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    J. L. Henry, Defendant in Error, v. Warren C. Darnall et al., Defendants. Warren O. Darnall, Plaintiff in Error.
    Gen. No. 8,064.
    1. Partnership — co-ownership of selling rights as element. One associated with a real estate broker in the sale of land, which selling right the broker has acquired by contract with a syndicate, is not a co-owner of the selling right with the broker within the statutory definition of a partnership, where it does not appear that the syndicate consented to any transfer of the broker’s selling right to the associate.
    2. Partnership — basic elements. The foundation principle of a partnership is the condition of co-ownership in the right to a profit and the sharing of such profits and that each acts as principal and agent for the other.

      3. Partnership — intent as decisive of. Whether a partnership exists is determined by the parties’ intention, and that can only be shown by an express agreement or by facts and circumstances from which the intent to form a partnership can be implied.
    4. Partnership — evidence that selling agent of realty broker was not a partner. A realty broker cannot be* held to have formed a partnership with his agent on- evidence showing that the broker bore all the expenses and paid the agent a fixed amount on all the latter’s sales; that the agent took a fee for getting the broker a loan; that the agent acted under the broker’s orders; and that the agent never owned any share in the right to sell the lands dealt in.
    Error by defendant to the Circuit Court of McLean county; the Hon. Frank Lindley, Judge, presiding.
    Heard in this court at the April term, 1927.
    Reversed and remanded with directions.
    Opinion filed October 31, 1927.
    Sigmund Livingston and W. W. Whitmore, for plaintiff in error.
    William R. Bach, for defendant in error.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

Plaintiff in error, one of the defendants in, the court below, has brought the record in this suit to this court, by .writ of error, seeking to reverse the decree of the circuit court of McLean county, finding and decreeing that a partnership existed between plaintiff in error and defendant in error, and upon an accounting had, the decree finds in favor of defendant in error in the sum of $7,784.80, part of which it was ordered should be paid in cash, and a part should be distributed upon the sale and disposition of certain notes and securities now in the hands of William W. Whit-more, by stipulation of parties, he being one of the solicitors for the plaintiff in error, no receiver having been appointed. We shall denominate the parties as complainant and defendants. There were others made parties defendant to the bill of complaint in addition to plaintiff in error, as having or claiming to have some interest in the said notes and securities.

Complainant filed his bill of complaint against defendant Warren C. Darnall for an accounting. The bill charges that in June, 1919, complainant entered into a special copartnership with defendant Warren C. Darnall for the purpose of carrying on a real estate and brokerage business in Bloomington; that both parties agreed to contribute their entire time to said business, other than such as was required by both parties to look after and attend to their individual properties, and that each was to receive one-half of the net profits of such business; that the business was commenced in June, 1919, and continued until September 1, 1921, when the copartnership was dissolved.

It was further alleged in the bill that defendant Darnall had taken possession of the books of account of said firm and had collected a large amount of money upon certain promissory notes and refused to account for said partnership moneys. Defendant Darnall filed his answer, in which he specifically denied that he entered into partnership relation with the complainant for the purpose of carrying on a general real estate business or any other business. The answer further specifically denied each and all of the allegations of the bill, in so far as such allegations tended to charge a partnership relation, and the answer averred that the only business relation or connection defendant had with the complainant was, that for about two years defendant sub-rented office accommodations to complainant where they carried on their business affairs as real estate brokers independently, with the understanding that they would mutually assist each other, working up and making real estate sales for brokerage; and in deals of that kind in which they jointly participated, brokerage should be divided equally between them, after deducting the necessary expenses, with the positive understanding that such deals were independent joint enterprises and not a copartnership.

The answer further averred that during their office association defendant would frequently permit complainant to participate and share in the brokerage where sales were made, and that in each case just as soon as the transaction was closed and the commission collected, defendant paid to the complainant his share of the brokerage, except in such instances where defendant had advanced money to the complainant equal to or in excess of the amount of his share of said brokerage; that each transaction was a separate undertaking and not a copartnership; that it was so understood by both parties; that such was the basis of several settlements and adjustments of accounts between them, and that said complainant never claimed any partnership relation, nor demanded a partnership accounting at such settlements. The answer averred that the method of settlement employed was that defendant furnished a statement of the deals in which complainant participated and the amount of brokerage collected, and that settlements were made thereon and accepted and acquiesced in by complainant without objection, and without any claim that there was a partnership.

The answer further states that defendant verily believed that he had overpaid complainant for all joint deals or ventures in which they had participated together.

It was further averred that the -question of the business relation between them came up on two particular occasions, when it was necessary for them to file income tax schedules to the United States Government, and that both said complainant and defendant, upon due conference and advice, declined to file partnership schedules of income, each then contending that there was in fact no partnership between them and, therefore, they filed no partnership schedule.

It is further averred in the answer that in their office association all business was transacted in their individual names, and that they had no joint letterheads, no partnership bank account, no firm books of account, and that each operated independently of the other, except as the defendant would permit the complainant to participate in individual deals, and that it was understood between them that each was to attend to his personal business, and that there never was any agreement between them as to what time either should contribute to the business deals in which both happened to be interested. The answer denied that defendant was in the possession of any money, funds, securities or property, as charged in the bill, in which the complainant had any interest. Replication was filed and the cause referred to a special master and proofs taken. The master made a report, to which objections were filed, overruled, and the same were made exceptions before the chancellor. One of the objections made and overruled was that there had been no interlocutory decree upon the contested issue as to the existence of a partnership, as alleged in the bill. The chancellor sustained the exception to the overruling of this objection, entered, an interlocutory decree, finding that a partnership existed, and rereferred the cause to the special master to take further proofs as to the accounting. No issue is made by the answer or proofs made and offered by the other defendants, none of whom except to the decree requiring attention in this court.

The master, after hearing further proofs from, both parties, again made his report, to which defendant filed objections, which were overruled by the special master, who filed his report in court, .where the objections were ordered to stand as exceptions. The matter was then heard before the chancellor, who, upon hearing exceptions to the master’s report, sustained many objections and overruled others, but the objections that were sustained and those that were overruled were not specified by the chancellor and are not noted in the decree.

In disposing of the exceptions to the master’s second report, the decree merely states that, “all exceptions of either the complainant or defendant Darnall to the Master’s report and which are in harmony with this decree, and the findings, are sustained, and all exceptions of either of said parties which are contrary to and are not in harmony with this decree and the findings are overruled.”

In the decree the court charges several items which were not contained in the master’s report and eliminates several items which were in the master’s report. The decree finds that defendant should be charged in the accounting for the following:

“$10.00 per acre commission, sale of 336.55 acres ..................................$3,365.00
$50.00 per acre on 119 acres............... 5,950.00
$10.00 per acre on 188.75 acres ............ 1,887.50
Collected of Scott ........................ 4,207.21
Collected of Bronson............. 1,180.79
To amount of money spent by Henry...... 875.00
To cash received from Warnsing .......... 106.88
To commission collected by Darnall on McKenzie deal.................... 350.00
$17,922.88”

The decree credits defendant with the following items:

“By Darnall, expense of office ............$ 798.50
By automobile expense.................... 254.79
By Darnall expense of trips .............. 1,020.00
Total ..............................$2,073.29”

Decree finds the balance, $15,849.59, the net with which defendant is charged, belongs to said partnership; that one-half of the same, namely, $7,924.80, less $140.00, complainant owes to defendant, or that $7,784.80 is due to complainant from said defendant.

The decree then makes further direction as to the notes and securities in the hands of William W. Whit-more, who was not a party to this suit, and orders certain of the moneys to be distributed and a sale of the notes and securities to be held by said Whit-more, at which sale complainant and defendant may bid.

To better understand this case and the nature of the major items allowed in complainant’s behalf, a brief statement of the transactions out of which they grew is of interest and sheds some light upon the nature of the relationship between complainant and defendant.

