Opinion
September 13, 1945. —
October 16, 1945.
APPEAL from a judgment of the circuit court for Milwaukee county: OTTO H. BREIDENBACH, Circuit Judge. Affirmed.
William E. Burke of Milwaukee, for the appellant.
John A. Lonsdorf and Edward J. Byrne, both of Appleton, for the respondent.
Action commenced March 31, 1941, by Anton Kons, plaintiff, against John G. Pallange, defendant, for breach of three land contracts for the sale of certain real estate. The damage claimed is the amount paid by plaintiff to defendant on the purchase price. Defendant appeals from a judgment entered January 6, 1945, in favor of plaintiff.
This action was before this court on a previous appeal, and is reported in 244 Wis. 64, 11 N.W.2d 634. Plaintiff appealed from a judgment of nonsuit dismissing plaintiff's complaint. The decision of the lower court was reversed.
The facts are fully set forth in the previous opinion, and no effort will be made to restate all of them at this time, reference being made to that decision for a statement of the facts in detail. The material facts are that at various times during the early part of 1930 plaintiff purchased three lots from defendant in the Airport Heights Addition in the township of Neenah, Winnebago county, Wisconsin, under three separate land contracts, for which he agreed to pay the sum of $1,935, making down payments totaling $830, balances to be paid in monthly instalments, on which plaintiff paid $675, leaving an unpaid balance of $430. The payments were to be completed during a three-year period, at which time defendant was to convey title, free and clear of incumbrances, to plaintiff.
May 19, 1930, and shortly after the execution of the land contracts, defendant mortgaged the entire property for the sum of $9,500, reserving the right in the mortgage to obtain partial releases of lots fronting on the highway at the rate of $5 per front foot. The lots purchased by plaintiff fronted on the highway, and the amount necessary to be paid by the defendant to have these lots released was the sum of $715, on the basis of frontage. The monthly instalments were continued through the years 1930 and 1931, and during the months of January, February, March, and April, 1932, plaintiff paid only the sum of $5 per month in place of $30 per month which was due. Plaintiff discovered the mortgage against the entire premises, including the lots he had purchased, and went to Milwaukee and talked with the defendant, calling his attention to the fact that the property was mortgaged. Plaintiff discontinued payments after discovering the existence of the mortgage.
Evidence not before the court in the former trial shows that on June 10, 1932, defendant notified plaintiff in writing that if he failed to bring his payments up to date by July 1, 1932, he would cancel the contracts and declare a forfeiture of the payments made. Other new evidence introduced at this trial was testimony of defendant that if payments had been made in accordance with the contract he would have been in position to convey title to the lots in question free and clear of any incumbrance.
On June 29, 1932, defendant wrote plaintiff, asking him to appear and testify in an action against one Fox, and in this letter made the following statement: "Then after that suit, which we hope to win, I'll have clear title and will be able to give you clear title and we will come together on the price of the lots." Another part of the letter contains the following: "You go see George Mayer and whatever you and he can agree on will be satisfactory for George is an honorable man. He is my agent there now and the only one." This letter also contained the following statement: "You and I will come to a satisfactory agreement for you are an honorable man and I try to be honest also."
Later the mortgagee started foreclosure proceedings on all of the property. Plaintiff was not made a party as his land contracts were not of record. When the action was started, defendant made application to the court for the appointment of George Mayer as receiver, which appointment was made. Mayer and plaintiff had several conferences, and pursuant to what Mayer considered his authority under his appointment as receiver, he placed a valuation on all the lots in the addition, and in fixing the value of the lots purchased by plaintiff, he determined that payments made by plaintiff upon his land contracts exceeded the value of the lots purchased by $210. He informed plaintiff that if he would make an additional payment of $45 he would convey to him the three lots purchased under the land contracts together with an additional lot. Plaintiff made this payment and Mayer, as receiver, executed and delivered a receiver's deed to the plaintiff on the 4th day of December, 1934. Judgment of foreclosure was entered January 14, 1935, and order confirming sheriff's report of sale was entered October 31, 1936. The lots deeded to plaintiff by the receiver were sold with other lots contained in the mortgage at the sheriff's sale under the foreclosure proceeding. Plaintiff claimed title to the lots under the receiver's deed, and in the court proceedings after the foreclosure sale the court canceled plaintiff's deed, holding that the receiver had no authority to convey any title to the premises in question, and ordered the refund to plaintiff of the sum of $45 paid by him to the receiver. Plaintiff seeks to recover money paid to defendant on the land contracts in question.
