#### Knauf & Tesch Company, Appellant, vs. Elkhart Lake Sand & Gravel Company and others, Respondents.

*April 9*

April 29, *1913.*

*Estoppel: Passing 0† title to land: Fraud 'by agent: Pointing out boundaries which include his own land: Statute of frauds: Equity: Retaining jurisdiction: Remedy at law.*

1. The familiar principle of estoppel *in pais*whereby the title to land of one who has fraudulently induced a person to buy it as the property of another is taken from him and vested in such purchaser, if otherwise, without want of due care on his part, the latter would be pecuniarily injured, applies to the case of an agent of a corporation who, while negotiating the sale of land of the corporation, points out boundaries which include land of his own.

2. Estoppel by covenant and estoppel *in pais*are clearly distinguishable, but each, operating in its appropriate sphere, is as effectual as the other to pass the title to real estate.

3. The doctrine of the transfer of the title to land by estoppel *in pais*does not violate the *statute*of frauds, which is *the*weapon of the written law to prevent fraud, not an instrumentality to enable the evil-disposed to perpetrate fraud.

4. A court of equity has very broad power in respect to disposing of the entire controversy appearing from the pleadings and evidence, whether legal or equitable relief, or both, be required; and where an action in equity is brought in good faith, it should not be dismissed upon its appearing that there is no sound basis for other than legal relief, merely because the facts were known to the plaintiff in the beginning, especially where no objection was made by answer or demurrer to the court’s dealing with the matter.

*307Appeal from a judgment of tbe circuit court for Sheboy-gan county: Michael KibwaN, Circuit Judge.

*Reversed.*

Action for equitable relief, establishing title to certain real estate in plaintiff and remedying the wrong complained of.

The issues raised and the nature of the evidence are shown by the following abridgment of the findings:

April 17, 1911, negotiations were begun between *Gar-vens,*— secretary, treasurer, and principal stockholder of the defendant *Gravel Company,*— and the president and vice-president of the plaintiff, as to a sale by such company of its real estate and property to plaintiff; such property being then used by the former for the excavation and sale of gravel, which business, the latter, to the *Gravel Company’s*knowledge, intended in case of purchase to continue. The *Gravel Company’s*land consisted of about thirty-eight acres deseribable as the south half of the northeast quarter of section 29, town 16, range 21 east, Sheboygan county, Wisconsin, northerly of the northerly boundary of the right of way of the Chicago, Milwaukee & St. Paul Railway Company, except a strip 100 feet wide off from the north side of the southwest quarter of said northeast quarter and extending 100 feet into the southeast quarter of the northeast quarter. The excepted part was used in common with the rest by the *Gravel Company,*but it belonged to *Garvens,*which, however, was unknown to plaintiff. Eor aught it knew, all belonged to such company. Such part is the land in controversy. It was bounded on the north substantially by fence. The forty on the north of the east part of the *Gravel Company’s*land was owned by Murphy, an officer of the company, but plaintiff supposed *Garvens*had some interest therein though he said nothing about his having any interest in any land south of the fence of any which plaintiff’s agents examined as *Gravel Company’s*land, which included all but the Murphy forty. *Garvens*solicited such agents to buy all the holdings. The diagram on page 308 shows the situation as it existed in fact.

*308

*309Plaintiff’s agents, during the negotiations with *Garvens,*representing the *Gravel Company,*examined what was understood to he the latter’s holdings, which included the 100-foot strip. Into such strip the *Gravel Company’s*operations had extended in excavating gravel for sale. While the parties were exploring the premises *Garvens*pointed to the fence as the north boundary, saying nothing as to his having any individual interest south of it. Relying thereon, April 18th, thereafter, plaintiff contracted in writing to acquire the *Gravel Company’s*property for $4,500, the business being done in behalf of the latter by *Garvens*and Murphy. In the written contract the property dealt with was thus described:

“The lands known as the *Elkhart Lake Sand & Gravel Company’s*sand and gravel pit, consisting of about thirty-eight acres of land situated in the county of Sheboygan, state of Wisconsin, together with the personal property, tools, and equipment needed to operate the same as it has been operated by us.”

