Lawer v. Kline

• Decision Date: 16 October 1928
• Docket Number: 1488
• Citation: 39 Wyo. 285,270 P. 1077
• Parties: LAWER v. KLINE [*]
• Court: Wyoming Supreme Court

270 P. 1077

39 Wyo. 285

LAWER v. KLINE ^[*]

No. 1488

Supreme Court of Wyoming

October 16, 1928

APPEAL from District Court, Fremont County, HARRY P. ILSLEY, Judge.

Action by H. C. Lawer against E. A. Kline, et al., co-partners in business as Kline's. There was a judgment for plaintiff and defendants appeal.

Affirmed.

M. C Burk and John D. Dawson, for appellants.

Our statute of frauds, 4719 C. S. differs from the English statute in two vital respects, (1) the English statute says that "No action may be maintained" and also includes the following: "Or their agent thereunto duly authorized." There are authorities holding that there is no vital difference between the English statute and statutes such as ours, but there are other authorities, based upon statutes such as ours, holding contracts such as the one involved, to be void and not merely voidable. Page on Contracts--Vol. 2, Sec. 1400, page 2403 and notes. Hanson v. Merriam, 151 N.W. 195; the point was indirectly covered in Williams-Hayward Co. v. Brooks, 9 Wyo 424, and in Oil Company v. Gibson, 19 Wyo. 8, and Davison, et al. v. Nicholson, 37 Wyo. 412. One partner is without implied authority, to contract on behalf of the firm, for a lease of property for partnership purposes. Lindley, 9th Ed., p. 200; Funk v. Young, 241 Pa. 72; Larkin v. Faggen, 71 Pa., S.Ct. at page 430, 30 Cyc. 490. A lease for a term of three to five years is, under our statute, a conveyance and governed by the general rules prescribed for the execution and delivery of conveyances. Secs. 4576-4579 C. S. The defense was sufficiently raised by a general denial. The subsequent agreement reducing the rental was binding, 25 R. C. L. 709. It was based on sufficient consideration. Page on Contracts 105. If it be held that the original lease was binding in the first instance, or by subsequent ratification, then the acts of plaintiff in re-taking part of the premises constituted a violation of the lease and defendants are entitled to an offset for a breach of the agreement, 16 R. C. L. 763, 766. The court erred in not holding the lease of January 8, 1923, void and in not holding that plaintiff had breached his agreement and in assessing damages for defendants. Defendants being in possession under an old lease, pursuant to which they paid the stipulated rental, and continuing to hold under the old lease, does not establish ratification of the alleged agreement.

A. C. Allen and O. N. Gibson, for respondent.

Every partner is an agent of the partnership for the purpose of its business including the execution of instruments for carrying on the business in the usual way. 4180 C. S. 30 Cyc. 490; Marks v. Chumos, (Kas.) 109 P. 397; Kenyon v. Johnson, (Minn.) 174 N.W. 436. The alleged subsequent agreement was not supported by a consideration, 36 C. J. 346; Goldsborough v. Gable, (Ill.) 29 N.E. 722; Bowditch v. Chickering, (Mass.) 30 N.E. 92; Campbell v. Spare, (Calif.) 179 P. 384; 36 C. J. 346. Having entered into possession lessee cannot question the validity of the lease. Lanique v. Plummer, 196 P. 300. To permit the objection after lessee has enjoyed possession and use after years of silence, would promote injustice. Hefferman v. Davis, 140 P. 719. Occupation of the premises and payment of rental according to terms of the lease, is usually held to be a ratification by lessee, of a defective lease or even one voidable for fraud, 35 C. J. 1169. A mere trespass by the landlord, not intended as a permanent expulsion, does not amount to an eviction, 36 C. J. 257, 258, 262. The alleged reduction of rent was shown by plaintiff's testimony to be a mere temporary indulgence, without thought of abandoning the requirements of the lease; there was no consideration to support a modified, or new agreement, reducing the rental rate, 36 C. J. 346; and cases cited; Gordon v. Green, (Cal.) 197 P. 955; Dodge v. Chapman, (Cal.) 183 P. 966. Defendants counter claim for damages for failure to repair and for the maintenance of the filling station was not sustained by evidence and the finding to that effect was without error.

BLUME, Chief Justice. KIMBALL and RINER, JJ., concur.

OPINION

BLUME, Chief Justice.

