Seymour v. Cushway

PiNNey, J.

The agreement of partnership between the defendants Merrick, and Cushway and the plaintiffs, entered into prior to November 22, 1892, was entirely verbal. It provided for and contemplated the purchase of growing timber upon lands upon the Lac du Elambeau reservation. The purchase of this timber was the main object and central purpose of the agreement, whether of partnership or to form a partnership. The claims of the plaintiffs to relief, it is apparent, rest wholly upon this alleged parol agreement to form a partnership with the defendants Merrick and Cushway to purchase the standing timber on the reservation and manufacture it into lumber. Before any interest whatever had been acquired by the plaintiffs or any of the defendants, and before anything had been done by the plaintiffs in the way of performing said agreement, the defendant Herrick expressly repudiated the same, and proceeded, openly and entirely independent of the plaintiffs, to form a new partnership, in which neither of the plaintiffs had or acquired any interest or control, and to acquire the timber for himself and his new associates. The claim of the plaintiffs to relief is met by the contention on the part of the defendants that the agreement upon which it rests is within the statute of frauds, and hence absolutely void, so that no rights, legal or equitable, can be founded on it; that, even if the agreement were valid, the only remedy of the plaintiffs would be an action at law for damages for the breach.

It is, and has for a long time been, settled in this state, beyond all controversy, that standing timber is a part of the land whereon it is standing, so that a contract for its purchase is a contract for the purchase of an interest in lands, within the statute of frauds. Lillie v. Dunbar, 62 Wis. 198, 202; Daniels v. Bailey, 43 Wis. 569; Strasson v. Montgomery, 32 Wis. 52; Warner v. Trow, 36 Wis. 196; Young v. Lego, 36 Wis. 394. And it has also been quite generally understood in this state that an agreement to form a partnership to purchase lands, since 1860 when the case of Bird v. Morrison, 12 Wis. 138, was decided, is within the statute of frauds. So that, whatever views may prevail in other jurisdictions, the rule in this state may fairly be considered as settled, and not open to discussion. McMillen v. Pratt, 89 Wis. 612; Clarke v. McAuliffe, 81 Wis. 106. And it would seem that the construction of the statute thus announced and so long acted upon fairly falls within the doctrine stare decisis, and is no longer open for discussion at this day, after the very able and full discussion of the question by Mr. Justice Paine in Bird v. Morrison, supra.

In speaking of the effects of a verbal contract where a part of the purchase money had been paid but there was; no part performance, it was held, in Brandeis v. Neustadtl, 13 Wis. 142, after an elaborate discussion, that “ under the statute which declares that every contract ‘ for the sale of any lands or interest in lands shall be void unless the contract, or some note or-memorandum thereof, etc., be in writing,’ a verbal contract for the sale of land is in all respects a nullity, unless there has been a part performance of it within the old equity rule upon the subject, and specific performance of it could not be decreed.” The court, in speaking of such contracts, say: “The defect consists in the failure or neglect of the parties to go far enough in the performance of that which they may legally do, instead of their attempting to perform what the law forbids. The parol bargain itself is not only innocent but serviceable, as it must precede the written consummation of almost all transactions-of the kind. But where they stop with the parol bargain, the statute declares the contract void, not because it is illegal, immoral or fraudulent, but because they omitted to take another step, made necessary to its validity in law. . . . The purchaser can derive no benefit from the supposed contract. Nothing passes to him by virtue of it; he obtains no-interest in the land, and no promise or agreement on the part of the seller to convey him any; and he can never derive any advantage from what has transpired, except it be as a matter of favor on the seller’s part. The latter suffers no damage by what has happened. He has lost or parted with nothing. His interest, control, and ownership of the land remain the same, and he is at liberty to do with it just as he might have done before.” To a similar effect and application is another section of the statute of frauds, namely, sec. 2302, which declares that “no estate or interest in lands, . . . nor any trust or power over or concerning lands, or in any manner relating thereto, shall be created, granted, assigned, surrendered or declared unless by act or operation of law, or by deed or conveyance in writing, subscribed by tbe party creating, granting, assigning, surrendering or declaring tbe same.”

Here there appears to bave been no fraud; nothing, in fact, but a mere breach of tbe verbal contract to enter into and perfect tbe proposed purchase and partnership. The trial court found, and the evidence seems quite conclusive, that the conveyance of the timber to the defendants, rather than the plaintiffs jointly with Herrick and Guslvway, was procured without any fraud, concealment, or misrepresentation whatever, unless the breach of the verbal contract on the part of Herrick to enter into the projected partnership and purchase can be considered such. The mere breach of a promise to convey is not enough. Hoge v. Hoge, 1 Watts. 213; 2 Pomeroy, Eq. Jur. 1056; Dunphy v. Ryan, 116 U. S. 491; Lantry v. Lantry 51 Ill. 458. And a party in no legal sense commits a fraud by refusing to perform a contract void by the provisions of the statute of frauds. He has not, in a legal sense, made a contract, and has a perfect right, both at law and in equity, to refuse to perform. He may stand upon the law and refuse. As said in Brandeis v. Neustadtl, 13 Wis. 150: “All that the parties may say or do, short of reducing their agreement to writing, expressing the consideration, and causing it to be subscribed by the party making the sale, affords the court no solid ground, or color-able pretext even, for noticing it or knowing that anything of the kind has ever transpired.”

