Lowther v. Potter

• Decision Date: 27 May 1912
• Citation: 197 F. 196
• Parties: LOWTHER v. POTTER et ux.
• Court: U.S. District Court — Eastern District of Kentucky

197 F. 196

LOWTHER v. POTTER et ux.

United States District Court, E.D. Kentucky.

May 27, 1912

Simeon S. Willis, of Ashland, Ky., for plaintiff.

David Hays, of Whitesburg, Ky., for defendants.

COCHRAN District Judge.

This cause is before me on demurrer to the bill.

It is a suit for the specific performance of a contract for the sale of certain real estate on Elkhorn creek and its tributaries in Letcher county, Ky., and within this district, alleged to have been made on or about September 20, 1910, by the defendants with one D. V Lowther. The consideration to be paid for the land covered by the contract was the sum of $2,080. Two deeds for different portions thereof were to be made, one a general warranty deed, and the other a quitclaim. It is not alleged that the contract was in writing. It must be taken, therefore, that it was an oral contract. It is alleged that on September 20 1910, the defendants prepared, signed, and acknowledged deeds in accordance with the contract, and in pursuance thereof, conveying the real estate and defendants agreed to carry same to Whitesburg in Letcher county, and there deliver them on receipt of the consideration, which they thereafter refused to do, and that on the same day--i.e., September 20, 1910-- the defendants made an affidavit in which they stated that by deed of even date therewith they conveyed lands and interests in land in Letcher county, Ky., and had executed no mortgages or other conveyances affecting the title to the lands conveyed, and there were no instruments executed by them affecting the title to the property and interest so conveyed except what were on record in the clerk's office in Letcher county, Ky., and delivered same to the purchaser, D. V. Lowther. Thereafter, to wit, on September 30, 1910, D. V. lowther in writing assigned the contract of sale to the plaintiff, and he brings this suit to enforce the contract as assignee thereof. Both at the time of the making of the contract and its assignment as well as at the time of the bringing of the suit were citizens and residents of West Virginia.

The ground of the demurrer is that the contract was not in writing, nor was there any written memorandum or note thereof signed by the defendants or by their authorized agent as required by section 470 of Kentucky Statutes, which is substantially the same as the English statute of frauds (St. 29 Chas. 2). The plaintiff relies on the undelivered deed and the delivered affidavit, both of which were signed by the defendants, the one acknowledged and the other sworn to, as a sufficient memorandum or note in writing of the contract to take the case out of the statute. I will consider each instrument by itself.

How is it then as to the undelivered deed?

The plaintiff claims that the statute only requires that the vendor sign the written memorandum or note called for by it, and that it does not require that the memorandum or note be delivered, and argues from these two positions that a case involving an undelivered deed, as here, is not within the statute. I think that these two positions on which he bases his conclusion are sound. It must be accepted that the statute only requires that the vendor sign the written memorandum or note. It was so held by the Court of Appeals of Kentucky in the recent case of City of Murray v. Crawford, 138 Ky. 25, 127 S.W. 494, 28 L.R.A. (N.S.) 680, following a line of earlier decisions to the same effect. I think, also, that the better doctrine is that the statute does not require a delivery of the written memorandum or note. Some cases in other jurisdictions hold that such a statute does require a delivery, but the weight of authority is otherwise. Benjamin on Sales (7th Ed.) Sec. 218, says: 'Now the statute in itself is entirely silent on the question of the delivery of the note or memorandum of the bargain signed by the party to be charged thereby. The statute itself deals exclusively with the existence, and not with the custody of the paper.'

In a note to the case of Charlton v. Columbia Real Estate Co., 67 N.J.Eq. 629, 60 A. 192, 69 L.R.A. 394, 110 Am.St.Rep. 495, as reported in 3 Ann.Cas. 402, it is said:

'Both on principle and authority, however, it would seem that delivery of a memorandum of a verbal agreement, otherwise sufficient to satisfy the statute, is not essential to its validity and binding force and effect.'

