Powers v. Hastings

• Decision Date: 31 July 1978
• Docket Number: No. 5004-I,5004-I
• Citation: 20 Wn.App. 837,582 P.2d 897
• Court: Washington Court of Appeals
• Parties: Clarence H. POWERS and Dorothy Powers, his wife, Appellants, v. Robert G. HASTINGS and Hazel Hastings, his wife, Respondents.

Page 837

20 Wn.App. 837

582 P.2d 897

Clarence H. POWERS and Dorothy Powers, his wife, Appellants, v. Robert G. HASTINGS and Hazel Hastings, his wife, Respondents.

No. 5004-I.

Court of Appeals of Washington, Division 1.

July 31, 1978.

Angevine & Johnson, Earl F. Angevine, Mount Vernon, for appellants.

Miracle, Pruzan & Nelson, Howard P. Pruzan, Seattle, for respondents.

DORE, Judge.

Plaintiffs brought an action for the breach of an oral lease and option to purchase real estate agreement

and obtained a verdict for damages. The trial court granted defendants' motion for judgment n. o. v. Plaintiffs appeal.

ISSUES

ISSUE 1: Whether the trial court erred in granting a judgment n. o. v. for defendants on the basis that enforcement of the oral lease and option to purchase agreement of the Hastings' farm was barred by the statute of frauds? DP ISSUE 2: Whether the testimony of a defendant seller in open court as to the details of an oral lease with option to purchase constitutes sufficient "memoranda" or "writing" under the statute of frauds?

FACTS

Defendants were the owners of a farm in Skagit County which they desired to sell. They advertised in various publications and in early 1973 plaintiffs contacted defendants in response to an ad. Subsequently the parties orally agreed that plaintiffs could lease the farm for three years with an option to purchase. Plaintiffs made substantial improvements in the approximate amount of $14,250 in converting the property into a dairy farm.

In the fall of 1974 plaintiffs had difficulty making the agreed monthly payments and ceased paying altogether in October of 1974. Plaintiffs attempted to obtain financing to purchase the property but the parties disagreed over the existence of the option to purchase agreement and the terms of a possible sale. Defendants refused to give plaintiffs a written lease and as a result plaintiffs claim they were unable to obtain financing so they could exercise their option. Plaintiffs left the property the latter part of 1974 and defendants sold the farm in March 1975 to a third party. Plaintiffs then sued for damages based on breach of the oral lease and option agreement.

The defendants in the pleadings, and in their testimony in open court, admitted the existence of the oral lease agreement and option to purchase defendants' farm. Defendants' only defense was that the lease and option to The trial judge, in granting defendants' motion for judgment n. o. v., found that there was an agreement and option to purchase the defendants' farm but that since such agreement was Not in writing, it was not enforceable under the statute of frauds. The trial court further found there was no part performance to take the agreement outside the statute of frauds.

purchase agreement was oral and was not enforceable under the statute of frauds.

DECISION

Our courts have often repeated the rule that a challenge to the sufficiency of the evidence or a judgment notwithstanding the verdict admits the truth of the opponent's evidence and all inferences that can be reasonably drawn therefrom, and requires that the evidence be interpreted most strongly against the moving party in the light most favorable to the opponent. No element of discretion is involved. Such motions can be granted only where the court can say, as a matter of law, there is no substantial evidence to support the opponent's claim. Davis v. Early Construction Company, 63 Wash.2d 252, 386 P.2d 958 (1963).

With the above guideline in mind, let us examine the authorities to determine whether the parties' oral lease with an option to purchase the defendants' farm is barred by the statute of frauds.

In Sealock v. Hackley, 186 Md. 49, 45 A.2d 744, 746 (1946), the statute of frauds was offered to prevent the enforcement of an oral contract to convey land and during trial defendant admitted in his testimony the existence of the contract, the parties and the consideration. The court held that the statute did not bar enforcement of the agreement and stated:

As stated in Trossbach v. Trossbach, 185 Md. 47, 42 A.2d 905, the admissions of a party in the form of testimony constitute sufficient "memoranda" or "writings" under the Statute of Frauds, for recorded testimony is regarded as equivalent to signed depositions. The purpose of the Statute of Frauds is to protect a party, not On the same issue the Supreme Court of Pennsylvania stated:

from temptation to commit perjury, but from perjured evidence against him. Admissions of a party in testifying, while evidence in form, are in essence not mere evidence, but make evidence against him unnecessary.

