COHODAS v. RUSSELL

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Docket Number

No. 73-659.

Attorney(S)

Patrick J. Murphy of Crabtree, Butler, Syprett Meshad, Sarasota, for appellant. Daniel E. Scott of Dillon Scott, Sarasota, for appellee.

Judges

GRIMES, Judge.

Acts

Statute Of Frauds, Fraudulent Transfers, And General Assignments — Unenforceable Contracts — Promise to pay another's debt, etc.

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Smart Summary

Factual and Procedural Background

This interlocutory appeal arises from an order denying the defendants' motion to dismiss an amended complaint. The plaintiff, Harry Russell, alleged that the defendant, Samuel Cohodas, agreed to sell certain land but later repudiated the agreement. Attached to the amended complaint was a letter signed by Cohodas outlining terms for the sale of 120 acres at $2,200 per acre, offering an option with a $5,000 down payment. Russell sought specific performance or, alternatively, damages for breach of contract. Mrs. Cohodas was joined as a defendant due to a claimed dower interest. The defendants moved to dismiss on the basis that the letter did not satisfy the Statute of Frauds requirements for a real estate contract.

Legal Issues Presented

Whether the letter signed by Cohodas constituted a sufficient written memorandum to satisfy the Statute of Frauds for the sale of land under Florida law.
Whether the absence of specified terms regarding the time and manner of payment invalidates the contract under the Statute of Frauds.
Whether dismissal was appropriate based on the insufficiency of the written memorandum.

Arguments of the Parties

Appellee's (Defendants') Arguments

The letter does not comply with the Statute of Frauds because it omits essential terms such as the manner of conveyance, warranties, payment of documentary stamps and taxes, responsibility for title insurance or abstract, and insurance of improvements.
The letter is silent as to the time and manner of payment, leaving unclear whether the sale was to be cash or credit.
These omissions render the letter insufficient as a written contract for the sale of land.

Appellant's (Plaintiff's) Arguments

The letter contains essential terms such as parties’ names, purchase price, and legal description of the property.
Some omitted details are customary matters determinable by local real estate practice and not essential to the contract.
The $5,000 deposit and option terms indicate a binding agreement.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Swisher v. Conrad, 76 Fla. 644, 80 So. 564 (1919)	The written memorandum must contain all essential terms of the contract; contract terms cannot be partly oral and partly written.	Established that the Statute of Frauds requires a complete written memorandum of essential terms.
Rundel v. Gordon, 92 Fla. 1110, 111 So. 386 (1927)	Dismissal affirmed where written memoranda lacked essential elements such as consideration, payment terms, and acts to be done by parties.	Supported the requirement that essential terms must appear in writing for real estate contracts.
Alton Beach Realty Co. v. Henderson, 92 Fla. 689, 110 So. 256 (1926)	Exchange of correspondence insufficient when essential terms like payment amount and total price are not set forth in writing.	Demonstrated insufficiency of writings lacking essential contract terms.
Schofield v. Talley, 79 Fla. 406, 84 So. 193 (1920)	Receipt acknowledging part payment and balance due sufficient to satisfy Statute of Frauds.	Contrasted with current case to show importance of specifying payment terms in writing.
Carnes v. Harris, 256 So.2d 237 (Fla. App. 1972)	Receipt for down payment and balance due by a certain date insufficiently definite for Statute of Frauds compliance.	Distinguished from Schofield based on suit type and demonstrated that more terms were required than present in Cohodas letter.
First Mortgage Corporation of Stuart v. deGive, 177 So.2d 741 (Fla. App. 1965)	In absence of specified closing date, closing presumed within reasonable time.	Used to argue that omitted timing details could be implied by local custom.
Mehler v. Huston, 57 So.2d 836 (Fla. 1952); Meek v. Briggs, 80 Fla. 487, 86 So. 271 (1920)	Referenced regarding requirements to amend pleadings to meet Statute of Frauds.	Supported court’s leave to amend complaint to allege additional writings.
Neveils v. Thagard, 145 So.2d 495 (Fla. App. 1962)	Referenced in relation to cause of action for return of deposit.	Supported alternative relief for plaintiff if contract fails.
Canell v. Arcola Housing Corp., 65 So.2d 849 (Fla. 1953)	Referenced in note concerning contract principles and Statute of Frauds.	Supplementary authority cited by court.

