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Wachter Development v. Gomke, 544 N.W.2d 127 (N.D. 1996)

This case demonstrates that co-owners are allowed to transfer their property interest without the consent of the other owners; however, this case also addressed the issue of whether a co-owner is obligated to transfer their property interest to a third party if another co-owner does not agree to the transfer.

Gomkes and Kilbers [owners] owned Lots 1-16, Block 6, Imperial Valley Subdivision, in Burleigh County. Wachter offered to purchase the property. All of the owners except Wayne Kilber, who was out of town, accepted the offer and signed the purchase agreement on February 7, 1995. The purchase agreement indicated that Arnold A. Gomke was an agent representing the sellers. When Arnold Gomke gave Wachter the signed purchase agreement, he attached a note stating: "4th owner will sign."

Wachter took steps to resell or develop the property and tendered payment for it. When the owners refused to complete the sale, Wachter sued for specific performance, damages, and such other "relief as the Court may deem just and equitable." Both sides moved for summary judgment. Wachter contended that the three owners who signed the purchase agreement were bound to convey their interests, regardless of whether the nonsigning owner was bound to convey, and that Wachter's partial performance took the agreement out of the statute of frauds, thus binding the nonsigning owner to convey. The owners contended that there was no enforceable contract because not all of the owners signed the contract.

...

Wachter contends that the three owners who signed the purchase agreement are bound to convey their interests in the property regardless of whether the nonsigning owner is similarly bound. The owners respond that "[t]he offer to purchase must be agreed to by all owners and if all don't agree, there is no contract" and that Wachter "may not force the three owners who did sign to sell and transfer their interest or respond in money damages."

Arnold and Luella Gomke owned one-half of the property as joint tenants. Similarly, Nyla and Wayne Kilber owned one-half of the property as joint tenants. Together, Gomkes and Kilbers owned the property as tenants in common. One joint tenant may convey his or her entire interest in the property to a third person. Robar v. Ellingson, 301 N.W.2d 653, 662 (N.D. 1981).

Joint tenants or tenants in common may sever the tenancy and convey their interests without the consent of all tenants, if they choose to do so. The question here is whether or not the three signing owners may be forced to convey their interests when a fourth owner did not sign the agreement.

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The parties have not adequately briefed the question of whether the signatures of some, but not all, owners should [bind the signors] ... depending upon whether or not there is a showing that the effectiveness of the signatures was conditioned upon obtaining the signatures of all owners. The parties will have the opportunity to brief this issue on remand.

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