Opinion ID: 1622017
Heading Depth: 1
Heading Rank: 2

Heading: Specific performance of an oral contract to sell land

Text: We next consider whether the Wilsons' complaint for specific performance was barred by the statute of frauds. In a letter opinion, the chancellor ruled in favor of the Wilsons and granted the petition for specific performance. The chancellor found that, by clear and convincing proof, the terms of the oral contract had been proven. She also required the Wilsons to reimburse Mrs. Dolphin for the 1994 taxes she paid on the land. Contracts for the sale of lands must be in writing to be enforceable. Ark.Code Ann. § 4-59-101(a)(4)(Repl.1996). There is no allegation in this case that a written agreement exists. Instead, Mr. Wilson claims that his payment for the land and his assumption of possession took the contract out of the operation of the statute of frauds. However, to take an oral contract out of the statute of frauds, both the making of the oral contract and its performance must be proven by clear and convincing evidence. French v. Castleberry, 238 Ark. 1038, 386 S.W.2d 482 (1965); Pfeifer v. Raper, 253 Ark. 438, 486 S.W.2d 524 (1972). The trial in this case primarily consisted of the competing testimonies of Mr. Wilson and Mrs. Dolphin. According to Mr. Wilson, Mrs. Dolphin told him that she owed so much money on the property that she could not do anything about the public sale. It was Mr. Wilson's testimony that Mrs. Dolphin agreed that, if he could get the indebtedness satisfied and could pay for the land to keep it from being sold at auction, she would deed the land to him. According to Mrs. Dolphin, she told Mr. Wilson that he could look into the sale of the property. However, she testified that she specifically told him that he could not purchase the land in her name. She denied the existence of any agreement to deed the property to the Wilsons. The only written evidence of communications between the parties is a facsimile that was sent from Mrs. Dolphin to Mr. Wilson on May 18, 1994. Mr. Wilson had told Mrs. Dolphin that he needed her authorization to obtain information from the FmHA about the indebtedness on the property. The one-page fax that Mrs. Dolphin sent read, according to her, as follows: This is to certify that I, Beatrice Dolphin, authorize Jimmie L. Wilson, to obtain information relating to the sale of my property located at Lakeview (Phillips County Arkansas). Past due monetary amounts are not to be dispensed with. s/Beatrice Dolphin NOTARIZED The record reflects that this exhibit is an original with a raised notary seal. Mr. Wilson denies that the sentence relating to past-due monetary amounts was included. After receiving the fax, Mr. Wilson sent a letter to the FmHA on his law firm's letterhead, in which he stated that Ms. Dolphin had contacted his office and had asked that he determine the appraised value of the property. The letter referenced the in rem action in federal district court, and stated that Mr. Wilson's representation in the matter was limited to tendering the settlement to FmHA. However, at trial, Mr. Wilson testified that he did not represent Mrs. Dolphin as an attorney. Attached to Mr. Wilson's letter to the FmHA was a copy of Mrs. Dolphin's May 18, 1994, fax; however, this authorization did not contain the sentence, [p]ast due monetary amounts are not to be dispensed with. On May 24, 1994, one day before the auction, Mr. and Mrs. Wilson sent checks to the FmHA in the amount of $13,200.00 for the property, and $1,239.40 for costs. These payments stopped the public sale of the property, and resulted in a satisfaction of judgment being entered on the FmHA's foreclosure action in federal court. The Wilsons then began work on trying to reduce the $300,000.00 indebtedness on the property. Unbeknownst to them, Mrs. Dolphin was working on her own, during this same period, to get her debt forgiven. She filed a formal application for settlement on August 16, 1994, and the FmHA issued a satisfaction on August 17, 1994. On August 18, 1994, the FmHA county supervisor recommended that Mrs. Dolphin's debt be cancelled. The FmHA approved the cancellation of the debt on May 2, 1995. Once the debt was satisfied, Mr. Wilson sent a warranty deed to Mrs. Dolphin so she could sign the property over to him. He also began to work on the land. He tried to clean up the property, and drained the back part of the land. He hired the city to mow the property a few times. He had someone disc the land, and he allowed others to plant a crop on part of the parcel. Sometime thereafter, he received notice from Mrs. Dolphin's attorney that she would not sign the warranty deed. The factors that point to the making of the contract and its performance include the following. The Wilsons paid the appraised value of the land, and worked to remove the indebtedness from the land. After the debt was satisfied, the Wilsons performed maintenance on the land and allowed a crop to be planted on a part of it. Finally, the Wilsons prepared a warranty deed for Mrs. Dolphin to sign. The cases of French v. Castleberry, supra , and Pfeifer v. Raper, supra , are instructive. Both involved tenants who claimed that their landlord had orally agreed to sell them the land which was the subject of their tenancy. In each case, the tenants claimed to have made improvements on the land in reliance on the oral contract. We observed in both cases that the improvements were of the type that might ordinarily be made by tenants. French, 238 Ark. at 1040, 386 S.W.2d 482; Pfeifer, 253 Ark. at 440, 486 S.W.2d 524. We also noted that, to satisfy the statute of frauds, the improvements must be so valuable and substantial that it would be inequitable to refuse specific performance. Id.; Blanton v. First Nat. Bank of Forrest City, 136 Ark. 441, 206 S.W. 745 (1918). The improvements (mowing, discing to keep down the weeds, and bulldozing debris from a burned building into a pile) by the Wilsons in this case essentially amounted to maintenance. They are the type of maintenance an agent will do for an absentee landowner and hence are consistent with Mr. Wilson's representation to the FmHA that he was acting as Mrs. Dolphin's agent. For that matter, Mr. Wilson testified that he had known Mrs. Dolphin all of his life, and this type of maintenance could easily be done by a long-time friend of an absentee landowner. These acts are not unequivocally referable to the agreement; they are not unintelligible or extraordinary unless as an incident of ownership. 1 E. Allen Farnsworth, Farnsworth on Contracts § 6.9, at p. 442, & n. 11 (1990), quoting Burns v. McCormick, 233 N.Y. 230, 135 N.E. 273 (1922). Thus, the only evidence of an agreement in this case is the Wilsons' payment for the land, in Dolphin's name, and the maintenance of the property. When examining this evidence, we must conclude that it lacks the clarity and cogency that the law demands. French, 238 Ark. at 1039, 386 S.W.2d 482. When looking at the countervailing evidence on behalf of Mrs Dolphin, the written evidence that she offered reflects that she only authorized Mr. Wilson to obtain information relating to the sale of her property. She also continued her own efforts to cancel the indebtedness on the land, and paid taxes on the land in 1994. When considering all the evidence, we conclude that the chancellor clearly erred in finding that there was clear and convincing evidence that an agreement existed between the parties. Under these circumstances, we hold that the Wilsons' complaint was barred by the statute of frauds, and reverse and remand for entry of an order consistent with this opinion. Reversed and remanded. NEWBERN, GLAZE and CORBIN, JJ., not participating. WM. LEE FERGUS, LEON HOLMES and JOHN C. LESSEL, Special Justices, join in this opinion. THORNTON, J., dissents.