Murphy v. Federal Land Bank
Murphy v. Federal Land Bank
Opinion of the Court
This case comes up on appeal from a decree in equity dismissing the plaintiff’s bill. The Federal Land Bank of Springfield obtained title to a 300-acre farm in Aroostook County by foreclosure of mortgages which it held. Hugh A. Murphy was the mortgagor. He had lived on the farm all his life, having become the owner by inheritance. It was a potato farm, and probably due to adverse conditions, Mr. Murphy had been unsuccessful and
On December 27, 1938, the bank made a contract for sale to Peterson and Burke, who were made parties defendant to the plaintiff’s bill. Under this contract, the prospective purchasers were to pay $21,000 upon terms which included the payment of $1000 in cash and $4000 not later than February 1,1939.
The plaintiff alleges that the bank entered into a contract with her under its lease of June 10,1937, giving her the right to purchase the premises the following spring upon the terms and conditions which were set out in the proposed contract of August 28, 1936; that the plaintiff, being unable to purchase the property in the spring of 1938, the bank again leased the premises to her and made the same agreement with reference to the right to purchase the
There are no allegations in the bill as to whether these agreements were made orally or in writing, but there are further averments that the plaintiff, relying upon her right to purchase, expended large sums of money and furnished labor in the betterment of the premises.
Theplaintiff then alleges that the contract of sale with Peterson and Burke was a violation of the rights of the plaintiff; that she was not informed of the negotiations, but upon learning thereof, offered to meet the terms of the Peterson and Burke proposal.
The plaintiff sought through the prayers in her bill to have specific performance decreed of the alleged contract of sale to her.
Many legal issues are raised by the parties but it appears that none are necessary of decision. The presiding Justice made no findings or rulings except the final decree that, “The bill is found to be without merit.” There was ample justification for such decree upon the facts disclosed by the record. The proposed contract of sale of August 28, 1936, by the frank admission of the plaintiff, never became operative or effectual. The lease to her of June 10,1937, contains no provision for an option to purchase. On the back of this lease are printed questions to be answered by the lessee to aid the bank in its decision as to approval of the lease. One of the questions is : “Why are you leasing this farm ?” The answer given is: “She hopes she will be able to buy.” In the lease of May 7,1938, appears the same question with the answer: “Wants chance to buy if financially able next spring.” Mr. Murphy testified that, as to the 1937 lease, the local representative asked these questions and that the answers were given by him and written in by the representative, and that Mrs. Murphy was present. Again, as to the 1938 lease, Mr. Murphy says that he gave the answer which was written in to the same question.
The plaintiff testified that, as to the 1937 lease she understood she was to have an option to buy in the spring of 1938 if financially able. No negotiations for purchase were initiated by her. As to the 1938
It is true that the local agents of the bank acknowledge that they suggested to Mr. Murphy at different times that he should get busy if he desired to purchase the property, but denied ever having entered into any oral agreement with either Mr. or Mrs. Murphy whereby either of them would have a right to purchase the farm.
Referring to the evidence as to substantial improvements, the period must in any event be limited to occupancy subsequent to the execution of the 1938 lease. The plaintiff did not exercise any claimed option under preceding arrangements. There being no provision for option in the 1938 lease, she asserts that such a right was granted orally. To avoid the effect of the statute of frauds, she asserts sufficient part performance by expenditures of value upon the farm. Assuming an oral agreement, with consideration, examination of the record discloses that in the summer of 1938, sixty rods of fencing were removed at an expense of $25, thus clearing some land for the purpose of planting potatoes. This slight and insignificant expenditure, incidental to the beneficial use of the premises by the tenant of a farm worth $21,000, could not support a finding of substantial improvements made in reliance upon an oral agreement as to the purchase of the property. It is also urged by the plaintiff that the defendant bank recognized the right to purchase on the part of Mrs. Murphy after it had entered into the contract of sale with Peterson and Burke, and that this appears from telegraphic communications between the parties. Instead, it is clear that when Mr. Murphy learned of the Peterson and Burke transaction, he caused a telegram to be sent, asking whether the bank would be willing to give him an opportunity to purchase the farm “providing signers of present contract keep offer open.” On December 31, 1938, the bank replied by telegram, stating that if the signers of the contract kept their offer open, the bank was “willing to entertain from Murphy the best cash offer he cares to make between now and noon of January 7, 1939.” Mr. Murphy then caused another tele
The presiding Justice was entirely justified from the record in reaching the conclusion that there was never any existing contract, either written or oral, between the defendant bank and the plaintiff for the sale of the property to her; that there was no fraud or mistake in the legal meaning of those terms, and that the bank was under no obligation to convey the premises to her.
Appeal dismissed. Decree below affirmed.
Reference
- Full Case Name
- Ellen V. Murphy v. Federal Land Bank of Springfield
- Status
- Published