Bennett v. Harrison (In re Bennett)

• Decision Date: 04 August 1911
• Parties: In re BENNETT et al. BENNETT et al. v. HARRISON et al.
• Court: Minnesota Supreme Court

115 Minn. 342

132 N.W. 309

In re BENNETT et al.BENNETT et al.

v.HARRISON et al.

Supreme Court of Minnesota.

Aug. 4, 1911.

Appeal from District Court, St. Louis County; Homer B. Dibell, Judge.

Application by Russell M. Bennett and others to register title to land. From an order denying a motion for a new trial, Bennett and others appeal. Reversed and remanded with directions.

Syllabus by the Court

A ‘part performance,’ to take an oral agreement to convey real estate out of the statute of frauds, must be substantial, and of such a nature that the refusal to enforce the agreement would result, not merely in the denial of the right which the agreement was intended to confer, but in an ‘unjust and unconscientious' injury.

One having no interest in land, legal or equitable, at the time a deed was executed by the owner to a third party, cannot assert the rights of a mortgagee therein against the grantee, solely by virtue of an oral agreement made by the grantee to convey the land to him upon payment of a certain sum.

In this case, land was conveyed by the owner to the applicants; they having orally agreed to thereafter convey an interest to the defendant upon payment by him to them, at any time within three years, of a specified sum. The defendant had no interest, legal or equitable, in the land at any time prior to the conveyance thereof to applicants. Held:

(a) That the fact that the defendant had a possible broker's opportunity to find other purchasers for this land, and that he acted for applicants in negotiating a purchase, was not such a change of defendant's situation in ‘part performance’ of the oral agreement as to render the same enforceable.

(b) That through such transaction the defendant did not acquire in the land included in the agreement the equitable interest or title of a mortgagor. Van Derlip & Lum, for appellants.

Baldwin, Baldwin & Dancer and John G. Williams, for respondent Harrison.

W. G. Bonham, for respondent Chesebrough.

SIMPSON, J.

This is an application to register title to lot 5, township 58 north, range 15 west. After issue joined and trial, the court, by amended findings and decree, determined that Russell M. Bennett was the owner of an undivided seven-eighteenths of lot 5, Edmund J. Longyear of an undivided seven-eighteenths, and William H. Daniels of an undivided four-eighteenths, subject to certain mining leases and agreements for the payment of royalties; and, further, ‘That the interest of said Russell M. Bennett and Edmund J. Longyear in the two-thirds (2/3) of the fee of said lands, acquired by the deed from William J. Atwell to Rollin N. Dow, and the deed from Rollin N. Dow to said Bennett and Longyear, is subject to the right of said defendant George L. Chesebrough and said defendant William Harrison to have from them a deed or conveyance of an undivided two-ninths (2/9) of an undivided two-thirds (2/3) of the fee of said land, the same being an undivided four twenty-sevenths (4/27) thereof, upon the payment to them by said Chesebrough and said Harrison of the sum of $8,777.77, with interest thereon from October 3, 1906, at the rate of 5 per cent. per annum; and the right of said Chesebrough and said Harrison to have such conveyance and deed upon such payment is hereby adjudged.’

After unsuccessfully moving for certain amendments, applicants Bennett and Longyear moved that the decision be vacated, and that a new trial be had. This motion being denied, they bring the case to this court by their appeal from the order denying such motion.

The applicants claim that, under the facts as shown by the evidence and found by the trial court, the defendants Chesebrough and Harrison have no right or interest in the fee of the land involved, and that the portion of the decision above quoted is not sustained by the evidence or findings of fact. The facts found by the trial court bearing on this contested point are:

