Opinion
No. 23525
Decided January 11, 1933.
Action at law — Money judgment, with prayer for accounting — Statute of frauds — Inapplicable to partially performed lease contract for seven years, when — Tenancy and receivership as eviction.
1. An action for a money judgment, with a prayer for an accounting, is an action at law. The amount of money due from the one to the other is the paramount issue, and the accounting is a mere incident. The chancellor searches the minds and consciences of the litigants, in order to develop the facts; while the law side of the court strikes the balance and renders judgment.
2. The plea of partial performance of a contract, in an action at law on such contract, if established by the evidence, is just as effectual to take the contract out of the Statute of Frauds today as it was in 1824, when the rule was first announced by the Supreme Court of Ohio. ( Wilber v. Paine, 1 Ohio, 251, approved and followed.)
ERROR to the Court of Appeals of Lucas county.
On December 26, 1925, Orville S. Brumback, as owner and lessor, leased to George Schackne lots Nos. I and 2 in Linden Heights, Toledo, Ohio, being the business and residence premises known as the Laurel building and the Artcraft Theatre building, for the term of seven years from and after January 1, 1926, at an annual rental of $6,000, payable in monthly installments of $500 each on the first day of each month, in advance.
By the terms of the lease, Schackne was to make repairs and promptly pay rent, taxes, and assessments, and keep the buildings insured for the benefit of lessor.
Schackne took possession of the premises under the lease and complied with its terms until February 14, 1927. On that date the lessor, Brumback, gave his consent in writing, under the requirement of the lease, authorizing the lessee, Schackne, to assign the lease in question to Claude La Bounty, plaintiff in error here. This assignment is in the words and figures following:
"Toledo, Ohio, February 14, 1927.
"I hereby consent to George Schackne assigning this lease to Claude LaBounty; said LaBounty to assume all the obligation of said George Schackne under the lease; without the release of said Schackne from his liability thereunder.
"A copy of said assignment to be furnished to me.
"[Signed] Orville S. Brumback."
Thereafter Schackne and La Bounty entered into an exchange of property whereby the lease in question was exchanged for a farm in Michigan. In this exchange, and after Brumback had executed his consent, Schackne signed his name on the back of the copy of his lease and delivered it to La Bounty, and La Bounty executed and delivered his deed for the Michigan farm to Schackne. It also appears that Schackne delivered the subleases then in existence to La Bounty. He accepted them, and executed other leases to tenants. Schackne and La Bounty adjusted the water rents due on the premises, and La Bounty collected rentals, paid taxes and insurance, and made repairs, and offered to rue back with Schackne. On December 18, 1929, on the application of Brumback, a receiver for the property in question was appointed by the court, and such receiver took charge of and has administered the property for about two months.
On September 1, 1929, La Bounty defaulted on his rents, and Brumback, on December 14, 1929, sued Schackne and La Bounty to recover unpaid rent.
The pleadings in this case are numerous and copious, and yet the issues are simple.
La Bounty as against Brumback pleads that the contract in question was not to be performed in one year, and that he did not enter into any memorandum in writing whereby he agreed to be bound by the terms of the lease in question; that there was an agreement between him and Brumback whereby he surrendered the premises in question to Brumback on or about September 1, 1929, and he was thereby released from the obligations under the lease, and that by the appointment of a receiver on the application of Brumback on December 18, 1929, he was evicted from the property in question, and nothing is due Brumback since September 1, 1929.
All these allegations necessary to be denied by Brumback are denied. Schackne pleads the lease and assignment by him to La Bounty, and asserts that by the terms of the lease La Bounty is indebted to him in excess of $1,500. He asks for an accounting and judgment against La Bounty, and that the receiver be continued in control of the property.
La Bounty as against Schackne admits the lease between Brumback and Schackne, and its terms; that Schackne took possession under the lease and performed its conditions until about February 14, 1927, at which time Schackne transferred the lease to him and he collected the rents from the premises; but he denies that he assumed and agreed to perform the conditions of the lease and save Schackne harmless therefrom. He further says Schackne made certain misrepresentations, inducing him to accept the assignment of the lease; that he expended $767.68 in placing the premises in a tenantable condition, which under his representation and promises Schackne was obliged to do, and to pay for, and he asks judgment in this sum against Schackne.
All these allegations are denied by Schackne.
La Bounty also pleads the statute of frauds against Schackne, and this averment is likewise denied.
Mr. Charles A. Thatcher, for plaintiff in error.
Mr. Orville S. Brumback, Mr. John S. Brumback and Messrs. Conn Holloway, for defendants in error.
A number of errors are assigned by plaintiff in error herein. They will be considered in inverse order.
Is the case improperly brought?
Counsel is correct in quoting Section 8510, General Code, to the effect that contracts involving the sale of real estate or an interest therein must be in writing and signed by the person parting with the title or possession. It is likewise the law that a lease for more than three years must be attested and acknowledged.
