Case ID: neb_76/html/0501-01.html
Source: Caselaw Access Project
Author: {"author": "Ames, 0. Barnes, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hiram Rice v. Stephen V. Parrott.
    
    Filed May 3, 1906.
    No. 14,239.
    1. Contract: Statute of Frauds. An oral contract, upon sufficient consideration, to divide the profits of a purchase and sale of land is not affected by the statute of frauds and is valid and enforceable.
    2. —'-: Repudiation: Action. An express repudiation and denial of such a contract by the party having the title will give rise to a cause of action at law for damages.
    3. Appeal: Motion for New Trial. An appeal to' this court without the execution of a supersedeas bond is not a waiver of a pending motion for a new trial in the district court, and it does not deprive the latter court of jurisdiction to grant the motion.
    Error to tlie district court for Boone county: James N. Paul, Judge.
    
      Affirmed.
    
    
      Charles Riley and H. C. Vail, for plaintiff in error.
    
      J. A. Price, Reeder & Hobart, I. L. Albert and J. J. Sullivan, contra.
    
    
      
       Rehearing allowed. See opinion, p. 505, post.
      
    
   Ames, 0.

The facts established, as we think, by a clear preponderance of the evidence in this case are that in March, 1899, Rice and Parrott entered into an oral agreement to the effect that the former should purchase with his own funds, and take to himself a conveyance of a certain tract of land, and that in consideration of certain acts and services performed and to he performed by Parrott in the procuring of the purchase and in looking after and caring for the ■land, the net profits of the transaction, when the land should be sold, should he equally divided between the parties. It is not clear that any specific date upon which the sale should he made was agreed upon although there is some conflict in the evidence in that regard, but the point is in this case immaterial because the law, in the absence of stipulation, implied a reasonable time. The purchase and conveyance were made for a consideration of $4,000 paid by Rice. Parrott, having, after the lapse of some time, made an ineffectual demand upon Rice for a sale of the land, procured a purchaser for it himself at an agreed price of $7,400 cash, and prepared a deed to the intended purchaser, which Rice refused to execute, and he also repudiated and denied any interest in the transaction on the behalf of Parrott, who is not shown to have been in any respect in default in the keeping of his part of the agreement. In October, 1901, two and a half years after the purchase of the land, Parrott begun this action apparently for a specific performance and for an accounting. The original petition is not in the record. A.trial to the court resulted, on May 1, 1903, in a judgment of dismissal without prejudice to a new action at law. Within three days Parrott filed a motion for a new trial which the court took under advisement and decided at a subsequent term, on November 17, 1903, by granting the application. In the meantime, and just before the expiration of the six months’ period of limitation, Parrott filed and docketed an appeal in this court, but without the execution of a su-persedeas, and immediately after the granting of his motion for a new trial he voluntarily dismissed his appeal. He, thereupon, by leave of court, filed an amended petition, also praying an accounting and specific .performance. Issues were made up, and as the result of a trial to the court, without a jury, the plaintiff recovered a money judgment for $2,100 and costs of suit, which the defendant seeks to reverse by this proceeding in error.

It has been argued at considerable length, both orally and by brief, that by docketing his appeal in this court the plaintiff below waived his then pending motion for a new trial, and that his subsequent dismissal of the appeal operated as an affirmance of the judgment of the district court dismissing the action, and deprived the latter mentioned court of jurisdiction. This contention is predicated upon two grounds: First, upon the doctrine of the election of remedies, and it is said that the plaintiff, having elected to review the former judgment bj appeal and actually-begun proceedings to that end, could not afterwards abandon them and proceed at law by urging the motion for a new trial. But this is putting the cart before the horse. If the doctrine of the election of remedies were applicable, the plaintiff by filing his motion for a new trial elected to proceed at law, and waived his remedy in equity by appeal, which latter not only had he a right to abandon, but this court, upon the matter being brought to its attention, would have deprived him of by dismissal. • But such has never been regarded as the law in this state, and, ever sinee the organization of its courts, parties have universally enjoyed the liberty of completing their records by obtaining rulings upon motions for new trial in equity causes, and afterwards appealing, and subsequently, if they chose, of abandoning the appeal and proceeding by petition in error.