April 21st, thereafter, for his company, *Garvens*delivered to Knauf, for plaintiff, an abstract and conveyance with other papers in execution of such contract, representing that such conveyance included the lands agreed upon. The papers were received for examination with the understanding that another paper, showing corporate authority to sell, would be furnished and that plaintiff should decide upon the sufficiency of the deed later. That was consented to by *Garvens,*but for accommodation of his company plaintiff then paid the purchase money. The lands were described in the conveyance thus:

“The following described real estate situated in Sheboygan county, state of Wisconsin, to wit: beginning one hundred (100) feet due east of the northwest corner of the southeast quarter (¿) of the northeast quarter (^) of section No. twenty-nine (29) in township No. sixteen (16) north, of range No. twenty-one (21).east, and running thence east twelve hundred and eighty-nine hundredths (1200.89) feet to the northeast corner of said southeast quarter (J), thence *310due south to the southeast corner of said southeast quarter Q*), .thence due west six hundred seventy-six (676) feet to the east line of the right of way of the Chicago, Milwaukee &. St. Paul Nailway, thence northwesterly along said right of way to the west line of said southeast quarter (J), thence due north five hundred forty-three (543) feet to a point one hundred feet south of the northwest corner of the said southeast quarter (£), thence due east one hundred (100) feet, thence due north one hundred (100) feet, to the place of beginning, containing 33.77 acres of land.

“Also that part of the southwest quarter Q-) of the northeast quarter (^) of said section lying northeast of the right of way of the Chicago, Milwaukee & St. Paul Nailway, excepting the north one hundred (100) feet, and described as follows: '

“Beginning one hundred (100) feet due south of the northeast corner of said southwest quarter (J) and running thence west parallel with the north line of said southwest quarter Q-) seven hundred eighty-two (782) feet, more or less, to the east line of the right of way of the Chicago, Milwaukee & St. Paul Nailway, thence southeasterly along said right of way to the east line of said southwest quarter (J), thence due north five hundred forty-three (543) feet to the place of beginning, and containing 4.87 acres of land.”

A careful examination of the conveyance and abstract would have disclosed that the premises in controversy were not included in the deed or according to the representations made leading up to the contract, nor to such contract, as plaintiff understood it in the light of such representations and that the *Gravel Company*never owned the strip. Such careful examination was omitted by consent of Garvens, because Mr. Knauf was required,’ for the time being, to give attention to sick relatives. Some few days thereafter, and before plaintiff had made the full examination of the papers contemplated, Murphy endeavored, as *Garvens*had before ineffectually, to have plaintiff purchase his forty; threatening that, if it did not, there would be competition in the gravel business; the 100-foot strip in controversy, which he then *311asserted belonged to *Garveiis>*being used in reaebing shipping facilities. That was the first intimation to plaintiff that the deed did not describe the 100-foot strip. Therefore, pursuant to the understanding had when the contract was made, plaintiff took possession of what it supposed was the *Gravel Company’s*property, described in the land contract, and has ever since remained in such possession, carrying on the gravel business. Seasonably after the intimation aforesaid, plaintiff discovered the facts and demanded conveyance of the disputed premises, which was refused. Under the circumstances plaintiff was not negligent in failing to discover the true state of things earlier than it did. May 11th, after the transactions aforesaid, *Garvens*notified plaintiff in writing to vacate the strip. Murphy then negotiated with defendant *Feldmann*to sell it with his forty, resulting in the latter arranging to take such property and transfer the strip to defendant *Laun*for $700; both *Feldmann*and *Laun*having knowledge of plaintiff’s occupancy and claim to have purchased the strip supposing it was a part of the *Gravel Company’s*property, described in the contract. *Feldmann*and *Laun*caused the records to be examined, resulting in confirmation of Murphy’s claim that the title to the strip was in *Garvens*and never had been in the *Gravel Company.*Relying thereon and the representations by Murphy that *Garvens*owned the strip, *Feld-mann*purchased it with the Murphy forty, taking the paper title thereto. May 16th, thereafter, he conveyed the strip to *Laun.*Neither of the parties made any inquiry of plaintiff’s officers in respect to their claim to the property. A few days later *Laun*and others formed the defendant *Concrete Company*which, June 22d thereafter, acquired paper title to the disputed strip. All the deeds vesting the record title in the *Concrete Company*were duly recorded. *Feldmann*and the parties who formed the *Concrete Company*did not combine to defraud plaintiff. They acted in the belief that Murphy’s claim as to the plaintiff not having any right to the disputed *312premises was true and upon the record title. *Garvens,*in the transactions with plaintiff, acted solely for the *Gravel Company,*making no representations in his own behalf.

