Irvine v. Campbell

• Decision Date: 18 April 1913
• Parties: IRVINE v. CAMPBELL et al.
• Court: Minnesota Supreme Court

121 Minn. 192

141 N.W. 108

IRVINE

v.CAMPBELL et al.

Supreme Court of Minnesota.

April 18, 1913.

Appeal from District Court, Ramsey County; Frederick N. Dickson, Judge.

Action by Clover G. Irvine against H. A. Campbell and others. From an order in plaintiff's favor, defendants appeal. Reversed.

Syllabus by the Court

Defendants secured the right to sell certain real estate, rapidly rising in value, at a price less than its value, and, by guaranteeing the repayment of all advances, with interest, and agreeing to make a resale of the property, induced I. to purchase and hold it for the purpose of such resale under an agreement that, at the sale, I. should receive back his advances, with interest, and the net profits be equally divided. Held, that defendants and I. were engaged in a joint adventure.

Their respective rights in the real estate were similar to those of partners.

I. held the real estate in trust for the purposes of the adventure.

At the decease of I. the real estate descended to plaintiff, his heir at law, subject to the trust.

Defendants are entitled to enforce the trust, to the extent necessary to secure their share of the profits, as against plaintiff, who has refused to sell for full value to a proffered purchaser, and who has repudiated the trust; and the trial court erred in holding that they had no interest in or lien upon the property. William G. White, of St. Paul, for appellants.

T. R. Kane, of St. Paul, for respondent.

TAYLOR, C.

This is an action to determine adverse claims to certain lots located in an addition to the city of St. Paul. The defendant Campbell answered, asserting an interest in the lots under the contract hereinafter set forth. The action was presented to the court upon a stipulated statement of facts, which, so far as here important, may be summarized as follows:

In 1905, the then owner of the lots authorized the defendants, who were real estate agents, to sell them for the sum of $325. The lots were then worth $750, and were so situated that the defendants believed they would increase rapidly in value. The defendants explained the situation to Clover G. Irvine, Sr., and proposed that he purchase the lots at $325 for the joint and mutual benefit of himself and the defendants; the defendants guaranteeing to him the repayment of the purchase price, with interest thereon. Irvine asssented to this agreement, made the purchase, and, on October 14, 1905, the lots were conveyed to him by warranty deed. The defendants neither charged nor collected any commission from either party for negotiating the sale.

Clover G. Irvine, Sr., died on May 22, 1907, and all his interest in the lots descended to and vested in his son, Colver G. Irvine, the plaintiff herein, as his sole heir. All the interest of the defendant Lamberton passed to and vested in the defendant Campbell prior to the commencement of this action. In 1910 the defendant Campbell procured a purchaser who offered to pay $2,000 for the lots, and in 1911 he procured another purchaser who offered to pay $1,800 for them. Plaintiff not only refused both offers, but repudiated the contract as in any way binding either upon himself or upon the land. The lots are now worth $2,000.

At the time of making the purchase on October 14, 1905, Irvine and the defendants executed the following written agreement, which had been prepared by or at the direction of Irvine:

‘This agreement, made between Clover G. Irvine, party of the first part, and Campbell & Lamberton, parties of the second part, witnesseth: That in consideration of the party of the first part purchasing lots 20, 21, and 22, of block 9, Merriam Park Third addition to the city of St. Paul, and paying for the same the sum of three hundred and twenty-five dollars ($325.00), that said parties of the second part agree to and with the said party of the first part to first guarantee to said party of the first part while his money is invested in said property the sum of 7 per cent. interest on the said investment over and above taxes and assessments that may hereafter be levied on said property; second, to sell the same for the said party of the first part without any brokerage commission; and if in case of sale of the said lots that the purchaser thereof requires a survey of said lots, that said parties of the second part agree to pay the expenses of said survey.

‘And it is further mutually agreed that upon the sale of the said property that there shall be first deducted from the proceeds of said sale the sum of 7 per cent. to go to the said party of the first part for what time his money is invested in said property, and to pay all other charges or assessments that have been levied against said property, with interest thereon at 7 per cent., and to divide equally between the said party of the first part and the said second parties the balance of the net profits of said transaction.

‘In witness whereof, we have hereunto set our hands and seals this 14th day of October, 1905.

Clover G. Irvine.

‘Campbell & Lamberton.

‘A. M. Reckinger.

‘S. A. Farnsworth.’

[1] The contract above set forth was evidently drawn by one not skilled in such matters, and is not as clear as might be wished. In the light of the attending circumstances, however, we gather from it that the property was purchased as a speculation, for the mutual benefit of both Irvine and the defendants, in the belief that it could soon be sold at a substantial profit, and for the purpose of so reselling it; that Irvine advanced the purchase price, and expected to pay the taxes and assessments that should be levied against the property while he held the title; that the defendants guaranteed the repayment to Irvine of all advances that should be made by him, together with 7 per cent. interest thereon, and also assumed the burden of reselling the property without expense for their services, and of making a survey of the property at their own expense if such survey should be necessary to consummated a sale; and that upon the sale of the property Irvine should be repaid his advances, with interest, and any profits remaining after such repayment should be equally divided between Irvine, as one...