Opinion
No. 249.
Argued April 30, 1970. —
Decided June 5, 1970.
APPEAL from a judgment of the circuit court for Walworth county: ERNST JOHN WATTS, Circuit Judge. Modified and, as modified, affirmed.
For the appellants there were briefs by Braden English of Lake Geneva, and oral argument by James L. English.
For the respondent there was a brief by Kenney, Korf Pfeil of Elkhorn, and oral argument by Richard H. Pfeil.
Facts.
This case involves the sale of a motorboat service business by the plaintiff, Vivian B. Kimball, to the defendants.
Prior to March, 1966, the plaintiff was the owner of the boat service business in Walworth, known as the Kimball Kraft Boat Company. Together with her husband and son, Brian, the plaintiff had conducted the business since 1945. The plaintiff's husband died in 1964, and the plaintiff and her son carried on the business thereafter. The son personally leased lakefront property used as a lake outlet for the business. The Kimball Kraft Boat Company was conducted on a piece of real estate which had two buildings on it, one of cement block construction, one of steel construction.
Prior to March, 1966, and since, the defendants, Earl Swanson and Richard Swanson, owned and operated Bay Boats, Inc., a sailboat service business. Richard managed the business.
Early in 1966, Brian Kimball indicated to Richard Swanson that the plaintiff might be interested in selling the Kimball Kraft Boat Company in its entirety — real property, personal property and business goodwill. Richard Swanson indicated interest, stating, however, that Bay Boats, Inc., would not be financially able to purchase the real estate involved, but that his father, Earl, might be willing to personally purchase such real estate. Discussions were had and a tentative agreement was worked out. Brian was to negotiate with the owner of the lakefront property, used by Kimball Kraft as a lake outlet, for transfer of the lease to Bay Boats, Inc. Bay Boats was to purchase the business and personal property of Kimball Kraft, including customer lists, and to take over the servicing of boats then in storage for the winter. Earl Swanson was to personally purchase the real estate of Kimball Kraft.
On March 20, 1966, a meeting was held at the home of Earl Swanson in Walworth. The lease of the lakefront property had been transferred to Bay Boats. At the meeting in the Swanson home, a contract for the purchase of the personal property was signed by the plaintiff, her son, Brian, and by Richard Swanson as an officer of Bay Boats. The contract provided that Bay Boats was granted exclusive use of the business name, Kimball Kraft, and included a noncompetitive agreement. Earl Swanson delivered a signed offer to purchase, covering the real estate involved. The trial court found that the plaintiff accepted this offer at that meeting. The typed portion of the standard form used provided that the deal was conditioned upon the completion of the purchase of the personal property and fixtures by Bay Boats, and upon the furnishing of a marketable title. The offer also provided that time was of the essence as to possession, with possession to be given at the date of closing, initially scheduled for April 15, 1966, with a land contract to be executed at that time.
At the time of the meeting, plaintiff was aware of a title defect to the real estate. She testified that she indicated to the Swansons her concern about being able to clear the title by the date set for closing. She testified that the Swansons indicated that their concern was in obtaining possession as soon as possible, since the spring boating season was near and boats in storage at the Kimball Kraft building would have to be serviced and put into the water. The trial court found that the plaintiff agreed to give immediate possession in exchange for an extension of the closing date, and that the Swansons stated that, if they had possession, the date of closing would no longer be important. It was agreed that possession would be given immediately to Bay Boats. Earl Swanson then changed the date of closing by writing in May 15th on the contract form.
During the survey of the property, it was discovered that a part of one of the buildings encroached upon property owned by the Milwaukee Road. On May 13, 1966, the trial court found the plaintiff visited Richard Swanson and informed him of this encroachment and was told that, since possession had been transferred, they were not particularly concerned over the date of closing, and that plaintiff could have the time needed to clear the title. The plaintiff then attempted to clear the title. Initially, the Milwaukee Road agreed only to execute a five-year lease for the property encroached upon. Earl Swanson indicated that he would accept only a ninety-nine-year lease or conveyance. On July 16, 1966, with the railroad consenting only to a five-year lease, the plaintiff forwarded an executed land contract and lease form covering the encroached property to Earl Swanson. On August 1, 1966, Earl Swanson indicated that this was unacceptable to him, and rescinded the real estate contract.
