Imperator Realty Co. v. . Tull , 228 N.Y. 447 ( 1920 )

The statute says that a contract for the sale of real property "is void unless the contract, or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the * * * grantor, or by his lawfully authorized agent" (Real Property Law, sec. 259 [Statute of Frauds]; Consol. Laws, ch. 50). In this instance, each party was a grantor, for the sale was an exchange. I think it is the law that where contracts are subject to the statute, changes are governed by the same requirements of form as original provisions (Hill v. Blake, 97 N.Y. 216; Clark v.Fey, 121 N.Y. 470, 476). Abrogated by word of mouth such a contract may be (Blanchard v. Trim, 38 N.Y. 225), but its obligation may not be varied by spoken words of promise while it continues undissolved (Swain v. Seamens 9 Wall. 254, 271, 272; Emerson v. Slater, 22 How. [U.S.] 28, 42; Goss v.Lord Nugent, 5 B. Ad. 58; Harvey v. Graham, 5 Ad. El. 61; Hickman v. Haynes, L.R. 10 C.P. 598; Abell v. Munson,18 Mich. 306; Malkan v. Hemming, 82 Conn. 293; Long v.Hartwell, 34 N.J.L. 116; Rucker v. Harrington,52 Mo. App. 481; Bradley v. Harter, 156 Ind. 499; Jarman v.Westbrook, 134 Ga. 19; 1 Williston on Contracts, sec. 593). A recent decision of the House of Lords reviews the English precedents, and declares the rule anew (Morris v. Baron Co., 1918, A.C. 1, 19, 20, 31). Oral promises are ineffective to make the contract, or any part of it, in the beginning (Wright v. Weeks, 25 N.Y. 153; Marks v. Cowdin, 226 N.Y. 138). Oral promises must also be ineffective to vary it thereafter (Hill v. Blake, supra). Grant and consideration alike must find expression in a writing (Real Prop. Law, sec. 259; Consol. Laws, ch. 50).

Some courts have drawn a distinction between the formation of the contract and the regulation of performance (Cummings v.Arnold, 3 Metc. 486; Stearns v. Hall, 9 Cush. 31;Whittier v. Dana, 10 Allen, 326; Hastings v. Lovejoy,140 Mass. 261; Wood on Statute of Frauds, p. 758). The distinction has been rejected in many jurisdictions (see cases cited supra; also L.R.A. 1917 B. 141 note). It has never been accepted by this court, and the question of its validity has been declared an open one (Thomson v.Poor, 147 N.Y. 402, 408, characterizing as dicta the statements in Blanchard v. Trim, supra). I think we should reject it now. The cases which maintain it hold that oral promises in such circumstances constitute an accord, and that an accord, though executory, constitutes a bar if there is a tender of performance (Cummings v. Arnold; Whittier v. Dana, supra). There seems little basis for such a distinction in this state where the rule is settled that an accord is not a bar unless received in satisfaction (Reilly v. Barrett, 220 N.Y. 170; Morehouse v.Second Nat. Bank of Oswego, 98 N.Y. 503, 509; Ladd v. King,1 R.I. 224; Pollock on Contracts [3d Am. ed.], p. 822). But there is another objection, more fundamental and far reaching. I do not know where the line of division is to be drawn between variations of the substance and variations of the method of fulfilment. I think it is inadequate to say that oral changes are effective if they are slight, and ineffective if they are important. Such tests are too vague to supply a scientific basis of distinction. "Every part of the contract, in regard to which the parties are stipulating, must be taken to be material" (Per PARKE, B.,Marshall v. Lynn, 6 M. W. 109, 117; 1 Williston on Contracts, sec. 594). The field is one where the law should hold fast to fundamental conceptions of contract and of duty, and follow them with loyalty to logical conclusions.

The problem, thus approached, gains, I think, a new simplicity. A contract is the sum of its component terms. Any variation of the parts is a variation of the whole. The requirement that there shall be a writing extends to one term as to another. There can, therefore, be no contractual obligation when the requirement is not followed. This is not equivalent to saying that what is ineffective to create an obligation, must be ineffective to discharge one. Duties imposed by law irrespective of contract may regulate the relations of parties after they have entered into a contract. There may be procurement or encouragement of a departure from literal performance which will forbid the assertion that the departure was a wrong. That principle will be found the solvent of many cases of apparent hardship. There may be an election which will preclude a forfeiture. There may be an acceptance of substituted performance, or an accord and satisfaction (McCreery v. Day, 119 N.Y. 1, 9; Swain v.Seamens; Long v. Hartwell; Ladd v. King, supra). What there may not be, when the subject-matter is the sale of land, is an executory agreement, partly written and partly oral, to which, by force of the agreement and nothing else, the law will attach the attribute of contractual obligation.

