Opinion
April 8, 1959 —
May 5, 1959.
APPEAL from a judgment of the circuit court for Milwaukee county: RONOLD A. DRECHSLER, Circuit Judge. Reversed.
For the appellants there was a brief and oral argument by Stephen J. Hajduch of Milwaukee.
For the respondents there was a brief by Becker, Kinnel, Doucette Mattison of Milwaukee, and oral argument by Joseph J. Doucette.
Action by the plaintiffs Harvey Schwartz and Alice Schwartz, his wife, for specific performance of an alleged contract for the sale of real estate, against the defendants Arthur Handorf and Victoria Handorf, his wife.
The defendants were the owners of a farm consisting of approximately 72 acres lying within the corporate boundaries of the city of Franklin, Milwaukee county, and the plaintiffs were interested in purchasing 48 acres of the same which fronted on the highway. The defendants had employed one Geraghty as a real-estate broker to sell such premises and he had one Karpinski working for him as a salesman.
On March 18, 1958, Karpinski exhibited such 48-acre tract to the plaintiffs and the latter made a verbal offer to purchase at a price of $16,000. That evening Karpinski phoned the plaintiffs and stated that the defendants would accept $16,000 for the 48 acres and that he would draw up the papers.
On March 19th, Karpinski called at the home of the plaintiffs Schwartz in the city of Cudahy and presented in quadruplicate a standard printed form of offer to purchase with the blanks filled in by typewriter. Such offer to purchase contained the legal description of the 48 acres and stated the agreed purchase price to be $16,000 payable as follows: $500 to be tendered with the offer, a further $500 upon the defendant owners accepting the offer, and the balance of $15,000 at the time of closing. The time of closing was specified to be on or before May 10, 1958. The plaintiffs signed all four copies of such offer to purchase and delivered three of them to Karpinski together with a check of $500 for the down payment. Karpinski executed the receipt form on the plaintiffs' retained copy of the offer to purchase acknowledging receipt for the $500 which was to be held in Geraghty's broker's trust account.
On the evening of March 20th, Karpinski phoned Mr. Schwartz that the defendants had accepted the offer to purchase but before doing so had inserted a provision therein providing for an easement of ingress and egress over the 48 acres for the benefit of the back 24 acres, which latter tract Milwaukee county was interested in buying. Karpinski then read over the phone the easement clause which he had inserted in his handwriting in the three copies of the offer to purchase before the defendants had affixed their signatures to the acceptance of such offer. Schwartz then told Karpinski that Schwartz would have to take such easement clause up with his lawyer. This was because Schwartz wished to be sure that the easement did not cut through either the farmhouse or the barn.
On Sunday, March 23d, pursuant to an arrangement made with Karpinski, Schwartz picked up a copy of the altered offer to purchase, which bore the defendants' signatures to the acceptance, at Karpinski's home from the latter's brother-in-law. However, Schwartz did not return the copy of the offer to purchase, which he had in his possession that did not contain the easement provision and which was unsigned by the defendants, although Karpinski had requested such return.
On March 24th Schwartz delivered his copy of the offer to purchase signed by the defendants to his lawyer and requested him to check the easement. The attorney told Schwartz he was a little busy right then and could not do such checking right away. On Wednesday, March 26th, the lawyer advised Schwartz that the easement provision met with his approval. Karpinski testified that the lawyer had phoned Karpinski on the 24th and had stated that the plaintiffs did not like the easement but that he would see if he could not get them to accept it. Karpinski further testified that the lawyer promised to phone him later to give his clients' decision but failed to do so.
Schwartz testified that on March 26th Geraghty phoned him and asked him to execute a note for the second $500 payment. Schwartz explained that he could get to the bank on Friday and secure the $500 in cash. According to Schwartz, Geraghty then replied, "Seeing today is Wednesday you might as well wait until Friday." On cross-examination Schwartz testified that in such telephone conversation Geraghty also said, "See that you mail the money Friday." Geraghty admitted having had a telephone conversation with Schwartz about payment of the second $500 but thought it had taken place a week earlier than the 26th, although he was not sure. However, the defendants had not signed the acceptance of the offer to purchase until Thursday, March 20th, and Schwartz did not receive a copy of it bearing such acceptance until Sunday, March 23d. These facts rather clearly establish that this conversation must have occurred Wednesday, March 26th, as testified to by Schwartz.