Defendant was an agent under contract with the Lee Land Company of Texas to represent it exclusively in the State of Illinois, in negotiating the sale of Texas lands, located in the Rio Grande Valley. Under this contract defendant was required to open and maintain an office in Bloomington. By a subsequent agreement, the Lee Land Company agreed to bear one-half of the expense of equipping and maintaining the Bloomington office. Pursuant to this contract, defendant opened an office in the Illinois Hotel building in Bloomington, and in organizing his sales force, associated with him two men, Henry G. Burgess and George A. Egan. The latter at first was employed as a bookkeeper and stenographer at the salary of one hundred dollars per month. Later on, an arrangement was made with Egan whereby he participated in the commissions and bore a pro rata share of the office expenses in lieu of his monthly salary. The arrangement was that' defendant, Burgess and Egan, commencing February 1, 1918, began dividing the expenses and commissions among them on the basis of 40, 30 and 30. Burgess withdrew and defendant and Egan continued operating together upon the basis of a fifty-five and forty-five per cent division of office expenses and commissions. In due course of time defendant and Lee, of the Lee Land Company, interested a group of men at Petersburg, in this State to go to Texas and inspect a three hundred acre tract of land which the Lee Land Company had for sale. For some reason defendant was unable to accompany the prospective purchasers on the trip and communicated that fact to Lee, who advised defendant that if he would send Egan down with the Petersburg parties he (Lee) would do everything he could to sell them the land on his contract, the same as if defendant were there. After inspecting the three hundred acre tract, the Petersburg men returned to Illinois and conceived the idea of organizing a syndicate to purchase a larger tract of land, known as the “Hill” tract, consisting of 1122 acres. Defendant learned of this movement from Egan, who had accompanied the party to Texas. Defendant went to Petersburg to see the parties who had been to Texas', and was invited by them to become a member of the syndicate which was considering the purchase of the “Hill” tract. As a result of defendant’s and Lee’s efforts, aided by the Petersburg men, a syndicate was organized, and this group, with the exception of three men who were represented by other members of the group, again went to Texas with defendant and Lee and closed the deal with the Masterson Irrigation Company for the purchase of the “Hill” tract. Defendant became a member of the syndicate to the extent of one-tenth interest, and also carried an additional one-twentieth interest in his name for the Lee Land Company. After the closing of this contract, defendant was later employed by the syndicate to manage the sale of the land thus acquired, defendant to receive ten dollars per acre from, the syndicate for superintending sales. In the meantime, defendant invited complainant to join his forces to assist in selling this land, first requesting complainant and his wife to go with him, at defendant’s expense, to inspect the Texas land. This they did and upon his return complainant agreed to assist in the sale of the land, and the three of them, defendant, Egan and complainant, were to divide equally the ten dollars per acre commission to be paid by the syndicate for such sale. By reason of complainant becoming interested in the sale of the Texas land, defendant agreed that he should share in the “Hill” tract commissions, when collected.

In the sale of the “Hill” tract to the Petersburg Syndicate, it was claimed by the complainant in the proofs that the tract was figured in to the members of the syndicate at about $164 per acre, to be paid for by members of the syndicate, one-third in cash, one-third in “A” vendor’s lien notes, and one-third in “B” vendor’s -lien notes, and that all of the shareholders, except defendant, made the cash payments and executed the notes, which were shown by the proofs to be good and collectible.

Complainant offered proofs tending to show that defendants and Lee were charged only one hundred twenty dollars per acre for the land, and were not required to make any cash payment, but that, after the sale was completed through the Lee Land Company, there was turned over to defendant $1750 in cash and an order upon the Masterson Irrigation Company, which was accepted by that company for vend- or’s notes amounting to the sum of $23,000, as defendant’s commission for procuring purchasers to buy the Hill tract. This order and payment of the cash to defendant was made at about the time or shortly after Egan severed his connection with defendant, and complainant claims to have joined with defendant on a “fifty-fifty” basis. Later, various methods were resorted to to make sale of the “Hill” tract. A price of $225 per acre was placed upon the lands, subjected to defendant’s commission of $10 per acre, and agents were given all they could obtain above that price for the lands. One Scott made a number of sales for a considerable acreage, but not having the funds to finance the advance or cash payments, defendant was compelled to and did advance moneys to the amount of nine or ten thousand dollars to complete the Scott sales. It was charged, and testimony was offered tending to prove that defendant received $50 per acre for all such lands sold by Scott, which defendant was required to finance, complainant claiming that the $50 per acre was a commission to defendant for the sale of the land, and defendant insisting that such charge was a concession to defendant for financing the deal, without which the sale of the lands would have been lost and the commission of $10 per acre to complainant and defendant unearned. In some of the sales Scott had a profit as high as $200 per acre above the syndicate selling price. The attempt on the part of the Petersburg Syndicate to sell the lands was a failure, and all the members except the defendant and the Lee Land Company met with severe losses. In the end a settlement was effected between the members of the Petersburg Syndicate, defendant, the Lee Land Company, or by one Stewart of the American Land Company, which had absorbed the Lee Land Company, and the Masterson Irrigation Company, by which the unsold lands were returned to the Irrigation Company and defendant returned the order which had been accepted for vendor’s lien notes, and received in return therefor two notes for five thousand dollars each, executed by one Warnsing, a member of the Petersburg Syndicate, which were paid in addition to eight hundred dollars interest on said notes, which defendant insists was all the commissions he received upon the sale of the “Hill” tract; and defendant also insists that said sum and settlement includes other commissions and payment for services performed by defendant for the Lee Land Company.

We have attempted only a meager detail of one of the transactions growing out of the claimed partnership. There may be minor errors in this statement. It is not important. . In the view we take of this case a review of each item in the accounting is not necessary.

Complainant contends, upon the establishment of the partnership, that defendant concealed the fact that he was charged only $120 per acre for the “Hill” tract and was not required to make the one-third cash payment for the lands to- the irrigation company, and that the vendor’s lien notes, signed by the members of the Petersburg Syndicate, being good and collectible paper, that defendant is therefore chargeable with profits belonging to the partnership in the sum of $1,750, cash paid, and the further sum of $23,000 for the vendor’s lien notes, by the accepted order. And the complainant further contends that defendant, having in his hands assets belonging to said partnership, had no right to release them, or waive them to the Petersburg Syndicate, or to any other person, and that, in reality, all of the funds advanced by defendant to Scott to finance his deals or for any other purpose, being partnership funds, complainant is entitled to share in the profits of said funds. The chancellor apparently took that view of the case, although he did not allow the order for vendor’s lien notes in the sum of $23,000 as a profit, for which complainant has filed an assignment of cross errors.

It becomes important first to consider whether the testimony presented in this case establishes a partnership. Before proceeding to that subject, it may be well to suggest that the four major items, amounting to over $1,500, grow out of profits and commissions connected with the “Hill” tract deal, and that on April 25, 1920, in consideration of the payment of the sum of $1,575 by the defendant to complainant, the complainant signed and delivered to the defendant his written receipt and acquittance: “‘In full settlement of my share of commissions in the sale of the Hill’ tract at Harlingen, Texas, to the Petersburg Syndicate in 1918. ’ ’ But the complainant contends that he should not be bound by this acquittance on account of the fraud and deceit of the defendant in concealing the fact that said lands were purchased from the Irrigation Company by the Lee Land Company and defendant at a price of $120 per acre and sold to the Petersburg Syndicate at a price of about one hundred sixty-four dollars per acre. Complainant further charges fraud in that defendant concealed the fact that he had received a commission or an order for commissions in the sum of $24,750 on the sale of the “Hill” tract, and therefore complainant should not be bound by his settlement, and that he should be permitted to repudiate, and that complainant did repudiate said settlement. In these contentions complainant is not borne out, either in the law or by the fact. Complainant in his bill nowhere charges fraud or deceit, nor makes any claim but that said settlement was made freely and voluntarily and for a full consideration. And upon the facts it is shown in the record, over the signatures of complainant and Egan, that upon April 17,1919, the defendant showed said complainant and Egan the original document of the following instrument :

“Warren C. Darnall, Esq. Ho. June 23rd 1918.
‘ ‘ City
“Dear Sir:—
“On consummation of sale to the parties signing contract of purchase yesterday of the Hill Plantation property near Harlingen so as to net me $120 per acre on Mr. Lee’s order I will pay you $1750 in cash and approximately $23,000.00 in second lien notes.
Tours truly,
(Signed) H. Masterson,”

This was shown to complainant and Egan at about the time defendant ivas making a settlement with Egan over the same subject matter about which settlement complainant was fully advised and consulted with, and with the terms of which he was in full accord. In fact, complainant reduced the amount of his commission so that Egan could get more. Defendant represented to complainant and Egan that his total commission for the sale of the “Hill” tract did not exceed six thousand dollars.

We have gone at length into the details of the “Hill” tract transaction, not for the purpose of determining the merits of the controversy as to the item, but to show its bearing upon the question of a partnership. There were several of such transactions, none so large as the Hill transaction, but each was settled, if it was settled, separately and independently of any other transaction, and proofs were presented tending to show that complainant received about nine or ten thousand dollars in commissions from defendant during the period they operated together. Likewise, commissions were paid by complainant to defendant in lessor amounts on transactions that originated with complainant or were of his own securing. Each transaction was settled or adjusted in most cases at the conclusion of the same.

