Opinion
No. 28807
Decided July 22, 1942.
Specific performance — Written agreement for sale and contemporaneous oral agreement to will property — Parol evidence admissible to prove consideration in addition to cash — Statute of frauds and statute requiring written agreement to will property — Sections 8621 and 10504-3a, General Code — Part performance by transfer of business and payment of specified sum — Specific performance not denied because of secret promise by one vendee, when — Evidence not weighed by Supreme Court — But examined to determine whether issue sustained by required proof — One not misled to his injury may not claim estoppel — Specific performance lies against heir of intestate person who agreed to devise realty.
1. The parol evidence rule does not interdict showing that in addition to a cash consideration, specified in a written agreement for the sale of property, there was a contemporaneous oral agreement by one of the vendees to leave property to the vendors as a further consideration for the sale.
2. When an interest in a business is sold to two persons, by an agreement in writing, for the payment of a specified amount, and one of the purchasers, as a further consideration for the sale, enters into a contemporaneous oral agreement with the vendors to leave real estate to them by will, a completed transfer of the business with payment of the specified amount, as agreed upon, constitutes such part performance of the contract as a whole as takes the case out of both the general statute of frauds (Section 8621, General Code) which applies to a contract to devise lands and the specific statute of frauds (Section 10504-3 a), which relates to agreements to make a will or to make a devise or bequest by will.
3. Where a contract, for the sale of a business to two persons in consideration of the payment of cash and a secret promise by one of the vendees to devise real property to the vendors, has been fully performed by the vendors and the other vendee, and thereafter the vendee, who made such promise, dies intestate, specific performance of the agreement to devise real estate will not be denied merely because the other vendee was not informed of the secret agreement; such secret promise is not in and of itself reprehensible and unconscionable.
4. This court, though not required to weigh the evidence, will examine it to determine whether an issue, required to be proved by clear and convincing evidence, has been sustained by proof which rises to that standard. (Paragraph 1 of the syllabus in Frate v. Rimenik, 115 Ohio St. 11, approved and followed.)
5. One who is not misled to his injury by the conduct of another cannot claim estoppel.
6. Specific performance of a valid contract to leave real estate by will may be maintained against the heir of the person who agrees to make the devise and thereafter dies without performing his contract.
APPEAL from the Court of Appeals of Franklin county.
On September 12, 1938, Helen A. Ayres and Mildred A. Spears brought an action in the Common Pleas Court of Franklin county, Ohio, against William E. Cook and Helen A. Ayres, administratrix of the estate of Emma Cook, deceased, seeking specific performance of a contract to devise real estate by will. The defendant, Helen A. Ayres, as such administratrix, filed an answer praying that such real estate be declared subject to her right as administratrix to sell the same to satisfy the debts of the decedent.
Defendant, William E. Cook, filed an answer setting up a first defense which was substantially a general denial, and a second defense which pleaded in effect that the contract was not in writing and so unenforceable.
The cause was tried in the Court of Common Pleas, judgment rendered in favor of the defendant, William E. Cook, and plaintiffs' petition dismissed.
Thereupon an appeal was taken to the Court of Appeals on questions of law and fact and the cause was tried there de novo.
The operative facts are as follows:
On or about April 26, 1919, Emma Cook, her son, William E. Cook, and her two daughters, Helen A. Ayres and Mildred A. Spears, each owned an interest in the undertaking business carried on in the name of Cook Sons Funeral Directors. The mother, Emma Cook, sought to buy the interest of her two daughters, the plaintiffs herein, for herself and her son, and offered each of them $2,500 for their individual interests. The daughters refused to accept the offers because they considered them insufficient in amount. Thereupon the mother agreed with the daughters that if they would transfer the undertaking business to her and her son she would leave to them, by will, the real estate which she owned at the time of her death in addition to the payment of $2,500 to each.