Court's Reasoning and Analysis

The court examined the letter attached to the amended complaint as the written memorandum purportedly evidencing the contract for sale of land. It acknowledged that the letter identified the parties, described the land, and stated the purchase price. However, the court found that the letter failed to specify the time and manner of payment, leaving ambiguous whether the transaction was intended as a cash sale or involved credit terms. The court rejected the notion that it should presume a cash sale in the absence of such terms, noting changes in real estate practices and tax considerations. It distinguished prior cases where payment terms were expressly stated and held that the omission of these essential terms rendered the letter insufficient under the Statute of Frauds. The court also recognized that other omitted details (e.g., conveyance method, warranties, taxes, insurance) were not essential terms but rather customary matters. Given the insufficiency of the written memorandum on its face, the court found the defendants’ motion to dismiss appropriate but allowed the plaintiff leave to amend the complaint to allege additional writings or seek return of the deposit.

Holding and Implications

The court reversed the order denying the defendants' motion to dismiss the amended complaint.

The court held that the letter did not satisfy the Statute of Frauds because it lacked essential terms relating to the time and manner of payment, and thus did not constitute a sufficient written contract for the sale of land. The plaintiff was granted leave to file a second amended complaint to allege additional writings sufficient to meet the Statute of Frauds or to state a cause of action for the return of the $5,000 deposit. This decision directly affects the parties by requiring more definitive written terms to support the real estate contract claim but does not establish new precedent beyond reaffirming established Statute of Frauds principles.

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SAMUEL M. COHODAS, APPELLANT, v. HARRY RUSSELL, APPELLEE.

GRIMES, Judge.

This is an interlocutory appeal from an order denying the defendants' motion to dismiss the amended complaint.

According to the amended complaint, the defendant, Samuel Cohodas, agreed to sell certain land to the plaintiff, Harry Russell, but Cohodas later repudiated the agreement. A copy of a letter purporting to contain the terms of the agreement was attached to the amended complaint. The letter, which was signed by Cohodas and mailed to the plaintiff, read as follows:

"September 7, 1972

Mosby Russell Engineering Associates, Inc. Box 1779 Sarasota, Florida

ATTENTION: Mr. Harry Russell

Dear Mr. Russell:

In reference to our phone conversation, I am enclosing you a legal description of the property in question.

It consists of 120 acres net. The price is $2200 an acre.

We are willing to give you an option of six months upon receipt of a $5000 down payment — an extension of three months if necessary. The $5000 advance against the option is to be deducted from the purchase price, if no purchase price the $5000 is forfeited.

Let us hear from you immediately.

Sincerely,

/s/ Sam Cohodas S.M. Cohodas SMC/ma Enclosure"

A detailed legal description of the property accompanied the letter. In his suit, Russell sought specific performance, or, in the alternative, damages for breach of contract. Mrs. Cohodas was joined as a defendant on the premise that she claimed a dower interest. According to the allegations, Russell tendered to the defendants an earnest money deposit of $5,000 which the defendants accepted and retained. The defendants moved to dismiss on the ground that the letter which is said to be the written contract with respect to the sale of land was insufficient to comply with the Statute of Frauds, Fla. Stat. § 725.01, F.S.A.

By its wording, the Statute of Frauds specifically encompasses a contract for the sale of land. The written memorandum relied upon to meet the requirements of the Statute must disclose all of the essential terms of the sale. The provisions of the contract cannot rest partly in writing and partly in parol. Swisher v. Conrad, 76 Fla. 644, 80 So. 564 (1919).

The Supreme Court affirmed an order dismissing a complaint for specific performance of a real estate contract in Rundel v. Gordon, 92 Fla. 1110, 111 So. 386 (1927), on the ground that written memoranda did not include the essential elements of the transaction. The court said:

". . . The matter of consideration, manner of payment, security for deferred payments, interest, dates when they shall become due, acts to be done by either party, and other essential conditions of the contract, must be certain, and must so appear from the written memoranda constituting the contract. . . ."

