Court Opinion

ID: 6965684
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:53:26.637547+00
Date Added: 2024-06-11T16:08:35.986454
License: Public Domain

Mr. Justice Phillips delivered the opinion of the Court: The question presented by the foregoing facts appearing in this record is, whether the appellee is liable to appellant as a partner of Speed Butler & Co. If such partnership existed, it was by reason of the written agreement signed by appellee and Speed Butler. Where a partnership is claimed to exist, not in writing, the intention of the parties is a material fact, to be ascertained from their conduct and declarations; but where the agreement is in writing, its true construction must o be determined-, and from that construction it Is to be found whether a partnership- exists. We shall only consider the written agreement in evidence in this case, in relation to the question as to what effect that agreement had between third parties and the signers of the agreement, and its construction in that connection. By the terms of this agreement it appears that a mine was already opened for mining coal, which mine was known as the “Black Diamond Mine,” and the tract of land on which it was opened was described, and by the terms used certain legal effects resulted, which may be summarized: First, it created between Speed Butler and Salome E. Butler the relation of co-owners of the coal mine; second, it created between them the relation of joint proprietors of the business of operating the mine; third, it created the relation of principal and agent between Salome E. Butler and Speed Butler for “the entire management and control of all matters in connection with the mine;” fourth, it gave to each the right to participate in the profits, and imposed upon each the duty of bearing proportionately the losses of the business of operating the mine. The.instrument contained other terms, providing for the payment of royalties upon coal hoisted; limiting the sources from whence coal- should be taken; making provision against the death of Speed Butler; forbidding the sale of the interest of Salome E. Butler without the consent of Speed Butler, and providing for the enlargement of the business by constructing tile works, and for the payment of the expenses of their construction, and the division of the profits and losses of their operation. These provisions are each and all consistent with the general purpose of the agreement. The entire management and control of all matters in connection with the mine by Speed Butler, as provided in the agreement, was within the power of the parties to so contract. (1 Bindley on Partnership, (2d Am. ed.) p. 10 ; Morse v. Richmond, 97 Ill. 303.) The agreement providing for the proportionate interests of the signers of the agreement, and providing for the operation of the mine under the entire management and control of one of the signers of the agreement, and providing for a proportionate share in the profits or losses, creates their relation to third persons doing business with them, having knowledge of such agreement. It is said in Bindley on Partnership, 55, that “tenants in common, or joint tenants of a mine or quarry, may or may not be partners, and the mine or quarry itself may or may not be a part of the common stock. But it is highly inconvenient, if not altogether impossible, for co-owners of a mine or quarry to work it themselves without becoming partners, at least in the profits of the mine; and persons who work a mine or quarry in common are regarded rather as partners in trade than as mere tenants in common of land. The co-owners of mines may be partners, not only in the profits, but also in the mine itself. The co-owners are then partners, to all intents and purposes, and their mutual rights and obligations are determined by the law of partnership, as distinct from the law of co-ownership.” In Fougner et al. v. First Nat. Bank of Chicago, 141 Ill. 124, the court cites with approval Cox v. Hickman, 8 H. L. 268, as follows: “It is often said that the test, or one of the tests, whether a person not ostensibly a partner is, nevertheless, in contemplation of law, a partner, is whether he is entitled to participate in the profits. This, no doubt, is, in general, a sufficiently accurate test, for a right to participate in profits affords cogent, even conclusive, evidence that the trade in which the profits have been made was carried on, in part, for or on behalf of the person setting up such a claim. But the real ground of the liability Is that the trade had been carried on by persons acting on his behalf. When that is the ease, he is liable on the trade obligations, and entitled to its profits, or to a share of them. It is not strictly correet to say that his right to share in the profits makes him liable for the debts of the trade. The correct mode of stating the proposition is to say that the same thing which entitles him to the one makes him liable to the other, namely, the fact that the trade has been carried on in his behalf,—i. e., that he stood in the relation of principal towards the persons acting ostensibly as the traders, by whom the liabilities have been incurred, and under whose management the profits have been made.” On thus quoting Cox v. Hickman, this court adds: “In the application of this rule many decisions are to be found by courts of last resort in this country, to the effect that notwithstanding a party may contract to receive a part of the profits of a business, he can not be held liable as a partner. On the other hand, many others—sometimes by the same courts—hold the contrary. These cases are all reconcilable, on the distinction that in the first class of cases there was a mere hiring of services, property or money to be paid for out of the profits of the business in which it was engaged, while in the latter there was a proprietary interest in the business.” It was held in Mecham v. Valentine, 145 U. S. 622: “In the present state of the law upon this subject it may perhaps be