Am. Dec. 286, the parties owned a tract of their oral promise to pay him a portion of land as tenants in common, one four-sixths and the other two-sixths, which they agreed to divide equally, one party to pay the other "one-sixth. The conveyances were made, but the promisor refused to pay for the one-sixth, for which the promisee brought suit in assumpsit. Proof of the promise to pay was objected to upon the ground that it was within the statute of frauds, but the Supreme Court held against this contention, for the reason that "this action is 'not on a contract for sale of lands, or any interest in lands. The law raises a promise to pay, and, in such case it is not within the statute of frauds, although it be raised from an agreement concerning an interest in lands"-citing Shephard v. Little, 14 Johns. (N. Y.) 210, where it is held that assumpsit will lie to recover the consideration for lands sold and conveyed. In Wetherbee v. Potter, 99 Mass. 354, two of four purchasers of real estate agreed to furnish the consideration price, and the two agreed that one should pay the entire sum upon the promise of the other that he would reimburse him to the extent of one-half of the cost. In an action in assumpsit for the one-half of the cost, the defendant set up the statute of frauds. The court held that, although the money was advanced for the purpose of purchasing real estate and upon an oral agreement to that effect, it is not of itself a contract for the sale of land, and if the money be in effect advanced before the request is revoked, an action upon such promise is not forbidden by the statute. And also in Root v. Burt, 118 Mass. 521, it was held, in a suit to recover the price of land sold and conveyed, that as a contract for the sale of lands, it is taken out of the statute by an executed and accepted convey ance. the consideration money. He, relying upon that promise, parted with his land to the party the defendants had contracted with, thus completing for them the sale they had in writing agreed to secure, and thereby relieving them from their obligation to the vendee concerning the sale of the land, or of any interest therein, which is a sufficient and legal consideration for their promise. Having by their promise to plaintiff been enabled to fufill their written obligation, binding under the statute, it would further the perpetration of a fraud of most flagrant character to allow the defendants to escape carrying out their bargain with the landowner, and this ought not to be permitted, unless their promise is barred by the statute, and we think it is not. If the conveyance had been made to the defendants, their promise, although oral, to pay the consideration would not be within the statute, and their legal obligation to the vendor is not altered because he conveys to their nominee instead of to them, for they get a benefit from the conveyance in either event, and it is illogical to argue that what the plaintiff did for the defendants at their request was not a performance of their contract by the plaintiff, who advanced his land for their exoneration. Whether it was money or land which they had contracted to supply, and which the plaintiff supplied for them, is of no consequence, for, as was well said by Chief Justice Hornblower in Linn v. Cook, 19 N. J. Law, 11, whenever the plaintiff has discharged an obligation of the defendant "to any other person, by applying his own money, goods, chattels, securities, or land to such discharge, he may recover the amount so paid or satisfied, in an action of general indebitatus assumpsit for money paid." In Woodward, Adm'r, v. Smith, 7 Ala. 112, In Lewis v. Grimes, 30 Ky. (7 J. J. Marsh.) S. agreed with O. to sell him a tract of land, 336, the action was in assumpsit to recover but when the conveyance was about to be part of the consideration promised by de- made, it was discovered that the title to a fendant, and the court held: "An assumpsit part of the tract was in the vendor's son, to pay for land is not a 'contract for the sale who at his father's request conveyed his of land. Neither the letter, policy, nor ob- tract to O. In a suit for money had and reject of the statute of frauds and perjuries ceived by the son to recover compensation should be deemed to embrace or apply to a from his father's estate for the land conveypromise, express or implied, to pay for landed at his father's request, it was held that which the vendor has conveyed or cove- the promise of the father to pay the son was nanted to convey. * * Surely a conveyance of land, or a covenant to convey land, would be a legal and sufficient consideration for a binding promise to pay its actual or conventional value." A right of action to recover the consideration of land already conveyed, based upon an oral promise, is also declared in Thayer v. Viles et al., 23 Vt. 494. In the case under review, the defendants had in writing contracted to "secure and convey to said company in fee simple" land the title to which was vested in the plaintiff. This was a binding contract which the defendants not within the statute. "Indeed we cannot perceive any sound distinction between a conveyance to the bargainee of land and a conveyance to one at his nomination; and we have heretofore held that assumpsit might be brought when a deed had been executed and accepted, although the contract of purchase was oral only." To the same effect is Follmer v. Dale, 9 Pa. 83, where Dale