Court Opinion

ID: 9856815
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:59:24.384572+00
Date Added: 2024-06-11T09:40:40.877506
License: Public Domain

McGHEE, Chief Justice. We are asked to reverse the decree of the lower court in an action for declaratory judgment directing the defendant, appellant here, to convey to the plaintiffs, appellees here, real estate formerly belonging to the community estate of the appellant and her former husband, the appellant not having joined in the execution of a contract for the sale of such real estate. The facts as found by the trial court are, in substance, as follows: • In April, 1948, while Jack L. Harper and the appellant were married, he contracted to convey to the appellees for $5,500 the real estate which is the subject of this action, it having been stipulated such real estate was community property. The appellant did not join in the execution of the-contract, and in it Harper represented himself to be a single man. The appellees entered into immediate possession of the premises which they occupied as their home. They had neither actual nor constructive notice of the fact Harper was a married man and in good faith they entered into the contract believing him to be single. Very shortly after the execution of this contract Harper filed suit for divorce and the appellant filed a cross-complaint in that action in which she referred to the “sale of properties” and “deals in real estate” by her husband. Pertinent requested findings of fact and conclusions of law made by her in that action were the following: “Requested Finding of Fact No. 6 “That subsequent to the ceremonial marriage in Safford, Arizona, in 1941, the plaintiff acquired certain real property in the County of Bernalillo, State of New Mexico, to-wit: (Description) taking said property in his own name and representing himself therein as a single man; that on the 15th day of April, 1948, as a single man the plaintiff entered into a real estate contract with LaMar D. Treadwell and Ruth Treadwell, his wife, selling to said Treadwells the ‘Westerly 41.03 feet of Lots numbered One Hundred and seventy-nine (179) and One Hundred and eighty (180)’ as above described for the sum of $5,500, $1,000 of which was paid in cash, plus $50 paid on the execution of the contract, and the balance of $4,-450 payable at $50 a month on the 15th day of each month at %5 interest. The balance still due under said contract is $4,025.12; that said property was acquired with community funds.” “Requested Conclusion of Law No. 5 “That the plaintiff has received under the Treadwell contract approximately $1,650, which said sum was community property and that the plaintiff holds one-half of the same as Trustee for the defendant, which said sum is $825, and plaintiff should account for and pay over said sum to the defendant.” "Requested Conclusion of Law No. 9 “That the defendant is entitled to alimony and the interest of her husband in the real property located in Bernalillo County, New Mexico, * * * that title to said property should be vested in the defendant; that both parties will be required to execute papers necessary to clear and transfer title to said property and that the Court retains jurisdiction of this cause for the purpose of altering or amending the award of alimony,” The final decree in the divorce action provided, among other things, the following: “c. That Marian Volney Harper is entitled to alimony, and the interest of Jack L. Harper in the real property located in Bernalillo County, New Mexico, including his interest in the Treadwell contract * * * is awarded to Marian Volney Harper in lieu of alimony, and title to said property is hereby vested in said Marian Volney Harper; that both parties be required to execute the papers necessary to clear and transfer title to all the property involved in this case.” The appellant took an appeal from the decree of the lower court in the divorce action, contending she should have been awarded half of the money already paid to Harper under the Treadwell contract of sale. This court rejected her contention and affirmed the decree of the lower court. Harper v. Harper, 1950, 54 N.M. 194, 217 P.2d 857. During the pendency of 'the divorce action, appellant’s mother called upon the appellees in their home and at such time the question of payments under the real estate contract was discussed. Later the same day the appellant encountered appellees in a restaurant in Albuquerque and promised them substantially as follows: “If I get the property, I will give-you a deed,” and, “You don’t need to worry, I’ll make it right with you.” It was upon this day the appellees first learned Harper was a married man. After her initial promise, made in the fall of 1948, and-until the latter part of August, 1951, the appellant called at the appellees’ home on different occasions and discussed the contract with them, reaffirming her earlier promise. It was not until the last mentioned date that appellees were informed appellant did not intend to execute a deed itf-their favor upon full performance of the contract, when the appellant called upon Mrs.. Treadwell and in the course of their conversation the contract was discussed. At this time the appellant told Mrs. Tread-well she would give the appellees their deed if she got the full price of the property— that is, if the appellees would contact Harper and obtain the money already paid him to give to appellant, or if the appellees would pay her such sum themse-lves, she would give them clear title. In reliance upon the promises made