Molokai Ranch, Ltd. v. Morris

Decision Date21 September 1942
Docket NumberNo. 2480.,2480.
Citation36 Haw. 219
PartiesMOLOKAI RANCH, LIMITED v. CHARLES E. MORRIS, ALSO KNOWN AS C. E. MORRIS, AND CHARLOTTE D. MORRIS, ALSO KNOWN AS MRS. C. E. MORRIS.
CourtHawaii Supreme Court

OPINION TEXT STARTS HEREERROR TO CIRCUIT COURT SECOND CIRCUIT. HON. D. H. CASE, JUDGE.

Syllabus by the Court

A claim of equitable title in the defendants is not a valid defense to an action in ejectment.

The doctrine of equitable estoppel includes estoppel by conduct (or estoppel in pais) and the doctrine of part performance.

The general rule pertaining to estoppel by conduct is that where one by his words, or conduct, willfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is precluded from averring against the latter a different state of things as existing at the same time. In order to have an estoppel by conduct, there must have been a representation or concealment of material facts, known by the party to exist, and with the intention of inducing a party, ignorant of the facts, to act upon the representations.

Where the parties have equal knowledge or opportunity of knowledge, or where facts are known equally to both, or both have equal means of ascertaining them, there can be no “estoppel by conduct” in the absence of a fiduciary relationship or an actual contract.

The underlying hypothesis of the doctrine of part performance is a subsisting and legally valid contract, enforceable in equity had the contract been in writing, to which any acts of performance must strictly refer and in reference to which the setting up of the statute of frauds would amount to a fraud.

C. B. Dwight (also on the briefs) for defendant, plaintiff in error.

R. A. Vitousek (Stanley, Vitousek, Pratt & Winn on the brief) for plaintiff, defendant in error.

KEMP, C. J., PETERS AND LE BARON, JJ.

OPINION OF THE COURT BY LE BARON, J.

The Molokai Ranch, Limited, brought ejectment against the defendants for restitution of a certain parcel of land situated at Maalehua on the island of Molokai, upon which the defendants were and are now living.

In addition to a general denial, the defendants interposed two alleged equitable defenses. Throughout the proceedings before the lower court, as well as on appeal, the attorney for the defendants argued that an oral contract, enforceable in equity, between the parties for the sale and purchase of the property in question, existed as the primary basis of the defenses and this theory was reflected by his objections and exceptions below and in his grounds of appeal to this court. The first defense alleged that by reason of such a contract the defendants had equitable title, which prevented the plaintiff from asserting its legal title to regain possession in ejectment. The second defense, as an alternative to the first, invoked the doctrine of equitable estoppel for the purpose of defeating the plaintiff's action. At the close of the trial plaintiff's attorney moved for a directed verdict against the defendants. This motion was granted by the trial judge and a directed verdict entered. A motion for a new trial was denied and the defendants have brought their appeal to this court.

Assuming, for the purpose of disposing of the first defense, that an oral contract for the sale of the property in question did exist between the parties, enforceable in equity, and that as a result thereof, together with subsequent acts of the parties, the rights of the defendants ripened into a complete equitable title to the premises involved, such a title would not under the rulings of this court constitute a defense to an action in ejectment at law. (Magoon v. Kapiolani Estate, 22 Haw. 510, 516. See also Okuu v. Kaiaikawaha, 7 Haw. 311, 312.) An equitable title to real estate is purely equitable in nature and indicative of a remedy peculiar to a court of equity; the distinction between law and equity and in the administration of legal and equitable remedies having been preserved in this jurisdiction. Consequently, if the defendants are the equitable owners by virtue of an enforceable contract in equity and would, through a suit in equity, be entitled to have the legal title of the property conveyed to them, it would be of no assistance to them as a defense here against the legal title of the plaintiff. Subject to equitable estoppels, which are admitted in ejectment actions, the rule in this jurisdiction is that actions of ejectment deal only with legal titles to land. ( Magoon v. Kapiolani Estate, supra.)

