Case Title: Robertson v. Murphy

Citation: 510 So. 2d 180

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1987-06-19T00:00:00Z

Document:
510 So. 2d 180 (1987)
William Gary ROBERTSON
v.
Fred B. MURPHY, et al.
85-366.

Supreme Court of Alabama.
June 19, 1987.
John I. Cottle III of Bowles & Cottle, Tallassee, for plaintiff.
Willard Pienezza, Michael S. Harper of Hornsby & Schmitt, Tallassee, for defendants.
ADAMS, Justice.
This is an appeal from a summary judgment in favor of the defendants, Fred Murphy, Willard Pienezza, W.G. O'Daniel, Lanier Y. Roton, Ernest C. Hornsby, and Auburn Federal Savings & Loan Association. The plaintiff's father, a partner with the individual defendants, died intestate, leaving his partnership interest to his son, William Gary Robertson. On May 23, 1985, Robertson filed his complaint in the Circuit Court of Tallapoosa County, seeking to have the property sold, the proceeds to be divided to the partners according to their interests. On August 28, 1985, Auburn Federal Savings and Loan Association filed its answer. On September 11, 1985, all defendants filed a motion to dismiss, which was denied. On October 29, 1985, the individual defendants filed their answer and a motion for summary judgment. The trial court granted the motion for all defendants on December 3, 1985, hence, this appeal.
Robertson's father and the individual defendants owned land in fee simple in East Tallassee, Tallapoosa County, Alabama. They purchased the land on July 1, 1975. On October 31, 1975, the six partners entered *181 into a partnership agreement which provided that upon the death of any partner, the partnership did not terminate and that the heirs, executors, administrators, or assigns of any partner would be bound by the terms of the partnership agreement. The agreement also contained a preemptive right of first refusal, which gave the partnership a 90-day period in which to buy the interest of any partner desiring to sell. In 1979, Robertson's father died intestate and Robertson acquired his father's interest in the property. Robertson wanted to sell his interest. At no time did he offer his interest to the partnership. He filed his complaint seeking to have the property sold, without first asking for dissolution of the partnership or for an accounting of the partnership assets. On appeal he argues that the preemptive right of first refusal violates the rule against perpetuities, and, therefore, that he is not bound by its terms.
The common law rule against perpetuities was adopted by statute in Alabama in § 35-4-4, Code of Alabama (1975). "The common law rule against perpetuities provides that no interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest. J. Gray, The Rule Against Perpetuities § 201 (4th Ed.1952)." Shaffer v. Reed, 437 So. 2d 98, 99 (Ala. 1983). Robertson argues that the preemptive right of first refusal contained within the partnership agreement violates the rule in that it contains no reference to lives in being; therefore, he argues, it is for a period longer than 21 years and the rule is violated.
In a case substantially the same as the present case, the Supreme Court of Wyoming, in Hartnett v. Jones, 629 P.2d 1357 (Wyo.1981), held that a preemptive right to purchase in a joint venture contract was not subject to the rule. In Wyoming, a joint venture is governed by the law of partnerships. The court cited and discussed Weber v. Texas Co., 83 F.2d 807 (5th Cir.1936), cert. denied, 299 U.S. 561, 57 S. Ct. 23, 81 L. Ed. 413 (1936); Oliner v. City of Englewood, 42 Colo.App. 106, 593 P.2d 977 (1979); Robroy Land Co. v. Prather, 95 Wash. 2d 66, 622 P.2d 367 (1980), for the proposition that the rule did not apply with regard to preemptive rights. The opinion then gave an overview of the manner in which different states have avoided the application of the rule to preemptive rights:
Hartnett, 629 P.2d  at 1362.
In reaching its decision that the preemptive right did not violate the rule against perpetuities, the Wyoming Supreme Court emphasized that the preemptive right did not restrict alienability, the goal of the rule:
Hartnett, 629 P.2d  at 1363.
Although not identical to it, this case is similar to Dozier v. Troy Drive-In Theaters, Inc., 265 Ala. 93, 89 So. 2d 537 (1956). Dozier dealt with a lease of land containing an option to purchase exercisable during the term after one year. The appellant in Dozier argued that such an option was violative of the rule in that, no reference to a life in being was stated. The Court held that the option was an exception and not subject to the rule against perpetuities. It initially held that because the lease was for 20 years and not for more than 21, the rule was not invoked. However, the Court then held that even if the lease was for more than 21 years, the rule would not be violated. The rationale espoused by the Court in Dozier is readily applicable to our present case:
Dozier, 265 Ala. at 103-04, 89 So. 2d  at 546. The Wyoming court in Hartnett described Dozier as holding "that the option or preemptive right simply is an exception to the rule of perpetuities because it creates an estate on a condition subsequent to which the rule does not apply." Hartnett v. Jones, 629 P.2d  at 1362. The Court in Dozier, partially relied upon the English courts for its pronouncement of the exception:
265 Ala. at 104-05, 89 So. 2d  at 547.
"The avowed object of the rule is to favor commerce and the circulation of property by preventing the right of absolute disposition from being tied up or restrained beyond a certain period." Lyons v. Bradley, 168 Ala. 505, 53 So. 224 (1910). As pointed out by the Supreme Court of Wyoming, preemptive rights do not inhibit the alienability of property. See Hartnett, supra. Therefore, the rights are not contrary to the main objective of the rule. Based on *183 the analysis of the Court in Dozier, supra, the preemptive right to repurchase created a conditional fee and this right is vested and presently reserved in the pre-emptioner. The preemptive right of first refusal as found in the partnership agreement is excepted from the rule against perpetuities. Therefore, plaintiff's claim fails and the trial court correctly granted summary judgment.
For the reasons set forth, the judgment of the trial court is due to be affirmed.
AFFIRMED.
JONES, SHORES, HOUSTON and STEAGALL, JJ., concur.