Page images

poration, but only of a minority number. Pugh and wife could dominate and control any stockholders' meeting with their eighty shares. Gressett received a salary of $300 a month as manager. The record does not show that he was employed, except by the month. It probably was an inducement to Howard to purchase this stock, to know that he would be made manager of the plant. It is admitted by both counsel for the appellant and for the appellee that this corporation could not purchase Gressett's stock; therefore negotiations for the sale of this stock were with the individuals, Pugh and Howard. It was an individual transaction among these three men, as contradistinguished from a corporate transaction. Gressett as an individual had no right to sell the position of manager. This position could only be sold or given by the corporation. It was not personal It was not personal property of Gressett. Had he been wrongfully discharged by the corporation, his cause of action would have been against the corporation, not against Pugh and his wife individually. The cases relied upon in the majority opinion are where either all of the stock or a majority of the stock of corporations was being sold, which necessarily carried with it the right to the control and management of the corporation. The Statute of Frauds contemplates the delivery of the personal property that the seller either unqualifiedly or qualifiedly owns. Had the corporation been selling this stock, together with the management of the plant, a different question would be presented. I think the opinion of the court in the case of De Nunzio v. De Nunzio, 90 Conn. 342, 97 Atl. 323, correctly states the rule upon this question.

Aside from the Statute of Frauds, I do not think that the letters and telegrams, taken in connection with the conversation of these parties, constitute a definite contract for the purchase of this stock, upon which a right of action may be predicated.

In addition to the letters and telegrams, we have the testimony of Mr. Gressett, in which he sums up the alleged contract agreed upon as follows: "The whole conversation was, if they couldn't pay the full amount in cash, they would arrange to pay $4,000 in cash, and I was to arrange to carry the balance."

The subsequent negotiations were then evidenced by the letters and telegrams. My view is that this conversation, when considered with these written documents, shows that the minds of the parties never met, first, as to the amount which was to be paid in cash; second, as to how the balance was to be paid, the amount of each payment, and the rate of interest the deferred payments, if any, were to bear; also by whom the notes were to be signed, and whether or not secured, by deed of trust or otherwise.

If I correctly construe Mr. Gressett's testimony, when considered Iwith the letters and telegrams, it was only that they were to make arrangements to pay, if possible, in cash $4,000, but this arrangement was superseded by the letters and telegrams, which only indicate to me that all of this was indefinite and uncertain. It was merely an agreement to make a contract on October 15th; an agreement upon which a cause of action cannot be maintained. This court in the case of the Yazoo & M. Valley R. Co. v. Jones, 114 Miss. 787, 75 So. 550, said: "Where there is no estoppel, the minds of the contracting parties to a contract must meet as to all the terms and conditions of the contract."

In fact, I do not think that the oral testimony in the case at all supplements or helps out the written memoranda. In my opinion there should be a decree in this case in favor of the appellants.

Smith, Ch. J., and Cook, J., concur in these views.

Suggestion of error overruled November 24, 1924.


Doctrine of part performance as applied to contract embracing more than one subject-matter.

I. Introductory, 693.

II. Circumstances held to constitute part performance, 693.

III. Circumstances held not to constitute part performance, 695.

I. Introductory.

In considering the cases dealing with the doctrine of part performance as applied to a contract embracing more than one subject-matter, the field has been restricted to contracts wherein the several subject-matters are of a diverse character, and those cases involving contracts embracing a sale of several different instalments of goods or of several pieces of real Nor property have been excluded. has any consideration been taken of those cases wherein the contract before the court was only partly within the Statute of Frauds.

11. Circumstances held to constitute part performance.

In each of the following cases, involving contracts embracing more than one subject-matter, the circumstances were held to constitute such performance as took the contract out of the operation of the Statute of Frauds: J. D. Kilgore Lumber Co. v. Halley (1919) 140 Ark. 448, 215 S. W. 653; Hightower v. Ansley (1906) 126 Ga. 8, 54 S. E. 939, 7 Ann. Cas. 927; Green v. Ditsch (1898) 143 Mo. 1, 44 S. W. 799; Fremont Carriage Mfg. Co. v. Thomsen (1902) 65 Neb. 370, 91 N. W. 376. And see the reported case (PUGH V. GRESSETT, ante, 678). See also Mahoney v. Kennedy (1920) 172 Wis. 568, 179 N. W. 754.

