76 Ind. App. 318 | Ind. Ct. App. | 1919
Lead Opinion
This action, by the appellants against the appellees, was in the Marion Superior Court. It is averred in the first paragraph of the complaint that on or about October 14, 1916, appellants and appellees entered into a contract whereby appellants, for a stipulated commission, agreed to provide the appellees with funds with which to acquire certain real estate located in the city of Indianapolis, Indiana, and erect thereon three apartment buildings. It was stipulated in said agreement that said buildings should be constructed according to plans which appellees were to exhibit to appellants for their approval; that the costs of said improvements would be approximately $124,-000; that appellees would cause to be incorporated a realty company under the laws of the State of Indiana, with a capital stock of $140,000, of which $50,000 should be common stock and $90,000 preferred stock, the latter to bear cumulative dividends at the rate of five and one-half per cent, per year, payable quarterly, and to be redeemed $3,500 per year beginning January 1, 1918, for nine years; the remaining $58,500 to be redeemed on January 1, 1927; that said realty company should have the option to redeem $1,000 of the preferred stock or any multiple thereof at any dividend paying period at 102 per cent, of par plus accrued interest, upon sixty days written notice being given the holders of the preferred stock; that the stock to be redeemed should be selected by lot from that last maturing. Appellees further agreed that the articles of association and certificates of stock of said realty company and all other legal papers incident to the issuance of the capital
Appellants were ready at all times, and able and willing to carry out each and every term and condition of the contract by them to be performed; that on October 16, 1916, appellees wrongfully repudiated said contract and all liability thereunder and wrongfully refused to and still refuse to perform any stipulations agreed to by them as aforesaid. Appellants, relying in good faith on said agreement, proceeded to advertise the preferred stock of said realty company, proposed to be issued as aforesaid, and secured a purchaser for $11,800 of par value thereof who was at all times, and is now ready to receive and pay to the appellants said sum for the same; that they would have been able to sell all of the preferred stock at a net profit to themselves of not less
The second paragraph of the complaint, though on a separate contract from that averred in the first, is similar in character.
To each of these paragraphs demurrers were filed by appellees respectively with a memorandum that the contract was one not to be performed within the year and by its terms could not be performed within the year. There are other memoranda with the demurrers, but this is sufficient for the purposes of this decision.
There is nothing that suggests that either of the parties to the contract contemplated that the realty company would or might, at any time, negotiate any other loan for the purpose of discharging this indebtedness. With this construction of the contract, which we hold to be a reasonable one, it was not possible for the realty company to finally discharge its obligations before January 1, 1926, and therefore the contract, so far as the realty company was concerned, could not be performed within a year. Appellants contend, however, that there is a distinction between the obligations which appellees should perform under the contract, and those which should be performed by the realty company to be organized, and that appellees’ contract only goes to the extent of organizing a realty company having certain characteristics, capitalization and privileges, and that this obligation upon appellees’ part, together with certain other obligations mentioned by appellants, could each and all of them, be performed within-the year. Appellants say that certain performances by the realty company, such as the payment of dividends upon stocks, etc., might extend through many years, but these were incidental and did not constitute any part of the appellees’ performance. They argue, in effect, that appellees would have performed their contract by causing a real estate company to be incorporated within a year, and the mere fact that th-is results in the creation of a relationship or contract which cannot be discharged until after the year, does not bring the contract within the statute, since it is the original performance which
Appellants assert that all of their obligations could be performed within the year, and then say that the overwhelming weight of authority is to the effect that where an oral contract can be performed within the year by one of the parties, it is not within the statute, although complete performance within the year by both parties is not possible. They cite to sustain this proposition, Houghton v. Houghton (1860), 14 Ind. 505, 77 Am. Dec. 69; Haugh v. Blythe (1863), 20 Ind. 24; Bell v. Hewitt (1865), 24 Ind. 280; Wolke V. Fleming (1885), 103 Ind. 105, 2 N. E. 325, 53 Am; Rep. 495; Piper, Exr., v. Fosher (1890), 121 Ind. 407, 23 N. E. 269; and Lowman v. Sheets (1890), 124 Ind. 416, 24 N. E. 351, 7 L. R. A. 784. We think that it clearly appears that there were a number of performances in which the appellants must have participated before the preferred stock could be redeemed, which were not within the year. Further, we have examined each of the above authorities cited by appellants, and note that in each case the contract had been fully performed by one of the parties. The case of Wilson v. Ray (1859), 13 Ind. 1, involved an executory contract like the one in suit, and in that case it was held that the fact that there had been no performance on the part of the plaintiff, he having paid nothing and the defendant having received nothing, very clearly distinguished that case from Donellan v. Read (1832), 3 Barn. & Adol. 899, which was a case similar to the ones relied upon by appellants. The fact that the complaint was based upon a contract that could not be performed within the year made it bad, and the demurrer for that reason
The judgment is affirmed.