On such facts the court concluded that plaintiff was not entitled to hold the *Garvens*land because he acted solely for his company, and that the cause could not properly be retained for legal relief because plaintiff knew the facts when the action was commenced.

Judgment was ordered for defendant on the grounds stated in the opinion referred to. There were no conclusions of law embodied in the paper filed in execution of the statutory requirements for findings of fact and conclusions of law to be filed by the trial judge. In place thereof, and denominated “conclusions of law,” there was an order dissolving a temporary injunction, granted at the commencement of the action, and an order for judgment dismissing the action on the merits, each party to pay its or his own costs.

Exceptions were filed requisite to save for review the questions discussed in the opinion.

For the appellant there was a brief by *J. F. McMullen,*attorney, and *Simon Gillen,*of counsel, 'and a reply brief and oral argument by *Mr. McMullen.*

They argued that the defendant *Garvens*acted in his individual capacity as owner of the land in question, and not merely as agent of the corporation. *Hubbard v. Oliver*(Mich.) 139 FT. W. 77; *Kipp v. Laun,*146 Wis. 591, 131 FT. W. 418. Upon thé question of estoppel they cited, among other authorities, *Norton v. Kear-ney,*10 Wis. 443; *Vilas v. Mason,*25 Wis. 310'; *McLean v. Dow,*42 Wis. 610; *Kingman v. Graham,*51 Wis. 232, 8 FT. W. 181; *Loizeaux v. Fremder,*123 Wis. 193, 101 FT. W. 423; *Two Rivers Mfg. Go. v. Day,*102 Wis. 328, 78 FT. W. 440; *Smith v. Willing,*123 Wis. 377, 101 FT. W. 692; *McCord v. Iiill,*117 Wis. 306, 94 FT. W. 65; *Williams v. J. L. Gates L. Go.*146 Wis. 55, 130 FT. W. 880; *Mariner v. Milwaukee,*146 Wis. 605, 131 N. W. 442; *Harley v. Harley,*140 Wis. 282, 122 FT. W. 761; *Appleton Mfg. Go. v. Fox River P. Co.**313Ill Wis. 465, 8? N. W. 453; *Kirie v. Hamilton,*102 U. S. 68; *Strasser v. Goldberg,*120 Wis. 621, 98 N. W. 554; *Wis. O. L. Go. v. Lcmrsen,*126 Wis. 484, 105 N. W. 906; *Lyndon L. Go. v. Sawyer,*135 Wis. 525, 116 N. W. 255; *Kimball v. Baker L. & T. Go.*152 Wis. 441, 140 N. W. 41. As to tbe power of tbe court to retain jurisdiction to administer suitable relief: *Fleming v. Ellison,*124 Wis. 36, 102 N. W. 398; *Gates v. Paul,*111 Wis. 110, 94 N. W. 55; *Franey v. Warner,*96 Wis. 222, 11 N. W. 81; *Luetzke v. Roberts,*130 Wis. 91, 109 N. W. 49; *Cole v. Getzinger,*96 Wis. 559, 11 N. W. 15; *Gi'ant M. Go. v. Abbot,*142 Wis. 219, 124 N. W. 264; *Gombs v. Scott,*16 Wis. 662, 45 N. W. 532; *Rock Go. v. Weirick,*143 Wis. 500, 128 N. W. 94. Tbe land in question was a part of tbe gravel pit sold, actually in use as sucb, and passed to tbe grantee even tbougb tbe title stood in tbe individual name of *Garvens. Yarn. Horn v. Richardson,*24 Wis. 245; *Green Bay ■& M. G. Go. v. Hewitt,*66 Wis. 461, 29 N. W. 231; *Gox v. Howell,*108 Tenn. 130,65 S. W. 868, 58 L. R. A. 481 and notes; *Wilson v. Hunter,*14 Wis. 683.

