Todd v. Pratt

Miller, J.: In a nutshell the case is this: The plaintiff made a contract to purchase three and one-half acres of a tract of land upon which there was a prior mortgage to secure bonds owned by the defendant. She brought an action to enforce specific performance of her contract and filed a Us pendens. The trustee brought an action to foreclose the mortgage, making the plaintiff a party defendant. To hasten the foreclosure proceedings [461] the defendant requested the plaintiff to discontinue her action and cancel the Us pendens, and the plaintiff says that she did that in consideration of certain promises made hy the defendant, which were evidently so indefinite in the plaintiff’s mind that in her complaint she expressed them in vague fashion as follows: “That he, Pratt, when he became possessed of said property would do with said plaintiff, Jean Benton Todd, upon his part, everything that the officers and agents of the Indian Kettles Park Association, corporation, had agreed to do with her, with reference to said tract of approximately three and a half acres of land, which was that when Pratt should have the title to said property he would carry out with said plaintiff the contract in writing existing between this plaintiff, Jean Benton Todd, and said Indian Kettles Park Association, to wit, to make title in said plaintiff of said approximately three and a half acres of land on the lake front of Lake George, as aforesaid, which contract was the subject-matter of plaintiff’s suit so mentioned in paragraph 1 herein; and said Pratt at said time contracted and agreed that when he should have acquired the title to said Indian Kettles Park Association property aforesaid, he would protect in the plaintiff herein, Jean Benton Todd, her interest in said approximately three and one-half acres of lake front land as fully as she had an interest therein, and as fully as it could be protected by said action which the plaintiff had brought, and which said Pratt desired discontinued, contracting and agreeing with said Jean Benton Todd that if she would dismiss her said action, as aforesaid, and withdraw her said notice of lis pendens, that he, the said Pratt, would see to it that she, the said Jean Benton Todd, should lose nothing of value by reason of such action on her part.” The defendant purchased the tract at the foreclosure sale and sold the three and one-half acres, which the plaintiff had contracted to purchase, to other parties, and the plaintiff brings this action to recover damages for breach of contract, the* particular damage alleged in the complaint being, not the loss of her bargain, but injury to other property to which she intended to annex the three and one-half acres. The defendant pleads the Statute of Frauds. In her reply the plaintiff admits that the contract sued on wag not in writing, and so the question is presented on [462] this motion for judgment on the pleadings whether the defendant can successfully invoke the Statute of Frauds as a defense. (Seamans v. Barentsen, 180 N. Y. 333.) To reduce the vague averments of the complaint to precise terms and to state them most favorably to the plaintiff, the defendant’s promise was: (1) Upon the purchase at the foreclosure sale, to convey to the plaintiff the three and one-half acres which she had ■ contracted to purchase; (2) to save her harmless from loss by reason of the discontinuance of her action for specific performance. Considering those promises in the inverse order, it is plain that the complaint fails to allege that the plaintiff suffered any loss. Her contract was subject to the prior mortgage and, of course, was extinguished by the foreclosure of that mortgage. By her consent the foreclosure action was expedited. Thereby she enabled that to be done speedily which, in any event, would have ultimately been accomplished. She alleged in her complaint that the corporation with which she contracted “had full authority to contract for the sale of said three and a half acres by reason of provisions relating thereto in the trust deed, or instrument expressive of said lien;” but, obviously, that is a mere conclusion of law. The provisions of the trust deed or mortgage referred to are nowhere stated and, of course, it is impossible to determine their legal effect without knowing what they were. According to her complaint the plaintiff’s relation to the mortgage was that of a subsequent vendee. She, therefore, fails to show that she lost anything by the discontinuance of her action and the canceling of the lis pendens filed therein. Plainly, the promise to convey the three and one-half acres, when purchased, was void for not being in writing, and the question arises whether there is any element in the case to take it out of the rule of the Statute of Frauds. All of the cases cited by my brother McLaughlin, except Riggles v. Erney (154 U. S. 244), -involved the element of abuse of a position of confidence and trust, the familiar case for treating the wrongdoer as a trustee ex maleficio. It certainly cannot be claimed that there was any confidential relation between the parties in this case or that the defendant undertook as agent for the plaintiff to purchase at the sale and thereby to induce [463] her to stay away or to refrain from bidding, as was the case in Ryan v. Dox (34 N. Y. 307). While equity is quick to circumvent that species of fraud which consists in the abuse of a relation of trust and confidence, it will not presume such a relation to have existed for the sake of exercising its extraordinary remedial jurisdiction. There being, then, no question of the abuse of a confidential relation, the plaintiff must succeed, if at all, on the theory of part performance. It is undoubtedly the rule that, where one party, relying upon a promise of the other, has so far performed that he cannot be restored to his former position and will suffer damage, the breach of the promise is treated as a species of fraud from the consequences of which the courts will relieve the party who has thus wholly or partly performed. But the difficulty in applying that rule to this case is that the plaintiff has suffered no damage. She merely made it possible for a judgment foreclosing her interest to be entered sooner than it otherwise could have been entered. Merely saying that the courts will not suffer the Statute of Frauds to be made an instrument of fraud determines nothing. It must always be remembered that the breach of a void agreement is not a fraud in law. (Levy v. Brush, 45 N. Y. 589; Wheeler v. Reynolds, 66 id. 227.) The acts of part performance which will take a case out of the Statute of Frauds must be unequivocally referable to the agreement of which they are a part execution. (Wheeler v. Reynolds, supra; Cronkhite v. Cronkhite, 94 N. Y. 323.) The act of part performance in this case was the discontinuance of an action which it was futile to prosecute. For aught that appears, the plaintiff, if well advised, would have discontinued her action anyhow, when the foreclosure action was begun. How can it be said, then, that her act in its object and design plainly refers to the alleged agreement % She must fail, then, on the theory of part performance both because she has suffered no damage and because the act of part performance relied upon is not unequivocally referable to the alleged void agreement. The judgment and order should be affirmed, with costs. Ingraham, P. J., Laughlin and Dowling, JJ., concurred; McLaughlin, J., dissented.