Court Opinion

ID: 9724093
Source: CourtListenerOpinion
Date Created: 2023-08-26 10:44:09.430866+00
Date Added: 2024-06-11T18:24:55.474569
License: Public Domain

SUNDBY, J.
(dissenting). Section 706.03(1), Stats., 1989-90, does not apply to the land contract between John Wyss and Co-Jem Farms because the contract was executed by the partnership and not by "one purporting to act as agent" for the partnership. I therefore dissent and would enforce the contract.
Section 706.03(1), Stats., provides:
A conveyance signed by one purporting to act as agent for another shall be ineffective as against the purported principal unless such agent was expressly authorized, and unless the authorizing principal is identified as such in the conveyance or in the form of signature or acknowledgment. The burden of proving the authority of any such agent shall be upon the person asserting the same. [Emphasis added.]
The statute applies only when one "purports" to act as the agent for another. "Purport" means "to convey, imply, or profess outwardly (as meaning, intention, or true character . . . .)" (Emphasis added.) WEBSTER'S *266Third New International Dictionary 1847 (1976). Here, the land contract was executed: "CO-JEM FARMS, an Iowa partnership," "BY: Robert J. Lager, Jr., partner," and "BY: James E. Miles, partner." This is how a partnership necessarily does business. See § 178.06(1), Stats.1
The same issue involved here arose in Cinema North Corp. v. Plaza at Latham Assocs., 867 F.2d 135 (2d Cir. 1989).2 The "vice-president" of Plaza, a partnership, executed a lease subject to the New York statute of frauds. That statute provided that "an agreement for the sale or lease of land is not binding unless 'in writing subscribed by the party to be charged, or by his lawful agent thereunto authorized in writing.'" Id. at 140 (quoting N.Y. Gen. OBLIG. LAW §5-703(2) (McKinney 1978)).
The New York court analogized to the law governing corporations: a corporate officer is not an "agent" within the meaning of the statute of frauds, and written authorization is not required for an agreement signed by an officer to be binding on the corporation. Id. The reason for this is that, because a *267corporation cannot act for itself, the acts of corporate officers are deemed to be the acts of the corporation itself. Id. The court held that this reasoning applied equally to partners who are generally authorized to do the business of the partnership. Id. at 141. New York's partnership law provides: "Every partner is an agent of the partnership for the purpose of its business, and the act of every partner... binds the partnership...." Id. at 140-41. Wisconsin's partnership law is identical to New York's in this respect, and to the Uniform Partnership Act.3 Additionally, § 178.06(1), STATS., provides that "the act of every partner, including the execution in the partnership name of any instrument... binds the partnership . . . ." (Emphasis added.) Here, the land contract was executed in the partnership name; that execution by the two partners bound the partnership.
"Agent" as used in § 706.03(1), STATS., has a meaning different from "agent" as used in § 178.06(1), STATS. In § 706.03, it describes the situation where a person executing a conveyance represents to the other contracting parties that he or she is acting on another's behalf and does not intend to be bound individually. The purpose of the statute is to put the other contracting parties on notice that the "purported agent" intends to bind a "purported principal." The statute *268warns such parties that they proceed at their own risk if they rely upon the agent's purported authority.4
Here, it is clear from the manner of execution of the land contract that the principal — Co-Jem Farms — intended to be bound. The persons executing the contract did not purport "to act as agent" for a "purported principal"; they were the principal.5 Marth v. Edwards, 159 Wis. 2d 773, 465 N.W.2d 248 (Ct. App. 1990) does not apply because, unlike here, in that case the contract to purchase real estate was signed by an individual and contained no mention of the partnership or of the alleged agent's status as a partner.
Section 706.03(1), STATS., as construed by the majority, deletes from the statute the phrase "purport*269ing to act as agent." This construction fails to give effect to all the language of the statute.

 Section 178.06(1), STATS., provides:
Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority.

 Cinema North Corp. v. Plaza at Latham Assocs., 867 F.2d 135 (2d Cir. 1989) "broke new ground in partnership law." William D. Harrington, Business Associations, 41 SYRACUSE L. Rev. 15,34 (1990). The author describes Judge Pratt's opinion on this issue of first impression as "thoughtful." Id. at 34-35.

 The majority fails to appreciate that this provision embodies not only the concept of agency but direct authority. See Fedders Fin. Corp. v. Borg Warner Acceptance Corp., 438 F. Supp. 1143, 1153-54 (S.D. Miss. 1977) (ordinary rules of agency govern partner's acts; partner also has power to bind partnership as to matters within scope of partnership business), rev'd on other grounds, Borg-Warner Acceptance Corp. v. Fedders Fin. Corp., 614 F.2d 399 (5th Cir. 1980).

 In the absence of facts indicating that a partner is acting beyond his or her real or apparent authority, a third party is not required to search for some limitation on the partner's authority. Whitney v. Citibank, N.A., 782 F.2d 1106, 1116 (2d Cir. 1986).

 The effect of the majority's decision is to adopt the "aggregate" rather than the "entity" approach to partnerships, even when applied to the holding and conveyancing of property. Bromberg and Ribstein state that the courts are divided as to whether the Uniform Partnership Act, ch. 178, STATS., adopted the aggregate or entity approach. 1 Alan R. Bromberg & LARRY E. Ribstein, Bromberg and Ribstein on Partnership § 1.03, at 1:22 (1994). They suggest, however, that "[a]n examination of the U.P.A. reveals a definite preponderance of entity-based over aggregate features." Id. As to partnership property they conclude that strong considerations of convenience and efficiency suggest that the partnership shall be treated as an entity. Id. at 1:24. "The holding and conveyance of property in the name of the partnership makes it unnecessary for the partners to join individually in every conveyance." Id.