Roby v. Colehour

• Decision Date: 26 November 1890
• Citation: 135 Ill. 300,25 N.E. 777
• Parties: ROBY v. COLEHOUR et al., (four cases.)
• Court: Illinois Supreme Court

135 Ill. 300

25 N.E. 777

ROBY

v.COLEHOUR et al., (four cases.)¹

Supreme Court of Illinois.

Nov. 26, 1890.

Error to circuit court, Cook county; M. F. TULEY, Judge.

Bill by Charles W. Colehour against Edward Roby and William H. Colehour to set aside certain titles to land near Chicago acquired by Roby through executions issued upon judgments recovered against Charles W. Colehour and William H. Colehour, one or both, and also to set aside a certain deed from William H. Colehour and wife to Edward Roby, conveying the land in question in this case and executed in January, 1887; and also for the purpose of obtaining an injunction against Roby's making any disposition of the titles thus acquired and for the appointment of a receiver. This suit was consolidated with three other suits brought by Roby against Charles W. Colehour and others to quiet Roby's title to said land, and a decree was rendered against Roby in the consolidated suit. He brings error.

Edward Roby, (Wolfred N. Low, of counsel,) for plaintiff in error.

H. S. Monroe and W. C. Goudy, for defendants in error.

PER CURIAM.

As we are disposed to concur, substantially, with the views expressed by the learned chancellor who heard this case in the court below, we shall content ourselves with considering briefly two or three propositions which are very earnestly pressed upon our attention by the counsel for the plaintiff in error in his argument here. The facts involved in the case are numerous and complicated, and the evidence is very voluminous, and, as to almost every material matter, it is directly conflicting. We have given the record as thorough and exhaustive an examination as the time at our disposal has rendered possible, or as the questions argued here have seemed to demand. Upon such examination we have reached the conclusion that the construction placed upon the evidence by the chancellor, and the findings of fact made by him, are as favorable to the plaintiff in error as can be held to be fairly warranted by the record. Nor does the counsel for the plaintiff in error seem to very seriously controvert the facts as found by the chancellor, his argument being mainly directed to a refutation of the legal propositions announced by him in his opinion, and an attempt to show that the rules of law thus adopted either have no existence or no application to the case. The evidence shows-and as to this there is no dispute-that at the time of the original purchase of the land in controversy from the Clarkes in 1871, and the conveyance of it to William H. Colehour, as trustee, Hansbrough, Morrill, Corby, and Charles W. Colehour embarked in a joint enterprise, in which they undertook to purchase 406 acres of vacant land near the city of Chicago, with a view of subdividing and platting it into blocks, lots, streets, etc., and of otherwise improving it, as suburban property, and of then selling it at a profit, the net profits to be divided between them in certain proportions then agreed upon. Morrill and Corby subsequently surrendered or abandoned their interests, and in 1873, the Hansbrough interest was, for a certain consideration, assigned and transferred to Roby, the plaintiff in error, and Charles W. Colehour, and by a declaration of trust then executed by William H. Colehour, it was provided that the net profits of said enterprise, after the payment of all incumbrances and all moneys advanced by either party, should be participated in by said parties in the following proportions, viz.: One-half by Charles W. Colehour, one-fourth by Roby, and one-fourth by William H. Colehour. From that time manifestly these parties sustained the same relation to each other that existed between Hansbrough, Morrill, Corby, and Charles W. Colehour in the original enterprise.

In Morrill v. Colehour, 82 Ill. 618, we had before us the declaration of trust executed by William H. Colehour to Morrill, Corby, and Charles W. Colehour, providing for their joint participation in one-half of the net profits arising from the sale of said land, and we there held that the beneficiaries under that instrument took no interest in or title to the land itself, but that their interest was only in the profits, as to which their relation was that of partners. The declaration of trust between the parties in this case is, so far as this question is concerned, in substantially the same terms, and must therefore receive the same interpretation, and it must be held, in effect, to establish between them the relation of partners, and to give them the rights and impose upon them the duties and disabilities incident to that relation.

We are of the opinion also that the evidence fully justified the court below in finding that Roby, from the time he acquired his interest in said joint enterprise up to a short time prior to the filing of the bill in this case, sustained, in fact, to the Colehours the relation of attorney and legal adviser, and that during a large portion of that time he was frequently in the office where the business of said trust or joint adventure was being carried on, examining the books and advising and consulting as to the business, and that the Colehours received and relied upon his legal advice in the matters in which they were jointly interested. Counsel now takes the position, if we correctly understand him, that, admitting the facts to be as found by the court below,-namely, that Roby was jointly interested as partner with the Colehours in the profits to be realized from the improvement and sale of said land, and also that he held the confidential relation to them of attorney and legal adviser,-these facts constituted no obstacle to Roby's acquiring title to said land adverse to the Colehours; and that the court therefore erroneously held that, in obtaining title to said land through said sheriff's sales, he must be deemed to have purchased and to hold the legal title to the land as trustee for himself and the Colehours, subject only to the right to be reimbursed for the moneys expended in making such purchases. The doctrine on this subject is too well settled to make it our duty to follow counsel through his labored argument and his voluminous citation of authorities, or even justify us in so doing. The general principles universally recognized in matters of this character are well stated by Lord CHELMSFORD in Tate v. Williamson, L. R. 2 Ch. 55, as follows: ‘The jurisdiction exercised by courts of equity over the dealings of persons standing in certain fiduciary relations has always been regarded as one of a most salutary description. The principles applicable to the more familiar relations of this character have been long settled by many well-known decisions, but the courts have always been careful not to fetter this useful jurisdiction by defining the exact limits of its exercise. Whenever two persons stand in such a relation that while it continues confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no confidential relation had existed.’ The relations to which these principles are applied are very numerous, and among those to which they are so applied by a substantial concurrence of all the authorities are those of attorney and client, trustee and cestui que trust, principal and agent, partners, and part owners of property. Will. Eq. Jur. § 170; 2 Pom. Eq. Jur. § 955 et seq.; 1 Story, Eq. Jur. § 307 et seq.; Bisp. Eq. § 231, and authorities cited in notes. Indeed, as said by Mr. Pomeroy, ‘it is settled by an overwhelming weight of authority that the principle extends to every possible case in which a fiduciary relation exists in fact, in which there is confidence reposed on one side, and the resulting superiority and influence on the other. The relation and the duties involved in it need not be legal; it may be moral, social, domestic or merely personal.’ 2 Pom. Eq. Jur. § 956. In cases of partnerships, which usually involve also the relations of joint ownership, trust, and agency, the utmost good faith is due from every member of the partnership towards every other member, and if any dispute arises between partners touching any transaction by which one seeks to benefit himself at the expense of the firm, he will be required to show, not only that he...