Court Opinion

ID: 9689525
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:38:48.993815+00
Date Added: 2024-06-11T18:18:49.889063
License: Public Domain

It may be time for the Supreme Court to again look at what courts of appeals are doing with the scope and application of the partial performance doctrine, a type of equitable estoppel, as an exception to the application of the statute of frauds. I recognize this is not a perfect case for that analysis and may get passed over for discretionary review, but I could not let a decision on the issue leave this Court without drawing attention to the problem so that, if not this case, when the right case is *Page 401 
presented to resolve the issue, this case will be included in the framework and history of the problem to assist the Court in crafting an appropriate resolution.8
 STATUTE OF FRAUDS
The appellant, Louis, asks us to ignore the statute of frauds. TEX. BUS. COM. CODE ANN. § 26.01 (Vernon Supp. Pamp. 2007).9 The majority agrees to do so, purportedly on the basis of the venerable Hooks v. Bridgewater decision and its progeny. Hooks v. Bridgewater, 111 Tex. 122,229 S.W. 1114 (1921). That decision applied a judicial exception to the application of the statute of frauds. If the facts of this case as described by the majority authorize an exception to the statute of frauds, the exception has swallowed the rule. By avoiding the statute of frauds in this case an oral agreement for the transfer of real estate that has allegedly been partially performed by the buyer will be enforced. If money changing hands based on an oral promise to convey real estate is all that is necessary to show fraud on the buyer to circumvent the statute of frauds, I contend we no longer have the protection of the statute of frauds.10
 REVIEW OF LAW AND FACTS
Upon the same legal authorities and standard of review cited by the majority, I do not find that Louis has brought himself within the exception to the statute of frauds referred to by the majority as partial performance. Specifically, the majority concludes that Louis's evidence is "that Peter received more than $25,000 which will constitute an `unearned benefit' if he is permitted to retain it without relinquishing title to the property. Peter contends that he is in rightful possession of these funds as rental payments." Maj. Op., pg. 400.
On these facts, I would have easily concluded, as the trial court did, that Peter was entitled to summary judgment. Here is the critical test from the authority quoted by the majority:
 The acts of performance relied upon to take a parol contract out of the statute of frauds must be such as could have been done with no other design than to fulfill the particular agreement sought to be enforced; otherwise, they do not tend *Page 402 
to prove the existence of the parol agreement relied upon by the plaintiff.
Maj. Op., pg. 399.
The only acts relied upon by Louis to take the contract he alleges he made out of the application of the statute of frauds is the payment of money.11 Under Louis's theory, this was purchase money. Under Peter's theory, this was rent money. These payments thus fail the test quoted above — to be the type act that could have been done with no other purpose than to fulfill the purchase agreement Louis contends he made with Peter.12
If this type of payment is all it takes to avoid the protection of the statute of frauds, every landlord should be very concerned that any long term tenant will argue: those were not rent payments; they were purchase money payments for the purchase of the property I was occupying.
In the final analysis, we either have the protection of a statute of frauds to prevent testimony about oral agreements to convey real property or we do not have that protection. If what Louis has presented qualifies as evidence of an equitable exception to the statute of frauds, the protection has been reduced to a toothless tiger of little use in the efficient resolution of the high cost of litigating real estate disputes. I note that if Louis is the one who is misrepresenting the terms of the parties's agreement and loses at trial, he still received a place to live for a number of years. But if the jury accepts his misrepresentation, not only did he get to live there for a number of years, he now gets a deed to the property!
I think this is precisely the type of effort to enforce an alleged oral agreement to convey real property that the statute of frauds was designed to avoid. The legislature made the decision that, notwithstanding that some victims of fraud would be deprived a legal remedy, certainty in transactions involving the conveyance of real property was more important for the public. Only by the application of the statute of frauds can persons avoid protracted litigation over alleged oral agreements to convey real property.
In summary, where is the protection for Peter to be able to avoid this type litigation? Peter must have a written agreement that Louis's occupancy is no more than as a tenant at will; but wait, a written agreement is the type of protection you are supposed to need if the agreement is to convey property, not rent it month to month. Yes, I believe the exception as applied in this proceeding has swallowed a large part of the rule.
I respectfully dissent.
TOM GRAY
Chief Justice *Page 403 
Dissenting opinion delivered and filed March 19, 2008
8 This case presents formidable issues for Louis beyond this appeal. The opinion of the Court does not address the statute of limitations, another ground on which summary judgment may have been granted, nor the sufficiency of the legal description necessary to enforce a conveyance of real property. I can see several other dispositive grounds but understand and agree with the trial court's decision to grant summary judgment on the statute of frauds based upon the facts as presented by the majority.
9 § 26.01. Promise or Agreement Must Be inWriting
 (a) A promise or agreement described in Subsection (b) of this section is not enforceable unless the promise or agreement, or a memorandum of it, is
 (1) in writing; and
 (2) signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.
 (b) Subsection (a) of this section applies to: (4) a contract for the sale of real estate. . . .
10 I agree with Peter that it is undisputed the first two elements of Hooks v. Bridgewater collateral estoppel have been met — payment of consideration and entry into possession. In a nutshell, the question is whether the evidence of the first element, payment of consideration, also meets the third element. Since no permanent and valuable improvements were made to the property with the consent of Peter, Louis must rely upon other facts demonstrating the buyer would be defrauded if the agreement is not enforced.
11 The act of moving onto the property is undisputed. Louis cannot use the traditional Hooks v. Bridgewater
elements because he does not assert or attempt to establish by summary judgment proof that he made valuable improvements to the property; thus, he must show some other facts that would constitute a fraud on him. I contend that payment, alone, is not adequate to meet this sub-element to show fraud, thus avoiding the application of the statute of frauds.
12 As to the unsigned memo relied upon so strongly by Louis as evidence of something, there are many problems. Not only does it fail as a memorandum because it is unsigned, the timing of its preparation is not established, who prepared it is not established, for what purpose it was prepared is not established, and it is as supportive of Peter's position that this was not a memorandum of sale as it is of Louis's explanation that this is how they were going to share expenses if they entered into a joint venture, something both of them agree they did not do.