Opinion
No. 836
Decided March 30, 1942.
Contracts — Sale of interest in realty — Vendee's verbal agreement to transfer portion of interest — Statute of Frauds — Part performance.
Where the vendee, under a written contract to sell an interest in real estate, orally agrees with a subpurchaser to transfer to him a one-half interest, in such interest, and the subpurchaser, under and pursuant to such oral agreement, enters into joint or concurrent possession of the premises with his vendor, pays one-half of the payments and expenditures required of the vendee under the written contract, and also makes certain improvements thereon, capable of compensation in damages, such acts on part of the sub-purchaser are not such part performance as will remove such oral agreement from the operation of the Statute of Frauds.
APPEAL: Court of Appeals for Allen county.
Mr. B.F. Welty, for appellant.
Mr. J.F. Emans, for appellees.
This is an appeal upon questions of law and fact from a judgment of the Common Pleas Court of Allen county, Ohio, in an action wherein the appellant, Charles Potts, was plaintiff, and the appellees, David Potts, Gladys M. Reynolds, Crayton Hoak, Irene M. Hoak and The Home Savings Loan Company, were defendants.
The action was brought originally by Charles Potts against David Potts, but later an amended petition was filed by such plaintiff in which, in addition to David Potts, he made Gladys M. Reynolds, Crayton Hoak, Irene M. Hoak and The Home Savings Loan Company, parties defendant.
The case is submitted for trial de novo in this court upon such amended petition, the joint answer of Crayton Hoak and Irene M. Hoak, the answer of Gladys M. Reynolds, the answer of The Home Savings Loan Company, the answer of Crayton Hoak, as executor of the estate of David Potts, deceased, the defendant David Potts having died subsequent to the commencement of the action, and the separate replies of the plaintiff to the answers of Crayton and Irene M. Hoak, Gladys M. Reynolds and The Home Savings Loan Company.
By stipulation of the parties the case is submitted upon a transcript of the evidence taken upon the trial of the case in the Common Pleas Court.
In his amended petition, for his first cause of action, the plaintiff alleges:
That on the 10th day of March 1936, David Potts entered into a written contract with Gladys M. Reynolds, the owner of certain real estate situated in Allen county, Ohio, which is specifically described, whereby David Potts purchased such premises and agreed to pay therefor the sum of $1460, payable $10 per month, on the first day of each month, and to pay the taxes thereon and to keep the same insured for the benefit of Gladys M. Reynolds, and that such contract was filed for record on October 27, 1937, and recorded in the record of deeds of such county.
That David Potts made payments upon the contract until the death of his wife in July 1936, at which time David Potts entered into a verbal contract with plaintiff in which he agreed to transfer to plaintiff one-half interest in his interest under such written contract, provided plaintiff would pay one-half of the payments and cost of improvements due under such written contract, also one-half the taxes and insurance.
That plaintiff in pursuance of such verbal contract moved on and took possession of the premises, paid one-half of the payments, one-half of the taxes, insurance and upkeep of said premises, and also made certain improvements thereon, which are specifically described and the cost thereof itemized, and which enhanced the value of the premises.
That David Potts failed and refused to assign such one-half interest.
For his second cause of action the plaintiff adopts all the allegations and averments set forth in his first cause of action, and alleges that the defendants David Potts, Gladys M. Reynolds, Crayton Hoak and Irene M. Hoak entered into a conspiracy for the purpose of defrauding plaintiff and, in pursuance and furtherance of such conspiracy, defendant David Potts, on the 23rd day of August 1941, cancelled his contract with Gladys M. Reynolds and, on the same day, in pursuance with, and in furtherance of such conspiracy, Gladys M. Reynolds deeded the premises to the defendants Crayton C. Hoak and Irene M. Hoak, husband and wife, which deed was recorded on the 28th day of August 1941, in volume 255, page 464 in the record of deeds of Allen county, Ohio.
That thereafter and in furtherance of such conspiracy, Crayton C. Hoak and Irene M. Hoak, on the 23rd day of August, executed a mortgage for the premises to The Home Savings Loan Company for the sum of $1,100, which mortgage was recorded in volume 231 at page 20 of the record of mortgages of Allen county, Ohio.
That all defendants knew of the interest of plaintiff in the premises and had notice of plaintiff's claim.
Plaintiff prays for an order that the cancellation of the contract by and between David Potts and Gladys M. Reynolds be held null and void and for naught; that the deed from Gladys M. Reynolds to Crayton C. Hoak and Irene M. Hoak be cancelled and held void and for naught; that the mortgage given to The Home Savings Loan Company be cancelled and released and held void and for naught; and that defendant David Potts be ordered to assign one-half interest, as agreed, to plaintiff and for such other relief as plaintiff may be entitled to in law and equity and for costs.
