Court Opinion

ID: 9532216
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:19:17.920038+00
Date Added: 2024-06-11T13:28:42.306171
License: Public Domain

*338WIEAND, Judge,
dissenting:
Wilda Fannin was the successful bidder at a public sale of improved real estate owned by Ward and Rachel Cratty. After the property had been “knocked down” to Ms. Fannin for $45,500.00, she. made a deposit of ten (10%) of the purchase price in accordance with the conditions of sale. Less than a week later, she demanded a return of her deposit; and when her demand was refused, she commenced an action in assumpsit to recover the deposit. The sellers filed a counterclaim for the difference between Ms. Fannin’s bid price of $45,500.00 and the price of $39,000.00 which they were able to obtain upon a resale after the original buyer persisted in her refusal to take title and pay the balance of the purchase price.
At trial, the evidence showed that after the real estate had been “knocked down” to Ms. Fannin, she signed an agreement as follows:

*339

The evidence did not establish, however, that the person signing on behalf of the sellers had been authorized in writing to sign the agreement on their behalf.
The trial court instructed the jury which heard the evidence that the buyer could recover her deposit on any one of three possible theories. The first theory presented to the jury was that the buyer, by making a bid, had merely offered to purchase the real estate and that her offer had been withdrawn prior to acceptance by the sellers.1 The second theory on which recovery could be based was that the sellers had committed a fraud by concealing latent defects in the foundation of the dwelling house. The third theory on which recovery could be effected, the court said, was that the writings evidencing the agreement of the parties failed to satisfy the requirements of the statute of frauds. Thus, the court told the jury “... the third contention of the plaintiff is that the statute of frauds was not completely [sic] within this particular transaction, it being a sale of real estate, and, therefore, since it was not complied with the plaintiff is entitled to receive back the money paid down after the bid at auction.” The court also told the jury that an agreement for the sale of real estate, to comply with the statute of frauds, had to be signed by both buyer and seller. The necessary implication of these instructions was that the buyer should be permitted to recover her down payment and the sellers’ counterclaim should be disallowed unless an agreement had been signed not only by the buyer *340but also by the sellers or their agent duly authorized in writing. The jury returned a verdict which reimbursed the buyer for part of her down payment, i.e., $3,500.00, and denied recovery on the sellers’ counterclaim. Post-trial motions were denied, and judgment was entered on the verdict of the jury. The sellers appealed.
The sole issue on appeal is defined in appellants’ “Statement of Question Involved” as follows: “Whether the court below erred in instructing the jury that the provisions of the statute of frauds must be complied with where the causes of action pled were for damages incurred as a result of breach of an agreement to sell/buy real property?” Appellants argued orally and in their brief that the trial court’s jury instructions had been incorrect, and had erroneously applied the statute of frauds to the causes of both plaintiff and defendants.2 This requires that we review the correctness of the trial court’s jury instructions as they pertained to the statute of frauds. Our duty to review the court’s instructions is not curtailed, as the majority contends, by the fact that in preparing their brief the appellants, in compliance with Pa.R.App.P. 2119(a), placed only an abbreviated form of the “question involved” at the head of their argument.3
My review of the trial court’s instructions to the jury regarding the statute of frauds discloses that the trial court fell into serious error which requires that a new trial be granted.4 The statute of frauds is an affirmative defense *341which limits judicial authority to afford a remedy. Haskell v. Heathcote, 363 Pa. 184, 188, 69 A.2d 71, 73 (1949). It does not render void those contracts relating to land which are oral or fail to comply with the statute’s formal requirements. Zlotziver v. Zlotziver, 355 Pa. 299, 302, 49 A.2d 779, 781 (1946); Allison v. Montgomery, 107 Pa. 455, 460 (1884); Bethlehem Steel Corp. v. Tri State Industries, Inc., 290 Pa.Super. 461, 467, 434 A.2d 1236, 1239 (1981). The purpose of the statute of frauds is to protect landowners and guard them against perjuries in support of alleged oral agreements to convey. Williams v. Moodhard, 341 Pa. 273, 280, 19 A.2d 101, 104 (1941); Sferra v. Urling, 328 Pa. 161, 168, 195 A. 422, 426 (1937); Brodhead v. Reinbold, 200 Pa. 618, 623, 50 A. 229, 230-231 (1901); Tripp v. Bishop, 56 Pa. 424, 429 (1867). The statute of frauds has been designed to prevent frauds, not to encourage them. Gerlock v. Gabel, 380 Pa. 471, 477, 112 A.2d 78, 81 (1955); Haskell v. Heathcote, supra; Haines v. Minnock Construction Co., 289 Pa.Super. 209, 216, 433 A.2d 30, 33 (1981); Lehner v. Montgomery, 180 Pa.Super. 493, 500, 119 A.2d 626, 630 (1956). In Simplex Precast Industries, Inc. v. Biehl, 395 Pa. 105, 149 A.2d 121 (1959), Justice Musmanno stated:
Ever since that venerable statute was armed with authority to prevent the assertion of verbal understandings regarding title to land, it has been called upon to strike down agreements which were not committed to writing. The laudable purpose of this guardian of truth is to prevent frauds and perjuries. Occasionally, however, an embattled property owner or prospective purchaser of land, summons the statute to enforce a condition which does not seem to coincide with principles of honesty and fair dealing. In such cases the Courts should study the situation involved to make certain that the statute is not *342being used to perpetrate fraud and perjuries rather than prevent them.
