This section is from the book "A Treatise On The Construction Of The Statute Of Frauds", by Causten Browne. Also available from Amazon: A treatise on the construction of the Statute of frauds.
1 Jeffereys v. Small, 1 Vern. 217; Jackson v. Jackson. 9 Ves. Jr. 591; Lake v. Craddock, 3 P. Wms. 158; Elliott v. Brown, 3 Swanst. 489, note (another report of which is alluded to by Lord Eldon in Jackson v. Jackson, supra); Forster v. Hale, 3 Ves. 696; s. c. 5 Ves. 309; Fereday v. Wightwick, 1 Russ. & M. 45.
2 Dale v. Hamilton. 5 Hare 369. And see Smith v. Tarlton, 2 Barb. (N. Y.) Ch. 336; Fall River Whaling Co. p. Borden, 10 Cush. (Mass.) 458; Traphagen v. Burt, 67 N. Y. 30; Slevin v. Wallace, 61 Hun (X. Y.) 288; contra. Gray v. Palmer, 9 Cal. 616. The authority of Gray v. Palmer, 9 Cal. 616, has been denied in Coward v. Clanton, 79 Cal. 23. See post, § 262.
§ 261 a. The result of the cases we have been considering upon this subject of the effect of a parol partnership upon the title to lands acquired and used for partnership purposes is, that, the fact of partnership being proved, whether by articles or by parol, real estate acquired and used for the partnership purposes becomes, as between the partners, and for all purposes of adjustment of claims against the firm or its members, partnership assets; that in cases where the title to the land is in the partners as joint tenants the right of survivorship incident to that tenancy does not exist; and that where the title is in one, or some number less than the whole, of the partners, it is for the purposes above named devested, and becomes vested in all the partners by partnership title; and this whether the land was purchased with the money of the firm (creating a resulting trust to the firm) or with the money of the partner taking the title; and that it is not material whether the partnership was already established and engaged in its business when the land was acquired and brought into the stock, or whether it was established and the land acquired and put in contemporaneously, or whether the partnership was established for the purposes of some other trade or business,1 or for the special purpose of dealing in and making profit out of the very land itself which is in question. The whole doctrine (unless it can stand as an application of the law of implied trusts to cases of land purchased and held by one partner in derogation of his fiduciary obligation to the other) must be regarded as a bald exception to the rule that no oral agreement can be made available directly or indirectly to effect or compel the transfer of any interest in land. It has been severely criticised, and strenuous efforts have been made to stop it half-way by limiting it to cases of a partnership already formed for and engaged in business, as distinguished from a partnership formed and the land acquired in pursuance of one and the same verbal agreement; or to cases of a partnership for general purposes to which the holding and use of the land was incidental, as distinguished from a partnership formed for the special purpose of dealing in the land. On principle, the doctrine of Forster v. Hale, that, on parol proof of a partnership existing and doing business, land used by the firm for the purposes of that business is assets of the firm, however the paper title may stand, seems to admit of no such limitations. And the cases which assert them do not deal at all, or do not appear to deal satisfactorily, with that question.
1 Black v. Black, 15 Ga. 449.
§ 261 b. In Caddick v. Skidmore (1857) before Lord Chancellor Cranworth, the defendant owned a colliery, and he and the plaintiff made an oral agreement to become partners in the colliery for the purpose of demising it upon royalties which were to be divided between them; it was demised upon a royalty on account of which defendant made certain payments to the plaintiff, and afterwards the defendant sold the original term; and the bill prayed for an account and for payment of what was due to the plaintiff, apparently both back royalties and his share of the proceeds of sale. Both Forster v. Hale and Dale v. Hamilton were cited in the argument, but neither was noticed in the opinion of the Lord Chancellor. He dismissed the bill for want of a satisfactory memorandum in writing of the agreement, simply saying that "an agreement to the effect that plaintiff and defendant were to become partners in a colliery for the purpose of demising it upon royalties which were to be divided in some proportion between them" was in his opinion "an agreement not capable of being enforced, unless proved by such evidence as is required by the Statute of Frauds."1 It is to be noticed that here the lease, which was the interest in lands in question, had been sold, and no relief was sought except a division of the profits; in this respect differing from Dale v. Hamilton, where the bill prayed for a sale of the lands on joint account and a distribution of the proceeds in conformity with the agreement, and an injunction to restrain the defendants from otherwise disposing of the land; and this would be a sufficient distinction, at least in this country, where it is settled that, a contract for the sale of lands on joint account having been executed as to the sale of the land, an action lies for distribution of the profits.2
1 In Clarke v. McAuliffe, 81 Wisc. 108, it was held that a parol agreement by a firm of lawyers to buy land on joint account with partnership funds, the title taken by one to be for the benefit of both, was within the Statute of Frauds, the land transaction being foreign to the partnership in the practice of law.
§ 261 c. On the other hand, the more recent case of Essex v. Essex, before Lord Chancellor Cranworth, where a parol agreement was held competent to extend the term of a written contract of partnership for dealing in land, and the rule of partnership distribution applied accordingly, may be considered as reaffirming the doctrine of Dale v. Hamilton, although that case was not referred to in the opinion.1 In England, therefore, that doctrine can hardly be regarded as overthrown.2