*H. J. Rooney,*for tbe respondents *Elkhart Lake Sand & Gravel Company*and *Garvens,*

contended that specific performance could not be enforced against tbe corporation because it never bad title, nor against *Garvens*because be never contracted to convey. ' 4 Pomeroy, Eq. Jur. (3d ed.) § 1405; *Bardon v. Hartley,*112 Wis. 14, 81 N. W. 809; *Auer v. Matheius,*129 Wis. 143, 108 N. W. 45; *Schneider v. Reed,*123 Wis. 488, 101 N. W. 682; *Park v. M., St. P. & S. S. M. R. Go.*114 Wis. 341, 89 N. W. 532. Equity will not retain jurisdiction to award damages where tbe facts were all known to plaintiff when be brought tbe suit. 1 Pomeroy, Eq. Jur. (3d ed.) § 231; *Luetzke v. Roberts,*130 Wis. 91, 109 N. W. 49; *Park v. M., St. P. & S. S. M. R. Go., supra; Rock Go.*v.' *Weirick,*143 Wis. 500, 128 N. W. 94; *Franey v. Warner,*96 Wis. 222, 11 N. W. 81.

*Francis Williams,*for the respondents *Feldmann, Laun,*and *Elkhart Sand & Concrete Company.*

*314Marshall., J.

Tbe appeal presents this for solution: If an agent induces another to contract for the purchase of the principal’s land by fraudulently pointing out its boundaries so as to include land of his own, and such other is let into possession accordingly and, later, such agent hands such other a deed and abstract, careful examination of which would disclose the facts, but it is reasonably delayed, the purchase money being as matter of accommodation paid in advance thereof, and such other within a reasonable time discovers such facts, insists upon having the omitted part and is not barred of right thereto by negligence, and the agent thereafter, by successive conveyances, causes title thereto to be vested in a distant party, each concerned having knowledge, or reasonable means of knowledge, of the truth, — may such person efficiently claim it and have relief in equity to confirm title thereto in him of record ?

The trial court ruled in the negative, since, as was supposed, an agent cannot lose title to his land by estoppel because of having fraudulently represented it as the property of his principal in conducting a sale of the latter’s property, not referring to any authority, elementary or judicial, in support thereof. There is none of which we are aware. On the contrary, the inquiry seems to be plainly ruled in the affirmative by the familiar elementary principle of estoppel *in pais*by which title to the land of one who has fraudulently induced a person to buy the property as that of another, is taken from him and vested in such person, if otherwise, without want of due care on his part, he would be pecuniarily injured.