Defendant contends, (1) that the statute of limitations has run against this action and it should therefore be dismissed, and (2) that plaintiff's failure to make payments on the three land contracts as they became due terminated the contracts and forfeited prior payments. These are the same contentions that were made when the case was before this court the first time, and both questions were decided against the defendant.
It is now argued that the former decision was made on the basis of plaintiff's evidence alone, as motion for nonsuit was made at the close of plaintiff's case, which motion was granted by the trial court. It was an established fact before this court at the first hearing that the plaintiff was in default in his payments under the terms of the contracts. The additional evidence offered by defendant is a letter of June 10, 1932, demanding that delinquent payments be made current on or before July 1, 1932, and we have the further testimony of defendant that if payments had been made in accordance with the terms of the contracts he would have been able to deliver title free and clear from all incumbrances, as provided in the land contracts. We do not consider that this changes the conclusions reached in the former decision. In a letter to the plaintiff, dated December 17, 1931, defendant said: "Times are hard everywhere." And also said: "Try to meet your payments as best you can and fear not." This letter was written when payments under the contracts were current. In this letter defendant recognized the fact which was common knowledge to everybody — that economic conditions were bad, money difficult to obtain, and values greatly decreased. Defendant had a right to rescind the contracts as set forth in his letter of June 10th, but prior to the expiration of the time fixed in defendant's letter of June 10th, defendant again wrote plaintiff on June 29, 1932, making these statements in different parts of the letter: "Then after that suit, which we hope to win, I'll have clear title and will be able to give you clear title, and we will come together on the price of the lots." "You go see George Mayer and whatever you and he can agree on will be satisfactory for George is an honorable man. He is my agent there now and the only one." "You and I will come to a satisfactory agreement for you are an honorable man and I try to be honest also." This letter was written by defendant less than three months after plaintiff had talked with defendant and called his attention to the fact that there was a mortgage on the premises, and there was a discussion about the delivery of title. Pursuant to defendant's letter, plaintiff and defendant's agent, Mayer, who was also receiver in the foreclosure proceeding, arrived at what was intended to be a settlement of these land contracts, whereby Mayer accepted the sum of $45 from plaintiff and conveyed to him, in his official capacity, the three lots described in the land contracts, together with an additional lot. The deed was later set aside by the court for the reason that Mayer had no authority, as receiver, to execute it, or the matter would have been fully disposed of and settled by that transaction.
Counsel contends that plaintiff could not question defendant's title at the time of his default, and asserts that the proof shows defendant was in a position to deliver good title if plaintiff had made his payments in accordance with the terms of the contract. To sustain his position, defendant cites Knapp v. Davidson (1923), 179 Wis. 493, 192 N.W. 75, and other cases, which hold that in the absence of misrepresentation or fraud, a vendee cannot, prior to the time fixed in the contract for conveyance, complain that the vendor's title is defective or incumbered. We approve all that is said in Knapp v. Davidson, supra, but there are exceptions to the general rule contended for by defendant, and plaintiff comes within an exception. It was held in the prior decision, and is here affirmed, that the defendant waived payment of the remaining instalments in accordance with the terms of the contracts, thus keeping the contracts in full force and effect until the foreclosure of the mortgage was completed on October 31, 1936, which divested defendant of any title to the lots which plaintiff purchased. This placed plaintiff in position to rescind the contracts and recover his damages.
"But where the nature of a defect in title is such that the vendor cannot acquire the title agreed upon, the vendee may rescind and put an end to the contract, even though the time for the delivery of the deed has not arrived. In such a case it is not enough that the vendor is `willing' to perform on his part." 102 A.L.R. 877. See also Drew v. Bowen (1929), 102 Vt. 124, 146 A. 254.
It is considered the trial court properly granted judgment for the plaintiff.
By the Court. — Judgment affirmed.