Smith v. Bouck , 33 Wis. 19 ( 1873 )

Dixosr, C. J.

A. owns lands, to be offered for sale at pub-lie auction, and in payment for which he is willing or obliged to receive certain land scrip issued by himself or some former owner of the land. B. is the owner of such land scrip, or a portion of it, which he desires to sell, and C. is a person wishing to purchase the lands or some of them at the sale. 0. has been at some trouble and expense to examine the lands and prepare lists or descriptions of such as he deems most valuable and wishes to buy. B. and C. both attend the auction sale, the former in order to sell his scrip, the latter to become purchaser of the lands. C. has no money to pay for the lands or the scrip, and applies to.B. to sell him the scrip on'a credit of one year, B. to take title of the lands at the sale and hold them in security for the payment of the price of the scrip and interest. B. accepts the proposition of C., and it is thereupon agreed between them that 0. shall attend the sale and bid off the lands in the name of B. as purchaser ; and 0. does so, and the lands are conveyed to B. in pursuance of the bids so made. B. pays the purchase money or price by delivery of the scrip to the vendor of the lands. No writings passed between B. and C., but the whole transaction as between them was verbal merely. The price of the scrip was more than fifty dollars, and no part of the same was delivered, or claimed to have been, by B. to C. C. paid no part of the purchase money of the scrip, nor did he pay or advance anything towards the lands. Such is the most favorable statement of this case for the plaintiff, and-the first question arising upon it is, whether there was any valid sale of the scrip to the plaintiff by the defendant Clark.

The provisions of the statute of frauds touching contracts of this nature are familiar. “Every contract for'the sale of any goods, chattels, or things in action, for the price of fifty dollars or more, shall be void, unless, 1. A note or memorandum of such contract be made in writing, and be subscribed by the parties to be charged therewith ; or, 2. Unless the -buyer shall accept and receive part of such goods, or the evidences, or some of them, of such things in action; or, B. Unless'the buyer shall, at the time, pay some part of the purchase money.” R. S., ch. 107, sec. 3; 2 Tay. Stats., 1256, § 3.

No question arises under the first clause of the statute, since nothing in the form of a note or memorandum in writing was made or attempted to he.

Nor was any part of the purchase money of the scrip paid at the time, so as to secure the validity of the contract by compliance with the third clause. The construction of this clause has always been, that no mere agreement to pay money, without actual payment or giving credit by some manual act, is sufficient to satisfy it. Something must pass between the parties besides mere words, some overt, symbolical act, like the payment of earnest-money, or the giving of a receipt or credit in writing for such payment, where the same consists in the release or extinguishment in whole or in part of a debt previously due from the seller to the buyer. It is not suggested even that the services of the plaintiff or of his agent, or the expenses incurred in examining the lands and ascertaining their quality and value, can be looked upon as taking the contract out of the statute under this clause. It is very clear they cannot so operate. The services were rendered and expenses incurred by the plaintiff in his own behalf and for his own benefit, sometime before the alleged contract for the purchase of the scrip was entered into, and without any reference to that contract, and, as it would seem, before it was known to the plaintiff or his agent that the defendant Clark had the scrip for sale. . It is obvious that no such consideration, however valuable, can be accepted in law in substitution for the payment of some part of the purchase \money at the time, required by the statute, or as equivalent to such payment. It was a past consideration in any view, and the information acquired and given Ito the holder of the scrip respecting the lands, though it may lhave been valuable, was not a payment of any part of the purchase money for the scrip, within the meaning and intent of the statute. Nothing passed between the parties but mere words. See Harman v. Reeve, 87 Eng. Law & Eq. R., 302, and Brown v. Slauson, 23 Wis., 244, 249.

We come, therefore, to consider the contract with respect to the second clause of the statute, or whether the sale was taken out of its operation by reason of a compliance with the requirements of that clause. It is earnestly contended that it was, and that the delivery of the scrip by the holder to the vendor of the lands in payment for the lands, was a delivery of it to the plaintiff and an acceptance of it by him, within the meaning of the provision now under consideration.

It is not to be questioned that the acceptance and receipt thus required by the statute may be by the agent of the buyer empowered for that purpose. But an examination of the authorities will show that it sometimes becomes a very nice and difficult question for the courts to determine when such an agency has been established, or how it may be sufficiently and properly proved, consistently with the due effect and operation of the statute. It has been said by a very able judge, that the designation of the agent by the buyer, being part of the contract itself, cannot be established by oral proof. Norman v. Phillips, 14 M. & W., 277. In that case it was held, that acceptance of the goods by the carrier pointed out by the buyer, was not sufficient evidence for the jury of an acceptance within this statute. In support of the rule to show cause why the verdict should not be set aside and a nonsuit entered, Talfourd, Serj’t, said: “The fallacy of the argument is in treating this verbal contract as if it were a valid contract in writing, and proving this to be an acceptance by the aid of it; whereas in truth it amounts to nothing, and was not admissible in evidence for any purpose.” And Aldeeson, B., interrupting the argument, remarked: “ When you introduce the fact that the goods were to be sent to a particular carrier, you introduce a part of the contract which the statute says shall not be evidence unless it is in writing.”

