Osborn v. Phelps

19 Conn. 63

• Court: Supreme Court of Connecticut
• Decided: June 15, 1848
• Status: Published

Opinion

Waite, J.

Our statute provides, “ that no suit in law or equity shall be brought or maintained upon any contract for the sale of lands, unless the contract upon which the action shall be brought, or some note or memorandum thereof, shall be made in writing, and signed by the party to be charged therewith, or some other person, thereunto by him lawfully authorized.” Stat. 299. tit. 39. s. 1. (ed. 1838.)

The original suit, in this case, was brought for the purpose of obtaining a decree for the specific execution of a contract for the sale of land. It was, therefore, incumbent upon the plaintiff to establish two facts — that the contract had been reduced to writing, and was signed by the party to be charged therewith, or his agent. If he fail to do this, the statute is imperative, that the suit cannot be maintained — at any rate, without showing other facts which will relieve the case from the operation of the statute.

It is claimed, that the contract for the sale of the land, was made by Osborn, one of the defendants ; and the object is, to have it enforced as against him, and the other defendants, who subsequently purchased the land, with knowledge of Osborn’s contract.

Now, the instrument, which was signed by Osborn, and the only one, as the case shows, which he ever did sign, contains no agreement to convey the land to the plaintiff. Without the aid of parol testimony, it would be very difficult, if not impossible, to say what the parties meant and intended, by that instrument. If not utterly void for uncertainty, it is so very vague and uncertain, that no court of chancery would ever decree any specific execution of a contract proved only by the instrument itself.

Indeed, this is not claimed by the plaintiff. And the case itself shows, that the writing was never made for the purpose of being executed by Osborn; and he signed it, through mistake, for another which he never did sign. The plaintiff thereupon calls upon the court to correct the agreement, and make it as the parties intended it should be, and then enforce the execution.

This was done, by the county court; and for the purpose of ascertaining what the parties intended to do, the court received parol evidence in support of the plaintiff’s claim, and decreed the execution of the contract, as established by the aid of that evidence. The enquiry now is, whether that was legally done, and is not in violation of the provisions of our statute.

This question was very fully considered, in a case before Lord Redesdale. Clinan v. Cooke, 1 Scho. & Lef. 22. There, a bill was filed, praying for the specific execution of an agreement for a lease of certain lands for three lives-The defendant had caused an advertisement to be inserted in the public papers, that the lands in question were to be let for three lives, or thirty-one years, and directing application to be made to one Meagher. The plaintiffs, in consequence, applied to Meagher, and he made and signed an agreement, which stated, that the defendant had demised to the plaintiffs the lands, at a certain rent, but omitted to state the term tor which they were leased.

' One question was, whether that omission could be supplied, either by a reference to the advertisement, or by parol evidence. For the plaintiffs, it was contended, that though the agreement, taken singly, might be defective, in not expressing the term for which the lease was to be made,.yet that deficiency was supplied, by a reference to the advertisement, in which the term for three lives or thirty-one years, was expressed ; and Meagher, who subscribed the agreement, was the person referred to, by the defendant himself, in the advertisement.

But the chancellor held, that the omission could not be supplied, in either mode : not by a reference to the advertisement, because the agreement contained no such reference, and the two instruments could not be connected together by parol evidence ; nor could the omission be supplied by such evidence, because, that, in effect, would be, to charge a party upon a contract not made in writing and signed by him. *

That case has evqr since been considered as a leading one upon this subject; a|d if the doctrine contained in it, is well founded, it is decisive of the one under consideration.

A different doctrirje is supposed to have been holden, by Chancellor Kent, in Gillepsie v. Moon, 2 Johns, Ch. R. 585. But that case is clearly distinguishable from the former. .A^fhere, a bill was brought to rectify a mistake in a conveyance to the defendant, which, by an error in the description, conveyed the whole lot, or 250 acres, instead of 200 acres, parcel of the same ; and the conveyance was rectified. The court held, that whether the error was occasioned by the fraud of the grantee, or the mistake of the parties, the deed should not have the full operation imported by its terms, contrary to the design and intent of the parties. As has been well said of this case, “ it is one thing to limit the effect of an instrument, and another to extend it beyond what its terms import.” Elder v. Elder, 1 Fairf. 80.

