Goetz v. Hubbell

Decision Date25 April 1936
Docket NumberNo. 6408.,6408.
Citation266 N.W. 836,66 N.D. 491
CourtNorth Dakota Supreme Court


Syllabus by the Court.

1. Under the statute of frauds (Comp.Laws 1913, § 5888) an agreement for the sale of real property is invalid unless the same, or some note or memorandum thereof, is in writing and subscribed by the party against whom the agreement is sought to be enforced.

2. To render such memorandum sufficient, it is not necessary it be signed by the other party to the agreement.

3. Such memorandum need not be a complete contract in itself. It is the written evidence of the contract, and while parol evidence may not be introduced to vary the terms of such memorandum, nevertheless parol evidence may be introduced to explain the same and make it certain.

4. Written receipts, signed by the party to be charged, which show that part of the purchase price of real estate described in the receipt has been paid by the other party and which sets forth the purchase price and a description of property is a sufficient memorandum to take an agreement out of the statute of frauds and parol evidence may be introduced to supply proof in harmony with the statements made in the receipts and in explanation thereof.

5. With proof of the contract furnished by the memorandum as required, the court will enforce the contract as made by the parties, and the party sought to be charged cannot be required to accept payment in any other manner or form than that agreed upon.

Appeal from District Court, Sheridan County; R. G. McFarland, Judge.

Action by A. J. Goetz against G. A. Hubbell. Judgment for defendant, and plaintiff appeals.

Modified and affirmed.

Peter A. Winter, of McClusky, for appellant.

George Thom, Jr., of McClusky, and Hyland & Foster, of Bismarck, for respondent.

BURR, Judge.

The plaintiff owned and operated a general store in his own building in Lincoln Valley, and sold his stock of goods to the defendant in the fore part of May, 1934. They discussed the use of the building and lots and agreed on a monthly rental of $40 for six months. At the same time the plaintiff offered to sell the building to the defendant for $2,000 in monthly payments of $50, defendant claiming the offer included the fixtures. Defendant asked for time for consideration, which was granted, no definite time being fixed. Nothing was said about interest or taxes, and no memorandum of agreement was made.

Defendant gave no formal notice of acceptance of the offer to sell, but on June 2, 1934, paid $50 in cash and prepared a receipt which was presented to the plaintiff and signed, as follows:

“Lincoln Valley ND


Received of G. A. Hubbell the sum of Fifty ------ Dollars as payment on purchase of building & Fixtures of Lots 3-4-5 blk 2 at a price of $2000.

A. J. Goetz

The parties differ as to what took place immediately afterwards-plaintiff claiming he met the defendant and asked him what he meant by having lot 3 and the word “fixtures” inserted in the receipt, and defendant responded, “I will come over later and see you.” Plaintiff made no objection to the statement as to the purchase of the building and other lots.

On June 30, 1934, another payment of $50 was made and the receipt recited that the money was “To apply on the purchase contract for Building & Fixtures.” Again, on July 30, a payment of $50 was made and this receipt recites that the money was received “to apply in payment on purchase contract for building and fixtures on lots 3-4-5 Blk 2 of Lincoln Valley at the price of $2000.”

On September 1 and October 1 other payments of $50 each were tendered, with receipts of the same tenor. Plaintiff refused to accept payment until, as he says, “Mr. Hubbell comes over and lines up a promise.” The offer to sell was not withdrawn before the three monthly payments of $50 were accepted, if withdrawn then. Thereafter the defendant deposited in a bank of good repute $50 per month, to the credit of the plaintiff, and subject to his check, until the sum of $450 had been deposited. Plaintiff paid the taxes, though defendant claims he attempted to do so and found them paid. During all this time the defendant was in possession of the building and operated his store therein.

After going into possession, the defendant made improvements on the building, but those which are of a permanent nature are negligible in value.

