Ryan v. Dunphy , 4 Mont. 342 ( 1882 )

Galbraith, J.

The complaint in this action is founded upon a promissory note made by the appellant to respondent, dated June 1, 1879, payable December 1, 1879, for .$1,511.50.

The answer of the appellant admit’s the execution and ■delivery of the note, and also that the same has not been paid, but alleges, by way of cross-action and counterclaim, in substance, the following state of facts: “That in February, 1879, the appellant was negotiating for the purchase of certain placer mining ground, with -the water rights, flumes and appurtenances owned by and in the possession of certain persons, Rumsey and Embry; that about this time, at the request of the respondent, it was (in substance) agreed between the appellant and respondent that the appellant was to effect the purchase of the above property upon the best terms possible, using his best judgment, for the benefit of both parties; that the title thereto was to be taken in the name of the appellant, and that the respondent was not to be known in the transaction till the purchase was completed and the conveyances executed; that when the appellant obtained a title to said property, he was to make to respondent a deed for the undivided one-third thereof, upon the execution and delivery of which the respondent was to pay to appellant the one-third of all moneys paid by him for such conveyance, and the one-half of all expenses paid out in and about the purchase; that on the 24th of February, 1879, the appellant obtained a deed from Embry for his interest in the property, the consideration therefor being $2,600; that on the 26th of July, 1879, the title from Rumsey for one-half of the property to the appellant also became perfected; and upon this day the appellant and wife executed a deed to respondent for an undivided one-third of said property, and the same was tendered to respondent, and demand made for the payment of $1,935.61, being the amount claimed by respondent on account of the purchase and expenses in relation thereto; that respondent denied the existence of the agreement, and refused to pay the money and receive the deed.”

The respondent filed his replication, denying the existence of the agreement, or that the respondent was indebted to appellant in the sum claimed in the answer, or in any other sum whatever.

Upon the trial, the appellant being placed upon the stand as a witness, was asked the following question: “You will state whether, in the month of February, 1879, you entered into any contract or agreement with the plaintiff in regard to the purchase of the mining ground in Grizzly Gulch, Minnesota mining district, Lewis and Clarke county, Montana territory.” This was the property set forth in the answer.

To this question the witnéss answered: “I did enter into a contract with plaintiff verbally; there was no written agreement.”

The witness was then interrogated as follows: “You will state what the contract was.” To this question the respondent objected, for the reason that the agreement, not being in writing, is void by the statute of frauds. The court sustained the objection. The exception to this ruling of the court presents the principal question for our decision.

It will be observed in relation to the agreement set forth in the answer, and which was sought to be proved by the question propounded, that the property which was the subject thereof was real estate; that the appellant was to obtain it in his own name and make the payment of the consideration therefor; that when the purchase was completed, the respondent was to pay the appellant one-half the amount of the purchase money, who thereupon was to convey one-third of the property to respondent.

The money so paid by the appellant was his own money, and it cannot be considered a loan or advance to the respondent. To take an agreement from the operation of the statute of frauds and establish a resulting trust, the purchase money must be the property of the party paying it at the time of payment. The same rule prevails “where the party taking the deed pays his own money therefor, with the understanding or agreement that it may afterwards be repaid and the land redeemed by him who sets np the trust.”

The agreement was therefore a contract within the statute of frauds. Secs. 160-162,176 and 177 of art. I, ch. 13, 5th division, Revised Statutes 1879, pp. 435-437; Browne on Statute of Frauds (4th ed.), sec. 90; Kendall v. Mann, 11 Allen (Mass.), 15; Kellum v. Smith, 33 Pa. St. 164; Jackman v. Ringland, 4 W. & S. (Pa.) 149.

But it is claimed by the appellant that the counterclaim, being an independent action for money paid, laid out and expended by appellant at the instance and request of the respondent, the statute has no application.

To this we think it would be sufficient to reply that the express contract being void by the statute of frauds, the counterclaim founded thereon cannot be sustained.

We understand it to be the .general rule, that the agreement must be mutual as to the remedy and obligation, and that a contract will not be enforced against a party who does not possess the power under the contract to enforce it upon his part.

Upon this agreement the respondent could not bring a bill for its specific performanpe.

It will be observed that the appellant founds his counterclaim wholly upon the express contract alleged in his answer. Therefore both the supposed bill in equity for specific performance by the respondent, and the counterclaim in question, are founded upon the same express verbal contract. No reason can, we think, be assigned for maintaining that a contract which would not sustain a bill in equity for specific performance, for the reason that it is void under the statute of frauds, would nevertheless, in itself, be sufficient to support an action or counterclaim for the recovery of the money paid out under its provisions.

It was the express agreement alone which the appellant offered to prove upon the trial. It was only to the refusal of the court to allow proof of this agreement that the appellant excepted. The claim of appellant was based wholly upon the express agreement set forth in this answer. He does not claim the sum demanded, or any portion thereof, by virtue of any implied contract, to pay for expenses incurred in and about the purchase. There is no claim in the answer upon what may be technically called a quantum meruit or a quantum valebat. There is no statement of facts that substantially establishes any such claim under our system of pleading. The proof Avas not offered for any other purpose than to sustain the allegations of the counterclaim and cross-action. It was the express contract alone which was put in issue by the pleadings.

It will be presumed, therefore, that the court ruled upon the objection in view of the state of the pleadings.

There was a replication denying the existence of the contract set forth in the answer. This required proof that the alleged agreement was in writing. Browne on Statute of Frauds (4th ed.), sec. 511; May v. Sloan, 11 Otto, 231; 1 Moak’s Van Santvoord’s Pl. p. 674.

The court ruled correctly on the objection.

The judgment is affirmed, with costs.

Judgment affirmed.