Summary
The Supreme Court of Texas held that an agreement between parties to jointly acquire real property for the benefit of a partnership was not a contract for the sale of real estate subject to the statute of frauds. The court also concluded that the agreement did not create an express trust governed by Texas Property Code section 112.004. The court reversed the court of appeals' judgment and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether an agreement for two parties to jointly acquire real property, with title initially taken in one party's name for the benefit of their partnership, is a contract for the sale of real estate subject to the statute of frauds.
- Whether the Texas Trust Code's writing requirement for express trusts in real property applies when the parties' agreement is for the joint acquisition of property and no express trust was created or found.
Holdings
- An agreement for two or more persons to jointly acquire land for their mutual or partnership benefit, even when title is taken in one person's name, is not a contract for the sale of real estate and is not subject to the statute of frauds.
- The Texas Trust Code's writing requirement for trusts in real property does not bar enforcement of an agreement for joint acquisition of property when no express trust was created.
Key quotations
“The agreement found by the jury was that Alattar purchased the Property for Gates Bluebonnet. It was not an agreement for the sale of real estate nor did it create an express trust.”
“We conclude that neither the statute of frauds nor the Texas Trust Code bar the enforcement of the agreement.”
“We reverse the court of appeals’ judgment and remand to that court for further proceedings.”
Factual background
John Ganim and Farouk Alattar investigated properties for joint investment and visited a 3,800-acre tract in Washington County. Alattar signed an agreement to purchase the property, and the parties and their attorneys exchanged documents that culminated in a limited partnership agreement for Gates Bluebonnet Hills, Ltd. Alattar later denied that he had agreed to purchase the property for the partnership, while the property was conveyed to him as trustee without identifying a trust or beneficiaries. The jury found that the documents established an agreement for Alattar to purchase the property for the partnership and awarded Ganim damages.
Procedural history
Ganim sued Alattar after Alattar denied that Ganim had an interest in property purchased in Alattar's name. A jury found that six documents established an agreement that Alattar purchased the property for the benefit of Gates Bluebonnet Hills, Ltd., that Alattar breached the agreement, and that Ganim was damaged. The trial court rendered judgment for Ganim. The court of appeals reversed and rendered judgment for Alattar, concluding that the agreement was subject to and did not satisfy the statute of frauds. The Supreme Court of Texas reversed and remanded to the court of appeals for further proceedings.
Remand instructions
The Supreme Court of Texas remanded the case to the Court of Appeals for the Fourteenth District of Texas for further proceedings on issues not addressed by that court.