Paine v. Wilcox

By the Court, Paine, J. We differ from the conclusion of fact arrived at by the court below “that the plaintiff had failed to show that he had entered into an agreement with the defendant Wilcox to purchase the mortgaged premises as alleged in the complaint.” And by this we do not mean to say that the proof shows that a written agreement of that' kind was completed, so as 'to make it sufficient under the statute of frauds. Nor does the complaint so allege. But we mean that such an agreement was verbally entered into; that it was a part of that agreement, that the appeal proceedings should be discontinued and the- premises allowed to be sold to Wilcox on the foreclos — 212 — ure judgment; and that the plaintiff acting through his agent and those interested in the equity of redemption, discontinued the appeal, and allowed the sale thus to take place on the faith of the agreement made by Wilcox through his agent Coolbaugh to convey the property, to the plaintiff, as alleged in the complaint, and also that it was agreed that Wilcox should sign the agreement, as it was prepared by Coolbaugh and forwarded to him for that purpose. This state of facts is plainly testified to by E. L. Paine, and his statements are so strongly corroborated by other testimony, and by the admissions and evidence on the part of the defense, as to leave no doubt as to their truth. There are certain leading facts about which there can be no dispute, a clear understanding of which will throw light on the whole transaction, and lead almost inevitably to a correct conclusion upon these points about which there is dispute. Wilcox had a foreclosure judgment, upon which the property was advertised for sale. The case was still in a condition to appeal, and the parties were about to take an appeal to the supreme court. While in this position, a proposition was made by the plaintiff, through his agent, that the property should be allowed to be sold by the sheriff, and bid off by him, and ¿hat he would re-convey to one of the Paines upon certain terms to be agreed on. This proposition was entertained ; negotiations were had; and an understanding of some kind was arrived at by the parties. All the evidence concurs in this. The point of dispute is as to the terms of that agreement. And upon this it would require very strong proof to do away with the effect of the written contract, drawn up by Coolbaugh, and forwarded for execution by Wilcox. There can be no doubt, that that writing was intended to, and did contain the agreement as made between Coolbaugh and the Paines. There was some attempt on the part of Coolbaugh, both in his testimony and in the argument, to claim that it was designed only as a memorandum to serve as a guide to Wilcox. But this — 213 — suggestion seems utterly unfounded. In the first place it is wholly improbable that the Paines, negotiating in regard to interests which they deemed valuable, would have allowed the sale to proceed and the land to be bid off by Wilcox, except upon the supposition that some definite agreement had been concluded, by which their rights were to be secured. The paper itself is inconsistent with such an idea, for it is a complete, formal land contract, filled up from a printed blank, and containing the entire agreement with precision and particularity. And why should Wilcox need a “ memorandum ” from Coolbaugh to “ serve as a guide ?” If no agreement had been concluded between Coolbaugh and the Paines, and Wilcox was himself to declare the terms of sale, then, for the first time, why should he need any instructions from his agent? It is very difficult to perceive. But if such an agreement had been concluded, then there would be nothing left for Wilcox to do, but to execute it. And it was entirely in accordance with this fact that his agent drew up a formal land contract, containing a complete and perfect agreement, and forwarded it for execution. That Coolbaugh himself so regarded the paper, is apparent from the evidence. He told Woodworth, the sheriff, that “an arrangement had been or would be made, whereby the premises would be sold on the adjourned day whether or-no.” He said, on the day of the sale, that an arrangement had been made and would be consummated, “ as soon as the papers could be sent and returned,” evidently referring to the paper he sent for execution. The witness Gary heard him ‘Say that “ there was a contract which would come in a few days from Wilcox, at which time the fees would all be paid,” showing that he expected the contract he had forwarded to be returned. It is also obvious from the answer of Wilcox, that he understood the paper was forwarded to him, as the contract which Coolbaugh had made with the Paines for him to execute. Eor ho says that he did receive a copy of an agreement, “ which he refused to sign or recognize, for the reason that he had — 214 — never authorized any one to make such an agreement for him.” This language would not have been used with reference to a paper sent to him “ as a mere memorandum.” He repudiated it for the reason that Coolbaugh had, as he claimed, no authority to make it; not on the ground that it was not intended as the agreement he was to execute. These circumstances, and others that might be pointed out if necessary, lead unmistakably to the conclusion, that that contract contained the terms actually agreed on between Coolbaugh and the Paines, upon which Wilcox was to convey the property to the plaintiff. Wilcox, however, refused to execute it, but returned another contract, imposing new and additional obligations on the plaintiff, which the plaintiff refused to accept, and insisted on his right to a specific performance of the agreement made between him and Coolbaugh. The question of law presented is, whether he has a right to have it specifically enforced. It is said not, because the agreement was not signed by Wilcox, and so is within the statute of frauds. But verbal agreements for the sale of lands are enforced in equity, where there has been such a part performance that it would operate as a fraud upon either party to allow the other to repudiate. The case of a verbal agreement to sell, and the delivery of possession under it, is a common one for the application of this rule. And it is claimed that such was the case here. And there is little doubt from the evidencie, that it was understood that the Paines were to remain in possession after the foreclosure sale, in pursuance of this agreement, and not by their former right, until the matter could be consummated by the delivery of the papers. The evidence upon this point is not very conclusive, but'such as there is, leads to this conclusion. The witness G-ary says that Paine offered Coolbaugh some money, which Coolbaugh refused until the contract should come, but told Paine “ to go on with the mill.” Now it cannot be assumed that this was a direction to the Paines “ to go on with the mill ” under their rights as they — 215 — stood "before the foreclosure sale, for that sale had divested those rights. The language used, assumed that the right to