Court Opinion

ID: 8194536
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:41.926538+00
Date Added: 2024-06-11T16:40:43.281780
License: Public Domain

Doerfler, J.
The court decreed specific performance as of date of August 26, 1922, at which time the tenant, Godar, vacated the building situated upon the premises. The defendant contends that the performance should be decreed as of the date of the judgment. Plaintiffs assume the position that they were ready, able, and willing to perform on July 1st, which was the date contemplated for consummation by the terms of the contract, but that if this court, should not agree with them on this contention, that performance should be decreed either as of July 8th, July 12th, or July 20th.
The actual date which a court of equity ought to fix in a case of this kind and under a contract like the one herein involved must depend largely upon a determination of which of the parties was at fault and to blame with respect to the delays which were encountered in the efforts to procure a consummation. A careful perusal of the evidence would indicate that neither of the parties was entirely blameless, and that each was responsible in a large degree for such delays. We are fully conscious that the contract involved is a valuable and important one. The contract price of the property is $55,000. The defendant at all times was as anxious to secure as good and merchantable a title as it was possible for him to obtain, particularly in view of the intentions entertained by him to subdivide and plat the land and to sell it in lots to numerous purchasers. Defects in title as to incumbrances, in description, and in the limitation of the boundaries constituted matters in which the defendant was vitally interested. On the other hand, it is a matter of common knowledge that few titles to property are in existence where some flaw may not be suggested. The law, therefore, in this respect, as in all other respects, requires *171a substantial compliance. On the other hand, when a vendor has substantially complied with his contract and has furnished what is deemed to be a good merchantable title, iipon performing his part of the contract he should receive ■that which is due him under the contract as a consideration of the same.
On thé 20th of July, as the court found, the abstract was in due form, which meant that the plaintiffs had substantially complied with the contract in that respect. Such finding by the court appears to be well supported by the evidence, and it will therefore serve no useful purpose to review the same. Had the plaintiffs on that date tendered their deed, it would have been incumbent upon the defendant to malee the additional payment, to execute or cause to have executed the notes and mortgage, and to thus perform. However, at or about that date the defendant claims to have discovered a new wrinkle, which he advanced as an excuse for not proceeding with the deal. He had lived on premises adjoining the property herein involved for a period- of six years before the contract was executed. He was familiar with the poles and wires maintained by the public utility upon the premises. He had knowledge that the dwelling house upon the premises was occupied by a tenant. Notwithstanding these facts, he raised for the first time this objection and insisted, upon the date last mentioned, that this tenancy constituted an incumbrance, and that the plaintiffs’ title was defective. The court in substance found that this contention on the defendant’s part was not made in good faith; that the tenancy having been open and notorious, it must be assumed, under the circumstances in the case, that the defendant had knowledge thereof; that in fact the tenancy did not constitute an in-cumbrance, and that the defendant in law is not entitled to any allowance, abatement, or compensation by reason of such tenant’s occupation; that the defendant had attained the main object and purpose which he had in mind when *172he negotiated for the purchase of this land, when the abstract of title was finally presented in due form, on or about July 20th.
It must be kept in mind that plaintiffs tendered their deed on the 26th day of July, 1922, and, the abstract being remedied as to' the alleged defects and it showing good merchantable title when the deed was tendered, the performance should have been decreed as of the latter date. Notwithstanding this situation the court decreed specific performance as of date of August 26th, the day of the surrender of the premises by the tenant. In taking this position it appears to us that the learned trial judge was clearly inconsistent and in error, and we conclude, therefore, that inasmuch as the plaintiffs have served a notice of review as is provided for by the statute, they are entitled to a modification of the judgment to the effect that specific performance shall be decreed as of date of July 26, 1922. For authorities as to the right of the court under circumstances as herein .shown to declare specific performance- with or without compensation, see Pomeroy, Spec. Perf. (2d ed.) secs. 442-444; 36 Cyc. 742.
