Court Opinion

ID: 8196274
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:19:37.102278+00
Date Added: 2024-06-11T16:40:45.937969
License: Public Domain

*455
On rehearing.

The following opinion was filed October 8, 1929:
Rosenberry, C. J.
In this case a motion for a rehearing was granted and the matter has been again fully reargued and reconsidered. The consideration of this case has been made extremely difficult from the beginning for the reasons stated in the original opinion.
The writer of the original opinion arrived at the conclusion therein stated with considerable reluctance, which was shared by other members of the court. Few cases appear upon our calendar- involving so much confusion and matters of such indefinite nature.
The primary question, as was said in the original opinion, is whether or not the agreement should be construed as an offer on the part of the defendants individually to purchase their proportionate share of the property in the event that it should become necessary for the plaintiff to take over the property to protect his loan at the due date of his note, or whether it should be considered as one of a series of connected and interrelated transactions arising between the parties to the agreement of March 13, 1924.
The dominant element of that part of the transaction set out in the instrument of March 13, 1924, is that the plaintiff is to loan to the Ellwood Company the sum of $11,500. This loan is to be made for the purpose of enabling the company to carry on its development work. If the development work should not prove successful, it was apparently contemplated that the plaintiff would have to protect his loan by taking over the property of the company. It appears from the allegations of the-complaint that the company was known to be extremely hard up for money if not in a failing condition. This loan was to be made to the company for the *456benefit of all the parties to the instrument because they were stockholders in the corporation which was to be aided by the loan. If the plaintiff was required to take over the property, he did it as much for the protection of the interest of the other stockholders as for himself because under the terms of the agreement they were to contribute their pro rata share of the amount loaned. Upon further reflection we are convinced that the instrument dated March 13, 1924, cannot be construed as an agreement to purchase an interest in the property described. It is apparent from other allegations in the complaint that the property was then subject to a mortgage lien of $30,000. Certainly there is no agreement, express or implied, in the instrument of March 13, 1924, that plaintiff should advance the amount of this mortgage lien. All he could take over without taking up the mortgage would be the equity in the property. To say that the instrument required him to advance the $30,000 and convey to the other parties to the instrument their pro rata share of the property upon payment of their pro rata share of $11,500, is clearly unreasonable and untenable. While upon its face the instrument bears the construction put upon it in the original opinion, we are of the opinion that upon consideration of all the facts and surrounding circumstances with reference to which the parties dealt, it should not be so construed. The apparent purpose of the transaction was to save the company. The amount necessary or thought to be necessary in order to bring about the desired end was $11,500. The parties to the instrument made themselves liable for their pro rata share of the amount to be advanced by the plaintiff, and it was agreed that whatever should be saved out of the property should be held by the plaintiff for the benefit of all signers to the instrument. This action is therefore an action to compel the defendants to pay their pro rata share of the amount advanced by the plaintiff under the instrument of March 13, 1924, subject to an accounting by the plaintiff for such interest in the property as he secured. It is an account-*457mg action between the parties to the instrument to determine their respective rights and obligations. It is stated in the original opinion that it was indicated that it was the duty of the plaintiff to bid in the property “if he deemed it necessary to protect his loan at the time the property was sold under proceedings brought to foreclose the trust deed.” We are convinced upon reconsideration of the case that this was an error; that from the allegations of the complaint it does not appear that it was agreed, intended, or expected that in consideration of the signing of the agreement by the defendants the plaintiff bound himself to protect the property against the consequences of a foreclosure of the mortgage lien. That was the principal ground relied upon in reaching what we now regard as an erroneous conclusion.
In the view which we now take of the case it becomes apparent that the statute of frauds has no application for the reason that the instrument does not amount to a contract to purchase an interest in land. It is further apparent that there is no misjoinder of parties or causes of action, particularly under the provisions of sec. 260.17, Stats., which provides :
“Persons severally liable upon the same obligation or instrument, including the parties to bills of exchange and promissory notes, whether the action is brought upon the instrument or by a party thereto to recover against other parties liable over to him, . . . may all or any of them be included in the same action at the option of the plaintiff.”
By the Court. — It is ordered that the former mandate be and it is hereby vacated and set aside; that the order of the trial court overruling the demurrer based upon an alleged defect of parties is affirmed; that the order overruling the demurrer on the ground that causes of action are improperly united is affirmed. The order of the court sustaining the general demurrer is reversed and the cause remanded for further proceedings according to law. No costs allowed either party. Respondents to pay the. balance of clerk’s fees.