Case: Statute of Frauds, U.S. Grant Hotel in San Diego
Posted: Wed Jul 27, 2016 6:48 am
Westlaw Key Number: 185 FRAUDS, STATUTE OF, VI Real Property and Estates and Interests Therein, key 56 Creation of Estates or Interests in General, (1) In general.
Westlaw Headnote:
Whether estate created in hotel property by alleged contract, whereby husband and wife during their lifetime or the lifetime of either of them were to receive free apartment and free maintenance from the hotel of which husband was president and director was a vested life estate in joint tenancy with right of survivorship or a trust for the benefit of the husband and wife as joint tenants with right of survivorship, it was an estate, in realty which could have been created only by an instrument in writing unless the statute of frauds was inapplicable under the special facts and circumstances.
Summary by me:
This is not a boundary case. The actors in this story are U.S. Grant, Jr. (son of General Grant) who was deceased at the time of the controversy, his second wife America Grant, the U.S Grant Hotel in downtown San Diego, Baron Long and others. When the Grants owned the hotel they occupied a 4 room suite plus free food, refreshments and drinks provided by the hotel. They transferred a portion of their interests to Long and others and, by oral agreement, continued to occupy the suite and receive the food and drink until 1935 when Mrs. Grant's liquor and wine bill suddenly increased; the hotel board passed a resolution limiting her free food and drink to $25/week. The lawsuit ensued. Long contended Mrs. Grant had an interest in real property which was required to be in writing per the Statute of Frauds, therefore it is a revocable license. Mrs. Grant contended there is an implied contract and the Statute of Frauds does not apply in this case. The Trial Court, affirmed here, agreed with Mrs. Grant except that it ruled the complimentary drink does not included alcoholic beverages. There is no information on why the Trial Court excluded alcoholic beverages. I will quote the Court's discussion below.
http://law.justia.com/cases/california/ ... 3/725.html
Quote:
[4] We must now consider the effect of the statute of frauds on the question of the validity of the implied contract we are considering.
It is a fundamental rule that as the statute of frauds is designed to prevent fraud it cannot be invoked to perpetrate a fraud. (Seymour v. Oelrichs, 156 Cal. 782 [106 P. 88, [33 Cal. App. 2d 740] 134 Am.St.Rep. 154]; Stepp v. Williams, 52 Cal. App. 237 [198 P. 661]; Tuck v. Gudnason, 11 Cal. App. 2d 626 [54 PaCal.2d 88].) This rule is based on the doctrine of estoppel. It is applied in those cases in which one party, in reliance on a parol contract that should have been reduced to writing, has changed his position or parted with value so that it would be an injustice to permit the other party to plead the statute of frauds. This rule was announced in Wilson v. Bailey, 8 Cal. 2d 416 [65 PaCal.2d 770], as follows:
"It is, of course, well settled, under the provisions of section 1624 of the Civil Code and section 1973 of the Code of Civil Procedure, that certain contracts to be enforceable are required to be in writing, or that some note or memorandum thereof be in writing, subscribed by the party to be charged, or his agent. It is also equally well settled that the facts of a particular case may give rise to an equitable estoppel against the party seeking to set up the statute of frauds and foreclose such party from relying thereon. (Seymour v. Oelrichs, 156 Cal. 782 [106 P. 88, 134 Am.St.Rep. 154]; Notten v. Mensing, 3 Cal. 2d 469 [45 PaCal.2d 198].) ...
"It was said in Glass v. Hulbert, 102 Mass. 24, 35 [3 Am. Rep. 418]: 'The fraud most commonly treated as taking an agreement out of the statute of frauds is that which consists in setting up the statute against its enforcement, after the other party has been induced to make expenditures, or a change of situation in regard to the subject matter of the agreement, or upon the supposition that it was to be carried into execution, and the assumption of rights thereby to be acquired; so that the refusal to complete the execution of the agreement is not merely a denial of rights which it was intended to confer but the infliction of an unjust and unconscientious injury and loss. In such case the party is held by force of his acts or silent acquiescence which have misled the other to his harm to be estopped from setting up the statute of frauds.' This statement has been accepted as setting forth a plain and satisfactory ground for equitable jurisdiction, together with a clear indication of the proper limitation of its exercise. ...
"We can see no good reason for limiting the operation of this equitable doctrine to any particular class of contracts included within the statute of frauds, provided always the [33 Cal. App. 2d 741] essential elements of an estoppel are present, or for saying otherwise than as is intimated by Mr. Pomeroy in the words already quoted, viz., that is that it applies 'in every transaction where the statute is invoked.' It is a general equitable principle, a part of the broader equitable doctrine stated in Dickerson v. Colgrove, 100 U.S. 578, 580 [25 L. Ed. 618], and quoted therefrom in Carpy v. Dowdell, 115 Cal. 677, 687 [47 P. 695], as follows: 'The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both.' This broad rule with reference to equitable estoppel was recently reaffirmed in the case of Notten v. Mensing, supra. The latter case quoted with approval the rule stated in the case of Anderson v. Hubble, 93 Ind. 570, 576 [47 Am. Rep. 394], as follows: 'It is not necessary, in order to the existence of an equitable estoppel, that there should exist a design to deceive or defraud. The person against whom the estoppel is asserted must by his silence or his representation, have created a belief of the existence of a state of facts which would be unconscionable to deny, but it is not essential that he should have been guilty of positive fraud in his previous conduct. ... All that is meant in the expression that an estoppel must possess an element of fraud is that the case must be one in which the circumstances and conduct would render it a fraud for the party to deny what he had previously induced or suffered another to believe and take action upon. ... There need be no precedent corrupt motive or evil design.'"
