Opinion
September 5, 1963 —
October 1, 1963.
APPEAL from a judgment of the circuit court for Kenosha county: M. EUGENE BAKER, Circuit Judge. Affirmed.
For the appellant there was a brief by Charles L. Goldberg and Francis X. Krembs, both of Milwaukee, and oral argument by Mr. Krembs.
For the respondent Jetco Properties, Inc., there was a brief by Mittelstaed, Heide, Sheldon Hartley of Kenosha, and oral argument by William A. Sheldon.
For the respondents Freeman there was a brief by Brown Black of Racine, and oral argument by Harley Brown.
Action by the appellant James L. Callan, Inc., against Estfred Corporation and Jetco Properties, Inc., defendants, for specific performance of a contract for the sale of land by Estfred. Jetco impleaded defendants Leon L. Freeman and his wife Cornelia G. Freeman from whom it purchased the land after Freeman purchased part of it from Estfred and part from Rose Mattioli. The trial court denied specific performance, and from the judgment dismissing the complaint the plaintiff appeals.
This case involves three real-estate brokers, two of whom desired to purchase the same land which ultimately was purchased as a supermarket site by Jetco from one of them. Both Freeman and Callan previously had contacts with Jetco which is a subsidiary of Jewel Tea Company, and as early as March of 1958 a representative of Jetco had looked over the land as a possible supermarket site, and was working with Freeman to acquire it. In 1957 Estfred was interested in purchasing the land in question which consisted of lots 10, 11, 12, 14, 15, 16, 17, and 18, in Tenuta Dells Subdivision in the city of Kenosha. All these lots were owned by Sam and Carmela Tenuta excepting lot 14 which had been sold to August and Rose Mattioli in 1952. On June 5, 1957, Estfred agreed to purchase lot 14 from the surviving owner Rose Mattioli for $2,500, and to close the sale on September 7, 1957, at the office of Freeman, providing Estfred was able to buy the other lots from Tenuta. Two months later on August 10th, Estfred acquired legal title by warranty deed to these lots. The deed, which was recorded, however included lot 14 then owned by Mattioli. Estfred did not close the sale with Mattioli of lot 14 on September 7th nor on March 15, 1958, the date to which the closing was extended. Unknown to Estfred, on that day Freeman purchased lot 14 from Mattioli and received a warranty deed. In this state of affairs on April 16, 1958, Estfred made a contract with Callan to sell all the lots included in the Tenuta deed for $24,500, $1,000 of which was paid down, the additional sum of $9,000 was to be paid on or before May 16th and the balance on June 16th. Estfred was to furnish a commitment for an owner's title policy "prior to fifteen days," which phrase was considered to mean fifteen days after execution of the contract rather than prior to the date of closing. The contract was not recorded until July 16, 1958, after the following events occurred.
On April 21st Freeman notified Estfred he had taken a deed to lot 14 from Mattioli which deed was recorded April 29th. About May 1st Estfred informed Callan there was difficulty regarding title and with a real-estate broker who was holding the lot for nuisance value. Prior to May 16th Estfred demanded of Callan the instalment payment of $9,000 which Callan refused to pay until Estfred furnished evidence of title which had been promised by Estfred and previously requested by Callan. On May 17th Estfred attempted to rescind the contract and tendered the down payment to Callan because of "title involvement." This was refused by Callan who demanded full performance of the contract. On June 2, 1958, Callan, knowing Estfred did not have title to lot 14 and had attempted to rescind the contract, wrote Jewel Tea Company (it is agreed Jewel Tea and Jetco for the purposes of this suit could be considered as a unit) inquiring whether it was interested in the land which Callan stated it had recently purchased. Upon receipt of this letter Jetco contacted Freeman who informed Jetco the plaintiff had no interest in the property and was merely fishing. Jetco then replied to Callan that they were working with a broker in Racine and nothing would be gained by talking to Callan at that time.
On June 26th, ten days after the closing date of the Callan contract, Estfred conveyed the lots it owned to Freeman and the deed was recorded on June 30th. On July 1, 1958, Freeman and his wife conveyed all the lots he purchased from Estfred and lot 14 he had purchased from Mattioli to Jetco, which deed was recorded the next day. Thereafter on July 15th Callan had his signature on his contract acknowledged and on the following day the contract was recorded. On July 18th Callan, through its attorney, wrote Jetco disclosing the details of the contract of purchase with Estfred, claiming Jetco was put on notice thereof by virtue of the Callan letter of June 2d and demanding Jetco perform the contract and convey all the property to Callan. This was refused and this suit resulted.
"June 2, 1958 Mr. R. D. Sturtevant Vice President Jewel Tea Co., Inc. 1955 West North Avenue Melrose Park, IllinoisDear Mr. Sturtevant:
Earlier this year some correspondence was exchanged with regard to your proposed store expansion in southeastern Wisconsin. It may be of interest that this company recently purchased a very desirable supermarket location in the City of Kenosha. It includes eight lots and contains approximately 48,000 square feet. Except for one corner which had previously been sold to Continental Oil Company, the property includes a full block and is bounded by 22nd Avenue, 23rd Avenue, 31st Street and 32nd Street.