The second ground is that the appeal vacated the judgment of the district court and deprived it of jurisdiction over the cause by transferring the entire controversy to this court.- Although in some respects and for some purposes an appeal has such an effect, it cannot be said to have it unqualifiedly in all cases and in all regards, for, otherwise, the mere docketing of an appeal would operate as a supersedeas and dispense with the necessity for the undertaking prescribed by the statute upon the subject. That statute must itself be regarded as an express legislative enactment that the judgment shall, in the absence of the undertaking, retain its vitality and be capable of execution during the pendency of the appeal, and this court has held that even after supersedeas has been effected it may, for sufficient cause, be set aside and the judgment of the lower court restored to its original status and enforceability. Tulleys v. Keller, 42 Neb. 788. As we have pointed out no supersedeas was given in this case, and the judgment for costs remained enforceable against the plaintiff! until it was vacated by tbe order granting the motion for a new trial, and a like condition could have existed, of course, if the judgment had been in favor of the plaintiff and the situation of the parties had been reversed. It follows, we think, as a necessary consequence, that the district court retained its jurisdiction over the judgment, and of process and procedure founded upon it, and if its power to vacate it, in all respects as it would have done if no appeal had been taken, except that it could not interfere or impair the procedure in this court so long as the judgment remained in existence.

We are therefore concerned only with the sufficiency of the pleadings and evidence to sustain the judgment of the district court about which we have no doubt. It is urged, with some earnestness, that in the absence of a writing no estate or interest in the land was created and that an action for a specific performance of the agreement to make sale of it will not lie. But this question need not now be decided. It has been held by this court that an oral contract, upon sufficient consideration, to divide the profits of a purchase and sale of land is not affected by the statute of frauds, and is valid and enforceable. Harris v. Roberts, 12 Neb. 631; Cameron v. Nelson, 57 Neb. 381; and such seems to be the current authority elsewhere. Holmes v. McCray, 51 Ind., 358; Richards v. Grinnell, 63 Ia. 44; Coward v. Clanton, 79 Cal. 23, 21 Pac. 359; Meagher v. Reed, 14 Colo. 335, 24 Pac. 681. Harris v. Roberts, supra, was, in essential features, not unlike this, the action being at law for damages for breach of an oral contract to convey. Whether in that case or in this a specific performance of the agreement could have been decreed has not been decided and need not be. In neither case could the party who held the title, after having repudiated his agreement and refused to convey, retain both the land and the consideration for which, in part, he obtained it. If he retains the former no statute excuses him from his obligation to return the latter, with such sum in addition thereto or substitution therefor, by way of profits, as he premised to make. This conclusion is in harmony with -Norton v. Brink, 75 Neb. 566. It was there decided that after such a contract has been executed by a sale of the land the statute of frauds is not a bar to an action to compel its performance by a division of the proceeds. It follows, of necessity, that the statute is not a bar to an action at law for damages for a breach of the contract by refusal to make a sale. That Rice was guilty of a breach of his contract cannot be successfully disputed. The action, though in form for specific performance, proceeded as one at law and resulted in a judgment for money only. There was no objection to the jurisdiction of the court in equity, and no demand for a jury to try the issue of damages, and it is not claimed that the amount of the recovery is excessive.

Contract: Statute of Fbauds. An oral agreement -whereby one of the parties thereto is to look up and negotiate the purchase of such land as can be bought and sold at a profit, to take charge of, rent, improve and procure purchasers therefor, the titles to be taken in the name of the other party, who agrees to furnish the amount of money necessary to carry on the business, the net profits of the venture to be equally divided, is not within the statute of frauds.

We are of opinion that no reversible error has been committed, and recommend that the judgment of the district court be affirmed.

Oldham and Epperson, CC., concur.

By the Court: For the reasons stated in the foregoing opinion, it is ordered that the judgment of the district court be.

Affirmed.

The following opinion on rehearing was filed April 4, 1907.. Judgment of affirmance adhered to:

Barnes, J.

The plaintiff below had judgment, and defendant prosecuted error. By our former decision the judgment of the district court was affirmed. A motion for a rehearing was sustained, and all of the questions presented by the record have been reargued to the court. For a full statement of the facts underlying this controversy reference may be had to our former opinion, ante, p. 501. The first trial in the district court resulted in a judgment dismissing the plaintiff’s action without prejudice. A motion for a new trial was filed in due season, but no ruling was had thereon until more than six months after the judgment was rendered; and plaintiff, as a matter of precaution, lodged a transcript in this court and had his appeal docketed. The motion for a new trial was finally sustained, and thereupon plaintiff was allowed to dismiss his appeal.