Complainant called defendant to the stand as the first witness in the case to testify to all conversations and business relations with the complainant. As to the conversations and the. terms of the relationship, defendant’s testimony substantially agrees with the complainant’s testimony. Complainant testified — and we subjoin substantially all of complainant’s testimony bearing upon the terms of the contract:

“I met him on the street and he wanted me to come over there and get interested in the Texas land proposition * * *.
“Darnall wanted to know what I thought of the proposition. I asked him what his proposition was. He said Burgess was in the office and Egan for a short time. He said, We have been working thirty-thirty and forty per cent. * * * I told him I didn’t want to go in unless he would operate three ways. * * * I told him provided it ivas satisfactory with Egan to divide on three way proposition to split the expenses three ways and the commission three ways. About three days later Is** asked Darnall if he had talked the matter over with Egan, and he said, ‘it is perfectly satisfactory with George (Egan) for you to come over, and we will divide three ways.’ * * *
“Under that arrangement I went over to Darnall’s office the 20th to the 25th of April, 1918.
“Darnall told me about having 320 acres (Texas land) on commission. Egan, Darnall and I continued together dividing our profits * * * three ways, until the first of June, 1919. The office did not make expenses during that time. * * *
“That arrangement between us continued from the time I went into the office until June, 1919. We couldn’t arrive at a settlement on the ‘B’ notes on the Hill Tract (a Texas land sale). Egan was insisting that we get some kind of an arrangement, and it seems as though we couldn’t. The office was not exactly satisfactory. Darnall was going to change and he did. * * * He withdrew from the office and moved to the People’s Bank building and Egan moved his stuff home. Egan wanted me to continue and keep the office and Darnall wanted me to go to the People’s Bank Building with him. Finally I went with Darnall. Darnall was going to get the sale of the Peters-burg land or the Hill Tract and there would be $10 an acre commission in it at $225 an acre. If I would go with him the $10.00 was to be divided fifty-fifty, same as everything else. We went over there on the basis of each paying one-half of the expense. * * *
“I said I would go on the basis of fifty-fifty divide. * *
“We each had our own interests and we were not going to buy any land. If we did anything it would have to be by special arrangements. Shortly after we went there we did buy an option from J. M. Duff on the Boss land. * * * I did not know or have anything to do with buying the Clarke land which Darnall testified about in this case. * * * The only thing I know he talked to me about it and told me that they were in bad up there and being a niece of his he had to help them out and he went up there and took the land over and after about 30 days he came to me one morning and asked me if I knew where I could get him a couple of thousand dollars. I asked on what, and he said, ‘Personal.’ I said if the security is all right, yes. He told me what he had and I said I could get it for him and in ten minutes he gave me a check for $25. He said he would give me $25. if I would find $2,000 until in the fall. I had nothing to do with Clarke deal only in that way. * * *
“Scott sold something over 200 acres before the arrangement was made whereby we were being paid $50 an acre to close the deals he had'made. We got $10 per acre from those sales but there was something else there. Scott had some money advanced and that is why that $10 an acre was added to it on account of the money that had been advanced by Darnall to make these trips and he had taken notes that Scott had taken and if there was any loss in them I was to stand my part and Darnall was going to put up the money.* * *
“Darnall and I quit working together on the fifty-fifty split of expenses and commissions along in February 1921, I stayed at the office there after that,
“After February, 1921, we were dividing office expenses and any deals that came up. We would decide how to divide the commissions, before the deal was made. That arrangement lasted from February until September.”

Complainant further testified upon cross-examination:

“I don’t know whether you call it a partnership. We had that agreement, we were dividing three ways.
“That agreement was made in April 1918. It is not in writing. The substance of it was we were to divide our commissions and divide our office expense.
“We were to divide our office expense and divide our commissions three ways, that was all. No other expenses were to be divided, we only had office expense. We wasn’t dividing any on the outside. * * * That was the understanding, no other expenses were divided except office expense. No other profits were divided except commissions; that is all. It wasn’t a division of losses and profits, it was limited to certain deals.
“Our agreement was that we would go to work and divide expenses, any deal that came up there would be certain expenses. The contract wasn’t written. I told him that we would split fifty-fifty. That was three ways when we made our first agreement. I said we will divide our office expense on deals and commissions. That was the substance of the whole thing. It was limited to office expense on deals. * * *
“I didn’t say profit. I said commissions. I don’t know anything about profit.”

The testimony showed that these parties kept no partnership book of accounts. Defendant kept a set of books in his individual name and the books covered all transactions with which defendant was connected. There was no partnership sign or name, although in two or three cases checks were drawn to defendant and complainant. There were no letter heads or envelopes showing a firm name, or any other insignia of a joint enterprise. On two different occasions, complainant and defendant discussed the question of submitting a partnership joint income tax schedule. They advised with lawyers and in one instance consulted the Federal income tax officials, and were advised by both lawyers and officials that such joint schedule was not necessary and no such schedule was filed. To some extent, at least, their relationship must be determined by the interpretation they have placed upon it.

In 1917 the Legislature passed an act entitled “An Act relating to Partnerships and to Promote Uniformity in the Law With Reference Thereto.” This act substantially embodies the law, as the courts had theretofore determined it. Section six of the act, Cahill’s St. ch. 106a, ¶ 6, provides: “A partnership is an association of two or more persons, to carry on as co-owners a business for profit.” At the outset, it is pertinent to inquire if the testimony shows complainant and defendant were the “co-owners” of the business and transactions in question. A part of this business, for example, the “Hill” tract, was the right to sell the lands of the Petersburg Syndicate at a stated commission of ten dollars per acre. Defendant had such right by virtue of his contract with the syndicate. This right defendant could not transfer to complainant, nor any interest therein, so as to make complainant a co-owner, without the consent of the syndicate. There is no testimony in the record that the syndicate ever consented to any such transfer. In other words, no privity is shown to have existed between the complainant and the Petersburg Syndicate, recognizing the complainant as a “co-owner,” or otherwise interested in the transaction or contract. One of the vital elements of “co-ownership” is therefore lacking in the transaction mentioned, and the same principle runs to the entire business. Section seven of the act, Cahill’s St. ch. 106a, ¶ 7, provides:

“The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.”

It is further provided in the act: “The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment:

“(b) As wages of an employee or rent to a landlord.”

The above principles laid down by the statute are amply sufficient to determine the rights of the parties in this case. We would say that the foundation principles of a partnership, as laid down by the statute and the decisions of the courts, is the condition of co-ownership in the right to a profit and the sharing of such profits, and that each acted as a principal and agent for each other. The right to act as a principal in relation to joint property is the basis of the right to act as agent for each other. The courts have fully recognized these principles. In Fougner v. First Nat. Bank of Chicago, 141 Ill. 124, 129, it is held:

“In Holman v. Hammond, L. R. 7 Exch. 218, it is said the import of the opinions delivered in the House of Lords, in that case, are correctly summarized by O’Brien, J., in Shaw v. Galt, I. R. 16 C. L. 375, thus: ‘The principle to be collected from them appears to be, that a partnership, even as to third parties, is not constituted by the mere fact of two or more persons participating in or being interested in the net profits of a business, but that the existence of such partnership implies also the existence of such a relation between such persons as that each of them is a principal and each an agent for the other. ’
“Lord Cranworth, in his opinion in the case, (viz., of Cox v. Hickman,) uses this language: ‘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, often 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 case, he is liable on the trade obligations, and entitled to its profits or to a share of them. It is not strictly correct to say that his right to share in the profits makes him liable to 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 toward the persons acting ostensibly as the traders, by whom the liabilities have been incurred, and under whose management the profits have been made.’ ”

In a case very similar to the case at bar, Reed v. Engel, 237 Ill. 628, 631, the court held: “Appellee’s proof tended to show that he was employed by appellant to assist in the sale of land on the agreement that he was to receive one-half of the profits, after deducting necessary expenses, for any land sold to buyers brought to appellant, directly or indirectly, through his efforts. Appellant contended that he had only agreed to pay appellee one dollar per acre for such sales, with perhaps extra pay, at Engel’s option, in case of a good trade being made.