The plaintiff commenced this action to determine adverse claims to the property involved. At no time did he offer to return the money received on the purchase price nor to pay for any improvements made. Neither did he demand the payment of any rent, nor tender any written contract of sale and purchase. Defendant claims these payments were a sufficient acceptance by him of the contract of sale and bind the plaintiff, if the contract be without the statute of frauds. The trial court gave judgment for the defendant, holding there was a valid contract for the purchase of the buildings and “that there is due upon said contract, from the defendant to the plaintiff, the sum of $2000.00 with interest from and after May 14, 1934, at the rate of 6%, amounting to the sum of $160.00 making a total of $2160.00, less the sum of $600.00 paid thereon by the defendant, with interest at the rate of 6% per annum on the payments as made, from the date of making of the same, said interest amounting to $29.50 making a total to be applied on said purchase price of the sum of $629.50 and leaving due and unpaid thereon the sum of $1530.50 as of the 14th day of September, 1935.” The plaintiff appeals demanding a trial de novo.

Appellant says there are three issues of law to be determined, viz.: (1) Are the receipts filed by the plaintiff “sufficient under our law to constitute a valid memorandum under the facts and testimony in this case?” (2) If such receipts are not sufficient to remove the case from the statute of frauds, “then is there such part performance by virtue of taking possession under the contract as will justify specific performance?” (3) Have there been such valuable and permanent improvementsmade “so as to create an equitable estoppel?”

[1][2][3] An agreement for the sale of real property is invalid “unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged.” Section 5888, Compiled Laws. Ordinarily, such memorandum would be an informal notation in writing of the salient features of the contract for purchase and sale and would state the provisions necessary to be included in the formal contract; but these need not be set forth in any set order. Neither is there any requirement that the memorandum itself shall be one document. “Any kind of document or documents, taken singly or together, may constitute the required memorandum, if the terms of the contract are sufficiently stated therein.” If these documents “show who are the contracting parties, intelligently identify the subject matter involved, express the consideration, and disclose the terms and conditions upon which the contract is entered into,” then the memorandum is sufficient. The law on this subject is admirably set forth in 29 Am. & Eng.Enc. of Law (2d Ed.) 848 to 854. The memorandum need not characterize the parties, that is, describe them as vendor and vendee, nor need it necessarily use technical terms. While the statute is a limitation of judicial authority to afford a remedy (Safe Deposit & Trust Co. v. Diamond Coal & Coke Co., 234 Pa. 100, 83 A. 54, L.R.A.1917A, 596), the purpose of the memorandum is not to make it the contract itself, but to constitute sufficient written evidence of the parol contract.

[4] In many jurisdictions the memorandum must be such as would bind both parties to the contract. Under our statute quoted, the memorandum is sufficient if it be signed by the party to be charged with the contract and required to carry it out. Hence, the question of mutuality depends upon the statutory requirements necessary to constitute a memorandum rather than upon the general principles of mutuality as affecting contracts. In the case at bar the defendant sets forth in his answer a claim to the property under an oral contract with the plaintiff, claiming a sufficient memorandum signed by the party he seeks to charge with the contract, that is, by the plaintiff. It was not necessary for him to produce a memorandum signed by himself. Hence, decisions of courts under statutes or constructions requiring memorandum to be signed by both parties are not applicable here on this feature.

In the earlier cases the courts construed a memorandum with strictness. In Parkhurst et al. v. Van Cortlandt, 1 Johns. Ch.(N.Y.) 273, Chancellor Kent states: “A memorandum, in writing, of the sale of lands, to be valid within the statute of frauds, must not only be signed by the party to be charged, but must contain the essential terms of the contract, expressed with such clearness and certainty, that they may be understood from the writing itself, or some other paper to which it refers, without the necessity of resorting to parol proof.” This rule appears to be based upon the theory that “Where an agreement is reduced to writing, all previous negotiations, resting in parol, are extinguished by the written contract, and cannot be resorted to, to help out or explain its meaning.” It would, in fact, require the memorandum to be a complete contract. Later the chancellor came to the conclusion that this theory was erroneous and evidently decided the memorandum was not intended to be a complete contract in itself, but was rather proof of the contract. In Clason's Ex'rs v. Bailey, 14 Johns.(N.Y.) 484, he says: “I have thought, and have often intimated, that the weight of argument was in favor of the construction that the agreement concerning lands, to be enforced in equity, should be mutually binding, and that the one party ought not to be at liberty to enforce, at his pleasure, an agreement which the other was not entitled to claim. It appears...

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