Fiers v. Jacobson

• Decision Date: 08 November 1949
• Docket Number: 8896.
• Citation: 211 P.2d 968,123 Mont. 242
• Parties: FIERS v. JACOBSON et al. POWER v. FIERS et al.
• Court: Montana Supreme Court

211 P.2d 968

123 Mont. 242

FIERS v. JACOBSON et al.

POWER v. FIERS et al.

No. 8896.

Supreme Court of Montana

November 8, 1949

Rehearing Denied Dec. 12, 1949.

Albert Fiers sued L. O. Jacobson, Mrs. Ella Jacobson and Pauline Power for specific performance of an agreement to convey real estate to plaintiff on his exercise of an option in a written lease thereof to purchase it. Defendant Pauline Power filed a cross-complaint against plaintiff and others to quiet title to the realty.

From a judgment of the First Judicial District Court, Lewis & Clark County, R. M. Hattersley, P.J., quieting title to the realty in cross-complainant and defendant Ella Jacobson, plaintiff appealed.

The Supreme Court, Angstman, J., reversed the judgment, holding that parol evidence of alteration of the lease and option by plaintiff's oral agreement not to exercise the option was inadmissible and that evidence did not show that plaintiff was estopped from asserting such right.

Loble & Loble, Helena, Don Sullivan, Helena Lester H. Loble, Helena, Henry Loble, Helena, for appellant.

Weir Gough & Matson, Helena, for defendant, cross-complainant and respondent Power.

Paul W Smith, David R. Smith, J. Miller Smith, Helena, T. B. Weir, Helena, for defendant and respondent Jacobson.

ANGSTMAN, Justice.

This is an action to compel specific performance of an agreement to convey real estate.

The agreement to convey was a written lease containing an option to purchase.

It was made between plaintiff and defendants Jacobsons on February 26, 1944. By its terms plaintiff leased the described land for a two-year period from and after March 1, 1944, at a stipulated rental payable in installments on the 1st of March and October of each year commencing March 1, 1944.

It contained this paragraph: 'The parties of the first part [being defendants Jacobsons] hereby give to the party of the second part [being plaintiff] the privilege of purchasing all of the above described premises at any time before the expiration of this lease for the sum of Four Thousand, Five Hundred Dollars (4,500.00). In the event the party of the second part elects to exercise this option, he should give the parties of the first part written notice thereof before the expiration of this lease and at the time of giving such notice, shall pay them the sum of ..... Terms agreeable to both parties at the time of sale ..... Dollars ($_____) on said purchase price, the balance of said purchase price to be paid as follows, to-wit: _____'.

It is this paragraph of the lease that gave rise to this controversy.

Plaintiff contends that he exercised the option to purchase by tendering the full amount of the purchase price. Defendants Jacobsons in their answer and defendant Pauline Power in her separate answer and cross-complaint allege and the proof shows that some of the land in question after the lease and option was given to plaintiff was deeded by L. O. Jacobson to Ella Jacobson, and that she thereafter sold all of it to Pauline Power on March 1, 1945, for $4,500, a part of which was paid on that date.

Defendants also pleaded that plaintiff is estopped from exercising the option to purchase and had waived his right to do so because he had repeatedly informed defendants by word of mouth that he did not want to and would not exercise the option; that Pauline Power in reliance upon these representations purchased the land in question from defendant Ella Jacobson and paid part of the purchase price together with some taxes. The court expressly found that these representations were made by plaintiff to Pauline Power and Ella Jacobson, and they in reliance thereon made the agreement whereby Pauline Power purchased the land from Ella Jacobson, and that thereby plaintiff waived his right to exercise the option.

As conclusions the court found that plaintiff is estopped from asserting any right to exercise the option.

A decree was entered quieting title in defendant Pauline Power and Ella Jacobson and awarding them rental against the plaintiff in the sum of $150.00. From the decree plaintiff has appealed.

The principal question involved is the propriety of the court's conclusion that plaintiff is estopped from claiming the right to exercise the option. It is the contention of plaintiff (and the point was saved by appropriate objection) that all evidence tending to support the estoppel was inadmissible as colliding head-on with section 7569, R.C.M.1935. That section reads: 'A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.'

