use the money either in or outside of his business if in his judgment desirable, thus giving him entire control of all the capital as he had indicated in a previous letter he regarded necessary. There is no reliable evidence that any of appellee’s money was so used, however, and in either event the partnership interest was not intended to be and was not affected by such permission. That it was the understanding of the deceased himself as well as of appellee that she had a partnership interest to the extent of her capital invested in the extract business of the deceased is shown by the subsequent conduct of the parties. The letter of February 24, 1901, written by the deceased a few days before his death contained a statement of appellee’s share of the profits of the business for the preceding year, and was accompanied by a money order for the balance of $590.43, thus shown to be due her, including payments for January and February of that year. The letter concludes with the statement that the writer feels contented because “I know that I did better than several of the rest-that are in it.” While it is true that in the agreement the words “interest or profit” occur, and that appellee in some letters speaks of “interest” and “loaned money,” it is evident that the transaction was not a loan of money at interest. The parties were not pretending to use phraseology legally exact. There is no foundation for any claim that either of them was endeavoring to avoid the usury laws or had any thought of so doing. Appellee’s money, as was said in Goodrich v. Rogers, 101 Ill. 523-529, was “employed in business where it might make profits or suffer losses. We do not understand that our statute was ever intended to prevent one person from furnishing capital to another with which the two might embark in trade, although the person advancing the capital might receive profits greatly in excess of the rate of interest allowed by law. In such a case where he takes the hazard of losses arising from the business there can be no usury.” In the present case it is true there was an agreement to pay back appellee’s capital at a certain time and she was guaranteed a net profit. In Robbins v. Laswell, 27 Ill. 365-369, there was an advance of money by Robbins to Laswell, the profits to be equally divided, and Laswell guaranteed “that the portion of profits coming to Robbins shall not be less than 20 per cent, per annum on the above sum.” It was said “the question properly arises here, does this agreement make a partnership? As between themselves we think there can be no doubt. It seems to be well settled that when by agreement persons have a joint interest of the same nature in a particular adventure, they are partners inter se, although some may contribute money and others labor. * * * If then parties agree to share the profits they are partners in the profits although one contributes the capital or goods and the other only trouble. * * * It was not necessary that the parties should agree to share in the losses.” (Citing cases.) What is said in Parsons on Contracts, Vol. 1 (9th Ed.), p. 187, is in point: “Though partnerships are usually formed by a participation of both profits and losses, it may be agreed that a partner shall have his share of the profits and not be liable for losses, and this agreement is valid as between the parties. And this agreement will be equally efficacious whether stated in articles or proved by circumstances or otherwise. For the partners inter se may make what bargain they will.” See, also, Rosenfield v. Haight, 53 Wis. 260; Gilpin v. Enderly, 4 Barn. & Ald. Reports, 954; Illingworth v. Parker, 62 Ill. App. 650, citing Lindley on Partnership. It is urged in appellant’s behalf that there had not been a complete settlement of account and of partnership profits between the parties at the time of Mr. Bode’s death, that there were still about two months of the year 1901 to be accounted for, that there should have been an accounting, as to which the Probate Court is without jurisdiction. The statement and payment of February 24, 1901, made by the deceased two or three days before his death included, as we have said, payments for January and February of that year, and practically settled the account up to that time. Appellee was at liberty to regard this settlement as conclusive and satisfactory and was not obliged to make any other or further claim on account of profits, if any, payable under the agreement.' • The claim is for the sum belonging to appellee held by the decedent at his death and was, we think, properly allowable against the estate. The judgment of the Circuit Court must be affirmed. Affirmed.