control possession had passed to Wilcox by the sale, and therefore Coolbaugh, as his agent, in pursuance of the verbal agreement that Wilcox should re-con vey to the plaintiff, and expecting soon to deliver the contract which he had forwarded to be executed, disposed of the possession in the meantime, as he did, which was entirely natural under the circumstances. Mr. Coolbaugh, who cross-examined this witness seemed to feel the force of this evidence, and attempted to obviate it, by asking if the statement to Paines, to go on with the mill, was not made in an indignant manner ; implying, as he urged here on the argument, that it was designed and understood only as an angry protest against their having so long “ contested the possession.” But this explanation seems entirely improbable. For leaving out of view the fact that there could have been no “ long contest ” about the possession before the sale, still if there had been, after the matter was all harmoniously adjusted and the sale allowed to proceed by mutual consent, and Coolbaugh expected in a very few days to deliver the contract entitling the Paines to remain in possession, it was rather too late for any sudden manifestation of anger on the previous “ contest.” We think, therefore, it might well be found from the evidence, that although the same parties remained in the actual occupancy of the mill who had previously occupied it, still that they held it, after the sale, under this direction of Coolbaugh even as agent of the plaintiff. But whether that were so or not, there is another sufficient ground for taking the agreement out of the statute of frauds. The party owning the equity of redemption was about to appeal from the judgment and prevent the sale. This he was induced not to do, by a proposition- coming from the owner of the judgment, that the sale should take place, and the property be bid off by him, and that he would re-convey upon certain conditions, including the payment of the amount due — 216 — on the judgment, with costs and interest. This proposition was accepted by him, and he neglected to take his appeal, and allowed the sale to take place on the faith of it. It is true that Coolbaugh testified that he never made any proposition to induce the plaintiff not to appeal or stay proceedings. But he says, that he did submit a proposition, and that a part of it was that “ the property must be sold by the sheriff.” This of course implied that the sale was not to be stayed, and the whole arrangement between Coolbaugh and Paines was obviously based upon this assumption. I can, therefore, only explain the statement that he never made any proposition to induce the plaintiff or his agent not to stay proceedings, by supposing him to mean, that he never made a proposition containing that in express words. For it was plainly implied as a necessary condition to the acceptance of the proposition which he did make. It is evident, also, that Coolbaugh so understood it, from his statement to Woodworth that “ an arrangement had been made by which the sale would take place on the adjourned day, whether or no.” There can be no doubt that the Paines relinquished the appeal and allowed the sale to take place upon the faith of this verbal agreement, that Wilcox should execute a contract to convey on the terms specified. Those were such acts of part performance on their part as to entitle them to have the agreement enforced, on the ground that it would operate as a fraud on them to allow it afterwards to be repudiated. It is often true, as was stated in the case of Sweet vs. Mitchell, decided at this term, that parties whose lands are liable to be sold on legal process make some arrangement, for the purpose of saving their interests, which involves the giving of security upon the very lands already threatened with sale ; and to accomplish this, they often allow such sale to take place for the mere purpose of passing the title, where it is necessary for it to go, to become such security. And whenever parties so situated, and being also in a condition to prevent a sale by further litigation, make an agreement with — 217 — the adverse party by which the sale is allowed to take place for the purpose of passing the title to a particular person, who is to hold it as security, or to re-convey upon certain terms, it might operate as the grossest fraud upon them, if the one who had thus obtained the title, might then repudiate the agreement and assume the character only, of a general purchase at a judicial sale. Where a judicial sale proceeds altogether in invi-tum, each party stands upon his own rights, and neither is thrown off his guard or induced to neglect any steps necessary to protect himself. But where such sale is allowed to take place for the purpose of executing an amicable arrangement, like the one before mentioned, the most valuable interests might be sacrificed, if the party thus getting the title could ignore the agreement and insist on being regarded only as a hostile purchaser. To get a title by means of such an agreement, used to throw the owner off his guard and induce him to abandon his litigation and deliver himself defenceless in the hands of his enemy, and then claim to hold as though the sale had been entirely adverse without any such agreement, is an obvious fraud. The relinquishment of further litigation, and the neglect to stay further proceedings, constitute very important features of such contracts. It is impossible to restore the party who has so far performed his part of such an agreement, to his former position. And his rights can only be preserved by enforcing the agreement on the faith of which he acted. Daniels vs. Lewis, ante p 140. And what makes this case still the stronger, is the fact, that it was here agreed that the contract should be in writing and signed, and Wilcox, after getting the title by virtue of the arrangement, then refused to execute the contract. Upon these facts the statute of frauds forms no obstacle to the enforcement of the agreement. It was also claimed in the argument, that the agreement should not be enforced for the reason that Coolbaugh had no authority to make it. But whether he had or not, Wilcox cannot adopt it so far as to hold the title obtained under it, and — 218 — repudiate tíre conditions upon which the sale was allowed to take place. The remarks already made, as to the distinction between a judicial sale thus obtained, and one proceeding in invitum only, are applicable here. The judicial proceeding in such a case should be regarded only as a means of passing the title under the agreement of the parties, and a principal should not be allowed to adopt the act of his agent so far as to hold the title thus obtained, and repudiate the conditions. If he repudiates at all, he should repudiate the yrhole, and set aside the sale, so as to restore the other party to hi’s former position. The judgment must be reversed, with costs, and the cause remanded with directions to enter a judgment in the plaintiff’s favor, for a specific performance of the agreement alleged in the complaint.