Miller v. McCamish

• Decision Date: 21 January 1971
• Docket Number: No. 41574,41574
• Citation: 479 P.2d 919,78 Wn.2d 821
• Parties: Richard P. MILLER and Mrs. Richard P. Miller, his wife, Petitioners, v. Harold McCAMISH and Lena S. McCamish, his wife, Respondents.
• Court: Washington Supreme Court

Page 821

78 Wn.2d 821

479 P.2d 919

Richard P. MILLER and Mrs. Richard P. Miller, his wife, Petitioners, v. Harold McCAMISH and Lena S. McCamish, his wife, Respondents.

No. 41574.

Supreme Court of Washington, En Banc.

Jan. 21, 1971.

Rehearing Denied March 24, 1971.

Loney, Westland & Raekes, Dean W. Loney, Kennewick, for petitioners.

Daniel J. Hurson, Kennewick, for respondents.

FINLEY, Judge.

In 1963, the McCamishes and the Millers entered into discussions concerning the future operation of the McCamish farm. Harold McCamish, a lifetime farmer then experiencing failing health, was interested in finding a competent person to work his farm. Richard Miller, who was then employed in Spokane, agreed to take the job, commencing in February of 1964. It is apparent from the facts surrounding the parties' negotiations that McCamish was anxious to sell his farm. The parties did not put their agreement in writing; however, from evidence presented, the trial court found that the parties had entered an agreement whereby: (1) Miller would move onto the McCamish farm and reside thereon rent free; (2) Miller would be employed to work the farm for an annual salary of $6,000, but one-half ($3,000) would be retained by McCamish and applied to the purchase price of the farm should Miller choose to buy at the end of three years; (3) Should Miller choose not to purchase the farm, he would receive one-half of the annual retained salary ($1,500); (4) Additionally, in the event that Miller purchased the McCamish farm, he would receive, as credit toward the purchase price, one-third of the farm's increased value over $40,000, less capital investments; and (5) Should the parties be unable to agree upon the purchase price a board of three appraisers would be appointed to establish the value of the farm property.

Pursuant to the parties' agreement, the Millers moved to and operated, the McCamish farm. With McCamish paying the expenses as agreed, Miller improved the farm and expanded its productivity. He improved the house, developed and put under irrigation an additional 50 acres of land, and planted 32 acres of permanent crop asparagus. Prior to Miller's employment, the farm had not grown a permanent crop.

In early 1966, Miller offered to purchase the McCamish farm for a price of $77,000. This offer was refused by McCamish. In August of 1966, a dispute arose between the parties over use of a certain chemical to be applied to the farm's potato crop. Miller refused to apply the chemical suggested by McCamish, and the latter secured its application by aircraft. Thereafter, the parties, through their respective counsel, exchanged letters of relevance to portions of the instant appeal. A letter from Miller to McCamish stated, in part, (a) that McCamish was unable to agree on the farm's purchase price; and (b) that Miller was then prepared, in accordance with the parties' agreement, to select an appraiser. A letter from McCamish responded, stating in part (a) that the parties had Never reached a firm agreement regarding the sale of the farm; (b) that Miller, as McCamish's employee, had failed to carry out McCamish's instructions; (c) that Miller was to vacate the premises by the end of August; but (d) that McCamish was willing to sell the farm to Miller if a 'satisfactory agreement' could be reached. Miller vacated the farm at the end of August and commenced the instant action against McCamish the following month. During pendency of the instant action, McCamish sold the farm to a third person for the sum of $85,000.

The Form of the Millers' action is of significance to the instant appeal. Read objectively, the Miller complaint must clearly be characterized as an action to recover Legal damages arising from the McCamish's alleged breach of the oral contract or agreement to sell the farm. The complaint cannot fairly be read to encompass a plea for Traditional equitable relief either in the form of specific performance or in the form of quantum meruit based upon unjust enrichment. Further, it is apparent that the parties' oral contract or agreement falls, at least initially, within the wording of our two statutes of frauds: RCW 19.36.010, which provides that

any agreement, contract and promise shall be void, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith * * * that is to say: (1) Every agreement that by its terms is not to be performed in one year from the making thereof * * *.

and RCW 64.04.010 which provides that '(e)very conveyance of real estate, or any interest therein, * * * shall be by deed.'