“Appellant contends that the testimony of appellee proved, if anything, a partnership, and therefore the action should have been brought in equity and not in a court of law. Neither party.claimed that there was a partnership in the sale of these lands. A partnership is never created between parties by implication or operation of law, apart from an express or implied intention and agreement to constitute the relation. (Bushnell v. Consolidated Ice Machine Co., 138 Ill. 67.) Even where the parties agree to enter into a joint enterprise and share in the profits, a partnership, as between themselves, does not necessarily result. The intention of the parties always controls. (Grinton v. Strong, 148 Ill. 587; National Surety Co. v. Townsend Brick Co. 176 id. 156.) While a different rule might prevail on this evidence as to the creditors seeking to hold defendants as partners, it is very clear from this record that neither appellant nor appellee intended a partnership. ’ ’

In the end, in all cases the question of a partnership is a question of the intention of the parties, which must be shown by an express agreement, or by facts and circumstances from which such intention may be implied. The intention is not otherwise to be inferred or implied. Reed v. Engel, supra.

As to all of the items and transactions for which complainant in this suit seeks a division of profits, on the basis of a partnership, the record is conclusive that complainant was not acting as a principal in his own behalf, but it does show that he acted as an agent and subordinate to defendant. As to the “Hill” tract, complainant testified to a conversation with the defendant, as follows:

“We were talking and he says, ‘Joe you know it is going to be quite a jot of expense to handle this Texas land and as I am owner and manager for owners I will have to do a lot of going around to close up these deals.’ * * * ‘It is going to be expensive, do you realize that’ and I said, ‘I will make you a proposition on that $10 an acre if you will pay all the expense I will take $2.50 and give you $7.50’ and he said ‘I will think it over until morning. ’ ’ ’

This statement evidences very strongly an employment and not a partnership. If they were operating under a partnership agreement, all expenses would have come out of the gross profits or commissions. It is further shown in complainant’s testimony that he accepted a twenty-five dollar fee for procuring defendant a two thousand dollar loan, at a time when, as complainant now claims, defendant had ample partnership funds in his hands. In no instance in this voluminous record do we find any testimony tending to show that complainant, as to the items claimed, acted upon his own initiative or independently of defendant’s orders and directions; but the record is replete that the contracts and deals upon which complainant worked and out of which he seeks profits or commissions, were the personal contracts and transactions of the defendant, none of which were assigned to complainant with the knowledge or consent of the owners, and that the complainant was not a co-owner of any of said contracts or a principal in said business. Should the defendant die and complainant seek to wind up the pretended partnership with any of the land owners, the Lee Land Company or others with whom defendant had dealings, each and all could safely answer that they had had no dealings with him, and that the complainant had no interest in their affairs. It is the conclusion of this court that complainant, under the proofs, took no part in a partnership as a principal, and that a partnership is not established.

Other errors are assigned and argued, and complainant has assigned cross errors, but it would extend this opinion to too great length to undertake to set out and discuss any of them. A determination upon any of them is not necessary to a decision of the case.

For the reasons stated, the decree of the circuit court of McLean county will be reversed and the cause remanded to that court with directions to dismiss the hill for want of equity.

Reversed and remanded with directions.


source: Caselaw Access Project

author: Mr. Presiding Justice Shurtleff

license: Public Domain

text:
    Stimpson Computing Scale Company, Appellant, v. Herman Ehmsen, Appellee.
    Gen. No. 8,074.
    1. Sales — when offer to purchase may he revoked. A written order for goods, which for acceptance requires shipment on the written acceptance by the seller, is a mere offer to purchase by the buyer, which may be revoked at any time up until the seller accepts by shipment or in writing.
    2. Agency — notice to agent as notifying principal. Notice to an agent while acting in the scope of his authority and in reference to a matter over which his authority extends, is notice to the principal.
    3. Sales — how offer of purchase revoked. A buyer’s notice of his withdrawal of his offer to purchase goods, given to the seller’s agent who had solicited his offer, is sufficient notice to the seller and effects withdrawal in case it is made before the seller has effected the stipulated acceptance of the offer by shipment or written acceptance.
    4. Sales — limit to sales solicitor’s authority. An agent who is only a solicitor of orders has no right to accept payment on goods to be shipped.
    5. Appeal and error — when technically erroneous instruction will not cause reversal. A technically erroneous instruction will not cause reversal of the judgment in a ease in which there was no material issue of fact, if the court should have instructed a verdict for the appellee.
    Appeal by plaintiff from the Circuit Court of Macon county; the Hon. George A. Sentel, Judge, presiding.
    Heard in this court at the April term, 1927.
    Affirmed.
    Opinion filed October 31, 1927.
    Wiley & Morey. for appellant.
    Mills Bros. & Armstrong, for appellee.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

This appeal is brought to reverse a judgment of the circuit court of Macon county. The parties substantially agree in a statement of the facts, except in one minor detail. Appellee’s statement more particularly details the facts which may have some bearing upon the case, as contended by appellant, and, therefore, we adopt appellee’s statement as follows:

In August, 1925, the appellee, who was the owner and manager of a grocery store at Decatur, Illinois,. went away on a vacation and left his wife in charge of the store. He had in use in the store, when he left, a set of Toledo scales. His wife discovered that these scales were not giving the correct weight and called the inspector, who condemned the scales and suggested that she call a Mr. White about repairing them. She telephoned White and requested him to come out and repair the scales. White came to the store, had no tools with him and went back to his place of business to get his tools. When he returned he brought with him, not his tools, but a set of used Stimpson scales, saying that he would have to take the Toledo scales to the shop to repair and that they could use the old Stimpson scales while they were without the Toledo scales. White placed the old Stimpson scales in the store of appellee on his own initiative and without any suggestion on the part of the wife of appellee. All parties concerned distinctly understood that when the old Stimpson scales had served their purpose in the store of appellee White was to come after them and take them away. White did not take away the Toledo scales to be repaired at that time because the wife of appellee told him to leave them until appellee returned. Appellee returned on or about the 17th of August. White came to the store on or about the 2nd or 3rd day following appellee’s return and on behalf of and as agent for appellant tried to interest appellee in the purchase of a set of new Stimpson scales. White called several times thereafter and finally on or about the 20th of August came to the store and procured the signature of appellee to a printed form or order. This form contained many blank spaces which were to be filled in. A carbon copy was made. There is some conflict as to what blanks were filled in. White stated that the carbon copy was a true copy of the order signed by Ehmsen. He recognized that there were differences in what was filled in the blanks of the original and carbon copy, but was unable to explain such differences. By the terms of the order appellee was to get a new Stimpson scale, and was to put in the old Toledo scale for one hundred dollars and pay in addition a net of $140. The printed form contained the following:

“Nothing but shipment or. accept in writing by a duly authorized officer of the Stimpson Computing Scale Co. shall constitute an acceptance of this order. The goods shall remain the property of the Stimpson Computing Scale Co. and the undersigned shall be considered as holding the same merely as their bailee until the execution and delivery of the mortgage, or until the price is paid. * " * This order shall not ■be subject to countermand or rescission,” etc.

The order was signed by appellee without any consideration from the appellant. When this order was signed, it was the understanding of, all parties that the old Stimpson scales (which White had several days before then voluntarily brought to the store of appellee) were to remain there and be used by the appellee until the new scales had been received, and White told appellee to keep the old Stimpson scales there until the others arrived from the factory, and that when they came he, White, would come out and set them up and “take back the old scales.” Nothing was said at the time the order was signed relative to when the Toledo scales were to be removed from the store. Appellee did not know that White had taken them until later, when he was told so by some of “the help.” Within three hours after the order was signed, the wife of appellee, at his request, called White over the phone and told White to cancel the order. White replied that he had mailed it in. There is some dispute as to the rest of the phone conversation. The wife of appellee says that she told White that he could telegraph to the company to cancel it, and that White replied that he could not telegraph. She replied that if White did not she would, to which White replied, “Never mind I will take care of it. ’ ’ The version of White is, that although there was something said about telegraphing he did not agree to send a telegram to the company. The wife of appellee states that in that conversation, or one held the next day, she told Wtiite to come and get the old Stimpson scales and bring back the Toledo scales. Appellee also testified that on August 20th, the date the order was signed, he also called White and told him to bring back the old Toledo scales and get the old Stimpson scales. White, appellee and appellee’s wife all agree that the old Stimpson scales at the time of the trial were at the store of appellee where White had voluntarily taken them to be used by the appellee until they had served their purpose. Appellee still is holding the old Stimpson scales for White.

At the time White was first called by the wife of appellee and during all of the negotiations, including the time appellee and his wife telephoned to White and withdrew or canceled the order, he was the “local representative” of appellant, maintaining a “place of business,” an “office” or sales room for appellant, with a sewing machine company in Decatur. In the deposition of secretary-treasurer of appellant, White is referred to as “our Mr. White.” After appellee refused to accept delivery of the new scales from the express office, White called the express company in Decatur and had the new scales delivered to “his office in Decatur” where, with the knowledge and consent of appellant, he is still holding them. He was not an officer of the company and had no authority whatsoever to accept or reject orders.

