Page images
PDF
EPUB

parties. An agreement of sale may, therefore, be defined as an agreemnt or contract in writing wherein one party agrees to sell and another agrees to buy real estate under such terms and conditions as is therein set forth.

43. Must Be in Writing. Pa. Statute of Frauds.

It has been considered sound public policy in all states that certain contracts should be required to be made in writing. And in all common law jurisdictions the one kind of contract most universally required to be in writing is the contract relating to sale and creation of interests in land. The first statute requiring contracts concerning the sale and creation of interests in land to be in writing was passed in England in 1676. As it recited in its preamble that its purpose was to prevent frauds, it has ever since been known as the Statute of Frauds and statutes of frauds similar to a greater or lesser extent have been re-enacted in most every state of the United States.

Pennsylvania Statute of Frauds.-The Pennsylvania Statute of Frauds is the Act of March 21, 1772 (1 Sm. Laws 389), which provides that "all leases, estates, interest of freehold or term of years or any uncertain interest of in or out of any messuages, manors, lands, tenements or hereditaments, made or created by livery of seisin only, or parol and not put in writing and signed by the parties as making or creating the same or their agents thereunto lawfully authorized by writing shall have the force and effect of leases or estates at will only, and shall not either in law or equity, be deemd or taken to have any other or greater force or effect, any consideration for making any such parol leases or estates or any former law or usage to the contrary notwithstanding, except nevertheless all leases not exceeding the term of three years from the making thereof."

This part of the statute deals with making of leases and in plainer words provides in substance that leases for a greater term than three years must be in writing. The other part of the statute which concerns us now continues "And moreover no leases, estates or interests either of freehold or terms of years or any uncertain interest of, in, to or out of any messuages, manors, lands, tenements or hereditaments shall at any time be assigned, granted or surrendered unless it be by deed or note in writing signed by the party so assigning, granting or

surrendering the same or their agents thereto lawfully authorized by writing or by act or operation of law."

This in brief means that no land or interest in land shall be assigned, granted or surrendered unless in writing signed by the party or his agent whose authority to do so must also be in writing. There are some exceptions to the general effect of the statute such as part performance of the contract, or possession given under an oral contract, but for the purposes of this book we will disregard the exceptions and consider the general rule to be unbending. The best interest of clients can only be served by reducing all such agreements concerning real estate to writing. 44. What the Writing Must Contain: Form.

That statute requires no particular form (Cadwallader v. App., 81 Pa. 194, but the memorandum should disclose (a) the interest of the parties, (b) the terms of the sale, (c) a definite enough description to identify the land, and (d) the consideration or the price to be paid. Any agreement which contains these essentials would be sufficient. The agreement need not be under seal (Colt v. Selden, 5 Watts 525). It has been held that a receipt on account of purchase price, if it contain these particulars, is sufficient (Evans v. Evans, 29 Pa. 277). The agreement need only be signed by the vendor, that is the man who agrees to sell land, although it is customary and better practice to have the vendee to sign also. Where the vendor is married, the husband or wife should sign also.

While it is true that no set form is required, it has become customary to use a form such as the following:

This Agreement, made the 12th day of June, A. D. 1908, between Andrew Black, of the City of Philadelphia, State of Pennsylvania, and Charles Dolan, also of the City of Philadelphia, State of Pennsylvania. WITNESSETH, that the said party of the first part agrees to sell and convey to the party of the second part, and the party of the second part agrees to purchase all that certain lot or piece of ground with the messuage or tenement thereon erected, situate on the west side of "Y" Street, at the distance of 337 feet northward from the north side of "X" Street, in the Fiftieth Ward of the City of Philadelphia, containing in front or breadth on the said "Y" Street 18 feet and extending of that width in length or depth westward between two parallel lines at right angles with the said "X" Street 100 feet to

a three feet wide alley leading northward from "X" Street to "Z" Street-or (premises No. 1242 Y Street, Philadelphia, Pa.), on the terms and conditions following, to wit, the said party of the second part agrees to pay therefor the sum of sixty-five ($6,500) hundred dollars as follows: Two hundred ($200) dollars on the signing of this agreement (which deposit it is hereby agreed may, at the option of the said party of the first part, be retained by said party as liquidated damages in case of the default by the said party of the second part in the performance of the terms of this agreement) and the balance of the purchase money at the time of the settlement. All perpetual policies of fire insurance to be paid for at withdrawal value and term policy at proportionate value for unexpired term. The premises are to be conveyed free and clear of incumbrance. The gas fixtures, heaters, ranges, etc., annexed to the said building are included in the sale. Possession to be given at time of settlement. Taxes, water rent, rent and interest on incumbrance (if any) to be apportioned for the current term at the date of settlement. Gas bills, if any, to be paid by the seller. The title is to be good and marketable and such as will be insured by any title and trust company of Philadelphia. And the said parties hereby bind themselves, their heirs, executors and administrators, for the faithful performance of the above agreement within thirty days from the date hereof, said time to be the essence of this agreement, unless extended by mutual consent in writing endorsed hereon.

