Court Opinion

ID: 9792828
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:37:37.301174+00
Date Added: 2024-06-11T07:54:28.474110
License: Public Domain

PETERSON, J.,
concurring.
I concur in the result in this case. I am not entirely convinced with the majority analysis, however, and therefore wish to express some concerns.
I
The Uniform Partnership Act was drafted in 1914 by the Conference of Commissioners on Uniform State Laws. It was adopted in Oregon in 1939. Or Laws 1939, ch 550. It contains carefully considered provisions regarding the ownership and transfer of real property. ORS 68.120(2) states, specifically and clearly, that joint ownership of property "* * * does not of itself establish a partnership, whether such coowners do or do not share any profits made by the use of property.” Something more than joint ownership therefore must exist before a partnership comes into existence. The majority opinion finds such something more to exist, and concludes that "* * * the relationship of the defendants was that of a joint venture rather than a partnership.” It would be more correct to say that because a joint venture is a species of partnership (a partnership for a single transaction is a joint venture, Hayes v. Killinger, *794235 Or 465, 470, 385 P2d 747 (1963)), partnership law therefore applies. My concern, however, stems from the application of ORS 68.210(1) and 68.220(4) to the facts.
n
The provisions concerning the ownership and transfer of real property are found in ORS 68.220, which has five sections. Parts (1) and (2) concern conveyances where title to real property is in the partnership name. Part (3) concerns the situation where the title "is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership.” Part (5) states that "[w]here the title to real property is in the names of all the partners a conveyance executed by all the partners passes all their rights of such property.”
To digress for a moment before further discussing ORS 68.220 it appears to me that the design of the Uniform Partnership Act, specifically ORS 68.220, was to make it possible, by examining appropriate public records,,to follow the chain of title of real property in order to determine whether marketable title exists.1 ORS 68.220 reflects an effort to set forth rules governing all conveyances of partnership property, whether the record title is in the name of the partnership (ORS 68.220(1) and (2)) or in the name of one or more or all the partners (ORS 68.220(3), (4), and (5)).
Clearly, subparts (1), (2) and (3) are inapplicable, for record title was in the name of all the partners. Therefore, subsections (4) or (5) may apply. Subsection (5) does not apply, however, since the conveyance was not executed by "all the partners.” That leaves subpart (4), which the majority cites as the applicable section. It provides:
"(4) Where the title to real property is in the name of one or more or all the partners, or in a third person in trust for the partnership, a conveyance executed by a partner in the partnership name, or in his own name, passes the equitable interest of the partnership, provided the act is one within the authority of the partner under the provisions of subsection (1) of ORS 68.210.”
*795Subsection (4) does not apply because the conveyance was not executed either by "a partner in the partnership name” or "in his own name.” The conveyance was in the name of "Vandehey Development Co.” In short, the conveyance here involved does not come within any section of ORS 68.220, and for that reason alone I would reverse. Where title to real property is concerned, whether marketable title exists should be determinable by an examination of public records.
In footnote 5, the majority state that the defendants made no contention "* * * that ORS 68.220(4) does not apply because VDC signed the earnest money agreement instead of Vandehey himself.” The defendants, in their brief, argued:
"* * * This section [ORS 68.210(1)] raises at least two questions with respect to this transaction. First, did Vandehey execute an instrument in the partnership name for the purpose of apparently carrying on in the usual way the business of the partnership. Second, did Stone have knowledge that Vandehey, in fact, had no authority to act on behalf of Leonard.
"The answers to those questions are all in the negative. In the first place, no instrument was executed in a partnership name. On the contrary, the earnest money documents were in the name of Vandehey Development Co., and Leonard’s name does not appear anywhere on them with the exception of the penciled entry on the Addendum. * * * 99
It seems to me that the issue was at least arguably raised.
m
Subsections (1) through (4) of ORS 68.220 are limited by words to this effect: "* * * provided the act is one within the authority of the partner under [ORS 68.210(1)].”2 This brings me to the majority holding that because Stone was on notice that Vandehey’s authority was limited, the statute of frauds (ORS 41.580(6)) applies. The majority reason as follows:
