Morse v. Richmond

• Decision Date: 03 February 1881
• Citation: 1881 WL 10413,97 Ill. 303
• Parties: CHARLES H. MORSEv.ELIZA H. RICHMOND.
• Court: Illinois Supreme Court

97 Ill. 303

1881 WL 10413 (Ill.)

CHARLES H. MORSE

v.ELIZA H. RICHMOND.

Supreme Court of Illinois.

Filed at Ottawa Feb. 3, 1881.

APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Superior Court of Cook county; the Hon. S. M. MOORE, Judge, presiding.

Mr. W. T. BURGESS, for the appellant:

No partnership was formed, under the papers in evidence, in the sense to give Jackson, as a member, power to issue negotiable paper binding on the others. It was only an arrangement among the owners of real estate touching the improvement and sale of the same, with no authority to buy any other, and the use of any firm name is not provided for in any of the papers.

The signing of papers “A. B. Jackson, trustee,” is, upon its face, a designation of a person, and not a description of an association of individuals using a name to do business in or with. Upon the face of this paper (the note) is the individual promise of the maker. Powers v. Briggs, 79 Ill. 493; Burlingame v. Brewster, 79 Id. 515; Little v. Bailey, 87 Id. 23.

The use of the word “trustee” simply indicates that the party has a fund out of which to pay it, and proposes to make it a charge upon that fund; but it is a great stretch of imagination to make it mean a charge upon the person of any one but the signer.

As to the power of one partner to bind the firm by bill, note, etc., counsel referred to Collyer on Part. sec. 402; Gray v. Ward, 32 Ill. 32; Story on Part. secs. 126, 127, 238, 154; 3 Kent's Com. 42, 33; Marvin v. Andrews & Mack, 10 Wend. 459.

As to the rule that written powers must be strictly construed and followed, counsel cited Howard v. Baillie, 2 H. Bl. 618; Franklin v. Egell, 1 Sneed, 497; Strong v. Stewart, 9 Heiskell, 137; Farrar v. Duncan, 29 La. 126; McAlpin v. Cassiday, 17 Tex. 449; Valentine v. Piper, 22 Pick. 85.

Where authority is conferred upon an agent by a formal instrument, as, by a power of attorney, there are two rules of construction to be carefully attended to: 1. The meaning of general words in the instrument will be restricted by the context, and construed accordingly. 2. The authority will be construed strictly, so as to exclude the exercise of any power which is not warranted, either by the actual terms used or as a necessary means of executing the authority with effect. The following cases are cited in support of this rule: Bissell v. Terry, 69 Ill. 184; Dunlap's Paley on Agency, 192; Story on Agency, secs. 68, 69; Chase v. Dana, 44 Ill. 262; Wood v. Goodridge, 7 Cush. 117; Rossiter v. Rossiter, 8 Wend. 495; Nixon v. Hyserott, 5 Johns. 57; Geiger v. Bolles, 1 N. Y. Sup. C. Rep. 129; Brantley v. So. Life Ins. Co. 53 Ala. 554; Craighead v. Peterson, 72 N. Y. 279; Atwood v. Memmings, 7 B. &. C. 278; Hubbard v. Elmer, 7 Wend. 446; Hodge v. Combs, 1 Black, 192; Rosseau v. O'Brien, 4 Biss. 395; Hatch v. Coddington, 95 U. S. 48.

Messrs. NEEDHAM & MILLER, for the appellee:

The questions of law involved in this case naturally arrange themselves under two general heads:

1. Was there a partnership in law, as to third persons, existing between Morse and Jackson, as charged in the bill; and

2. Had Jackson the power to borrow money for the business of the firm, and give therefor a promissory note that would bind the members of the firm.

As to what state of facts will constitute a partnership in law as to third persons, counsel cited Collyer on Part. secs. 3, 81, 82, 83; Waugh v. Carver, Smith's Lead. Cases, vol. 1, (Eng. ed.) 491; Niehoff et al. v. Dudley et al. 40 Ill. 406; Pittis et al. v. Atkins et al. 60 Id. 454; Flagg v. Stowe, 85 Id. 164; Irving v. N. C. and St. L. R. R. Co. 92 Id. 103.

But it is said this was an arrangement among the owners of real estate touching the sale and improvement thereof, and therefore is not a partnership.