The writer has made a rather thorough investigation of suitable locations in the northern and western sections of Kenosha. There is very little available in the way of vacant land, and we believe that the subject site is strategically located for your purposes. Please advise at your convenience. Very truly yours, JAMES L. CALLAN, INC. By President JLC:jm"
Callan contends its contract with Estfred was specifically enforceable at the time it was entered into because Estfred had legal title to all the lots excepting lot 14 for which it had a contract of purchase with Rose Mattioli which gave rise to an equitable title. Callan then contends its right to specific performance is enforceable against Jetco because Jetco as successor in title to the land from Freeman was not an innocent purchaser without notice, nor was Freeman. In substantiation of the first argument, Callan relies on 49 Am. Jur., Specific Performance, p. 118, sec. 100, to the effect specific performance will be enforced against one who has equitable title to the land by virtue of an executory contract with the holder of the legal title to convey the land to him and suit might be brought to enforce the contract either against the vendor alone, if the purchaser is willing to accept such title, or by joining the holder of the legal title as party defendant. This argument is based on the theory the Mattioli contract was specifically enforceable by Estfred on April 16, 1958. It is undoubtedly true if a contract existed capable of being specifically enforced and suit were brought on that day, a court of equity might decree specific performance. Callan relies also on cases involving specific performance with compensation for a partial breach by way of damages, restitution, or abatement in price. Such remedy is available in Wisconsin in a proper case. McFarlane v. Dixon (1922), 176 Wis. 652, 187 N.W. 671, 48 A.L.R. 1; Dells Paper Pulp Co. v. Willow River Lumber Co. (1919), 170 Wis. 19, 173 N.W. 317; O'Malley v. Miller (1912), 148 Wis. 393, 134 N.W. 840; Restatement, 2 Contracts, p. 659, sec. 365. But to apply such a doctrine the buyer must be willing to accept part performance. In this case Callan is not seeking specific performance with compensation and has never indicated its willingness to accept part performance. Its demands on Estfred were for full performance; the prayer of the complaint calls for full performance; and on this appeal, in its brief, it requests the judgment appealed from be reversed and the cause remanded with instructions that judgment be entered for full performance. Opportunity was given Callan at the close of the trial to prove damages for the breach of the contract by Estfred because it was unable to convey all the lots. This was in lieu of specific performance either full or partial. Callan did not accept the offer to prove damages but appealed.
Regardless of Callan's right to specific performance against Estfred for the lots Estfred had title to and sold to Freeman after breaching its contract, Callan must show that at the time of trial Estfred had a right to specific performance of the Mattioli contract. This Callan has not done and the record does not disclose that at the time Callan entered into the contract with Estfred on April 16th Estfred had a right to specific performance against Mattioli. Estfred did not close the contract to purchase lot 14 on March 15th and was in default. A month later, when Estfred entered into the contract with Callan, lot 14 had been conveyed to Freeman. Estfred apparently accepted the situation that Freeman had a right to buy lot 14 from Mattioli and so far as the record shows took no contrary action to require Freeman to convey lot 14 in recognition of the Mattioli contract. It is true Callan as one who contracted for the purchase of land had a right to rely on the seller Estfred either of having title or of procuring it so as to carry out the promise to convey on the closing date. McLennan v. Church (1916), 163 Wis. 411, 158 N.W. 73. As early as May 1st Callan knew Estfred did not have title to one of the lots and on May 17th knew Estfred was not going to acquire the title. Equity will not compel a vendor to acquire title to fulfil his contract to sell and convey unless the vendor has a specifically enforceable contract to acquire the title from the third person holding the legal title.
A buyer may acquire through specific performance the right of the vendor to get specific performance against another if such right exists; however, where the seller makes performance impossible either by failing to acquire title to the land he has agreed to convey or allows his rights under the contract to terminate, the vendee cannot get specific performance. It is true some offer to sue for specific performance was made by Estfred if Callan would pay the instalment on its contract so Estfred could sue Freeman. But Callan refused to make the instalment payment. Callan cannot now successfully maintain such a suit in effect as a part of its suit against Estfred and Jetco.
The trial court was not in error in finding that Estfred did not perform its contract and could not perform it. The evidence does not sustain Callan's position that on April 16th Estfred had any right to specific performance of the Mattioli contract either against Rose Mattioli or against Freeman and in the absence of such proof the plaintiff has not sustained its first contention that it is entitled to specific performance on its contract in its entirety. This disposition, which is substantially the analysis of the trial court, makes it unnecessary to discuss the second proposition that neither Jetco nor Freeman was an innocent purchaser without notice because such proposition is predicated upon the right of Callan to get specific performance of the entire contract.
By the Court. — Judgment affirmed.