This was an action for rent brought by H. C. Lawer against E. A. Kline, David Kline and Morris Kline, co-partners doing business under the firm name of Kline's. Eight actions, each brought to recover rent, were consolidated and tried as one action. The plaintiff recovered judgment for the sum of $ 1699.94, less a deduction of $ 416.06, and the costs of the action. From the judgment so rendered, the defendants appeal. The parties will be hereinafter named as in the court below. The partnership conducted a clothing business in the town of Riverton. The term during which it was to last does not appear, but it seems to have been unlimited as to time.

Each of the actions was brought to recover rent, though for different periods, under a written lease made and executed on January 8, 1923 and signed by H. C. Lawer as lessor, and the partnership above named, by David Kline, one of the partners, as lessee. The lease was for the period of five years, and reserved a monthly rental of $ 177.50 for the first two years and a monthly rental of $ 190 during the remainder of the term. The dispute herein arises by reason of the increased rental during the last three years. It was contended by the defendants that according to the verbal arrangements made previous to the execution of the written lease, it had been agreed that the lease of January 8, 1923 should be upon the same terms and conditions as a previous lease for these premises, which, too, was for five years and which reserved a rental of $ 177.50 per month throughout the term, and that David Kline, one of the partners, had no authority to execute the lease in question, and that the only partner who had such right was E. A. Kline. The defendants claim that the plaintiff had knowledge of the limited authority of David Kline, but this was denied by the plaintiff, and the court having found in favor of the latter, this disputed point must be deemed to be settled herein accordingly.

1. The main question herein is as to whether or not the lease of January 8, 1923, was binding on the partnership. Counsel for defendant contend that it was void, for the reason that the person signing had no authority to bind the partnership or the other members of the partnership to a lease for a term of years, and that, further, the lease comes within the provisions of the statute of frauds which provides, among other things (Section 4719, W. C. S. 1920):

"In the following cases every agreement shall be void unless such agreement or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith: * * * Every agreement or contract for the sale of real estate, or the lease thereof, for more than one year."

The assignment of error involves, it will be noticed, two distinct questions, namely, (1) whether a partner has implied authority to execute a lease on behalf of the partnership for a term of years--in this case for five years, and (2) whether the lease is violative of the statute of frauds above mentioned. We shall discuss these questions in the order named.

The first point arose in the English courts in 1856 in the case of Sharpe v. Milligan, 22 Beav. 606, 52 Eng. Rep. 1242. In that case one of the partners had executed a lease for the partnership to last for the period of twenty-one years, and the Master of the Rolls said on this point as follows:

"I do not think it necessary to decide this point, but I am disposed to concur in the argument that where persons simply enter into an agreement to carry on a partnership of which the term is not fixed, one of those partners would not have authority within the scope of the partnership contract to take a lease for twenty-one years and to bind the other partners."

It may be noted that the Master of Rolls based his reason apparently upon the ground that a partner had no right to make a lease beyond the term for which the partnership was to last. He would not presume that one formed for a term which was not fixed would last for twenty-one years. The case is of doubtful authority in favor of the defendants, for the reason that leases for twenty-one years are, perhaps, somewhat unusual in case of partnerships, while leases of five years are not, and it is not unlikely that the Master of Rolls might have presumed, in case of a partnership formed for an indefinite period of time, that it would continue for at least five years.

In Kock, et al. v. Endriss, et al., 97 Mich. 444, 56 N.W. 847, decided in 1893, the court held that the lease was not binding, inasmuch as it was a specialty, the court saying in part:

"It is a general rule of law that one partner cannot bind his co-partner upon a specialty unless he is authorized under seal, or unless he executes the instrument in the presence of and with the assent of his partner, or unless there is a prior parol assent or subsequent parol ratification."

That, too, was the holding in the case of Larkin & Co. v. Faggen, 71 Pa.Super. 430, in which the court said, among other things:

"It is conceded by the learned counsel for the appellant that one partner cannot bind another by a sealed instrument, and many authorities compel this concession, among which is the recent case of Funk v. Young, 241 Pa. 72, 88 A. 291. The implied authority arising out of the relationship to bind each other is limited to ordinary dealings within the scope of the business of the partnership, but contracts under seal relating to future action are out of the usual course of business and are not recognized as binding upon non-assenting partners."

Bates on Partnership, Sec. 413, commenting upon the rule...