conveyed to one Garman, in consideration of the oral promise of Follmer that he would pay the consideration if conveyance was made to Garman. The deed and Dale brought suit against Follmer as, promise which has no concern with the sale guarantor. The defense was that the prom- of land or of any interest therein. The sale ise to pay the consideration was not in writ- was closed when plaintiff conveyed, and ing, and therefore void under the statute. | nothing remained to be done to complete the The court held in effect that, as Dale would sale of the land. The promise which inducnot have conveyed without the promise of ed the conveyance became a debt of those Follmer to pay, the promise was not within who agreed to pay the consideration, enforcethe statute, and said, "To enable Follmer to able as an implied obligation arising in part cut himself loose from the contract would from what the plaintiff did under the influencourage, not prevent, fraud." We have no ence of the contract. Spengeman v. Palesdoubt that where a sale of land is executed tine Building Association, supra. by delivery and acceptance of a conveyance passing the title, a previous oral promise to pay the consideration, whether the conveyance be to the promisor or to his nominee, is not within the statute of frauds, for the consideration of the promise is executed, and the law implies a debt recoverable in assumpsit, when there has been a previous request by the defendant to convey to him, or to his nominee, coupled with circumstances showing that both parties expected that plaintiff would be recompensed for complying with such request, and the action is not limited to cases where money alone has been expended, but extends to those where goods, securities, or land have been parted with on a previous express request. It is not without significance that these defendants, in the contract they made with the Sims-Kent Company, required it to deposit in the bank a sum of money subject to their order, or to the order of a majority contracting to convey, as a guaranty that after conveyance that company would proceed to erect the factory on the land. The sum required to be deposited was not the full consideration named in the deed, but only $2,000, which was the precise sum which plaintiff's case shows they promised to pay him, and the inference is permissible that this was required to secure the defendants for the cost of the land, if the Sims-Kent Company did not make the agreed use of it. It further appears that these defendants subsequently assented to the withdrawal of the $2,000 by the depositing company when it had, to their satisfaction, complied with the terms of its contract with them, which may be taken, until otherwise explained, as an indication that the consideration which defendants contracted for as the price of the conveyance of the land had been fulfilled by their nominated vendee to their satisfaction, which would justify the inference of an accepted performance of the covenant contained in the contract of sale beneficial to them. In this case there was testimony from which may be inferred, not only a request to convey, but a promise by the defendants to pay a part of the value of the land, which at their request the plaintiff conveyed to their nominee in satisfaction of their contract, and when plaintiff advanced his land to relieve these defendants, at their request, the law raised an implied promise by the de The appellant devotes a portion of his brief to the question whether the promise was a joint obligation or several, arguing that it was joint, but the defendant does not suggest or argue this question in his brief, nor was the motion for nonsuit put upon that ground, but, assuming that it is raised in this case, there was evidence from which a jury might find the promise to be joint, or joint and several, and therefore that question should have been left to them as a question of fact. On this question the plaintiff testified that when the effort to induce the local Improvement Association to purchase plaintiff's land proved to be unsuccessful, he proposed that five or six of the citizens, of whom he was one, should pay for the land, and thereupon the defendants and plaintiff agreed with each other to purchase the land from plaintiff for the Sims-Kent Company; that the price was finally fixed at $2,500, of which the plaintiff was to contribute $500, and the balance, $2,000, to be paid to him by the other five parties. An inference of a joint obligation to pay may be drawn from this, and therefore, even if this question was relied upon by defendant, a nonsuit would not have been proper, but the question whether the obligation was joint or several depending upon the testimony was a jury question. There was some evidence tending to show that, as between the promisors, they expected each to contribute $400 towards the fund, but that would not of itself destroy their joint obligation to pay the whole sum to the plaintiff, if a joint promise existed. The argument is advanced that oral proof of a promise to pay the consideration, if the vendor, upon request of the promisor, would convey to a third party, with whom the promisor had contracted to secure a conveyance of land to the vendee, would subject an alleged promisor to the danger of false testimony tending to establish such promise, but that danger is inherent in every case where it is sought to enforce a promise or fix the legal liability of a