That the dictates of the law and the principles of common morality are not always blended to perfection is not a startlingly new pronouncement. Undoubtedly the courts use every legitimate means at their disposal in forming their decrees to enforce conduct that we are pleased to regard as called for in the name of simple honesty. But in at least one situation the Statute of Frauds has appeared to many courts to prevent a decree harmonizing law and justice. The type situation is that P, being desirous of purchasing a piece of realty, orally engages A to negotiate the purchase with X, the present owner. The deed is to be taken in P's name, and P is to secure the funds or the credit needed to pay for the land. At the time P orally engages A, neither of them have any interest in the land, or contract with respect to it. A then approaches X, who has no knowledge of P, and arranges for a conveyance. However, he causes the deed to run to himself, and pays the purchase price with his own funds. Immediately thereafter A sells the land to some third person, making a handsome profit. P, upon learning of the facts, seeks to impose a constructive trust on the profits made by A. On being confronted with this situation in the recent case of Carkonen v. Alberts, the Supreme Court of Washington, relying on two sections of our Statute of Frauds, concluded that no constructive trust could be imposed. In so deciding, the court is in line with a great many other jurisdictions.
Hardyn B. Soule,
Real Estate Brokers' Contracts Within the Statute of Frauds,
14 Wash. L. Rev. & St. B.J.
Available at: https://digitalcommons.law.uw.edu/wlr/vol14/iss3/4