Ellsworth v. Southern Minnesota Railway Extension Co.

| Minn. | Mar 24, 1884

Mitchell, J.

In the spring of 1878, the defendant, desiring the immediate settlement and improvement of the lands along the line of its railway to which it expected to acquire title under the “land-grant” acts referred,to in the complaint, made known to the public the terms upon which it would issue “permits” to persons desiring to enter and settle upon them. These terms were embodied in the published circular, Exhibit A. In May, 1878, one Lee Neel (plaintiff’s assignor) verbally applied for a “permit” for the land in controversy, upon the terms referred to. On the twentieth of July, 1878, defendant’s land commissioner executed and delivered to Neel a “permit” for this land, of which the circular “A” was made a part. This permit and circular is length y, and we will leave it to be set out in the statement of the ease. A few days after its issue, and before Neel had entered upon the land or had done anything under it, the general manager of defendant informed him that this land had been reserved by the company for its own uses, and that the permit had been issued without authority, and that it would not be recognized by the defendant, and that his (Neel’s) claim to the land under it was then and there repudiated.

The point is made by plaintiff that this was an attempted repudiation, and not a revocation. But we are clear that it was sufficient as a revocation if the defendant then had power to revoke. The form of the withdrawal of an offer, or the revocation of a license, is not material. It is sufficient, if, by words or acts, a party clearly indicates that he will no longer'.consider it as continuing or in force. The defendant makes the point that it appears that the land commissioner had been instructed not to issue any permit for this tract, and that this permit was issued through fraud or mistake. But inasmuch as the land commissioner was acting within the general and apparent scope of his agency, and Neel had no knowledge of this special limitation upon his authority, nor of any fraud or mistake in the issue of the permit, his rights could not be affected. The following spring, Neel, disregarding this revocation, went on the land and broke up a part of it, against the wishes and express orders of the company.

We shall assume, for the purposes of this decision, that the improvements which he made would have been a full compliance with the terms and conditions of the permit, if it was in force and not revoked. Neel subsequently assigned to plaintiff, who, having tendered payment, brings this action to compel a conveyance of the land. Thej important question, therefore, is whether defendant had a right kh revoke this permit. This, of course, depends upon the further question whether there was at the time a closed and completed contract between the parties. If there was, then defendant had no power to revoke or rescind. If, on the other hand, there was a mere offer by defendant, not accepted by Neel, or a mere license, not yet acted upon by him, then it could be' recalled at any time before he had accepted and acted upon it by entering upon the land and commencing to improve it.

The permit must be construed as if the written acceptance now attached to it was not there; for it appears that it was not there when the instrument was delivered to Neel, and the fact of its subsequent signature was never communicated to the defendant.

It is elementary that mutuality is essential to any contract; without a consideration there can be no contract. Where the contract is wholly executory — no money paid, or property passed — there must be a mutuality of promises, — a promise for a promise. Cases in which it has been held that, under the statute of frauds, there is not a mutuality of remedies, are not, in theory at least, an exception to this universal rule. In these cases it has always been held that there must be a promise for a promise, good as a consideration at common law; although, because one party has promised in writing and the other only verbally, the former is bound to perform and the latter is not. It is difficult to see how, on principle, a void promise, which is of no benefit to the promisee or injury to the promisor, can constitute a consideration for a contract; but such is the ground on which the cases put it. Old Colony R. Co v. Evans, 6 Gray, 25.

Now, what was the undertaking or promise on the part of Neel which would constitute a consideration for any promise on the part of the defendant ? for we take it that if there was no promise or agreement on the part of Neel obligating him to go on and improve the land, then there was no contract between the parties, and the defendant was not bound. If it was still entirely optional with Neel whether he would take possession of and improve the land, then the permit was a mere license or offer, which could be revoked at any time before it was acted upon. This, in our opinion, is the crucial test in this case. Of course an “option” contract is valid and can be enforced if there be a consideration for the option. But, inasmuch as Neel paid nothing, if he promised nothing there would be an entire want of consideration in the present ease. This permit (of which the circular “A” is a part) is a somewhat peculiar instrument, some of its provisions seeming to look in one direction and others in the opposite. But, taking it as a whole, and construing it in the light of the situation, and in accordance with its apparent object, we are of opinion that it amounts merely to an authority or license to Neel to enter upon and improve the land, with the privilege, in ease he does so, of] purchasing in case the defendant acquires title. But that there was nothing binding upon him to do this; that he could do so or not as he chose; and if he had refused, the company could not have compelled him to do it, nor maintained an action against him for damages. If this be so, it is decisive of this case, for if there is no mutuality of obligation there was no contract.

The central idea on the part of the company seems to have been the immediate improvement of the lands. To induce this, they gave parties permission to go into possession with the privilege of purchasing on certain conditions. The permit contains no promise on the part of Neel. The instrument does not seem to be framed upon the theory of binding the party to whom it was issued to perform, it being in its whole tenor permissive merely; the company depending solely for its protection upon the fact that the permit would become void or revocable upon failure to comply with its conditions.