by appellant, appellees continued to make monthly payments to an escrow agent under the contract of sale and spent some $635 in improving the premises and the appellee LaMar D. Treadwell labored 283 hours on these improvements. When the appellees were informed appellant would not carry out her assurances to them, they ceased to make monthly payments to the escrow agent, but have stood ready to perform at all times. The lower court found that at all times material the appellant knew or should have known of the real estate contract and its terms; that she knew or should have known that the appellees were making their monthly paj^ments; that she knew or should have known the appellees were improving the real estate, but that she never advised the escrow agent to refuse to accept the payments being made, or advised appellees to discontinue the payments; that she never advised them they had no right to live on or improve the real estate, or asserted she was entitled to its possession until the counterclaim was filed in the present action. The lower court then concluded as a matter of law that appellant was bound by the contract of sale, apparently resting this conclusion on the doctrine of equitable estoppel and upon the further ruling the appellees were in privity with Harper with respect to the duties, rights and benefits conferred on the parties to the divorce proceeding. It was decreed the appellant should execute and place in escrow a conveyance adequate to transfer merchantable title to the property in question to the appellees upon their performance of their duties under the contract. On this appeal the appellant argues first, that § 65-403, N.M.S.A. 1941 Comp., renders void any transfer or conveyance attempted to be made of the real property of the community by either husband or wife alone; that by the force of this statute, a contract for the sale of community realty in which the wife does not join is likewise void, at least to the extent that the wife cannot be divested of her interest in the community real estate by estoppel or other equitable doctrine. Secondly, it is contended the decree in the divorce action did not purport to make the contract of sale binding on appellant, and that even if it were to be so construed, such decree would be of no effect, as the appellees were not before the court in the divorce action, and there is no relation of privity between them and Harper. Lastly appellant asserts even if the doctrine of equitable estoppel may be invoked against her, the evidence is insufficient to establish all of the elements of the doctrine as laid down by this court in Chambers v. Bessent, 1913, 17 N.M. 487, 134 P. 237. We will first consider appellant’s argument the elements of equitable estoppel have not been established.  We have carefully examined the record, and beyond any doubt there is sufficient evidence to support the findings made that appellant on different occasions promised appellees she would give them a deed to the property, and otherwise reassured them; that until shortly before this action was commenced she never took a position inconsistent with such promises and assurances, even in a divorce action making division of the community prop^ erty, and, finally, that she stood by for some two years after having full knowledge of the contract, permitting appellees to remain in .possession, when she knew, or should have known, they were steadily improving the premises.  Appellant objects there was lio proof of any misrepresentation on her part —that she promised to give appellees a deed to the property, but that she did not say for how much she would give such deed. It is sufficient answer to this that a!t' all times material hereto the appellant was chargeable with notice of the contract, and could easily have learned at the time the initial promise was made by her (if she did not already know) what amount remained unpaid on the contract; if she intended to- claim otherwise than under the contract, it was her duty. after- representing her intention to convey title to appellees to specify her terms. Her silence upon this point after stating she would give appellees a deed and assuring them, ‘You don’t need to worry. I will make it right with you,”. amounts to concealment of' a material fact.  It is also' objected the appellees have .not shown they relied on the promises , made. Appellant seems principally disturbed here because in referring to their mental attitude after the promises made to them by appellant, the appellees did not characterize it as one of “reliance,” and because at one point in the testimony of the appellee, Mrs. Treadwell, she stated they presumed they had a purchase. It is thus argued that appellees, rather than relying upon the misrepresentations of the appellant, relied upon their contract with Harper. It is true that one claiming the benefit of equitable estoppel must have relied upon the conduct and representations of the one sought to be estopped, but /the fact of reliance mry be established by the use of language which may or may not contain the wqrd “reliance.” Our holding in Martinez v. Cook, 1952, 56 N.M. 343, 244 P.2d 134, was never intended to impart to the tvord “reliance” the properties of a magic formula. In this connection' the appellee, Mrs. Treadwell, testified as follows: ■ “Q. Now prior to the time that you consulted your attorneys, did (appellant) ever make any demand, written or oral, requesting that you vacate and leave the property? A. No, she never did. That was why we went ahead with our improvements and put our money