Birch v. Baker

• Decision Date: 16 March 1914
• Citation: 90 A. 297,85 N.J.L. 660
• Parties: BIRCH v. BAKER et al.
• Court: New Jersey Supreme Court

90 A. 297

85 N.J.L. 660

BIRCH

v. BAKER et al.

Court of Errors and Appeals of New Jersey.

March 16, 1914.

(Syllabus by the Court.)

Gummere, C. J., and Minturn and Kalisch, JJ., dissenting.

Appeal from Supreme Court.

Action by Foster F. Birch against William B. Baker and others. From a judgment of nonsuit, plaintiff appeals. Reversed.

See, also. 79 N. J. Law, 10, 74 Atl. 151; 81 N. J. Eq. 264, 86 Atl. 932.

King & Vogt, of Morristown, for appellant. B. W. Ellicott, of Dover, and W. W. Cutler, of Morristown, for appellees.

BERGEN, J. The plaintiff and the five defendants, being residents of the town of Dover, were interested in procuring the Sims-Kent Company to locate there a manufacturing plant, and to accomplish this entered into negotiations with the company, which resulted in a written agreement between the plaintiff and the defendants, as joint contractors, and the company, in which the plaintiff and the defendants agreed "to secure and convey to said company in fee simple the title of said land and premises from the said Foster F. Birch," the premises being a tract of land in Dover belonging to the plaintiff. In consideration of this conveyance, to be without cost to it, the Sims-Kent Company agreed to erect its factory on the lands. The plaintiff subsequently conveyed the land to the company, and it erected thereon its factory. The plaintiff, claiming that the defendants, to induce him to make the conveyance to the Sims-Kent Company according to their contract, promised orally to pay him $2,000 of the considerating price, upon their refusal to pay, brought his suit against the defendants on their oral promise. There was evidence from which it could be inferred that the defendants, to induce plaintiff to enter into the contract, and subsequently convey the land to the Sims-Kent Company, promised to pay him $2,000. The trial court ordered a judgment of nonsuit from which plaintiff appeals, and the defendants now seek to sustain the nonsuit upon the ground that the oral promise was one concerning the sale of lands, and, not being in writing, void under the statute for the prevention of frauds and perjuries (C. S. 2610), section 5 of which prohibits an action to charge any person "upon any contract or sale of lands, tenements or hereditaments, or any interest in, or concerning them," unless the agreement be in writing, signed by the person charged.

This case was before the Supreme Court on a rule to show cause, where it was held that such a promise was within the statute (79 N. J. Law, 10, 74 Atl. 151), and on the second trial, the judge at circuit, following the judgment of the Supreme Court, ordered the nonsuit The plaintiff having appealed from the judgment of nonsuit, the question presented is whether a promise, not in writing, to pay the owner of lands an agreed consideration if he convey the land to one in performance of a written contract by the promisor to secure such conveyance, and the owner does convey as requested, relying upon such promise, is enforceable as not being barred by the statute of frauds.

That a vendor may recover in assumpsit upon an oral promise by the vendee to pay the consideration agreed upon for land conveyed, and that such promise is not within the statute, has the sanction both of legal reasoning and adjudged cases. It was so held by the Supreme Court of this state in Murray v. Schuldt, 73 N. J. Law, 489, 63 Atl. 904, where the court said "that, the property having been conveyed to the defendant, the plaintiff's action was not upon the express contract of sale, but upon the debt which arose upon the conveyance," and that such promise was not within the statute.

So in Speugeman v. Palestine Building Association, 60 N. J. Law, 357, 37 Atl. 723, where the prosecutor, who was vendor's broker, induced the defendant in certiorari, the plaintiff below, to purchase real estate upon his oral promise that he would allow plaintiff his commission as broker in reduction of the purchase price, and after conveyance and payment of the purchase price, the prosecutor, having collected the commission from the vendor, refused to carry out his promise, and, being sued, set up, among other defenses, that his promise was a contract for "sale of lands, or an interest in or concerning them," and not enforceable because of the statute. In sustaining plaintiff's right to recover, Mr. Justice Dixon said: "The present action, according to our view, is maintained, not upon the express agreement, but to enforce an implied obligation arising in part from what the plaintiff did under the influence of that agreement."

