Pierce v. Clarke

BUCK, J.

On February 23,1892, one Herman Munch executed and delivered to E. A. Christian a promissory note, with interest coupon's attached, whereby Munch promised to pay to the order of said Christian on February 23, 1895, the sum of $6,750, value received, with interest thereon until paid at the rate of 8 per cent, per annum, payable semiannually in instalments to time of maturity, according to the terms of six interest coupon notes executed by Munch for the sum of $270 each. In case of default in the payment of any of the instalments of interest or interest notes, which default should continue for thirty days, then the whole of the principal sum of $6,750 was to become due and payable, at the option of the holder of the note; notice of such option being waived. In order more effectually to secure the payment of said note, Munch, at the time of its execution, also executed and delivered to Christian a real-estate mortgage upon certain land in Ramsey county, in this state, containing the conditions usually found in real-estate mortgages, and the mortgage was duly recorded.

The note and mortgage were assigned by Christian to Eliza C. Darrah on July 7, 1892, by an instrument in writing, which was duly recorded. In order to induce Darrah to purchase the note and mortgage, the defendant, Clarke, joined in the assignment of the note; and, to give it further faith and credit, Clarke then and there, for value received, executed an agreement in writing on the back of the note, whereby he guarantied the payment of the note, principal and interest, and waived demand and protest for nonpayment. On August 23,1892, Darrah sold, assigned and transferred the note and mortgage to one Samuel B. Pierce by an instrument in writing; which was duly recorded. Munch defaulted in the payment of interest upon the note due August 23,1892, and the interest thereon due February 23,1893, and thereupon Samuel B. Pierce commenced proceedings to foreclose said mortgage by reason of such default.

■While the mortgage was being foreclosed the defendant, Clarke, and Samuel B. Pierce entered into an agreement in writing, reciting the making of said mortgage, and the facts and proceedings above stated, and therein stating that the mortgage foreclosure sale was set for June 19, 1893, and that Clarke had guarantied the payment of the mortgage debt, and desired that Samuel B. Pierce should, at said mortgage sale, purchase said premises for the full amount due upon said mortgage. It was thereupon agreed between said parties that said Pierce should purchase said premises for the full amount due upon the mortgage, but that the same should not be deemed in any sense a payment of such mortgage, as between said Clarke and Pierce, but that Pierce should continue to have and hold a personal obligation against Clarke, as if no foreclosure had been made, and that Pierce might take all lawful means to collect and enforce such personal obligation.

It was also agreed that, whenever Clarke should pay to Pierce the amount due upon said mortgage debt, then Pierce should convey the premises, or assign the certificate of foreclosure sale, as the circumstances of the case might require. It was also agreed that the obligation between the parties should remain precisely as though no sale or foreclosure had been had, and the terms and conditions of the note guarantied by Clarke should remain in full force and effect, and that the purchase of said premises should operate as payment only in so far as it might concern the maker of said obligation, but not in so far as it might affect Clarke; the latter agreeing to pay all expenses of the foreclosure. This agreement was not signed by Pierce in person, but by one Charles H. Clark, who was the agent of Pierce and orally authorized by Pierce to make said agreement for him.

Thereupon Pierce foreclosed said mortgage in accordance with the terms of said agreement, and on June 19,1893, bid off the premises covered by the mortgage for the sum of $7,574.36, being the total amount of the mortgage debt, interest and expenses, and took the sheriff’s certificate of sale in his name, which was duly recorded. No redemption was made from said sale. Defendant, Clarke, paid the interest upon said note up to February 23, 1896, amounting to $1,350, but made no further payment. Samuel B. Pierce assigned said note and his interests thereunder, in writing, to the plaintiff, J. Homer Pierce, on December 13, 1893, and at the same time executed under seal, acknowledged and delivered to the-plaintiff an assignment of said note and mortgage; and the assignment was duly recorded January 29, 1894. Samuel B. Pierce was an unmarried man at the time he made the assignment and at the time of his death, which occurred before the commencement of this action. It further appears from the record that plaintiff has not parted with his rights secured by said foreclosure, and the transfer of the note and mortgage to him, as above stated, and that he is ready and willing to execute a conveyance of said mortgaged premises to the defendant upon his paying plaintiff the amount due upon said note sued upon in this action. The-trial court ordered judgment in favor of the plaintiff for the sum of $6,750, and interest at the rate of 8 per cent, per annum from February 23, 1896, and the defendant appeals.

The defendant contends that the instrument upon which the plaintiff bases his rights in this case is void, under the statute of frauds, for the reason that it is a contract for the sale of land or an interest therein, and is not in writing subscribed by the party to whom the sale was to be made, or by his lawful agent thereunto authorized in writing. It must be conceded that the instrument in question was not subscribed by Pierce in person, but was subscribed by his agent, Charles H. Clark, and that he was not authorized in writing to do so. Our statute of frauds (G. S. 1894, § 4212) provides that every contract for the sale of lands, or any interest in lands, shall be void,' unless the contract, or some note or memorandum thereof expressing the consideration, is in writing, subscribed by the party by whom the sale is to be made, or by his lawful agent thereunto authorized in writing. This language seems explicit. The party to be charged in this contract, and against whom it is sought to be enforced, is Samuel B. Pierce. He did not subscribe it, nor did his agent do it for him by any act authorized in writing.

The English statute of frauds differs from ours. That provides that no action shall be brought upon such contracts unless they are in writing, and signed by the party to be charged, and hence they cannot be enforced upon mere oral proof. See distinction between English statute and ours, as pointed out in Brandeis v. Neustadtl, 13 Wis. 142; McWhorter v. McMahan, 10 Paige, 386, 395. In some instances, perhaps in many, under the English statutes, such contracts would not be absolutely void, as under ours.

It is proper here to call attention to an erroneous statement as to the effect of our statute found in the case of Hagelin v. Wacks, 61 Minn. 214, 216, 63 N. W. 624. The writer hereof, who wrote the opinion in that case, stated that the statute of frauds does not declare oral contracts as to estates or interests in lands void, but merely that they are not enforceable by action; citing Trowbridge v. Wetherbee, 11 Allen, 361; Lowman v. Sheets, 124 Ind. 416, 24 N. E. 351. Such is not the law under our statute, because it makes such contracts void. Evidently the writer had in mind the English statute, which does not declare such contracts void, but nonenforceable by action.

The question now arises, is the contract under consideration within the inhibition of the statute? It provides that at foreclosure sale Samuel B. Pierce shall purchase the premises described in his mortgage for the full amount due upon the mortgage debt, and when Ross Clarke, the other party to the contract, pays the same to Pierce, then the said Pierce shall convey the premises, or assign the certificate of mortgage sale, as the circumstances of the case may require. It is difficult to see how this is not a contract for the sale of an interest in land, and, if so, it is void, because the contract was not signed by Pierce, nor by his agent authorized thereunto in writing.

That the contract provides for the future vesting of the right in the land by assignment of the certificate, or by conveyance of the same, does not change the rule. It simply leaves the contract executory, but the right to be acquired in the land is precisely the same as though the contract was immediately fulfilled, and certainly this would convey an interest in land. We see no escape from this conclusion. Whether the interest to be acquired was a legal or equitable one would make no difference in the application of the statute. Browne, St. Frauds, § 229. We are of the opinion that this case is controlled by the case of Veazie v. Morse, 67 Minn. 100, 69 N. W. 637. The facts there are substantially the same as those in this case, and it was there held that the contract was within the statute of frauds, and void.

Order reversed.

START, C. J., dissents.