Id., 395 Pa. at 108-109, 149 A.2d at 123. In the same vein, Professor Corbin has said that the purpose of the statute of frauds is “the prevention of successful fraud by inducing the enforcement of contracts that were never in fact made. It is not to prevent the performance or the enforcement of oral contracts that have in fact been made; it is not to create a loophole of escape for dishonest repudiators. ” 2 Corbin on Contracts § 498, pp. 680-681 (1950) (emphasis added).
The law is eminently clear that the statute of frauds cannot be used to support a cause of action to recover a down payment voluntarily made pursuant to a valid oral contract to purchase land. Roberts v. Roesch, 306 Pa. 435, 440, 159 A. 870, 871 (1932). See also: Brunetto v. Ferrara, 167 Pa.Super. 568, 571, 76 A.2d 448, 450 (1950).
In the instant case, appellee voluntarily made a deposit or down payment and signed an agreement to purchase real estate. Even if the agreement failed to meet the formal requirements of the statute of frauds, appellee was not entitled to use the statute of frauds as a sword to recover the down payment thus made. When the trial court instructed the jury otherwise, it fell into error.
The trial court told the jury that the appellee-buyer could recover her down payment on any one of three, separate theories. The jury did not answer special interrogatories but returned a general verdict. Thus, there is no way in which a reviewing court can ascertain whether or not the jury’s verdict was based on the erroneous instruction that recovery could be based on a failure to achieve full compliance with the formal requirements of the statute of frauds. Consequently, a new trial is necessary. Rivera v. The Philadelphia Theological Seminary of St. Charles Borromeo, Inc., 326 Pa.Super. 509, 522-523, 474 A.2d 605, 612 (1984). See also: Fama v. Smith, 303 Pa.Super. 414, 416, 449 A.2d 755, 756 (1982).
*343The trial court’s instructions were also incorrect as they pertained to the applicability of the statute of frauds to the sellers’ counterclaim. The statute of frauds is found in the Act of March 21, 1772, 1 Sm.L. 389, § 1, 33 P.S. § 1. It does not require a written agreement of sale signed by both parties. The statute requires, rather, that the writing be signed by “the parties so making or creating [the interest in real estate] or their agents, thereunto lawfully authorized by writing.” Id. See: DiBenedetto v. DiRocco, 372 Pa. 302, 305, 93 A.2d 474, 475 (1953); Stevenson v. Titus, 332 Pa. 100, 105, 2 A. 2d 853, 856 (1938); Stephens v. Carrara, 265 Pa.Super. 102, 107, 401 A.2d 821, 823-824 (1979). The purpose of the statute of frauds is to prevent the perpetration of fraud where the owner of real estate has not actually made a conveyance or agreement to sell. Lehner v. Montgomery, 180 Pa.Super. 493, 500, 119 A.2d 626, 630 (1956).
A review of the evidence and pleadings in this case discloses that the buyer admitted making a bid of $45,-500.00. She contended, however, that her admitted bid constituted merely an offer which could be withdrawn before it was accepted. Moreover and in any event, she contended, the sellers had fraudulently concealed the deteriorating condition of “the substructure and foundation of the house.” The appellant sellers similarly admitted the authority of their agent to sell. They argued the existence of a written agreement signed by the buyer and a wrongful failure by the buyer to perform her agreement.
Competent evidence of the foregoing facts was produced and submitted to the jury. If the jury found that appellee’s bid was merely an offer which had been withdrawn prior to acceptance, appellee was entitled to recover her deposit. In that event, there was no agreement, and appellee could have no liability to the sellers. If there was an agreement, appellee could avoid the agreement if the sellers had fraudulently concealed the deteriorated condition of the building. The agreement was not subject to avoidance, however, merely because the auctioneer’s authority to sell had not *344been evidenced by a prior written agreement signed by the sellers. The sellers, who are the parties intended to be protected by the statute of frauds, have admitted the authority of the auctioneer. The buyer personally signed the agreement of sale. Under these circumstances, the statute of frauds could not be used by the buyer to repudiate a valid agreement which she had executed for the purchase of real estate.
If the agreement for the sale of real estate was legally and properly signed by the buyer but not by the seller, the seller was entitled to enforce the agreement against the buyer even though the statute of frauds may have prevented the buyer from specifically enforcing the contract against the seller. Restatement of Contracts § 372(1) and Illustration 5, now incorporated into Restatement (Second) of Contracts § 363, comment c. See: Driebe v. Fort Penn Realty Co., 331 Pa. 314, 319-320, 200 A. 62, 64-65 (1938); Guzzi v. Czaja, 163 Pa.Super. 597, 600, 63 A.2d. 426, 428 (1949). See also: Erkess v. Eisenthal, 354 Pa. 161, 47 A.2d 154 (1946); 5A Corbin on Contracts §§ 1190, 1192. “Mutuality of obligation is one thing and mutuality of remedy another.” Driebe v. Fort Penn Realty Co., supra, 331 Pa. at 319, 200 A. at 64. Mutuality of obligation is essential to the existence of a contract. A valid contract, however, cannot be avoided merely because the remedies available to the parties are not identical. A contract for the purchase of real estate which fails to comply with the formal requirements of the statute of frauds is a valid contract. In such a contract the obligations of the parties are mutual. The statute of frauds has an effect only on the remedies available to the parties. The law does not require that those remedies be precisely the same for each party.5
*345To summarize, the correctness of the trial court’s jury instructions pertaining to the statute of frauds was properly preserved for appellate review and requires consideration by this court. Those jury instructions, in my opinion, were egregiously in error. Therefore, I would reverse and remand for a new trial. The majority, believing the verdict proper despite erroneous jury instructions concerning the statute of frauds, would affirm. Because the majority, in my judgment, has established bad precedent and has failed to apply the law correctly to the present litigation, I must respectfully dissent.