This was an action for money and an accounting only. It was tried to the court. The trial court heard the evidence, and dismissed La Bounty's cross-petition against Schackne.
La Bounty insists that his claim against Schackne was wholly ignored. We cannot subscribe to this contention, in the face of the record. The trial court did pass on La Bounty's cross-petition against Schackne, and we must assume, in the absence of a showing to the contrary, that such court gave due consideration to all the evidence introduced by La Bounty in support thereof.
This is an action for rent, and is not improperly brought if a contract can be established by the parties claiming the benefit thereof.
La Bounty claims that he is the party charged, that he never subscribed his name to any instrument or memorandum, that he made no contract, and is not obligated to any one.
In order to take this contract out of the statute of frauds, Brumback pleads part performance. Counsel for plaintiff in error insists that part performance cannot be pleaded in an action at law, as it is an equitable principle, pure and simple. We agree with counsel that, outside of Ohio, he is supported by the overwhelming weight of authority; but in Ohio he is confronted with the antithesis of the doctrine. The case of Wilber v. Paine, I Ohio, 251, is the first pronouncement of the law in Ohio to the effect that part performance takes a contract out of the provisions of the statute of frauds; and that was an action at law. The Supreme Court, it seems, was not announcing a new principle of law in that case, as the learned judge, on page 255 of the opinion, says:
"It has frequently been held, on the circuit, that the delivery of possession, on a parol agreement, was sufficient to take it out of the statute, and we see no reason to reverse the rule, or to reject the principle on which it is founded."
In arriving at this conclusion, the court discussed the old English Statute of Frauds, 29 Charles II, and its interpretation and construction; the English cases being cited. That case is cited and followed in Waggoner v. Speck, 3 Ohio, 292, and in Grant v. Ramsey, 7 Ohio St. 157.
After the case of Grant v. Ramsey, supra, the case of Wilber v. Paine, according to the citation digest, is referred to but once in the opinions of this court, and that is in Bumiller v. Walker, 95 Ohio St. 344, where, on page 350, 116 N.E. 797, L.R.A., 1918B, 96, Judge Jones in his opinion refers to it incidentally.
There is every good reason why this rule of law was not given more notoriety. Even before its announcement it had been the law of Ohio; ever since Ohio became a state. It is humane, just, and responds to the rule of reason. Our early tendency to depart from the policy of the common law to forever keep separate the legal and equitable causes of action, and the spirit of fairness that animated our ancestors, firmly imbedded in our law the rule that a litigant would not be permitted, in Ohio, to invoke delicate distinctions and subtle niceties to discharge him from the obligations of a contract, fair on its face, which he had undertaken to perform and thereafter breached.
There was an issue in this case to the effect that this contract was unfair. The trial court, sitting as a trier of facts, heard the evidence and determined this issue adversely to the plaintiff in error. If there was some evidence, and there was, this phase of the case passes from our consideration.
It is not necessary for this court to determine whether or not La Bounty signed an instrument or memorandum in writing evidencing this contract. He went into possession of the real estate and partially performed his contract, and it can make no difference whether the contract was written or parol.
There is some contention made by plaintiff in error to the effect that the trial court erred in the admission of testimony tending to show the cost of certain repairs made by La Bounty which under the terms of the lease Schackne was bound to do; it being contended that the duty to repair was a personal obligation of Schackne.
The duty to repair was included in one of the terms of the lease, and it was the theory of Brumback that he, La Bounty, was the assignee of the lease, without qualification or limitation. On this theory, this testimony was competent, notwithstanding La Bounty had a different theory. If La Bounty was in fact the assignee of the lease, then he stepped into Schackne's shoes and assumed Schackne's obligations thereunder.
The trial court found against La Bounty on the issue of surrender, and we are not disturbing this finding.
The issue was likewise made that La Bounty was, at the most, a tenant from month to month. Whether he was a tenant for the full term of the lease, or merely a tenant from month to month during possession, depended on the intent of the parties as developed by the circumstances under which the contractual relations arose. This had to be determined from the evidence, and was so determined.
We agree that the appointment of a receiver on the application of a lessor for leased real estate does amount to an eviction of the tenant during the time the receiver is in possession of the premises and collects the rent therefrom, and the tenant is relieved from payment of rent during the receiver's incumbency. The court regards this question practically moot in this case. No rental was charged to La Bounty while the property was in the receiver's hands. The court has read the record and does not find one syllable of testimony to the effect that La Bounty treated the appointment of a receiver as a complete eviction. This is likewise a question of fact determined by the trial court. The further fact that La Bounty acted as receiver does not affect the issue one way or another.
We think both courts below were right. The judgments of the Court of Appeals and of the Common Pleas Court are affirmed.
Judgments affirmed.
DAY, ALLEN, JONES and MATTHIAS, JJ., concur.
WEYGANDT, C.J., and KINKADE, J., not participating.