This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
This rule assumes that apart from the contract, the conveyance leaves no equitable interest of any kind in A. If A then has any right it depends solely on the oral contract, and this contract cannot be enforced under the statute of frauds. Thus if A is a mortgagor and conveys his equity to B on B's promise to reconvey on payment of the amount of the debt within a given time, it may be difficult to determine whether A's conveyance is still a mortgage or an absolute deed. If the latter, B's promise to reconvey is unenforceable.2 An exception to this rule exists in some jurisdictions where the parties to the contract are in confidential relations. A breach of such contract is held to be fraud "independent of any element of actual fraud,"3 and a constructive trust arises. The statute of frauds does not apply therefore.4 The breach of such contract is not fraud and does not create a constructive trust in the absence of confidential relations.5 A delivery of a deed by A to B in escrow for C, on condition that C will deed certain property to X in return for the property deeded by A to C, has been held not to be a contract within this clause of the statute.6
1Goree v. Clements, 94 Ala. 337; 10 So. 906; Peagler v. Stabler, 91 Ala. 308; 9 So. 157; Brock v. Brock, 90 Ala. 86; 9 L. R. A. 287; 8 So. 11; Ellis v. Hill, 162 111. 557; 44 N. E. 858; Hurley v. Donovan, 182 Mass. 64; 64 N. E. 685; Rose v. Bank, 165 Mass. 273; 43 N. E. 93; Smith v. Marsh, - Mich. -; 93 N. W. 1091; Poppe v. Poppe, 114 Mich. 649; 68 Am. St. Rep. 503; 72 N. W. 612; Veeder v. Trust Co., 61 Neb. 892; 86 N. W. 982; Guntert v. Guntert (Tenn. Ch. App.) , 37 S. W. 890; Lancaster v. Richardson, 13 Tex. Civ. App. 682; 35 S. W. 749; Caffey v. Caffey. 12 Tex. Civ. App. 616; 35 S. W. 738.
2Goree v. Clements, 94 Ala. 337; 10 So. 906.
3Brison v. Brison, 90 Cal. 323; 27 Pac. 186.
4 Brison v. Brison, 75 Cal. 525; 7 Am. St. Rep. 189; 17 Pac. 689.
5 See cases cited in this section.
6 Simons v. Bedell, 122 Cal. 341; 68 Am. St. Rep. 35; 55 Pac. 3. It does not appear clearly whether the conveyance by C to X was a condition precedent to the delivery of A's deed by B to C. A's death was one condition on which such deed was to be delivered. The court divided on the question of the statute of frauds, the minority holding on the authority of Wittenbrock v. Cass,