The proposition here is, to raise up and establish an agency by oral proof, which agency, thus established, shall have the effect of changing the character of the transaction altogether, and of making it the reverse of what on its face and according to all the acts of the parties it otherwise appears to have been. What, otherwise, and according to the acts of the parties and facts transpiring as evidenced by every surrounding circumstance, was a delivery by the purchaser of the lands to the vendor of them in payment of the price, is to be transformed into a delivery for another and a clearly distinct and contradictory purpose ; and the characters of the parties themselves to the transaction, or the capacities in which they acted, are to be wholly subverted, and they made to assume entirely new and inconsistent relations, by the oral proof. The purchaser of the lands is no longer to appear as such, but only as the seller of the scrip to a third party; and the vendor, instead of having accepted and received the scrip as vendor in payment for his lands, is likewise to be understood as having accepted and received it as agent for the third party, who claims to have previously bargained by parol for it. By all these transformations and changes, produced and established by oral evidence, an acceptance of the scrip by the buyer is claimed to have been shown, and thus the contract taken out of the operation of the statute. It is obvious to this court that the requirements of the statute cannot be evaded in this way, and that it would be better that it should be repealed altogether than that it should receive such a construction. With such construction, it would be possible by the introduction of oral evidence, the very admission of which the statute was designed to prevent, to convert every purchase of real estate by conveyance absolute on its face, into a trust, or a mortgage, or other defeasible title or interest, at the instance of any party claiming to have bargained with the purchaser for the property, goods or chattels, or things in action, given in exchange for the land, or to have borrowed from the purchaser the consideration money paid by him. Oral evidence of the bargain or the borrowing being received, and it being in like manner shown that the claimant was desirous of purchasing the land, the vendor of the land would at once be converted into the agent of the claimant for the purpose of accepting and receiving the property bargained for or the money borrowed. However agency may be created or shown in other cases for the purpose of proving an acceptance by the buyer, we are confident it cannot be thus created or shown in a case like this. It involves too many and too gross and palpable contradictions of actual facts and circumstances to be allowed. -It involves not only such contradictions of facts and circumstances, not evidenced by writing but admitted .by the party making the claim, but also the contradiction of the written evidences themselves, made and executed at the time. It exposes the party assailed to the very hazards, and all of them, which it was the object of the statute to prevent and protect him against, by forbidding the introduction of parol evidence. The claim asserted rests wholly in parol — mere words spoken, — and without the aid of these, which were inadmissible and amount to nothing for any purpose, there is not a scintilla of evidence going to show an acceptance of the scrip, or to be considered upon that question. The written memorandum required by the statute, and deemed so important by the legislature to guard against the effects which may be produced by fraud and perjury, can only be dispensed with where by mutual consent there has been a part performance. Such part performance consists in the doing of some positive overt act, as payment at the time by the buyer of any sum in earnest to bind the bargain or in part payment, or as (being the corresponding act on the part of the seller) the delivery by the seller to the buyer of a part of the goods sold, if the buyer shall accept such part and actually receive the same. The statute evidently contemplates the performance of these acts by and between the parties themselves to the contract, or, if an agency intervenes, that the same shall be created or the agent appointed in some manner or by some means independent of the mere verbal bargain wbicb tbe statute deelares shall be void. Tbe agency to accept and receive cannot, by implication as it were, or by subsequent ratification or adoption on tbe part of the buyer alone, spring up out of tbe void verbal agreement, so as to save that agreement or give it any validity or effect; but such agency, to be valid and sufficient for the purpose, must have been ci’eated, or tbe agent designated, by some separate and distinct act or appointment of the buyer. Tbe cases bolding that a delivery of goods by the seller to a carrier or wharf-inger named by the buyer, and according to the buyer’s directions, is not a delivery to the buyer, nor an acceptance or receipt of the goods by him, which will satisfy the statute, have some bearing upon this question. Hunt v. Hecht, 8 Ex. (W., H. & G.), 814 ; Rogers v. Phillips, 40 N. Y., 519, 526, 527, 531, 532, and authorities cited.

