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 Caddick v. Skidmore, 2 De Gex & J. 51.
2 Trowbridge v. Wetherbee, 11 Allen (Mass.) 361; Morrill v. Colebour, 82 111. 618; Coleman v. Eyre, 45 N. Y. 38; Newell v. Cochran, 41 Minn. 374; Everhart's Appeal, 106 Pa. St. 349; Coward v. Clanton, 79 Cal. 23. In a recent case in New York, however, a distinction has been taken between land bought for speculation or trading and for investment. Slevin v. Wallace, 64 Hun (N. Y.) 288.
§ 261 d. In this country the decisions are conflicting. The Supreme Court of Indiana3 has directly followed Dale v. Hamilton, adopting in terms the opinion of the Court of Appeals of New York4 to the same effect; that opinion, however, being unnecessary to the decision in the Court of Appeals, where the question was of the competency of parol evidence to prove the existence of the partnership relation between the several defendants for the purpose of charging all for the torts of some; the partnership being in fact for dealing in land, but no remedy being sought against the land or its proceeds. In Henderson v. Hudson in the Court of Appeals of Virginia,5 sometimes referred to as opposed to the doctrine of Dale v. Hamilton, the agreement was that the plaintiff and defendant should join in the purchase of lands, and also that the defendant should after a certain time let the plaintiff have his share at a certain price; and it was held that the two stipulations were inseparable,6 and that, inasmuch as the latter was clearly within the statute, no recovery could be had on the former. So far, therefore, as the case bears at all upon the question we are considering, it recognizes an agreement to buy lands on joint account as good by parol. The case of Walker v. Herring,1 in the same State, does decide that a parol agreement to be jointly interested in a purchase of land is within the statute; the decision, however, being put expressly on the authority of Henderson v. Hudson, which is not an authority to that point.2
1 Essex v. Essex, 20 Beav. 442.
2 It is proper to add that the affirmance of Dale v. Hamilton by the Lord Chancellor on appeal (see 2 Phillips 266) was put upon a different ground from the rule to which it is cited in the text.
3 Holmes v. McCray, 51 Ind. 358. See also Knott v. Knott, 6 Oregon 142; Bates v. Babcock 95 Cal. 479. In Illinois the doctrine of Dale v. Hamilton seems to be questioned. Home v. Ingraham, 125 111. 198.
4 Chester v. Dickerson, 54 N. Y. 1. See also Gibbons v. Bell, 45 Tex. 417; King v. Barnes, 109 N. Y. 267; Kilbourn v. Olmstead, 5 Mackey (D. of C.) 304.
5 Henderson v. Hudson, 1 Munf. 510.
6 See Chap. IX., ante. Also Raub v. Smith, 61 Mich. 543.
§ 261 e. The most prominent American case involving the question of a parol partnership for dealing in lands, as affecting the title to the land bought by one partner in pursuance of it, is Smith v. Burnham, decided by Mr. Justice Story several years before Dale v. Hamilton.3 The plaintiff and defendant made an oral agreement to become copartners in the business of buying and selling land and lumber, upon a joint capital to be furnished by both, and the profits and losses to be equally shared between them. The bill alleged that land and lumber had been bought and held accordingly, the plaintiff advancing capital for the purpose, and called for an account and a decree of dissolution, and a conveyance to the plaintiff of his share of the land remaining unsold. Judge Story held that, inasmuch as the suit was for recognition and enforcement of a trust in land, arising upon the breach of the oral partnership agreement, it could not be maintained, and dismissed the bill.4 This decision is manifestly opposed to Dale v. Hamilton and the cases which it represents. It should be noticed that in the copious citation of cases in the opinion, there is no reference to the case of
1 Walker v. Herring 21 Grat. 678.
2 The subject of agreements to join in purchases of land is resumed, post, § 261 g. See also Raub v. Smith, 61 Mich. 543.
3 Smith v. Burnham, 3 Sumn. 437.
4 In Dale p. Hamilton the Vice-Chancellor was of opinion that the trust arising upon the refusal to perform the parol partnership agreement was a trust implied from the relation of copartnership, and hence exempt from the statute.
Lake v. Craddock,1 which Sir Lancelot Shadwell cited in Dale v. Hamilton, and which fully supported his judgment.
§ 261/. In conclusion of the review of the American cases, reference should be made to an able judgment of the Supreme Court of Wisconsin,2 where the whole subject of the operation of a parol partnership relation upon the title to land bought in pursuance of it is fully discussed, and Smith v. Burnham followed, and a vigorous protest made against the doctrine of Forster v. Hale and the cases which it represents, the court evidently appreciating the difficulty of distinguishing the general rule of those cases from its particular application in Dale v. Hamilton.8
§ 261 g. There are frequent cases of parol agreements to join in the purchase of land, where the party excluded from the purchase seeks to enforce his right to a joint interest in it, or the party who has made the purchase alone seeks to compel the other to contribute to the payment of the price; and these cases, in this country, are held to be within the Statute of Frauds. It seems that such agreements must be regarded as pro hac vice agreements of copartnership in land; and the decisions in question must therefore be taken into consideration in ascertaining the preponderance of authority in this country on the question we have had under discussion.4 Where the action is only for the agreed share of the profits of the sale of land, no agreement affecting the title to the land itself remaining executory, the statute (at least in this country) does not apply.l
1 Lake v. Craddock, 3 P. Wms. 158.
2 Bird v. Morrison, 12 Wisc. 138. See also Clarke v. McAuliffe, 81 Wisc. 108.