In late August or early September, 1966, the plaintiff obtained title from the railroad for the property encroached upon. On September 29, 1966, the plaintiff tendered a land contract to Earl Swanson, together with proof of marketable title, which he rejected.
On November 25, 1966, plaintiff commenced an action for specific performance of the contract to purchase the real estate, and for reformation of the contract to purchase the personal property. Following trial, on June 16, 1969, the trial court entered judgment in favor of the plaintiff, ordering Earl Swanson to execute a land contract within twenty days of its delivery by the plaintiff to the clerk of circuit court. Following motions for a new trial, which were denied, and upon Earl Swanson's failure to execute the land contract, a money judgment was granted on September 8, 1969, and a sale of the premises was ordered. Defendants appeal.
The various aspects of this case are like pieces of a jigsaw puzzle. Fitting them together is made more difficult because the shape and form of each such piece is in sharp dispute. The case involves an agreement for the sale of the real estate and personal property of the Kimball Kraft boat service company in Walworth. As to each matter in dispute, the seller gives one account, the purchaser another. However, the assembling of the jigsaw pieces is aided by keeping in mind that, as to each and every issue as to fact, the trial court accepted the testimony of the seller and rejected the testimony of the buyers. In each instance, his findings are supported by the testimony of the seller and her son, and so find support in the record. The trial court chose to accept the testimony of the Kimballs, and reject the testimony of the Swansons. The judgmental factor involved is that of comparative credibility and the trial court, which had the opportunity to observe the witnesses and their manner of testifying, was in a better position to determine credibility than a reviewing court which had only the transcribed record before it. We will not deal further with the question of whose testimony was to be believed, and will deal only with the issue of whether the plaintiff's testimony sufficiently supports the findings made.
Modification of contract
. A principal issue on this appeal is whether or not there was a valid oral modification of the written contract for the purchase of real estate. The trial court found that there was such valid modification. Such finding is to be sustained unless it is contrary to the great weight and clear preponderance of the evidence. Accepting the testimony of the plaintiff and her son, and rejecting the contrary testimony of the defendants, the trial court had ample testimony in the record to support its finding of oral modification of the written contract. Plaintiff and her son testified that Earl Swanson had stated at the March 20th meeting that his son, Richard, could act for him. The plaintiff testified that Richard stated that time was not a factor, possession of the premises having been turned over to the Swansons. Plaintiff's son, Brian, testified that Richard Swanson stated there was no need to be concerned over closing on the exact date mentioned in the contract. Plaintiff and her son testified that Richard stated that they could have as much time as was needed to clear up the title. Accepting the Kimball's testimony, as the trial court did, furnishes adequate support in the record for the finding of oral modification of the contract to give the Kimballs the time needed to furnish marketable title. For the same reason, Earl Swanson's denial that he authorized his son, Richard, to consent to a delay fails. The Kimballs testified to the contrary, and their account, not Earl's, was accepted by the trial court. The trial court finding that there was an oral modification of the contract which dispensed with any necessity for a speedy performance is sustained and upheld. We need not take up the question of whether the tender of performance in September was within the reasonable time rule, and the corollary rule requiring notice as to the expected date of performance, because the trial court finding is that plaintiff was given as much time as necessary to clear the title defect. Form of judgment . A number of objections are made to the form of judgment, and specific provisions contained therein. One such objection is to the trial court's granting a money judgment against Bay Boats for the full amount specified in the bill of sale covering the personalty, with interest from April 1, 1966, the date on which the bill of sale was delivered. The contract provided for payment by installments, the full sum to be paid within three years, which would have been April 1, 1969. The contract also called for interest from April 1, 1966. Even if payments were offered while the entire matter was in dispute, the three-year period had expired at the time judgment was entered in this case. No payments had been made. Bay Boats had had the property involved since March of 1966, without payment. The granting of a money judgment in the full amount, with interest, was warranted, since Bay Boats was merely ordered to do what it would already have done if the dispute as to the transaction had not arisen.Defendant Earl Swanson objects to the fact that the judgment calls for payments of $300 per month on the land contract, plus interest which had accrued on the delinquent monthly payments. The original land contract provided for payments of $300 per month to include both principal and interest. The trial court obviously took into account the fact that no payments under the contract had in fact been made, and that plaintiff has had neither the benefit of the property nor the money since the contract was entered into. The judgment of the trial court in this particular is confirmed.
