Court Opinion

ID: 9716477
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:41:05.723503+00
Date Added: 2024-06-11T18:23:45.883597
License: Public Domain

Mr. JUSTICE SULLIVAN, dissenting: I must respectfully dissent from the decision of my colleagues that plaintiff and defendants were engaged in a joint venture, as that concept is commonly understood, to develop the subject property. Although it is true that the intent of the parties is most significant in determining the existence of a joint venture and that a joint venture may be inferred from the conduct of the parties, I fail to see how any indicia of such status are reflected in the conduct of the parties here. The evidence does disclose that plaintiff contributed sums of money to the undertaking of Y-K Builders, a construction company owned by Mrs. Klein which was to serve as general contractor on the project; that he expressed an interest in the progress of the work and also provide a construction trailer for the use of the development. However, these factors alone, in my opinion, do not establish that a joint venture was entered into between the parties. In fact, the various possibilities that can be ascribed to the arrangement raise as many indicators contrary to the establishment of a joint venture as those which favor it. In Richton v. Farina, 14 Ill.App.3d 697, 303 N.E.2d 218, this court stated at page 706: “[I]n addition to the requirement that a joint venture must have a contractual basis, either express or implied, we note that the decisions are in substantial agreement that the following factors must also be present: (a) a community of interest, (b) a proprietory interest in the subject matter, (c) a right to govern the policy in connection therewith, and (d) a sharing in both the profit and losses. (Carroll v. Caldwell, 12 Ill.2d 487, 147 N.E.2d 69; Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677; Williston, Contracts, sec. 318A (3d Ed. 1959).)” My consideration of the record and the arguments presented indicates that although it might appear that plaintiff may have been desirous of assuming an equity position in the development,, it could just as readily have been said that he was a lender having a creditor position. (This is borne out by the note subsequently signed by defendants and backdated.) In. either event, without more substantial evidence, the position of plaintiff as either an investor or creditor, is insufficient to establish him as a joint venturer in the development of the property. Initially, it is noted that although Mrs. Klein testified that she and plaintiff were each to have a one-half interest in the arrangement after the return of “capital contributions,” there was apparently nothing said with respect to the ownership of the eventually completed development. If Mrs. Klein had predeceased plaintiff, because of the prohibitions of the Dead Man’s Act1, he would have been unable to establish any interest over and above the amounts he placed in the venture which, at that point, would more than likely have placed him in a creditor position. By the same token, if Mrs. Klein at any time chose to deny that plaintiff was entitled to an interest, he would have been unable to establish any such interest in the absence of some agreement or other evidence of ownership, e.g,, stock certificates. In addition, there is no substantive evidence reflecting any arrangement for the distribution of profits and the liability for losses. There was apparently no understanding in these regards inasmuch as plaintiff arbitrarily decided not to advance any further funds and thereafter made no effort to aid the troubled development. Obviously, Y-K Builders remained as the sole debtor of the development and, because it is indicated in defendants’ brief that the “venture” was in a state of failure by the fall of 1966, it would seem that defendant’s apparent decision not to seek contribution from her “co-venturer” to assist in paying creditors, strains any reason to the argument that a joint venture existed. This is particularly so in view of the fact that the claims of the creditors were far in excess of the $67,000 advanced by plaintiff. Furthermore, although the funds advanced, together with the visits to the. jobsite and the use of tire trailer all tend to establish a degree of participation on the part of plaintiff, they do not evidence the type of control that warrants a finding that plaintiff was a joint venturer. As indicated earlier, plaintiff may have been an investor or a creditor; in fact, he may have been both. However, it appears to me that the alleged status of joint venturer here is so lacking in supporting evidence that I am of the opinion that no such status existed and, while each case differs on its own facts, I would subscribe to the reasoning of Richtonwhich would negate any such relationship. I agree with my colleagues that the judgment for $24,880 in favor of defendants and against plaintiff should be reversed but, for the reasons stated, I believe that the trial court erred as a matter of law in finding that the parties were engaged in a joint venture.   Ill. Rev. Stat. 1973, ch. 51, par. 2.