Opinion
June 3, 1957 —
June 26, 1957.
APPEAL from an order of the circuit court for Milwaukee county: RONOLD A. DRECHSLER, Circuit Judge. Affirmed.
For the appellant there was a brief by William Schnellbaecher, Jr., attorney, and Vernon E. Waters and George A. Gessner of counsel, all of Milwaukee, and oral argument by Mr. Gessner.
For the respondent there was a brief by Zimmers, Randall Zimmers, attorneys, and Bruce B. F. Randolph and William L. Randall of counsel, all of Milwaukee, and oral argument by Wilke M. Zimmers and William L. Randall.
The order appealed from overruled plaintiff's demurrers to defendant's answer and counterclaim in an action by the executrix of a deceased partner against the surviving partner for an accounting.
The complaint alleges in substance that plaintiff's testator, Boek, and defendant Wagner established a partnership in 1931 which continued until Boek's death in 1956; that the partnership agreement provided that the partners should contribute equally to capital and expense and share equally in net profits; that at Boek's death the partnership assets were worth about $100,000, including good will; that since Boek's death defendant has been in exclusive possession of the partnership assets, has continued to carry on the business using the partnership name, has collected large sums in the business, has withdrawn large sums therefrom and has used much of the same as his own, and has otherwise converted to his own use the assets and funds of the partnership, to the damage of the plaintiff; and that defendant has not paid over to plaintiff any of the partnership assets or proceeds of the partnership business since Boek's death. The complaint prays an accounting of transactions from the beginning of the partnership, judgment for the amount found due to plaintiff, and receivership.
In brief summary, the answer admits the partnership and admits that defendant has continued to carry on the partnership business and has used the partnership assets and name since Boek's death, but denies that the assets are worth $100,000. It alleges that the rights of the parties are governed by a written agreement made by the partners on April 30, 1941, copy of which is attached to the answer; and that by virtue of that agreement defendant is the sole owner of the assets, and plaintiff has no interest therein. It denies that defendant has failed to pay over to plaintiff any partnership assets or proceeds of the partnership business to which she is entitled, and denies that there has been any loss or damage to her. The answer further alleges that pursuant to the agreement defendant caused the proceeds of an insurance policy on Boek's life in the sum of $6,236.58 to be paid to Mrs. Boek, which she accepted, and that he also tendered to her individually and as executrix "moneys due under the terms of said agreement" which she refused to accept; and that she refused "to perform her part under the terms of said agreement."
The agreement of April 30, 1941, appended to the answer, provides for the maintenance of certain life insurance on each partner payable to his wife, the premiums to be paid by the partnership and charged proportionately to each partner's account. It further provides, in bare summary, that on the death of a partner the survivor "shall be the sole owner of the partnership business and all of the assets employed therein, . . . in the proportion that the interest of each, hereunder, bears to the interest of both," and shall have the right to the insurance on his own life and shall assume full liability for all partnership obligations; but the foregoing provision shall be carried out at death only if the insurance on the decedent's life shall be turned over to the beneficiary named therein, and if payment shall be made to the decedent's executor in consideration of his release of all right in the partnership assets, of amounts as follows: (1) The difference between the value of decedent's partnership interest and the face value of the insurance on his life with dividend accumulations, (2) plus the amount of premiums contributed by the decedent or his proportionate interest in the cash surrender value of all the insurance policies, whichever is the greater, (3) less any indebtedness owed by the decedent to the partnership or the surviving partner. The partnership interests are to be valued each year as of December 31st and any transfer shall be on the basis of the value so adopted for the December 31st preceding. The net amount due the decedent's estate shall be paid in five semiannual instalments evidenced by promissory notes bearing five per cent interest and secured by chattel mortgage on the partnership assets. It is further provided that —
"In the event that the foregoing terms and conditions are not carried out within ninety days after the date of death, through fault of the surviving partner,"
then the decedent's estate shall receive the share to which he would have been entitled if the agreement had never existed, plus his equitable interest in the insurance on the life of the surviving partner.
Following the answer above summarized, and "by way of further answer to said complaint and by way of counterclaim," defendant realleges the agreement of April 30, 1941, and other matters previously set forth, and further alleges that defendant was ready, willing, and able to comply with the terms of that agreement, and requested that plaintiff comply therewith; "that tenders of moneys due to the plaintiff were made by said defendant by way of mail and in person in the county court of Milwaukee county, Wisconsin, as appears by the records in said court;" that plaintiff refused to accept the tenders and failed to give defendant releases called for by the agreement; that the net worth of the partnership, computed in accordance with the agreement, was $40,036.96; that Boek's interest therein was $20,018.48; that under the contract Mrs. Boek individually became entitled to life insurance proceeds in the sum of $11,278.63, which have been paid or tendered to her, and there is owing to plaintiff executrix a balance of $8,646.78, computation of which is set forth in detail, payable in five semiannual instalments of $1,729.35 each, to be evidenced by secured promissory notes bearing interest; and that defendant has "tendered, offered, and agreed to comply with the terms of" the agreement. The counterclaim demands judgment that all of the assets of the partnership belong to the defendant, that the plaintiff be ordered to deliver a bill of sale of all of decedent's right therein, to release her interest in the insurance on defendant's life, and to accept specified promissory notes secured by chattel mortgage for the cash balance of $8,646.78 due her.