‘That in the month of September, 1906, said defendant Chesebrough called the attention of said applicants Bennett and Longyear to the matter of purchasing the fee of said William J. Atwell in a two-thirds (2/3) of said lands; that said defendant Chesebrough had no interest in the fee of said Atwell, had no contract or agreement of any kind, either verbal or written, for the purchase or sale thereof, and had no property right therein or claim thereto; that said Chesebrough was engaged as a broker in the buying and selling of mining lands; that he had no acquaintance or connection with said Atwell; that he then knew that said A. P. Cook was the one through whom Atwell could likely be reached and a purchase made, and said defendant Chesebrough was then in a favorable position for obtaining title to the said Atwell interest; that said Bennett and Longyear were not in a position where they could likely obtain title without the aid of some one; that he then represented to them that he thought the fee of said Atwell could be purchased for the sum of $25,000, and that he would be able, as in fact he was, to secure the same through said Cook; that in case said Atwell interest should be purchased, he, said Chesebrough, would be unable to obtain any commission, and that he desired to acquire for himself an interest therein; that said applicants Bennett and Longyear were desirous of obtaining title to said Atwell interest; that it was thereupon agreed orally between said applicants Bennett and Longyear and said defendant Chesebrough that said defendant should and would do what he was able to do in securing a transfer and conveyance of the Atwell interest; that said property should be purchased of said Atwell in the same of said applicants Bennett and Longyear, or in the name of the clerk of one of them; that said Bennett and Longyear should pay the purchase price thereof; that said defendant Chesebrough should have a two-ninths (2/9) interest in the two-thirds (2/3) interest of said Atwell, being a four twenty-sevenths (4/27) of the whole fee of said lands, and should pay two-ninths of the purchase price thereof to said Bennett and Longyear at any time within three years from said date, with interest thereon at the rate of 5 per cent. per annum; that upon such payment said Chesebrough should have a deed of such interest from said Bennett and Longyear, or from the person in whose name title should be taken.’

Facts further found in detail, briefly stated, are: Upon completion of the purchase, a contract was to be given Chesebrough, containing the foregoing agreement, and Chesebrough was to give Bennett and Longyear, as security for the payment to be made by him, certain royalty agreements. Chesebrough, in attempting to secure a transfer of the Atwell interest, learned it could not be secured for less than $35,000. Bennett and Longyear thereupon agreed with him that it should be purchased at that price under the same arrangement. Chesebrough then had Cook procure a deed of the Atwell interest made to Bennett and Longyear's clerk, who later conveyed to Bennett and Longyear, and Bennett and Longyear paid the $35,000 purchase price.

After receiving such deed, Bennett and Longyear refused to execute a contract to Chesebrough pursuant to the agreement, and refused to convey an interest in the land to Chesebrough, although Chesebrough demanded such contract, ‘after doing all the things required of him by the agreement.’ And, further, ‘that when said Bennett and Longyear entered into said oral agreement with said Chesebrough they intended in good faith to abide by it and to carry out its terms.’

It is further found that the defendant Chesebrough thereafter transferred to the defendant Harrison one-half of his interest inder such agreement.

By his memorandum the trial judge indicated that the theory on which the right of Chesebrough and Harrison to a deed of an undivided four twenty-sevenths of the land was adjudged is that the facts found created an equitable mortgage.

The defendants take the position that the transaction constitutes an equitable mortgage, but, if not, that the facts establish an oral agreement to convey land, which is taken out of the statute of frauds by the part performance on the part of Chesebrough.

The applicants take the position, first, that no equitable mortgage was created because at the time of the transaction claimed to constitute a mortgage Chesebrough had no estate or right in the land, has never had any mortgageable interest therein, and the arrangement made was within the statute of frauds; second, that specific performance of the oral agreement to convey cannot be decreed because there was no such partial performance of the agreement as to take it out of the statute of frauds.

The findings of fact are relied upon by the defendants as sufficient to sustain the conclusion upon either position taken by them; that is, as showing an equitable mortgage or an oral promise to convey. There is no specific finding that the claimed interest of Chesebrough was agreed to be held as security, or that it was so held. Chesebrough's version of the conversation which constituted the agreement contains some phrases tneding to characterize it as a mortgage, and others equally apt to characterize it as a privilege to buy in the future at a specified price. The applicants claim that from the evidence nothing could be found beyond an oral promise to sell an undivided interest to Chesebrough, if they acquired the land, made on the representation of Chesebrough that he would be unable to obtain a commission from the seller. The applicants further claim from the evidence that Chesebrough, contrary to such representation, did receive $1,000 as a commission from Cook, and that they thereupon refused to carry out their oral agreement, but offered to pay to Chesebrough an additional sum to make a full broker's commission. The trial court made no finding as to whether or not Chesebrough did receive $1,000 as a commission, and, if so, the circumstances of such payment; but in...