Moale v. Buchanan ( 1840 )

Archer, J.,

delivered the opinion of the court.

There is no agreement in writing within the statute of frauds for the transfer of any lands to trustees in this case. The proposal R designates no land, or property to be conveyed. It proposes to convey all the property, without designating what property. To make it an agreement within the statute of frauds,, it cannot be connected'by parol evidence with schedule S. An agreement to be within the statute of frauds, cannot be partly in writing, and partly in parol. It must be entirely in writing, and signed by the parties to be charged, or their authorised agents, and if proposal R, had referred to schedule S, without further explanation, it would have been difficult for both conjointly to have said, that the parties had agreed to convey all the- property in- schedule S, to trustees; because that paper contained a schedule of other property, than property owned by the Factory, and the proposal R, was only made in behalf of the Factory. The - parol evidence however, when connected with proposal R, and schedule S, leaves no doubt on our minds, but that it was agreed between the Warren Factory, and the owners of the city property, (including the Pratt street Factory, embracing both lots, as well the lot included in the deed of 17th July 1829, as the lot excluded,) and the creditors of the. Warren Factory, that all the property in schedule S, should be conveyed to the creditors of Warren Factory, if they would grant the time asked for in proposal R, to meet the responsibilities due them.

It is clear in our minds, that it was not the design of the parties to reduce the entire agreement to writing. The proposal R, was made to show the terms of the deed, and the extent of indulgence asked.

The schedule S, was made to show the general condition of the Factory, so as to induce the creditors to grant the indulgence, and what property, individual and otherwise, was intended to be conveyed; but it was unintelligible, without oral explanations, as to the property intended to be conveyed. Besides, it is in proof, that the individual owners of the city property had agreed to convey the property mentioned in the •schedule, but neither proposal R, or schedule S, refer in any manner to their agreement; nor are they in any manner bound by any thing contained in either paper; yet the parties acted throughout on the writings, and oral agreement.

The agreement then exists, partly in writing, and in partly parol. If the agreement were entirely in parol, and were in part performed, it would be specifically executed; the part performance talcing the case out of the statute of frauds.

Now has there been such a part performance here? The deed was executed on the 17th July 1829, and the proof is, that possession was delivered, as well of the property included in the deed, as the property omitted, about the 1st October 1830; and that on the 8th October 1830, insurance was affected thereon.

Possession to be available must be in part performance, and must be referrible to the contract, and not to a distinct title. Sugden, 136. It is true the trustees took possession in virtue of the deed, but all parties believed, that the deed was in pursuance of the contract, so that the possession taken by the trustees, was both under the deed and the contract. The trustees were not named in the written proposition, but were agreed upon by the parties, and the deed having omitted the controverted lot through mistake, when they obtained possession, Chancery would consider them in possession under the contract, holding an interest therein, as trustees, for the benefit of the cestui que trust, and having an interest in the enforcement of such contract. We conclude therefore, that the part execution was referrible to this contract, and not to a different or distinct title.

But the agreement was partly by parol and partly in writing. That can make no difference where part performance is relied upon, as is clear upon authority. 14 John. 33. 3 Bro. Ch. 149. 1 Scho. & Lef. 37, and there would be reason for giving a.s much, if not more weight,“to evidence partly in writing, than if it were all by parol, because a greater probability of truth and certainty.

As to the mistake in the deed of July 17th, there can be no doubt. It is proven, that the grantors all agreed to convey the property left out of the deed; that the creditors acted upon the faith that it would be conveyed. That the parties believed it had been conveyed; that the grantors delivered it over with the other property to the trustees, and that it was sold under a decree of a court of equity at the instance of the trustees, and that while in their possession it was insured, and that the mistake was not discovered until the purchase under the decree disclosed, the fact. All these facts prove the mistake so clearly as to leave us no room to entertain a doubt about the matter.

The parties have ineffectually attempted to execute this contract, the deed of 17th July having left out a part of the property agreed, and intended to be conveyed by the mistake, to which we have adverted, and the complainant’s seek to rectify the mistake, and specifically enforce the agreement. It is supposed, that by the established principles of Chancery, this object is not attainable; and that the evidence ought not to be let in, to show the mistake in the executed contract, where the complainant is seeking to enforce the contract; because it would controvert the statute of frauds, and charge a party with the sale of lands by an agreement not in writing; but if the party have so far executed the contract, by putting the complainant in possession, so that it would be a fraud upon them, to insist that their agreement was not in writing, a case is presented not within the statute of frauds, so that the statute is not contravened by letting in the evidence, and such it would seem was the opinion of Lord Redesdale, who although he held the doctrine that a complainant on a bill for a specific performance of a contract in relation to land, could not offer evidence of a mistake in the agreement, and have it executed as rectified, still thought that the contract might be executed, where there was such a part performance as took the case out of the statute. 2 Scho. & Lef. 39. Had the agreement been entirely by parol, and a part performance, the complainant would have been entitled to relief. Shall he be in a worse situation by having attempted to reduce the whole agreement into the form of a conveyance, if he shall make an omission in the conveyance, by mistake of an essential part of the agreement? This is not the case of a party resting solely on a written contract for the sale of lands, and who seeks to reform it by parol, and as reformed to have it executed. .But the complainant rests on possession, amounting to such a part performance, as withdraws his case from the operation of the statute, and then there would be nothing to distinguish it from the ordinary case of a complainant going into Chancery to reform a contract on the ground of mistake. In 7 Ves. 217, Sir William Grant however, declares, that though the instrument does not contain the terms, it must in contemplation of law be taken to contain the agreement, and that parol evidence of mistake or fraud can only be offered by a defendant to rebut an equity ; but that it cannot be offered by a plaintiff, first to falsify the instrument, and then to substitute an agreement to be executed by the court. He seems to consider it a universal principle, applicable to all cases of agreements, whether under the statute of frauds or not. This doctrine has been repudiated in this country by Chancellor Kent, who has shown many cases in the reports, where the complainant has been permitted to offer parol evidence of mistake, and where the instruments have been rectified. 2 John. Ch. 599.