In general, he who in dealing with another negligently or designedly misrepresents the facts, or, when he ought to speak, omits to disclose the truth for the purpose of inducing such other to, or with reasonable ground to expect he will, change his position in reliance thereon, is estopped to assert the truth to such other’s injury. *Two Rivers Mfg. Co. v. Day,*102 Wis. 328, 78 N. W. 440; *Frels v. Little Black F.**315*M. Ins. Co.*120 Wis. 590, 98 N. W. 522; *Marling v. Nommensen,*127 Wis. 363, 106 N. W. 884. Tbe rule bas no sucb infirmity tbat an agent can fraudulently represent bis own property as tbat of bis principal, and induce a purchase by means thereof, and then escape from losing what be so misrepresented because of bis having falsified while acting as agent. Tbe doctrine of estoppel penalizes for tbe wrong and so as to effectually remedy it as practicable. In a case of tbe sort before us, from tbe very logic of tbe principle, it bears on tbe person committing tbe fraud and those claiming under him with knowledge, as tbe only way of affording, as to tbe person wronged, tbe very thing which tbe wrongdoer fraudulently represented sucb person would obtain by dealing as be proposed. Tbe instrumentality operates in favor of tbe one who bas been misled though tbe fraud, — acts upon tbe wrongdoer and any one responsible for tbe mischief, *respondeat superior,*or because of ratification, and it is effectual to take title to land from one and vest it in another, where justice requires that to be done. It is a rule of last resort, but, as said in *Marling v. FitzGerald,*138 Wis. 93, 101, 120 N. W. 388, when it is aroused into activity:

> “It stays tbe operation of other rules which have not run their course [with tbe possible exception of tbe statute of limitations], when to allow them to proceed further would be a greater wrong than to permanently enjoin them. It is a rule of justice which, in its proper field, bas a power of mastery over all other rules,” tbat it is “entitled to tbe distinction of being one of tbe greatest instrumentalities to promote tbe ends of justice which tbe equity of tbe law affords.”

Many illustrations are found in our own books of tbe application of the doctrine of estoppel *in pais*to change title to realty from one person to another to save the latter from tbe consequences of tbe former’s fraudulent representations on tbe faith of which sucb other acted. The following are a few of them: *Peabody v. Leach,*18 Wis. 657; *North v. Henneberry,**31644 Wis. 306; *Two Rivers Mfg. Co. v. Day,*102 Wis. 328, 78 N. W. 440; *McCord v. Hill,*117 Wis. 306, 94 N. W. 65; *Mariner v. Milwaukee,*146 Wis. 605, 131 N. W. 442. In *Kingman v. Graham,*51 Wis. 232, 8 N. W. 181, it was distinctly Held that one may lose title to bis land to another by active fraud, but not by mere silence with no more than a mere moral obligation to speak, quoting this from *Brant v. Virginia C. & I. Co.*93 U. S. 326:

> “And it would seem that to the enforcement of an estoppel of this character with respect to the title of property such as will prevent a party from asserting his legal rights, and the effect of which will be to transfer the enjoyment of the property to another, the intention to deceive and mislead, or negligence so gross as to be culpable, should be clearly established.”

This case would satisfy, fully, the aggravated characteristics thus mentioned though later authorities seem to indicate that, to designedly or inexcusably mislead another is sufficient, as in *Two Rivers Mfg. Co. v. Day, supra,*and *Mariner v. Milwaukee, supra.*There the more modern doctrine, as gathered by text-writers from the trend of judicial administration, was adopted. 2 Pingrey, Real Prop. § 1220. One should not be misled, in a case of this sort, by failing to distinguish between estoppel by covenant and estoppel *in pais.*Each operates in its appropriate field and is quite as effectual as the other, as indicated in *North v. Henneberry, supra.*

It is suggested that the doctrine aforesaid is in violation of the statute of frauds when applied to real-estate titles. Not so, as uniformly held. The statute of frauds' was not designed to enable the evil-disposed to possess an instrumentality with which to perpetrate fraud. It is the weapon of the written law to prevent fraud while the doctrine of estop-pel is that of the unwritten law to prevent like evil. Each is effective in its appropriate field. Roth are essential to prevent and redress wrongs. Courts elsewhere, as well as our own, have uniformly dealt with this subject as not impairing *317tbe integrity of tbe statute in case of tbe taking of title to realty from one and vesting it in another being necessary to prevent tbe latter from suffering loss in consequence of having acted upon that one’s false representations. *Bell v. Goodnature,*50 Minn. 417, 52 N. W. 908; *Richardson v. Chickering,*41 N. H. 380; *Louks v. Kenniston,*50 Vt. 116; *Stanwood v. McLellan,*48 Me. 275. Tbe cases decided here and these authorities well illustrate bow effectually tbe principle of es-toppel *in pais*operates in such circumstances as were disclosed in this instance.

