Shaughnessy v. Eidsmo - Case Brief
Shaughnessy v. Eidsmo, 222 Minn. 141, 23 N.W.2d 362 (1946).
Facts: The Shaughnessys (P) made an oral agreement to lease a house for one year from Eidsmo (D), with an option to purchase the house and the end of the lease period. P notified D that they intended to exercise the option and D assured them that he would honor the agreement, but never delivered the contract. P remained in possession of the house after the original lease term expired and continued to pay rent while attempting to complete the purchase of the house.
P sued for specific performance and D challenged P’s factual allegations regarding the option to purchase. The trial court entered judgment for P and D appealed.
Issue: 1) Under what circumstances is a lease agreement with an option to purchase not subject to the statute of frauds? 2) Under what circumstances are contracts within the statute of frauds removed therefrom?
Holding and Rule: 1) The acts of taking possession of property and of making part payment, when performed under or in reliance upon the oral contract as to be unequivocally referable to the vendor-vendee relationship, and not referable to any other relationship between the parties, are sufficient to remove the contract from the statute of frauds. 2) Contracts can be removed from the statute of frauds either by fraud or part performance.
The court found that the original lease by itself was covered by the statute of frauds because it could not be performed within one year. When the option to purchase was exercised, it became a contract for sale and therefore covered by the statute of frauds.
The court held that the oral contract whereby D was to sell the house to P was removed from the statute of frauds through possession (living in the house) and part performance (making payments that they believed would be applied to the purchase price of the house).
With respect to the remedy sought by P, the court noted that specific performance is normally available only where damages would be inadequate. However, in contracts for the sale of real property, money damages are presumed to be inadequate, and P was not required to prove their inadequacy.
Disposition: For P; order denying D’s motion for a new trial affirmed.
Tags: case briefs, Contracts, law, lawnix, lease, options, oral contract, part performance, specific performance, statute of frauds
