Weingart v. C W Taylor Partnershi ( 1991 )

No. 87-437
IN THE SUPREME COURT OF THE STATE OF MONTANA
1991
ALEX WEINGART, JR., Individually and
as Personal ~epresentativefor
RITA WEINGART, deceased, and
NORMA J. WEINGART,
Plaintiffs and Appellants,
-vs-
APR 11 199:
C & W TAYLOR PARTNERSHIP, CHARLES
R. TAYLOR, WYMAN D. TAYLOR, J. ANTHONY
DEDE, M.D., ROBERT McCROSKEY, M.D. and
CJ s m, l f ~
CLERK OF SUPREI)~; COUR7
JENNIE OSTLER, STATE OF i M ~ l ~ + , q p J ~
Defendants and Respondents.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter L. Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Robert L. Johnson, Attorney at Law, Lewistown,
Montana
For Respondents:
Keith A. Maristuen; Bosch, Kuhr, Dugdale, Warner,
Martin & Kaze, Havre, Montana (for Respondent
McCroskey)
J. Michael Young, Attorney at Law, Great Falls,
Montana (for Respondents W.D. Taylor, C & W
Partnership and C.R. Taylor)
Carl A. Hatch, Attorney at Law, Helena, Montana (for
Respondent Ostler)
Submitted on Briefs: December 13, 1990
~ecided: April 11, 1991
Filed:
Justice William E. Hunt, Sr., delivered the Opinion of the
Court.
Alex Weingart, Jr., individually and as personal
representative for Rita Weingart, deceased, and Norma J.
Weingart appeal from a decision of the District Court of the
Tenth Judicial District, Fergus County, Montana, granting
summary judgment to respondents, J. Anthony Dede, M.D., Robert
McCroskey, M.D., and Jennie Ostler on the ground that they were
not personally liable to the Weingarts on a contract for deed.
We affirm.
The sole issue is whether the District Court erred in
granting summary judgment to respondents for breach of the
contract between appellants as sellers and Charles R. Taylor
and Wyman D. Taylor as buyers, to purchase appellants1 ranch.
Appellants argued that respondents, J. Anthony Dede, M.D.,
Robert McCroskey, M.D., and Jennie Ostler, were personally
liable to appellants on one or more of three theories: first,
a general partnership; second, a joint venture; and third, an
agency.
Brothers Charles W. Taylor and Wyman D. Taylor formed the
C & W Taylor partnership to purchase the Weingart ranch.
Respondents, J. Anthony Dede, M.D., Robert McCroskey, M.D., and
Jennie Ostler, contributed $55,000 each Ifto enable Charles R.
Taylor and Wyman D. Taylor to purchase the ranch lands1'on or
before December 18, 1981, and signed the "Agreement To Share
General Partner Interest."
This agreement was created in advance of formation of a
limited partnership to make the purchase of the Weingart ranch
possible. The agreement provided that Charles Taylor and Wyman
Taylor would buy the ranch "with the intent to transfer said
land to a limited partnership to be known as C & W Limited
partnership, whereunder they [Charles Taylor and Wyman Taylor]
would become the general partners and managing partners." The
agreement noted that the Ivlimitedpartnership agreement has not
been effectuated.
The limited partnership was not formed before the next
installment on the ranch became due May 20, 1982. C & W Taylor
could not raise the additional capital to make the payment, and
the Weingarts served notice of default upon C & W Taylor on
June 21, 1982. The Weingarts closed the escrow and removed the
documents from the escrow file. C & W Taylor strongly argued
that it had 120 days, as provided in the contract, to cure
default by making payment.
When the second installment due under the land sale contract
was not made, Charles Taylor contacted the Weingarts and
negotiated what C & W Taylor believed was a termination of the
land sale contract on September 20, 1982. The terms of the
agreement were alleged to be (1) forfeit of the $210,000
initial payment to the Weingarts; and (2) reinvestment of title
and interest in the ranch to the Weingarts by executing and
delivering a quit claim deed and bill of sale and reassigning
all BLM leases to the Weingarts.
The Weingarts brought this action for specific performance
or damages against C & W Taylor as the buyer designated in the
contract for deed, and respondents J. Anthony Dede, M.D.,
Robert McCroskey, M.D., and Jennie Ostler, alleged to be
vicariously liable.