The circuit court, in a form of note and mortgage attached to the findings, ordered that the date thereof should be February 26, 1924, and fixed the maturity date as August 26, 1927, so that the date of maturity would be exactly three and one-half years subsequent to the date of such instruments, or five years after the date as of which specific performance was decreed. While from a practical standpoint the obligation as thus imposed upon the defendant is substantially the same under the findings and the judgment as it would be if the instruments referred to were dated in accordance with the terms and provisions of the contract, nevertheless it would appear that the decree as actually formulated created a new contract and declared its specific performance, whereas in an action of this kind it is fundamental that the contract itself should be enforced in *173accordance with the terms and provisions therein contained. As heretofore indicated, the court should have enforced specific performance as of date of July 26, 1922. This fixed the date of the execution of the deed, and under the contract the notes were to be made payable on or before five years after such date. In the interval between July 26, 1922, and the date of the decree, three semi-annual instal-ments of interest became due and payable, which instalments of interest were computed by the court and in its decree were ordered and adjudged to be paid. It is said in Bauer v. International W. Co. 201 Mass. 197, 203, 87 N. E. 637:
“There is no principle of equitable jurisprudence which prevents a court of equity from adapting its relief to the state of facts existing at the time of the entry of the final decree. It is for the interests of the parties as well as of the public that there should be an end of litigation, and inasmuch as the parties hereto seem to have been fully heard and the prayers of the bill are broad enough to include the relief asked for, there is no ground for objection to including in the decree an order for the payment of all instalments of money due up to the time of its entry. Randel v. Brown, 2 How. 406, 423, 11 Lawy. Ed. 318; Kilbourne v. Supervisors, 137 N. Y. 170, 178, 33 N. E. 159.”
Therefore the court was fully warranted in ordering the payment of the three instalments of interest which had fallen due, the only error committed by the court in that behalf being referable to the improper date from which the interest is to be computed. While the court adjudged as due the instalments of interest and ordered their payment, the effect of such order in no manner deprived the plaintiffs of their remedy to resort to mortgage foreclosure proceedings in order to obtain satisfaction of their legitimate claim. If the effect were otherwise, a court of equity in decreeing specific performance would deprive a party to the contract of one of his essential rights, which became his by virtue of the very terms of the contract. Therefore, notwithstanding the order of the court directing the payment of *174the instalments due, plaintiffs still retained their equitable rights to enforce payment by the remedy of foreclosure. Under the view as thus expressed, the findings and judgment should have provided that upon the payment of these instalments of interest in accordance with the direction of the court, such payments should be indorsed upon the note in order to evidence their payment.
In its conclusions of law the court directed the defendant to pay interest upon instalments of interest from the time they became due. In so ruling the court committed error. It is argued by plaintiffs’ counsel that in declaring specific performance the court should place the parties substantially in the same position that they would be in provided the contract would have been consummated in accordance with its terms. Had the contract in express terms, as is required under the provisions of the statutes, provided for'compound interest, no practical difficulty can be perceived why a judgment such as was decreed in the instant case with respect to compound interest should not be entered. However, assuming that the form of mortgage outlined by the court is a proper form of mortgage, plaintiffs, upon failure to pay the interest, in order to obtain full relief would have been authorized to declare the whole amount of principal and interest due, and they would then be entitled to proceed with foreclosure proceedings and obtain a judgment, but in such an event judgment could only have been obtained at the end of the litigation instituted, and interest would then accrue upon the entire judgment, including the instalments of interest, which would from that time on, to all legal intents, become a part of the principal. On the other hand, under the provisions of the statutes the plaintiffs miglit have brought foreclosure proceedings for failure to pay instalments of interest immediately after such instalments became due. In either event the time when plaintiffs would be, entitled to interest upon these instalments would rest in mere speculation and uncertainty. By this it is intended to *175make clear that under the very terms of the contract' itself it was not contemplated that interest -should be computed upon interest before judgment, and, it being impossible to fix any date or dates certain from which such interest can be legally computed, it was error on the part of the court to order and direct the payment of interest upon instalments of interest which became due. A court of equity will enforce the contract as it exists, and in such enforcement will direct that only which is reasonably certain and which is practicable.