The next day, after appellee had given notice to White, the agent of appellant, that he had cancelled his order, according to the deposition, the order was stamped “accepted” by the secretary-treasurer of appellant; a regular express order was made out and delivered to the traffic department of appellant with a request to that department to make immediate shipment; the shipping department handled the order in the usual way and on some date, apparently September 1st, the new scales were delivered to the American Railway Express Company consigned to appellee. On August 28th, appellant received a letter from appellee again cancelling the order. So far as the record shows, no notice or acceptance of any sort was given or put in the course of transmission to appellee until August 29th, at which time a letter was written by appellant to appellee, stating that the order was not subject to cancellation and that appellee would be held responsible for settlement. On September 1st, appellant mailed an invoice covering shipment of the scales. Some time after September 1st, appellee was notified that the express company had received the scales consigned to him and he refused to accept them. The express company apparently notified appellant of the refusal of appellee to accept the scales. Thereafter White, the agent of appellant, called up the express company and instructed it to deliver the scales to his office in Decatur. White received the scales and from such time on, to the trial kept them at his place of business, apparently as agent of appellant, “ready, able and willing” to turn them over to appellee.

Some matters set out in the statement we deem of no importance, but they are inserted in view of one contention made by appellant. There was a verdict and judgment for appellee and appellant has appealed.

Appellant contends that the order was not subject to rescission or cancellation; that notice to White was not notice to appellant and that in any event appellee could not rescind or cancel the order without placing appellant in statu quo, that is, the old Stimpson scales should have been returned to appellant.

Appellant further assigns error upon the giving of one instruction for appellee. The terms of the written order, requiring shipment on the written acceptance in writing by a duly authorized officer of the appellant company, to constitute acceptance of the order, renders the order, on the part of appellee, a mere offer to purchase for no consideration, which may be revoked or cancelled at any time, before acceptance, in writing or shipment by appellant. (23 R. C. L. par. 1288, sec. 104; Martin & Co. v. Wilms, 61 Ill. App. 108; Alexander Hamilton Institute v. Jones, 234 Ill. App. 444; Stahl & Stahl v. Loeb, Cooney & Loeb, 209 Ill. App. 245; Taylor & Verble v. John A. Tolman Co., 47 Ill. App. 264; Bauman v. McManus, 75 Kan. 106, 89 Pac. 15,10 L. R. A. [N. S.] 1138 and note; J. L. Owens Co. v. Bemis, 22 N. D. 159, 133 N. W. 59, 37 L. R. A. [N. S.] 232 and cases there cited.) In fact, the principle is elementary. But it is contended that notice of cancellation in this case to White, is not notice to appellant. With this contention we cannot agree. It is conceded in this case, and stated in the proffered offer, that White did not have authority to accept the offer and contract; but it is conceded that White had authority to solicit the order and submit it to his superiors for acceptance. It is an elementary rule, settled by an unbroken current of authority, that notice to an agent, while acting within the scope of his authority and in reference to a matter over which his authority extends, is notice to the principal. (2 Mechem on Agency, sec. 1803, page 1384; 21 R. C. L. pp. 838, 839; 2 C. J. 859; Booker v. Booker, 208 Ill. 529, 542; Fischer v. Tuohy, 186 Ill. 143, 150; Sterling Bridge Co. v. Baker, 75 Ill. 139.)

Appellee’s withdrawal of his offer or notice to withdraw, in the hands of the agent used by appellant to solicit the offer, is sufficient notice to appellant and effects a withdrawal. Stahl & Stahl v. Loeb, Cooney & Loeb, supra; Cross v. Arnold, 177 Ill. 575.

In the Stahl case defendants sent to plaintiff a telegraphic offer for certain goods, reading: “Offer seven ten your track immediate shipment to New* York. Answer,” which plaintiffs accepted by telegraph, but before receipt of plaintiff’s telegram defendant telegraphed its withdrawal of its offer. It was held that the delivery of the withdrawal telegram to the Telegraph Company was a delivery to plaintiffs and was in sufficient time to prevent the completion of the contract. The withdrawal was made to the agent, selected by both parties to communicate the transaction.

In Gross v. Arnold, appellees executed notes and a contract and placed them in the hands of appellant’s agents, at their solicitation, for appellant’s acceptance or rejection. Before appellant either accepted or rejected the offer, appellees notified appellant’s agent of their withdrawal of the offer. It was held that the notice of withdrawal revoked the offer and cancelled the notes. The court bases its reasoning upon the ground that the notes and contract were never delivered, and holds:

“Delivery is a question of intent, and depends on ‘ whether the parties at the time meant it to be a delivery to take effect at once. ’ Jordan v. Davis, 108 Ill. 336; Wilson v. Wilson, 158 Ill. 567.” And a similar rule is laid down in Weber v. Hulbert, 225 Ill. App. 321, 328; Sinclair v. Sinclair, 224 Ill. App. 130, 136; Gustin Bacon Mfg. Co. v. First Nat. Bank of Englewood, 224 Ill. App. 457, 464; and Corbett v. Cronkrite, 239 Ill. 9, 16, some of the cases placing the rule upon the ground of no' consideration and others that the instrument or contract was never delivered. To hold in this case that appellee should have given notice of withdrawal of offer directly to appellant, is, in effect, holding that appellant had some rights in the contract before it knew anything about the transaction or had accepted the offer. The authority of an agent to solicit offers for goods, or sales to be approved or accepted by a superior, necessarily carries -with it the authority to receive notice of the revocation of such offers and before acceptance the superior is bound by such notice. “ -

Appellant contends further that appellee was not permitted in this case to rescind or revoke the offer without placing appellant in statu quo by returning the old scales which were furnished or loaned by White to appellee. In this connection appellant also contends that White only had authority to solicit sales. In this situation White, being only a solicitor of orders, had no right to accept payment of goods to be shipped. He was acting outside of his authority. Simmons Motor Co. v. Dudley, 196 Ill. App. 329, 333. The delivery of the old scales to appellee by White passed no right of property in the scales to appellee, whether they were owned by White or appellant. Abrahams v. Weiller, 87 Ill. 179. The contention, also, totally ignores the terms of the offered contract requiring shipment or acceptance in writing before it shall become a valid contract. We do not see how the loaning of the old scales in any manner affects the merits of the case at bar.

Appellant complains of the appellee’s first given instruction, informing the jury: “If the defendant cancelled his order * * * before the scales were shipped, ‘or’ before the order was accepted * * * then it is your duty to return a verdict for the defendant. ” The wording of this instruction, technically was error, but it does not follow that the judgment should be reversed. It was undisputed on the trial that appellee gave White notice to withdraw the offer before the order was accepted or the goods shipped, and it follows, there being no material issue of fact in the case, that the court should have instructed a verdict for appellee.

Finding no reversible error in the record, the judgment of the circuit court of Macon county is affirmed.

Affirmed.


text:
    John H. Staley, Appellant, v. The Illinois Threshermen’s Mutual Insurance Company, Appellee.
    Gen. No. 8,080.
    Dismissal and nonsuit — failure to file copy of instrument sued on. Under section 32 of the Practice Act, Cahill’s St. ch. 110, ¶ 32, a defendant has a mandatory right to judgment as in case of a nonsuit, where the plaintiff does not file a copy of the instrument of writing or account on which his action is brought, by ten days before the term of the court after the one to which the summons is made returnable.
    Appeal by plaintiff from the Circuit Court of McLean county; the Hon. Edward Barry, Judge, presiding.
    Heard in this court at the April term, 1927.
    Affirmed.
    Opinion filed October 31, 1927.
    Foster & Morrissey, for appellant.
    Adlai H. Rust, for appellee.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

The question in this case is raised as to the construction of section 32 of the Practice Act, Cahill’s St. ch. 110, ¶ 32, requiring plaintiff to file, with his declaration, copy of the instrument of writing on which the action is brought, ten days before the second term of court, or suffer judgment of dismissal, as in case of nonsuit. Appellant filed his suit in assumpsit to the September term, 1925, of the circuit court of McLean county, and summons was served and declaration filed more than ten days prior to that term. The suit is brought to recover loss by fire, based upon a policy of insurance in writing.

At the September term appellee appeared and moved for a continuance, on account of the failure of plaintiff to file with or as a part of the declaration, copy of the instrument in writing sued upon. No further proceedings were had in the case at the November term, 1925, or at the February or April terms, 1926. On September 15, 1926, during the September term, plaintiff, appellant, filed a copy of the instrument upon which the suit was brought, and upon September 28 defendant, appellee, moved to dismiss under the statute. The court dismissed the suit and entered a judgment for costs against appellant and the record is brought to this court for review.

