Robertson v. Melton

• Decision Date: 20 April 1938
• Docket Number: No. 1724-7008.,1724-7008.
• Citation: 115 S.W.2d 624
• Parties: ROBERTSON v. MELTON.
• Court: Texas Supreme Court

115 S.W.2d 624

ROBERTSON v. MELTON.

No. 1724-7008.

Commission of Appeals of Texas, Section B.

April 20, 1938.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action by H. W. Melton against R. R. Robertson for damages for breach of an agreement for the exchange of real estate. From a judgment of the Court of Civil Appeals affirming a judgment of the district court in favor of plaintiff, 86 S.W.2d 473, defendant brings error.

Reversed and rendered.

Kilgore & Rogers, of Wichita Falls, for plaintiff in error.

Bonner, King & Dawson and Arch Dawson, all of Wichita Falls, and Underwood & Strickland, of Amarillo, for defendant in error.

SMEDLEY, Commissioner.

The Court of Civil Appeals affirmed a judgment of the district court in favor of defendant in error, Melton, against plaintiff in error, Robertson, for damages on account of breach by Robertson of an agreement for the exchange of real estate. 86 S.W. 2d 473. Robertson pleaded the statute of frauds, Rev.St.1925, art. 3995.

The parties executed a written contract on August 20, 1931, by which Melton agreed to convey to Robertson 1,735 acres of land in Deaf Smith county and Robertson agreed to convey to Melton 8 improved lots in the city of Wichita Falls. The land in Deaf Smith county was subject to a first lien securing a debt of $17,350 due July 1, 1938, with accrued interest thereon amounting to $1,619.34, and subject to a second lien securing three notes for $969.38 each payable to Dr. C. L. Edgar, three notes for $659.98 each payable to J. E. Persons, three notes for $659.98 each payable to J. F. Persons, and one note for $1,725 payable to C. B. Redman, due July 15, 1934, there being accrued interest on the same amounting to $861.36; and subject to a lien securing taxes for the year 1930 in the amount of $275. The contract stipulated that Robertson should take the land subject to the said liens and contained the further paragraph:

"Consummation of this contract shall depend upon the rearrangement of the payment of the above notes held by Dr. C. L. Edgar, J. E. Persons and J. F. Persons, whereby said notes may be paid in annual installments of $1000.00 each, together with interest at 6% per annum, said arrangement to be made not later than August 23, 1931."

There appeared in the contract the usual provisions for the furnishing and examining of abstracts, the curing of objections made to titles, and the proration of taxes for the current year. The contract expressly provided that no change or addition in it should be made except in writing signed by both parties and their agents.

On the day after the execution of the contract Melton procured from Dr. Edgar and J. E. and J. F. Persons a written statement signed by them in the form of a letter addressed to Robertson, in which they agreed that in consideration of Robertson's agreement to pay accrued interest on the first mortgage, to pay all taxes for the year 1930 and to pay accrued interest on the notes held by them, they would agree to renew and extend the payment of their said notes so that they would become due in five installments of $1,000 each on September 1, 1932, 1933, 1934, 1935, and 1936, respectively, and one installment in the sum of $1,866.64 on September 1, 1937, and that upon the payment by Robertson of said sums required to be paid by him they would accept an extension agreement executed by Melton. Approval of this letter by Melton was evidenced by his signing it under the letters "O.K." Robertson did not sign the letter or otherwise agree to it in writing.

In anticipation of Robertson's plea of the statute of frauds, Melton alleged in his petition that the arrangement made for the extension of the notes as evidenced by the letter signed by Dr. Edgar and the two Persons constituted a substantial compliance with the terms of the original contract, and, further, that if it was not such substantial compliance it was agreed to and accepted by Robertson personally and by his agents; that such acceptance of the arrangement by Robertson waived compliance with the terms of the original contract; and that Robertson was estopped by his agreement to the arrangement to claim that it was not made in compliance with the law, in that Melton was caused thereby to believe for many weeks that the contract would be consummated and because Dr. Edgar and the two Persons would have divided the final note so as to make another annual payment of $1,000 and a final payment of $866.64, had Robertson not agreed to the method of payment as set out in the letter.

Melton alleged compliance on his part by procuring the agreement for extension of the notes as evidenced by the letter, by furnishing a complete abstract of title to the Deaf Smith county land, and by executing and tendering a deed conveying the land to Robertson subject to the said liens. He alleged further that while Robertson led him to believe until October 28, 1931, that he would perform the contract by executing and delivering a deed conveying the Wichita Falls property, he definitely on or about said date refused to perform the contract and still refuses to perform it.

The jury in answer to special issues found that Robertson prior to August 23, 1931, agreed to the terms of the letter of extension; that Melton could have obtained an extension within the exact terms of the original agreement; and that Melton's failure to obtain an arrangement for extension of the notes in accordance with the terms of the original contract was caused by Robertson's agreement to the terms of the letter.

The extension of the notes as proposed by the letter signed by Edgar and the two Persons was not a compliance with the terms of the original contract, but was the proposal of an agreement changing that contract materially. The contract provided that the time for the maturity of the notes should be changed so that they might be paid $1,000 each year, whereas according to the plan set out in the letter a payment of $1,866.64 would be required on the sixth year. Robertson did not bind himself in the original contract to pay or to assume the payment of any part of the principal or interest secured by liens on the land. The letter made payment by him of accrued interest on the first lien note, of accrued interest on the notes held by Dr. Edgar and the two Persons and of the 1930 taxes a condition to the extension of the notes. Robertson's oral agreement to the plan for extension of the notes as set out in the letter constituted an oral modification of the terms of the original contract.

It is our opinion that such oral modification of the contract is prohibited by the statute of frauds, article 3995, Revised Civil Statutes of 1925. The rule is that parties to a written contract coming within the provisions of the statute of frauds may not by mere oral agreement alter one or more of the terms thereof and thus make a new contract resting partly in writing and partly in parol, the reason for the rule being that, when such alteration is made, part of the contract has to be proven by parol evidence, and the contract is thus exposed to all the evils which the statute was intended to remedy. 27 C.J. pp. 327, 328, § 416; 25 R.C.L. p. 708, § 352; Kistler v. Latham, Tex.Com.App., 255 S.W. 983, 985; Adams v. Hughes, Tex.Civ.App., 140...