Warner v. Texas & Pacific Ry. Co.Annotate this Case
164 U.S. 418 (1896)
U.S. Supreme Court
Warner v. Texas & Pacific Ry. Co., 164 U.S. 418 (1896)
Warner v. Texas and Pacific Railway Company
Argued May 5, 1896
Decided November 30, 1896
164 U.S. 418
ERROR TO THE CIRCUIT COURT OF
APPEALS FOR THE FIFTH CIRCUIT
The clause of the statute of frauds which requires a memorandum in writing of "any agreement which is not to be performed within the space of one year from the making thereof" applies only to agreements which, according to the intention of the parties as shown by the terms of their contract, cannot be fully performed within a year, and not to an agreement which may be fully performed within the year, although the time of performance is uncertain, and may probably extend, and may have been expected by the parties to extend, and does in fact extend, beyond the year.
An oral agreement between a railroad company and the owner of a mill, by which it is agreed that if he will furnish the ties and grade the ground for a switch opposite his mill, the company will put down the iron rails and maintain the switch for his benefit for shipping purposes as long as he needs it, is not within the statute of frauds as an agreement not to be performed within a year.
Packet Co. v. Sickles, 5 wall. 580, doubted.
The provisions of the statute of frauds of the State of Texas concerning sales or leases of real estate do not include grants of easements.
This was an action brought May 9, 1892, by Warner against the Texas and Pacific Railway way Company, a corporation created by the laws of the United States, upon a contract made in 1874 by which it was agreed between the parties that if the plaintiff would grade the ground for a switch and put on the ties at a certain point on the defendant's railroad, the defendant would put down the rails and maintain the switch for the plaintiff's benefit for shipping purposes as long as he needed it. The defendant pleaded that the contract was oral, and within the statute of frauds because it was "not to be performed within one year from the making thereof" and because it was "a grant or conveyance by this defendant of an estate of inheritance, and for a term of more than one year, in lands."
At the trial, the plaintiff, being called as witness in his own behalf, testified that prior to the year 1874, he had been engaged in the lumbering and milling business in Iowa and in Arkansas, and, in contemplation of breaking up and consolidating his business, came to Texas and selected a point, afterwards known as "Warner's Switch," as a suitable location, provided he could obtain transportation facilities; that he found at that point an abundance of fine pine timber, and, three miles back from the railroad, a stream, known as "Big Sandy Creek," peculiarly adapted to floating logs, and lined for many miles above with pine timber; that in 1874 the defendant's agent, after conversing with him about his experience in the lumber business, the capacity of his mill, and the amount of lumber accessible from the proposed location, made an oral contract with him by which it was agreed that if he would furnish the ties and grade the ground for the switch, the defendant would put down the iron rails and maintain the switch for the plaintiff's benefit for shipping purposes as long as he needed it; that the plaintiff immediately graded the ground for the switch, and got out and put down the ties, and the defendant put down the iron rails, and established the switch, and that the plaintiff, on the faith of the continuance of transportation facilities at the switch, put up a large sawmill, bought many thousand acres of land and timber rights and the water privileges of Big Sandy Creek, made a tram road three miles long from the switch to the creek, and otherwise expended large sums of money, and sawed and shipped large quantities of lumber until the defendant, on May 19, 1887, while its road was operated by receivers, tore up the switch and ties and destroyed his transportation facilities, leaving his lands and other property without any connection with the railroad. His testimony also tended to prove that he had thereby been injured to the amount of more than $50,000, for which the defendant was liable if the contract sued on was not within the statute of frauds.
On cross-examination, the plaintiff testified that when he made the contract, he expected to engage in the manufacture of lumber at this place for more than one year, and to stay
there and to have a site for lumber there as long as he lived, and that he told the defendant's agent, in the conversation between them at the time of making the contract, that there was lumber enough in sight on the railroad to run a mill for ten years, and by moving back to the creek, there would be enough to run a mill for twenty years longer.
No other testimony being offered by either party bearing upon the question whether the contract sued on was within the statute of frauds, the circuit court, against the plaintiff's objection and exception, ruled that the contract was within the statute, instructed the jury to find a verdict for the defendant, and rendered judgment thereon, which was affirmed by the circuit court of appeals, upon the ground that the contract was within the statute of frauds as one not to be performed within a year. 54 F. 922. The plaintiff sued out this writ of error.
MR. JUSTICE GRAY, after stating the case, delivered the opinion of the Court.
The statute of frauds of the State of Texas, reenacting in this particular the English statute of 29 Car. II, c. 3, § 4 (1677), provides that no action shall be brought "upon any agreement which is not to be performed within the space of one year from the making thereof," unless the
"agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith or by some person by him thereunto lawfully authorized."
Tex.Stat. Jan. 18, 1840; 1 Paschal's Digest (4th ed.), art. 3875; Rev.Stat. 1879, art. 2464; Bason v. Hughart, 2 Tex. 476, 480.
This case has been so fully and ably argued, and the construction of this clause of the statute of frauds has so seldom
come before this Court, that it will be useful, before considering the particular contract now in question, to refer to some of the principal decisions upon the subject in the courts of England and of the several states.
In the earliest reported case in England upon this clause of the statute, regard seems to have been had to the time of actual performance in deciding that an oral agreement that if the plaintiff would procure a marriage between the defendant and a certain lady, the defendant would pay him fifty guineas, was not within the statute, Lord Holt saying:
"Though the promise depends upon a contingent the which may not happen in a long time, yet if the contingent happen within a year, the action shall be maintainable, and is not within the statute."
