The undertaking in the instant case, evidenced by the contract with Ditis, the assignments of the beneficial interests of the first land trust, and the terms of the trust agreement itself, was a single enterprise in which the parties engaged for their joint profit without any actual partnership or corporate designation. The enterprise, therefore, fell within the definition of a joint adventure as an association of two or more persons to carry out a single enterprise for profit. ( Hagerman v. Schulte, 349 Ill. 11.) The fact that three of the joint adventurers grouped their identity as shareholders under the corporate entity of the Ahlvin Construction Company, then in existence, does not operate to exclude appellant from the venture, for by his contract and assignment of beneficial interest it could be said that he was, in effect, a joint adventurer with the corporation. The fact remains, too, that he continued to act as an officer of the corporation even though not a shareholder, and as such was not completely excluded from the corporate affairs.
We disagree. Plaintiff cites Bandringa v. Bandringa, 20 Ill. 2d 167, 174 (1960), Ditis v. Ahlvin Construction Co., 408 Ill. 416, 426-30 (1951), and Hagerman v. Schulte, 349 Ill. 11, 21 (1932), in support of the proposition that parties can owe a fiduciary duty regardless of, and independent from, any written agreement between the parties. Thus, plaintiff urges that Casalino should be held personally liable because he was so involved in the partnership that he created a fiduciary relationship between himself individually and the partners.
It says the four workout documents must be read together because they are all inextricably tied together as part of one transaction. It relies on the case of Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677 (1932). In Hagerman, the court stated:
In this regard, in addition to the requirement that a joint venture must have a contractual basis, either express or implied, we note that the decisions are in substantial agreement that the following factors must also be present: (a) a community of interest, (b) a proprietory interest in the subject matter, (c) a right to govern the policy in connection therewith, and (d) a sharing in both the profit and losses. ( Carroll v. Caldwell, 12 Ill.2d 487, 147 N.E.2d 69; Hagerman v. Schulte, 349 Ill. 11 181 N.E. 677; Williston, Contracts, sec. 318A (3d ed. 1959).) We believe the record here does not reveal the presence of these factors.
Accordingly, it can be said that a joint adventure contemplates an enterprise jointly undertaken; that it is an association of such joint undertakers to carry out a single project for profit; that there must be a community of interest in the performance of a common purpose, a proprietary interest in the subject matter, a right to direct and govern the policy in connection therewith, and a duty, which may be altered by agreement, to share both in profit and losses. Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677; Harmon v. Martin, 395 Ill. 595, 71 N.E.2d 74; Harris v. Young, 298 Ill. 319, 131 N.E. 670; 23 I.L.P. Joint Adventures; 48 C.J.S. Joint Adventures; 30 Am.Jur., Joint Adventures; Wyoming-Indiana Oil Gas Co. v. Weston, 43 Wyo. 526, 7 P.2d 206, 80 A.L.R. 1037; Hathaway v. Porter Royalty Pool, Inc., 296 Mich. 90, 295 N.W. 571, 138 A.L.R. 955. The same authorities, together with Berkey v. Third Ave. Railway Co., 244 N.Y. 84, 155 N.E. 58, 50 A.L.R. 599, and Gleichman v. Famous Players-Lasky Corp., 241 Mich. 266, 217 N.W. 43, establish that the relationship is a matter of intent, as between the parties, and arises only where they intended to so associate themselves, such intention being determined in accordance with the ordinary rules governing the interpretation and construction of contracts." (Emphasis added.)
It has long been the settled law in this jurisdiction that transactions of parties between whom a fiduciary relationship exists are prima facie voidable on the grounds of public policy. ( Hagerman v. Schulte, 349 Ill. 11; Burrows v. Palmer, 10 Ill.2d 344.) But, at the same time, the mere existence of a fiduciary relationship does not invalidate a transaction between the parties where the evidence discloses that the contract was fair, open and honest.
We think the complaint and its prayer is sufficient to permit the trial court to decree a constructive trust by way of specific performance as well as to order an accounting and such other relief as is necessary to adjust the equitable rights of the parties. See Gregg v. Green, 95 Colo. 255, 35 P.2d 495; Hanson v. Chamberlin, 76 Colo. 562, 233 Pac. 830; Pepper v. Hyman, 117 Colo. 365, 189 P.2d 155. Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677. The agreement of these parties is clear and unambiguous, each of their rights and obligations are spelled out as far as was necessary to perform the acts of acquiring and preparing to develop the land. It was not a loan agreement or a contract for services void for lack of mutuality as is asserted by Lindsay.
Accordingly, it can be said that a joint adventure contemplates an enterprise jointly undertaken; that it is an association of such joint undertakers to carry out a single project for profit; that there must be a community of interest in the performance of a common purpose, a proprietary interest in the subject matter, a right to direct and govern the policy in connection therewith, and a duty, which may be altered by agreement, to share both in profit and losses. ( Hagerman v. Schulte, 349 Ill. 11; Harmon v. Martin, 395 Ill. 595; Harris v. Young, 298 Ill. 319, 23 I.L.P. Joint Adventures, 48 C.J.S., Joint Adventures, 30 Am.Jur., Joint Adventures, 80 A.L.R. 1037; 138 A.L.R. 955). The same authorities, together with Berkey v. Third Ave. Railway Co., 244 N.Y. 84, 155 N.E. 58, and Gleichman v. Famous Players-Lasky Corp., 241 Mich. 266, 217 N.W. 43, establish that the relationship is a matter of intent, as between the parties, and arises only where they intended to so associate themselves, such intention being determined in accordance with the ordinary rules governing the interpretation and construction of contracts. The facts pleaded in the complaint, and the unitization agreement incorporated therein, show that the unitization venture possessed all the recognized attributes of a joint adventure. It was a single project; the common interest and purpose of plaintiff and defendant was to get more revenue from tracts A and B through the secondary recovery of oil and gas; both plaintif
However, none of them, with one possible exception, supports the theory that, by construing the contracts together, a contract can be established between any two of the parties who are not parties to the same instrument. The only authority presented by the appellant for his proposition that, by construing instruments together, one may be rendered liable to a party with whom he did not contract is Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677. That case involved a joint adventure, orally agreed upon, between three parties, whereby one was to construct an apartment building upon land owned by another, and the third was to manage it, and each was to share in the profits. Their agreement was later reduced to two writings, one signed by the owner and the contractor, the other by the owner and the manager.
In its ultimate legal effect it is a partnership limited and confined to the performance of one particular enterprise or venture and controlled by the terms of the agreement under which it is formed or created; and the rights and liabilities of the parties to it with respect to matters and occurrences within its scope are therefore to be tested by the rules governing partnerships in the full sense of the word. Harmon v. Martin, 395 Ill. 595, 71 N.E.2d 74; Ditis v. Ahlvin Const. Co., 408 Ill. 416, 97 N.E.2d 244; Hagerman v. Schulte, 349 Ill. 11, 181 N.E. 677; Spencer v. Wilsey, 330 Ill.App. 439, 71 N.E.2d 804; Sappenfield v. Mead, 338 Ill.App. 236, 87 N.E.2d 220; Schmalzl v. Derby Foods, Inc., 341 Ill.App. 390, 94 N.E.2d 86. Under the facts of this case which we have stated to the full extent of the record, the conclusion seems inescapable that plaintiff and Spagnola, together with all their associates, were engaged in a joint enterprise in connection with the operation of the carryall as a means of transportation between their homes and their place of work.