Appellee contends that under the express provisions of section 32 of the Practice Act, Cahill’s St. ch. 110, ¶ 32, in which it is provided: " and if the declaration and copy of the instrument of writing or account, on which the action is brought, shall not be filed ten days before the second term of the court, the defendant shall be entitled to a judgment as in case of a non-suit,” there was no alternative open to the trial court to do other than to render the judgment in favor of the defendant, and that said judgment should be affirmed by this court.

Section 32 of the Practice Act, Cahill’s St. ch. 110, ¶ 32, provides:

“If the plaintiff shall not file his declaration, together with a copy of the instrument of writing or account on which the action is brought "in case the same be brought on a written instrument or account, ten days before the court at which the summons or capias is made returnable, the court, on motion of the defendant,, shall continue the cause at the cost of the plaintiff, unless it shall appear that the suit was commenced within ten days of the sitting of the court, in which case the cause shall be continued without costs, unless the parties shall agree to have a trial; and if the declaration and copy of the• instrument of writing or account, on which the action is brought, shall not be filed ten days before the second term of the court, the defendant shall be entitled to a judgment as in case of a nonsuit: Provided, that in all suits by capias, where the defendant shall have been arrested, and in replevin and attachment, the plaintiff may be required' to file his declaration at the first term, and the defendant may have a trial at such tdrm, unless sufficient cause for a continuance is shown.”

Prior to 1907, the act did not contain in its second part the words underscored as follows: “and copy of the instrument of writing or account on which the action is brought”; but those words were inserted by amendment to the section by the Legislature at its session in 1907. The act was originally passed in 1827. Prior to the amendment in 1907, it had been held that when no declaration was filed ten days before the second term of court the defendant was entitled- to a judgment as in case of nonsuit, and that the trial court had no right to enter any order other than one of nonsuit, if that order was requested (Waidner v. Pauly, 141 Ill. 442; Gibbs v. Crane Elevator Co., 180 Ill. 191; Garnsey v. Schwartz, 154 Ill. App. 154; Rubin v. Raynor, 181 Ill. App. 403; Beamesderfer v. Cermak, 203 Ill. App. 294), and under the statute, before the amendment, upon motion, it was necessary to file a copy of the instrument sued Upon, unless it was set out in haec verba in the declaration. (Jefferson v. Alexander, 84 Ill. 278; Phoenix Ins. Co. v. Stocks, 149 Ill. 319, and Lambert v. Jonte, 28 Ill. App. 591.)

In Garnsey v. Schwartz, supra, the plaintiff filed his declaration after the beginning of the second term, as in the ease at bar, and later took a default against the defendant for failure to plead. The court held:

“Section 32 of the present Practice Act is a consolidation of sections five and eight of the former Practice Act of 1845. The defendants were entitled to a nonsuit, unless they had in some way waived the right secured to them by the statute. ‘Undoubtedly the right was one which may be waived, but we think a party should at least have an opportunity to be heard before he is considered as having waived the right * * V ‘He was not, under the circumstances, in default, and he should have been placed in that situation before a judgment was rendered against him by reason of it. Ordinarily, a party who, without any rule, fails to plead according to the practice of the court, is in default; but a party who is not required to plead, cannot justly be said to be in default for not so doing.’ Pratt v. Grimes, 35 Ill. 164; Moody v. Thomas, 79 Ill. 274; Waidner v. Pauly, 141 Ill. 442. Plaintiffs in error not having waived their right to a judgment as in case of a non-suit, it was error to render a judgment against them by default. The judgment is' therefore reversed and the cause remanded. ’ ’

In 1907 the Legislature amended this section by authorizing a dismissal of the suit unless the copy of the instrument of writing or account on which the action is brought was filed at the same time, or by the second term. For failure to file the declaration by the second term it has been held that the dismissal amounts to an involuntary nonsuit. The question arises as to the intent of the Legislature in making the amendment of 1907. It could not have been amended so that defendants could compel the filing of copies of such instruments, upon motion, as the term of the act afforded defendant that relief before the amendment was made. It seems reasonable to conclude that the purpose of the amendment of 1907 was to render it mandatory that plaintiff file a copy of the instrument of writing, etc., on which the action is brought, ten days before the second term of the court, the same as the declaration; otherwise, the defendant will be entitled to judgment as provided in the statute. Any other construction of the amendment renders its passage purposeless and its effect void.

The judgment of the circuit court of McLean county will, therefore, be affirmed.

Affirmed.


text:
    In re Estate of William K. Mertz, Deceased. Matt Yaple and Hugo W. Greb, Administrators of the Estate of William K. Mertz, Deceased, Appellants, v. Ella Mertz Still et al., Heirs at Law of William K. Mertz, Deceased, Appellees.
    Gen. No. 8,083.
    1. Estates of decedents — when adjudication of items of report final. The decree upon the items of the report of representatives of an estate is final except as to items from adjudication on which appeal is taken and which are thereafter modified by the remanding order of the reviewing court.
    2. Estates of decedents — principles governing settlement of accounts. The principles and procedure to he adopted in settling questions regarding accounts of representatives of an estate raised by heirs or devisees are those obtaining in courts of equity.
    3. Estates of decedents — reimbursement for attorneys’ fees and, contract liability. A representative of a decedent incurring a personal liability for employment of attorneys, and in entering into contracts, may in proper case apply to the court for reimbursement out of the estate.
    4. Estates of decedents — allowance of other than taxable costs to representatives. A reviewing court may grant leave to a party to apply to the county court in the settlement of an estate in his hands, for allowance of expenses other than taxable costs.

      5. Estates op decedents — allowance of costs if neither party in right. When neither an estate’s representative nor the other party is entirely in the right on appeal from adjudication on the items of a final report, costs should not be taxed for either party.
    6. Estates op decedents — when costs refused to representative. Costs and expenses for proceedings for accounting and settlement ma.y be charged to the representative individually if he renders them necessary by misconduct or neglect in such accounts, or when on contest the finding is against him.
    ■ 7. Estates op decedents — discretion in allowing costs. The discretion of the court in allowing such expenses as representative’s compensation, for services of attorneys and for costs, will not be disturbed on appeal except for manifest abuse' of discretion.
    Appeal by plaintiffs from the Circuit Court of Cass county; the Hon. Guy R. Williams, Judge, presiding.
    Heard in this court at the April term, 1927.
    Affirmed.
    Opinion filed October 31, 1927.
    A. T. Lucas, for appellants.
    Bradley, Williams, Harper & Farrell, for appellees; Thomas E. D. Bradley and Edward J. Farrell, of counsel.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

The above cause comes to this court upon the appeal of the administrators of the estate of William K. Mertz, deceased, assigning error upon the decree of the circuit court of Cass county, in sustaining the exceptions of the heirs at law of William K. Mertz, deceased, to the supplemental final report of appellants, filed in said circuit court upon a remanding order from this court. The cause was before this court at a former hearing and for a statement and the opinion then filed reference is had to In re Estate of William K. Mertz, deceased, 241 Ill. App. 446. The decree of the circuit court of Cass county, from which the former appeal was taken, after overruling all other exceptions, sustained the exceptions of the heirs: number two, the item of $8,200 paid to the Kilbourne Bank; number three, the item of $6,332.24 paid to the First National Bank of Chicago; and number six, the sum of $1,135 deducted from the item of .$8,635 claimed by appellants for the services of their attorneys, leaving the item of attorney’s fees at the sum of $7,500 allowed, and “adjudged and ordered that the total sum of said foregoing items, namely, $15,667.24, be paid and distributed by said administrators to the heirs at law of said deceased, according to their respective rights and interests.” Upon appeal, this court reversed the circuit court of Cass county as to the item of $8,200 paid to the Kilbourne Bank, affirmed that court in all other respects and held:

“For the reasons stated, the order of the circuit court is affirmed in all respects except as to the $8,200 item, and the cause is remanded with directions "that in recasting the account of appellants the appellants be given credit for the $8,200 item.”