But this question subsequently came before the supreme court of the state of Maine, and the two preceding cases, and others upon the same subject, were carefully reviewed. There, a bill was brought for the specific execution of a contract for the conveyance of a lot of land, lying in the towns of Windham and Westbrook, being in one parcel. The written agreement was for the sale of a lot situated in Windham ; and the plaintiff claimed, that there was a mistake in writing the memorandum of agreement, and prayed that it might be corrected and the whole lot conveyed to him. But the court held, that it was not competent for the plaintiff to make out his case, by parol evidence, and dismissed the bill.

So also in another recent case, Mr. Baron Alder son remarked : “ I cannot help feeling, that in the case of an execu-tory agreement, first to reform, and then to decree an execution of it, would be virtually to repeal the statute of frauds.” Attorney General v. Sitwell, 1 Younge & Coll. 559. 582, 3. cited 1 Sto. Eq. c. 5. s. 161. in notis.

These cases appear to be founded upon a just and reasonable construction of the statute, and fully establish the rule, that if two parties enter into an agreement respecting the sale of real estate, and fail to reduce that agreement to writing, according to their intention, it is not competent for the purchaser to come into a court of chancery, for the purpose of having the written agreement rectified, by the aid of parol evidence, and then the execution enforced.

But this rule does not apply where the mistake is set up by way of defense against a claim for the specific execution of a contract. In such case, the object is not to enforce the execution of a parol agreement, but to prevent the execution of a written one, which the parties never intentionally made— to resist one which to enforce would be inequitable and unjust.

It was not the object of the statute to give any greater efficacy to written contracts for the sale of lands, than they possessed at the common law; but merely to require such contracts to be made In writing, in order to lay the foundation of a suit at law or in equity.

It is however insisted, that in this case, there were two instruments, executed by the parties, at the same time, as parts of one transaction, and that they are to be taken together, in determining the contract. If this were done, the uncertainty, without any light from parol testimony, would not be removed. The instrument executed by the plaintiff is as vague and indefinite as the other. But when we let in parol evidence, and learn from it, that each instrument was executed by the wrong party, the whole difficulty vanishes. So that we are still brought back to the question, whether parol evidence is -admissible to show the mistake.

Again, admitting that both instruments taken together would sufficiently show what the agreement was, still there is the same difficulty in the way. Osborn signed but one of them, and that one contains no reference to the other. We cannot leam from it, that any other ever existed. How then can it be said, that the writing executed by the plaintiff, was signed by Osborn ? The case shows, that it was drawn for him to execute, but by mistake, that was not done.

Suppose the contract had been fully and correctly drawn, and Osborn, by mistake, had never signed it; could it be enforced in the face of the statute ? Clearly not. The plaintiff’s case might be a hard one, but he would be remediless. And in our judgment, it makes no difference, whether he entirely omitted to sign the agreement, or through mistake signed the wrong one, provided the one he did sign, does not show an agreement on his part to convey the land to the plaintiff.

Had the writing signed by Osborn referred to the one executed by the plaintiff, as containing, in whole or in part, the agreement, the case would be different. The two instruments then might be treated as one. The case of Clinan v. Cooke, already cited, is directly in point. There it was held, that the omission in the agreement could not be supplied by the advertisement, because the former contained no reference to the latter. The same principle governs the present case.

Again, it is said, that here has been a part execution of the agreement, which will relieve the case from the operation of the statute, and let in parol evidence to show the agreement. Now, the ground upon which courts of equity interfere in such cases, is, that otherwise one party might practice a fraud upon the other. What fraud has been practiced, by either of these defendants, in relation to any part execution by the plaintiff?

No part of the purchase money was ever paid by the plaintiff, and no act done by him, which he could not have done, if he had never made any such agreement. The only circumstances relied upon by him, to show such part execution, are the possession of the property, and the erection of the mill.

With respect to the former, the case does not show any possession, as against either of these defendants. The land, at the time of the agreement, was under a lease, made by a previous owner, to one Hubbard, and so continued until the 1st of April following ; and of course, during all that period, the possession was beyond the controul of either of the defendants.