It is not shown in this case, nor anywhere suggested, that there existed any previous or contemporaneous agreement or understanding whatever between the buyer or bargainor for the scrip and the vendor of the lands, that the latter should act for the bargainor in receiving the scrip or become his agent for the purpose of accepting the same. Without such agency, thus or similarly constituted, it is very apparent that the vendor of the lands was not the agent of the bargainor for the scrip, to accept and receive the same for the bargainor, so as to take the bargain out of the statute, or dispense with the memorandum in writing required by tbe statute. Without such agency, so shown or established, there was no acceptance and receipt of the scrip either by or for the bargainor, and consequently no sale of it to him by the holder and owner, either before or at the time such holder and owner became the purchaser of the lands. If, instead of this proceeding to compel a conveyance of the lands or to redeem as from a mortgage, suit had been brought by the purchaser of the lands against the bargainor for the scrip, to recover the price, it is obvious that such suit must have failed. The purchaser could not have shown an acceptance and receipt of tbe scrip by tbe bargainor for it, b}r showing that be, tbe purchaser, delivered it to tbe vendor of tbe lands in payment for tbe same sold and conveyed to himself. There must be mutuality of rights and remedies between tbe parties; and if the owner of the scrip could not have recovered from the person who bargained for it, then the latter can have no remedy against the owner.

There is perhaps one other circumstance connected with the case which may possibly be thought to have some influence upon it, and which, therefore, ought to be noticed. It is the fact, undisputed, that the agent of the plaintiff attended'the sale and bid off the lands in the name of the defendant Clark, who became the purchaser. This may be looked upon as an important fact, showing or tending to show that the plaintiff had or claimed some interest in the purchases, or the lands the titles of which were thus acquired, and that the purchaser knew of and recognized such interest or claim. However significant this fact might be under some circumstances, it cannot suffice, here to dispense with the written memorandum required by the statute of frauds. The agent of the plaintiff appeared on that occasion as the agent of the purchaser of the lands, and to give any weight to the circumstance of his being there as the agent of the plaintiff involves a flat contradiction and denial of his agency for the purchaser, which agency is also clearly established.

There is a class of cases which have arisen under the clause of the statute we have last been considering, which indeed seem to have gone very far towards establishing that there need be no actual receipt or manual taking or holding possession of the goods, chattels, things in action, or any part of them, by the buyer, in order to constitute a valid delivery and acceptance within the meaning of the statute. I refer to that class of cases where the buyer, in the presence of the seller and with the goods actually before him, clearly signifies his willingness and intention to accept and receive them, and does do so, and then immediately constitutes tbe seller his bailee to hold the goods for him until some future time or for some particular purpose, to which the seller gives his assent, and thereupon agrees and promises to keep the goods accordingly, and to become such bailee. It has been held that there is nothing in the statute that prevents the buyer and seller from forming this new relation. It was so held by this court in Janvrin v. Maxwell, 23 Wis., 51, on the authority of several English cases there cited. See also Marvin v. Wallace, 37 Eng. Law & Eq., 6.

But it will be observed that the present case lacks what those cases possessed, namely the express agreement of the parties, clearly proven, constituting the new relation. There was no express agreement, nor in truth any agreement at all, on the part of the vendor of the lands, to be or become the agent of the buyer to accept and receive the scrip. Neither was there any such agreement between buyer and seller showing that they intended title should pass at once and absolutely, and that henceforth the seller should be and remain the mere bailee of the buyer. The facts are such as to repel the supposition of any intention of the kind on the part of either buyer or seller.

The decisions referred to undoubtedly seem to go very far, and while we think they are strictly correct on principle, we are yet of opinion that great caution should be exercised where application is sought to be made to new cases. The safeguards of the statute are not to be frittered away and lost by loose and latitudinary construction.

Another question elaborately argued in this case is, whether, supposing the title of the scrip to have passed by the verbal bargain, and that the plaintiff became the owner, the deed of the lands, absolute on its face, could be shown to have been a mortgage by oral proof. The particular question thus discussed is, whether the deed, thus to be converted into a mortgage, must be one directly from the alleged mortgagor to the mortgagee, or whether the rule allowing such evidence to be received extends also to a deed executed by a third person to the alleged mortgagee. The evidence was held admissible by this- court in a case of the latter kind, in Sweet v. Mitchell, 15 Wis., 641, 664, 665. It should be remarked of that case, however, that the relation of debtor and creditor as between the alleged mortgagee and the mortgagor, and growing out of the transaction claimed to have been a mortgage, was established by other than mere parol evidence. A promissory note had been given by the the mortgagor to the mortgagee for the loan made by the latter to the former, with which to buy and pay for the land. The rule permitting oral evidence to be received in such cases is exceptional, and certainly a very dangerous one, and the true policy of the law, no doubt, is not to extend it beyond existing precedents. Whether the relation of mortgagor and mortgagee, in a case like this, can be shown by evidence wholly verbal, is a point 'which we are now happily relieved from the necessity of deciding.

It follows from the views above expressed, that the judgment of the court below must be reversed, and the cause remanded with direction that it be dismissed.

By the Court. — It is so ordered.

A motion for a rehearing was denied at the June term, 1873.