Defendant’s counsel complain that the form of mortgage outlined by the court is not the one which the parties intended by the contract. The contract provides that the notes shall be secured “by first purchase-money mortgage on said premises,” and that “said mortgage shall contain the so-called mortgage tax clause, requiring the mortgagor to have the said property and the said mortgage assessed together.” Plaintiffs contend that the form of mortgage contemplated by the parties is the usual and ordinary form used in the state of Wisconsin where transactions of a similar nature are entered into, and that the form provided for by the findings and the judgment constitutes such usual and ordinary form. On the other hand, defendant contends that by such contract the statutory form was intended. No evidence was introduced upon the trial with respect to the usual and ordinary form of mortgage in use in this state, and the court therefore took cognizance and judicial notice of such usual and ordinary form. The court resorted to its own knowledge and experience in the matter. No suggestion was made at the trial by the defendant that the form adopted was not the usual and ordinary form, and no application was made to the court to use any other form. The form of mortgage actually adopted is the identical form with which the profession in general is familiar and which is generally in use under similar circumstances. It contains the tax clause referred to in the contract, and the option *176clause under which the plaintiffs may elect, upon the failure of the defendant to pa}'' any instalments of principal or interest as they become due, to declare the whole amount due. Under the facts as thus disclosed, we are forced to the conclusion that the defendant tacitly assented to this form of mortgage, and that the form as so decreed is the proper form and the one contemplated by the parties under the terms of the contract.
In fixing the dates when the notes should become due, leaving out of consideration the error committed by the court with respect to the time as of which specific performance should be decreed, the court, evidently by an oversight, committed error. This is conceded by plaintiffs’ counsel. The contract provides that the notes shall become due on or before five years from the dates thereof. While defendant’s counsel broadly and generally excepted to the court’s conclusion of law in that behalf, such exception should have been specific; and before judgment the attention of the court should have been called to this error, in which event there can be no doubt that it would have been quickly and readily corrected. The findings and judgment will therefore be amended in accordance with the actual terms of the contract itself upon the subject.
Finally, the defendant contends that the decree herein should have provided for a conveyance to the North Shore Realty Company, the corporation designated by the defendant as the party to whom the deed should run. It is undisputed in the evidence that after the abstract had been so remedied that it became a good and merchantable one, the plaintiffs tendered their deed running to the North Shore Realty Company, which deed the defendant refused to accept. The plaintiffs therefore offered and tendered a full compliance on their part. Defendant’s counsel argue that in any event specific performance should have been decreed requiring the execution of a deed to the Realty Company, and in the event of its failure to accept or to comply with *177the contract, then, and then only, specific performance should be decreed against the defendant. The contract upon which this action is based was entered into solely by the parties to this action. Ordinarily a court of equity will decree specific performance in accordance with the terms of the contract of the parties. In the instant case, however, the defendant expressly refused on the 26th day of July, 1922, to accept the tendered deed to the Realty Company. During the entire interval between July 26, 1922, and the commencement of the action herein, the sole objection of the defendant to accept a deed was based upon the existence of the Godar tenancy and the difference between the parties as to the time of consummation. In his answer the defendant expressed his readiness, ability, and willingness to perform. In his proposed findings of fact, in a number of instances, he proffered specific performance as to himself. Under these circumstances, particularly in view of the fact that the Realty Company was not a party to the suit, the court was fully warranted and justified in entering the decree against the defendant himself. In arriving at this conclusion we have also taken into consideration the fact that the defendant is the president of the Realty Company and manages and controls it, which leads to the logical inference that the provision in the contract under which the deed is required to be executed either to the defendant or to any one whom he might designate was inserted for the defendant’s benefit, making him at all times the real owner, and the Realty Company the holder of the title for convenience.
By the Court. — The findings of fact and conclusions of law of the trial court and the judgment entered are hereby modified in accordance with the foregoing' opinion, and the judgment as so modified is affirmed, with costs in favor of the plaintiffs.