Garth v. Davis & Johnson

Opinion by Judge 0 ’Bear Beversing. Appellant owned a tract of land in the city of Bowling Green, Ky., which he caused to be divided into town lots. A plat was recorded. He advertised the lots by descriptions as indicated in the recorded plats for sale at public auction. The advertisements were printed, and stated the terms of the sale, which were, that part of the purchase price was to be cash and balance in notes due at stated intervals. At the sale appellee, John T). Davis became the purchaser of some of the lots, being the ingest' bidder, and appellee, Henry J. Johnson became the purchaser of others of the lots. The auctioneer at the time entered a memorandum of each of the sales upon his book, and signed it. Appellant tendered a joint deed to appellees, conveying to them jointly all the lots bought by them respectively, and demanded a compliance on their part with the terms of the sale. They refused to accept the deed tendered. This suit against them is for the specific execution of the contract of sale. The petition avers that appellees Davis and Johnson, by parol agreement between themselves, entered into a co-partnership, to buy, own, and use all the lots bought by them respectively; that it was part of the agreement between them that each was to buy in his own name for the partnership certain of the lots, which they each did buy and that both were thereafter to pay for and own all of them as co-partners. A demurrer was sustained to the petition, and it was dismissed because the circuit court conceived that the transaction and agreement were within the statute of frauds and.perjuries, and were therefore void. There was not a tender of [109] deeds to each of the appellees for the several lots hid in by each. So, unless the alleged parol agreement to enter into a partnership to buy the lots, and to hold them for the joint account of the partners, is enforceable, the judgment will have to be affirmed. The auctioneer’s memorandum, signed by him, describing the lots sold, and stating the terms of the sale, is sufficient to bind both seller and buyer, and is a compliance with the statute. (McBrayer v. Cohen 92 Ky., 482, 13 Ky. Law Rep., 667, 18 S. W., 123; Gill v. Hewett, 7 Bush, 11.) The question, is, who was the buyer? Nominally, Davis bought ■ certain lots, and Johnson certain others. So far as the auctioneer’s memorandum goes, none of the lots were sold to both Davis $nd Johnson. However, if, as a matter of fact, they were purchased by each of them in their individual names for the partnership, they became partnership assets, liable for the debts of the firm, and to be treated as other partnership assets; for it can not be material how the title appears if it in fact belongs to the partnership. An agreement to become partners in trafficing in real estate is not within the statute of fraud and perjuries. That statute, as re-enacted in this State, reads: "No action shall be brought to charge any person * * * upon any contract for the sale of real estate, or any lease thereof, for longer term than one year, * * unless the . * * * contract, * * * or some memorandum of note thereof, be in writing, and signed by the party to be charged therewith, or by his authorized agent. ’ ’ Section 470, Ky. St., 1903. An agreement to become partners in dealing in real estate is neither a contract to buy nor' a contract to sell real estate as between the parties to it. So far as the formation of the co-partnership is concerned, the title to real estate is no wise affected by the making of the agreement. The terms [110] of the agreement, the mutual undertakings by the partners as between themselves as to what each will contribute, and the interests of each in the profits of their undertaking, are matters not necessarily affected by the statute; The most numerous, and what seems to us the best-reasoned, authorities hold that such contract need not be in writing if to be begun and may end within a year, although as a fact it may not be terminated for more than a year., We cite the following among many cases holding these views: Browne, Stat. of Frauds, secs. 364-67; Meagher v. Reed (Colo.) 24 Pac. 681, 9 L. R. A., 455; Dale v. Hamilton, 5 Hare, 369; Jones v. Davies, 60 Kan., 309, 56 Pac., 484, 72 Am. St. Rep., 354; Bates v. Babcock, 95 Cal., 479, 30 Pac., 605, 16 L. R. A., 745, 29 Am. St. Rep., 133; Holmes v. McCray, 51 Ind., 358, 19 Am. Rep., 735; Richards v. Grinnell, 63 Iowa, 44, 18 N. W., 668, 50 Am. Rep., 727; Chester v. Dickerson, 52 Barb. (N. Y.), 349; Id., 54 N. Y., 1, 13 Am. Rep., 550. In this State the doctrine prevails that partnership real estate is deemed personalty for the purposes of the partnership (Spalding v. Wilson, 80 Ky., 589, 4 Ky. Law Rep., 575; Casky v. Casky, 5 Ky. Law Rep., 775; Flanagan v. Shuck, 82 Ky., 617, 6 Ky. Law Rep., 699), which is sometimes given as one of the reasons for the rule that agreements to become partners in dealing in lands is not within the statute (Flower v. Barnekoff, 20 Or., 132, 25 Pac., 370, 11 L. R. A., 149). When the partnership is formed, though by parol, and the status of the co-partners has become thereby fixed, the firm’s transactions as between it and others concerning lands are subject to the same terms under the statute as any individuals are. The firm, if it proposes to buy or sell land, will be bound or not in the transaction, precisely as an individual would be under the same circumstances. Duncan v. Duncan, 93 Ky., 37, 13 Ky. [111] Law Rep., 917, 18 S. W., 1022, 40 Am. St. Rep., 159. It may buy or sell by its agent, whose authority need not be in writing. Tewksbury v. Howard, 138 Ind., 103, 37 N. E., 355; Brown v. Eaton, 21 Minn., 409. The memorandum or contract, though signed by the agent alone, his principals not being named, is sufficient under the statute to charge the principals. Salmon Falls Mfg. Co. v. Goddard, 14 How. (U. S.), 446, 14 L. Ed., 463. As co-partners are deemed agents for each other in the transactions of the firm (Ferguson v. Sims, 3 Ky. Law Rep., 684; Davis v. Wiley, 3 Ky. Law Rep., 315, 755; Scott v. Colmesnil, 7 J. J. Marsh., 423), a memorandum signed by a partner, or authorized by him and in his name, but made for the firm, will bind the partners. The case of Parker’s Heirs v. Bodley, 4 Bibb., 102, can not be deemed in conflict with what is herein adjudged. That case ought to turn upon the fact that the agreement between Bodley and Parker to become co-partners in the purchase of the Byer’s estate was not consummated until after Parker had bought the land. It was then held that his agreement subsequently entered into, to sell a part of it to Bodley in the way of a partnership enterprise, was within the statutes of frauds. But, if the opinion be not susceptible of this construction, it is not in harmony with the later decisions of this court, nor with the trend of the decisions on this subject generally. It follow’s that, if either of the appellees was in fact acting for his firm in buying the lots bid in by him at the sale, and was acting in pursuance to the partnership agreement alleged, his act in that matter was the firm’s act. He had the power to bind his firm by employing an agent to act for it in signing a sufficient memorandum to comply with the statute. v So that the signature of the auctioneer to his memorandum be [112] came the binding act of the firm in that transaction. As the sale was to appellees as partners, which gave them joint interests in the lots, and made them jointly liable therefor (assuming the allegations of the petition to be true), the tender of one deed to them conveying the lots to them jointly was a full compliance with appellant’s obligation under the terms of the sale to convey the title as a condition precedent to demanding the money and the execution of the notes. In our opinion, the petition stated a cause of action, and the court erred in sustaining the demurrer to it. Judgment reversed, and cause remanded for proceedings consistent herewith.