On or about April 26, 1919, Helen A. Ayres executed and delivered a written instrument which recited that she sold her interest to her mother and brother for one dollar and other considerations. Shortly thereafter Mildred A. Spears executed and delivered a like instrument in which it was recited that she sold her interest in the business to the same persons for $2,500. The part of the agreement relating to the devise of real estate to the plaintiffs was not reduced to writing. Emma Cook died intestate on June 9, 1938, and up until that time the defendant, William E. Cook, had no knowledge of the oral agreement respecting his mother's real estate.
At the time the undertaking business was sold the value of the interest of each of the plaintiffs was from $7,000 to $7,500. In addition the business was shown to be quite extensive. The only witness called by the defendant testified to no facts except a conversation with the mother in which she stated that she wanted all of her children to share alike. There is no substantial conflict in the evidence offered on behalf of plaintiff. The Court of Appeals entered judgment in favor of the plaintiffs and decreed specific performance of the agreement to leave the property by will subject to decedent's administratrix right to sell the property if necessary to pay debts.
This court allowed a motion to certify.
Messrs. Vorys, Sater, Seymour Pease and Mr. Lyman Brownfield, for appellees.
Mr. H.W. Bradshaw and Mr. W.B. McLeskey, for appellant.
The defendant, William E. Cook, maintains that the judgment of the Court of Appeals adjudging specific performance of the contract to leave real property by will is prejudicially erroneous and should be reversed. The various alleged grounds of error will be discussed in logical order.
1. It is contended that the contract for the sale of the undertaking business, which is in writing, could not be supplemented by showing a contemporaneous oral agreement to devise real property by will.
It has been suggested that the doctrine of partial integration applies here and it certainly would as to the writing executed by the plaintiff, Helen A. Ayres, for it recites that the undertaking business is sold for one dollar and other considerations. This recital would permit proof that the other considerations were partly money and partly real property to be left by will. The writing executed by Mildred A. Spears, however, recites that the consideration was $2,500 cash. The parol evidence rule ordinarily does not prevent showing what the actual consideration was. Of course, the recital that the consideration was $2,500 could not be altered or contradicted by showing that the agreement was in fact for a different amount payable in cash. But the agreement for an additional consideration, viz., a promise to leave property by will can be shown, for evidence of such a fact is not deemed inconsistent with or contradictory of the writing. Vail v. McMillan, 17 Ohio St. 617; Conklin, Trustee, v. Hancock, 67 Ohio St. 455, 66 N.E. 518. Therefore the parol evidence rule was not violated.
2. Defendant further claims that the oral part of the agreement is not enforceable because of the statute of frauds.
Section 8621, General Code, which is the general statute of frauds, and applies to a contract to devise real estate ( Kling, Admr., v. Bordner, 65 Ohio St. 86, 61 N.E. 148), provides, inter alia, that no action shall be brought "to charge a person * * * upon a contract or [ sic] sale of lands, tenements, or hereditaments, or interest in, or concerning them, * * * unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing * * *."
Recently Section 10504-3 a, General Code, has been enacted, which provides: "No agreement to make a will or to make a devise or bequest by will shall be enforceable unless such agreement is in writing, signed by the party making it or by some other person by his express direction, in which latter case the instrument must be subscribed by two or more competent witnesses who heard such party acknowledge that it was so signed by his direction."
There is some question as to whether this latter section is applicable for the reason that it did not become effective until September 2, 1935 (116 Ohio Laws, 385), some years after the contract herein was entered into. We are of the opinion, however, that it is not necessary to go into that question. That the doctrine of partial performance applies to both of these sections cannot be denied; so the first question is whether, under the state of facts we have here, there is such part performance as takes the case out of the statutes. An affirmative answer will be dispositive of this phase of the case.