That partnership may exist in the buying and selling of lands, see Story on Part. secs. 82, 83; Williams v. Gillies, 20 Sup. C. (N. Y.) 422; Chester v. Dickerson, 54 N. Y. 1; Sage v. Sherman, 2 Id. 417; Ontario Bank v. Hennessy, 48 N. Y. 549; Fall River Whaling Co. v. Borden, 10 Cush. 458; Dudley v. Littlefield, 21 Me. 418; Dale v. Hamilton, 5 Hare, 383.

It is further urged by appellant's counsel, that they did not provide for the use of any firm name in the trust deed, but this, we submit, is wholly immaterial. The business of a firm may be carried on in the name of one of the partners. LeRoy v. Johnson, 2 Peters, 198; Collyer on Part. sec. 215, n. 2; Williams v. Gillies, supra.

Mr. JUSTICE MULKEY delivered the opinion of the Court:

This is an appeal from a judgment of the Appellate Court for the First District, affirming a decree of the Superior Court of Cook county, rendered in a chancery proceeding commenced by appellee against the heirs at law of Andrew B. Jackson, deceased, his administratrix, and Charles H. Morse, appellant. The bill charges, that on the 5th day of March, 1874, Andrew B. Jackson, since deceased, and Charles H. Morse, were partners, and jointly interested in certain real estate situated in the county of Cook and State of Illinois. That the title to said property was acquired and held for their use in the name and style of “Andrew B. Jackson, trustee.” That on the day last named, Jackson & Morse, being indebted to the complainant in the sum of two thousand and eighty dollars, for moneys used in and about their partnership business, executed to her their note, of that date, for the amount of said indebtedness, by the name and style of “Andrew B. Jackson, trustee,” payable one year after date. That on the same day, the said Jackson, as such trustee, together with his wife, for the purpose of securing the payment of the note, executed to complainant a deed of trust upon certain lands, describing them. The bill also shows the subsequent death of Jackson, alleges default in payment of the note, and prays for a personal decree against Morse, and a sale of the property mentioned in the trust deed.

Morse answered, denying the partnership and all liability on account of the note. There was a decree in favor of complainant, substantially as prayed for in the bill, which, as already stated, was, on appeal, affirmed by the Appellate Court.

It will be perceived from the foregoing, that the real question involved in this controversy, is, whether the note secured by the deed of trust, and which was signed in the manner heretofore stated, by Jackson alone, is the note of Jackson & Morse, as partners, or the individual note of Jackson.

A brief statement of the circumstances under which this note was executed, is necessary to a proper solution of the questions involved.

It appears, from the record before us, that prior to the 29th day of March, 1872, Luther F. Greenleaf, Andrew B. Jackson, Stephen P. Lunt, and Charles H. Morse, the appellant, purchased, partly on credit, certain lands situated in Cook county, on the line of the Chicago and Milwaukee Railroad, amounting in value to some $92,000, giving for the deferred payments their joint and several notes. The object of the purchase was, to lay out and build up a town or village on the premises--the enterprise being a mere venture or speculation. In pursuance of this object, and for the mere convenience of the parties in making transfers to those who might be desirous of investing in the town or village property, it was deemed advisable to convey the legal estate in the whole to one of their number, upon certain specified trusts.

Accordingly, on the day above mentioned, in pursuance of this arrangement, the entire property belonging to the parties at that time was conveyed to Stephen P. Lunt, upon the following trusts: “To subdivide said premises, or any part thereof, into lots, and to expend whatever money he (the trustee) deems best in improving and making said premises salable for village or town lots; and to sell and convey said premises, or any part thereof, at public or private sale, upon such terms and conditions as he may deem best. * * * And, also make loans, if he finds it necessary so to do, in order to lay out and improve said premises, or any part thereof, or to pay off and satisfy the indebtedness ‘now’ on said premises, and in order to secure said loans he may execute ‘mortgage’ or trust deeds on such portion or part of said premises as he (said Lunt) may deem most advisable; and also to pay out of the money received from said premises, whatever money, if any, second party has advanced or may owe for improving said premises, as aforesaid; and also to pay out of same any and all incumbrances ‘now’ on said premises that may become due and payable. And upon further trusts, that second party shall render to first party, as often as once every six months, viz: half yearly, a full and true account of all his acts in the premises, and divide whatever money, notes or securities he has received on account of said premises or which he then holds susceptible of being divided, as follows, to-wit: One-fourth thereof to be paid or delivered to said Luther L. Greenleaf, one-fourth to Andrew B. Jackson, one-fourth to...