Knoff v. Grace

• Decision Date: 07 July 1920
• Docket Number: 9841.
• Citation: 190 P. 526,68 Colo. 527
• Parties: KNOFF et al. v. GRACE.
• Court: Colorado Supreme Court

190 P. 526

68 Colo. 527

KNOFF et al. v. GRACE.

No. 9841.

Supreme Court of Colorado

July 7, 1920

Department 2.

Error to District Court, Morgan County; L. C. Stephenson, Judge.

Action by O. M. Knoff and Ray White, copartners doing business under the firm name and style of Knoff & White Grocery against T F. Grace. There was a judgment for defendant, and plaintiffs bring error.

Affirmed.

Arlington Taylor, of Ft. Morgan, for plaintiffs in error.

Johnson & Robison and Walter S. Coen, all of Ft. Morgan, for defendant in error.

DENISON J.

A demurrer to the complaint was sustained, the plaintiffs stood by the complaint, and now ask for a supersedeas. Both sides ask us to determine the case now.

The action was by tenants to compel specific performance of an oral lease for three years, beginning February 1, 1919. The defendant, after rent had been paid for several months, refused to accept more, and gave notice to quit. The plaintiffs rely on the doctrine of part performance of an oral contract to support their case.

The statutes in point are as follows:

'Every contract for the leasing for a longer period than one year * * * of any lands * * * shall be void' unless in writing. R. S. 1908, § 2662.

'Nothing in this chapter contained shall be construed to abridge the powers of courts of equity to compel the specific performance of agreements, in cases of part performance of such agreement.' R. S. 1908, § 2664.

The question before us, then, is whether, under the above sections, the part performance shown in the complaint is sufficient to justifiy a decree for specific performance of an oral lease for more than one year.

The contract alleged is:

'That plaintiffs did * * * enter into an oral lease with said defendant for said storeroom, the said lease to date from February 1, 1919, and to continue for three years, with the option to plaintiffs to extend the said lease two years thereafter at a rental of $75.00 per month payable monthly in advance; that said storeroom was to be used for a general retail grocery and merchandise store.'

The facts relied on as constituting part performance are: (1) That, relying on said agreement, plaintiffs resigned their positions; (2) formed a partnership; (3) bought and installed furniture, fixtures, and other equipment; (4) bought a stock of goods; (5) took complete possession; (6) established a paying business; (7) paid six months' rent; (8) it was the only available room; (9) no other now available; (10) business will be destroyed if relief is denied; (11) defendant will be unharmed if relief is granted; (12) that defendant is not in court with clean hands; (13) that defendant seeks to perpetrate a fraud by renting to another for a higher rent.

Section 2664 is a continuation of the equity rule in England and most of the United States. The principle which supports the rule is estoppel by conduct which fundamentally is fraud. It is therefore always necessary to show that the acts constituting part performance were done with the knowledge and consent of the other party to the contract. There is some question whether this is sufficiently alleged here, but we do not determine the case upon that point.

The statute in question was passed for the reason that it was not safe to let proof, upon the questions therein referred to, rest in parol; it follows that to serve the purpose of the statute we must take care never so to extend the exceptions thereto, which are pressed upon us so constantly, as to let those questions become issues to be tried on oral testimony alone.

While it has often been truly said that equity ought not to allow the statute of frauds to be used as an instrument of fraud or wrong, yet the statute can never be enforced without some hardship and wrong. Wherever there is an oral contract on which a party has relied, it is, in some degree, a wrong and hardship upon him to hold it invalid, and if there is no oral contract there is no room for the statute to act. Therefore the enforcement of the statute must always be, in a sense (though, of course, not in legal contemplation) a fraud...