Court Opinion

ID: 9759983
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:37:05.230604+00
Date Added: 2024-06-11T07:29:07.116698
License: Public Domain

SPEARS, Justice,
dissenting.
I respectfully dissent. The majority concedes the virtually unanimous critical view that an oral rescission of a contract within the Statute of Frauds ought to be enforceable. The majority refuses to follow this line, however, saying that it instead prefers to uphold the “well-established” Texas rule. Close analysis reveals, however, that there is no Texas authority governing this case, and that in fact all the cases cited by the majority are consistent with the strong scholarly position to the contrary.
. There is no doubt that the prevailing rule outside of Texas is that such oral rescis-sions are effective. The Restatement says so, Restatement (Second) of Contracts § 148 (1981), and the commentators say so. See J. Calamari and J. Perillo, Contracts § 19-37 (2d ed. 1977); 2 A. Corbin, Corbin on Contracts § 302 (1950); J. Murray, Murray on Contracts § 332 (1974); 4 W. Jaeger, Williston on Contracts § 592 (3d ed. 1961). This rule is not a new one; Williston regarded it as settled in 1904, Williston, Recission by Parol Agreement, 4 Colum.L.Rev. 455, 462 (1904), and even cited an 1833 case in so stating. Goss v. Lord Nugent, 5 B. & Ad. 58 (1833).
There is one qualification to this general rule, and it is a logical one. If the subsequent rescission itself, because of its subject matter, falls within the Statute of Frauds, then it must be in writing. J. Murray, supra. The most frequent manifestation of this rule is the requirement that a rescission of a contract for the transfer of an interest in land be in writing. Williston, Recission, supra; Restatement § 148. This exception makes sense. At some point, the cancellation of a land sale is, essentially, a retransfer of the land, and thus within the statute.
No case cited by the majority conflicts with the rule as stated above. The grandfather case, Dial v. Crain, 10 Tex. 444 (1853), involved the sale of land; in fact, Williston cited it in noting the exception outlined above. In Gardner v. Sittig, 222 S.W. 1090 (Tex.Comm’n App.1920, jdgm’t adopted), the question was whether a five year lease of real property could be orally rescinded. The court held that it could not, but in so holding noted that there was more than a year to run on the leasehold term. Apparently, the court thought that the rescission was not performable within one year, and thus was covered by the statute. Finally, Reyes v. Smith, 288 S.W.2d 822 (Tex.Civ.App.—Austin 1956, writ ref’d n.r.e.), also involved the cancellation of a lease, and thus arguably falls within the real property exception. Moreover, much of the authority relied on by the Reyes court was simply not in point, involving either the parol evidence rule rather than the Statute of Frauds, or an oral modification rather than a rescission of a contract.
Not only does no Texas authority support the majority’s position, the policy underlying the Statute of Frauds does not do so either. The majority’s own quotation from Denman v. Hall, 144 Tex. 633, 193 S.W.2d 515 (1946), reveals as much: “[The] purpose [of the statute] is to prevent fraud arising from parol testimony as to the terms and conditions of such contract.” Id. at 516. In other words, the purpose of the Statute of Frauds is to fix the specific terms of the agreement between the parties. Here, on the other hand, there is no dispute as to the terms; the question is whether the contract has been discharged. That is a question of fact and can be decided by a jury just as the jury always determines facts that constitute performance or breach. Yaeger v. Long Bros. Drilling Co., 147 S.W.2d 276 (Tex.Civ.App.—San Antonio 1941, writ ref’d). Generally, courts construe the Statute of Frauds *880strictly, in order to avoid defeating the intent of the parties. J. Calamari and J. Perillo, supra, § 19-1. Here, on the other hand, the majority has read an entirely new provision into the statute. The statute makes no mention of contracts of rescission, and should not be construed so as to include them.
There is neither policy nor precedent mandating the result reached by the majority; both logic and authority suggest the opposite. I would go along with the nearly unanimous rule, and affirm the court of appeals.
WALLACE, J., joins in this dissenting opinion.