Jasmin v. Alberico
376 A.2d 32, 135 Vt. 287, 1977 Vt. LEXIS 610 (1977)
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Rule of Law:
An oral contract for the conveyance of real estate, even with part performance, is generally unenforceable under the Statute of Frauds unless the partial performance constitutes a substantial and irretrievable change of position that cannot be adequately compensated by monetary damages.
Facts:
- In 1969, a house became available at a modest price that John Alberico attempted to buy.
- John Alberico was unable to obtain bank financing, even with Arthur Jasmin, his lifelong friend, willing to co-sign a $2,000 note for the down payment.
- Arthur Jasmin then purchased the house, proposing to deed it to John Alberico once John repaid the $2,000 down payment; in the interim, the Albericos were to make mortgage payments, including taxes, credit life insurance on Arthur Jasmin, and water rent.
- The Albericos moved into the house in May 1969, making payments and, with Arthur Jasmin's help, worked to make it livable, also making various improvements such as repairing a back porch, piping gas, and electrical/plumbing repairs.
- Arthur Jasmin died on January 3, 1971, and the mortgage was paid off by the proceeds of his credit life insurance policy.
- After Arthur Jasmin's death, John Alberico sought to pay Phyllis Jasmin the $2,000 down payment to obtain the deed, but she initially put him off and then refused.
- The Albericos continued to make payments to Phyllis Jasmin until August 1972.
Procedural Posture:
- Phyllis Jasmin initiated an action of ejectment in the trial court against John and his wife, seeking to evict them as tenants at will.
- The Albericos resisted the ejectment action and filed a counterclaim for specific performance, alleging an oral agreement between the parties to convey title to them upon payment of $2,000.
- The trial court heard the matter and denied Phyllis Jasmin's action for ejectment.
- The trial court granted judgment for specific performance in favor of the Albericos on their counterclaim, conditioning it upon payment of $2,000.
- Phyllis Jasmin appealed the trial court's decision.
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Issue:
Does making mortgage, tax, and insurance payments, along with minor improvements, constitute sufficient part performance to take an oral agreement for the conveyance of real estate out of the Statute of Frauds, thereby warranting specific performance?
Opinions:
Majority - Barney, C.J.
No, making mortgage, tax, and insurance payments, coupled with minor improvements, does not constitute sufficient part performance to take an oral agreement for the conveyance of real estate out of the Statute of Frauds and warrant specific performance. The court explained that while specific performance is generally available for land contracts due to the unique nature of land, an oral contract to convey real estate faces a significant hurdle under the Statute of Frauds (12 V.S.A. § 181). To overcome this, the doctrine of part performance requires a change of position by the party seeking relief, made in reliance on the oral agreement, to such an extent that the parties cannot be restored to a reasonable equivalence of their former condition. This reliance must be “something beyond injury adequately compensable in money,” as even payment of part or all of the purchase price, coupled with possession, is insufficient to circumvent the Statute of Frauds, as established in Cooley v. Hatch and Troy v. Hanifin. The payments made by the Albericos (mortgage, taxes, water, and credit life insurance premiums) were considered monetary payments on the purchase and thus failed to satisfy this requirement. Furthermore, the improvements made by the Albericos (porch repair, gas piping, electrical/plumbing repairs, landscaping, bringing in stoves) were deemed indistinguishable from the activities of a tenant responsible for maintaining leased premises. Citing Hunt v. Spaulding and Towsley v. Champlain Oil Co., the court clarified that such improvements must be so substantial that the parties cannot be restored to their former situation, which was not the case here. These actions did not meet the test of a “substantial and irretrievable change of position.” Therefore, the oral agreement was unenforceable, and specific performance was not an available remedy.
Analysis:
This case significantly reinforces the stringent application of the Statute of Frauds to oral contracts for the sale of real estate, even in situations where there are clear equitable appeals. It establishes a high threshold for the doctrine of part performance, clarifying that routine payments (like mortgage or taxes) and maintenance-level improvements do not suffice to prove an 'irretrievable change of position' necessary to circumvent the Statute. The ruling underscores the importance of written contracts in real estate transactions, serving as a cautionary precedent for parties who rely on informal verbal agreements, as it limits the availability of specific performance to only the most exceptional circumstances where monetary compensation is clearly inadequate and the change of position is fundamental and irreversible.
