Traiman v. Rappaport, 4209.

• Decision Date: 08 May 1930
• Docket Number: No. 4209.,4209.
• Citation: 71 ALR 475,41 F.2d 336
• Parties: TRAIMAN v. RAPPAPORT.
• Court: U.S. Court of Appeals — Third Circuit

71 ALR 475, 41 F.2d 336 (1930)

TRAIMAN v. RAPPAPORT.

No. 4209.

Circuit Court of Appeals, Third Circuit.

May 8, 1930.

Robert T. McCracken, of Philadelphia, Pa., for appellant.

Ben-Zion Oliensis, of Philadelphia, Pa., for appellee.

Before WOOLLEY and DAVIS, Circuit Judges, and MORRIS, District Judge.

WOOLLEY, Circuit Judge.

In Ocean City, New Jersey, a land boom was on. An auction sale of lots was advertised to be conducted by a real estate company of which the defendant was president and active broker. Prior to the sale the plaintiff, according to his story, called upon the defendant for information as to the desirability of the properties and protection in case he should buy, but really, the defendant said, to obtain a division of the commissions on any sale of properties to his friend Yellin. However that may be, both parties, long familiar with the business of selling and buying real estate, knew what they were doing. Each knew the motives that actuated the other. The defendant, with an eye only to commissions, was keen to sell the lots at high prices — prices so high that they had little relation to land values — and the plaintiff was willing to buy lots at such prices in the hope that, before settling day, someone would repurchase them at even higher prices. Before buying, however, the plaintiff wanted something more; he wanted to be assured of the future market. So he said, and the jury found, that the defendant promised him that if he would purchase properties at the sale and should not be able to resell them before the date fixed for settlement he (the defendant) would return to him the deposit money and take over the agreements of sale himself. Feeling then that he might win and could not lose, the plaintiff attended the sale and on a purchase of five properties for a total price of $95,800 paid deposit money in the sum of $9,580. He at once signed confirmations with the defendant broker and, later, entered into formal agreements of sale with the owners of the properties which contained clauses usual in such documents including one that a first payment of ten per cent. (named in dollars) of the purchase money on each lot had been paid by the purchaser (plaintiff), and that this payment be applied on account of the purchase price or, on default in paying the balance, be forfeited as liquidated damages. The boom broke. The plaintiff, not being able to resell the properties and therefore not being satisfied with his purchases, defaulted and called upon the defendant to refund the deposits. When the defendant refused, he brought this suit to recover them. On the court's instruction that the only law in the case was that when a man makes a lawful promise he is bound to stand by it and that the promise here, if made, was lawful and enforcible as not being violative of the Statute of Frauds, though dealing incidentally with real estate, and on its submission that the sole question of fact for the jury to determine was whether or not the contract was made, the plaintiff had a verdict. The defendant appealed, assigning error in several respects but particularly in the respect that the contract is void under the Statute of Frauds and therefore it was error to submit it to the jury.

We must first determine, what is the contract? Though oral, there is no difficulty in finding its terms. The difficulty is in determining its character. Its terms are given in the words of the plaintiff, both in his statement of claim and when on the witness stand, and, since the verdict, are not open to dispute. In his statement of claim he said:

That prior to the date of the sale, the defendant auctioneer, "in order to interest, solicit and induce plaintiff to become a bidder and purchaser of real estate at said public auction sale, did enter into an oral agreement and arrangement with said plaintiff wherein and whereby it was agreed that in the event that the said plaintiff would purchase at the auction sale which was to be conducted by said defendant on September 5th, 1925, as aforesaid, any land, parcels or pieces of ground, or any other real estate, and thereafter at any time prior to November 5th, 1925 (the date upon which final settlement was to be made for any real estate so purchased), should be dissatisfied with any part, or all, of said real estate so purchased, for any reason whatsoever, then said plaintiff was to have the right or privilege of: (a) demanding the return and receiving from said defendant, any moneys paid toward the purchase price of said real estate; (b) being relieved by said defendant from any agreement or agreements which said plaintiff may have entered into in connection with the purchase of said real estate; (c) the said defendant was to return to said plaintiff, upon demand by said plaintiff, at any time prior to November 5th, 1925, any moneys which said plaintiff may have paid on account of any of said real estate; (d) and said defendant was to take over from said plaintiff any agreements entered into by said plaintiff in connection with the purchase of said real estate."

That is the contract as declared on. When on the stand the plaintiff, in answer to the question, "What was that arrangement," proved the contract, as pleaded, in this one sentence: "He (the defendant) told Mr. Yellin and myself that if those properties were not sold before November 5, which was the date of settlement, that he personally would refund every penny we put in as a deposit on them and take them over himself." This testimony supports the averments a, b, c and d in the paragraph quoted from the statement of claim.

What is the subject matter of the contract? We are constrained to hold that it is an equitable interest in real property. 25 R. C. L. 580. Clearly the contract contemplated the purchase of land, indeed two purchases, one by the plaintiff from the owners and one by the defendant from the plaintiff. Actual purchases were made and first...