It appears that soon after the agreement was made, which was in the month of August, 1844, the plaintiff took possession of the land, and continued in possession, for a period of about seven months, which would expire about the time of the expiration of the lease. With that possession, therefore, neither of the defendants could interfere ; nor does the case show that either of them ever assented to the plaintiff’s taking possession.

As to the erection of the mill: it was no part execution of the contract made with Osborn. The mill was not erected upon the land in question, but upon other lands of the plaintiff. It was no part of the agreement that it should ever be erected; and the court has found, that it did not appear whether the plaintiff would, or would not, have erected the mill, had he made no contract with Osborn.

The only effect to be given to the erection of the mill, was, that in such event, the plaintiff might have the land at a reduced price.

The defendants, in permitting the plaintiff to hold possession of the land, during the continuance of the lease to Hub-hard, and while they had no controul over it, and in suffering him to erect a mill upon his own land, at his own pleasure, were chargeable with no fraud towards the plaintiff; and the acts done by him, under such circumstances, cannot be considered as such part execution of the agreement, as will exonerate it from the operation of the statute.

Upon the whole, therefore, we are satisfied, both upon principle and authority, that parol evidence was not admissible for the purpose of showing the contract in fact made by Osborn, and having the execution enforced : and that, without the aid of such evidence, no contract is shown, which can be enforced, in the manner stated in the decree of the county court; and consequently, that decree is erroneous, and ought to be set aside.

Other errors have been assigned, which, after the view already taken of the case, we deem it unnecessary to consider.

, In this opinion Church, Ch. J., and Storrs and Hinman, Js., concurred.

Ellsworth, J.

I am not without apprehension that the obvious justice of this case may lead me to appreciate inadequately the errors assigned on the record. Nor is this apprehension lessened, when I find, that my opinion differs so much from that of some, if not all, of the court. But after much reflection upon the chief points discussed at the bar, I am constrained to say, that my views remain unchanged. It should be remembered, the decree complained of, does, of itself, without requiring any act of cooperation on the part of the defendants, transfer to and vest in Phelps, the land in question ; and therefore, if Phelps is justly entitled to it, they cannot complain, unless they should have had costs awarded to them, which, for reasons hereafter to be stated, will appear not to be the case.

The principal, if not the only, insuperable difficulty, in the minds of some of the court, arises from the statute of frauds and perjuries. I feel this difficulty myself; and were there nothing in the case besides this abstract question, I might not express a dissenting opinion : for although I am not satisfied with the arguments used, yet I do not deny, that the modern English authorities, and perhaps the preponderating weight of American authorities, are in accordance with the decision just expressed. But the case of Gillespie v. Moon, 2 Johns. Ch. R. 585. which was decided by Chancellor Kent, in full view of the English cases, followed up by the approbation of Judge Story, (I. Sto. Eq. s. 161.) is well calculated to create doubt, and especially as Washburn v. Merrills, 1 Day, 140. seenis to be a case of like character, and was decided against the objection now made. I will, however, state, in a few words, the reasons of my dissatisfaction.

There is no part of the jurisdiction of courts of equity more fully established, more important, or ancient, or more generally exercised, than that of reforming written contracts. This jurisdiction is founded in such sound sense and obvious necessity, and withal, rests so much in the sound discretion of the court, that no lawyer or judge will call its propriety in question, or wish its extent abridged. The party injured, likely to be injured, by a clear mistake, founded in accident or fraud, may at once apply for relief or protection, without waiting to be made a party defendant. In principle, he stands on the same ground, whether he seeks for relief, or resists an inequitable claim. If a writing does not express the agreement of the parties, the correction should be made while the proof is at hand ; and if necessary, a court of equity should lend its aid to see that it is done. Errors are incident to human affairs; and there must somewhere rest a power to grant relief, or there is a great defect in the administration of justice. Take, for illustration, the case of Washburn v. Merrills. There, Solomon Sanford executed to Rachel McDonald an absolute deed, when the parties intended it should be a mortgage. Upon proof of the mistake, the representative of the grantor had the mistake corrected ; and then he was allowed to redeem.

