Young v. Neill
| Decision Date | 27 June 1950 |
| Citation | 190 Or. 161,220 P.2d 89 |
| Parties | YOUNG v. NEILL et al. |
| Court | Oregon Supreme Court |
Argued June 13, 1950.
Otto J. Frohnmayer, Medford, argued the cause for appellant. On the brief were Neff & Frohnmayer, of Medford.
Frank J Van Dyke, Medford, argued the cause for respondent-cross appellant. On the brief were Van Dyke & Lombard, of Medford.
George M Roberts and Edward Branchfield, Medford, argued the cause for respondents. With them on the brief was G. W. Kellington, of Medford.
Before LUSK, C. J and BELT, ROSSMAN, HAY, and LATOURETTE, JJ.
This is an appeal from a decree denying specific performance of an alleged lease of a grocery store in Ashland, Oregon, the terms and conditions thereof being embraced in a written, unsigned instrument. Plaintiff-appellant Young and her ex-husband Neill, respondent-cross appellant, were the lessees, and the defendants-respondents McGee, husband and wife, were the lessors. Mr. Neill and Mrs. McGee are brother and sister; Mr. McGee is a minister of the gospel. Since Mrs. Young and Mr. Neill were married at the time of the transactions involved herein, we will hereinafter designate them as 'the Neills.'
The McGees were co-partners in a grocery business known as the 'Boulevard Market' and owners as tenants by the entirety of the premises where the grocery business was located. About the middle of June 1946, they contemplated disposing of their business because of McGee's ill health. Negotiations were had between the parties, whereupon the Neills quit the business in which they were engaged and took possession of the grocery store, paying to the McGees the sum of $12,797.31 for the stock of goods and $1,000.00 for the goodwill of the business. A lease to the premises involved and a bill of sale covering the stock of goods were prepared by William Briggs, attorney for the McGees, at the instance of McGee, this lease being the one involved in this controversy. These documents were not signed by any of the parties but were delivered to the Neills who placed them in the safe in the store building. The Neills paid the McGees on a monthly basis as provided for in the written lease on the following terms: three per cent of the gross sales of the business each month up to $12,000.00, plus two per cent on all sales in excess of that amount.
The Neills were divorced in December 1946, and in July 1947, Mrs. McGee, who was very much exercised about the divorce, told Mrs. Neill that she should sell the business 'because so many people were asking why we didn't get that mess out of there.' The matter continued until October 24, 1947, when the McGees served notice upon the Neills to quit the premises, claiming a tenancy from month to month. Thereupon, the Neills, in looking over their papers, found that the lease and bill of sale were unsigned. This suit was then brought to compel specific performance, the claim being that the unsigned lease was the lease actually entered into between the parties. The ex-husband Neill refused to join in the suit and was made a party defendant; however, he filed an answer which contained most of the allegations of the complaint and also asked for specific performance. The McGees answered and inter alia admitted the sale of the stock of goods at its inventory value of $12,797.31, plus an additional $1,000.00 for the good-will of the business but denied that the parties ever agreed upon the terms of said lease, and alleged that said unsigned lease was null and void and of no effect. They alleged that the Neills' occupancy was based on a tenancy from month to month and asked that the tenancy be cancelled and that they be given possession of the real property. As a separate defense they alleged, among other things, that the Neills were estranged at the time of the culmination of the transaction and withheld knowledge of such estrangement from the McGees, and had they known of such estrangement, they would not have made the sale to the Neills nor allowed them to conduct the grocery business on said premises, and, therefore, they should be estopped from asserting that the McGees agreed to be bound by the terms of the alleged lease. This defense cannot be considered as the evidence shows the McGees had knowledge of the marital troubles between the Neills at the time the transaction was closed.
The McGees contend that this case falls within the statute of frauds, O.C.L.A. § 2-909, and, since the lease was unsigned, no evidence of its contents could be received. The Neills counter by contending that the case was taken out of the statute of frauds because of part performance, and that the McGees should be estopped to deny the validity of the lease.
In Oregon a lease for more than one year is void unless it is in writing; however, equity will relieve a party from the effects of such statute where the lease can be shown to be clear, certain and unambiguous in its terms and where there is part performance on the part of the lessee, such as taking possession of the premises and payment of rental under the lease. Wallace v. Scoggins, 18 Or. 502, 21 P. 558, 17 Am.St.Rep. 749. The statute of frauds was never designed to shield against the perpetration of a fraud.
There are three essential elements of a lease, namely, description of the property, duration of term and rental consideration. Bevan v. Templeman, 145 Or. 279, 289, 26 P.2d 775.
There is sharp conflict in the testimony of the witnesses concerning the lease, but on a close analysis of the evidence, we find that the same established the following facts: after discussions were had between the parties regarding the sale of the business, all four of the parties went to the Ashland branch of the First National Bank of Portland for the purpose of discussing the feasibility of the Neills obtaining a loan of $10,000.00 to complete the deal. Mr. Wenner, manager of the bank, testified as follows:
Discussion was had about the extent of the business which the McGees had done; whereupon McGee submitted to Wenner a profit and loss statement covering the years 1944 and 1945 and told Wenner '* * * that they (the Neills) should have no difficulty in realizing that amount of income from the business which was potential.' Thereupon McGee and Neill went to the office of William Briggs, attorney for the McGees, and asked him to draw a lease covering the premises involved. Mr. Briggs testified as follows:
'Q. Just tell the Court what conversation you had with Mr. McGee and Mr. Neill at that time as nearly as you can remember. A. Well, Mr. McGee and Mr. Neill came in the office, and Mr. McGee told me that he was planning on selling the grocery store to Dick and Mollie----
'Q. That's Mr. Neill and Mrs. Young? A. Yes; and that they wanted a lease prepared; and Everett--that's Mr. McGee--had a little memorandum of the various points he wanted in the lease, and we discussed it, and I took notes of what the provisions were that he was especially interested in, and I drew the lease on that basis. That's about all there is to it.
'Q. Did you recall having any discussion relative to how the percentage would be checked on by Mr. McGee? A. Yes. There was a little something said about that. On those percentage leases we sometimes put in a clause about access to the books, and Mr. McGee said 'Well, I am dealing with Dick--Mr. and Mrs. Neill--and there isn't any necessity of a lot of complicated provisions on that, because he indicated he trusted them thoroughly on that. I did, however, put in a short provision that they could check the income tax returns.
* * *
* * *
'Q. Mr. Briggs, I am handing you Plaintiff's Exhibit 'A'. I will ask you to state whether or not that is the lease which you prepared after your discussion with Mr. McGee and Mr. Neill? A. That's it.
'Q. Looking at the terms of that lease, Mr. Briggs, would you just take the first paragraph for example and tell the Court how it happened you put in the lease that it should be for a period of five years beginning July 1, 1946, and ending June 30, 1951? A. Just because I was told to; that's all.
'Q. And the description that it covered (reading) 'those certain premises known as the Boulevard Market at 842 Siskiyou Boulevard, City of Ashland, Jackson County, Oregon, together with all of the furniture, furnishings and store equipment pertaining thereto, but excepting that portion thereof which is now occupied by the Boulevard Market Butcher Shop and its equipment, on the terms, stipulations and conditions herein set forth and enumerated.' How did you get that description? A. Mr. McGee and Mr. Neill. Everett did most of the talking, however, as far as that is concerned.
'Q. With reference to paragraph two (reading) 'That the rental for said premises, which the first parties agree to accept...
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