Brown v. Hallisey

Massachusetts Superior Court · 2004 · Corporations

18 Mass. L. Rptr. 675 (2004)

Updated August 22, 2026

CorporationsPartnershipsDissolutionPartnership propertyManagement authoritypartnershipjoint venturetenancy in partnership

Facts

In 1990, Brown, Trainor, and Hallisey agreed to acquire and manage the property at 29 Main Street in Orleans for profit, with unequal initial contributions but equal one-third shares in profits and losses. Their written agreement said title would be taken as co-tenants, but it also provided that two of the three could decide "all matters affecting the premises," binding the third, except that all three had to agree before one partner could occupy space in the building. For years the venture operated profitably through a single account, but Hallisey later denied that the arrangement was a partnership, insisted that leases required all three signatures, fired the bookkeeper, withheld access to accounts, and refused to reimburse Brown and Trainor for a septic system they paid for. Brown and Trainor then executed leases and a purchase and sale agreement by majority vote and sought dissolution and equitable relief.

Issue

Whether the parties' 1990 agreement created a partnership, with the real estate held as partnership property, rather than only a joint venture or tenancy in common; and, if so, whether Hallisey's conduct dissolved the partnership and limited Brown and Trainor's authority to bind it thereafter.

Rule

A partnership exists when two or more persons associate as co-owners of a business for profit. The parties' written agreement may vary default partnership rules, and an agreement granting two of three partners authority over "all matters affecting the premises" can create majority control broader than G.L.c. 108A, §18. Property acquired and operated with partnership funds and under such an agreement may be held as tenancy in partnership even if the agreement or conveyances refer to co-tenancy. A partner's repudiation of the partnership and breach of partner obligations can cause dissolution under G.L.c. 108A, after which the partnership may act only to wind up its affairs.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Maine, Avery Cole, Nina Patel, and Derek Sloan signed a written agreement to acquire and operate a small office building for rental income. The agreement said title would be taken "as co-tenants," but it also required equal sharing of profits and losses and provided that any two of the three could decide "all matters affecting the property," except that all three had to agree before one of them could move a separate business into the building.

If Derek later argues that the arrangement created only a tenancy in common because the agreement used the term "co-tenants," which is the strongest response?

Explanation. The majority opinion focused on substance over labels. A written arrangement to own and manage real estate for profit, with shared profits and losses and broad majority control over matters affecting the property, can create a partnership and tenancy in partnership even if the document says title is held as co-tenants. The label does not defeat partnership status where the agreement shows a continuing profit-making business and surrender of individual control.