into it.” At another point she testified: “Q. And what, to your best recollection did (appellant) say about the Treadwell Contract? * * * A. * * * when we would come around to the contract, she would always say, yes, it would be settled to our satisfaction by a new deed. That is why we hadn’t seen an attorney sooner. We figured that is the way it would be.” This testimony amply shows the appellees did in fact rely upon the promises and assurances made by appellant. Appellant further contends no detriment will be sustained by appellees if she is allowed to repudiate her former conduct. It is claimed appellees have received almost five years’ free occupancy of property having a rental value of $75 per month; that they have expended only some $635 in making improvements; and that the money they have paid on the contract still remains in escrow. This state ment ignores the amount of labor expended b.y the appellee, LaMar Treadwell, in making the improvements, found to be 283 hours, and likewise ignores .the fact $1,650 of the 'purchase price was paid to Harper, against whom appellees have no realistic recourse, since he is presently residing in Mexico and not subject to service of process in this state. Furthermore, although the brief of appellant speaks of rent-free occupancy of the premises by appellees, in her counterclaim she asserts a right to $2,900 damages up to the time of commencement of this suit and an additional $100 per month for each month thereafter that appellees remain in possession of the premises. However, even if appellant were to abandon her claim to these sums, there would yet remain substantial detriment to appellees if appellant be now allowed to repudiate her promises and assurances to them. In addition to the foregoing it is contended there was no consideration for appellant’s promises and that to require her to convey the real estate under the circumstances of this case would be violative of the Statute of Frauds.  Appellant’s attempt to insert into the requirements of equitable estoppel that of “consideration” will be rejected. The doctrine of estoppel is not one of contract. 19 Am.Jur., Estoppel, § 44; 3 Pomeroy’s Equity Jurisprudence, 5th Ed., § 808b.  With' regard to the Statute of Frauds, in- 3 Pomeroy’s Equity Jurisprudence, § 807, the relation between it and estoppel affecting the legal title to land is carefully stated: “ * * * It (equitable estoppel affecting legal title to land) is a purely equitable doctrine settled long before the modern rules of equitable estoppel by conduct. It is confined to estates in land. The general rule is, that if a person interested in an estate knowingly misleads another into dealing with the estate as if he were not interested, he will be postponed to the party misled, and compelled to make his representation specifically good. ■ It applies to one who denies his own-title or encumbrance when inquired of by another who is about to purchase the land or to loan money upon its security; to one who knowingly suffers another to deal with -the land as though it were his own;- to one who knowingly suffers another to expend money in improvements without giving notice of his own claim, and the like. This equity, being merely an instance of fraud, requires intentional deceit, o-r at least that gross negligence which is evidence of an intent to deceive. “ * * * The most important ‘ground of justice and equity’ admitted by courts of equity to uplift and displace the statute of frauds concerning legal titles to land, by fastening a liability upon the wrongdoer, is fraud. There are many instances in-which equity thus compels the owner of land to- forego the benefits of his legal title and to admit the equitable claims of another, in direct contravention of the literal requirements of the statute, but they all depend upon the same - principle.” The principle adverted to in the above quotation that the Statute of Frauds may not be used to shield one in the perpetration of a fraudulent act, is axiomatic. 2 Williston on Contracts, Rev.Ed., § 533A; 19 Am.Jur., Estoppel, § 87. Extensive reference need not be made to New Mexico cases so holding, but see the following: Provencio v. Price, 1953, 57 N.M. 40, 253 P.2d 582; Ritter-Walker Co. v. Bell, 1942, 46 N.M. 125, 123 P.2d 381; Schauer v. Schauer, 1939, 43 N.M. 209, 89 P.2d 521. And, in this connection, we note the following language from 19 Am.Jur., Estoppel, § 93: « * * * Although fraud is not an essential element of the original conduct working the estoppel, it may with perfect propriety be said that it would be fraudulent for the party to repudiate his conduct, and to assert a right or claim in contravention thereof. * $ *» See also, Annotation in 50 A.L.R. 668, at page 686, et seq., under the-title, “§ 7. Fraud, actual or constructive.” In a final attempt to overturn appellees' claim of equitable estoppel, appellant argues appellees ' shared equal knowledge with her of the defect in the contract of sale. Of course, appellees did have knowledge of the deficiency of the contract after they learned Harper was not a single man, but it would be to subvert the very heart of the doctrine of equitable estoppel if by promises -and other conduct the appellant could effectively dissuade appellees from pursuing their appropriate remedy under their contract under the false belief she assented to the contract and its terms, then bé allowed to repudiate her actions after appellees have changed their position to their detriment. Nothing in Emblem v. Emblem, 1953, 57 N.M. 495, 260 P.2d 693, can bring comfort to