Russell v. Thielen

• Decision Date: 29 June 1955
• Parties: Carl E. RUSSELL and Bertha K. Russell, husband and wife, and Bruce Edward Kerney, Petitioners, v. Paul THIELEN, sometimes known as Paul Theilen, and Augustin Thierry, Respondents.
• Court: Florida Supreme Court

Page 143

82 So.2d 143

Carl E. RUSSELL and Bertha K. Russell, husband and wife, and Bruce Edward Kerney, Petitioners, v. Paul THIELEN, sometimes known as Paul Theilen, and Augustin Thierry, Respondents.

Supreme Court of Florida, Division A.

June 29, 1955.

Rehearing Denied Sept. 12, 1955.

Shackleford, Farrior, Shannon & Stallings, R. W. Shackleford, J. Rex Farrior and Norman Stallings, Tampa, for petitioners.

Fowler, White, Gillen, Yancey & Humkey, Cody Fowler and Margaret Deaton, Tampa, for respondents.

PER CURIAM.

The subject matter of this litigation is 'Whitfield Estates,' a subdivision between Sarasota and Bradenton containing approximately 537 vacant lots. It was platted during the boom days of the twenties, but very few houses had been placed on it. It had grown up in weeds and bushes and was generally run down at the heels. The parties to this litigation are Carl E. and Bertha K. Russell and Bruce Edward Kerney, a son of the latter, defendants below, petitioners here, and Paul Thielen and Augustin Thierry, plaintiffs below, respondents here. The Russells were retired people with some money they were interested in placing on Florida real estate but wanted nothing to do with sale and development. Thielen and Thierry were developers with the 'know how' to sell and develop land. Mrs. Frances Livingston, a real estate broker of Bradenton, introduced the Russells to Thielen and Thierry.

The Russells entered into an oral agreement with Thielen and Thierry to the effect that the Russells would purchase 'Whitfield Estates' from the owners, that Thielen and Thierry would develop and sell the property and that the parties hereto would split the profits. This much of the agreement is clear, but there is a dispute as to the existence of other elements of the initial oral agreement. Thereafter the Russells did purchase 'Whitfield Estates' for a consideration of approximately $115,000, title being taken in their name. Thielen and Thierry being 'real estate developers' had no license to sell real estate for other owners and apparently for this reason the parties executed an 'option agreement.' There is a dispute as to how much, if any, of the previous oral agreement was reflected in the 'option agreement,' that being the only written agreement executed by all the parties. The 'option agreement' was executed July 12, 1950, was not acknowledged and was not recorded until the parties came to cross purposes and could no longer go ahead with the development and sale of the lots. Under the 'option agreement' Edwin J. Kennedy, an attorney in Sarasota, was appointed a trustee to deliver deeds upon his receiving the option price set forth as each sale was made by Thielen and Thierry.

Standing alone, the 'option agreement' clearly did not establish, nor is it so contended, a joint venture under the decisions of this court in that the developers (Thielen and Thierry) were not obligated to do anything; although they had the 'right' to improve the property at their own expense, they were not obligated to do so, nor were they obligated to purchase or exercise the 'option' feature contained therein which set forth the 'option price' of each lot in the development. Neither party relies wholly upon the legal effect of the 'option agreement.' The parties operated under this arrangement for a period of about two years and a number of lots were sold. Distribution of the proceeds, including the allocated base cost and the profits, were made by Kennedy, not by the price schedule shown in the 'option agreement's but in accordance with forms specially prepared by the parties for that purpose as each sale was closed. Since all sales were made above base cost, these sheets show only the distribution of profits, 50% of the profit to the Russells and 50% to Thielen and Thierry.

On January 22, 1953, Kennedy on behalf of the Russells notified Thielen and Thierry that the 'option agreement' was no longer in force because they or their representative had not purchased 'last year' twenty percent of the total original lots as the 'option agreement' required. Thielen and Thierry were thereafter able to conclude a number of other sales on the same basis previous to the cancellation notice, but after a series of unsuccessful conferences in an attempt to work out their differences, Thielen and Thierry filed this suit, their complaint praying, inter alia, that a partnership or joint venture be declared to exist between the parties and that an accounting be had. After answer was filed, the matter came on for a preliminary hearing on the question of existence of a joint venture. Much testimony was presented and numerous exhibits were admitted in evidence. The chancellor concluded that a joint venture existed, that a dissolution had been made necessary by the actions of the Russells and an accounting was ordered. From this interlocutory order we are confronted with a petition for certiorari.

It is contended by the petitioners (1) that the relationship between the parties was that of an exclusive sales agency and that no joint venture was intended or created; (2) that a joint venture to develop and sell real estate cannot be created by parol; (3) that this suit should have been brought by Uplands, Inc., the corporation that respondents operated in the development of another subdivision and through which they channelled the expenses and their share of the profits from lots sold in Whitfield Estates; (4) that even if a joint venture existed, the petitioners are in no way obligated to respondents since they (petitioners) have exercised their option to cancel the agreement; (5) that since petitioners paid for the real estate, the respondents have no claim on it that could be the basis for an accounting even though a joint venture did exist.

With the exception of petitioners' issue No. 2, there...