Rehearing
On Petition for Rehearing.
They also cite Rogers v. Brightman (1859), 10 Wis. 49, 65, which was decided upon the evidence, the court saying: “The evidence of the defendants themselves showed that the logs could not all have been sawed by their mill, within one year from the time the contract was made.” And the court further speaking says that if “it appears that everything-provided for by the contract may in the nature of things and without any violation of its provisions, be done within the year, it cannot then be avoided by an outside inquiry.” In the case at bar there was no outside inquiry, but the court determined from the contract itself, the substance of which is stated in the original opinion, that in the na
They also cite Warner v. Texas Pac. R. Co. (1896), 164 U. S. 418, 434, 17 Sup. Ct. 147, 153, 41 L. Ed. 495, in which case the railroad company contracted to “put down the iron rails and maintain a switch for appellant’s benefit for shipping purposes as long as he needed it,” and the court said: “The parties may.well have expected that the contract would continue in force for more than one year; it may have been improbable that it would not do so; and it did in fact continue in force for much longer than a year, but they made no stipulation which in terms or by reasonable inference required that result, and again the question is * * * whether the contract according to reasonable interpretation of its terms required that it shotild not be performed within the year.” The contract here under consideration was for the construction of a building, thereafter to be operated by a realty company, and from the proceeds of its operation to pay the indebtedness represented by preferred stock, maturing at the rate of $3,500 per year for nine years, $58,500 at the end of the tenth year, with the right to make additional payments on the stock- last maturing. We hold that the reasonable interpretation of these terms required that it should not be performed within the year.
Treat v. Hiles (1887), 68 Wis. 344, 32 N. W. 517, 60 Am. Rep. 858 is cited, in which it was held that in the nature of things the parties could not have known that a certain quarry to be operated would not be exhausted within one year. This case is clearly not in point.
Wooldridge v. Stern (1890), 42 Fed. 311, 9 L. R. A. 129, is cited. In that case it was held that the term not to be performed “does not include an agreement not likely to be performed within the year, nor one scarcely expected to be performed within that time;
Blair Town Lot and Land Co. v. Walker (1874), 39 Iowa 406, is cited, in which case it is said “to be within the statute, the contract itself must show from the nature of its subject matter, by its express terms, or by its necessary implication, that its performance within the year is forbidden—it must show that it is not to be performed.” By the construction which we give this contract, not only by its terms, but by necessary implication, it was not to be performed within the year.
In the case of Lennard v. Texarkana Lumber Co. (1906), 46 Tex. Civ. App. 402, 94 S. W. 383, it was expressly held that the contract of employment was for an uncertain or indefinite period of time.
In the case of Thomas v. Armstrong (1889), 86 Va. 323, 10 S. E. 6, 5 L. R. A. 529, it was held that if by the terms or by reasonable construction a contract not in writing can be fully performed within a year, although it can be done only by the occurrence of some improbable event, as the death of the person referred to, it is not within the statute.
