The opinion of the court was delivered by: CLARY
This is an action brought by the plaintiff, Harry Kale of Atlantic City, New Jersey, against Dr. Joseph L. Dennis of Philadelphia, Pennsylvania, which is in this Court on the basis of diversity of citizenship.
The plaintiff seeks to obtain an accounting of profits realized by the defendant from the sale of a certain tract of land with a hospital erected thereon in Pinewald, Berkeley Township, Ocean County, State of New Jersey. Plaintiff claims one-half of said profits on the basis that defendant's investment in and taking title to the property was based upon a joint venture of the parties and that on the sale thereof he was entitled to one-half of the profits. Plaintiff seeks to have the defendant declared a trustee for all monies found to be due the plaintiff. From the pleadings and proof I make the following
1. The plaintiff, Harry Kale, a resident of Atlantic City, New Jersey, is an eldely man who can neither read nor write the English language. Prior to 1946 and until March 21, 1951, the plaintiff and defendant were brothers-in-law, the plaintiff being married to the defendant's sister; said marriage was terminated by divorce on March 21, 1951.
2. The defendant, Joseph L. Dennis, is a licensed physician who resides, and since 1937 has practiced medicine, in Philadelphia, Pennsylvania. He is now also registered to practice medicine in the State of New Jersey. He entered military service in 1943 and returned to civilian life in 1946.
3. The matter in controversy exceeds the sum of $ 3,000 exclusive of interest and costs.
4. The plaintiff is a speculator, interested in almost any transaction where he can make the greatest profit from the least investment; he has been a dealer in used automobiles, operated a boat works, a lumber yard, a chicken farm, and is a comparatively well known real estate dealer in the Atlantic City area. After defendant's return from military service in 1946, the parties had a number of business dealings. These dealings were always on an informal basis and, although fairly large amounts of money were often involved, no formal bookkeeping, exchange of legal instrumentalities, or other legal formalities were observed between them.
5. In the latter half of 1946 defendant made known to plaintiff his interest in acquiring a property in New Jersey for the purpose of establishing a sanitarium. Plaintiff brought two properties to defendant's attention, one in Brigantine and the other in Wildwood, New Jersey. For various reasons both properties were unsatisfactory to defendant for the purpose of establishing a sanitarium.
6. Plaintiff in November, 1946, brought to defendant's attention the Royal Pines Hospital property consisting of some 200 acres in Pinewald, Ocean County, New Jersey, which was listed for sale by a Dr. Edward C. Hazard with Mr. Rudolph J. Bushell, resident Vice-President in charge of the Atlantic City, New Jersey, office of Albert M. Greenfield and Company, Inc. Plaintiff, defendant and defendant's wife motored to Pinewald sometime in November of 1946 to inspect the property as a possible site for the sanitarium. A few days thereafter, following a family conference, the defendant told plaintiff that he was not interested in acquiring Pinewald due to the extremely large size of the hospital building, its poor condition, and its distance from both Philadelphia and Atlantic City.
7. About two weeks later, sometime in late November or early December, 1946, plaintiff called upon defendant, at the latter's home, and suggested to defendant that they join in speculating on Pinewald. The plan was to put a small deposit on the property and then try to sell it within a 90-day settlement period; they were to forfeit the deposit if they could not find a buyer within the 90-day period. Each was to bear one-half of the expense and they were to suffer the loss, or enjoy the profit, equally.
8. A second trip was made to Pinewald, by plaintiff and defendant alone, their purpose being to inspect the property to calculate the advisability of the proposed speculative venture; upon their return defendant informed plaintiff that he would join him and they orally agreed to the aforementioned speculative plan. As a result thereof they offered the owners of Pinewald $ 70,000 for the property and plaintiff gave Mr. Bushell a check, dated December 30, 1946, for $ 2,500 as a deposit. This offer was rejected by the hospital owners. An offer of $ 75,000 was then made and the parties were informed of the acceptance of this offer by letter dated January 20, 1947.
9. On January 22, 1947, plaintiff signed and Mr. Bushell approved an exclusive agency agreement whereby Albert M. Greenfield and Company, Inc. were authorized to sell the interests of plaintiff and defendant in Pinewald for 'no less than Ninety-five Thousand Dollars; terms to be all cash above Purchase Money Mortgage with $ 7,500 payable at time of signing or assignment of existing agreement then in force between us and the present owners.' On a $ 2,500 outlay, the parties hoped to realize a $ 20,000 return within 90 days.
10. Immediately thereafter plaintiff and his wife went to Florida where many of plaintiff's friends and business acquaintances were for the winter season. He hoped to interest someone in Pinewald. On February 19, while plaintiff was still in Florida, Mr. Bushell and a Mr. Sacks, an Atlantic City real estate broker, now deceased, with whom plaintiff had had many dealings and who, from the record, appears to be the only real disinterested witness with any substantial knowledge of the transactions which lead to this action, called upon defendant at his office in Philadelphia and requested a deposit of $ 1,000 towards the charge of a title search which was to be made by the Chelsea Title Company of Atlantic City, New Jersey, which search plaintiff had requested. Defendant telephoned plaintiff in Miami, Florida, to discuss this matter with him and plaintiff insisted that the search be made so defendant gave his callers a check for $ 1,000.
11. Messrs. Bushell and Sacks returned to defendant's office on February 24, 1947, with the agreement of sale. Defendant signed the agreement for himself and, pursuant to instruction from the plaintiff, Albert M. Dennis, Esquire, a brother of the defendant, signed the agreement on behalf of the plaintiff. In said agreement, plaintiff and defendant agreed to pay the purchase price of $ 75,000, of which $ 2,500 was already on deposit, to give a bond, warranty and a mortgage in the amount of $ 40,000 and to pay the balance of $ 32,500 in cash. Settlement was to be made no later than May 15, 1947.
12. The plaintiff was unsuccessful in his attempt to interest anyone in Florida in the acquisition of the property. He returned from Florida in early March, 1947, and made diligent, though unsuccessful, efforts to sell the property in Atlantic City, Lakewood and New York. At plaintiff's suggestion, defendant advertised the hospital property for sale in the Philadelphia County Medical Journal in March, 1947, but the advertisement also proved fruitless.
13. To this point, the middle of March, 1947, neither the plaintiff nor the defendant viewed their venture as anything but a speculative business undertaking. There was no thought of acquiring the hospital property in the event that their efforts did not produce a buyer by settlement date. Instead they intended to simply forfeit the deposit money. Their investment, however, had increased from $ 2,500 to $ 4,300 by virtue of the $ 1,800 charge for the title search. The title search revealed a flaw in the chain of title which caused plaintiff to request Martin Bloom, Esquire, his attorney of many years standing, to determine whether said flaw was of such a nature that might now even allow the parties to recapture their deposit money at the time of settlement in the ...