party in the case of any engagement clearly not within the statute. And if, as we hold, the promise to pay the consideration for an executed conveyance, under the circumstances present in this case, is not within the statute, proof of such promise is subject to the veracity of witnesses as in all cases of like character. GUMMERE, C. J., and MINTURN and is all the vendor can do, and the contract KALISCH, JJ., dissent. WHITE, J. (concurring). The purpose of the statute of frauds is to prevent fraud. The question of its applicability is largely dependent upon this purpose. The statute is therefore not permitted to be invoked to perpetrate an equitable fraud. Vreeland v. Vreeland, 53 N. J. Eq. 387, 32 Atl. 3, and cases there cited. I think that it is because of this wellestablished doctrine that a parol contract for the sale of real estate, which has been executed by a conveyance by the vendor and an acceptance by the vendee, will support an action by the vendor against the vendee for the agreed purchase price. 20 Cyc. 231, and cases there cited. may, in a sense, be said to be performed so far as he is concerned. But in the absence of acceptance of the conveyance by the vendee, the statute interposes an absolute barrier to the enforcement of the contract. When, however, the vendee has accepted the benefit of performance of the contract by the vendor, a new element intervenes. To permit the vendee to then say that the contract could not be enforced against him because of the statute would be to permit him to invoke the statute in order to perpetrate the fraud of procuring a benefit on the faith of the promise to pay for it, and then, while retaining the benefit, repudiating that promise. The all-important element, therefore, is the acceptance by the vendee of the benefit of the performance. Without this acceptance there is no fraud, and mere performance by the vendor is without effect upon the barrier interposed by the statute. I am for this reason unable to agree with that portion of the foregoing opinion which states that a conveyance by the vendor to, and an acceptance of the conveyance by, a third party, to whom, by the terms of the verbal contract of sale the conveyance was to be made, without further act on the part of the other party to the verbal contract, the vendee, will suffice to take the case out of the prohibition of the statute, so that the price may be recovered from such vendee. All that he did was to enter into a verbal contract for the sale of land. The statute made that contract unenforceable against him, unless he, by some other act, accepted the benefit of performance of that contract, in which case it would be a fraud for him to invoke the statute. He did not accept such benefit. Where is his fraud? What has he done to estop him from claiming a protection (the statute) to-day after the conveyance to the third party which admittedly he had a perfect right to claim yesterday, before such conveyance? He has not accepted anything, nor has he received any benefit. I am unable to see that he is estopped from asking the protection of the statute. I am aware that in Murray v. Schuldt, 73 N. J. Law, 489, 63 Atl. 904, the Supreme Court said that the recovery would be, not upon the express contract, but upon an implied contract, to pay for the land so conveyed; but what that case really decided was that it was error for the trial judge to exclude evidence of the price agreed upon in the express parol contract, which seems to me to substantiate my view rather than the one expressed in the opinion filed in that case. I cannot think that a man who has received and accepted a conveyance of real estate in pursuance of a parol contract to pay therefor the sum of $10,000 may escape with a payment of $3,000 by proving that to be the real value of the land; nor that a man who has received a conveyance of real estate in pursuance of a parol contract to pay $3,000 therefor may be required to pay $10,000 upon proof that such was the real value of the property conveyed. Of course, it is true that where the parol contract to sell real estate has not been carried out by the conveyance, money paid for or on account of the purchase price may be recovered back, or services, properly measurable in money value, may be recovered for on a quantum meruit, both upon an implied contract. Smith v. Smith, 28 N. J. Law, 208, 78 Am. Dec. 49; Cooper v. Colson, 66 N. J. Eq. 328, 58 Atl. 337, 105 Am. St. Rep. 660, 1 Ann. Cas. 997; Gay v. Mooney, 67 N. J. Law, 28, 50 Atl. 596. But, the reason for this is that the parol contract to sell the real estate, not having been performed, is barred by the statute, and, consequently, the payment or the performance of services, being without consideration, and under circumstances neg- ter, and in a story of a verbal contract by ativing a gratuity, raises an implied contract. Where the parol contract to sell real estate has been performed, however, by the conveyance, the payment of the price, as it seems to me, is compelled, not upon the theory of the nonexistence of the parol contract, but in pursuance and enforcement of it. Under this view, obviously, a tender to the vendee of the conveyance, duly executed That the situation presents an apt case for the application of the statute goes almost without saying. It is difficult to imagine a more appropriate subject for such application than one presented by the picture of an anxious seller and an obliging impecunious