Farr v. Newman

• Decision Date: 28 February 1963
• Citation: 18 A.D.2d 54,238 N.Y.S.2d 204
• Parties: Franz FARR, Appellant, v. George W. NEWMAN and Elbert C. Hardy, Respondents.
• Court: New York Supreme Court — Appellate Division

Page 204

238 N.Y.S.2d 204

18 A.D.2d 54

Franz FARR, Appellant, v. George W. NEWMAN and Elbert C. Hardy, Respondents.

Supreme Court, Appellate Division, Fourth Department.

Feb. 28, 1963.

Shane & McCarthy, Olean, for appellant, Edward M. Horey, Olean, of counsel.

Kelly & Monighan, Salamanca, for respondent Elbert C. Hardy, John J. Monighan, Salamanca, of counsel.

Before WILLIAMS, P. J., and GOLDMAN, HALPERN, McCLUSKY and HENRY, JJ.

WILLIAMS, Presiding Justice.

This action was instituted to enforce specific performance of a contract for the purchase and sale of real estate. The defendant, among other defenses, pleads the Statute of Frauds.

The defendant Hardy, the present owner of the property, is the grantee of Mr. and Mrs. Newman, former owners. Mr. Newman, no longer a resident of this state, was named a party defendant and was served by publication, but he defaulted in pleading and appearance and was not represented at the trial. Mrs. Newman was not made a party. No testimony of either was produced by deposition or otherwise.

The complaint demands judgment that both defendants Newman and Hardy be directed to deliver a deed of conveyance. The complaint alleges that Mr. Newman entered into a contract to sell the property to the plaintiff. No reference is made to Mrs. Newman, and it is not alleged that she joined in the written contract. Facts were developed during the trial which demonstrated that if there was a valid written contract it would be binding upon Mr. Newman as a signatory and upon Mrs. Newman under the theory of estoppel.

In 1959 the plaintiff was the owner of premises on North Lyndon Road, Cattaraugus County, New York, directly across the road from a farm owned by the Newmans as tenants by the entirety. Plaintiff happened to visit the Newman farm, and while he was there Mrs. Newman asked him if he wished to purchase it. He said that he did not but that he thought his brother-in-law would be interested. Mrs. Newman set a price of $3,000 cash, and he asked for her name and her Florida address, which she wrote on a piece of note paper. At the request of the plaintiff, she also wrote down the price as '3,000.00 cash' and the address of the people with whom she was staying in New York State. Mr. Newman was also present throughout this discussion.

Later that day plaintiff returned to the Newman farm, when both Mr. and Mrs. Newman were standing in the driveway. Plaintiff told Mrs. Newman that he was interested in the property. He said: 'I am interested and would like to take it myself.' Mrs. Newman said, 'Very well. That is good.' The plaintiff asked his wife if she would make a deposit on the property, and she gave $50 in cash to Mrs. Newman. After receiving the cash, Mrs. Newman said to her husband: 'Go in the house and make a receipt for the fifty dollars for Mr. Farr.' All of them then went into the house, and in Mrs. Newman's presence Mr. Newman wrote and signed a paper which read:

'July 20, 1959

Received of Mr. Farr $50.00 as down payment on farm--sale price 3,000.00 three thousand dollars cash at delivery of clear title.

George W. Newman

148 acres more or less

                      $3,000.00
                          50.00
                      ----------
                       $2,950.00"
                

At that time Mr. Newman said that the farm contained 148 acres. He stated that he wanted to sell the farm because he had no other interests and wanted to return to Florida.

About 8:00 o'clock the next evening plaintiff received a telephone call from a Mr. Cash, an attorney of the locality, who indicated that Mr. and Mrs. Newman were in his office with another purchaser. He said that if plaintiff would be willing to pay an additional $1,000 he could have the farm. Plaintiff told Cash that he had a signed memorandum from Mr. Newman, but nevertheless Cash said the Newmans were going to sell to the other party. Plaintiff objected, and the conversation was concluded. Nothing was said by Cash about Mrs. Newman's interest in the property. Plaintiff had no further discussions with Cash. However, subsequently and before the deed to Hardy, plaintiff's brother-in-law law telephoned Cash and said that he was talking about the farm that plaintiff had purchased 'from the Newmans' and that he had consulted counsel and was advised that plaintiff had an enforceable agreement. About a week later plaintiff received a letter from Cash enclosing a bank money order in the amount of $50 'from George W. Newman,' which he has never cashed or used. Later, on learning that the property had been deeded to the defendant Hardy, he wrote to Hardy saying that he was ready to pay the balance of $2,950 upon the receipt of a deed.