In J. D. Kilgore Lumber Co. v. Halley (Ark.) supra, it appeared that the plaintiff had contracted to sell to the defendant the timber on a certain tract of land, which the latter agreed to buy at a stated price, and had also agreed to lend the defendant money to erect a mill on the property, the debt to be secured by a mortgage thereon.

In an action for the specific performance of the contract of sale, the plaintiff alleging that the defendant refused to buy the timber and to execute the mortgage, the court said: "According to the allegations of the complaint, the plaintiff furnished the de

fendant an additional amount of money for the purpose of erecting a mill on the timberlands, and pursuant to the contract, the defendant entered into possession of the lands and erected the mill thereon with the money furnished by the plaintiff. This constituted such performance of the contract as to take it out of the Statute of Frauds. Moore v. Gordon (1884)

44 Ark. 334."

Green v. Ditsch (1898) 143 Mo. 1, 44 S. W. 799, was a suit to obtain specific performance of an alleged contract for the sale of a house and lot. The petition alleged that the plaintiff had agreed to sell, and Ditsch (the defendant's ancestor) to buy, the property for the sum of $3,000, and that it was also agreed that an addition to the house was to be constructed at a cost of $500, for which Ditsch was to repay the plaintiff, the contract to be consummated when the addition was completed. The addition was erected, and it was agreed, it was alleged, that, before the consummation of the contract, Ditsch should pay the plaintiff $3,000 and the latter should execute a note for that amount secured by the property; which was done. The plaintiff alleged compliance on his part with the contract, and sought specific performance on the part of the defendant, who took possession of the property after the death of his ancestor. The court said: "The first substantial defense is that the contract, being for the sale of real estate, can only be proved by some writing signed by the party to be charged, and there was, therefore, a failure of proof. Plaintiff meets this defense by the charge

that there was such part performance of the contract on the part of the plaintiff, and acceptance thereof on the part of the defendant's ancestor, as prevents the interposition of the Statute of Frauds as a defense. The agreed price for the property, as it stood at the time of the contract, was $3,000, to be paid in cash on certain conditions in respect to the title, and on the condition that plaintiff would build an addition to the house at a cost of $500, this amount to be added to the purchase price. Mr. Ditsch prepared the plans and specifications for the addition and superintended the work, and when completed plaintiff paid the contractor $500, the contract price therefor. This contract was let

on the 20th of April, 1891, and the improvement was completed in about thirty days thereafter. On the 1st day of December, 1890, a few days after the date of the alleged agreement, Ditsch paid, or gave over to the plaintiff, the sum of $3,000, and plaintiff executed and delivered to him his note for the same amount payable six months after date, with interest from maturity, and also a deed of trust on said property purporting to secure said note. If these acts were referable to the verbal contract of sale, and were done by the parties with the intention of carrying it out, they were undoubtedly sufficient to estop both parties to invoke the Statute of Frauds to defeat the contract. Plaintiff built, at his own expense, the addition to the dwelling house, and Ditsch paid the agreed purchase price. Nothing remained to be done on the part of the plaintiff, but to make to Ditsch such title to the land as the contract contemplated, and, on the part of Ditsch, to refund the cost of the improvement.

Considering the

evidence and all the circumstances, we are of the opinion that the acts done were in performance of the contract."

