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Bernkrant v. Fowler - 55 Cal. 2d 588, 12 Cal. Rptr. 266, 360 P.2d 906 (1961)

Rule:

In determining whether a contract entered into in another state is subject to the California statute of frauds, the court must consider both the policy to protect the reasonable expectations of the parties and the policy of the statute of frauds.

Facts:

The buyers purchased an apartment complex in Nevada. By agreement of the parties, the buyers refinanced their obligations and paid a substantial part of their indebtedness to the seller in exchange for the seller's promise that he would provide in his will that upon his death all their indebtedness to him would be canceled. When the seller died in California, he did not provide for the cancellation of the buyers' balance and the buyers continued to make regular payments under protest. The buyers brought an action against the executrix to have the note cancelled and the property reconveyed to them. The trial court concluded that the action was barred by both the Nevada and the California statute of frauds; that to remove the bar of the statutes, the action must be one for quasi-specific performance in which an heir or beneficiary under the will would be an indispensable party; and that defendant was not estopped to rely on the statutes of frauds.

Issue:

Was the action barred by both the Nevada and the California statute of frauds?

Answer:

No.

Conclusion:

The Supreme Court of California reversed the judgment of the trial court. According to the Court, protection of the buyers' rights under a valid contract precluded interpreting the general language of the statute of frauds to destroy such rights despite possible applicability of the statute arising from the movement of one or more of the parties across state lines.

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