The action was delayed by bankruptcy proceedings involving
McCroskey and by resolution of another suit related to this
transaction. See Taylor v. Weingart (1984) , 214 Mont. 282, 693
P.2d 1231. All parties moved for summary judgment. On
September 10, 1987, the District Court granted summary judgment
in favor of respondents. The District Court denied partial
summary judgment to the Weingarts and denied summary judgment
to C & W Taylor on the ground that genuine issues of material
fact existed between them. From the grant of summary judgment
to respondents, the Weingarts appeal.
The Weingarts maintain that the District Court erred in
granting summary judgment to respondents because respondents,
as either undisclosed partners, undisclosed joint venturers,
or undisclosed principals, were personally liable on the
contract of sale between the Weingarts and C & W Taylor.
Respondents contend that as investors, rather than partners,
joint venturers, or principals, they were not liable on the
contract of sale.
Summary judgment is proper where no genuine issue of any
material fact exists and the moving party is entitled to
judgment as a matter of law. Rule 56(c), M.R.Civ.P. ; First
Security Bank of Bozeman v. Jones (1990), 243 Mont. 301, 303,
794 P.2d 679, 681. Since the facts are undisputed, the issues
are matters of law and summary judgment is appropriate.
Partnership
A partnership is defined as Itanassociation of two or more
persons to carry on as co-owners a business for profit.I1
Section 35-10-201, MCA. To determine existence of a
partnership four requirements must be met: (1) the parties
must clearly manifest their intent to associate themselves in
a partnership relationship; (2) each party must contribute
something that promotes the enterprise; (3) each party must
have a right of mutual control over the subject matter of the
enterprise; and (4) the parties must agree to share profits.
Montana Bank of Red Lodge, N.A. v. Lightfield (1989), 237 Mont.
41, 45, 771 P.2d 571, 574; Bender v. Bender (1965), 144 Mont.
470, 480, 397 P.2d 957, 962.
The Agreement to Share General Partner Interest states the
clear intent by respondents to eventually become limited
partners and nowhere shows they had any right of mutual control
over the Weingart ranch, either in management of the ranch
itself or in control of the ranch as an investment. Without
a showing of that control, the third requirement to establish
a partnership was not fulfilled. Therefore, respondents were
not general partners of C & W Taylor and could not be liable
on the contract for deed. The District Court did not err in
concluding that respondents were not general partners.
Joint Venturers
To qualify as joint venturers four elements must be met: (1)
an express or implied agreement or contract creating the joint
venture; (2) a common purpose among the parties; (3) community
of interest; and (4) an equal right of control of the venture.
Papp v. Rocky Mountain Oil & Minerals (1989), 236 Mont. 330,
342 ; 769 P.2d 1249, 1257. Although management may be delegated
to one joint venturer while the others retain the right of
control, Murphy v. Redland (1978), 178 Mont. 296, 583 P.2d
1049, it must be an equal right of control. Here the
respondents did not have an equal right of control of the
venture. Therefore, the court did not err in concluding that
respondents were not joint venturers with Charles and Wyman
Taylor.
Principal/Aqent
The appellants next contend that the Agreement to Share
General Partnership Interest created an agency relationship to
allow the Taylors to acquire the Weingart ranch for the mutual
benefit of the five investors and that respondents were
undisclosed principals.
I
An agent is "one who represents another, called the
principal, in dealings with third persons. l1 Section 28-10-
101, MCA. '
I 'Agency is the fiduciary relation which results
from the manifestation of consent by one person to another that
the other shall act on his behalf and subject to his control. 'I1
Koch v. Yellowstone County (1990), 243 Mont. 447, 453, 795 P.2d
454, 458 (quoting Restatement (Second) of Aqency 5 1 (1957));
Wolfe v. Schulz Refrigeration (1979), 188 Mont. 511, 517, 614
P.2d 1015, 1018. An agency relationship did not exist between
the Taylors and respondents because the Taylors were not
subject to respondents1control. Although respondents supplied
capital, the Taylors did not represent respondents in dealing
with the Weingarts. As we determined above, respondents were
not general partners of C & W Taylor. The Land Sale Contract
is between the Weingarts and I1Charles R. Taylor and Wyman
Taylor, co-partners, doing business as C & W Taylor
Partnership.I1 The court did not err in concluding that
respondents were not joint venturers with Charles and Wyman
Taylor.
The judgment of the District Court is affirmed.
w
Justice John C. Sheehy did not parti.cipate in this decision.