Hightower v. Ansley (1906) 126 Ga. 8, 54 S. E. 939, 7 Ann. Cas. 927, was an action to recover damages for the refusal of the defendant to deliver stock in a corporation, in accordance with a contract, wherein the court, confronted with the defense of the

Statute of Frauds, said: "The plaintiff further contends that the contract has been taken out of the statute, because of part performance of the contract. It is his contention that the firm of Heath & Hightower promised him that if he would negotiate for the purchase of timber for a sawmill location, they would give him an equitable interest in the partnership; that Heath & Hightower purchased the timber as the result of his negotiations, and afterwards promised that if he would go into the service of a corporation into which the partnership was to be merged, at and for the sum of $150 per month, they would each sell him fifty shares of the capital stock of the corporation for the sum of $2,400, on credit; that he entered into the service of the corporation and remained with it for a period of two years, when he severed his connection, with the assent of the defendant, who subsequently agreed that he would charge him 8 per cent interest on the purchase price of the stock up to that time, and would let the debt owing him by plaintiff run for the next twelve months at 6 per cent. By rendering the service to the corporation according to the terms and stipulations of his agreement with the defendant, the plaintiff had so far performed his obligations under the contract as would take the case out of the statute."

In Fremont Carriage Mfg. Co. v. Thomsen (1902) 65 Neb. 370, 91 N. W. 376, it was alleged that Thomsen bought stock in the Fremont Company and paid therefor, and in consideration also received a position with the company, his stock to be repurchased in case of his discharge. Thomsen, on being discharged, sometime later, demanded that his stock be repurchased, and, on the company's refusal, brought this action. It was held that, since the contract had been fully performed on the part of Thomsen, it was not subject to the defense of the Statute of Frauds.

The reported case (PUGH v. GRESSETT, ante, 678) involved a contract whereby the plaintiff, the principal owner and manager of a corporation, agreed to sell his majority stock there

in at a certain price to the defendants, and to yield his position in control of the business. He turned over to one of the defendants the management of the company's affairs, and, on the defendant's refusal to pay the agreed price for the stock, brought suit. The court holds that the case is not within the Statute of Frauds, since the plaintiff's surrender of the control of the plant and the defendants' acceptance thereof constituted such part performance of the contract as made the statute inapplicable. As the court points. out, the negotiations involved not only the transfer of the stock, but, perhaps primarily, the delivery and acceptance of the management of the business.

Somewhat similar in its facts to the reported case (PUGH v. GRESSETT) was the case of Mahoney v. Kennedy (1920) 172 Wis. 568, 179 N. W. 754 (not, perhaps, within the scope of the annotation), an action to recover $7,000, the purchase price of the plaintiff's interest in a publishing company alleged to have been sold to the defendants under an oral contract. No certificates of stock had ever been printed, and the plaintiff alleged that the contract stipulated payment to him within two weeks, whereupon he gave up his offices and duties with the corporation. The court, holding that the contract was taken out of the Statute of Frauds by reason of the part performance, said: "The evidence, if true, would show that, in performance of the contract, the plaintiff ceased to act as secretary, treasurer, and general manager, notified the bank and defendants that his checking right was transferred to them, and that he took no further part in the management of the company. It would likewise show that defendants made J. E. Jones general manager in place of plaintiff, and suffered him to check against the corporate funds in the bank, that they attempted to sell some of the corporate assets, and that they, with Jones, controlled the company thereafter. In view of the nature of the subject-matter sold it is difficult to see what more could have been done to perform the contract. The certificates of stock were not printed, so

could not be delivered. Possession of the thing sold was taken by the defendants through Jones, which was mutually consented to by both parties. That is a sufficient delivery and acceptance in law. 25 R. C. L. 620 et seq. The nature of the subject-matter of the sale in this case did not permit of a manual delivery, but delivery, so far as possible, was made by plaintiff stepping out and the defendants stepping in. This constituted delivery and acceptance."

III. Circumstances held not to constitute part performance.

In several cases involving a contract embracing more than one subject-matter, it has been held that the circumstances did not constitute such

performance as would take the case out of the operation of the Statute of Frauds. Ducie v. Ford (1888) 8 Mont. 233, 19 Pac. 414, affirmed in (1891) 138 U. S. 587, 34 L. ed. 1091, 11 Sup. Ct. Rep. 417; Broadway Hospital & Sanitarium v. Decker (1907) 47 Wash. 586, 92 Pac. 445. See also Vogt v. Mullin (1914) 82 N. J. Eq. 452, 89 Atl. 533.

