242 N.W. 592 | S.D. | 1932
The complaint alleges that plaintiff paid defendant $1,000 on an oral agreement for the purchase of a tract of 160 acres in Lincoln county, S.D. Defendant in his answer admits the receipt of the money, but affirmatively alleges that, when the verbal agreement was made and entered into, and at all times up to the commencement of the action, defendant was able, ready, and willing to comply with the terms of the verbal agreement and to convey the premises upon compliance with the terms of the contract. Judgment was entered upon findings in favor of the plaintiff for the purchase money paid with interest. From this judgment defendant has appealed.
[1] The question presented for decision is the right of a vendee to recover back money paid upon an oral contract for the sale of land when the vendor is ready, willing, and able on payment of the balance of the purchase money to convey title. It is the settled law that the purchaser of land under a contract which does not satisfy the statute of frauds may recover, as upon an *3 implied promise, the amount he has paid upon the purchase price, when, without fault on the part of the vendee, the vendor refuses or is unable to perform the contract by conveying such title or interest as he has agreed to convey. 25 C.J. 725. The rule does not give effect to the oral agreement contrary to the statute. In such instance, the law implies a promise on the part of the vendor to refund the amount that he has received in consideration of the agreement which cannot be enforced against him and which he is unwilling to perform.
A more difficult question is presented where the vendor is able and stands ready and willing to perform in compliance with the terms of the oral agreement. This question of the right of a vendee to recover has had the attention of courts in other jurisdictions, but thus far we have had no occasion to pass upon it in the direct form presented by the present record. An examination of the authorities indicates a divergence of opinion. The weight of authority is to the effect that the vendee may not recover back payments on the purchase price if the vendor has not repudiated the contract and stands ready, able, and willing to perform his contract. 25 R.C.L. 725; Brown on the Statute of Frauds, § 122; Annotations: 105 Am. St. Rep. 793, and L.R.A. 1916D, 472.
[2-4] The difference in the rulings appears to depend upon the form and interpretation of the statute of frauds. Contracts within the statute of frauds in this state are not merely voidable, but are void. The statute does not prescribe a mere rule of evidence, but is a matter of substantive law. Section 856, R.C. 1919; Jones v. Pettigrew,
There is an apparent lack of judicial harmony in determining the effect of a statute of frauds which provides that an oral agreement shall be invalid or that the agreement shall not be valid, unless in writing. Some of the courts treat a contract not complying with the terms of such form of statute as voidable. It is said that there is in legal effect no difference between a statute of frauds which provides that "no action shall be maintained" and a statute which provides that such contracts shall be "invalid" or that an agreement shall not be valid, unless in writing, 27 C.J. 309-314; Williston on Contracts, § 531. In California, Montana, and Oklahoma, the statutes of frauds, like the statute in this state, declare that oral contracts shall not be valid, unless in writing, and yet these states adhere to the majority rule which denies the right of a vendee to recover the amount he has paid upon the purchase *5
price under the terms of an oral contract which does not satisfy the statute of frauds, if the vendor is ready, able, and willing to perform. Thus, in Laffey v. Kaufman,
The holdings in these states are premised upon a construction of the statute of frauds that a contract within such statute is not void, but merely voidable. Wood v. Lowney et al,
The settled construction of the statute of frauds in this state *7 seems to us to compel the conclusion that the parol agreement, being in all respects a nullity, did not constitute a consideration for the partial payment and that the plaintiff was entitled to judgment.
The judgment appealed from is affirmed.
CAMPBELL, P.J., and POLLEY, WARREN, and RUDOLPH, JJ., concur.