majority vote. No exception is made anywhere in the Agreement requiring unanimous consent for the sale of the venture's property. To the contrary, paragraph 2 of the 1973 Amendment provides that "all provisions of the Agreement which are inconsistent with this paragraph [providing for majority rule] are hereby rescinded . . . ." Therefore, the Agreement clearly provides that a majority may agree to sell the property of the joint venture.
Defendant's argument that he cannot be forced to sell the property due to his status as a tenant in common is without merit. A tenancy in common is an estate in which there is a unity of possession, but separate and distinct titles. Each tenant has a right to possess the entire estate, but this right of possession is not exclusive. See J.M. Shober Farms, Inc. v. Merrill, 179 Pa.Super. 446, 448, 115 A.2d 384, 386 (1955); 14 Pennsylvania Law Encyclopedia, Estates in Property, § 41 at 26 (1959). Ordinarily, although a tenant in common may freely sell or otherwise dispose of his own interest in jointly held property, he may not act so as to prejudice the rights of his co-tenants. For example, a tenant in common may not unilaterally bind his co-tenants to an agreement concerning the use, control, or title to the joint property. See McKinley v. Peters, 111 Pa. 283, 3 A. 27 (1885). Nevertheless, a tenant in common may bind his co-tenants to an agreement affecting the ownership of the tenancy property if he or she has been authorized to enter into such an agreement or if the other co-tenants later ratify the agreement. See Caveny v. Curtis, 257 Pa. 575, 580, 101 A. 853 (1917); McKinley v. Peters, 111 Pa. 283, 286, 3 A. 27 (1885); Browning v. Cover, 108 Pa. 595, 599 (1885); 4A Powell on Real Property 633 (1982). Thus, tenants in common can agree that the property may be sold by majority vote.
By agreeing to the 1971 Amendment, the defendant has contractually authorized and empowered a majority of the joint venture to sell his interest in the venture's property along with their own, provided that the sale is one of the permissible activities of the venture.
Article I expressly includes the sale of venture property as a purpose of the joint venture. All members have agreed to be bound by and to execute and deliver all instruments and to do all things required to implement the decisions of the majority. Defendant may not now avoid the contractual obligations to which he has freely consented. There is no allegation of bad faith or fraud in either the contract or the proposed sale of the property.
This Court further construes the clear and unambiguous provisions of Article V as not granting to any member a right of first refusal with regard to a proposed sale of the entire venture property. A joint venture agreement is a contract to which all of ordinary rules of contractual construction apply. See Richardson v. Walsh Construction Co., 334 F.2d 334 (3d Cir.1964). Under Pennsylvania law, a contract is construed or interpreted so as to give meaning to the intent of its signatories.
"It is well established that the intent of the parties to a written contract is to be regarded as being embodied in the writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement." Steuart v. McChesney, 498 Pa. 45, 48-49, 444 A.2d 659, 661 (1982). In addition, a contract should be construed as a whole, whenever possible, giving legal effect to all of its parts. See Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1131 (3d Cir.1969); Atlantic Richfield Co. v. Razumic, 480 Pa. 366, 372-73, 390 A.2d 736, 739 (1978).
The clear and unambiguous language of Article V indicates that the parties intended to make the right of first refusal applicable only to the sale of individual membership interests in the ongoing joint venture and not to a transaction which would bring the venture to an end. The right of first refusal is contained in the Article entitled "CHANGES IN MEMBERSHIP." This heading along with the provisions in Article V that a purchaser of a membership interest execute appropriate documents agreeing to be bound by all of the terms and conditions of the Agreement as would an original member clearly show that the parties contemplated that the right of first refusal would apply to proposed sales of interests in the joint venture where the venture continued following sale.
Construing the right of first refusal as being effective only when a member proposes to transfer his or her interest in the ongoing joint venture is consistent with the usual purpose of such a clause in real estate joint venture agreements. Each joint venturer has an interest in maintaining some control over the transferability of interests in the enterprise.
For example, a member whose role it is to develop the property may want to be assured that the other members whom he relies upon to provide investment capital have sufficient economic capacity to make additional contributions. Likewise investor-members want to make sure that one who purchases the developer's interest has sufficient experience and ability to guide a successful project. All members will be wary of allowing transfers of membership interests to persons who are incompatible or whose reputations would be likely to reflect unfavorably upon their own. See Bell, The Real Estate Joint Venture, Real Estate Review, Fall 1983, at 34; Leon, Designing The Real Estate Joint Venture to Work, Real Estate Review, Spring 1973, at 33, 40; Leon, Some Basic Non-Tax Considerations in Preparing Real Estate Joint Venture Agreements in Joint Ventures in Real Estate 42 (1972) (Practising Law Institute, Real Estate Law and Practice Course Handbook No. 61).
Therefore, the right of first refusal contained in Article V of the Agreement applies only to the proposed sale of membership interests in a venture that will continue after the transfer. In this case, however, the sale of the venture's property will effectively end the venture, itself. In Richardson v. Walsh Construction Co., 334 F.2d at 336, the Third Circuit defined a joint venture under Pennsylvania law as follows:
A joint venture is an association of persons or corporations who by contract, express, or implied, agree to engage in a common enterprise for their mutual profit. The essential elements of a joint venture are: (a) a joint proprietary interest in, and a right to mutual control over, the enterprise; (b) a contribution by each of the parties of capital, materials, services or knowledge; and (c) a right to participate in the expected profits.