In the former appeal, upon the motion of appellants later entered in said cause, after consideration, it was ordered that the costs in this court be apportioned one-half to each party. Upon filing the remanding order in the court below, by leave of court appellants presented and filed a supplementary report, conforming to the remanding order, and in addition thereto presented three items of expense on the part of the appellants as such administrators: one for fees for the attorney for appellant, court costs and witness fees in the former suit in the circuit court, amounting to the sum of $951.56; one for fees for the attorney for appellant, transcript, bill of exceptions and briefs in this court, amounting to the sum of $1,348.75, and a third covering items for attorney’s fees, court costs and the printing of briefs in the Supreme Court, to which court appellants, by petition for certiorari, presented said cause without success, said third item amounting to the sum of $945.25, the total sum of said items being $3,245,56,

It further appears by the proceedings in the court below that appellants made a motion to tax costs and for an order allowing to their credit the costs and fees expended by appellants in defending their final report, “on the basis fixed by the Appellate Court,” etc. The supplementary report filed by said appellants asked that they, as administrators, be credited with one-half of the amount of said costs and charges, or the sum of $1,622.78. Appellees filed objections and exceptions to said item of expense and by a further objection appellees excepted to each and all of said items on the ground that said fees and expenses were incurred for the benefit of the administrators and not for the heirs at law, and that “such payments are illegal and have no authority in law. ’ ’

Proofs were heard principally as to the services of the attorneys in said cause in the circuit, Appellate and Supreme Courts in the former hearings, and there was no contention as to the reasonable value of said services. The court sustained the exceptions and refused to allow the said three items; but in the final decree the court apportioned the court costs and witness fees in the circuit court, and the cost of the transcript and bill of exception in the Appellate Court, one-half to each party; allowed appellants six per cent commissions in the added receipts shown in the supplementary report, and allowed them the sum of two hundred and fifty dollars as a reasonable fee for the services of an attorney in connection with said supplemental report. Appellants had collected a mortgage for $559.27 by advancing five hundred dollars of the estate funds to adjust a difference in connection with the Musch heirs, or in effect had collected $59.27 net for the estate upon a mortgage, a small judgment for twenty-seven dollars and rebates on Federal estate tax and income taxes, amounting to $603.50, after the filing of the .former report and entry of the first decree. The decree of the circuit court disallowed items claimed by appellants:

First, the attorney’s fees for the administrators in the circuit, Appellate and Supreme Courts on the hearing of the former report.
Second, the costs of briefs in the. Appellate Court and court costs and printing briefs in the Supreme Court.
Third, the full amount of the court costs and witness fees in the circuit court, and the cost of transcript and bill of exceptions in the Appellate Court, one-half of which only was allowed.

From this decree appellants have appealed. In determining the rights of the parties in this cause there may be a distinction between allowances which can be made out of funds in the hands of appellants, and out of funds which came into their hands after the date of that decree. We shall point out the exact amount of funds which came into appellant’s hands after the first decree and the disposition made of them.

Appellants collected for the estate, after the first decree, the sum of $687.77. Out of this sum the court allowed appellants $71.39 as commissions and $250 as attorney’s fees, making a total of $321.39, leaving a balance of $368.38 net accrued to appellants after the date of the first decree and not adjudicated by the terms of that order. The court costs and witness fees amounted to $16.45, and the cost of transcript of record and bill of exceptions amounted to $251.50, one-half of which was apportioned to each party as costs. We assume the administrators would have the right to deduct one-half thereof or $133.98 from the moneys decreed to be paid to appellees under the first decree, and the other one-half should be paid by appellants under the mandate of this court. As to all funds in the hands of the administrators at the time of the former “final report” and covered by the decree upon that report, we conclude that the decree would be res adjudicata, except as to the items appealed from, and res adjudicata, except as modified by the remanding order of this court, that is, such funds would become funds or assets administered upon. (Curts v. Brooks, 71 Ill. 125; Morgan v. Morgan, 83 Ill. 196; Marshall v. Coleman, 187 Ill. 556, 585; Wilkinson v. Ward, 42 Ill. App. 541, and Allen v. Allen, 222 Ill. App. 438, 442.)

In Marshall v. Coleman, supra, it was held: “It has been held, that each item in an administrator’s account is a separate claim depending alone upon its own merits, having no connection with the other items, and that an appeal by the administrator from an order or judgment, rejecting one of his claims against the estate, only brings up for review the propriety of the ruling in respect to such rejected claim,” citing, also, Millard v. Harris, 119 Ill. 185. The appellant may also dismiss his appeal as to an item or items, leaving the decree as to such item or items valid and binding. Bacon v. Lawrence, 26 Ill. 53.

The decree of the lower court as to the first final report adjudicated .as to all items in the report, and ordered the administrators to distribute $15,667.24. The only modification of this order affected by the appeal was that the administrators were to be credited with the item- of $8,200 paid to the Kilbourne Bank, and appellees were to be charged one-half of the legal costs, amounting to the sum of $133.98. This leaves a balance of $7,333.26 under the first decree, a fund administered upon, which appellants are directed to distribute and which is composed of items adjudicated, from which adjudication no appeal has been taken or is now pending. This comprehends the entire estate except the moneys collected since the first final report, inasmuch as both reports are denominated “final reports.” There is, therefore, only the sum of $368.38 on hand in the estate out of which the items and charges of appellants can be paid, if allowed, The rule is uniform that where the accounts of administrators or executors are challenged by heirs at law, legatees or devisees, the procedure to be adopted is that obtaining" in courts of equity and the settlement of any disputed item is to be determined by the application of equitable principles. (Dixon v. Buell, 21 Ill. 203; Heward v. Slagle, 52 Ill. 336, 337; Wadsworth v. Connell, 104 Ill. 369; Millard v. Harris, 119 Ill. 185; Ingram v. Ingram, 172 Ill. 287; Henry v. Caruthers, 196 Ill. 136; Heppe v. Szczepanski, 209 Ill. 88; Atherton v. Hughes, 156 Ill. App. 215, 222; Corpus Juris, Vol. 24, page 48.)

In Christy v. Christy, 225 Ill. 547, 552, it was held: “In the performance of his duties an administrator must act with the highest degree of fidelity and with the utmost good faith, but he is held to the exercise of only that degree of skill and diligence which an ordinarily prudent man bestows on his own similar private affairs. Nothing more can be required of him, and if his acts will stand the test of that rule he cannot be held liable for any loss that may be sustained by the estate of his intestate. 11 Am. & Eng. Ency. of Law (2d ed.) 904; Estate of Corrington, 124 Ill. 363.”

It is also a universal rule that the administrator or executor in the employment of attorneys or entering into contracts after his decedent’s death, incurs a personal liability, and may, in a proper case, apply to the court for reimbursement out of the estate. The rule is well stated in Thompson & Lively v. Mann, 65 W. Va. 648, 64 S. E. 920, 22 L. R. A. (N. S.) 1094, 1095, where it is held: “ ‘This doctrine applies to a debt incurred by the representative in employing counsel to advise and assist him in the discharge of his duty’ — and so says this court in Hall v. McGregor (W. Va.), 64 S. E. 736. And Woerner says (page 756), citing many cases, that the estate is not liable to an attorney for his services at the instance of an executor or administrator, but that the latter is himself liable in a suit by the attorney. ‘Indeed,’ says Schouler, ‘the rule is that executors and administrators cannot, by virtue of their general powers as such, make any contract which at law will bind the estate and authorize a judgment de bonis decedentis; but, on contracts made by them for necessary matters relating to the estate they are personally liable, and must see to it that they are reimbursed out of the assets.’ At page 473 he says: ‘In causes of action wholly accruing after his decedent’s death, the personal representative is in general, liable individually (citing DeValengin v. Duffy, 14 Pet. 282 (U. S.), 10 L. Ed. 457; Kerchner v. McRae, 80 N. C. 219). And, wherever an action is brought against an executor or administrator, on promises said to have been made by him after the decedent’s death, he is chargeable in his own right and not as representative (citing Wms. Ex. 1771; Cro. Eliz. 91; Cowp. 289; Jennings v. Neiuman, 4 T. R. 348; Clarke v. Alexander, 71 Ga. 500.) ”

From an examination of the record in this case, it is difficult to comprehend how appellants can justify the expenses of an appeal from the circuit court on the items-of payments to the First National Bank of Chicago of $6,332.24 and the item in reduction of attorney’s fees. It has been held by this court that the payment to the First National Bank of Chicago, upon a claim filed after the statute of limitations had expired, was clearly without authority of law, and that' the reduction of $1,135 in attorney’s fees was fully warranted by the evidence. Upon this finding the Supreme Court refused to grant a writ of certiorari. On the item claimed in this case for attorney’s fees for defending the first final report in the circuit court, we must conclusively presume that the circuit court had that service under consideration and made an allowance therefor in fixing the amount in the decree upon that report. The service was fully performed before the decree was entered, and without doubt an allowance was made to cover that service and it is now adjudicated. As to the item of $8,200 paid to the Kilbourne Bank and allowed by this court, reversing the circuit court, no order of court was obtained by the administrators to make such payment until the final report was submitted. So far as this record shows, the heirs at law had no knowledge or information about the claim until that report was submitted. This court has found that a situation arose which called for prompt' and speedy action, and that the appellants consulted with the attorneys for the estate and the county judge. The estate owned five thousand dollars worth of stock in the bank and advanced $8,200 to protect that stock and save the estate from a further liability. One of the administrators, who was similarly situated, in his own behalf made the same payment. The heirs would be entitled to a full explanation of this item upon the final report. The bank failed soon after the payment, notwithstanding the advancement of the sums. It is plain to see that such payments might lead to litigation and that minds might differ as to whether appellants used due care and circumspection in the methods used to bring about such payment. It was not a claim the administrators were compelled to pay. It was a situation calling for the use of their best judgment and discretion. It may be that in order to avoid future litigation due care would have required the appellants to consult the heirs before this payment was made. No reason is shown why that could not have been done. The heirs were the beneficiaries of the fund and the ones to be benefited, if any one, by making the payment. The appellants could not have acted with the highest degree of fidelity and with the utmost good faith if they, or either of them, had any speculative interest in the bank which might be served by the estate’s payment. While this court has held that the payment was legal and justified, it has not held that the appellants exercised due care to avoid litigation in their methods of affecting the payment.

