Faircloth v. Ktnlaw

• Decision Date: 01 April 1914
• Parties: FAIRCLOTH. v. KTNLAW.
• Court: North Carolina Supreme Court

(165 N.C. 228)

81 S.E. 299

FAIRCLOTH.

v.KTNLAW.

Supreme Court of North Carolina.

April 1, 1914.

1. Frauds, Statute of (§ 138*)—Operation and Effect—Implied Contract—Services.

Defendant, who verbally requested plaintiff to sell part of a tract of land at a certain figure upon an agreement that if he did so defendant would convey to him the remaining four acres, and who received the full benefit of plaintiff's services resulting in the sale, was impliedly bound to pay for such services what they were reasonably worth and could not escape liability by pleading the statute of frauds.

[Ed. Note.—For other cases, see Frauds, Statute of, Cent. Dig. §§ 327-333; Dec. Dig. § 138.*]

2. Frauds, Statute of (§ 138*)—Contract Implied by Law—Improvement of Land.

Where a party has entered into the possession of land and made valuable improvements under a parol contract of the owner to convey it to him, the owner, if he repudiates the contract, must pay for the improvements to the extent that they have increased the value of the land.

[Ed. Note.—For other cases, see Frauds, Statute of, Cent. Dig. §§ 327-333; Dec. Dig. § 138.*]

3. Frauds, Statute of (§ 74*)—Verbal Contract for Compensation — Contract foe Interest in Land.

A contract, whereby plaintiff agreed to sell land for defendant at a certain figure with the understanding that if he did so defendant would convey to him the remaining four acres of the land, was within the statute of frauds and void.

[Ed. Note.—For other cases, see Frauds, Statute of, Cent. Dig. §§ 83, 122-131; Dec. Dig. § 74.*]

4. Frauds, Statute of (§ 138*)—Contract for Interest in Land—Recovery of Damages.

In such case no damages could be recovered on account of its breach.

[Ed. Note.—For other cases, see Frauds, Statute of, Cent. Dig. §§ 327-333; Dec. Dig. § 138.*]

5. Frauds, Statute of (§ 138*)—Services-Measure of Recovery.

A broker, whose oral agreement to sell land, in consideration that the owner would convey the balance to him, was within the statute of frauds and void, on performance, was not entitled to recover the balance, but only the reasonable value of the services; and the terms of the contract, though not conclusive, were admissible to show the value of his services, as being in the nature of an admission or declaration of the parties as to value.

[Ed. Note.—For other cases, see Frauds, Statute of, Cent. Dig. §§ 327-333; Dec. Dig. § 138.*]

6. Courts (§ 121*)—Jurisdiction—Amount in Controversy.

In a suit for $250 brought in good faith, the superior court had jurisdiction, although plaintiff recovered only $200; since it is the amount demanded in good faith that determines the jurisdiction, and not merely the amount of the recovery.

[Ed. Note.—For other cases, see Courts, Cent. Dig. §§ 413-420, 428, 450, 452, 458, 459, 466; Dec. Dig. § 121.*]

Appeal from Superior Court, Hake County; Lyon, Judge.

Action by J. M. Faircloth against G. W. Kinlaw. Judgment for plaintiff, and defendant appeals. New trial.

Plaintiff, at defendant's request, agreed to sell 70 acres of land for him at $2,500, with the understanding that, if he did so, defendant would convey to him the remaining four acres of the land. Plaintiff secured a purchaser for the land, to whom the defendant sold and conveyed it, but refused to pay the plaintiff for his services, and instead of performing his part of the contract, as it was made, he pleads the statute of frauds to this action for the value of plaintiff's services so rendered to him. Plaintiff alleged in his complaint and testified that the land is reasonably worth $250, and sues for that amount. The jury returned the following verdict, in response to the issues submitted by the court: "(1) Did the defendant employ the plaintiff to sell the land and agree to give him four acres of the land if he would sell 70 acres for $2,500? Answer: Yes. (2) Did the plaintiff sell the 70 acres for $2,500? Answer: Yes. (3) What is the value of the four acres that the plaintiff claims he was to have? Answer: $200." Defendant excepted to the first and third issues.

Shaw & Currie, of Raeford, for appellant.

A. S. Hall, of Fayetteville, for appellee.

WALKER, J. (after stating the facts as above). [1] The defendant cannot escape liability for the value of the services rendered by the plaintiff, at his request, by pleading the statute of frauds. He asked for the services, and has received the full benefit of them, and the law implies a promise to pay for them what they are reasonably worth; otherwise the statute would be turned into an instrument of fraud instead of executing the purpose for which it was passed. It was intended to prevent and not to promote fraud. What was said by an able and learned court in a similar case is applicable here: The case would fall under a familiar rule— that he had incurred expense and trouble at the request of the defendant—and a right to compensation would follow as a matter of course, not for the loss of the bargain, but for the loss actually sustained, or for the trouble and loss of time incurred. It is a salutary principle of law that every man is bound to the observance of good faith to the extent that he knows that he is trusted; and it is not necessary, to hold him liable, that he was not in a situation to be benefited —he must act so as not to injure another by his conduct The defendant knew the extent to which he was trusted, and had, by. hisown act, secured the confidence of the plaintiff. He could not be ignorant of the trouble and expense which would necessarily be incurred by the plaintiff if he reposed such confidence in the assurance of the defendant as one man may reasonably repose in another. Under such circumstances, while it is unquestionably true that no action can be maintained, either to recover damages for the loss of the land, or a good bargain, or for a specific performance, yet to hold that the action cannot be sustained to recover for the injury or loss already named would be equivalent to saying that the subject was one in regard to which fraud or bad faith could not be practiced. Prazer v. Howe, 106 Ill. at page 563.

It is well settled by the authorities that where payments are made or services rendered upon a contract void by the statute of frauds, and the party receiving the services or payments refuses to go on and complete the performance of the contract, the other party may recover back the amount of such payments, or the value of the services, in an action upon an implied assumpsit. A party who refuses to go on with an agreement void by the statute of frauds, after having derived a benefit from a part performance, must pay for what he has received. Galvin v. Prentice, 45 N. Y. 162, 6 Am. Rep. 58, citing King v. Brown, 2 Hill (N. Y.) 487; Lockwood v. Barnes, 3 Hill (N. Y.) 128, 38 Am. Dec. 620. It is said in Browne on the Statute of Frauds (5th Ed.) § 118: "One who has rendered services in execution of a verbal contract which, on account of the statute, cannot be enforced against the other party, can recover the value of the services upon a quantum meruit." Judge Bryan, in Baker v. Lauterbach, 68 Md. 64, at page 70, 11 Atl. 703, at page 704, expresses the principle with great force and accuracy: "It must be observed that, although contracts within the statute of frauds are void unless they are in writing, yet the voluntary performance of them is in no respect unlawful. If services be rendered in pursuance of a contract of this kind by one party, and be accepted by the other, they must be compensated"—citing Ellicott v. Turner, 4 Md. 491.

A rule, based upon the same reason, has often been applied in this court, where a party has entered into the possession of land, and made valuable improvements, under a parol contract of the owner to convey the same to him. We have recently...