IN WITNESS WHEREOF, the said parties have hereunto set their hands and seals that day and year first above written.

Sealed and delivered in the pres

[blocks in formation]

-Received that day of the date of the within agreement the sum of $200.00 on account of the purchase money named therein.

WITNESS.

WM. F. BELSTERLING.

ANDREW BLACK.

(Seal.)

On the 12th day of June, A. D. 1908, before me the subscriber, William F. Belsterling, a notary public of the Commonwealth of Pennsylvania, residing in Philadelphia, came the within named

Andrew Black and Charles Dolan, and acknowledged the within agreement to be their act and deed and desired the same might be recorded as such.

WITNESS my hand and seal the day and year aforesaid.

Commission expires Feb. 14, 1910.

WM. F. BELSTERLING,

Notary Public.

This agreement can, of course, be altered to suit the terms of the sale in question.

45. Meaning of the Various Parts.

(a.) The Introduction, to wit:

"Agreement made 12th day of September, A. D. 1911, between A. B., of the City of Philadelphia, State of Pennsylvania, of the first part, and C. D., also of said City and State, of the second part. Witnesseth that the said party of the first part agrees to sell and convey to the said party of the second part, and the said party of the second part agrees to purchase."

This part of the agreement may be called the introduction, and its purpose is to recite the names, identify the parties and to state what the agreement is about.

(b.) Description.-Then follows the description, to wit:

All that certain lot or piece of ground with the buildings and improvements thereon erected, known as No. 2214 Y Street, in the City and County of Philadelphia, State of Pennsylvania.

The description should be definite enough to identify the property. Within the city limits the words "property situate No. 2214 Y Street, in the City of Philadelphia, State of Pennsylvania," is definite enough. Where there is no street and number then the description should be by metes and bounds and copied from the vendor's deed, e. g., as follows:

All that certain lot or piece of ground within the threestory brick messuage or tenement thereon erected, situate on the west side of "Y" Street, at the distance of 337 feet northward from the north side of "X" Street, in the Fiftieth Ward of the City of Philadelphia, containing in front or breadth on the said "Y" Street, 18 feet and extending of that width in length or depth westward between two parallel lines at right angles with said "X" Street one hundred feet to a three feet wide alley leading northward from "X" Street to "Z" Street.

(c.) Terms and Conditions.

The said party of the second part agrees to pay therefor the sum of sixty-five hundred ($6,500) dollars as follows: Two hundred ($200) dollars on the signing of this agreement [which deposit it is hereby agreed may, at the option of the said party of the first part, be retained by said party as liquidated damages in case the default by the said party of the second part in the performance of this agreement] and the balance of the purchase money at the time of settlement.

Under the law, if a vendee fails to make settlement the vendor has a choice of these remedies either to tender deed and sue for the whole purchase price (Tupp v. Bishop, 56 Pa. 424), or make a bona fide private or public resale and sue the vendee for the difference between the original purchase price and that of the re-sale (Ashcom v. Smith, 2 P. & W. 211). Sometimes, however, the vendor would prefer to do neither and would rather retain the deposit money and call the sale off, especially when he thinks he can sell it more advantageously later on. In such event he would only be entitled to retain from the deposit money his actual damages which are difficult to prove, for they only include actual expenses, such as preparing the agreement, etc. If such actual expenses do not equal the deposit money paid on account, the balance would have to be returned to the vendee (See Lowenstein v. Armstrong, 27 Pa. Superior Ct. 543). Where, however, there is such a clause as that set forth above, the law takes the view that the parties have agreed on the deposit money as being liquidated, i. e., determined damages which the vendor suffers by reason of loss of his bargain. Such a clause therefor give the vendor three choices, to wit: Tender deed and sue for purchase price. Resell the property and sue for his loss, or call the sale off and keep the deposit money as his liquidated damages. The words "at the option of the said party of the first part," must not be omitted else the court might take the view that the parties had agreed on the forfeiture of the deposit money as the sole remedy in case of a breach (Heckman's Estate, 236 Pa. 193. But see Cape May Co. v. Henderson 231 Pa. 82).

relates to the terms The methods of pay

The rest of this part of the agreement under which consideration should be paid. ing the consideration may be as many and varied as the parties may see fit to agree upon. For example, if desired to purchase subject to an existing mortgage it may be stated as follows:

« PreviousContinue »