. The record does not disclose that the sale was “without reserve.” See: Brereton Estate, 355 Pa. 45, 57, 48 A.2d 868, 873 (1946); Restatement (Second) Contracts § 28(1).

. This is illustrated by the argument appearing on page 14 of the appellant’s brief that ”[t]he injection of the statute of frauds into the trial of the case, which did not control either the Plaintiffs or the Defendants’ case, was reversible error and a new trial is the only remedy.”

. The majority’s argument to the contrary appears in footnote 3. (At p. 330).

. Inasmuch as the sole issue on appeal is the correctness of the trial court’s instructions regarding the statute of frauds, I find it neither helpful nor appropriate to hold, as the majority does, that it "will not disturb the trial court's resolution of the issue” of a latent defect in the basement wall. (At p. 337). Because the issue is not which party should ultimately prevail, I find it also inappropriate to suggest, as the *341majority does, that it ”agree[s] with the trial court which denied appellant’s counterclaim and granted appellee’s claim for the return of her down payment” (At p. 337) and that "the record is devoid of any evidence which would support a conclusion that the appellee breached the contract or otherwise secured the contract through the use of fraud.” (At p. 336).

. The failure to make the distinction between mutuality of obligation and mutuality of remedy is evident in Burg v. Betty Gay of Washington, Inc., 423 Pa. 485, 225 A.2d 85 (1966). Lack of authority to contract destroys the mutuality of the parties’ obligations. That situation must be distinguished from the situation where authority exists but has not been put in writing as required by the statute of frauds. Such a contract is valid; only the remedies are limited by the *345statute of frauds. The contract is not invalidated merely because the remedies of the parties are not mutual.