Schwartz testified that he had no conversation with Karpinski during the period of March 24th through March 28th. On the other hand, Karpinski testified he had a telephone conversation with Schwartz on the 26th. The defendants' counsel put the following questions to Karpinski with respect to such conversation and received the following answers:
"Q. Now did you at any time prior to March 31st tell either Schwartz or Mr. Hajduch that part of this land was being sold to the county? A. I told it to Schwartz, yes.
"Q. When did you tell that to Schwartz? A. On the 26th of February.
"Q. Twenty sixth of what? A. Or, March."
However, when Karpinski was asked to state exactly what he then told Schwartz about the county purchasing the 30 acres, he stated:
"Q. Just what did you tell them? A. Well, I told them the county wanted 30 acres of land, instead of 24, the original plan; and I says if they would take 42 1/2 acres it would eliminate the easement."
The fact is that no sale to the county of the 30 acres had taken place on March 26th and it was not until March 28th that the defendant landowners signed an option granting the county the right to purchase such 30 acres.
Karpinski further testified that in such alleged telephone conversation with Schwartz on March 26th the latter agreed to accept 42 1/2 acres instead of 48 acres in return for a reduction in price from $16,000 to $15,000. Karpinski claims that he also on March 26th had asked Schwartz for payment of the second $500.
Both Mr. and Mrs. Schwartz worked during the day so that they could not get to their bank at Cudahy during the daytime without taking time off from work. However, on Friday evenings the bank was open and they could do their banking then without loss of time from work. On Friday, March 28th, Schwartz went to his bank and withdrew $500 and purchased five $100 money orders, aggregating $500, payable to Geraghty, inclosed them in an envelope addressed to Geraghty, and mailed the envelope registered mail with return receipt requested. Geraghty received such money orders the next day, March 29th, and signed a post-office registered mail receipt for the same.
On Monday, March 31st, Karpinski took the draft of a new offer to purchase to the Schwartz home and tried to induce them to sign it. Such new offer was for 42 1/2 acres for a total purchase price of $15,000. The Schwartzes insisted on having their lawyer pass on the matter. Their lawyer advised them in the presence of Karpinski that they already had a good contract of purchase with the defendants, and advised them against signing the new offer and it was not signed.
Thereafter, on April 3, 1958, the attorneys for the defendants mailed the following letter to the plaintiffs Schwartz:
"We represent Arthur Handorf and Victoria Handorf, his wife, of 10882 South Seventy-Sixth street, Hales Corners, Wisconsin, in reference to a real-estate transaction with you on the property described as:
"The west 48 acres more or less, of the north one half of the southwest one quarter of section 34, town five north, range 21 east, county of Milwaukee.
"Under date of March 19, 1958, you made an offer to purchase these premises from our clients. Our clients would not accept your offer to purchase but inserted in the same, the following language, to wit: `Subject however, to an easement for ingress and egress to the owner of the above described property that lies east of the center line of the south branch of the Root river to use the south 20 feet thereof for said purposes.'
"Thus, our clients did not accept your offer, but made a counteroffer to you which you never accepted. We, therefore, hereby revoke this counteroffer at this time and we are returning to you your check for $500 and five money orders of $100 apiece." (Emphasis supplied.)
The plaintiffs Schwartz applied for and were granted a first-mortgage loan of $10,000 by a bank at Hales Corners and possessed enough money of their own to finance the balance of the $16,000 purchase price. They thus established that they were ready, able, and willing to perform the alleged contract of purchase.