We are not out of harmony with'this decision for we hold that by a reasonable construction of the contract involved it cannot be performed within the year. The above cases cited by appellants are cases from which they have quoted in their brief.
In Brown, Statute of Frauds (5th ed.) §281 the author said:' “Where the manifest intent and understanding of the parties, as gathered from the words and
Again in 1 Chitty, Contracts (11th ed.) 99, the principle is thus stated: “This enactment applies to all contracts, the complete performance whereof is of necessity to extend beyond the space of a year; the rule being that where the agreement distinctly shows upon the face of it, that the parties contemplated its performance to extend over a longer period than one year, the case is within the statute. Accordingly, the provisions of the statute render a verbal contract void, if it appear to have been the understanding of the parties at the time, that it was not to be completed within a year, although it might be, and was, in. fact, in part performed within that period.”
In the English case of Boydell v. Drummond (1809), 11 East 142, the plaintiff proposed to publish a series of illustrated scenes from Shakespeare in eighteen numbers, one number at least annually. After receiving two numbers the defendant refused to take any more. Although there was mo express agreement that the contract should not be performed within the year, the court held that it was “impossible to say that the parties contemplated that the work was to .be performed within the year,” but that on the contrary “the whole scope of the undertaking shows that it was not to be performed within the year, and was therefore within the statute of frauds.”
In Peters v. Westborough (1837), 19 Pick. (Mass.) 364, 31 Am. Dec. 142, the court said: “It must either have been expressly stipulated by the parties, or it must
In the original opinion there were other grounds of demurrer presented, but we did not deem it necessary to consider them. We deem it expedient, however, in ruling upon the motion for a rehearing that we call attention to one other ground of demurrer.
By the contract involved, appellants agreed to furnish appellees with funds with which to acquire certain real estate located in the city of Indianapolis, Indiana and appellees agreed to cause said real estate to be conveyed to a realty company which was to be incorporated, and to furnish abstracts showing, the title in such company to be a good merchantable estate in fee simple. It was agreed that in payment for such real 'estate there would be issued to such persons as the appellees might designate $16,000 of the common stock of the realty company. To say that this contract did not involve the purchase, the sale and the conveyance of real estate would be. a clear misinterpretation of its terms.
In the case of Collins v. Green (1907), 40 Ind. App. 630, 82 N. E. 932, appellant contracted with appellee to purchase for him certain real estate agreeing to pay him a commission when the purchase was made. Ap
In the case of Mather v. Scoles (1870), 35 Ind. 1, appellee conveyed certain lands to appellant upon an agreement that appellant would procure a conveyance of certain real estate from one Evans to appellee or to pay the appellee a sum of money sufficient to procure such conveyance from Evans.
Appellant failed to procure from Evans the conveyance of the land stipulated. In deciding the case on appeal, the Supreme Court says: “But what is the effect of the statute of frauds upon the contract alleged in the complaint? Our statute provides that no action shall be brought upon any contract for the sale of lands, unless the promise, contract, or agreement upon which the action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or by some person thereto by him lawfully authorized. Here the contract was not that Mather himself would convey the lands to Seoles but as it is alleged in the complaint, that he would procure Evans to do so. Was this a contract for the sale of lands within the statute, which, to be binding, must be in writing? We think it was. It is so decided in Chiles v. Woodson, 2 Bibb. 71; Parker’s Heirs v. Bodley, 4 Bibb. 102; Griffin v. Coffey (1849), 9 B. Mon. 452; Hooker v. Gentry, 3 Met. Ky. 463; Brown, Admr. v. Jones, 46 Barb. 400; 4 Amer. Law Reg. (N. S.) 383.” See also, Allen v. Richard (1884), 83 Mo. 59; Haeberle v. O’Day (1895), 61 Mo. App. 390.
Petition for rehearing overruled.