Sandfoss v. Jones

California Supreme Court Jul 1, 1868Published

Before: Sanderson

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Holding. A verbal agreement to purchase property at a sheriff's sale for the benefit of an execution debtor, where the purchaser uses the debtor's funds or acts in a manner that would make repudiation a fraud, is enforceable in equity and not barred by the Statute of Frauds.

Issues

Whether a verbal agreement to purchase land at a sheriff's sale for the benefit of the execution debtor is void under the Statute of Frauds.
Whether a resulting trust arises when property is purchased at a sheriff's sale using the debtor's funds pursuant to a verbal agreement.
Whether allegations of fraudulent intent in entering a verbal agreement to hold property for another take the contract out of the Statute of Frauds.

Disposition. reversed

Quotations verified verbatim against the opinion

“To allow the defendants, under such circumstances, to evade their promise, would be to enable them to practice a fraud upon Bartram, and convert a statute designed to prevent frauds into a shield for their protection.”

“The statute was designed for no such purpose. It was designed to prevent fraud, not to promote it.”

Synopsis

Section Six (Chapter One) op Statute op Frauds.—The provisions of the sixth section (Chapter One) of the Statute of Frauds relate exclusively to corir tracts in respect to real estate.

Idem.—A verbal agreement was made by J. and B., who were two of several] judgment creditors, with Bartram, an execution debtor, who owned a. large amount of real and personal property, then under execution levy, but still in Bartram's possession, the value of which exceeded the amount due on the exemptions by over one half, to take into their immediate possession, in their own names, and to purchase all of said property at the Sheriff's sale for the benefit of Bartram, and to advance their own money, if necessary for that purpose; and when they should have repaid themselves for said advances, with interest, together with the amount of their own judgment demands out of the rents, issues and profits of the property, and the sales of such portions of the personal property as could he advantageously sold by them, to reconvey the portions of the property unsold to Bartram: Held, that so far as the agreement contemplated the payment by J. and B. to he made from the proceeds of Bartram's property, there was raised a resulting trust in favor of Bartram, and it was, therefore, not within the Statute of Frauds; and so far as the agreement contemplated the payment by J. and B. to be made from money to be advanced by J. and B., it was equivalent to a loan of the money and a taking of the title as a security for its repayment, under such circumstances as would amount to a fraud upon Bartram if J. and B. should afterwards he allowed to repudiate the agreement, and was, therefore, not within the statute.

Idem.—To allow!, and B. under such cirucmstanccs to evado their promise, would be to enable them to i>ractice a fraud upon Bartram, and convert a statute designed to prevent frauds into a shield for their protection.

Idem.—If in such case !. and B. acted from the outset in had faith, and entered into said agreement with the intent and for the- purpose of defrauding Bartram, by betraying him into a false confidence, and thus to get possession of his property, such fraud on their part would, of itself, take the ease out of the operation of the Statute of Frauds.

By the Court, Sanderson, J. : The defendants demurred to the complaint; the demurrer was sustained, and, the plaintiff having signified his intention to stand upon his complaint, the action was dismissed. The only ground of demurrer worthy of special notice relates to the validity, under the Statute of Frauds, of the verbal agreement, of which the plaintiff seeks a specific performance. The material facts stated in the complaint are as follows:

In August, 1865, one Bartram was the owner of a tract of valuable timber land in El Dorado County, and certain improvements thereon, consisting of a sawmill with its machinery and appurtenances, a blacksmith shop, a planing mill, and a hotel, with barns and outhouses. He was also the owner of a large amount of personal property used by him in the lumber and hotel business, which was being conducted by him upon the aforesaid real estate, consisting of mules, horses, cows, oxen, cattle, hogs, wagons, harness, chains, trucks, hay, liquors, provisions, furniture, lumber, etc.; the real estate being of the value, as alleged, of twenty thousand dollars, and the personal property of the value of fifteen thousand dollars—amounting, in the aggregate, to thirty-five thousand dollars. He was, however, indebted to various parties in the aggregate sum of about sixteen thousand and three hundred and seventy-five dollars—of which amount three thousand dollars on note and mortgage was due to the defendant Jones, and two thousand dollars to the defendant Blanchard. All his creditors brought suit—the defendant Jones to foreclose, and the others by attachments— under which all of the aforesaid property was attached, but left by the officer in Bartram’s possession. Under these circumstances, Bartram applied to the defendants Jones and [485]Blanchard for assistance. After several interviews, it was verbally agreed between Bartram on the one side, and the defendants Jones and Blanchard on the other, “that Jones and Blanchard should receive possession of all of said property from Bartram, and should continue the business in their own names, and should sell so much of the personal property as could be spared from the business, and use the proceeds in the payment of Bartram’s debts, and should also advance money of their own for the same purpose, so far as they should be able to do so; and that with the means thus acquired, and the profits of the business, should pay off Bar-tram’s debts, including the debt of Jones secured by mortgage; and that if any of the property should go to Sheriff’s sale under judgments which might be rendered in the actions aforesaid, they would bid it in, and hold the title as security for such advances as they might make and the debts which would then be their due, and that Bartram should oversee the business as their agent; and that whenever the sales of personal property, to be made by them, and the profits of the business should reimburse them for all advances and pay the debts due them, they should reconvey to Bar-tram the title, if any, acquired by them at Sheriff’s sale, and restore to him the possession of the real estate, and all the personal property remaining unsold.”

Sandfoss v. Jones

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