*796"* * * [I]t would appear to follow that the act of a partner in selling real property when in the apparent scope of the partnership business is binding upon the partnership and the other partners without obtaining their written consent, notwithstanding the provisions of the statute of frauds, ORS 41.580(6), requiring the authority of an agent to sell real property to be in writing. Conversely, it would appear that when a partner cannot act except by express authority from the other partners by reason of the provisions of ORS 68.210 and 68.220, then the authority of such a partner is substantially the same as that of any other agent of the partnership in the sense that he must have express authority to act, with the result that when a partner undertakes to sell real property in such a situation his authority to do so must be in writing because of ORS 41.580(6).
* * * *
"These facts, based upon testimony offered by the plaintiff, make it clear that on the first day of the conversations between Mr. Stone and Mr. Vandehey, Mr. Stone was informed of the fact that Mr. Vandehey’s authority to sell the property was limited to a sale at a price not less than $15,500 per lot. In other words, Mr. Stone then 'had knowledge of the fact’ that Mr. Vandehey did not have authority as an agent of the joint venture, acting within the apparent or usual scope or course of the business of the joint venture under the initial provisions of ORS 68.210(1), to sell the real property being developed by it for the best price that he could negotiate. Instead, Mr. Stone then 'had knowledge of the fact’ that the authority of Mr. Vandehey was expressly limited to a sale at a price not less than $15,500 per lot.”
"It follows, to again paraphrase the final provision of ORS 68.210(1), that Mr. Vandehey 'had in fact no author^ ity to act for the (joint venture) in the particular matter’ (i.e., the proposed sale of the property at a price of $15,000 per lot as offered by Mr. Stone), and (Mr. Stone) Trad knowledge of the fact that he (Mr. Vandehey) had no such authority.’ It also follows, in our opinion-, upon application of the provisions of ORS 68.210 and 68.220, that because of that limitation upon the authority of Mr. Vandehey to sell the property, and because the title to that property was then held in his name, Mr. Vandehey had no authority to enter into an earnest money contract the next day for the sale of the property at a price of $15,250 per lot unless he had express authority from Mr. Leonard to do so as an *797agent of the joint venture and unless that express authority was in writing, as required by ORS 41.580(6) for agents selling real property.”
ORS 68.210(1) provides that the act of the partner binds the partnership "* * * unless [1] the partner so acting has in fact no authority to act for the partnership in the particular matter, and [2] the person with whom he is dealing has knowledge of the fact that he has no such authority.” Vandehey’s authority was unquestionably limited in that he could sell but only at $15,000; but that is not to say that he had "no authority to act for the partnership.” I fail to see why Stone’s knowledge as to Vandehey’s stated lack of authority to sell for $15,000 per lot, on one day, puts Stone on notice under ORS 68.210(1)' that Vandehey lacked authority to sell for $15,250, on the next.
The holding of the majority opinion may have significance far beyond this case, and may apply to any sales transaction in which a partner tells a would-be buyer or seller, "I have no authority to deal at that price.” As I understand the majority, once such a statement is made by a partner, the other party deals at peril, absent something more than the expression of the partner that the partner now has such authority. Thus, if a party (Mr. Buyer) is dealing with a partner (Mr. Seller) and Seller says that he has no authority to sell at a price less than $x + $5 on Monday, but calls on Tuesday and says that the deal can be made at $x, even if Seller confirms with a purchase order or other sales document, signed by Seller as "partner,” the partnership is not bound because Buyer, on Monday, was told by the partner that his authority was then limited. Under the majority opinion, Buyer, before dealing with Seller on Tuesday at the new price, would need to obtain some other verification or expression of Seller’s express authority (such verification, in the case at bar, being a writing complying with the Statute of Frauds).
In short, I do not believe that Stone’s knowledge of Vandehey’s limitation of authority on the first day necessarily compels the conclusion that Stone was thereupon on notice that Vandehey had "no authority to act for the partnership in the particular matter,” at a different price, on the next.
*798However, in view of the fact that the conveyance did not meet the requirements of ORS 68.220(4) (see Part II, above), I concur in the result.
Denecke, C. J., joins in this concurring opinion.

 In addition to the deed records, one such record might be the assumed business name filings. Under ORS chapter 648, a partnership is required to register an assumed business name with the Corporation Commissioner which lists "the real and true name of each person conducting or intending the business, or having an interest therein * * ORS 648.010(2)(b).

 Subsection (5) is not so limited because it covers the situation in whch title to real property is in the names of all partners and all the partners execute the document conveying title. Thus, no question of authority would arise.