Indeed, I do not understand, that the court call in question this general remedial power of equity. It cannot be denied. Lord Hardwicke, in Hinckle v. The Royal Exchange Assurance Company, 1 Ves. 314. says, (what is found in the entire body of decided cases and elementary writers,) “ no doubt this court has jurisdiction to relieve in respect of a clear mistake in written contracts, as well as of fraud in writings.” Nor, independent of the statute of frauds, is there any difference or difficulty, whether the subject of the contract be real or personal estate. Whenever or wherever there is a plain mistake in fact, equity must afford relief, or else the most prudent and vigilant will often be ruined through inadvertence or fraud. Now, the statute was' never intended to wrest from courts of equity this portion of its jurisdiction. Such is neither its language nor purpose. Its language is, “ That no suit in law or equity shall be brought,” &c.; not that equity shall not, as before the statute, exercise its beneficent and remedial power to reform written contracts. If a policy of insurance expresses too much, or too little ; or a note of hand, a charter-party, a deed, a covenant or other writing, by reason of fraud, mistake or surprise, is defective or false ; it is the daily practice of courts of equity to lend their interposition, whether the party be plaintiff or defendant; and no matter to what kind of property it relates.

Besides, the party asking to have a contract reformed, does of course, ask more. This may be all he needs for his security; and he may be under no necessity “to sue in law or eqUity.” If he should be, at any time, the reformed writing will satisfy the provisions of the statute.

But further, the statute is not held to be so inexorable and stringent in its application, as its language imports. Suits in equity are brought, not unfrequently, where there is no note or memorandum whatever. The reason is. courts of equity will not allow a statute to be made the instrument of injustice, which was framed and designed to secure the contrary. Hence fraud is relieved against. So relief is given in case of part performance, for a like reason. It should be so, when the statute is used to take away a portion of the acknowledged jurisdiction of courts of equity. Why make the statute a trap to catch those who are so unfortunate as to commit a mistake in the writing, though it may not be through fraud ? The statute is no more repealed, in the one case than in the other. Suppose an agreement is made upon consideration of marriage, (a clause of the statute not affected by part performance,) and the marriage is had, and it is found that the marriage settlement, through misdescription, perhaps a wrong reference, or the signing of a wrong paper, is defective, while the parties intended, and in fact understood, that the contract of settlement had been reduced to writing and signed; can there be no relief in favour of the suffering party, unless a case of palpable fraud is made out ? It is conceded that the statute does not prevent a defendant from setting up, in his defense, a mistake in a written contract to convey land. This would be inequitable, and is not within the language of the statute. So one exposed to be sued at law, on a like contract, is not hindered from obtaining an injunction, notwithstanding the writing be clear and explicit. So, in the case of a mere correction of a mistake, nothing is asked for against the language of the statute. It would be deeply to be regretted, that in such a case, a statute made to prevent injustice, should be used, because of its technical language, to work injustice, when in truth the correction of mistakes, from whatever cause existing, is not within the purview of the statute, but belonged always to the jurisdiction of courts of equity. To illustrate my views: suppose that in contracting to sell a house in this city, I am made to say in the contract of sale,, (by reference for description to a wrong deed,) that I engage to sell the City Hotel, which is worth 20,000 dollars, when in fact, for 1,000 dollars, I had engaged to sell a house adjoining the Hotel. I may, in this case, resist an application for a specific execution, and may show, by parol, the mistake made. So, if sued on the contract, I may obtain an injunction to arrest the suit at law. Now, suppose that for 20,000 dollars paid me, (and which I may be entirely unable to refund,) I had contracted to sell the City Hotel, but the writing is so drawn that I am made to say, (through a like mistake,) that I engage to sell the adjoining house. Is the purchaser remediless ? Will the statute exclude the enquiry, by parol evidence, in the one case, and not in the other? Cannot equity afford relief in both cases, without violating the language or spirit of the statute ? I confess, I cannot see any substantial difference between the two cases. If there be any, it is one of nice technicality, quite foreign to the intent and aim of the statute.

Here, the parties may well be taken to have agreed, that their contract should be instantly put into writing. They attempted to do it. They supposed they had done it. In fact, they had done it, except that each party had inadvertently signed the wrong counterpart of the contract.

These are briefly the reasons why I am not able at present, to yield assent to the view of this question, taken in the modern cases in England.