Upon trial of the instant action, the Millers were awarded money damages in the amount of $12,823.27--a figure representing Both a sum for one-half of Miller's wages retained by McCamish during the period of Miller's employment ($3,875) And a sum amounting to one-third of the farm's increased value over $40,000, less capital investments ($8,948.27). The McCamishes admit liability for the retained wages, and the amount thereof is not in substantial dispute. We therefore affirm--as did the Court of Appeals--the trial court's award as to the retained wages. The Court of Appeals, however, felt constrained--on the basis of this Court's prior decisions--to reverse that portion of the trial court's award representing damages for one-third of the farm's increased value. The Millers appeal from this latter determination.

The instant appeal thus presents the issue, as accurately stated by the Court of Appeals, Whether a contract, within the statute of frauds and exempted therefrom by part performance, may serve as a basis for an action at law for money damages. Upon the facts presented herein and the reasons developed below, we hold in the affirmative.

Unquestionably, the generally stated and often repeated rubric in this area is that the doctrine of part performance, being an equitable doctrine unrecognized at law, accordingly will not sustain an action at law based on a contract within the statute of frauds. We have previously so held this to be the rule. See Goodwin v. Gillingham, 10 Wash.2d 656, 117 P.2d 959 (1941). And, this rule is widely, although not unanimously, recognized and applied in other jurisdictions. See Annot., 59 A.L.R. 1305 (1929).

We believe it appropriate at this point to focus upon and to reexamine the rationale behind the prohibition against recovery of legal damages in view of the circumstances in this case, and to determine whether that prohibition retains continuing validity. At the outset it is relevant to note that the statute of frauds has never been given 'blind' or absolute implementation and application by the courts. From earliest times the English courts of chancery exhibited a willingness and have proclaimed and granted, suitable relief in those instances where strict application of the statute of frauds, resulting in total avoidance of the parties' oral agreement, would produce an inequitable result. Thus, courts have long granted equitable relief both in the form of specific performance and in the form of recovery in quantum meruit based upon unjust enrichment where sufficient showing or proof of part performance by the parties to the oral agreement warrants the granting of such relief.

The reasoning behind the willingness on the part of courts to grant equitable relief from the strict operation of the statute of frauds in appropriate cases is, clearly, apparent within the rationale behind, and reason for enactment of, the statute of frauds itself:

The purpose and intent of the statute of frauds is to prevent fraud, and not to aid in its perpetration, and courts, particularly the courts of equity, will, so far as possible, refuse to allow it to be used as a shield to protect fraud, or an instrument whereby to perpetrate a fraud. * * * On the contrary, the courts will endeavor in every proper way to prevent the use of the statute of frauds as an instrument of fraud or as a shield for a dishonest and unscrupulous person, And under modern theory of practice, what a court of equity would do, law courts, under proper allegation, will no doubt also do. The courts do not tolerate the use of the statute of frauds to enable one to take advantage of his own wrong. As has been said, That principle of law or legislative enactment would be an anomaly which, while attempting to prevent fraud, would become an instrumentality for the perpetration of fraud.

(Italics ours. Footnotes omitted.) 49 Am.Jur. Statute of Frauds § 578 (1943).

Thus, this Court has long held that an agreement to convey an estate in real property, though required by RCW 64.04.010 and 64.04.020 to be in writing with the formal requisites specified for a deed, may be proved without a writing, given sufficient part performance; and that specific performance will be granted where the acts allegedly constituting the part performance point unmistakably and exclusively to the existence of the claimed agreement. See, e.g., Mobley v. Harkins, 14 Wash.2d 276, 128 P.2d 289 (1942); Richardson v. Taylor Land and Livestock Co., 25 Wash.2d 518, 171 P.2d 703 (1946); Granquist v. McKean, 29 Wash.2d 440, 187 P.2d 623 (1947); Ormiston v. Boast, 68 Wash.2d 548, 413 P.2d 969 (1966); Ferguson v. McBride, 69 Wash.2d 35, 416 P.2d 464 (1966); Beckendorf v. Beckendorf, 76 Wash.2d 457, 457 P.2d 603 (1969). Similarly, where specific performance is not available, this Court has held that, upon an owner's breach of an oral contract to convey lands to another then residing thereon, the owner of the lands is liable for the value of improvements placed thereon by such other person, over and above the value of the rents and profits while occupied. See, e.g., Ernst v. Schmidt, 66 Wash. 452, 119 P. 828 (1912); Gregory v. Peabody, 149 Wash. 227, 270 P. 825 (1928); Gregory v. Peabody, 153 Wash. 99, 279 P. 102 (1929); Lager v. Berggren, 191 Wash. 437, 71 P.2d 377 (1937); Hardgrove v....