Flagg v. Stowe

Citations

• 85 Ill. 164

Syllabus

<p>1. Partnership—whether it exists. Where two or more parties agree to form a corporation, some putting in machinery and patents, and others money and labor, but no corporation is formed, by reason of a failure to comply with the statute, if the parties are entitled to share in the profits and losses, it will constitute a quasi partnership, although the title to the property put in, whether real or personal, may not be changed.</p> <p>2. Same—^ownership of property—liability for losses. Where an association is formed, not under the statute, for manufacturing purposes, by which one is to furnish machinery, etc., and another a patent, and the third money and advances to put the business in operation, and to convey lands, the persons so operating together will not become jointly entitled to the property itself, but simply to its use, except as to the money advanced. If the party furnishing the machinery withdraws, and files his bill for an account and a sale of the property, he will be liable to account to the party advancing the money, for any loss that has occurred.</p> <p>3. In case of an association for manufacturing purposes, not incorporated, in the absence of an agreement to the contrary, each will be liable, in equal proportions, for any loss that may be sustained, but if, by the articles of association, they are to share in the profits in proportion to the stock each puts in, then the loss must be shared in the same manner.</p> <p>4. Same—rule for accounting. Where one partner puts into the firm simply the use of machinery, and another a patent right, and another advances money to put the business in operation, and agrees to convey land, on bill for an accounting and for a sale of the property, each party should be allowed for all money advanced, a fair and reasonable rent for his properly employed, up to the time of filing the bill, and for labor performed by each during that period, and the balance struck accordingly. It is error to allow a certain per cent