As to the items paid to the First National Bank of Chicago and the amount claimed as attorney’s fees by the appellants, there is no equity in the judgment of this court warranting a reimbursement to appellants for their charges for litigation in that behalf. As to appellants’ right to reimbursement for their expenses and attorney’s fees in defending their final report in the former proceeding, as presented in this cause, we find no exact precedent where the courts of this State have passed upon the question. There is authority found for a reviewing court to grant leave to a party to apply to the county court in the settlement of an estate of decedent in his hands for an allowance for expenses other than taxable costs. Shaw v. Moderwell, 104 Ill. 64, 70. It has been held that costs should not be taxed either for the representative or for the other party to the appeal when neither party was entirely in the right. Phelps v. Slade’s Heirs, 10 Vt. 192; In re Wilson, 15 Ont. L. 596; 24 C. J. 1058. It has also been held that costs and expenses of proceedings for accounting and settlement may be charged to the personal representative individually, when he has rendered it necessary that such costs and expenses should be incurred by his misconduct or negligence as to accounting or settling, or when, on a contested settlement, the finding is against him. 24 Corpus Juris, 1057; Marshall v. Coleman, 187 Ill. 556. It is also held that the granting of costs and allowances is a matter of discretion of the court rather than of right. 24 Corpus Juris, 1054, In re Kreidler, 68 Misc. 412, 124 N. Y. S. 628; In re Choate’s Estate, 165 Mich. 420. Determinations of the lower court as to matters which are properly within its discretion will not be disturbed on appeal, except for manifest abuse of such discretion. This rule is most frequently applied with respect to such matters as the compensation of the representative, allowances for the services of attorneys and costs. 24 C. J. 1050. The order or decree in such matters, of which a review is sought, is as a general rule presumed to be right, in the absence of any affirmative showing in the record to the contrary, and every reasonable presumption will be indulged in favor of the correctness of the proceedings below. 24 Corpus Juris, 1050. Following the rule that such matters should be determined upon equitable principles and are governed by rules of judicial discretion rather than abstract right, we have searched the record for testimony or proofs upon which this court could review and determine whether the decree of the circuit court of Cass county was an abuse of the discretion confided to the trial court. The record contains the report and exceptions that were brought up on the former hearing; the decrees of the probate and circuit courts, based upon that report, and the opinion of this court, In re Estate of William K. Mertz, deceased, supra, together with the testimony showing the costs paid, the services of attorneys employed and the reasonable value of such services. Our only information as to the differences which led to the litigation we are compelled to glean from the opinion of this court In re Estate of William K. Mertz, deceased, supra. To hold that the decree of the circuit court of Cass county, in refusing to allow these items, was an abuse of judicial discretion, would result in holding that administrators and executors in all cases could.compel estates to pay costs and attorney’s fees, in litigation, as a matter of right, whether the representative was successful or not, and would be followed by a new petition in this cause to recover the costs and expenses of this appeal and by endless litigation, unless heirs and parties interested abandoned their prerogative to inquire into their affairs and have an accounting with their trustee.

We find no proofs in the record tending to show that the circuit court of Cass county abused its discretion in disallowing said claims, and the decree of that court will be affirmed,

Affirmed.


text:
    Murray Denzel Helfrick, Appellant, v. Frances May Helfrick, Appellee.
    Gen. No. 8,091.
    1. Marriage — annulment for fraudulent representations. The fraudulent representations for which a marriage may be annulled must be of something essential to the marriage relation — of something making impossible the performance of the duties and obligations of that relation or rendering its assumption and continuance dangerous to health or life.
    2. Marriage — pregnancy at marriage by other than husband as ground of annulment. A marriage will not be annulled on the ground that the wife falsely and fraudulently represented that her pregnant state at the time of marriage was due to her husband instead of to a third party.
    Appeal by plaintiff from the Circuit Court of Champaign county; the Hon. F. H. Boggs, Judge, presiding.
    Heard in this court at the April term, 1927.
    Affirmed.
    Opinion filed October 31, 1927.
    Earl Wagner and Herrick & Herrick, for appellant.
    Charles E. Erbstein and Harry E. Kerker, for appellee.
   Mr. Presiding Justice Shurtleff

delivered the opinion of the court.

Appellant filed his bill in equity, in the circuit court of Champaign county against appellee, his wife, to annul and dissolve the marriage with appellee, which took place upon November 14, 1925, in Illinois, based upon the ground that appellee fraudulently represented to appellant, at the time of said marriage, and before that time, that she was pregnant with child, by appellant, when in truth and in fact she was pregnant by another man, which fact she fraudulently and corruptly concealed from appellant.

The bill contained the other necessary and proper averments. There was a demurrer filed to the bill, a hearing and the court sustained the demurrer and the bill was dismissed for want of equity. Appellant has brought the record to this court, by appeal, for review. While a considerable line of very respectable authority is cited in support of the doctrine that the facts stated in the bill, constitute a ground for annulment, such as Wallace v. Wallace, 137 Iowa 37, 114 N. W. 527, 14 L. R. A. (N. S.) 544; Lyman v. Lyman, 90 Conn. 399, 97 Atl. 312, L. R. A. 1916 E 643; Gard v. Gard, 204 Mich. 255, found in 11 A. L. R. 923, where the authorities are collated and the principles discussed, still a cursory examination of the cases cited, shows that the result arrived at, in many of the states, is based upon the statute of the state, where the case was decided, and that the principle involved would be in conflict with the Illinois statute providing for divorce.

Our own court in Lyon v. Lyon, 230 Ill. 366, 370, has laid down the rule: ‘‘ Concealment of the fact that the woman had previously been insane has been held insufficient to justify a decree of nullity of marriage. Cummington v. Belchertown, 149 Mass. 223, 21 N. E. 435, 4 L. R. A. 131. So has concealment of kleptomania. Lewis v. Lewis, 44 Minn. 124, 46 N. W. 323, 9 L. R. A. 505, 20 Am. St. Rep. 559. Also concealment by a woman of unchastity prior to marriage. Leavitt v. Leavitt, 13 Mich. 452; Allen’s Appeal, 99 Pa. 196, 44 Am. Rep. 101; Varney v. Varney, 52 Wis. 120, 8 N. W. 739, 38 Am. Rep. 726. Also concealment of a prior marriage. Donnelly v. Strong, 175 Mass. 157, 55 N. E. 892; Fish v. Fish, 6 App. Div. 432, 39 N. Y. Supp. 537. Also concealment of the birth of an illegitimate child prior to marriage. Farr v. Farr, 2 MacArth. (D. C.) 35; Smith v. Smith, 8 Or. 100. The fraudulent representations for which a marriage may, be annulled must be of something essential to the marriage relation — of something making impossible the performance of the duties and obligations of that relation, or rendering its assumption and continuance dangerous to health or life. Smith, v. Smith, 171 Mass. 404, 50 N. E. 933, 41 L. R A. 800, 68 Am. St. Rep. 440; Ryder v. Ryder, 66 Vt. 158, 28 Atl. 1029, 44 Am. St. Rep. 833; Cummington v. Belchertown, supra.”

We know of no modification of this rule by the courts in Illinois, and so long as this remains the established law in this state, in the opinion of this court, the facts stated in the bill, do not state a ground for equitable relief.

The decree of the circuit court of Champaign county is affirmed.

Affirmed.