Scott v. Bush

• Citation: 26 Mich. 418
• Court: Supreme Court of Michigan
• Decision Date: 17 January 1873
• Parties: Jesse Scott v. Jonathan T. Bush

26 Mich. 418

Jesse Scott v. Jonathan T. Bush

Supreme Court of Michigan

January 17, 1873

Heard January 13, 1873

Error to Jackson circuit.

Judgment reversed, with costs, and a new trial granted.

Gibson & Wolcott, for plaintiff in error.

Johnson & Montgomery, for defendant in error.

OPINION

Campbell, J.:

This case presents the single question, whether a person who has made a verbal arrangement with another to purchase land of him, and has paid money with a stipulation that he may retain it if the purchaser fails to complete the bargain, can recover back the money, where the vendor is willing and offers to convey.

It is necessary to consider on what grounds the holder of the money can claim to hold it. It cannot be held as in any way analogous to a gift. It is delivered upon condition, to be held in case of a failure to perform and expected act, but in case of performance, to be applied towards the full price of land. It cannot, then, be put upon any other ground than that of an agreement, involving rights and obligations on both sides, and a forfeiture upon the default of the party paying over the money.

This agreement is an agreement for the purchase and sale of lands; and the stipulation for a forfeiture of the deposit is the agreed penalty, or, more properly, the stipulated damages, for its breach. If the contract is valid the forfeiture is valid, as it is not claimed to be unreasonable; but if the contract is not valid, then no part of it can be enforced, without leading to confusion and contradiction.

Under our statutes every contract for the sale of lands is void, unless the contract, or some note or memorandum of it, is in writing, and signed by the vendor, or his agent lawfully appointed in writing: 2 Comp. L., 1871, § 4694. The law does not require the purchaser to sign the agreement, and he is liable, therefore, upon the written contract, though his own assent is verbal: Holland v. Hoyt, 14 Mich. 238. The statute does not require the consideration to be set forth in writing, but allows it to be proved otherwise: § 4695.

The validity of part performance, as taking contracts out of the statute so as to authorize their specific performance, is also declared: § 4696.

The only consideration for the agreement of the purchaser to forfeit his deposit in this case, was the verbal promise of the vendor to convey. No possession was given of the land, and no act whatever was done by the vendor. The payment of the deposit was not such an act of part performance as would, under any of the authorities, authorize the purchaser to demand a specific performance.

There was, then, no consideration whatever for his agreement, and it gave him no rights against the vendor. The arrangement, therefore, was in no sense a contract, and he was not bound by it. Until both parties are brought into binding relations, their dealings have no effect. They can only be regarded as preliminary negotiations, which confer no rights.

They cannot, therefore, be made binding thereafter, by any attempt of a single party to force a contract on the other. If there was no contract already in existence, the subsequent assent of both was as necessary as if they had never negotiated. A party who has never become bound, cannot be held by any but his own agreement. And the cases which intimate that one party cannot retract, if the other is willing to...