The defendant Earl Swanson objects to the fact that the trial court in its judgment ordered specific performance, dating it from April 1, 1966. This included interest, taxes and fire insurance premiums from the April 1st date. In this opinion, we have held that the defendant was required to perform the contract entered into, orally modified as to the time element, as of September 29, 1966. He was not called upon to perform until clear evidence of marketable title was furnished. Interest, taxes and insurance charges accrued during the period when the defect in the title was being cleared up by the plaintiff are to be paid by the plaintiff. The judgment is ordered modified to provide that the specific performance dates from September 29, 1966, with interest, taxes and fire insurance premiums accruing after such date to be paid by the defendant.
Defendant Earl Swanson further objects to that portion of the judgment which provided that he was to execute the land contract within twenty days of its delivery to the clerk of court, and to the trial court's revision of the judgment to provide for a money judgment and sale of the premises instead of reinstatement of the land contract monthly payments. As to the first point, the defendant secured both a review of the judgment by the trial court, and an appeal to this court, so that his claim of prejudice in these regards cannot stand. As to the entry of the money judgment, and the provisions for sale of the premises, the trial court apparently weighted heavily the fact that a three-year period had run and that only a money judgment could give to the plaintiff, an elderly lady, what she had every right to expect when she entered into the transaction with the Swansons for the sale of the Kimball Kraft boat service company. The revision of the judgment by the trial court, following motions for new trial and review of the judgment, is held to be reasonable, and is affirmed.
In dealing with the objections raised to the form of judgment, we have kept in mind that specific performance is an equitable remedy, addressed to the sound discretion of the court. This court has said that, in granting specific performance, "`. . . A court of equity must be satisfied that the claim for a deed is fair and just and reasonable, and the contract equal in all its parts and founded on an adequate consideration, before it will interpose with this extraordinary assistance.'" In the exact form of the judgment entered in this type of action, the trial court has an area in which judicial discretion is to be exercised. Here the trial court was entitled to consider that plaintiff was facing a partial, not total, rescission of the transaction by which she gave up the boat service business which she had conducted since 1945. The buildings involved were constructed and used for the boat service business. That business she no longer had. Its customer lists, servicing of boats in storage, and right of access to the lake were all transferred to the purchaser of the business. The trial court specifically found that ". . . there was one general transaction between the plaintiff and defendants comprised of different related parts," and further that "Vivian Kimball was no business match for Earl Swanson and Brian Kimball and Richard Swanson were equally lacking in knowledge of business affairs." Obviously, considerations of fairness and equity, as well as adherence to established principles of applicable law, motivated the effort of the trial court to put the parties in the exact situation in which both would be if each had kept the agreements that were made. We commend the effort made and approve the result reached, with the single modification as to the date on which specific performance by the defendant was due.
Mulligan v. Albertz (1899), 103 Wis. 140, 143, 144, 78 N.W. 1093, quoted with approval in McKinnon v. Benedict (1968), 38 Wis.2d 607, 617, 618, 157 N.W.2d 665.
By the Court. — Judgment modified as stated in the opinion and, as so modified, affirmed.