If tbe foregoing were not sufficient to dispose of this case in appellant’s favor, a reversal would be necessary because of tbe trial court having taken too narrow a view of its competency to deal with a situation in equity, upon its appearing that there is no sound basis for other than legal relief, and tbe facts were known to tbe plaintiff in tbe beginning. There is no question, even from tbe trial court’s point of view, but that a cause of action was stated in equity and, if that were not so, yet tbe action was commenced in tbe good-faith belief that equitable relief was obtainable on tbe facts. Moreover, no objection was made by answer or demurrer to tbe court’s dealing with tbe matter.

Tbe mere circumstance of itself that appellant knew tbe facts when tbe action was commenced would not require a dismissal because of facts not being established warranting equitable relief if, notwithstanding, good cause for legal relief was shown. Having properly acquired jurisdiction, in such a case, a court of equity has very broad power to wind up tbe entire controversy appearing from tbe pleadings and evidence, whether legal or equitable relief, or both, be required, as tbe following will show: *Franey v. Warner,*96 Wis. 222, 71 N. W. 81; *Cole v. Getzinger,*96 Wis. 559, 71 N. W. 75; *Stevens v. Coates,*101 Wis. 569, 78 N. W. 180; *Gates v. Paul,*117 Wis. 170, 94 N. W. 55; *Luetzke v. Roberts,*130 Wis. 97, 109 N. W. 949.

*318It should .not be thought that the facts of any one of those cases clearly indicate the- entire scope of the rule. Difficulty often happens from taking the circumstances of some particular controversy as measuring the r.ule of the decision in respect thereto, instead of the rule merely applying to the facts as it might to many somewhat similar conditions. The principle itself is stated as fully, perhaps, as anywhere in *Gates v. Paul, supra,*thus:

> “If one sues in equity in good faith and fails to establish his cause but shows a state of facts entitling him to recover at. law, the court, having rightfully obtained jurisdiction for a proper purpose, may retain the cause and grant just such relief as upon the facts the plaintiff appears entitled to, whether at law or in equity.”

The different adjudications on the subject are, to some extent, reviewed in *Stevens v. Coates, supra.*

I may be permitted to say for- myself, in passing, that where warrant can be found in the Code for dismissing an action, under any circumstances, merely because relief was sought in equity and the nature of the redress warranted by the proven facts is legal only, I have never been able to find. Neither have I been able to appreciate how the practice to the contrary, to any extent, was retained under the Code. We have but one form of action, one form of complaint, one method of forming issues, and one court for the trial thereof. There is no jurisdictional question, in the technical sense, which could arise as to whether a cause of action should be constructively in a court of equity or in a court of law. The court having jurisdiction in one aspect has jurisdiction in the other. In either case the complainant is required in plain and concise language to tell his story, and he is entitled thereon, the facts being established, to just such relief as is appropriate to redress any wrong or vindicate any right which is within the competency of the court to grant. In case the matter requires interference by a jury, it is under the control of the court to give it that direction as matter of administra*319tion. The cause can be dismissed as to some parties, other parties may be brought in if necessary, and the whole subject dealt with according to the real necessities of the case, as indicated by the facto pleaded and properly established. Why then need a party entitled to judicial relief of some sort on the pleaded and established facts, be turned out of court without it ?

It follows from what has been said that the judgment appealed from must be reversed and the cause be remanded for judgment in appellant’s favor, establishing its title to the disputed premises, against all parties to the action and, if neces-jary, charging the one holding it of record as trustee for plaintiff and requiring a transfer from that one in an appropriate way; that is, by the party or by the court under its equity power in that regard in lieu thereof.

The costs for printing on the appeal must be specially limited because of the case being needlessly long. No more than $75 can be allowed.

*By the Court.*— The judgment is reversed, and the cause remanded for judgment in appellant’s favor as indicated in the opinion.