It is again strenuously contended by counsel for the defendant below that plaintiff waived his pending motion for a- new trial by filing a transcript and docketing an appeal in this court; that his subsequent dismissal of the appeal operated as an affirmance of the judgment of the court dismissing his action and deprived that court of jurisdiction. On this question, by our former opinion, we ruled against the defendant. On a reexamination of the matter we are satisfied with that ruling. We find that in the recent case of Henry v. Allen, 147 N. Y. 346, it was held that the taking of an appeal and its pendency does not prevent the trial court from sustaining a motion for a new trial, and it was said in that case by the court of appeals:

“We have heretofore pointed out that upon an appeal to this court the record itself is not transmitted to us, but a transcript thereof, and the case for all general purposes still remains in the court of original jurisdiction. People v. Board of Education, 141 N. Y. 86. In the above case we said: ‘In all matters pertaining to the appeal itself and to the proper hearing thereon this court has jurisdiction, and also in regard to all applications which by statute may be made to this court after the taking of the appeal, but as to all other applications the case is regarded as still pending in the conrt of original jurisdiction, and such applications should he made to that court/ * * * If the supreme court, in the exercise of its discretion, grants the motion for a new trial, the legal effect will be the vacating of the judgment from which the appeal has been taken to this court, and a motion to dismiss the appeal would then be proper.”

So, both on principle and precedent, our former judgment on this point was right and we adhere to it.

The second contention, and the one most relied on for a reversal of the judgment of the trial court, is that section 3, ch. 32, Comp. St. 1905, commonly called the statute of frauds, is a bar to plaintiff’s right of recovery herein. The facts stated in plaintiff’s petition and found by the trial court are, briefly stated, as follows: On or about the 30th day of March, 1899, the plaintiff and defendant entered into an oral agreement by which the defendant was to furnish all the money necessary to conduct the business of speculating in real estate, was to take and hold in his own name the title to such land as should be purchased until the same could be sold at a fair and reasonable profit above the original investment, and he was then to convey the same to the purchasers. It was agreed that the plaintiff, being a dealer in real estate, should look for and procure such lands as in his judgment could be bought and sold again at a profit, should cause the title thereto to be conveyed to the defendant, should seek for and procure purchasers for such lands, and should sell the same when a profit could be realized upon the original investment. He was also to have the general oversight, care and management of such real estate as might be bought and sold. He was to attend to renting the same, and to threshing, dividing and marketing the crops grown thereon; and when he procured a purchaser at a fair and reasonable profit the defendant was to convey the lands to such purchaser, and the proceeds of the sales were to be divided as follows: The defendant to be paid the amount of his original investment; the remainder, together with the income from the land, was to be equally divided between tbe plaintiff and defendant, after deducting taxes and expenses. It appears that in pursuance of tbe agreement tbe plaintiff purchased two tracts of land; one known as tbe Stangland farm, and tbe other as tbe Copson land, and bad them conveyed by good and sufficient title to- the defendant; that he thereupon took charge of the property, rented it, improved tbe Copson farm by hauling • about 100 loads of manure thereon; that be looked after the division of tbe crops, and finally, a short time before this action was commenced, procured purchasers therefor at fair and reasonable prices, at a good profit over the original investment, and demanded that the defendant should convey said real estate to such purchasers. The defendant refused to comply with this request, and refused to pay the plaintiff his share of the profits which could have been realized upon such proposed sales.

It appears that contracts of this kind have been quite uniformly upheld by the courts of this country. In Carr v. Leavitt, 54 Mich. 540, the facts were similar to those in the case at bar. There the defendant, desiring to purchase certain lots in the city of Detroit, procured the services of the plaintiff in bringing about such purchase, and it was agreed that the plaintiff should employ his time and services in and about the purchase of said property at a price fixed between the plaintiff and defendant, and in and about the management of said property; that the defendant would furnish the means necessary to make the purchase, and upon the sale and disposition of the property so purchased the defendant would pay the plaintiff one-half the profits realized upon the sale over and above the price paid therefor. The plaintiff performed the services, and purchased the property for $37,000, which was the price agreed upon. The property was conveyed to the defendant, and later on was sold for $52,000, and the defendant, on demand, refused to account to or pay the plaintiff one-half of the profits realized on the sale. -It was admitted that the alleged contract was not in Avriting, and tlie defendant took the objection that the contract was void under the statute of frauds. The trial judge held the objection well taken, and directed a verdict for the defendant. The case was appealed to the supreme court and upon the foregoing facts Cooley, Chief Justice, speaking for the court, said:

“If the contract the plaintiff relied upon was within the statute, it must have been because it contemplated a purchase and then a sale of certain lands. But the plaintiff was to be neither purchaser nor seller, and the contract did not contemplate that in any contingency an interest in the land was to be conveyed to or vested in him. It contemplated only that' in a certain event the plaintiff should receive a share of the moneys that a sale of the land should bring. His interest was therefore in these moneys, and not in the land itself. And the’moneys were to be payable to him in consideration of services performed. The profits on the two trades, to be brought about by the plaintiff, were to be taken as the measure of compensation, instead of any other that might have been agreed upon. This surely was not a contract ‘for the sale of any lands or any interest in lands/ within the meaning of the statute of frauds. How.. St., sec. 6181. That statute contemplates a transaction between parties contracting with each other as principals; and this was not such a transaction. In this case plaintiff as. agent undertook to perform for the defendant certain services, and the defendant undertook to make a compensation therefor, the amount of which should be contingent on the value of the services. It was assumed in Bunnel v. Taintor’s Adm’r, 4 Conn. 568, that such a contract was not within the statute, and there are many express adjudications to the same effect.”

We approve of the rule announced in that case, and the reasoning of the learned chief justice supporting it. As before stated, nearly all of the courts of this country have upheld contracts like the one here in question. Some of them on the ground that the contract is one of partnership for the purpose of speculating in real estate; others holding that the contract is one for profit-sharing only; and still others, on the ground of compensation for services, as set forth in the opinion just quoted from. Richards v. Grinnell, 63 Ia. 44; Brosnan v. McKee, 63 Mich. 454; Snyder v. Wolford, 33 Minn. 175.

It is further contended that an affirmance of the judgment of the trial court commits us to a rule inconsistent with our last opinion in Norton v. Brink, 75 Neb. 575. It seems clear, hoAvever, that such is not the case, for the two cases are easily distinguishable. In Norton v. Brink, to avoid the statute of frauds, it was alleged that by the contract the land in question was to be purchased in partnership, and held for joint profit by the plaintiff and defendant. Nothing was said as to when it should be sold, if at all. It appears that Brink purchased the land himself, paid the full consideration therefor, took the title in his own name, and died without'having sold it. His son, who inherited his estate, sold the land at a profit, and suit was brought against him to declare a resulting trust and for an accounting as to the proceeds of the sale. It was there held that the facts did not create the relation of partnership, and as the plaintiff had contributed nothing to the enterprise, and had paid no part of the purchase price, no resulting trust arose in her favor.

In the case at bar the plaintiff makes no claim to an interest in the land; neither does he allege the existence of a partnership.. His claim is based on his right to recover one-half of the net profits of the transaction as his compensation for his services contributed to the joint enterprise. His evidence not only sustains this claim, but the defendant has in two letters written by himself to the plaintiff acknowledged the' existence of such claim; and those letters were properly received in evidence against him. In one of them he says: “Yes, Parrott, I always keep my word. You are to have on^-half the profits in the above farm when sold, and the same in the Oopson farm. Of course, this is after the expenses are deducted, provided the income on them does not meet expenses.” In the other letter, among other things, he said: “We must get all we can out of the place until a good price is given for it.” This is a case Avhere the establishing of the debt does not involve the establishing of an interest in the land itself. And, when the action concerns only the purchase money for the execution of the conveyances, of course the promise does not seek to create a trust, and is enforceable. Harris v. Roberts, 12 Neb. 631; Cameron v. Nelson, 57 Neb. 381; Linscott v. McIntire, 15 Me. 201; Hess v. Fox, 10 Wend. (N. Y.) 436; Snyder v. Wolford, supra; Smith v. Putnam, 107 Wis. 155.

For the foregoing reasons, we are satisfied that onr former conclusion on this point was right. As the foregoing are the only questions presented for our consideration on the rehearing, onr former judgment is adhered to.

Affirmed.