As 1 have already intimated, I choose to place my opinion on another ground. I hold, that the two writings recited in the bill, are parts of one contract, together furnishing a sufficient memorandum or note to satisfy the requisition of the statute. These writings are evidently counterparts, making together one agreement. Writings executed between the same parties, at the same time, about the same subject matter, and to effect the specific object, are held to be parts of the same contract. Thus Ch. J. Shaw, in giving the opinion of the court, in Perry v. Holden, 22 Pick. 269. 277. lays down the rule thus: “ Instruments made at the same time, between the same parties, to accomplish one and the same object, should be construed and taken together.” In Chickering v. Lovejoy & al. Mass. R. 61. 55., the court say: “The from Withington to Wilcox, and that from the latter to the demandant, were executed at the same time ; and all the other acts necessary to give them validity, were simultaneous. These deeds, then, must be considered as parts of the same contract.” The same is held in King v. King, 7 Mass. R. 499. and in Carey v. Ramson, 8 Mass. R. 159. So in New York, in Stow v. Tifft, 15 Johns. R. 458. 463. Spencer, J. says : “ I am authorized to say, by the decision of this court, in Jackson v. Dunsbagh, 1 Johns. Cas. 95. that where two instruments are executed at the same time, between the same parties, relative to the same subject matter, they are to be taken in connexion, as forming together the several parts of one agreement.” The same is held in Jackson d. Trowbridge &. ux. v. Dunsbagh, 1 Johns. Cas. 91. 95. above referred to. In Crop. v. Norton, 2 Atk. 74. the Lord Chancellor says: “ But when writings are executed so near together, it is very natural to think they are all in pursuance of one transaction and agreement between the parties.” In Isham v. Morgan, 9 Conn. R. 374. 378. this court held, “ that where two instruments are executed at the same time, between the same parties, relative to the same subject matter and to effectuate one object, they are to be taken in connexion as forming parts of the same agreement.” The same is held in Bates v. Coe, 10 Conn. R. 292. The rule laid down in 1 Smith’s Leading Cases, 216., as deduced from the books, is this: “Provided that the agreement be reduced to writing, it matters not out of how many different papers it is to be collected, so long as they can be sufficiently connected in sense.” Jackson v. Lowe, 1 Bing. 9. (8 E. C. L. 222.) Phillimore v. Barry, 1 Campb. 513. Saunderson v. Jackson, 2 Bos. & Pul. 238. Allen v. Bennet, 3 Taun. 169. Dobell v. Hutchinson, 3 Ad. & Ell. 355. (30 E. C. L. 118.) Johnson v. Dodgson, 2 Mees. & Wels. 653.

Let now the rule be applied to the case in hand. The parts, evidently imperfect, are counterparts of the same agreement, and both are essential to make out the whole. To use the language in Isham v. Morgan, “ the two instruments are executed at the same time, between the same parties, relative to the same subject matter, and to effectuate one 4 object.”. When read as parts of the same agreement, we find in it all the constituents of a perfect obligation in writing. The subject matter is certain ; a piece of land is described in • both, in the same words, sufficiently explicit; the vendor, the vendee, and the purchase money, are certain. What more is wanting, in order to satisfy the statute ? Put these counterparts together, and let the entire writing be considered as signed by both parties to the agreement, and all difficulty vanishes at once.

Another ground may be taken equally decisive for the defendant in error, upon the facts found. The county court found, that upon the execution of the writings of August 1844, the purchaser took possession of the land, in full reliance upon the faithful performance of said contract, “ under and by virtue of the same and retained possession seven months. It was agreed, that taking possession is such part performance as that the statute of frauds presents no difficulty, though there be no writing at all, if the agreement can be satisfactorily made out, by parol. To avoid the effect of a fact so decisive on this objection, the plaintiffs in error say, there was an outstanding lease in one Hubbard, extending through these seven months. But it is only found, that when Osborn bought this land of one Kinsley, Hubbard had a lease of it for a year from the 1st day of April 1844. It is not found, that at or after the contract between Osborn and Phelps, Hubbard claimed any right under the lease, or that it was in force, or that Hubbard was in possession under it. For aught that appears, (and as Osborn does not notice it, in his sale to Phelps, in August 1844, I take it to be so,) Hubbard, perhaps to save the payment of rent, renounced his lease, or at all events, did not keep up any possession incon-aieiy aner me aom oi August 1844, f Helps took possession “ under and by virtue of the contract.” Even the contin-taking possession. He may have entered with Hubbard’s consent, and excavated the land, or built upon it, or expended money for the repairs, or received rent. Some or all of these things may be presumed under the unqualified finding of the court. At all events, I cannot see such contradiction as to say Phelps could not, and therefore did not, take possession of this land. And as to a part of the land, viz. a strip three rods wide on the highway, the court finds, as I understand the record, that Hubbard, was not in possession of that, on or after the 26th of August 1844. So much he had abandoned ; and if Phelps in fact took possession of that, and received rent for the enjoyment of the rest, the finding of the court is decisive.

