Summary of Opinion — Smith v. Phillips

Factual and Procedural Background

This is an action of assumpsit with facts found by a referee. On July 1, 1893, Bradley executed to the defendants a five-year lease of a tract of land in Concord, with a right of renewal. A polishing mill on part of the tract was owned by the State Capital Polishing Works. On August 10, 1893, the defendants orally agreed with the plaintiff that if the plaintiff purchased the polishing mill from its owners, the defendants would execute to him a lease of the land occupied by the mill for as long as Bradley had leased it to them. The plaintiff purchased the mill in reliance on that oral agreement, entered possession, and operated the mill; the referee found that this occupation was, insofar as it was a question of fact, a partial performance of the oral contract. On November 23, 1893, the plaintiff requested the defendants to execute the agreed lease; the defendants refused. After notice to the defendants, and because of their refusal, the plaintiff removed the mill on March 23, 1896. The referee found the plaintiff entitled to $9.79 on other items and submitted to the court the question whether damages for breach of the oral contract to lease could be recovered.

Legal Issues Presented

1. Whether an action at law can be maintained upon a parol (oral) agreement to lease land for a term of years (i.e., whether such an agreement is within the statute of frauds).
2. Whether part performance of such an oral agreement takes the case out of the statute of frauds so as to authorize recovery of damages in an action at law for breach of the oral contract.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began from the established principle that a parol agreement to lease land for a term of years is a contract to convey an interest in land and therefore falls within the statute of frauds. The opinion cites the relevant statutes and several New Hampshire decisions to support that proposition. The court then addressed whether part performance of the oral agreement by the plaintiff (purchase of the mill and occupation/operation of it) removed the case from the statute so as to permit recovery of damages in an action at law. Relying on prior authorities, the court held that part performance of such an agreement does not have that effect; those authorities were cited to show that part performance will not authorize recovery of damages in an action at law for breach of an oral lease agreement. The court noted that it was unnecessary to decide whether equity might have afforded specific performance, because the plaintiff had not sought equitable relief and, by removing the building and yielding possession, had abandoned any equitable title he might have had; in that posture, specific performance would afford him no relief. Because the plaintiff made no claim for equitable relief and sought recovery only upon the oral contract, and because the record disclosed no grounds upon which any action at law could be maintained on that contract, the court concluded that no recovery for breach of the oral lease could be had. The court did, however, allow the separate sum of $9.79 found by the referee on other items.

Holding and Implications

Core Ruling: The court held that an action at law cannot be maintained upon a parol agreement to lease land for a term of years, and that part performance of such an agreement does not take the case out of the statute of frauds so as to authorize recovery of damages in an action at law.

Direct consequences for the parties: The plaintiff was denied recovery for breach of the oral lease agreement but was awarded judgment for $9.79 on other items found by the referee. The court discharged the case as to the claim based on the oral lease. The opinion does not discuss any broader implications beyond applying existing authorities; it applied established precedents rather than announcing a new rule.