The circuit court filed a written decision analyzing the answer and counterclaim carefully and holding that both are sufficient against demurrer. We find no error in that conclusion.
1. Appellant's first criticism is that in determining the sufficiency of the answer, the court considered allegations appearing only in the counterclaim, and thus pieced out the part denominated "answer" with facts alleged only in the counterclaim. It is urged that this was error; that the answer must stand or fall as complete in itself, unaided by matter in the counterclaim.
We are of opinion that the allegations of the counterclaim were incorporated in the answer by reference, and hence the court could properly consider them as a part of the answer. Between the first five paragraphs of the answer and the counterclaim appears the following:
"And by way of further answer to said complaint and by way of counterclaim, the above-named defendant alleges," etc.
This sufficiently made the subsequent allegations a part of the answer as well as a counterclaim. The presence of the quoted words of reference sufficiently distinguishes the present case from Rood v. Taft, 94 Wis. 380, 384, 69 N.W. 183; McGovern v. Eckhart, 192 Wis. 558, 563, 213 N.W. 332, and other authorities cited by appellant on this point.
2. Appellant criticizes the answer as composed largely of negative pregnants, legal conclusions, and argumentative matter insufficient to state a defense to the complaint.
We can agree that it is inartistic, and may not state a complete defense against all relief sought by the complaint; but that does not necessarily make it demurrable. On demurrer, an answer, like other pleadings, is to be liberally construed with a view to substantial justice between the parties (sec. 263.27, Stats.), doubts are to be resolved in its favor where it is uncertain and ambiguous, and it is entitled to all reasonable inferences that can be drawn from the facts pleaded. Manning v. School District No. 6, 124 Wis. 84, 90, 102 N.W. 356; Cargill Coal Co. v. Valentine, 275 Wis. 598, 602, 82 N.W.2d 883. This liberality is particularly in order where uncertainties are criticized but no motion to make more definite and certain has been made. Wisconsin Zinc Co. v. Fidelity Deposit Co. 162 Wis. 39, 53, 155 N.W. 1081. It is not necessary that the answer state facts showing that no part of plaintiff's claim is valid and that nothing is due from defendant to plaintiff; it is not subject to general demurrer if it states even a partial defense. Patterson v. Cappon, 125 Wis. 198, 203, 102 N.W. 1083.
Viewed in the light of these principles, we think the answer sufficient. The complaint claims in essence that plaintiff, as the deceased partner's personal representative, is entitled to one half of assets worth about $100,000, plus a share of any profits since Boek's death. To this the answer alleges that the rights of the parties are governed by the agreement of April 30, 1941, which is attached in full; that the net worth of the partnership, valued in accordance with the agreement, is only $40,036; that under the agreement defendant is entitled to all of the partnership assets and to continue the business as his own upon making certain payments, and that he has tendered performance on his part but that plaintiff refuses to accept it or to perform obligations imposed on her by the agreement. We think this sufficiently apprises the plaintiff of the general nature of a defense which if established will be a valid defense to at least a part of the plaintiff's claim. If plaintiff needs more definite information to enable her to prepare her case, there are available to her a motion to make the answer more definite and certain (sec. 263.43, Stats.), a demand to admit or refuse to admit in writing the existence of any material fact (sec. 327.22), and discovery examination (sec. 326.12). A demurrer is not to be used as a substitute for those measures.
Plaintiff contends that the answer insufficiently alleges tender of performance on defendant's part, particularly in view of the provisions of the contract of April 30, 1941, that "In the event that the foregoing terms and conditions are not carried out within ninety days after the date of death, through fault of the surviving partner," the deceased partner's estate shall receive the share to which he would have been entitled if the agreement had never existed, plus his equitable interest in the insurance on the life of the surviving partner. It is true that defendant's allegation of tender of performance on his part is most general, does not allege that any tender or offer of performance was made within ninety days after Boek's death, and does not specify clearly what was tendered in terms of dollars and documents. We consider, however, that it is not fatally defective in that respect. In pleading performance of conditions precedent in a contract, it is not necessary to state the facts showing such performance, but it may be stated generally that the party duly performed all the conditions on his part. (Sec. 263.34, Stats.)
3. What has been said concerning the answer also applies with respect to the counterclaim. According its allegations and the terms of the contract the liberal construction that is presently appropriate, it indicates that defendant is entitled to some measure at least of judicial redress against plaintiff, and hence it is proof against general demurrer. (Sec. 263.07, Stats.)
The contract of April 30, 1941, appears to be uncertain and ambiguous in more than one respect, and it is not clear to us that defendant has properly construed it in computing the share or amount to which the counterclaim asserts the deceased partner's estate is entitled. Nothing in our present decision or in this opinion is to be taken as construing the agreement in any particular, nor as approving defendant's assertions as to its meaning or his conclusions as to what it obligates him to do or the amounts he is obligated to pay, or the propriety of the method of computation exhibited in the counterclaim. The trial court will no doubt be in better position after trial on the merits than we are at present to determine the precise meaning of the contract as applied to the matters in issue. If ambiguities appear to be material, evidence may be received to aid in resolving them in the light of the circumstances surrounding the parties when the agreement was made. See Cargill Coal Co. v. Valentine, 275 Wis. 598, 602, 82 N.W.2d 883.
By the Court. — Order affirmed.