The statute of frauds, however, does not absolutely invalidate an oral contract relating to land but is intended merely to guard against perjury on the part of one claiming under the alleged agreement. Accordingly, if the title holder admits, either in his pleadings or his testimony, that he did in fact enter into the contract, the purpose of the statute of frauds is served and the oral agreement will be enforced by the court: (citations omitted) Here defendant, in his testimony, admitted the making of the agreement as claimed by plaintiff.

Zlotziver v. Zlotziver, 355 Pa. 299, 49 A.2d 779, at 781 (1946). Other courts have likewise interpreted and recognized this rule: Peacock Realty Co. v. E. Thomas Crandall Farm, Inc., 108 R.I. 593, 278 A.2d 405 (1971) (court held the statute of frauds writing requirement for conveyances of land will not bar enforcement of a broker's claim for a commission on a land sale when defendant admits in testimony the existence and terms of the agreement). Adams v. Wilson, 264 Md. 1, 284 A.2d 434 (1971) (the court held the statute of frauds provision providing contracts not to be enforced in one year must be in writing is not a bar to enforcement of a contract where the party to be charged has admitted the contract in testimony). Wolf v. Crosby, Del.Ch., 377 A.2d 22 (1977) (holding that the rule permitting an admission of an oral agreement and the simultaneous assertion of the statute of frauds as a bar to the enforcement of such an agreement should no longer be recognized). And Corbin has stated:

Let us proceed, therefore, with a general consideration of what constitutes a sufficient note or memorandum. We may well start with this one general doctrine: There are few, if any, specific and uniform requirements. The statute itself prescribes none; and a study of the existing thousands of cases does not justify us in asserting their (Emphasis added.) 2 Corbin on Contracts § 498, at 683 (1950).

existence. Some note or memorandum having substantial probative value in establishing the contract must exist; but its sufficiency in attaining the purpose of the statute depends in each case upon the setting in which it is found. A memorandum that is sufficient in one case may well be held insufficient in another. A complete admission in court by the party to be charged should dispense with the necessity of any writing whatever.

In addition, the Uniform Commercial Code, RCW 62A.2-201(3)(b), recognizes that an oral contract for the sale of goods even though in excess of the $500 limit imposed, is enforceable if "the party against whom enforcement is sought admits in his pleadings, testimony or otherwise in court that a contract for sale was made . . ." See Dehahn v. Innes, 356 A.2d 711 (Me.1976) (holding that the salutary principle embodied in 2-201(3)(b) is applicable to a contract for the sale of goods alone but also should apply equally to the instant contract involving both goods and real estate).

Obviously the purpose of the statute of frauds is to prevent a fraud, not to perpetuate one, and in this regard the courts of this state are empowered to disregard the statute when necessary to prevent a gross fraud from being practiced. Granquist v. McKean, 29 Wash.2d 440, 187 P.2d 623 (1947). The legislative intent in enacting the statute was to prevent fraud resulting from the uncertainty inherent in oral contracts of this nature. Miller v. McCamish, 78 Wash.2d 821, 479 P.2d 919 (1971).

In examining the record in the subject case, we find that both parties agreed that the parties had entered into an oral lease with an option to purchase defendants' farm. However, we disagree with the trial court's conclusion that the statute of frauds would bar enforcement of the parties' agreement. Our decision is supported in the record, which reveals that defendants on Six different occasions admitted the existence of the lease with option to purchase in Writing or In testifying in open court. These occasions were:

1. Defendants in their answer and amended answer admitted the existence of a lease with an option to purchase.

2. Defendant Robert G. Hastings filed an affidavit (Ex. 32) which spells out with particularity every aspect of the lease and option to purchase. The pertinent parts of the affidavit provide:

STATE OF WASHINGTON )

STATE OF WASHINGTON ) SS.

COUNTY OF SKAGIT )

ROBERT G. HASTINGS, being first duly sworn, on oath deposes and says as follows:

That I am one of the defendants named in the above entitled action. That I make this affidavit from my own personal knowledge in support of our motion for summary judgment.

I and Clarence H. Power entered into an oral agreement sometime in late April or May of 1973 wherein he would lease my farm beginning July 1, 1973 for a period of three years with an option to purchase exercisable by him at any time prior to July 1, 1976. Mr. Power was to pay One Thousand Dollars ($1,000) a month for the first twelve months of said agreement and thereafter was to pay Fifteen Hundred Dollars ($1,500) a month which was about what my payments were to the Federal Land Bank. If he exercised the option he would pay One Hundred Eighty-five Thousand Dollars ($185,000) with Twelve Thousand Five Hundred Dollars ($12,500) down with monthly payments of at least Thirteen Hundred Dollars ($1,300) or something close to...