Westlaw Headnote:
Whether estate created in hotel property by alleged contract, whereby husband and wife during their lifetime or the lifetime of either of them were to receive free apartment and free maintenance from the hotel of which husband was president and director was a vested life estate in joint tenancy with right of survivorship or a trust for the benefit of the husband and wife as joint tenants with right of survivorship, it was an estate, in realty which could have been created only by an instrument in writing unless the statute of frauds was inapplicable under the special facts and circumstances.
Summary by me:
This is not a boundary case. The actors in this story are U.S. Grant, Jr. (son of General Grant) who was deceased at the time of the controversy, his second wife America Grant, the U.S Grant Hotel in downtown San Diego, Baron Long and others. When the Grants owned the hotel they occupied a 4 room suite plus free food, refreshments and drinks provided by the hotel. They transferred a portion of their interests to Long and others and, by oral agreement, continued to occupy the suite and receive the food and drink until 1935 when Mrs. Grant's liquor and wine bill suddenly increased; the hotel board passed a resolution limiting her free food and drink to $25/week. The lawsuit ensued. Long contended Mrs. Grant had an interest in real property which was required to be in writing per the Statute of Frauds, therefore it is a revocable license. Mrs. Grant contended there is an implied contract and the Statute of Frauds does not apply in this case. The Trial Court, affirmed here, agreed with Mrs. Grant except that it ruled the complimentary drink does not included alcoholic beverages. There is no information on why the Trial Court excluded alcoholic beverages. I will quote the Court's discussion below.
http://law.justia.com/cases/california/ ... 3/725.html
Quote:
[4] We must now consider the effect of the statute of frauds on the question of the validity of the implied contract we are considering.
It is a fundamental rule that as the statute of frauds is designed to prevent fraud it cannot be invoked to perpetrate a fraud. (Seymour v. Oelrichs, 156 Cal. 782 [106 P. 88, [33 Cal. App. 2d 740] 134 Am.St.Rep. 154]; Stepp v. Williams, 52 Cal. App. 237 [198 P. 661]; Tuck v. Gudnason, 11 Cal. App. 2d 626 [54 PaCal.2d 88].) This rule is based on the doctrine of estoppel. It is applied in those cases in which one party, in reliance on a parol contract that should have been reduced to writing, has changed his position or parted with value so that it would be an injustice to permit the other party to plead the statute of frauds. This rule was announced in Wilson v. Bailey, 8 Cal. 2d 416 [65 PaCal.2d 770], as follows:
"It is, of course, well settled, under the provisions of section 1624 of the Civil Code and section 1973 of the Code of Civil Procedure, that certain contracts to be enforceable are required to be in writing, or that some note or memorandum thereof be in writing, subscribed by the party to be charged, or his agent. It is also equally well settled that the facts of a particular case may give rise to an equitable estoppel against the party seeking to set up the statute of frauds and foreclose such party from relying thereon. (Seymour v. Oelrichs, 156 Cal. 782 [106 P. 88, 134 Am.St.Rep. 154]; Notten v. Mensing, 3 Cal. 2d 469 [45 PaCal.2d 198].) ...
"It was said in Glass v. Hulbert, 102 Mass. 24, 35 [3 Am. Rep. 418]: 'The fraud most commonly treated as taking an agreement out of the statute of frauds is that which consists in setting up the statute against its enforcement, after the other party has been induced to make expenditures, or a change of situation in regard to the subject matter of the agreement, or upon the supposition that it was to be carried into execution, and the assumption of rights thereby to be acquired; so that the refusal to complete the execution of the agreement is not merely a denial of rights which it was intended to confer but the infliction of an unjust and unconscientious injury and loss. In such case the party is held by force of his acts or silent acquiescence which have misled the other to his harm to be estopped from setting up the statute of frauds.' This statement has been accepted as setting forth a plain and satisfactory ground for equitable jurisdiction, together with a clear indication of the proper limitation of its exercise. ...
"We can see no good reason for limiting the operation of this equitable doctrine to any particular class of contracts included within the statute of frauds, provided always the [33 Cal. App. 2d 741] essential elements of an estoppel are present, or for saying otherwise than as is intimated by Mr. Pomeroy in the words already quoted, viz., that is that it applies 'in every transaction where the statute is invoked.' It is a general equitable principle, a part of the broader equitable doctrine stated in Dickerson v. Colgrove, 100 U.S. 578, 580 [25 L. Ed. 618], and quoted therefrom in Carpy v. Dowdell, 115 Cal. 677, 687 [47 P. 695], as follows: 'The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both.' This broad rule with reference to equitable estoppel was recently reaffirmed in the case of Notten v. Mensing, supra. The latter case quoted with approval the rule stated in the case of Anderson v. Hubble, 93 Ind. 570, 576 [47 Am. Rep. 394], as follows: 'It is not necessary, in order to the existence of an equitable estoppel, that there should exist a design to deceive or defraud. The person against whom the estoppel is asserted must by his silence or his representation, have created a belief of the existence of a state of facts which would be unconscionable to deny, but it is not essential that he should have been guilty of positive fraud in his previous conduct. ... All that is meant in the expression that an estoppel must possess an element of fraud is that the case must be one in which the circumstances and conduct would render it a fraud for the party to deny what he had previously induced or suffered another to believe and take action upon. ... There need be no precedent corrupt motive or evil design.'"