The contract, therefore, stood unchanged. The defendant might have retracted his oral promise an hour after making it, and the plaintiff would have been helpless. He might have retracted a week before the closing, and if a reasonable time remained within which to remove the violations, the plaintiff would still have been helpless. Retraction even at the very hour of the closing might not have been too late if coupled with the offer of an extension which would neutralize the consequences of persuasion and reliance (Arnot v. Union Salt Co., 186 N.Y. 501; Brede v. Rosedale Terrace Co., 216 N.Y. 246). The difficulty with the defendant's position is that he did none of these things. He had notified the plaintiff in substance that there was no need of haste in removing the violations, and that title would be accepted on deposit of adequate security for their removal in the future. He never revoked that notice. He gave no warning of a change of mind. He did not even attend the closing. He abandoned the contract, treated it as at an end, held himself absolved from all liability thereunder, because the plaintiff had acted in reliance on a consent which, even in the act of abandonment, he made no effort to recall.

I do not think we are driven by any requirement of the Statute of Frauds to sustain as lawful and effective this precipitate rescission, this attempt by an ex post facto revocation, after closing day had come and gone, to put the plaintiff in the wrong. "He who prevents a thing from being done may not avail himself of the non-performance which he has, himself, occasioned, for the law says to him, in effect; `This is your own act, and, therefore, you are not damnified'" (Dolan v. Rodgers,149 N.Y. 489, 491, quoting West v. Blakeway, 2 M. Gr. 751). The principle is fundamental and unquestioned (U.S. v. Peck,102 U.S. 64; Gallagher v. Nichols, 60 N.Y. 438; Risley v.Smith, 64 N.Y. 576, 582; Gen. El. Co. v. Nat. ContractingCo., 178 N.Y. 369, 375; Mackay v. Dick, 6 App. Cas. 251;New Zealand Shipping Co. v. Societe des Aletiers, etc., 1919 A.C. 1, 5). Sometimes the resulting disability has been characterized as an estoppel, sometimes as a waiver (Gallagher v. Nichols; Gen. El. Co. v. Nat. Contr. Co.; Thomson v.Poor, supra). We need not go into the question of the accuracy of the description (Ewart on Estoppel, pp. 15, 70; Ewart on Waiver Distributed, pp. 23, 143, 264). The truth is that we are facing a principle more nearly ultimate than either waiver or estoppel, one with roots in the yet larger principle that no one shall be permitted to found any claim upon his own inequity or take advantage of his own wrong (Riggs v. Palmer, 115 N.Y. 506). The Statute of Frauds was not intended to offer an asylum of escape from that fundamental principle of justice. An apposite precedent is found in Thomson v. Poor (147 N.Y. 402). In deciding that case, we put aside the question whether a contract within the Statute of Frauds could be changed by spoken words. We held that there was disability, or as we styled it, estoppel, to take advantage of an omission induced by an unrevoked consent (Cf. Swain v. Seamens, supra, at p. 274; Arnot v.Union Salt Co.; Brede v. Rosedale Terrace Co., supra; 1 Williston on Contracts, sec. 595). A like principle is recognized even in the English courts, which have gone as far as those of any jurisdiction in the strict enforcement of the statute. They hold in effect that until consent is acted on, either party may change his mind. After it has been acted on, it stands as an excuse for non-performance (Hickman v. Haynes, L.R. 10 C.P. 598, 605; Ogle v. Lord Vane, 2 Q.B. 275; 3 id. 272; Cuff v.Penn, 1 Maule S. 21; Morris v. Baron Co., 1918 A.C. 1, at p. 31). The defendant by his conduct has brought himself within the ambit of this principle. His words did not create a new bilateral contract. They lacked the written form prescribed by statute. They did not create a unilateral contract. Aside from the same defect in form, they did not purport to offer a promise for an act. They did, however, constitute the continuing expression of a state of mind, a readiness, a desire, persisting until revoked. A seller who agrees to change the wall paper of a room ought not to lose his contract if he fails to make the change through reliance on the statement of the buyer that new paper is unnecessary and that the old is satisfactory. The buyer may change his mind again and revert to his agreement. He may not summarily rescind because of the breach which he encouraged. That is what the defendant tried to do. When he stayed away from the closing and acted upon an election to treat the contract as rescinded, he put himself in the wrong.

I concur in the conclusion that the judgment must be reversed.

HISCOCK, Ch. J., POUND and ANDREWS, JJ., concur with CHASE, J.; CARDOZO, J., concurs in opinion, in which POUND and ANDREWS, JJ., also concur; COLLIN and CRANE, JJ., dissent.

Judgment reversed, etc.