Opinion
September 17, 1952 —
October 7, 1952.
APPEAL from a judgment of the circuit court for Milwaukee county: WM. F. SHAUGHNESSY, Circuit Judge. Affirmed.
Sydney M. Eisenberg and Harold Harris, both of Milwaukee, for the appellant.
For the respondent there was a brief by Rubin Ruppa, attorneys, and Nathan Ruppa and Norman W. Wegner of counsel, all of Milwaukee, and oral argument by Mr. Wegner.
This is an action to recover a $200 down payment made by plaintiff, Joseph G. Tribolini, purchaser, to the defendant, Federal Business Appraisers Company, Inc., as agent for Louis P. McCargo, seller, on the purchase price of a filling station in the city of Milwaukee, the total purchase price being $1,200.
McCargo had operated the filling station in question since November, 1949, as lessee. The filling-station real estate was owned by two brothers named Grossman. Samuel Grossman, one of the two landlords, also was the owner of the Beacon Oil Company which supplied McCargo with gasoline. Apparently, the gasoline was supplied on a consignment basis, because title to the gasoline was in the Beacon Oil Company and not in McCargo. McCargo employed the defendant corporation as his agent to sell the assets of the filling station owned by him. On January 23, 1950, the plaintiff signed a written offer to purchase such filling station on a printed blank prepared by the defendant, and part of such offer was in the form of printed material, and part was in handwriting in ink inserted in blanks in the document. The property to be purchased, according to the offer, was described as "Lou's Service Station," the location was given, and the purchase price was stated to be $1,200, of which $200 was to be paid down and the $1,000 balance was payable on the closing date, which was to be on or before February 15, 1950. The fixtures to be included were not described, and the only mention of stock of merchandise was that there was to be included stock worth "approximately" $100 in amount. Following the printed words "Special Conditions" the following was inserted with pen and ink:
"This is my offer to purchase the above business for the above price, if it cannot be bought for the above price, my money is to be refunded in full. Hoist must be in working condition. Rent $60 per month. Lease as per landlord." Among the printed provisions was the following:
". . . all earnest moneys paid to the Federal Business Appraisers Company, Inc., will be forfeited to them as and for liquidated damages for their services in the above matter, at the option of the Federal Business Appraisers Company, Inc."
Printed below the offer to purchase was a form of receipt by the defendant for the down payment which had been filled in and signed by the president of the defendant corporation, and a form of acceptance by McCargo which had been signed by him under date of January 26, 1950.
At the time the offer to purchase was signed by plaintiff there was no discussion about the gasoline in the filling-station tanks, nor was there any discussion as to what items were to be included in the approximately $100 worth of stock which plaintiff was to receive.
February 8, 1950, was set for the closing date, and that evening the plaintiff met in the office of the defendant with its president, another employee of defendant, and Samuel Grossman. Plaintiff was accompanied by his brother-in-law, Edward Warta, whom he introduced to the others as his partner who was to assist him in financing the purchase. The defendant had ready for delivery a bill of sale executed by McCargo to plaintiff covering fixtures and other items being purchased by plaintiff, an affidavit in compliance with the Bulk Sales Act, and a list of the merchandise stock to be included, aggregating $106 and certified to by McCargo as being the stock included in the sale. No gasoline was included in such list.
The question of the substitution of the plaintiff and Warta as lessees in place of McCargo was taken up with Grossman; the plaintiff paid Grossman $60 for the first month's rent; and Grossman stated that he was satisfied to accept the plaintiff and Warta as tenants in place of McCargo. Grossman then started to leave, and as he got to the door he turned and stated that on Saturday morning he would send someone out to measure the gasoline in the tanks, and he inquired of the plaintiff whether plaintiff would have money enough to pay for the gasoline. The tanks when full held $800 worth of gasoline, but the record is silent as to the amount of gasoline then in the tanks. Warta, upon hearing such remarks by Grossman, became very angry at the plaintiff and stated that the plaintiff had told him that the tanks would be full and that the gasoline was to be included in the deal, and Warta made it clear that he wanted no part in the transaction. According to plaintiff, the plaintiff then called the deal off, and a few days later demanded his down payment back. The plaintiff also a few days after the February 8th conference told defendant's president that if the matter of payment for the gasoline had not been brought up before the closing of the purchase, the deal would have been set and he could have handled Warta afterward.
