Linn v. Clark

• Decision Date: 10 December 1920
• Docket Number: No. 13412.,13412.
• Citation: 128 N.E. 824,295 Ill. 22
• Parties: LINN et al. v. CLARK et al.
• Court: Illinois Supreme Court

295 Ill. 22

128 N.E. 824

LINN et al.

v.CLARK et al.

No. 13412.

Supreme Court of Illinois.

Oct. 23, 1920.

Rehearing Denied Dec. 10, 1920.

Action by William R. Linn, Edwin M. Clark, and others against James B. Muir. From an adverse decree, the first-named plaintiff and others appeal.

Affirmed.

Carter, J., dissenting.Appeal from Superior Court, Cook County; Denis E. Sullivan, judge.

Bayley & Webster and George P. Merrick, all of Chicago, for appellants.

James J. Barbour and Edward H. S. Martin, both of Chicago, for appellee Clark.

Robert L. Lyons and Edmund S. Cummings, both of Chicago, for appellee Muir.

DUNN, J.

William R. Linn, Charles L. Raymond, and Edwin M. Clark were partners in a trading venture in a tract of land in the city of Chicago situated at the corner of Sheridan road and Devon avenue and extending to Lake Michigan. They bought the land on July 2, 1900. It was conveyed to Linn, who paid the purchase price, $45,000, and a written agreement was executed by the three on that date, providing for the subdivision and improvement of the property; that Raymond should furnish the money required from time to time for the payment of taxes and assessments and for the improvement of the property; that Clark was to give his attention and services to the subdividing, improving, and selling of the property, without compensation other than his share of the proceeds of the sale as provided in the agreement, and that the proceeds which should be realized from sales of the property were to be applied first to the repayment to Linn and Raymond, respectively, of the sums which they had advanced, with interest, and the remainder should be divided equally among the three partners. The property was all sold in the course of time, each of the partners receiving about $20,000 of profits. In November, 1904, James B. Muir, who was a lawyer and had then been practicing his profession in the city of Chicago about 30 years, entered into negotiations with Clark for the purchase of a part of the tract. He was well acquainted with Clark, having gone to school with him in their boyhood in Michigan and Clark having occupied part of Muir's office for a time. Muir was acquainted with the property and its ownership by the partners. After some negotiations a written contract was entered into between Linn and Muir, by which Linn agreed to sell the property to Muir, for $12,000, of which $1,000 was paid in cash, $5,000 was to be paid January 3, 1905, and the remainder of $6,000 on or before 3 years from the date of the contract. On January 3, 1905, Muir paid the entire purchase price by giving his check for $12,000 to Clark, who thereupon surrendered the unpaid check which Muir had given for the $1,000 cash payment. Linn executed a deed to Muir for the premises, which were then vacant. Since that time the property has been managed and controlled by Muir, buildings have been erected on it by tenants without expense to the owner, the cost to Muir, together with interest and all expenses, has been repaid to Muir out of the income, and it is now producing from $8,000 to $10,000 a year rent, and is worth $200,000.

On January 5, 1905, Muir went to Michigan on account of the death of his mother and did not return to Chicago until January 15, when Clark called at his office, and the following instrument was executed by them:

‘It is hereby agreed by and between James B. Muir and Edwin M. Clark, both of the city of Chicago, that whereas on January 4, 1905, James B. Muir bought and took title in his name to all that part of lot nine (9) in Cape Hayes subdivision of the southeast fractional quarter (1/4) of section thirty-two (32), township forty-one (41) north, range fourteen (14) east, of the third principal meridian, which lies west of the Chicago, Milwaukee & St. Paul Railroad Company, in Chicago, Cook county, Illinois, and paid for the above described property the sum of twelve thousand dollars ($12,000).

‘It is understood between the parties hereto that said above-described property was bought for the joint benefit and account of James B. Muir and Edwin M. Clark, and that after the said James B. Muir receives all moneys advanced by him for the purchase of said property, together with taxes on same and interest at six per cent. per annum, the net profits from the sale of said property shall be divided equally between the parties hereto.

‘James B. Muir,

‘Edwin M. Clark.’

On March 21, 1919, Clark filed a bill in chancery against Muir in the superior court of Cook county, averring that the purchase from Linn was made for the joint account and mutual benefit of Clark and Muir, claiming that Muir should be regarded as a trusteeof one-half of the premises for the benefit of Clark, and praying that Muir be required to convey the undivided one-half of the premises to Clark, or that they be sold, that an account be taken of the rents and profits, and for general relief. In the bill it was alleged that it was understood and agreed between Muir and Clark that Clark would take such steps and actions in relation to the property that it could be bought, held, and finally disposed of so as to yield a large and substantial profit, and that such understanding and agreement were reduced to writing, as has been set forth.

Muir filed an answer, denying that the purchase was made on joint account, or that the declaration of trust was a part of the purchase, and averring that the memorandum made on or about January 15, 1905, was entirely independent of the purchase of the premises, and was executed by the defendant, at the request of the complainant, without any consideration. Muir also informed Linn and Raymond of Clark's action in filing a bill and his claim, this being the first intimation to Linn and Raymond that Clark had or claimed any interest in the premises under the sale to Muir. Thereupon Linn and Raymond filed a petition in the cause to be made parties defendant. The court denied the petition, but gave them leave to become parties complainant, and thereupon, on August 8, 1919, they filed a bill of complaint in the original cause of Clark v. Muir in which they alleged the purchase by Muir, and averred that it was for the joint account of himself and Clark; that Muir had knowledge of Linn and Raymond's interest and of Clark's relation to them. They offered to repay Muir's advances, and prayed for an accounting, for a reconveyance of the premises, and for general relief. Clark answered this bill on November 28, 1919, denying, contrary to his original bill, that he had any interest in the sale to Muir at the time. He admits that Muir knew of the contract between Linn, Raymond and Clark, but avers that his contract with Muir was entered into after the sale to Muir; that Clark was not a lawyer, and believed that his relations with Muir were so intimate and friendly that no question of the interpretation of the contract would ever arise between them; that he therefore gave no special thought to the terms of the memorandum which he prepared evidencing the agreement, and that by the statement that the property was bought for their joint benefit he did not intend to state the exact facts, but to impose a status between Muir and himself, whereby his rights and liabilities in the ownership of the property and the profits would be the same as though the premises had been actually bought by Muir for their joint benefit and account. He says that he left Chicago for Pasadena, Cal., on December 21, 1918, and did not return until November 14, 1919; that during much of that time he was in ill health; that his attention was not directed to the detailsof the sale by Linn to Muir until notified, subsequent to May 6, 1919, by Linn and Raymond that they claimed an interest in the Muir property; that he promised his counsel, from time to time, to return to Chicago and give his counsel his best recollection as to all facts concerning the transaction, but was unable to do so until the present time.

On December 6, 1919, Clark amended his original bill in accordance with his answer, omitting the allegations that Muir purchased the premises on the suggestion and advice of Clark for their joint account and mutual benefit, and that it was mutually understood and agreed between them that Clark would take such steps and actions in relation to the property that the same could be bought, held, and finally disposed of so as to yield a large and substantial profit for the mutual benefit of himself and Muir, and that their...