It has been held that full performance of an agreement for the exchange of realty by one of the parties constitutes such part performance as will take the case out of the statute of frauds. Pearsall v. Henry, 153 Cal. 314, 326, 95 P. 154. See monograph, 101 A. L. R., 1105, f. 1. The transaction in the instant case was in the nature of an exchange. A business was sold in consideration of cash plus land to be devised. The contract was fully performed by all of the parties with, the sole exception that the oral part was breached by the decedent. Yet the written and oral parts must be considered as a whole notwithstanding the defendant, William E. Cook, was not obligated by what was oral. Considered as a whole, the contract was fully performed by the plaintiffs and such defendant and partially performed by the decedent. This is distinctively a case in which there is such part performance of the contract as a whole as takes it out of the statutes and makes it enforceable.
3. Did plaintiffs come into court with clean hands?
Defendant, William E. Cook, claims that the plaintiffs, his sisters, have been guilty of reprehensible conduct in that they held secret meetings with their mother, the decedent, which were not revealed to him until after his mother's death, or for a period of twenty years. Of course, a court of equity may refuse a decree on the ground of reprehensible or unconscionable conduct. As stated in the preliminary statement each one of the plaintiffs received $2,500 for her interest in the undertaking business in addition to the mother's oral agreement to leave them her real property by will.
There is undisputed evidence that the interest of each of the plaintiffs in the undertaking business was worth $7,000 or more. Under these circumstances the mother was getting the interest she purchased from her daughters for much less than it was worth unless the difference was made up by the devise of her real estate. With the assistance and active cooperation of the decedent the son was getting his share of the purchased interest in the business for much less than it was worth absolutely. It would be in keeping with good conscience and fair dealing for the mother to make good the difference between the cash paid and the true value of the property so that the daughters would not be the losers. The son can hardly be heard to complain that the daughters do not have clean hands when they seek to compel performance of the promise of the mother which gave to the daughters a fair price for their property — the very thing the son would not do. Under the circumstances the contractual obligations arising from the writings and oral agreement were just as to all parties concerned.
4. Defendant claims that the evidence offered by plaintiffs was not clear and convincing.
An examination of the record discloses that all the competent evidence was in favor of the plaintiffs. This court is not required to weigh the evidence but will examine it where a high degree of proof is required in order to determine whether it attains that standard. Frate v. Rimenik, 115 Ohio St. 11, 18, 152 N.E. 14, We can only reach the conclusion that there was clear and convincing proof of plaintiffs' case. Indeed there was no evidence to the contrary on the principal issue in this case.
5. The defendant, William E. Cook, claims that plaintiffs are estopped from asserting the oral part of the contract.
This contention goes back to the so-called secret agreement. The mother had a right to make a will and leave her property to whomsoever she chose. The plaintiffs likewise had a right to enter into a contract the consideration for which was in part the promise to devise property to them. Smith v. Nyburg, 136 Kan. 572, 16 P.2d 493. The fact that the plaintiffs entered into such a contract with their mother, depriving the defendant Cook of an inheritance, which he would have received upon the death of his mother intestate if the contract had not been made, would of itself not work an estoppel against the plaintiffs. He was not misled to his injury by the secret agreement for the simple reason that he was not deprived of anything to which he was entitled.
6. The defendant, William E. Cook, further claims, that the plaintiffs here have an adequate remedy at law.
Plaintiffs could not maintain an action against the defendant Cook for the difference between the cash consideration paid and the actual value of the real property of which the mother died seized, for he did not breach his contract. The plaintiffs could sue the estate for breach of contract but are not relegated to that kind of action exclusively as an action at law does not ordinarily afford an adequate remedy for refusal to convey real estate in accordance with a valid agreement. An enforceable contract to leave real property by will constitutes no exception to the rule. On the death of the contracting owner legal title will descend to the heirs of the decedent subject to the right of the plaintiffs to specific performance. Emery v. Darling, 50 Ohio St. 160, 161, 33 N.E. 715.
This court finds no prejudicial error on the face of the record, and, therefore, the judgment is affirmed.
Judgment affirmed.
WEYGANDT, C.J., TURNER, MATTHIAS, HART and ZIMMERMAN, JJ., concur.
BETTMAN, J., not participating.