We quite agree with plaintiff that it is not necessary for the vendee to sign the memorandum in order to make a contract for the sale of lands binding; that if accepted by the vendee it may be enforced, although only signed by the vendor, and that it is not necessary that the written memorandum should state or contain the promise on the part of the vendee; that it is sufficient if there was such a promise in fact, and that this may be proved by parol. But ike court nowhere finds that Neel ever agreed to enter and improve these lands, and the evidence nowhere discloses any such promise; at least, not an express promise. If there was any such promise on his part, it must be one which the law would imply from the fact that he applied for and received the permit.

Counsel cites numerous authorities to the point that a party who accepts and adopts a written contract, although unilateral as to its execution, will be bound by its terms. He also says Neel “accepted” this permit and was therefore bound by it. But in what sense did he accept it ? In one sense he accepted it when he took it and put it in his pocket. In another sense he may have accepted it as a mere license, which left it optional with' himself whether or not he would avail himself of it. In another sense he might have accepted it by agreeing to go on and improve the land in accordance with its terms. Only this last would amount to an acceptance within the meaning of the cases such as would make a completed contract.

Á promise by one party is not under all circumstances to be implied from the fact that a promise has been made by another, to which that sought to be implied would be correlative, and so the parties placed under mutual obligations. Churchward v. The Queen, L. R. 1 Q. B. 173.

Whatever might be the rule in cases where the instrument, although unilateral as to its execution, is mutual in its general scope and objects, and provides for something to be done by each party, yet, in a case like the present, where the instrument is in form as well as fact unilateral, and upon its face a mere license or permit, it will not be presumed as a matter of law that there was a promise or undertaking on the part of the other party from the mere fact that the latter applied for and received the instrument. Even if these facts would be some evidence of such a promise, the inference to be drawn from them would be one of fact and not of law. Justice v. Lang, 52 N. Y. 323.

The cases cited by plaintiff to the point now under consideration mostly belong to one of three classes, none of which, in our judgment, reach this ease: First, those which hold that a grantee who accepts a deed of conveyance is bound by the terms and conditions, as where it provides that he shall pay an incumbrance on the property. Finley v. Simpson, 22 N. J. Law. 311, is an example of this class. But these are executed contracts, supported by a consideration actually received by the grantee. If he accepts the estate conveyed, he must take it subject to all the burdens and conditions imposed by his deed. The second class are cases of executory contracts for the sale of real or personal property. Such are the cases of Vilas v. Dickinson, 13 Wis. 488" court="Wis." date_filed="1861-04-10" href="https://app.midpage.ai/document/vilas-v-dickinson-6598390?utm_source=webapp" opinion_id="6598390">13 Wis. 488, and Hutchinson v. Chic. & N. W. Ry. Co., 37 Wis. 582" court="Wis." date_filed="1875-01-15" href="https://app.midpage.ai/document/hutchinson-v-chicago--northwestern-railway-co-6601798?utm_source=webapp" opinion_id="6601798">37 Wis. 582. But in most of these it will be found that the instrument, although only executed by one party, was, on its face, mutual in its scope, and provided expressly for something to be done by each party; and in all of them we think it will be found that it appeared from the evidence outside the instrument, either that there was an express promise by the party not signing it to buy or sell, as the ease might be, or else that he had received money or accepted possession of the property under the contract. The third class are cases where the sole question was raised under the statute of frauds, that where only one party had signed the memorandum the other party was not bound, and hence no mutuality of remedy, and therefore, in fact, no contract. Old Colony R. Co. v. Evans, supra, and Mason v. Decker, 72 N.Y. 595" court="NY" date_filed="1878-02-22" href="https://app.midpage.ai/document/mason-v--decker-3606388?utm_source=webapp" opinion_id="3606388">72 N. Y. 595, are examples of this class. But in these eases it was never claimed that the statute of frauds did away with the necessity of a consideration. It always appears or is assumed that there was, in fact, a mutuality of promises, although the promise of the party not signing could not have been enforced, because not in writing.

The ground upon which these contracts are held binding upon the party whose promise was in writing, has been already referred to. Whether it is sound need not now be considered.

In Boyd v. Brinckin, 55 Cal. 427" court="Cal." date_filed="1880-07-01" href="https://app.midpage.ai/document/boyd-v-brinckin-5439814?utm_source=webapp" opinion_id="5439814">55 Cal. 427, a circular was issued, as in this case, inviting persons to settle on the lands, and stating that they would be preferred, as purchasers. But it appears that the party accepted the offer by settling on and improving the lands, and notified the company of his acceptance, and filed an application to purchase. The facts are somewhat similar in the case of Perkins v. Hadsell, 50 Ill. 216" court="Ill." date_filed="1869-01-15" href="https://app.midpage.ai/document/perkins-v-hadsell-6953388?utm_source=webapp" opinion_id="6953388">50 Ill. 216.

The dicta in Justice v. Lang, 42 N.Y. 493" court="NY" date_filed="1870-06-05" href="https://app.midpage.ai/document/justice-v--lang-3632137?utm_source=webapp" opinion_id="3632137">42 N. Y. 493, so much relied on by plaintiff, are much modified, if not entirely repudiated, in the same case, in 52 N.Y. 323" court="NY" date_filed="1873-04-01" href="https://app.midpage.ai/document/justice-v--lang-3599218?utm_source=webapp" opinion_id="3599218">52 N. Y. 323, supra.

Our conclusion, therefore, is that defendant had at the time power to revoke the “permit.” Judgment affirmed.