Francam v. Foster (1692), Skin. 326; s.c., Holt 25.
A year later, another case before Lord Holt presented the question whether the words, "agreement not to be performed within one year" should be construed as meaning every agreement which need not be performed within the year, or as meaning only an agreement which could not be performed within the year, and thus, according as the one or the other construction should be adopted, including or excluding an agreement which might or might not be performed within the year, without regard to the time of actual performance. The latter was decided to be the true construction.
That was an action upon an oral agreement, by which the defendant promised, for one guinea paid, to pay the plaintiff so many at the day of his marriage, and the marriage did not happen within the year. The case was considered by all the judges. Lord Holt
"was of opinion that it ought to have been in writing, because the design of the statute was not to trust to the memory of witnesses for a longer time than one year."
But the great majority of the judges were of opinion that the statute included those agreements only that were impossible to be performed within the year, and that the case was not within the statute because the marriage might have happened within a year after the agreement, and laid down this rule:
"Where the agreement is to be performed upon a
contingent, and it does not appear within the agreement that it is to be performed after the year, then a note in writing is not necessary, for the contingent might happen within the year; but where it appears by the whole tenor of the agreement that it is to be performed after the year, there a note is necessary."
Peter v. Compton (1693), Skinner 353; s.c., Holt 326, cited by Lord Holt in Smith v. Westall, 1 Ld.Raym. 316, 317; Anon., Comyns 49, 50; Comberbach 463.
Accordingly, about the same time, all the judges held that a promise to pay so much money upon the return of a certain ship, which ship happened not to return within two years after the promise made, was not within the statute,
"for that, by possibility, the ship might have returned within a year, and although by accident it happened not to return so soon, yet, they said, that clause of the statute extends only to such promises where, by the express appointment of the party, the thing is not to be performed within a year."
Anon., 1 Salk. 280.
Again, in a case in the King's Bench in 1762, an agreement to leave money by will was held not to be within the statute, although uncertain as to the time of performance. Lord Mansfield said that the law was settled by the earlier cases. Mr. Justice Denison said:
"The statute of frauds plainly means an agreement not to be performed within the space of a year, and expressly and specifically so agreed. A contingency is not within it, nor any case that depends upon contingency. It does not extend to cases where the thing only may be performed within the year, and the act cannot be extended further than the words of it."
And Mr. Justice Wilmot said that the rule laid down in 1 Salk. 280, above quoted, was the true rule. Fenton v. Emblers, 3 Burrows 1278; s.c., 1 W.Bl. 353.
It thus appears to have been the settled construction of this clause of the statute in England, before the Declaration of Independence, that an oral agreement which, according to the intention of the parties as shown by the terms of the contract, might be fully performed within a year from the time it was made was not within the statute, although the time of
its performance was uncertain, and might probably extend, and be expected by the parties to extend, and did in fact extend, beyond the year.
The several states of the Union, in reenacting this provision of the statute of frauds in its original words, must be taken to have adopted the known and settled construction which it had received by judicial decisions in England. Tucker v. Oxley, 5 Cranch 34, 9 U. S. 42; Pennock v. Dialogue, 2 Pet. 1, 27 U. S. 18; McDonald v. Hovey,110 U. S. 619, 110 U. S. 628. And the rule established in England by those decisions has ever since been generally recognized in England and America, although it may in a few instances have been warped or misapplied.
The decision in Boydell v. Drummond (1809), 11 East 142, which has been sometimes supposed to have modified the rule, was really in exact accordance with it. In that case, the declaration alleged that the Boydells had proposed to publish by subscription a series of large prints from some of the scenes of Shakespeare's plays, in eighteen numbers containing four plates each at the price of three guineas a number, payable as each was issued, and one number at least to be annually published after the delivery of the first, and that the defendant became a subscriber for one set of prints, and accepted and paid for two numbers, but refused to accept or pay for the rest. The first prospectus issued by the publishers stated certain conditions, in substance as set out in the declaration, and others showing the magnitude of the undertaking, and that its completion would unavoidably take a considerable time. A second prospectus stated that one number at least should be published annually, and the proprietors were confident that they should be enabled to produce two numbers within the course of every year. The book in which the defendant subscribed his name had only, for its title, "Shakespeare Subscribers, their signatures," without any reference to either prospectus. The contract was held to be within the statute of frauds as one not to be performed within a year because, as was demonstrated in concurring opinions of Lord Ellenborough and Justices Grose, Le Blanc, and Bayley, the
contract, according to the understanding and contemplation of the parties as manifested by the terms of the contract, was not to be fully performed (by the completion of the whole work) within the year, and consequently a full completion within the year, even if physically possible, would not have been according to the terms or the intent of the contract, and could not have entitled the publishers to demand immediate payment of the whole subscription.
In Wells v. Horton (1826) 4 Bing. 40; s.c., 12 J.B.Moore 177, it was held to be settled by the earlier authorities that an agreement by which a debtor, in consideration of his creditor's agreeing to forbear to sue him during his lifetime, promised that his executor should pay the amount of the debt, was not within the statute, and Chief Justice Best said:
"The present case is clearly distinguishable from Boydell v. Drummond, where, upon the face of the agreement, it appeared that the contract was not to be executed within a year."
In Souch v. Strawbridge (1846), 2 C.B. 808, a contract to support a child for a guinea a month as long as the child's father should think proper was held not to be within the statute, which, as Chief Justice Tindal said, "speaks of any agreement that is not to be performed within the space of one year from the making thereof,