Boone v. Coe
153 Ky. 233, 1913 Ky. LEXIS 783, 154 S.W. 900 (1913)
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Rule of Law:
A party cannot recover reliance damages for expenses incurred in preparation for performance of an oral contract that is unenforceable under the Statute of Frauds unless the other party has received a benefit from the acts of part performance.
Facts:
- In the fall of 1909, J. F. Coe, a farm owner in Texas, made a verbal contract with W. H. Boone and J. T. Coe, who were farmers in Kentucky.
- J. F. Coe agreed to lease his Texas farm to Boone and J. T. Coe for twelve months, to commence upon their arrival.
- In exchange, Boone and J. T. Coe agreed to leave their homes in Kentucky, move with their families and equipment to Texas, and cultivate the farm.
- J. F. Coe promised to have a dwelling house completed for them upon their arrival and to supply materials for a barn.
- Relying on this agreement, Boone and J. T. Coe traveled for 55 days with their families and equipment from Kentucky to the farm in Texas.
- Upon their arrival, J. F. Coe refused to permit them to occupy the premises or cultivate the land, having failed to complete the promised dwelling.
Procedural Posture:
- Plaintiffs W. H. Boone and J. T. Coe filed an action in a Kentucky trial court against defendant J. F. Coe to recover damages for breach of a parol contract.
- Defendant filed a demurrer to the petition, arguing that the claim was barred by the Statute of Frauds.
- The trial court sustained the defendant's demurrer and dismissed the plaintiffs' petition.
- Plaintiffs appealed the dismissal to the highest court in Kentucky.
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Issue:
Does the Statute of Frauds bar a plaintiff from recovering damages for expenses incurred and time lost in reliance on an unenforceable oral contract for a lease of land, when the defendant has received no benefit from the plaintiff's actions?
Opinions:
Majority - William Rogers Clay, Commissioner
Yes, the Statute of Frauds bars recovery. A party cannot recover damages for losses sustained in reliance on a contract that is unenforceable under the Statute of Frauds where the defendant has not been unjustly enriched. The court reasoned that a parol lease of land for one year to commence at a future date is void under the Kentucky Statute of Frauds. While there are exceptions to this rule, they are based on the theory of implied contract or quantum meruit, which allows recovery only when the defendant has received a tangible benefit from the plaintiff's part performance, such as services rendered or purchase money paid. Here, the defendant, J. F. Coe, received no benefit from the plaintiffs' act of moving to Texas; the plaintiffs merely sustained a loss. To allow plaintiffs to recover for their expenses and lost time would indirectly enforce a contract that the statute explicitly declares unenforceable, thereby undermining the purpose of the statute.
Analysis:
This decision solidifies a strict interpretation of the Statute of Frauds, drawing a sharp distinction between reliance damages and restitution based on unjust enrichment. By holding that a plaintiff cannot recover for losses incurred in reliance on an unenforceable oral contract unless the defendant received a tangible benefit, the court prevents an indirect enforcement of such contracts. The opinion clarifies Kentucky law by overruling a prior case (McDaniel v. Hutchinson) that had allowed for the recovery of such reliance damages. This holding reinforces the principle that the Statute of Frauds cannot be circumvented by framing a claim as one for reliance damages rather than for breach of contract, providing greater legal certainty in this area.