If, however, Phelps did take possession, as now claimed, it is said it was not done as part performance. The court, it is true, does not find any express consent given by Osborn, and that Phelps should take possession. Nor was an express consent necessary. An implied consent was enough. The court finds, that Osborn sold the land, without making any reservation of the lease. Perhaps he had arranged to have it given up, and Phelps took possession immediately upon the purchase, under and by virtue of the contract, and kept it for seven months. In my judgment, this is enough, and more than can be proved ordinarily, in cases of part performance.

Again, it is said, that the acts to be done by the parties, are concurrent; and that Phelps did not tender the purchase money in season, if at all; and not having performed on his part, he cannot properly ask for a deed. By the terms of the contract, the amount of the purchase money is to depend on the quantity of land, which, of course, is to be ascertained, by and at the expense of the vendor ; and if the mill is not built, the price is to be 50 dollars more. If now the land is to be measured by Osborn, before the deed is made, not to say, (which perhaps might be said,) that the land is not to be conveyed until after the mill is built, this objection, and especially if we consider what Osborn did do, comes with a bad grace from him. He did nothing, on his part, which he should have done, to forward the completion of the contract, but much to prevent it. His aim was, to cheat Phelps : by a fraudulent conspiring with others, to subject Phelps and his entire establishment, to the cupidity, if not the mere will and caprice, of fraudulent associates. On or about the 18th day of December 1844, without having done a single thing by him to be done, and without any complaint of delay by Phelps, he conveys the land to Hamilton and Abbe, who were cognizant of the facts, while too Phelps is in the possession and enjoyment of the land. After this, Osborn could not make a good and clear title. He intended to render it impossible, except on his own terms ; but this is not all. On the 1st of March following, Phelps called on Osborn with a bag of-dollars, to pay him for the land, according to the contract, and to take a deed, not even specifying the kind of deed ; (and under the circumstances, a release deed would be worth nothing.) He is met with a flat denial. Osborn utterly declined and refused to go on with or perform said contract, or to have any thing further to do therewith. In my judgment, this is a waiver of any further or future attempt, on the part of Phelps, to get a title from Osborn. The other defendants stand on no better ground. Though they were in fact requested to comply with the contract, the title is justly taken from them all; nor are they entitled to costs. The money is lodged for them with the clerk, if in justice it belongs to them. I confess my sympathies are not at all excited in behalf of these confederates in iniquity. Besides, the exact time of performance, i. e. of paying the money and conveying the land, was not considered or treated, by the parties, as important. Osborn had done nothing to ascertain how much would be due to him. Phelps was in possession, and both parties were satisfied, until Osborn undertook to break up the contract, and place the interests of Phelps at his mercy, or the mercy of others of a kindred character.

It has been said at the bar, that the bill is bad, in not alleging that a tender of the money and demand of a deed, were made in a reasonable time. It is alleged, that the plaintiff has always been ready and willing to perform his part of said agreement, yet said Osborn has always neglected and refused ; and this is found to be true. The facts, too, which go to show, that the tender and demand were in due time, and the conduct of the parties, are stated. This is enough, especially upon the plea of a general denial.

Again, it has been said, that the decree is defective in not directing a final division of the money. The court was not asked to divide it, nor to give it any direction whatever. It was not furnished with the means of knowing how the parties stood among themselves in relation to the money. If any thing of this kind be necessary, it can still be done.

Decree of county court reversed.