Lindsay-Field v. Friendly: One Co-Owner Can’t Sign Away Your Share

One co-owner cannot sell, lease, or sign a contract over another co-owner’s share unless that owner agreed. In Lindsay-Field v. Friendly (1995) 36 Cal.App.4th 1728, 1734–1735, the Court of Appeal held that “[a] cotenant has no authority to bind another cotenant with respect to the latter’s interest in common property,” except as the co-owners have agreed between themselves. Because the owners who said no had never given that authority, a $400,000 judgment based on the deal was reversed.

The property in this case was a racehorse (co-owned personal property can be partitioned too), but the rule is the same one that protects co-owners of a house or a commercial building. It is why a co-owner cannot list the whole property with only their own signature, why a co-owner’s loan reaches only their own share, and why the owners who want a sale need a partition action rather than a vote.

Why Lindsay-Field v. Friendly Matters

1. A co-owner cannot bind your share without your consent. Authority comes only from you or from an agreement you signed. (Lindsay-Field, at pp. 1734–1735.)
2. A majority does not rule unless the co-owners agreed it would. Owners who approved the deal had no power over the owners who did not, except under the voting rules in their own agreement. (Lindsay-Field, at p. 1735.) That is why co-owners who want to sell file a partition action instead of taking a vote, and why a majority owner cannot block one.
3. Buyers and tenants act at their own risk. Anyone dealing with a co-owner who claims to speak for the others must find out whether that authority is real. (Lindsay-Field, at p. 1734.) A buyer who deals with only one co-owner gets only that owner’s share.
4. A deal that needs every owner is all or nothing. The court refused to enforce the contract against only the owners who voted yes. (Lindsay-Field, at pp. 1735–1736.)

The Facts: A Stallion, a Ballot, and a Deal the Owners Voted Down

The Naevus Syndicate owned a retired racehorse named Naevus in 40 undivided shares, and the jury found the owners were tenants in common, not partners. Dick Sturgis, the syndicate manager, owned 21 of the 40 shares, a majority interest. Under the syndicate agreement, the owners acted by majority vote at a meeting, needed 75 percent to amend the agreement or sell the horse, and could act without a meeting only by unanimous written consent. (Lindsay-Field, at pp. 1731–1732.)

In June 1987, Australian horse breeders and their American agent proposed to ship Naevus to Australia every breeding season, for $100,000 the first year and an option on his southern hemisphere breeding rights for life. Sturgis mailed the owners a ballot. Most of them voted yes. One owner did not respond, and the trustee for an owner holding 5 of the 40 shares voted no and asked for a meeting. Sturgis then signed the agent’s letter “On behalf of the Owners,” with a handwritten note that the deal depended on a more formal agreement. (Lindsay-Field, at pp. 1732–1733.)

At the meeting on July 10, 1987, the owners voted not to go forward. The breeders sued for breach of contract. A jury awarded $400,000 against the owners who had voted yes on the ballot, split among them by their ownership shares. The owners appealed to the Court of Appeal’s Second District, which sits in Los Angeles. (Lindsay-Field, at pp. 1731, 1733.)

How the Court of Appeal Decided the Case

A Co-Owner Has No Authority Over Another Co-Owner’s Share

The breeders argued that the yes ballots gave Sturgis actual authority to sign for the owners. The court disagreed, starting from the basic rule of co-ownership:

“A cotenant has no authority to bind another cotenant with respect to the latter’s interest in common property …, except as they may have agreed between them.”

Lindsay-Field v. Friendly (1995) 36 Cal.App.4th 1728, 1734–1735

The owners who returned yes ballots “had no authority to bind the objecting cotenants, except in accordance with the syndication agreement.” (Lindsay-Field, at p. 1735.) The agreement allowed action without a meeting only by unanimous written consent. One no vote and one unreturned ballot meant there was no unanimity, so the decision had to be made at a meeting, and at the meeting the owners said no. In the same way, heirs cannot sell an inherited house by majority vote, but any one of them can force a sale through partition.

The Deal Could Not Bind Only the Owners Who Voted Yes

The jury had tried to split the difference by holding only the yes voters liable. The court rejected that approach. The deal was not a sale of individual shares; it required the whole horse to go to Australia. “It could not be satisfied by sending 85 percent of the horse to Australia.” (Lindsay-Field, at p. 1735.) Either the contract bound every owner under the agreement’s rules, or it bound no one.

“There was no binding contract because the members voting yes had no authority to bind the other cotenants, except as provided in their agreement, and the agreement’s requirements for unanimous written consent or 75 percent at a meeting were not satisfied.”

Lindsay-Field v. Friendly (1995) 36 Cal.App.4th 1728, 1736

The Buyers Had to Check the Manager’s Authority

The court also rejected the claim that Sturgis appeared to have authority. The breeders’ agent knew a vote of the owners was required, never asked to see the syndicate agreement, and relied only on what Sturgis told him. Apparent authority must come from the conduct of the owners themselves, not from the person claiming it, and “persons dealing with an assumed agent are bound at their peril to ascertain the extent of the agent’s authority.” (Lindsay-Field, at p. 1734.) The owners’ silence before the meeting was not a ratification either, because the meeting was the proper place to object. (Lindsay-Field, at p. 1736.)

The Result

The Court of Appeal reversed the $400,000 judgment and directed the trial court to enter judgment for the owners. The breeders’ own appeal, which sought more money, was dismissed as moot. (Lindsay-Field, at pp. 1731, 1736.)

What Lindsay-Field v. Friendly Means for California Co-Owners

1. Your co-owner cannot sell, lease, or borrow against your share without you. A listing, lease, or loan signed by one owner reaches only that owner’s interest. See Swartzbaugh v. Sampson on leases and whether one co-owner can take out a loan. Even moving the property into a company without your consent does not defeat your partition, as Capuccio v. Caire (1922) held.
2. Owning the most shares does not mean you are in charge. Sturgis held 21 of 40 shares and still could not bind the others. Majority control exists only if your agreement creates it, and even then, a majority owner cannot stop a partition. See also your rights as a one-third owner.
3. Read your co-ownership agreement. If you signed a tenancy in common agreement or an operating agreement, its voting rules may decide who can act for the group. It should also say plainly that the right to partition is not waived. Even a right of first refusal does not waive partition.
4. When the owners cannot agree, no one needs a vote to get out. Under Code of Civil Procedure section 872.210, any co-owner can file for partition, and the court can order a sale without the others’ consent. Our guide to the absolute right to partition explains why, and even a minority owner can force a partition.

Co-Owners Can’t Agree on a Sale? A Partition Action Doesn’t Need Their Vote

Lindsay-Field shows how hard it is to make a deal when one co-owner says no. A partition action replaces that standoff with a court order: under Code of Civil Procedure section 872.710, partition is a matter of right, and the court can sell the property even when your co-owners object.

Talkov Law can help. With 12 full-time partition attorneys and experience in over 650 partition actions throughout California, our team handles every step, from the complaint through the partition sale and the final distribution of proceeds. Call (877) PARTITION (727-8484) today or contact us online to get started.