appellant because the circumstances in that case and those before us are so dissimilar. We view the conduct of appellant-as a grave and unusual abuse of fundamental equitable principles and entertain no hesitancy in concluding she should not be allowed to triumph over appellees in the assertion of her harsh demands. The next problem before us is whether the doctrine of equitable estoppel may be invoked against appellant, as it is contended the contract of sale, being unsigned by her, is an absolute nullity insofar as enforcibility is -concerned-, and that validity cannot be breathed into it by the doctrine of equitable estoppel or on any other equitable ground. In support of this argument we are referred to § 65-403, N.M.S.A. 1941 Comp., and several decisions of this court interpreting the effect of such statute, and the earlier statute, Ch. 84, Laws 1915, which for present purposes is the same as § 65-403, supra. The argument is that under Terry v. Humphreys, 1922, 27 N.M. 564, 203 P. 539, and Jenkins v. Huntsinger, 1942, 46 N.M. 168, 125 P.2d 327, we have held conveyances of interests in community real estate attempted to be made by the husband alone were void, so that if a conveyance under such circumstances is void, a contract to convey must also be void when unsigned by the wife, as far as enforcibility of it is concerned, and that such was the holding of this court in Adams v. Blumenshine, 1922, 27 N.M. 643, 204 P. 66, 20 A.L.R. 369. Section 65-403, supra, provides: “The husband has the management and control of the personal property of the community, and during coverture the husband shall have the sole power of disposition of the personal property of the community, other than testamentary, as he has of his separate estate; but the husband and wife must join in all deeds and mortgages affecting real estate; Provided, that either husband or wife may convey or mortgage separate property without the other joining in such conveyance or mortgage; and,. Provided, further, that any transfer or conveyance attempted to be made of the real property of the community by either husband or wife alone shall be void and of no effect, except, that the husband may convey directly to the wife or the wife to the husband without the other joining in the conveyance.” We are in agreement with appellant’s position as to the effect of this statute on mortgages and conveyances, and further in the agreement that a contract for the sale of community realty executed by the husband alone is unenforcible, but it does not follow such contract is void. That position is untenable under the cleár provisions of the statute itself, which is referable only to deeds and mortgages, and under our' holdings in Conley v. Davidson, 1930, 35 N.M. 173, 291 P. 489, and Potter v. Connor, 1934, 38 N.M. 431, 34 P.2d 1086, where we have held a vendee under such contract may recover damages upon it in action against the httsbimd. Damages would not have been recoverable if the contracts were void.  The appellant is simply in a position of being estopped in equity from asserting an otherwise valid defense of unenforcibility of a contract. We said in Holder v. Hunter, 1924, 29 N.M. 644, 226 P. 163, 164: “It appears that intervener was a married woman and claimed the attached property as her separate estate. The plaintiff had pleaded estoppel against her. Her counsel argues that estoppel in pais does not operate against a married woman except in cases of tort or fraud, citing some old cases and texts. ' This doctrine was founded upon the principle that, whereas a married woman at the time of those decisions was unable to contract concerning her property, the same result could not be effectuated by means of the doctrine of estoppel. When, however, she was guilty of active fraud or deceit, for which she was always liable in damages, the doctrine of estoppel was allowed against her as a more direct and complete remedy than an action for damages. But now that married women have been freed from the common-law restrictions upon their power to contract, are subject to the doctrine of estoppel the same as any other person. See 10 R.C.L. Estoppel, §§ 55 and 65; 2 Pom.Eq.Jur. (4th Ed.) § 814.” Inasmuch as appellant cannot under the principle of equitable estoppel prevail over appellees, it is unnecessary to treat of appellees’ contention, recognized by the lower court, that the decree in the divorce action bound appellant to the contract of sale, and we make no ruling concerning it, except to note appellant’s conduct throughout the course of that action certainly bolsters appellees’ claim of equitable estoppel.  There remains for our consideration only the objection of appellant to the trial court’s action in making its conclusion of law that she was entitled to no interest upon payments under the contract of sale for the period from August 21, 1951, the date of the last payment into escrow under the contract, until entry of the final decree of the court below in this cause, December 10, 1952. This court notes such conclusion is not carried forward into the final decree, which simply provides the appellant shall execute and place in escrow a conveyance adequate to transfer merchantable title to the premises in question to appellees upon their full performance of their duties under the real estate contract. As the conclusion is not carried forward into the decree, it has no effect or operation. Dunham v. Stitzberg, 1948, 53 N.M. 81, 201 P.2d 1000. The decree of the lower court is hereby affirmed, and it is so ordered. COMPTON and SEYMOUR, JJ., concur.