Thé plaintiffs have, so far as appears, wholly failed to show that they had any interest, legal or equitable, upon or in aid of which they could make any claim for protection or relief consistent with or under these statutory provisions. They were mere volunteers, without any interest or estate in these lands, legal or equitable; and as strangers to the title they have no standing in a court of equity to ask it to interfere in their behalf. They had and have no interest in the timber. A mere stranger to the title, no matter how much fraud and deceit may have been practiced upon him by the party who has procured the title, cannot complain. The plaintiffs coining into court asserting a title to the timber, it is incumbent on them to maintain it by competent legal proof. Before a party can have a deed set aside and a trust declared in his favor, he must, by proper evidence, show that he has an equitable interest in the land, which a court of equity will recognize or enforce. Dunn v. Schneider, 20 Wis. 509; Lawson v. Lawson, 117 Ill. 98; Conant v. Riseborough, 139 Ill. 391. Whether the agreement was one of copartnership, or to form a partnership at some time in the future, in either case it was only an agreement. The business of the proposed partnership does not appear to have been entered upon, or any partnership accounts created. There was nothing in the case, then, but the bare agreement and its alleged breach. Eor this the remedy provided in the courts of law was adequate and complete, where the parties might have, as a matter of right, a trial by jury. Hill v. Palmer, 56 Wis. 123, quoted and approved in Hyer v. Richmond Traction Co. 168 U. S. 484; Treat v. Hiles, 68 Wis. 344; Doyle v. Bailey, 75 Ill. 418. The court found that the Indians knew, when they signed the contracts, that they were conveying the timber to the defendants, and not to the plaintiffs; and also that the several government officials who indorsed the contracts each knew at the time of his indorsement-that the defendants were the grantees in such contracts, and that the plaintiffs had no interest therein; in short, that the conveyances were made to the defendants by the Indians knowingly and understandingly, and sanctioned by the government authorities, with full knowledge of their purport, and that the consideration therefor was paid entirely by the defendants.

The claim that there were writings in evidence sufficient to satisfy the requirements of the statute is clearly not maintainable. No such writing is pointed out that can serve the necessary purpose. The written agreement between Cushway and Herrick to form a partnership is manifestly of no avail. The plaintiffs were not parties to it, and it was not sufficient in form or substance. To satisfy the statute, the memorandum must contain all the essential terms of the contract, either by its terms or by reference to other writings, so that it will not be necessary to resort to parol evidence to explain it. It must be definite in respect to the intention of the parties, who they are, their relation one to the other,— who is the seller, who the buyer,— the property, the price, and terms of payment. This is too well established to need authorities in support of it. The real agreement, being entirely verbal and within the statute of frauds, is absolutely void, and cannot give rise to any right of action, legal or equitable. The court found: “That the agreement of partnership between the defendant Fred Herrick, Joseph H. Cushway, and the plaintiffs, entered into prior to November 22, 1892, and hereinbefore mentioned, was entirely verbal; that said agreement of copartnership provided for and contemplated the purchase of growing timber upon said Lac du Llambeau reservation as a condition precedent to and as a foundation of the entry upon any other business, and that the purchase of said timber was the main and central purpose of said partnership agreement; that the partnership business contemplated by said agreement was never actually begun or entered upon, and that nothing, or substantially nothing, had ever been done by the plaintiffs, or any of them, in the way of performing said agreement.”

The argument urged by counsel, that equity will not allow the statute of frauds to be made an instrument of fraud, has no application, we think, to the facts of the case. A similar argument was pressed in the case of Levy v. Brush, 45 N. Y. 589. The court there said (page 596): “ The position, rightly understood, is correct. This is the basis upon which the doctrine of specific performance of verbal contracts for the purchase of real estate by courts of equity in cases of part performance rests. . . . But no case can be found where a contract has been taken out of the statute in favor of a party who had no existing interest in the property, who had done no act of part performance, who had parted with nothing under the contract; simply upon the ground that the other party was guilty of a fraud in refusing to perform his verbal agreement.” '

Authorities as to the validity of a parol partnership for dealing in lands are collected in a note to Bates v. Babeock (95 Cal. 479), in 16 L. R. A. 745. — Rep.

It was also found that the plaintiffs paid no consideration for the timber in question, and contributed nothing whatever, either of time, labor, or money, to the business of the said Cushway & Co.; and they had not, so far as appeared, altered their position on the faith of any promise made to them by any of the defendants. It is not perceived that the facts and circumstances give rise to any trust in favor of the plaintiffs. Admitting that prior to the conveyance to the defendants they had an agreement of copartnership with Herrick and Cushway to purchase the same timber, this would not prevent Herrick and Cushway from breaking such agreement, making themselves liable for damages, and forming a new partnership to procure, if they could, the conveyance of the timber to the new firm.

Upon the pleadings and facts contained in the'record and-findings of the court, we do not perceive any ground upon which it can be maintained that the facts and circumstances give rise to any trust in favor of the plaintiffs. For the reasons above stated we hold that the circuit court rightly gave judgment dismissing the plaintiffs’ complaint.

By the Court.— The judgment of the circuit court is affirmed.

Case Details

Case Name: Seymour v. Cushway

Court Name: Wisconsin Supreme Court

Date Published: Oct 11, 1898

Citation: 100 Wis. 580

Court Abbreviation: Wis.