Title: Hurst v. Thomas

State: alabama

Issuer: Alabama Supreme Court

Document:

91 So. 2d 692 (1956)
C. H. HURST et al.
v.
Robin THOMAS.
8 Div. 856.

Supreme Court of Alabama.
December 21, 1956.
*693 Julian Harris and Philip T. Shanks, Jr., Decatur, for appellants.
Russell W. Lynne, Decatur, for appellee.
GOODWYN, Justice.
The appellee, complainant below, brought a suit in equity against appellants, respondents below, seeking specific performance of an oral agreement for lease of real estate and an injunction to restrain respondents from interfering with complainant's possession of the property. The trial court rendered a decree granting the relief prayed for. This appeal is by the respondents from that decree. The testimony was taken orally before the trial judge.
To the extent material to an understanding of the issues presented for review on this appeal, the facts are these: The property involved is a store building in Decatur belonging to C. H. Hurst, one of the respondents. This building had been leased for the year 1955 to one Semmes who operated an automobile agency on the adjoining lot. In the fall of 1955 the complainant, Thomas, learned that Semmes seldom used the building and did not intend to renew his lease at the end of the year. Thomas then approached Hurst seeking a lease for the coming year. He testified that he planned to use the front part of the building as a furniture store and to sub-rent the rear portion to another concern, the Worthington Corporation.
Thomas contacted Hurst several times with regard to procuring a lease, but they could not agree on the rental. Finally they agreed to meet at a cafe in Decatur to further discuss terms. Here the evidence is in sharp conflict. The only witnesses present at the meeting were Thomas and Hurst. Thomas testified that a definite oral lease agreement was made for the coming year at a monthly rental of $200 payable in advance, with an option for renewal for an additional year, and that Hurst told him to go ahead with his plans for the use of the building. Hurst denied that any agreement was reached, and testified that the negotiations were left pending. The trial court resolved this conflict in the evidence in favor of the complainant, and found as a matter of fact that the oral lease had been agreed on as contended by the complainant.
The complainant testified that, in reliance on the agreement with Hurst, he negotiated an agreement with Semmes for the sub-lease of the building during December for $150. No part of the rental money was paid to Semmes, but an employee of Semmes did give the keys of the building to Thomas, and Thomas proceeded to clean out the building and erect a partition between the area he was to use and the portion which he planned to subrent to the Worthington Corporation. Thomas further testified that he definitely committed himself to sub-rent to the Worthington Corporation on the faith of his agreement with Hurst. However, no agreement between Thomas and his proposed sub-tenant was ever signed.
Later in December Hurst entered into a written lease of the premises with the defendant Gregg for a term of three years at a monthly rental of $250. Semmes also agreed to sub-rent to Gregg for the remainder of December and the rental was immediately paid in cash. Gregg then changed the locks on the building and refused entry to the complainant.
The complainant then brought this suit for specific performance of the alleged oral lease agreement with Hurst, and asked the court to restrain Gregg and Hurst from interfering with his possession. The trial *694 court granted specific performance, and the respondents prosecute this appeal.
The position taken by appellants is thus stated in their brief:
The first question presented, then, is whether the alleged oral lease is valid and operative as being within the exception to the Statute of Frauds, § 3, Subd. (5), Tit. 20, Code 1940, as amended. Section 3 was amended in 1951 by adding subdivision (6), but the amendment has no bearing on this case. Act No. 645, approved Sept. 4, 1951, Acts 1951, p. 1109. If it should be held that the oral agreement is not valid because within the Statute of Frauds, another question is whether the principle of estoppel is applicable so as to deny to respondents the right to interpose the Statute of Frauds as a defense.
Section 3, Subd. (5), Tit. 20, as amended, provides as follows:
This court has uniformly held that both possession and payment are necessary in order to take the oral agreement out of the operation of the statute. Neely v. Denton, 260 Ala. 26, 29, 68 So. 2d 537; Allen v. Bromberg, 163 Ala. 620, 624, 50 So. 884; Heflin v. Milton, 69 Ala. 354, 357.
It is undisputed under the facts of this case that Thomas never actually paid Hurst any rental money under the alleged oral lease. It is contended by the appellee, however, that the cleaning of the building and the erection of partitions by Thomas constituted partial payment within the terms of the statute. We are unable to agree. It appears obvious from the evidence that the erection of the partitions and the cleaning of the building were done by Thomas for his own benefit, and not as part of the agreed consideration for the lease. Williams v. Williams, 210 Ala. 372, 373, 98 So. 200; East Tennessee, V. & Ga. Railway Co. v. Davis, 91 Ala. 615, 619, 8 So. 349.
It is further argued by appellee that Thomas' parol promise to pay Hurst $200 as the first month's rent constituted partial payment. Our cases are conclusive on the point that a parol promise to pay *695 money does not constitute part payment within the saving clause of the statute. Timmerman v. Stout, 216 Ala. 49, 112 So. 335; Carlson v. Erickson, 164 Ala. 380, 382, 51 So. 175. We are at the conclusion, therefore, that there was no payment of the purchase price, or a part of it, and that the oral agreement falls within the operation of the statute. We forego any discussion on the question of possession.
The decree of the trial court, however, is not based on a finding of compliance with the saving clause of the Statute of Frauds but upon the doctrine of equitable estoppel. The trial court granted specific performance, not because the contract was taken out of the operation of the statute by partial performance, but rather on the theory that the defendant is estopped to assert the statute as a defense because of his conduct. The opinion states:
The misconduct of the defendant upon which the estoppel is based consisted of a deliberate breach of the contract after its creation. The court's finding of fact on this point is as follows:
It is well-settled in Alabama that "an executory agreement which is void under the statute of frauds cannot be made effectual by estoppel merely because it has been acted on by the promisee, and has not been performed by the promisor." Clanton v. Scruggs, 95 Ala. 279, 283, 10 So. 757, 759; Allen v. Bromberg, 163 Ala. 620, 624, 50 So. 884; Thompson v. New South Coal Co., 135 Ala. 630, 637, 34 So. 31, 62 L.R.A. 551, 93 Am.St.Rep. 49; White v. Levy, 93 Ala. 484, 487, 9 So. 164. See, also, Spencer v. Spencer, 254 Ala. 22, 26, 47 So. 2d 252.
The rule is thus stated in White v. Levy, supra [93 Ala. 484, 9 So. 165]:
From Clanton v. Scruggs, supra, is the following:
In Allen v. Bromberg, supra [163 Ala. 620, 50 So. 885], it is said:
We wish to make it clear that we do not find any indication in the bill of complaint, the findings of fact of the trial court, or the evidence, that respondent Hurst was guilty of fraud or inequitable conduct which should serve to estop him from interposing the Statute of Frauds as a defense. The worst that can be said of him is that he deliberately "breached the agreement solely for the purpose of profit and because he felt the law was powerless to compel him to keep faith," as stated in the trial court's findings of fact. We think the case falls fairly within the rule of the cases cited above and that Hurst is not estopped from asserting the invalidity of the oral agreement on the ground that it violates the Statute of Frauds.
Reversed and rendered.
LIVINGSTON, C. J., and SIMPSON and SPANN, JJ., concur.