Henkle vs. Royal Exchange Assurance Company. Baker vs. Paine, 1 Ves. 456. 1 P. W. 60. 2 Atkins 31. Prece. in Ch. 309. 3 Ves. 356, 2 Ves. 377, 5 Ves. 601, 1 Ves. 400. 2 P. W. 464. Dick. 294. 5 Ves. 593, 2 Ves. 565. 1 Eq. Ca. Abr. 820, Pla. 1. 1 P. W. 279 — and heaccordingly received parol evidence, at the instance of the complainant, rectified the contract, and specifically executed it. 2 John. Ch. 535. 4 John. Ch. Rep. 144. These opinions of Chancellor Kent have m.et the decided approbation of Mr. Justice Story, as will be seen by reference to his commentaries, 1 Vol. 175, note 1. In these opinions we accord, perceiving no just reason why the evidence should be admitted to rebut an equity, and not be received to'enforce an equity.

Possession was delivered to the trustees about the first of October 1830. Didier recovered judgments against E. Buchanan and.A. Buchanan, in April 1831. Didier issued a fi.fa. on this judgment, and levied it on the lot in controversy, and the question arises, whether the equity of the complainants is not superior to his. If there were no evidence in the cause, calculated to shew that he had assented to the contract and deed of trust, we still think, the equity of the complainant the superior equity, as a judgment creditor he had no specific lien on the property. But the creditors acquired a specific lien in virtue of the contract and the delivery of possession under it to the trustees. If Didier acquired a lien in virtue of thefi.fa. and levy thereon, it was subsequent to the lien of the complainants. But there exists other grounds upon which he must be postponed to the complainants. He has in fact made himself a party to the deed. He has accepted a dividend with the rest of the creditors; and having done so, must be considered as affirming the deed, and the contract upon which it was executed. A contrary opinion would give him an unconscientious advantage over the other creditors; on this branch of the subject he might have placed himself in a more favourable attitude, had he when seeking to enforce his judgment, offered to surrender the dividend acquired under the deed, if in truth he had never been a party to the contract or deed.

With regard to the right of the Marine Bank to resist the specific execution of this contract, we remark, that the complainant dates his equitable interest in the controverted lot from one of two periods, first, from the day where possession was delivered to the trustees, or secondly, from the date of the deed of 17th July 1829. If from the former period, the complainants have no priority, for as they are seeking to defeat the lien of the Marine Bank, the onus lies on them to show that the judgment was posterior to the date of the delivery of possession. This should be clearly shown to the court before we could enjoin the execution on the judgment of the Bank. Now the judgment of the Bank is proven to be on the 7th of October 1830, and the date of the delivery of possession is uncertain; it is stated to be about the 1st of October of that year. This is too uncertain; it may have been on any day from the first to the eighth of October inclusively, and still be about the first of October. If the equitable interest of the complainant existed cotemporaneously with the deed of July 17th, still it was a latent and secret equity unknown to the Bank, or not proven to be known to them, until after the rendition of the judgment in favour of the Bank.

Objections have been taken to the contract and deed, and it is alleged, they are both fraudulent and void. It becomes unnecessary to determine this question, because they are valid in any aspect against parties thereto, and Didier, who by his acceptance of dividends under the deed, has become a party thereto. Having determined that the Marine Bank, having a preference, has liberty to pursue her execution against the controverted property, there is nothing in her case which would demand of us a judgment on the validity or invalidity of the contract or deed.

From what we have said in the former part of this opinion, it will be observed,that we consider Messrs. Moale and Johnson as interested in this contract, and of course in its enforcement, and therefore do not consider there is any objection on the ground of parties.

We therefore think that relief should be decreed to the complainants to the extent of their prayer, except as against S. S. Buchanan, who was an infant at the date of the deed and contract, and except as against the Mari?ie Bank, in relation to which, the injunction heretofore issued, should be dissolved, and the said Bank and the said S. S. Buchanan should be allowed their costs in the Court of Chancery and in this court.

DECREE REVERSED IN PART AND CAUSE REMANDED.