Burns v. Fidelity Real-Estate Co.

Mitchell, J. The facts found by the court are that in April, 1890, Ferodowell, plaintiff’s assignor, and the defendant entered into a contract in writing under seal by the terms of which the former was to sell and deliver to the latter 400,000 brick, for which the latter agreed to pay $7 per 1,000, or $2,800, payable, $1,100 in cash, and $1,700 by conveyances of two lots, one at an agreed valuation of $1,000, and the other of $700; that, pursuant to this contradt, Ferodowell had delivered 293,000 of the brick, and defendant had paid him $805.71, when on July 1st defendant refused to receive anymore of the brick, or to permit Ferodowell to make any further performance of the contract; that immediately thereafter Ferodowell and defendant orally agreed that no more brick should be delivered under the contract, and that in payment or settlement of what had been delivered defendant should convey to Ferodowell the $700 lot at that valuation, and pay him the balance due in cash; that, although demand was made before the commencement of this action, the defendant has refused to convey the lot or pay the cash. On these facts the court held that plaintiff was entitled to a conveyance of the lot and to a money judgment for the balance due him. The facts thus found and the relief granted are the same as alleged and prayed for in the complaint, except that in the complaint it is not alleged that the defendant refused to receive any more brick, or to permit Ferodowell to continue performance of the contract, but [34] merely-that, “at the instance and request of the defendant, the contract as to the further delivery of brick was abrogated,” and then the new agreement above referred to entered into. It seems to us that the conclusions of law arrived at by the trial court are directly in the face of the statute of frauds, (1878 G. S. ch. 41, § 12,) whether we treat the arrangement of July 1st as a modification of the original contract or a new contract, after breach of the former, for the settlement and payment for the brick already delivered. If it is the former, then, as the original contract fell within the statute, it could not be varied by any subsequent oral agreement. Brown v. Sanborn, 21 Minn. 402; Heisley v. Swanstrom, 40 Minn. 196, (41 N. W. Rep. 1029.) If it is the latter, it is equally within the statute, because it is a contract for the sale of lands or an interest in lands. The difficulty is not obviated by the fact that the lot, which is the subject of the “modified” or new contract, was .also the subject of the original contract. The case is the same in principle .as if the former had stipulated for the conveyance of an entirely different lot. Plaintiff’s counsel contends, however, that, as this, parol modification or new contract is void, the original contract remained intact, and that his suit is on the original contract, from which he has merely waived or “dropped out” the provision as to the conveyance of the $1,000 lot. This is not true in fact, for he has claimed and recovered under the new oral agreement a larger money judgment than he would be entitled to under the original contract. But it is very clear that the suit is not on the original contract, but -upon a new' contract made out by incorporating therewith certain oral stipulations varying its terms. If counsel means by “dropped out” that, some of the provisions of the original contract were “cut off” or “dropped out” by the subsequent oral agreement, of the parties, the statute of frauds is still in the way, for it makes no. difference whether the modification consists in adding to or subtracting from the terms of a contract. In either case, the terms are altered and the contract is a new one. If, however, counsel means that he has merely waived his right to performance as-to,the other,lot, and that upon the facts he would [35] have been entitled to performance by defendant of the. original contract, he is clearly in error, for he has not himself performed. . The facts alleged and found may show a good reason for his not having performed, and may state a cause of action for damages for the breach of the contract by defendant, or for compensation in money for the brick which Ferodowell delivered, but they do not make out a case entitling him to specific performance. In other words, he is not en-. titled to specific performance of the original contract because he himself, or his assignor, has not performed, and he is not entitled to specific performance of the new one, because it is void under the statute. Treating the oral agreement as being in the nature of an accord of all matters under the original contract, if it had been executed by. conveyance of the lot and the payment of the money, it would have, been available as a defense to either party to an action by the other, on the original contract. In such case the oral stipulations would be -relied on simply by way of accord and satisfaction, for performance according to orally substituted, terms is always as available as would have been performance according to the original contract; and this is all that was meant by what was said in Heisley v. Swanstrom, 40 Minn. 199, (41 N. W. Rep. 1029.) But in this action it is sought to enforce and compel specific performance of oral stipulations which are within the statute. Nor has there been in this case any part performance of the new oral agreement to tako it out of the statute, for all that was done was done under the original, and not under the substituted, agreement. The plaintiff has clearly mistaken his remedy, which was for damages for the breach of the contract, or for compensation in money for the brick which had been delivered. The decision, in so far as it directs a money judgment, is supported by the findings, but not in so far as it directs a decree for the conveyance of the lot. It appears that the oral “modification” of the original contract was made in behalf of the defendant by its secretary Nesbitt, and the point is” made that there was no evidence of his authority to do so. In view of what has been said, this question is perhaps not material, but we are of opinion that, while the evidence, is rather scant, it was sufficient to make out . a prima facie case, .in the absence of any rebutting evidence on behalf of defendant. Nes*. [36] bitt was the person who made the original contract with Ferodowell, and, so far as the evidence discloses, the only person who ever appeared in behalf of the defendant in this transaction,' or in any other connected with or growing out of it. It is true that the original contract is certified to as having been ratified and approved by defendant’s board of directors, but this certificate is by Nesbitt himself as secretary. The extent of his authority was a matter peculiarly within the knowledge of defendant itself, and, if he exceeded it, it was a very easy matter to prove it, and we think there was enough in the evidence to put defendant on its proof. The order appealed from will be reversed, and a new trial granted, unless plaintiff, within ten days after the filing of the remittitur in the district court, files a stipulation consenting to a modification of the order for judgment by striking out so much as relates to a conveyance of the lot, in which event a new trial will be denied, and plaintiff entitled to the money judgment as directed by the trial court. (Opinion published 53 N. W. Rep. 10X7.)