No case involving this question decided by the Court of Appeals of Kentucky has been cited to me, nor have I found any such. In the case of Fugate v. Hansford, 3 Litt. (Ky.) 262, an owner of a lot in the town of Carlisle had given a written order on the town trustees to make a deed therefor to another, reciting therein that such other person had that day purchased the lot from him and paid him the purchase price. It was held that that order was a sufficient note or memorandum to entitle the purchaser to specific performance. But there the order had been delivered to the purchaser. In the case of Kleeman & Co. v. Collins, 9 Bush (Ky.) 460, there was some proof that the vendor had written to his partner or agent specifying the terms of the contract of sale. Judge Pryor said:

'Counsel for appellee now insists that such a memorandum, if proven, will take the case out of the statute. We are not disposed to doubt but that such a letter being produced, or its contents proven, if lost, showing the nature of the contract would be sufficient evidence of the agreement.'

There, though there had been no delivery to the purchaser, the vendor had put the memorandum out of his possession, and in similar cases emphasis is sometimes placed on this phase of the matter, as, for instance, in the case of Wier v. Batdorf, 24 Neb. 83, 38 N.W. 22. Judge Maxwell said:

'There is a class of cases where letters have been addressed to a third party, stating and affirming the contract where such letters may be used against the writer as evidence of the contract. It is sometimes said that such letters may be used as a memorandum of the contract. In fact, however, such letters are independent evidence or admissions by the party to be charged of the existence of the contract and its nature; and, being delivered to a third party and thus beyond the control of the writer of the letters, they are held to be admissible against such party as admissions in writing.'

In the case of McBrayer v. Cohen, 92 Ky. 479, 18 S.W. 123, the sale was at public auction by an auctioneer. He made a memorandum of the sale and terms thereof in a blank book of the vendor, signing it, leaving the book in the vendor's possession, and making a duplicate of the memorandum which he held for the purchaser's benefit and subject to his demand. But, as Judge Lewis said:

'The auctioneer is to be ordinarily treated as agent of both seller and purchaser of real as well as personal property sold by him.'

So it is that I find no decision of the Kentucky Court of Appeals involving the question whether a written memorandum or note signed by the vendor and retained in his custody will take the case out of the statute. In this connection, however, it is to be noted that I am dealing with the memorandum or note of a contract for the sale of real estate referred to by the statute, and not to the contract itself. The statute recognizes that a contract for the sale of real estate and a memorandum or note thereof are two distinct things and requires that one or the other must be in writing. The latter presupposes a previous oral contract; the former does not. Now in a case not involving a memorandum or note of a previous oral contract, but simply whether a written contract for the sale of real estate has been made, there must be a delivery. A delivery is essential to the making of the contract for the sale. Such was the case of Newburger v. Adams, 92 Ky. 26, 17 S.W. 162. In that case the purchaser delivered to the vendor's agents, who, in turn, handed it to their principal, the vendor, a written offer to buy. The vendor indorsed on this written offer an acceptance thereof, but changing the terms as to the payment of the purchase price in a slight particular, sufficient, however, to prevent the making of the contract had there been a delivery without more. The vendor retained the written offer with his acceptance indorsed thereon, and thereafter the purchaser gave verbal assent to the change in terms to the vendor's agents or to the vendor, to which not appearing. Thereafter the vendor tendered a deed in accordance with the contract, and demanded performance on part of the purchaser, and upon his refusal brought suit to enforce it. It was held that he was not entitled to the relief sought because of the nondelivery of the acceptance of the offer. Inasmuch as the purchaser gave his assent to the change in the terms of payment of the purchase price, the case was disposed of the same as if the acceptance had made no change in the terms, so that there would have been a binding contract had the acceptance been delivered. Judge Pryor said:

'The trouble in this case, it seems to us, is the failure to allege that the writing upon which the proposition of purchase was made by the defendant and the indorsement of an acceptance by the plaintiff changing the time of payment was ever delivered to the defendant, or to any one authorized to receive it for him. The appellee (the vendor) held the bond for title as well as the deed and the appellant (the vendee) had no written evidence of any sale by the defendant to him of the realty in question. * * * If the appellant had sued Adams to enforce the contract, he could have responded that the writing had never been delivered either to the defendant or to any one for him, and a mere parol promise to deliver would not upon such a state of facts be

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