Real Property
Issue
The issue, in this case, lies in whether the agreement made between Fred and Ethel is enforceable as a restraint on alienation which would, in turn, prohibit Fred’s action to partition the property.
Rule
Restraint on alienation forbids the sale or handover of interest on a property. Partition of property, on the other hand, refers to the division of property into portions that represent the interest of the property owners; usually ordered by a court. The legal principles that should be applied in this case stem from the ruling of McGahey v. Wilson. The parties had purchased three acres of land together in 1975 and built a residence on it. However, they divorced in 1984 and entered into a settlement agreement that would allow them to retain ownership of the property as tenants in common. In 1999, McGahey sort to partition the property which after a lot of deliberation and years was approved by the court of appeals based on the particulars if their agreement. The court found that, in order to maintain the enforceability of an agreement not to sell, there needs to be a time limitation and adequate evidence of the reason for the restraint.
A similar case is that of Raisch v. Schuster whereby the court found that due to lack of purpose for restraint the court cannot find the reasonableness of the restraint involved. Consequently, such an implied covenant is void before a court of law. Additionally, Tennessee state laws on Section 29-27-101 provides that any individual having ownership of a property for life, years or by inheritance as a tenant in common or otherwise with others, is entitled to partition or sell for partition, the property under provisions of this chapter. This is a common law that gives property owners the freedom to do as they please with a property save for cases where a stipulated period is defined or where public parks and gardens are being put-up.
Analysis
The court may need to apply the precedents brought forth from McGahey v. Wilson and Raisch v. Schuster. This in conjunction with Tennessee law will assist them in coming up with a decision. Fred and Ethel purchased the property as tenants by the entirety; but upon their divorce, their status changed to that of tenancy in common. Therefore, Fred has the right; under Tennessee law, to withdraw from the co-tenancy at any given time. This is also backed by the fact that the clause highlighted in their divorce settlement does not stipulate definite time duration. The lack of a time limitation regarding the restriction also makes the agreement further unenforceable. Furthermore, there was no adequate evidence of reason for restraint on alienation. If it were to be deemed applicable, both parties should have presented a unanimous reason for the restriction. As such, Fred is also free to decide what to do with the property since Ethel cannot also afford to buy Fred’s portion of the property. The law is quite clear, and a good lawyer should have guided them on the need to highlight all the important elements of a contract prior to their amendment of the existing contract.
Conclusion
Based on McGahey v. Wilson, Raisch v. Schuster, and the Tennessee Code, it is quite probable for the court to find the agreement between Ethel and Fred unenforceable. Thus, Fred’s action to partition is likely to be granted.
References
McGahey v. Wilson, M2000-01931-COA-R3-CV (Tenn. Ct. App. 2001)
Raisch v. Schuster, 47 Ohio App. 2d 98, 352 N.E.2d 657 (Ct. App. 1975).
