Opinion
January 8, 1965 —
February 2, 1965.
APPEAL from a judgment of the county court of Washington county: LESTER A. BUCKLEY, Judge. Reversed.
For the appellant there was a brief by O'Meara O'Meara of West Bend, and oral argument by Stephen O'Meara.
For the respondent there was a brief by Simester, Schowalter Bunk of West Bend, and oral argument by T. W. Simester.
This is an action for specific performance brought by the plaintiff, Doctor William Hausmann, to compel the defendant, Henry Wittemann, to comply with the terms of an executory contract for the sale of real estate. The defendant contends that the contract was rescinded by mutual consent. The court entered judgment granting specific performance in favor of the plaintiff.
Wittemann owned certain land (61 acres) near the city of West Bend, Wisconsin, part of which bordered on a small lake. On May 24, 1954, Wittemann entered into a written agreement to sell the land to Doctor Hausmann for the price of $15,500. He paid $500 via checks as earnest money. The balance was to be paid as follows: $3,900 on July 1, 1954; $5,600 on July 1, 1955; and the remainder on July 1, 1956. At the time of the execution of the contract, a tenant occupied the land under a lease which was to expire December 31, 1955. This lease was referred to in the contract and the contract was made subject to it.
A few days after the execution of the contract, Wittemann went to the doctor's office. The parties disagree about the events of that meeting.
The plaintiff contends that the following took place: Wittemann came to his office and said that the tenant was giving Wittemann trouble about the proposed eviction. Wittemann suggested that the transaction be postponed until the tenant was off the land. Wittemann said further that he would inform his sister that if anything should happen to him the doctor was to have the property.
Wittemann recounted the following as his recollection of the events of that day: He went to the doctor's office because of the problem with the tenant who was provoked by the intended sale. Wittemann says that he returned the earnest-money check to the doctor and said, "I am not selling."
The doctor admits that he received the check from Wittemann and that he kept it. Wittemann continued to see the doctor for dental checkups twice a year up to October, 1962. The doctor questioned Wittemann about the tenant at each of these visits. Wittemann admitted that this topic was discussed but also stated that he told the doctor of an offer made by the Ziegler Foundation to purchase the property and also that he had listed the land with a real-estate broker. The foundation offered $18,600, and the listing with the broker was for $90,000. Certain real-estate salesmen in the area testified that the land was worth at the time of trial about $60,000 because of the lake frontage.
The tenant moved off the farm in December of 1962. In a letter dated February 5, 1963, the doctor wrote to Wittemann stating that, since the tenant was now removed from the premises, they could complete the transaction. He wrote.
"I am now ready to take it over and still hold our real estate agreement that you signed and also have the check that was given to you to validate the agreement."
The trial judge interpreted the conflicting testimony of the parties as follows:
"The defendant [Wittemann] in effect said, I do not wish to go through with this agreement because I am fearful that I will have trouble with the tenant. The plaintiff [doctor] in effect responded, by saying in effect, very well, we'll simply postpone the closing until after the tenant vacates the premises. The defendant further stated that he would inform his sister as to what was done so that there would be no question in the event something should happen to him."
The court also rejected the argument of the defendant that if there was an oral agreement to postpone it was inoperative by virtue of laches, concluding that the doctor acted rather "promptly upon the occurrence of the event upon which the closing of the transaction was dependent."
Judgment was entered granting the plaintiff, doctor, specific performance upon payment of $15,500 to Wittemann.
The appellant, Wittemann, argues that the trial court was in error in failing to find that the contract was rescinded by the mutual consent of the parties. We agree with this contention, and we accordingly reverse the trial court and direct that the action for specific performance be dismissed.
We arrive at this result since a review of the record indicates the trial court's decision is contrary to the great weight and clear preponderance of the evidence. Nehls v. Nehls (1963), 21 Wis.2d 231, 124 N.W.2d 18. Whether the contract was rescinded poses a question of fact to be determined from the intent of the parties as manifested either in their words, acts, or conduct. Skopes Rubber Corp. v. United States Rubber Co. (1st Cir. 1962), 299 F.2d 584, 594; and Church v. Bobbs-Merrill Co., (7th Cir. 1959), 272 F.2d 212.
The trial judge concluded that there was no evidence to indicate that the parties mutually agreed to rescind the contract. We disagree. Upon review of the testimony only of the verbal acts of the parties on the day in question, the result might appear to be correct. According to the statements of Wittemann and the doctor, the former said he was not selling and the latter said nothing. But this analysis overlooks the decisive act of the return of the check by Wittemann and its receipt and retention by Doctor Hausmann. If the sale was to be simply postponed, the seller, Wittemann, would have no reason to return the earnest money. If the doctor thought the sale to be postponed until the tenant was removed from the property, he would have no reason to accept the check. In accepting the check, the doctor manifested an acquiescence in the termination of the contractual relationship.
In Douglass v. Ransom (1931), 205 Wis. 439, 445, 237 N.W. 260, we held that the retention of the earnest-money check (received in the mail) might be construed as an acquiescence that the agreement to sell was rescinded. We, however, found no rescission because of the other acts of the buyer (the filing of the lis pendens and the commencement of the action) negated any inference of acquiescence and showed that he did not intend to waive his rights under the contract. Here the vendee commenced no action, but simply asked whether the tenant was removed from the premises. These inquiries are merely indicative of a continued interest in the property as a subject for future negotiations, and are not inconsistent with the prior manifestations of rescission. We conclude, however, that the retention of the check, and the failure to take any legal action to enforce the contract were so inconsistent with a continued contractual relationship, as to be conclusive evidence of an intent to consider the transaction at an end. In view of the only interpretation that can be placed upon these acts, it is clear that the finding of the court is contrary to the evidence.
Other acts of the doctor indicate that he thought that the sale was terminated. Wittemann told the doctor of the Ziegler offer, but at no time did Dr. Hausmann indicate that such dealings were inconsistent with the contractual relationship which he now insists was then in existence. Wittemann said that he told the doctor of the listing contract with the real-estate broker for $90,000. Dr. Hausmann disputes this. Nevertheless, the vendee's conduct, until the time he asserted the continued existence of the vendor-vendee relationship, can only be accounted for if we conclude that the parties by mutual consent abrogated the contractual relationship.
In view of our conclusion that the contract was rescinded by the parties in 1954, the other points raised by the parties need not be considered.
By the Court. — Judgment reversed.