Johnson v. Hayward
| Decision Date | 08 June 1905 |
| Citation | 103 N.W. 1058,74 Neb. 157 |
| Parties | JOHNSON v. HAYWARD ET AL. |
| Court | Nebraska Supreme Court |
1. A contract whereby one person employs an agent to negotiate for the purchase of real estate is not a contract for the creation of an estate or interest in land, or trust or power over or concerning lands, etc., within the meaning of the statute of frauds.
2. Where one employed to act as the agent for another in the purchase of real estate becomes the purchaser himself, he will be considered in equity as holding the property in trust for his principal, although he purchased with his own money, subject to reimbursement for his proper expenditures in that behalf.
3. The maxim “prior in time, prior in right,” applied in a contest between rival claimants under equitable titles to real estate.
4. Evidence examined, and held sufficient to sustain the findings and decree of the trial court.
Commissioners' Opinion. Department No. 2. Appeal from District Court, Howard County; Paul, Judge.
Action by Daniel L. Johnson against Benjamin D. Hayward and others. Judgment for plaintiff. Defendants appeal. Affirmed.T. T. Bell, F. J. Taylor, and M. B. Reese, for appellants.
Daniel L. Johnson, A. A. Kendall, O. A. Abbott, and Henry Nunn, for appellee.
In this suit the plaintiff seeks to have a trust declared and enforced with respect to certain real estate. The pleadings are unnecessarily voluminous, covering some 35 pages of the record. Reduced to their simplest form, the ultimate facts relied upon by the plaintiff to entitle him to the relief sought are: That the defendant Benjamin D. Hayward, while under an oral contract of agency with the plaintiff to negotiate on behalf of the plaintiff for the purchase of certain real estate, negotiated therefor and bought the same for his own use and benefit, taking the title thereto in the name of the defendant Day, his nephew, who later conveyed to the defendant Mary F. Hayward, the wife of defendant Benjamin D., in trust and for the use of her said husband; that afterward the defendants Mary F. and Benjamin D. Hayward borrowed $1,200 of the defendant Paul, and, as security therefor, deposited the conveyance of the land from Day to Mary F. Hayward, which had not been recorded; that afterward Benjamin D. Hayward, acting as the agent of his wife, entered into a written contract with the defendant Mathiason for a sale of the land to the latter for $2,700, receiving on the purchase price $500; that afterward Mathiason entered into a written contract with the defendant Kohler for the sale of the land to the latter for $3,000, upon which there was paid $500. The court found for the plaintiff, took an account of the expenditures and charges of defendant Benjamin D. Hayward in the premises, of the amount due on the Paul mortgage, and the amount due Kohler on account of the $500 paid by him on his contract with Mathiason, and entered a decree requiring a conveyance of the land to the plaintiff upon payment of the amount found due Benjamin D. Hayward, and made such order for the distribution of the proceeds of said payment as would protect the defendants Paul and Kohler as to the money by them respectively advanced on the land. The case is here on defendants' appeal, the defendant Paul not participating.
The contract of agency upon which the plaintiff relies rests wholly in parol, and no part of the consideration which the agent Hayward paid for the land was advanced by the plaintiff, and the principal contention of the defendants in this case is that it falls within the provisions of section 3 of our statute of frauds (see section 3, c. 32, Comp. St. 1899), which is as follows: “No estate or interest in land, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall be hereafter created, granted, assigned, or surrendered or declared, unless by operation of law, or by a deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same.” Among other authorities supporting this contention are the following: Burden v. Sheridan, 36 Iowa, 125, 14 Am. Rep. 505; 2 Story on Equity Jurisprudence, §§ 1201, 1201a; 1 Perry on Trusts (4th Ed.) § 135. The Iowa case just cited deserves more than a passing notice, because it is hardly distinguishable on principle from the case at bar. As in this case, the contract of agency was oral, and the principal had advanced no part of the consideration for the land. The court held that the contract, being oral, came within the section of the statute of frauds of that state corresponding with that section of our own statute just quoted, and that, no part of the consideration having been paid by the principal, the case did not fall within another provision which provides that the section referred to shall not apply where the purchase money, or any portion thereof, has been received by the vendor, etc. In the absence of an express statutory provision, part payment of the purchase price, in and of itself, is not regarded as such part performance of an oral contract as will relieve against the statute. It seems to us that in the defendants' argument, as well as in the authorities cited in support of it, there is a failure to distinguish between those cases where an estate or interest in land, or some trust or power over or concerning lands, is one of the considerations of the contract, and is acquired as a direct result thereof, and those where such estate, interest, trust, or power is not such consideration, and is not acquired as a direct result of the contract, but which arises as a remote result of the contract, and from an abuse of the relations thereby established. It is not claimed by the plaintiff that at the time he made his contract with Hayward he thereby acquired any title, legal or equitable, to the land or that any trust or power over or concerning the land was thereby created. On the contrary, the most he claims for the contract is that it created between him and Hayward the relation of principal and agent. The land itself, or any interest or trust or power over and concerning the land, was no part of the consideration moving from either party to the other. The consideration which the plaintiff agreed to pay was the value of Hayward's service, and the consideration moving from Hayward was the service he undertook to render as the plaintiff's agent. That an oral contract creating an agency, although for the purchase or sale of real estate, is valid, is clearly established by the authorities. In one of the headnotes to Griffith v. Woolworth, 28 Neb. 715, 44 N. W. 1137, the rule is laid down that, “where a landowner employs an agent to procure a purchaser for his real estate, the contract of employment need not be in writing.” This was regarded as the settled law of this state up to the time of enactment of section 74, c. 73, which took effect April 12, 1897, requiring every contract for the sale of land between the owner thereof and any broker or agent to sell the same to be in writing. There is no similar provision in regard to contracts for the purchase of real estate by agents. In the absence of a statute like the above, there is no such difference in principle between a contract with an agent to negotiate a sale and one to negotiate a purchase as would make one fall within section 3 of the statute of frauds and the other without. That the former does not fall within the statute of frauds was the view of this court in Griffith v. Woolworth, supra, and this view was recognized as sound and acted upon by the Legislature by the enactment of section 74, above, otherwise there was no necessity for the enactment of that section. That an oral contract for the employment of an agent to buy or sell land is not within the statute of frauds is settled by a long line of authorities, which are collated in volume 29 (2d Ed.) American & Eng. Encycl. of Law, p. 892.
If, then, it be competent--and we are clearly of the opinion that it is--to establish the contract of agency by parol testimony, the question then arises whether parol testimony is competent to establish the trust in this case, or whether the plaintiff will be relegated to his remedy at law for damages for breach of contract. Section 4 of our statute of frauds expressly provides that ...
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