In Bolles v. Beach, 22 N. J. Law, 680, 53 Am. Dec. 263, Beach agreed in writing to sell a tract of land to two persons or their assigns who were to associate themselves with others and form a company to dispose of it in parcels at public auction, Beach to make conveyances to such persons as the so-called company might require, and upon their request he conveyed a portion to Bolles, subject to a mortgage previously given by Beach, the amount of which was allowed to Bolles by the company when they collected the consideration from him, and in the settlement with Beach deducted, from the price it had agreed to pay, the amount allowed Bolles, he having orally agreed to pay the mortgage. There was no contract for sale between the actual parties to the deed. The only written contract with the vendee, prior to the delivery of the deed, was the conditions of the sale made by the company which was carried out by the deed from Beach to their nominee, Bolles. The deed acknowledged payment of the consideration without reference to the mortgage, or written assumption of its payment, and, the vendee refusing to pay the mortgage, Beach, being obligated on his bond it was given to secure, was compelled to take care of the mortgage, and then brought his suit in assumpsit against Bolles to recover the sum "in part payment of the consideration money of the deed of conveyance." The defense set up was that Beach was estopped by the recitals in his deed to deny payment of the consideration, and that the agreement, not being in writing, was void under the statute of frauds. This court held, on error, that the evidence of the agreement did not affect the operation of the deed, but only the character and extent of the payment of the consideration, and was therefore not within the statute, and that the acknowledgment of payment of the consideration, while it could not be denied by the grantor for the purpose of destroying the effect and operation of the deed, could be for the purpose of recovering the consideration money, and, further, that, although the consideration when paid became so much paid for the account of "the committee of speculators," yet, as it was to be paid to Beach as purchase money, he was the party in interest and entitled to sue. As there was no proof of any agreement by the vendee with the vendor to pay the consideration price, it would seem that the right of recovery was based either upon the promise of Bolles to pay the committee, or upon an implied promise to pay the vendor, upon conveyance, but in any event the committee, or the two contracting purchasers, were bound to pay the consideration to Beach when he conveyed to their nominee upon request, and the action affirmed simply avoided circuity of action if based upon their contract with Bolles to appropriate the consideration money left in his hands for the discharge of the mortgage. While this case is not precisely like the one under review, it recognizes the principle that the consideration for lands conveyed may be recovered by the grantor from the vendee without a previous written contract between them, and also that the promise to pay the consideration is not within the statute of frauds as a sale of land, or of an interest therein.

In Brackett v. Evans, 55 Mass. (1 Cush.) 79, it was held that "a party who receives a grant of land, on his promise to pay for it, cannot avoid payment by showing that his promise was not in writing."

In Bowen v. Bell, 20 Johns. (N. Y.) 338, 11

Am. Dec. 286, the parties owned a tract of land as tenants in common, one four-sixths and the other two-sixths, which they agreed to divide equally, one party to pay the other one-sixth. The conveyances were made, but the promisor refused to pay for the one-sixth, for which the promisee brought suit in assumpsit. Proof of the promise to pay was objected to upon the ground that it was within the statute of frauds, but the Supreme Court held against this contention, for the reason that "this action is not on a contract for sale of lands, or any interest in lands. The law raises a promise to pay, and, in such case it is not within the statute of frauds, although it be raised from an agreement concerning an interest in lands" —citing Shephard v. Little, 14 Johns. (N. Y.) 210, where it is held that assumpsit will lie to recover the consideration for lands sold and conveyed.

In Wetherbee v. Potter, 99 Mass. 354, two of four purchasers of real estate agreed to furnish the consideration price, and the two agreed that one should pay the entire sum upon the promise of the other that he would reimburse him to the extent of one-half of the cost. In an action in assumpsit for the one-half of the cost, the defendant set up the statute of frauds. The court held that, although the money was advanced for the purpose of purchasing real estate and upon an oral agreement to that effect, it is not of itself a contract for the sale of land, and if the money be in effect advanced before the request is revoked, an action upon such promise is not forbidden by the statute.

And also in Root v. Burt, 118 Mass. 521, it was held, in a suit to recover the price of land sold and conveyed, that as a contract for the sale of lands, it is taken out of the statute by an executed and accepted conveyance.

In Lewis v. Grimes, 30 Ky. (7 J. J. Marsh.) 336, the action was in assumpsit to...