The action was tried to the court without a jury in the civil court of Milwaukee county. Judge HANLEY, who tried the case, filed a memorandum decision and stated that the defendant in the "interest of the owner of the property" attempted to place an additional provision in the contract upon which there had been no meeting of the minds of the parties, viz., that of having to pay additional for the gasoline, and that such attempted change in the contract entitled the plaintiff to rescind and recover his $200. Judgment was rendered in behalf of the plaintiff against the defendant for the recovery of the $200 and costs and disbursements.
From this judgment the defendant appealed to the circuit court, and the circuit court reversed the civil court by judgment entered August 27, 1951, and granted recovery of costs and disbursements to defendant. From such latter judgment the plaintiff has appealed to this court.
The question before us on this appeal is whether the learned judge of the circuit court was correct in determining that the findings of fact of the civil court, upon which findings the original judgment for the plaintiff was entered, are against the great weight and clear preponderance of the evidence.
It is undisputed in the testimony that the matter of paying for the gasoline in the tanks was brought up at the closing conference by Samuel Grossman and not by any representative of the defendant as agent for the seller. It is also undisputed that Grossman knew nothing about the original offer to purchase by plaintiff and had nothing to do with that transaction. His presence at the closing conference had been requested only because his consent to the changing of the tenancy was necessary. There is also no evidence whatever that the defendant in any way acted as agent for Grossman, or the latter's brother. Therefore, the finding made by the civil court, that the defendant " in the interest of the owner of the property" (evidently referring to the landlords) had attempted to include in the contract a new condition, viz., that of paying for the gasoline, at the closing conference is entirely without support in the testimony.
We fully agree with the statement made by the circuit judge in his memorandum decision, in which he stated:
"It appears without contradiction in the record that the payment for the gasoline in the tanks which had been supplied by the Beacon Oil Company, not a party to the contract, was entirely distinct from and collateral to the contract to purchase the business. It does not appear that the parties entering into the contract ever complied with section 241.18, Wisconsin statutes, nor that the sale of gasoline of an undetermined amount in the tanks was at any time contemplated by the parties. It was a matter upon which the plaintiff was bound to inquire, and his failure to do so leaves him without a remedy. The contract between the parties was complete, and the attempted rescission by the plaintiff because payment for the gasoline in the tanks was insisted upon by the lessor cannot be made the basis for a cause of action against the defendant. The findings of the trial court are, therefore, against the great weight and clear preponderance of the evidence, . . ."
The offer to purchase was executed on January 23, 1950, and the actual closing date was February 8th, although it could have been any date up to February 15th. It is quite evident that if the service station was operated in the meantime, the stock on hand would fluctuate, as the usual filling station carries oil and supplies for automobiles in addition to gasoline. A fair interpretation of the provision in the offer to purchase, that stock of the value of approximately $100 was to be included in the purchase price, is that such condition required that the seller tender at the closing stock on hand of a value of not less than $100. It certainly would be a strained and unreasonable interpretation of the contract, if the tanks should be full of gasoline worth $800 at the closing date, to hold that the seller was required to deliver over such gasoline to the plaintiff purchaser as part of the stock included in the $1,200 purchase price. Surely $800 is far from being "approximately" $100.
There is one other point which occurs to this court, which was not raised by the plaintiff in the civil court, the circuit court, or this court, and that is whether the forfeiture of the $200 was actually intended as liquidated damages, or whether it was in the nature of a penalty. Counsel for plaintiff, not having raised the issue in any of the three courts which have had this case before it, we assume the explanation therefor is because counsel, after due consideration, had concluded that it would not be in the best interests of plaintiff to do so. However, even if the plaintiff were successful in establishing that the provision for forfeiture was in the nature of a penalty and void, the seller, nevertheless, would be entitled to recover his actual damages sustained by reason of plaintiff's failure to consummate the purchase. Elmor Realty Co. v. Community Theatres (1932), 208 Wis. 76, 241 N.W. 632. Such damages might conceivably exceed the $200 down payment.
By the Court. — Judgment affirmed.
BROADFOOT, J., dissents.