friendly buyer uniting, for mutual interests, in a conveyance from the former to the lat the former with a financially responsible third party, whereby the payment of the price is foisted upon such third party. Surely a statute to prevent fraud has excellent ground for application here. Its terms seem quite broad enough to cover it. In fact it would seem to have covered it twice; once, as to the contract itself in the prohibition against a verbal contract for the sale of ness. acceptance of benefit by a third party) upon | merely executory, and did not constitute an acwhich the exception is proposed to be ground- cord and satisfaction of the existing indebteded, in its prohibition of a verbal contract to [Ed. Note. For other cases, see Accord and pay the debt of another. Satisfaction, Cent. Dig. §§ 116-122; Dec. Dig. § 16.*] It may be that where the vendee comes in and admits the verbal contract and a request by him to convey to the third party, which was done, he may be estopped from setting up the statute because he has waived its protection by admitting the absence of what it is the purpose of the statute to prevent; but, where he admits nothing and simply invokes the statute, I think there is every justification for its intervention. [Ed. Note. For other cases, see Novation, Cent. Dig. § 1; Dec. Dig. § 1.* Novation means that, there being a contract I concur, however, in a reversal of this in existence, some new contract is substituted judgment because in this case there was an therefor either between the same or different act of acceptance by the vendees, the defend- parties; the consideration mutually being the discharge of the old contract. Every novation ants, of performance by the vendor of the embraces, necessarily, an accord and satisfacverbal contract of sale. That acceptance con- tion; the principal distinguishing feature besisted in their joining in a perfectly legal tween them being that a novation implies the extinguishment of an existing debt by the parand binding written contract with the third ties thereto and its transition into a new existparty (the Sims Company), whereby they ence between the same or different parties. obligated themselves to procure the convey- whereas, an accord and satisfaction relates soleance in question to be made, and the subse-ly to the extinguishment of the debt or obligation. quent execution and delivery by the verbal vendor of that conveyance to the benefit of such vendees in the discharge of their said legal obligation. The vendees legally bound themselves to procure the making of this conveyance by the vendor, who then, at their request, discharged their obligation by making it. Clearly they have accepted performance of the verbal contract of sale, and have received the benefit of such performance. They now propose to retain that benefit, and, by invoking the statute, to decline to pay what they agreed to pay for it. That to permit them to do so would be to sanction a use of a statute for the prevention of fraud to perpetrate a fraud is equally clear. This view, that appears not to have been presented, or evidently was overlooked, when this case was before the Supreme Court on rule to show cause (79 N. J. Law, 10, 74 Atl. 151), leads me to concur in the reversal of the judgment; but I dissent from the much wider declaration contained in the majority opinion, not only because I think it is not involved in the decision of this case, but because it leaves wide open one of the doors leading to the perpetration of fraud, which. in my judgment, it was the expressed purpose of the statute to close. (85 N. J. L. 692) COOKE v. MeADOO. For other definitions, see Words and Phrases, vol. 5, pp. 4848-4851; vol. 8, p. 7733; vol. 1. pp. 81-84; vol. 8, p. 7561.] 4. NOVATION (4*)-EXECUTORY AGREEMENT. Plaintiff offered, in case defendant would substitute a single note, with interest payable semiannually, for his several existing notes to plaintiff, plaintiff would carry the note so long as interest was paid and defendant continued to own an interest in certain property. Defendant on several occasions told plaintiff he was ready to deliver to him a single note for the others, but never made a tender thereof, and the agreement was never executed. Held that, in the absence of such tender, the agreement did not constitute a novation so as to bar plaintiff's right to sue on the old debt. [Ed. Note.--For other cases, see Novation, Cent. Dig. § 4; Dec. Dig. § 4.*] Appeal from Supreme Court. Action by Charles D. Cooke against Malcom R. McAdoo. Judgment for plaintiff, and defendant appeals. Affirmed. Michael Dunn, of Paterson, for appellant. Wayne Dumont, of Paterson, for respond ent. KALISCH, J. There was a direction of a verdict for the plaintiff for the sum of $16,014.96. Neither the indebtedness nor the amount thereof was disputed by the defend ant. The sole defense relied on in the court (Court of Errors and Appeals of New Jersey. below and insisted upon here as a bar to the March 16, 1914.) plaintiff's right of recovery was and is that the proof in the case showed that there had been a novation of the debt sued upon. This, the appellant claims, is made to appear by correspondence had by him with the plaintiff. The plaintiff wrote to the appellant: "If you will substitute a single note, with interest payable semiannually, for the several notes of yours which I now hold, I agree for myself and my personal representa- [accord and