The remaining defense presents two phases of the doctrine of equitable estoppel which may be applicable to the case before us. One is estoppel by conduct (or estoppel in pais). The other is the equitable doctrine of part performance. Both phases depend on the evidence relating to the dealings between the defendants and one George Cooke, the president and manager of the plaintiff corporation, who, the jury would have been justified in finding, had the authority to speak for the plaintiff. The dealings consisted primarily of conversations. The defendants are uncertain in their evidence as to when these conversations occurred in relation to their entry on September 15, 1934, upon the property of the plaintiff at Maalehua at a rental of $50 a month. However, this uncertainty becomes immaterial and without legal significance if the conversations were merely the expressions of future hopes or intentions. In such a case none of the statements made by Cooke to the defendants would be sufficient to give rise to estoppel by conduct. They would be subject to change and withdrawal and therefore of necessity would be uncertain and not final. Consequently, any reliance upon them would have been unjustified and the doctrine of equitable estoppel could not be successfully invoked for the reason that they could not properly form a basis or inducement upon which the defendants could have reasonably adopted any fixed or permanent course of action in respect to the property of the plaintiff. (Bankruptcy of Spencer, 6 Haw. 134; Kapiolani Estate v. Thurston, 17 Haw. 312.)

The record unequivocally shows that the defendants and Cooke dealt with each other on an equal basis, without suggestion of any fiduciary relationship between them. It is manifest from the record, particularly from the evidence of the defendants, that both the parties had at least an equal means of knowledge of all the material facts. If anything, the defendants were in a better position to know, for they were direct participants therein. They were at no time mistaken, misled or deceived as to any material fact or circumstance. There was no fraud or deception alleged or shown. Judged by the decisions of this court the plea of estoppel by conduct wholly fails. ( Kauhi v. Keoni Liaikulani, in the Estate of Liaikulani, deceased, 3 Haw. 356; Kela vs. Pahuilima, 5 Haw. 525; Nahaolelua v. Kaaahu, 10 Haw. 18. See also Goo Kim v. Holt, 10 Haw. 653, and Peabody v. Damon, 16 Haw. 447.)

In Kamohai ( k.) v. Kahele ( w.), 3 Haw. 530, 531, this court adopted the general rule enunciated by Lord Denman in Pickard v. Sears, 6 A. & E. (K. B.) 469, 475, as follows: ‘The rule of law is clear that where one by his words, or conduct, wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is precluded from averring against the latter a different state of things, as existing at the same time.’ (Hayselden v. Wahineaea, 10 Haw. 10;Haw. Com. & S. Co. v. Kahului R. R. Co., 12 Haw. 85. See also 31 C. J. Sec. § 59, p. 236, § 67, p. 254.) “In order to [have] an estoppel by conduct, there must have been a representation or concealment of material facts, known by the party to exist, and with the intention of inducing a party, ignorant of the facts, to act upon the representations.” Kamohai ( k.) v. Kahele ( w.), supra, at 532.

Hence, in the absence of an actual contract or a fiduciary relationship between the parties, estoppel by conduct is not present where the truth is known to both parties or where they have equal means of knowledge. (Loff v. Gibbert, 39 N. D. 181, 166 N. W. 810; 31 C. J. Sec. § 71, p. 272.)

The mandatory prohibitions of the statute of frauds (R. L. H. 1935, § 3900) apply equally to courts of law and to courts of equity that “No action shall be brought and maintained * * * Upon any contract for the sale of lands, tenements or hereditaments, or of any interest in or concerning them; * * * Unless the promise, contract or agreement, upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and be signed by the party to be charged therewith, or by some person thereunto by him in writing lawfully authorized.” Therefore, it is clear that there is no remedy whatsoever in law afforded to the defendants under the statute and none in equity unless equitable principles outside of the express language of the statute intervene. Courts of equity consistently have excepted from the operation of the statute of frauds oral contracts for the sale of land where there has been part performance, so-called, of the contract. Such a doctrine, although purely a creation of equity, is also recognized by courts of law as an equitable defense within the more comprehensive doctrine of equitable estoppel. In Riggles v. Erney, 154 U. S. 244, 254, the doctrine of part performance is set forth in the following language: “Indeed, the rule is too well settled to require further citation of authorities, that, if the parol agreement be clearly and satisfactorily proven, and the plaintiff, relying upon such agreement and the promise of the defendant to perform his part, has done acts in part performance of such agreement, to the knowledge of the defendant--acts which have so altered the relations of the parties as to...

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7 cases
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    ...determined between the parties and its terms definitely ascertainable without resort to future negotiations.' Molokai Ranch, Ltd. v. Morris, 36 Haw. 219, 227 (1942); Francone v. McClay, 41 Haw. 72, 78 (1955). 'A court of equity cannot make a contract . . ..' Vierra v. Ropert, 10 Haw. 294, 3......
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    ...a fiduciary relationship, the truth is known to both parties or where they have equal means to the truth of the matter. Molokai Ranch, Ltd. v. Morris, 36 Haw. 219 (1942). In the instant case, there was no showing of reliance upon any misrepresentation or concealment of facts and both sides ......
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