Opinion
No. 414.
Submitted under sec. (Rule) 251.54 February 5, 1975. —
Decided June 30, 1975.
APPEAL from a judgment of the circuit court for Milwaukee county: EDMUND P. ARPIN, Circuit Judge of the Third Circuit, Presiding. Affirmed.
For the appellants the cause was submitted on the briefs of Walter M. Tammi and Schneider Tammi, all of Milwaukee; and for the respondents the cause was submitted on the brief of Quarles Brady of Milwaukee, attorneys, and Peter W. Bunde, David E. Jarvis and Larry J. Jost, all of Milwaukee, of counsel.
Action for specific performance. An offer to purchase was entered into between plaintiff buyers and defendant sellers on December 30, 1968. The closing date was January 31, 1969. The offer was contained on a standard form offer to purchase, and the property was described as:
"All of the 20 acre parcel of land, including about 450 feet of frontage on Lake of the Falls, owned by Helen Miller Warner herein, on the South end of said Lake of the Falls. . . ."
The standard provision to the effect that title evidence should be an abstract or title insurance policy at the choice of the sellers was changed to provide that the choice should be that of the buyers "if obtainable." The sellers had sent an abstract to buyer William Schneider, who is a Milwaukee attorney, on December 20, 1968, before the offer to purchase was accepted. On January 6, 1969, Schneider demanded a title policy in a letter to the attorney for the sellers. This was because he had obtained a copy of the assessor's plat and there was a variance between the description of the property as shown on the abstract and that in the assessor's plat. The principal problem was that the assessor's plat showed no lake frontage. Subsequently, the abstract was extended on January 7, 1969, and tendered to Schneider. On January 10th he formally demanded a title insurance policy in a letter to sellers' attorney and stated that he had ordered a title policy from Chicago Title Insurance Company in the buyers' behalf.
On April 7, 1969, Schneider wrote another letter to the sellers' attorney in which he stated that the title company refused to issue a title policy without an accurate survey. Schneider proposed that each party pay half the survey. The sellers finally agreed on July 21, 1969, to employ Genisot Associates to make a survey for approximately $400 and to pay one half of that cost. In a letter to Schneider dated July 14, 1969, the surveyor stated that the survey schedule would be in the latter part of August or at the latest the first week in September. The schedule was not adhered to. On October 7, 1969, Schneider wrote a letter to the surveyor in which he requested the survey of a much larger parcel of land abutting the property which is the subject of this action. He asked that this survey be consolidated with the previously ordered survey and asked that it be done promptly because "the sellers of such land [defendants in this case] are starting to give me some heat."
On January 14, 1970, the attorney for the sellers wrote a letter to Schneider and his wife stating in part as follows:
". . . [U]nless you, as buyers under the terms of the Offer to Purchase of December 10, 1968, are willing to waive the alleged legal defect in title (namely, lack of recent survey description) and make payment in full of the balance of the purchase price on or before January 31, 1970, the Warners will consider said contract as void and shall immediately return to you the $100 down payment."
At this time, no title policy binder had been offered to the Schneiders, and in fact the sellers never obtained a title policy binder.
On January 20, 1970, Schneider wrote the surveyor a letter in which he stated that he was forced to close the purchase of one parcel of land with an incomplete legal description due to his inability to come up with surveys. He also stated that the sellers in this case were threatening to void the sale unless he could give them a firm commitment as to when he would have the survey. He requested that the surveyor give him a firm date on which he could promise the various surveys.
On February 3d defendants returned the down payment to Schneider. He refused to accept the return. On February 13th the surveyor wrote him a letter, responding to his letter of January 20th. The letter states as follows:
"Dear Sir: I am sorry that the above survey has not been completed by this time. However my health is such that I have returned to work this week and shall be up to Mercer within the next two weeks. At that time we shall attempt to finish the job. If the weather conditions are such that it might take longer I shall write and notify you."
The survey was apparently completed some time in March of 1970. Schneider brought this action for specific performance in June of the same year.
The trial court found as a fact that the offer to purchase was modified to provide that the plaintiffs assumed the responsibility for obtaining a title insurance policy, except for payment, and assumed responsibility for making the necessary arrangements for the survey.
In its conclusions of law, the court held that the buyers breached the contract by failing to obtain a survey by the first week of September, 1969, and by their failure to keep the defendants advised of the difficulties that developed in meeting that deadline. It further held that by reason of this default the sellers had the right to demand that the transaction be closed within a reasonable period of time, and that the notice of January 14, 1970, made time of the essence with respect to a closing date of January 31, 1970. It concluded that the uncertainties of description in the abstract of title constituted a valid legal defect in title which the buyers were unwilling to waive before the closing date and the buyers were not entitled to specific performance because of the provision in the contract of sale regarding the sellers' default. The provision states:
"Should the Seller be unable to carry out this agreement by reason of a valid legal defect in title which the Buyer is unwilling to waive, all money paid hereunder shall be returned to the Buyer forthwith, and this contract shall be void."
Judgment was entered dismissing the complaint. Plaintiffs appealed.
The evidence supports the findings of fact made by the trial court. Therefore, the question in this case is whether the court correctly invoked the rule of Ochiltree v. Kaiser (1963), 20 Wis.2d 191, 121 N.W.2d 890, that time may be made of the essence after breach of a contract for the sale of land by reasonable notice to the party in default to perform.
In this case, the sellers promised to furnish the buyers' choice of an abstract or title policy, if obtainable, as title evidence. The sellers furnished an abstract, but the buyers demanded a title policy. The buyers undertook to obtain the policy as the agent of the sellers. They were unable to do so, because of a lack of a survey. The failure to get the survey, which was attributable to the buyers, made the title policy unobtainable as evidence of title, and precluded the buyers from exercising their choice of either a title policy or an abstract. Thus, the tender of the abstract, under the facts of this case, satisfied the condition precedent for furnishing title evidence before the buyers could tender performance.
The sellers not being in default, the question arises whether the trial court's conclusion that the buyers were in default with regard to the closing date can be sustained. In effect, the trial court held that the contract contained an implied obligation to close within a reasonable time and the buyers did not do so. This is going too far. Under the contract the sellers had an obligation to furnish a title policy until it was determined that such policy was unobtainable. This was a condition precedent to the buyers' obligation to tender performance. The buyers were not in default prior to the notice of January 14, 1970. However, this does not mean that the judgment should be reversed.
Ochiltree v. Kaiser, supra, applies to a situation where a definite time for performance is fixed in a contract for the sale of land, although the time fixed is not of the essence of the contract. In such circumstances, a party not in default can tender performance of his obligation and, by notice, fix a reasonable time for return performance by the party in default. But what of a situation where no definite time for performance is fixed? Is one party obliged to wait indefinitely upon the other? We hold he is not. Both Corbin and Williston support the proposition that where no definite time is fixed for performance, one party may serve notice on the other fixing a reasonable time for performance and thereby place a time limit on his own liability. This is because a contract for sale of land is one for simultaneous exchange of performance, the seller's conveyance of merchantable title, and the buyer's payment of the purchase price. The duty of each party is conditional upon an offer of performance by the other.
3A Corbin, Contracts, p. 382, sec. 723.
Williston, Contracts, p. 209, sec. 852.
In this case, the sellers were entitled to and did fix a reasonable time for closing the transaction. The buyers failed to close within that time, thereby relieving the sellers of further obligation under the contract except the return of the buyers' earnest money.
By the Court. — Judgment affirmed.