satisfaction; but the converse of tives to carry this note for you so long as this proposition is not true. Lord Chancellor interest thereon shall be paid as and when Selborne, in Scarf v. Jardine, L. R. 7 App. due, and so long as you shall continue to Cas. 351, says, "Novation," a term borrowed hold and own approximately a one-third in- from the Roman law, means this, "that, there terest in the proposed option on the New being a contract in existence some new conYork & New Jersey Rapid Transit Company tract is substituted for it, either between the Syndicate property, and the extension or same or different parties; the consideration extensions thereof as at present proposed in mutually being the discharge of the old concase such extensions be arranged. tract." Morecraft v. Allen, 78 N. J. Law, This letter is dated January 17, 1911. Five 729, 75 Atl. 920. days later the plaintiff wrote appellant as follows: "It was always my intention to hold your notes until you had worked out of your financial troubles. This is shown by my conduct in the past, and my intention has in no way altered. I suggest that you substitute a single note for the several notes which you now have. I agree for myself and personal representatives to carry this note for you during the life of the proposed option on the New York & New Jersey Rapid Transit Company Syndicate property, and the extension thereof as at present proposed, in case such an extension be arranged, unless the option be sooner exercised, in which event the first proceeds of your share in the option are to be applied to the payment of the note." [4] Now in the case, sub judice, the appellant claims, because he had on several occasions told the plaintiff that he was prepared to deliver to him a single note for the various separate notes, and received the replies that the notes were in a safety deposit box in the city of Paterson, and that he (the plaintiff) would get them for him, that this was tantamount to an execution of the terms of the agreement, and equivalent to an accord and satisfaction or a novation. But, for the reasons already stated, this is not so. The appellant, in fact, never made a tender of any note to the plaintiff. It was the duty of the appellant, if he desired the extension of time, to seek the plaintiff and offer the single note in substitution, and this he never did. The appellant never substituted a single note, [1, 2] To the proposed arrangements, the and, though it appears he offered to do it appellant acceded. It is important in this whenever the plaintiff produced the old connection to note that the agreement is, notes, this constituted no bar to the action. in effect, neither a novation nor an accord For the legal rule is well settled that, if an and satisfaction. It is wholly executory in agreement intended as a novation is concharacter. It clearly contemplates some- ditional, the novation can only take effect thing to be done by the defendant for the by the performance of the condition before extinguishment of the old debt, and that the debt is extinct. 29 Cyc. 1134. In the was to give the plaintiff a single note in present case, in order for the defendant be-` substitution of the old note, and this the low to have succeeded in his defense, it was plaintiff never did. It was not an accord incumbent upon him to establish that a new and satisfaction for, though there was proof note was substituted for the old indebtedof an accord, there was no proof of a satis-ness, and that it was accepted by the plainfaction. A defense of accord and satisfac- tiff in extinguishment of the old debt. Havtion will be of no avail in an action at law, ing failed to do this, the defense was propwhere it appears to have been only partly erly overruled, and the verdict properly diexecuted. Oliver v. Phelps, 20 N. J. Law, rected. 180; Line et al. v. Nelson et al., 38 N. J. Law, 358; Stone v. Todd, 49 N. J. Law, 274, 8 Atl. 300; Headley v. Leavitt, 65 N. J. Eq. 748, 55 Atl. 731. To satisfy the requirement of the law, the accord must be executed. A mere executory agreement is not sufficient. Bandman v. Finn, 185 N. Y. 508, 78 N. E. 175, 12 L. R. A. (N. S.) 1134, and note. [3] What has been said regarding the defense of accord and satisfaction is equally applicable to that of novation, which is a species of accord and satisfaction. The principal distinguishing feature between them is that a novation implies the extinguishment of an existing debt or obligation by the parties thereto, and its transition into a new existence between the same or different parties; whereas, an accord and satisfaction relates solely to the extinguishment of the debt or obligation. Judgment will be affirmed. (85 N. J. L. 696) DAVIS v. CLARK. CHASER. Under Negotiable Instruments Act ( Comp. St. 1910, p. 3741), §§ 56, 57, declaring that to constitute notice of an infirmity, the person to whom an instrument is negotiated must have actual knowledge, or knowledge of such facts that his taking the instrument amounts to bad faith, and that a holder in due course takes the instrument free from defenses available against prior holders, a holder for value before maturity of a note procured by the payee's fraud cannot be defeated because there were circumstances sufficient to put him on inquiry, but not to make his taking of the note fraudulent. [Ed. Note. For other cases, see Bills and Every novation embraces, necessarily, an Notes. Cent. Dig. § 869; Dec. Dig. § 346.*] |