It is undisputed that Cash represented both the Newmans and the defendant Hardy. At the time of the conveyance to Hardy, Cash had full knowledge of the fact that plaintiff claimed the right to purchase the property under a contract of sale. Cash testified that he did not communicate that fact to Hardy, nor did he tell Hardy that he had previously been retained by the Newmans. Nevertheless, his knowledge of the plaintiff's contention that he had the right to purchase full title was imputable to Hardy. (Bennett v. Buchan, 76 N.Y. 386, 390-391; Raines v. Moran, Sup., 57 N.Y.S.2d 800, aff'd 270 App.Div. 979, 62 N.Y.S.2d 817. See also Henry v. Allen, 151 N.Y. 1, 9, 45 N.E. 355, 357, 36 L.R.A. 658; Smith v. John Hancock Mutual Life Ins. Co., 260 App.Div. 990, 23 N.Y.S.2d 331.)

Apparently Cash had full knowledge of all the facts involved, including the activities and inactivities of Mrs. Newman, because he advised his clients that plaintiff's contract was unenforceable. How he could arrive at that conclusion without exploring the matter fully is difficult to understand. His explanation was that both of the Newmans had told him that Mr. Newman had signed the receipt upon the condition that it would not be valid unless Mrs. Newman signed. However, a simple examination (which he did not undertake) of the document would have disclosed that it contained no such condition but that it was an outright contract of purchase and sale.

It may be that 'communication[s], made by his client[s] to him,' were confidential and that he had no right to divulge such information to Hardy (Civil Practice Act, § 353). This restriction, however, would not encompass information that he acquired from other sources (King v. Ashley, 179 N.Y. 281, 72 N.E. 106). Nevertheless, after he entered into his legal relationship with Hardy, notice of plaintiff's contentions as to the validity of the contract was again given him, this time by plaintiff's brother-in-law. He then owned a duty to Hardy to investigate the matter full because, as principal, Hardy was chargeable not only with Cash's actual non-confidential knowledge, including full knowledge of plaintiff's assertions, but also with what information an inquiry, reasonably suggested under the circumstances, would have developed.

'If the agent acquires knowledge of a fact, while engaged in the business of his principal, and fails to institute the proper inquiries, by reason of forgetfulness, it is negligence and the doctrine of constructive notice applies.' (Bennett v. Buchan, supra, 76 N.Y. pp. 386, 390-391).

See also Link v. Wabash R. R. Co., 370 U.S. 626, 633-634, 82 S.Ct. 1386, 8 L.Ed.2d 734; Hilton v. Federated Brokerage Group, Inc., 30 Misc.2d 503, 508, 213 N.Y.S.2d 171, 176; Restatement (Second), Agency § 272, Comment b (1958); 7 C.J.S. Attorney and Client § 69, p. 853.

We now turn to a consideration of the legal sufficiency of the purported contract in the light of the defense of the Statute of Frauds. We find that it mentions the $50 payment as 'down payment on farm--sale price 3,000.00 three thousand dollars cash at delivery of clear title.' Beneath Mr. Newman's signature and in his handwriting are the words '148 acres more or less.' Although generally a contract which is under attack by virtue of the Statute of Frauds must stand unsupported by oral evidence, some proof of the surrounding circumstances may be considered for the purpose of identifying the property described in the writing (Marks v. Cowdin, 226 N.Y. 138, 143-144, 123 N.E. 139, 140-141). In this case the evidence shows that the 'farm' which is the subject of the contract was the one upon which the owners and the potential purchasers were personally present during the negotiations. The acreage is stated, its location is in no doubt, and the testimony shows--or at least strongly indicates--that the Newmans owned no other real property in that vicinity.

A contract, to be enforceable, need not contain every single element of the transaction. It is sufficient if the property and the general terms of sale may be ascertained from the document. In other words, the agreement will not fall merely because it does not embrace every detail incidental to its performance. 'Details of that order may be left open for future specification without destruction of the contract and of every remedy thereunder. * * * Seller and buyer accept by implication as to such matters the test of the reasonable or the customary if no other is available.' (Citations omitted.) (N.E.D. Holding Co. v. McKinley, 246 N.Y. 40, 45, 157 N.E. 923, 924). No essential term...