Marth v. Edwards, 90-0967

Decision Date19 December 1990
Docket NumberNo. 90-0967,90-0967
Citation465 N.W.2d 248,159 Wis.2d 773
PartiesWilliam J. MARTH and June Marth, his wife, Plaintiffs-Counter Claimants-Defendants, v. William A. EDWARDS and Violet Edwards, his wife, Defendants-Counter Claimants-Cross Claimants-Plaintiffs-Appellants, Arthur W. Guenther, Jr., Defendant-Cross Claimant-Defendant. VALLEY BANK OF KEWASKUM and Washington County, Defendants, v. Robert A. SWOBODA, individually and as a partner of the Greenbriar Partnership, Additional-Counter Claimant-Cross Claimant-Defendant, David Doerr, Lee A. Doerr, Jr., Brian Zimmermann and James Brzezinski, individually and as partners of the Greenbriar Partnership, Additional-Counter Claimants-Cross Claimants- Defendants- Respondents.
CourtWisconsin Court of Appeals

Brian T. Rogga of Fellows, Piper & Schmidt, Milwaukee, for defendants-counter claimants-cross claimants-plaintiffs-appellants.

Susan LaCava, Henry J. Loos and Samuel J. Recht of Quarles & Brady, Milwaukee, for additional-counter claimants-cross claimants-defendants-respondents.


BROWN, Judge.

The question on appeal is: When it is alleged that a partnership agreed to purchase real estate, but there was no express authority of the alleged agent to bind the partnership to a contract to purchase real estate and the partnership was not identified in the contract or by the alleged agent's signature, did the trial court correctly dismiss the case against the partnership under the statute of frauds, particularly sec. 706.03(1), Stats.? We hold that the answer is "yes" and reject an "apparent authority" argument founded upon secs. 178.07 and 178.06(1), Stats., of the Wisconsin Uniform Partnership Act.

Robert Swoboda is the alleged agent. On June 29, 1982, he offered to exchange four condominium lots, allegedly titled to Greenbriar Partnership, and $25,000 for William and Violet Edwards' tavern. Swoboda's offer was signed by him, with no indication either in the body of the document or by his signature, that he was acting on behalf of a partnership. The Edwardses accepted the offer and the transaction closed on October 5, 1982. The closing statement also failed to indicate that Swoboda was acting on behalf of the partnership.

On October 6, Swoboda entered into a buy-back agreement with the Edwardses in which he agreed to buy the lots from the Edwardses over a four-year period. Again, no mention was made, either by Swoboda's signature or within the document itself, that Swoboda was acting on behalf of the partnership. A year later, the buy-back arrangement was renegotiated calling for Swoboda to make one lump sum payment. This document was also silent concerning whether Swoboda was acting on behalf of another party.

Eventually, the Edwardses were sued by William J. Marth, their realtor. The Edwardses then sued Swoboda for breach of the buy-back agreement. The Edwardses also sued Greenbriar Partnership and David Doerr, a partner in Greenbriar with Swoboda. They reasoned that Swoboda was an agent of the partnership with apparent authority to bind the partnership and Doerr to the supplemental buy-back agreement. The trial court dismissed the action against Greenbriar and Doerr based on the statute of frauds. The Edwardses appeal.

The trial court's decision is founded upon sec. 706.03(1), Stats., which applies to instruments affecting land that are signed by agents. The statute reads as follows:

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.


The trial court properly determined that the statute imposes two requirements: first, the agent must be expressly authorized; second, the authorizing principal must be identified as such in the conveyance or in the form of signature or acknowledgment. The trial court held that neither of these requirements had been met. There was no showing that Swoboda was expressly authorized to bind the partnership to a real estate contract on his signature alone. To the contrary, the Partnership Agreement required the signature of two persons. In addition, the partnership was not identified in either the body of the buy-back agreement or by Swoboda's signature.

The Edwardses concede that sec. 706.03(1), Stats., was not satisfied, but they argue it is immaterial because sec. 706.03 governs conveyances signed by "agents, officers and guardians." Thus, sec. 706.03(1) concerns "principal-agent" relationships generally. The Edwardses assert, however, that sec. 178.07, Stats., pertains to a specific species of the principal-agent relationship--the partnership. The Edwardses reason that since partners are agents of the partnership as provided in sec. 178.06(1), Stats., secs. 706.03(1) and 178.07 conflict and are therefore ambiguous with respect to "agency." The Edwardses claim that sec. 178.07 is the more specific in that it relates expressly to transactions between partnerships and partners, while sec. 706.03(1) speaks to principal-agent relationships generally. The Edwardses conclude that sec. 178.07 controls.

The construction of secs. 706.03(1) and 178.07, Stats., is a question of law which this court must consider de novo. See Central Nat'l Bank v. Dustin, 107 Wis.2d 614, 617, 321 N.W.2d 321, 322 (Ct.App.1982). If the statute's meaning is clear on its face, the reviewing court need not look outside the statute to determine legislative intent. See Wisconsin Elec. Power Co. v. Public Serv. Comm'n, 110 Wis.2d 530, 534, 329 N.W.2d 178, 181 (1983).

There is no question but that sec. 706.03(1), Stats., is clear on its face. Section 178.07, Stats., is also clear on its face. The latter consists of five numbered paragraphs fully set forth in the footnote below. 1 None of the paragraphs pertains to a partnership or partner buying real estate. Rather, the sections discuss only the conveyance of partnership real estate. Since we are here dealing with the buying of real estate by Swoboda, the whole of sec. 178.07 is inapplicable. On that ground alone, the Edwardses lose.

The Edwardses alternatively argue that sec. 178.06(1), Stats., instead of sec. 706.03, Stats., controls in this case. Section 178.06(1) 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....

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3 cases
  • Wyss v. Albee, 92-2572
    • United States
    • Wisconsin Court of Appeals
    • September 23, 1993
    ...matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. In Marth v. Edwards, 159 Wis.2d 773, 465 N.W.2d 248 (Ct.App.1990), William and Violet Edwards sued Greenbriar Partnership and Doerr, one of Greenbriar's partners, for breach of a real est......
  • State v. Riley
    • United States
    • Wisconsin Court of Appeals
    • September 8, 1999
    ... ... United States v. Edwards, 415 U.S. 800, 807 (1974). This rule applies to one who is taken into custody on a probation/parole ... ...
  • Wyss v. Albee
    • United States
    • Wisconsin Supreme Court
    • May 31, 1995 act as an agent," and sec. 706.03, Stats., controls. The facts of this case are similar to those in Marth v. Edwards, 159 Wis. 2d 773, 465 N.W.2d 248 (Ct. App. 1990). In that case, William and Violet Edwards sued Greenbriar Partnership and Doerr, one of Greenbriar's partners, for breach ......

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