It will be noted that the plaintiff, in his amended petition, predicates his right to relief solely upon an oral contract entered into by him and David Potts for the purchase by him from David Potts and the transfer by David Potts to him of a one-half interest under a written contract entered into between David Potts and Gladys M. Reynolds of the real estate described in the amended petition, and partial performance of such oral contract by the plaintiff, in taking possession of the premises, making payments thereon in conformity with the terms of the oral contract and expending certain fixed amounts in making improvements thereon.
There are no averments, admissions or allegations in any of the other pleadings which may be considered as modifying in any respect the allegations of the amended petition predicating plaintiff's right to relief upon the oral contract of purchase of such one-half interest, and the partial performance of the oral contract of purchase, by the plaintiff, in taking possession of the premises, making payments thereon in conformity with the terms of the oral contract, and expending certain fixed amounts in making improvements thereon. There is no evidence tending to prove any other basis for relief that plaintiff may be entitled to in the premises.
Plaintiff's right to relief is therefore measured by and limited to the allegations of his amended petition.
Assuming that such allegations are supported by the evidence and taking into consideration the fact conclusively established by the evidence, that whatever possession the plaintiff had of the premises in question was had concurrently with his vendor David Potts, our first inquiry will be whether the facts pleaded and either assumed or found to be in evidence are such as entitle plaintiff to the relief prayed for, or any relief.
Section 8621, General Code, provides that:
"No action shall be brought whereby to charge the defendant * * * upon a contract or sale of lands, tenements, or hereditaments, or interest in, or concerning them, * * * unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged therewith, or some other person thereunto by him or her lawfully authorized."
Under this statutory provision, oral contracts for the sale of land or an interest therein are unenforceable at law, and are also unenforceable in equity unless there has been such part performance of the terms thereof as to take such contract out of the purview of the statute. So an agreement by a vendee of real property to transfer his interest therein to a subpurchaser, who contracts to buy it, is within the provisions of such statute requiring agreements, in respect of real property, to be in writing. 19 Ohio Jurisprudence, 589, Section 52; Annotation in 38 A.L.R., 1348.
In order that possession may take a lease or contract for the sale of land out of the operation of the statute, the possession must be definite and exclusive; it must unequivocally show what land is possessed, and that it is possessed by the purchaser exclusively and not concurrently with the vendor. It must, in short, indicate the commencement of a new interest in the estate. 19 Ohio Jurisprudence, 624, Section 99; Myers v. Croswell, 45 Ohio St. 543, 15 N.E. 866; Pomeroy's Specific Performance of Contracts (3 Ed.), 305, Section 121.
The joint or concurrent possession of land by both the vendor and vendee, is not sufficient to take a parol contract of sale out of the operation of Section 8621, General Code. To have such effect the possession of the vendee must be definite and exclusive. Thomas v. Watt, 15 O.D. (N.P.), 427.
It has long been well settled that mere payment of part of the purchase money of lands, there being no memorandum in writing of an agreement to sell, does not take the contract out of the Statute of Frauds, and this rule applies whether the payment be made in money or services. 19 Ohio Jurisprudence, 619, Section 97.
Improvements made by a purchaser under an oral contract must be of such a character as to be incapable of compensation in damages in order to constitute part performance of such contract sufficient to take it out of the operation of the statute. 19 Ohio Jurisprudence, 627, Section 101.
Considering the facts pleaded and in evidence or assumed to be in evidence in this case, in the light of the foregoing rules, it is clear that the oral contract for the purchase of one-half interest in real estate, purchased under written contract, upon which plaintiff predicates his right to recovery, comes within the provisions of Section 8621, General Code, and is unenforceable unless there has been such a partial performance on the part of the plaintiff as to take it out of the operation of the statute.
The partial performance pleaded and in evidence or assumed to be in evidence consists of plaintiff taking possession of the premises purchased under the oral contract, making payments on the purchase price thereof, and making expenditures for certain improvements on the premises.
The possession taken was concurrent with the vendor's possession and does not constitute such a possession as is required to take an oral contract of the character mentioned out of the operation of the statute; nor do the payments made on the purchase price have such effect; nor do the expenditures made for improvements, the improvements being of such a character as to be capable of compensation in damages, have such effect. Consequently the oral agreement is unenforceable and the plaintiff is not entitled to any relief in this action.
A decree will therefore be rendered in favor of defendants upon the issues joined, and the petition of the plaintiff will be dismissed at his costs.
Decree for defendant.
CROW and JACKSON, JJ., concur.