The lease in question here, being for two years, was required to be in writing. Sections 6859, 7519, 10611, R.C.M.1935.

Section 7569 does not alone apply to such contracts as are required by the Statute of Frauds to be in writing but applies to all written contracts. 27 C.J., Statute of Frauds, § 416, page 327; 37 C.J.S., Frauds, Statute of, § 232.

The effect of the statute is to say to parties entering into a contract, if you choose to place it in writing you may not alter it by any subsequent oral agreement unless such agreement is fully executed. Here proof of the alteration in the written lease and option rested entirely in parol.

In Quong v. McEvoy, 70 Mont. 99, 224 P. 266, 268, this court said: 'Upon the trial defendant sought to show that prior to February 2, 1922, plaintiffs orally agreed to surrender the lease and to vacate the premises as soon as defendant could procure a new tenant, and they could wind up the business and remove their own property, and complaint is made of the rulings excluding this offered evidence. The lease was in writing. It is not pretended that the oral agreement was executed * * *.' Because of section 7569, this court held that the district court did not err in excluding the evidence.

The Supreme Court of Washington had before it the question of altering an option contract in Woolen v. Sloan, 94 Wash. 551, 162 P. 985, 986. In that case plaintiff had paid $1,000 for the option and sued to recover it. The court, in holding that the option contract could not be altered by a subsequent oral agreement, said: 'The appellant admits the execution of the contract and the note, as well as the payment of the note, but claims that, after the option contract was entered into, and during the 90-day period covered by the option, the parties thereto orally rescinded the contract, and that the respondent agreed that, if he subsequently sold the property, he would repay the option money, together with interest thereon. The option contract, being for real estate, of course was required by the statute of frauds to be in writing. A contract which the statute requires to be in writing cannot be abrogated or rescinded by a subsequent oral contract, unless such oral contract is accompanied by acts of part performance sufficient to remove the requirement that it shall be in writing.'

Here the evidence purporting to alter the writing fails to show an executed oral agreement so as to meet the requirements of section 7569 and in fact fails to show any agreement at all. There was no consideration for the alleged abandonment or waiver of the option, and hence no agreement at all.

Ordinarily to permit evidence of an oral statement that plaintiff did not intend to exercise the option is to open wide the door to abuses which section 7569 was designed to prevent.

Defendants take the view that there are exceptions to the general rule and that in a proper case a person may be estopped from relying upon the Statute of Frauds and that plaintiff here is estopped because of statements made by him to now assert the right to exercise the option by virtue of section 10605, subdivision 3, R.C.M.1935, reading: 'The following presumptions, and no others, are deemed conclusive: * * * (3) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsity it.'

The evidence relied on to show an estoppel is the following: L. O. Jacobson testified that in the latter part of June or the first part of July 1944 he had a conversation with plaintiff in Wolf Creek. The witness was asked this question: 'Q. What, if anything, then and there, did the plaintiff tell you with reference to his intention, with regard as to this land in dispute? A. Well, he said: 'I am going to make a trip.' * * * A. He said: 'I am looking for a ranch that is more suitable.' He said: 'I have a place in mind I intend to buy somewhere,' I can't describe it, 'near Terry, or Miles City.' So that was about all there was in the conversation. * * * A. Well, that is what he said, that he was going to buy a ranch and didn't want to stay on our ranch for that reason.'

Mrs. Power testified that she met plaintiff in Wolf Creek in October 1944. She asked him if he wouldn't lease her land which adjoined that on which he held the lease and option and that he replied, 'No, I am going to move away from Wolf Creek; I am going back to Terry.'

She testified that she said to him, 'Then you are going to leave Mrs. Jacobson's ranch?' And that he replied, 'Yes, I can't make a living there and I am not going to stay in Wolf Creek. I am going back to sheep.'

It should be noted that whatever plaintiff may have said in June, July or October 1944 about leaving the Jacobson ranch, the fact is that on October 1, 1944, he paid $150 rental covering the rental until March 1, 1945, and continued in possession of the property. He offered the rental in March 1945 and Mrs. Jacobson refused to accept it and told him to pay it to Mrs. Power, which he did.

...