doubted whether any more precise general rule can be laid down than is indicated at the beginning of this opinion, that those persons are partners who contribute either property or money to carry on a joint business for their common benefit, and who own and share the profits thereof in certain proportions. If they do this, the incidents or consequences follow, that the acts of one in conducting the partnership business are the acts of all; that each is agent for the firm and for the other partners; that each receives part of the profits as profits, and takes part of the fund to which the creditors of the partnership have a right to look for the payment of their debts; that all are liable as partners upon contracts made by any of them with third persons, within the scope of the partnership business; and that even an express stipulation between them that one shall not be so liable, though good between themselves, is ineffectual as against third persons.” On considering this agreement under any of the authorities above cited, it must be held that according to its terms it clearly creates a partnership, and is to be so regarded and treated by any person having notice thereof, doing business with Speed Butler in the line of business by the agreement to be done and performed. The agreement reduced to writing must be presumed to speak the intention of the parties who sign it. It speaks for itself, and the intention with which it was executed must be determined from the language used to express that intention. It is not to be changed by extrinsic evidence as to how it was understood or what was intended. Gardt v. Brown, 113 Ill. 475; Lintner v. Millikin, 47 id. 178; Fougner et al. v. First Nat. Bank, supra. Nor is appellee to be exempt from liability by reason of the fact that she did not know the contents of the agreement, or relied on the statement made by her brother as to its contents. A woman of education, able to read and write, deliberately signs a written agreement without informing herself as to the nature of its contents, when that agreement may be used to the prejudice of third persons who may give credit on the strength of it, can not be permitted to allege, as a matter of defense, her ignorance of that which it was her duty to know, where the means of information were within immediate reach, of which she neglects to avail herself. (Black v. Wabash Railway Co. 111 Ill. 351.) And however the representations made by Speed Butler might affect the question as between himself and appellee, (was the question one between themselves,) if appellee permitted herself to be held out to the world as a partner, the rule is different where the rights of third persons are involved. In such case she is estopped from denying the existence of a partnership. Niehoff et al. v. Dudley et al. 40 Ill. 406. The subject matter to which the agreement related—a coal mine already opened—was either real estate or a chattel real, and hence was an instrument that could properly be recorded, as it conveyed an interest, if not in real estate, yet in a chattel real, and when found on record by the cashier who examined the record, he could, from its terms, correctly deduce the conclusion that a partnership existed. By signing that agreement without examination, and putting it in the power of Speed Butler to put the same, so signed, on record, with a clause therein giving him “the entire management and control of all matters in connection with the mine,” precludes her from insisting that she should have been consulted or inquired of by appellant before giving credit on her name. She can not be heard to say she did not act or do anything under the contract as a partner, for here again she was, by the terms of her contract, precluded from doing anything as an active member of the firm, and her not doing anything can create no presumption in her favor, as she had a right to legally so contract. The testimony of the cashier is, that he examined the agreement as recorded, and from that reached the conclusion that appellee was a partner, and gave credit accordingly, and but for that would not have extended farther credit to Speed Butler & Co., or advanced additional sums of money. Here is an agreement in writing, signed, which by its terms constitutes a partnership,—an agreement concerning a subject matter rendering it proper that it should be recorded. The cashier of appellant examined that record to find if a partnership existed, before extending credit. The appellee, who signed the agreement without examination, put it in the power of Speed Butler to have the same recorded and procure credit because thereof. Appellant extended credit because of it, and if a loss is to be sustained it should not be sustained by appellant. The fact Speed Butler and Salome E. Butler are each mentioned in the agreement as trustee, does not change the terms of the agreement or affect the notice. So far as appellee was concerned she is not described as a trustee for any person, and is sued in her individual and not in a representative capacity. With a partnership thus formed, no question as to the liability of the trust estate of any cestui que trust arises on this record. Neither does the fact that by the agreement no firm name was adopted, and no time the partnership was to continue was specified, render the agreement invalid. Appellant asked the court to hold as law five different propositions, which sought to draw the legal conclusion, from the evidence, that a partnership existed, which were refused. With the evidence of the notice of the agreement had by appellant, each of those propositions should have been held, and it was error to refuse to hold the same. We are of the opinion that the circuit court erred in its finding and entering judgment against the plaintiff, and the Appellate Court erred in affirming the judgment of the circuit court. The judgments of the circuit court and of the Appellate Court aré reversed, and the cause remanded. Judgment reversed Mr. Justice Shore, dissenting.