Ducie v. Ford (Mont.) supra, was an action seeking specific performance of a verbal agreement which, the plaintiffs alleged, was to the following effect, viz., that the plaintiffs were to abstain from filing an adverse claim to a mining claim and were to give up possession of the premises, the defendant to procure a patent for the mine, purchasing it conjointly, and to transfer to the plaintiffs a half interest in the property. With respect to the application of the Statute of Frauds to the agreement, the court said: "A careful examination of the complaint will show very plainly that the plaintiffs and defendant were each claiming adverse possession and ownership of the same mining claim or ground; and when the complainants, as they allege, relinquished their right of possession, they conferred no additional


new right upon the defendant which he was not already claiming to exercise and to be in possession of. Relinquishing a disputed possession, and abstaining from prosecuting an

[ocr errors]

adverse claim which was never filed, do not show the parties to be in a position different from that which they might have occupied if there had been no contract made. The plaintiffs at best, and according to their own showing, refrained from exercising a litigious right, and relinquished a precarious and doubtful possession. Obviously these acts were merely ancillary or preparatory to the main verbal contract, which was that the defendant should patent the mine, and then sell the complainants a half interest. We have no difficulty in holding that refraining to prosecute an adverse claim which was never filed, and relinquishing a disputed mining claim, do not constitute a part performance of a verbal contract whereby the defendant was to procure a patent to the mine, and transfer a half interest to the complainants. Such acts may be accounted for in many ways, and by themselves do not in any way tend to prove the main contract. Under the authorities referred to, it would seem that the part performance must be of the contract to sell and convey; and acts merely introductory or preparatory to the defendant's obtaining the title or patent do not fall within the purview of the law of part performance." Nor was payment of the plaintiffs' share of the purchase money, even if made out, sufficient to take the case out of the statute, on the ground of part performance, said the court.

In affirming the decree in the foregoing case, the Supreme Court of the United States, in (1891) 138 U. S. 587, 34 L. ed. 1091, 11 Sup. Ct. Rep. 417, said: "Taking the averments of the complaint together, it appears that both these parties had located and claimed this lode, and that plaintiffs were preparing to adverse and contest defendant's application for a patent, when a bargain was made between them, by which it was agreed that plaintiffs should relinquish such possession as they had to defendant, in consideration of the latter agreeing to purchase the land upon their joint account. In Clinan v. Cooke (1802) 1 Sch. & Lef. (Ir.) 41, 6 Eng. Rul. Cas.

721, 15 Eng. Rul. Cas. 344, Lord Redesdale indicated, as a test, whether the party let into possession could have been treated as a trespasser in the absence of the parol agreement, and this has been accepted by many writers upon equity jurisprudence as a most satisfactory criterion. Now, it does not appear in this case that the antecedent relations of the defendant to this land were changed by reason of this contract, and it does appear that the only change that took place, in fact, arose from the plaintiffs' withdrawal in favor of the defendant, and from their refraining to prosecute an adverse claim, which was never filed. This would clearly be insufficient to take the case out of the statute. If, in fact, plaintiffs had been in the exclusive possession of the lode in question, and defendant had never been in possession or exercised acts of ownership until the bargain was made between them, and the plaintiffs had surrendered possession in pursuance of the contract, it would have been easy to set forth such facts in unequivocal terms, and not have left them to be inferred from the ambiguous averments of this complaint."

Broadway Hospital & Sanitarium v. Decker (1907) 47 Wash. 586, 92 Pac. 445, was an action to enforce specific performance of a contract which, according to the plaintiff's allegations, gave to it a lease of certain real property for one year, together with an option to purchase at a certain price. The court, pointing out the application of the Statute of Frauds to the alleged agreement, said in part: "Appellant relied further upon the allegation in the complaint that it went into possession of the property. By this it seeks to have the alleged contract specifically enforced as in case of an oral agreement partly performed. We think this contention cannot be sustained. The complaint shows that appellant was in possession as a lessee under its lease, and that it took no steps to put itself within the binding force of the alleged contract for an option until October 22, 1906, when it alleges that, by its tender and demand in writing, it exercised its alleged

« PreviousContinue »