In Alton Beach Realty Co. v. Henderson, 92 Fla. 689, 110 So. 256 (1926), the Supreme Court construed an exchange of correspondence as not containing the essential elements of a contract for the sale of land so as to comply with the Statute of Frauds. As a premise for its holding, the court pointed out:

". . . [T]here is no reference to the amount of the initial cash payment or what proportion it bears to the total purchase price, nor is the total purchase price or the terms of the alleged sale set forth in any writing, signed by the party to be charged. . . ."

Applying these principles to the instant case, we find a written memorandum signed by the party against whom the action is brought, which clearly sets forth the names of the parties, the purchase price and the property description. The defendants point out that among the items not covered by the memorandum are the manner of conveyance, the warranties to be given, the responsibility for the payment of documentary stamps, intangible tax and recording fees, the responsibility for procuring an abstract or title insurance and the responsibility for insuring improvements on the property while the alleged contract remained executory. Rather than being essential elements of the contract, these matters could properly be characterized as details determinable by reference to the customs incident to local real estate transactions. In the absence of a specified closing date, it could be assumed that closing would take place within a reasonable time. First Mortgage Corporation of Stuart v. deGive, Fla.App. 1965, 177 So.2d 741.

More significant is the fact that the letter is silent with respect to the time for payment and the manner of payment. In short, one cannot tell whether the parties intended this to be a cash or a credit transaction.

The written memorandum relied upon to support an action for breach of a real estate contract in Schofield v. Talley, 79 Fla. 406, 84 So. 193 (1920), acknowledged receipt of "one dollar in part payment balance due" on a described lot "and $999.00 cash." The Supreme Court held this to be a sufficient recitation of the terms of payment as to comply with the Statute of Frauds.

On the other hand, in Carnes v. Harris, Fla.App. 1972, 256 So.2d 237, the written memorandum consisted of a receipt for $400.00 "for deposits as down payment" on a described lot with "balance due $800.00 by 1 July 1970." The court held that the receipt was not sufficiently definite to meet the requirements of the Statute of Frauds. The case of Schofield v. Talley, supra, was distinguished on the basis that Schofield was an action at law for damages, whereas Carnes was a suit for specific performance. We do not have to decide whether we agree with the rationale relied upon to distinguish these two cases because each of the receipts given in the two cases contained more "terms" of the agreement than the Cohodas letter.

See 2 Corbin on Contracts, Sec. 231; Swisher v. Conrad, supra; Canell v. Arcola Housing Corp., Fla. 1953, 65 So.2d 849.

In order for the Cohodas letter to meet the requirements of setting forth the terms upon which the purchase price was to be paid, we would have to presume that since credit was not mentioned, the parties must have intended the purchase price to be paid in cash. Authority for such a presumption may be found in certain cases from other jurisdictions which are cited in 23 A.L.R.2d 164 at page 194. As the annotator points out, several courts have held that the writing need not state the time of payment when by a fair presumption the transaction appears to be a cash sale and no agreement to the contrary appears.

Nevertheless, this court does not believe that it ought to be presumed that the parties intended a cash transaction when there is absolutely nothing in the written memorandum to suggest whether cash or credit was contemplated. There may have been a time when most real estate transactions were consummated by the payment of cash, but this was before the impact of income taxes became such a major consideration in the sale of land. We think it no more reasonable to presume that Cohodas intended to sell his land for $264,000 in cash than it would be to presume that he intended to sell on an installment basis secured by a purchase money mortgage. Since the letter does not include one of the essential provisions of the alleged agreement, it fails to satisfy the Statute of Frauds.

While the Statute of Frauds is an affimative defense, it may be raised by motion to dismiss where it appears as a defense on the face of the complaint. Rule 1.110(d) FRCP, 30 F.S.A. Accordingly, the order of denial is reversed with leave to the plaintiff to file a second amended complaint whereby he may be able to allege sufficient additional writings to meet the requirements of the Statute of Frauds, or in any event, to state a cause of action for the return of his $5,000 deposit.

Cf. Mehler v. Huston, Fla. 1952, 57 So.2d 836; Meek v. Briggs, 1920, 80 Fla. 487, 86 So. 271.

See Neveils v. Thagard, Fla.App. 1962, 145 So.2d 495.

McNULTY, A.C.J., and JOHNSON, W. CLAYTON, Associate Judge, concur.