On April 9, 1958, the plaintiffs Schwartz instituted the within action for specific performance which was tried to the court. The material findings of fact and conclusions of law entered by the trial court are as follows:
"5. That on March 23, 1958, plaintiffs received from the defendants' salesman the offer to purchase with the easement insertion and upon being advised of the easement insertion, informed defendants' agents that they would not approve of said easement insertion and that they would have to take the matter up with their attorney and would let defendants' agents know their position in reference to the transaction.
"6. That during the week of March 23, 1958, the defendants' broker and salesman repeatedly advised plaintiffs to pay in the sum of Five Hundred ($500) Dollars called for in said offer to purchase and to return their copy of the offer to purchase which did not contain the easement insertion.
"7. That plaintiffs informed defendants' broker that they would pay the additional Five Hundred ($500) Dollars by March 28, 1958, and that they would return their copy of the offer to purchase to defendants' broker not later than March 28, 1958.
"8. That plaintiffs failed to return their copy of the offer to purchase to the defendants or their agents and failed to pay the additional sum of $500 by March 28, 1958, to the defendants or their agents.
"9. That plaintiffs were informed by defendants during the week of March 23, 1958, that the county of Milwaukee was interested in acquiring a portion of the land in question and pursuant to inquiry made by the county of Milwaukee, defendants attempted to negotiate with plaintiffs on that portion of the land less the 30 acres desired by the county of Milwaukee.
"10. That on March 28, 1958, defendants gave the county of Milwaukee an option to purchase 30 acres of the land in question.
"11. That plaintiffs failed to pay the $500 to the defendants or their agents on or before March 28, 1958, or to deliver their copy of the offer to purchase to the defendants or their agents on or before March 28, 1958, although they had promised to do so. That plaintiffs sent five U.S. postal money orders of $100 each without any notation or letter through the U.S. mails to the defendants' broker and that the defendants' broker received said five U.S. postal money orders on March 29, 1958; that said five U.S. postal money orders were payable to G. W. Geraghty, defendants' broker in this transaction.
"12. That plaintiffs never entered into possession of the land in question; that plaintiffs were not misled by the defendants in regard to the purchase of said land and have not sustained any injury or loss as a result of their failure to get title to the land in question.
"13. That defendants have returned to plaintiffs all moneys paid in reference to the purported transaction.
"And I find as Conclusions of Law
"1. That no agreement existed between the parties as to the sale of land in question.
"2. That any understanding that existed between the parties in reference to the sale of the land in question was contrary to the statute of frauds.
"3. That defendants have judgment dismissing plaintiffs' complaint and the taxable disbursements of this action."
Judgment was accordingly entered on November 10, 1958, dismissing plaintiffs' complaint, and the plaintiffs have appealed therefrom.
The learned trial court was in error in holding that the alleged contract of purchase And sale violated the statute of frauds. The applicable statute is sec. 240.08, which provides as follows:
"Every contract for the leasing for a longer period than one year or for the sale of any lands or any interest in lands shall be void unless the contract or some note or memorandum thereof, expressing the consideration, be in writing and be subscribed by the party by whom the lease or sale is to be made or by his lawfully authorized agent."
The defendant landowners had signed the acceptance of the plaintiffs' offer to purchase after the insertion therein of the easement provision. It is immaterial that the plaintiff purchasers had not signed the contract after the making of such insertion if they actually accepted it in some other manner. Heins v. Thompson Flieth Lumber Co. (1917), 165 Wis. 563, 163 N.W. 173. The statute only requires that the contract "be subscribed by the party by whom the . . . sale is to be made."
The alteration of plaintiffs' offer to purchase by insertion of the reservation of the easement, which occurred after the plaintiffs had signed the offer but before the defendants had signed the acceptance thereof, constituted such altered offer to purchase a counteroffer. Pick Foundry, Inc., v. General Door Mfg. Co. (1952), 262 Wis. 311, 317, 55 N.W.2d 407.
The brief in behalf of the respondent landowners does not take issue with the above-enunciated principles of law. In fact, such brief concedes that the issues on this appeal are limited to the following:
(1) Was such counteroffer revoked prior to the attempted acceptance thereof by the plaintiffs?
(2) Did the plaintiffs ever accept such counteroffer so as to cause a valid contract of purchase and sale to come into being?
Revocation of Counteroffer.
With respect to the issue of alleged revocation, the defendants did not plead the same as a defense and the trial court did not find that such a revocation had occurred prior to Geraghty's receipt of the $500 of money orders on March 29, 1958. While the trial court did find that during the week of March 23, 1958, the defendants attempted to negotiate with the plaintiffs for the sale of that part of the farm less the 30 acres which the county was interested in buying, it did not find that the same constituted a revocation of the outstanding signed counteroffer providing for the sale to the plaintiffs of the 48-acre tract. Such a revocation would be inconsistent with finding No. 6 that the defendants' broker and salesman during the week of March 23d had repeatedly advised the plaintiffs to pay the second $500 called for by the counteroffer.
We also consider the contents of the letter written by defendants' counsel to the plaintiffs under date of April 3, 1958, to be of great significance with respect to the claim now made that the counteroffer had been revoked prior to Geraghty's receipt of the $500 of money orders on March 29th. Not only does such letter not claim that any such prior revocation had occurred, but it expressly states, "We, therefore, hereby revoke this counteroffer at this time and we are returning to you your check for $500 and five money order[s] of $100 apiece." (Emphasis supplied.)
When Geraghty was questioned about such letter of April 3, 1958, he testified as follows:
"I was in contact with my attorney and told them the problem, that Mr. Schwartz, the buyer, hadn't brought in the money and there were two outstanding conflicting offers and that I received the $500 in money orders from the Schwartzes; and he advised me that the only thing to do, to bring the matter to a head, is when we couldn't obtain the old offer, we had no assurance as yet that this offer was acceptable, we had nothing in writing, so I mailed the money orders to my attorney and he proceed according to his best judgment." (Emphasis supplied.)
The act of the defendants in granting the option to purchase 30 acres to the county on March 28th cannot constitute a revocation of the counteroffer because such fact was not communicated to the plaintiffs.
We find no merit to defendants' contention that the counteroffer had been revoked prior to the receipt of plaintiffs' money orders for $500.
Acceptance of Counteroffer.
When the defendants altered plaintiffs' original offer to purchase by insertion of the reservation of easement, this amounted to a rejection of the same and it was no longer of any legal significance. Restatement, 1 Contracts, pp. 45, 46, sec. 38. Therefore, in so far as the plaintiffs were concerned, the only outstanding offer at the time of forwarding the $500 in money orders was the counteroffer. It is our considered judgment that the forwarding of this $500 on March 28th and the receipt of the same by defendants' broker, Geraghty, on the 29th constituted an acceptance of the counteroffer.
The prior course of conduct between the plaintiffs and Geraghty and Karpinski established that this second $500 was to be paid after the lawyer for the plaintiffs approved the easement clause. It necessarily follows from this that the tender of payment of such $500 with no strings attached was subject to no other interpretation than that the plaintiffs were now satisfied with such easement clause and had accepted the counteroffer. While the failure of the plaintiffs to pay the $500 to Geraghty on the 28th may have given the defendants the right to revoke the counteroffer before actual receipt of the $500 on the 29th, the defendants did not do so. Under the existing facts, we cannot hold that the time for acceptance of the counteroffer had already expired when the $500 was so received by Geraghty on the 29th.
The findings of the trial court stress the fact that the plaintiffs failed to comply with the request of defendants' broker to return the copy of plaintiffs' original offer to purchase. Such copy did not contain the reservation of easement and did not bear the signatures of the defendants to the printed acceptance clause. We cannot construe the return of such copy as a required condition precedent to the plaintiffs' acceptance of the counteroffer, but view the broker's request for the return of the same to be a collateral issue of no legal significance.
By the Court. — Judgment reversed, and cause remanded for further proceedings not inconsistent with this opinion.