Bunbury v. Krauss

• Decision Date: 07 February 1969
• Docket Number: No. 85,85
• Citation: 41 Wis.2d 522,164 N.W.2d 473
• Parties: Grant BUNBURY et al., Appellants, v. Melvin A. KRAUSS et al., Respondents.
• Court: Wisconsin Supreme Court

Page 473

164 N.W.2d 473

41 Wis.2d 522

Grant BUNBURY et al., Appellants, v. Melvin A. KRAUSS et al., Respondents.

No. 85.

Supreme Court of Wisconsin.

Feb. 7, 1969.

Rehearing Denied April 1, 1969.

Richard R. Rynders, Madison, for appellants.

Croak & Croak, Madison, for respondents.

HEFFERNAN, Justice.

Bunbury argues that the evidence fails to show an oral contract supplanting the payment terms of the land contract. He argues that the parol evidence rule excludes the evidence relied upon by the court to support its findings; and, in any event, since the Statute of Frauds requires a contract transferring an interest in real estate to be in writing, the oral modification, if in fact agreed upon, is in violation of the Statute of Frauds and void.

The trial herein was before the court, and when a trial judge finds there has been an oral modification or substitution of a written contract, this court in determining whether or not to sustain the findings will apply the rule that a finding by the trial court will be sustained unless it is contrary to the great weight and clear preponderance of the evidence. Air Power Equipment Corp. v. Telemark Co. (1967), 34 Wis.2d 699, 702, 150 N.W.2d 457. Applying that test we conclude that the findings of the trial court must be sustained. Florence Krauss testified unequivocally that she had not agreed to payments of $217.50, and she testified that she had told Bunbury that $175 was the maximum that could be paid. She testified that Bunbury agreed that this amount would be acceptable. Attorney Philip J. Croak also testified that Bunbury agreed that the lessor amount would be agreeable to him until the profits of the farm warranted the full $217.50 per month payment.

From the testimony of Clyde Hutson, a representative of the Mortgage Company, the trial judge could properly infer that the plain meaning of the loan agreement was that Krauss was to pay $175 per month and Bunbury was to make up the difference between that amount and the total amount owed, by payments every six months to the Mortgage Company.

Bunbury denied that any oral modification or substitution of the terms of payment of the land contract was ever entered into. He acknowledged, however, that, at the request of the Mortgage Company, he made up the difference between the Krauss payment and the $217.50 per month by payments every six months from July, 1963, until the time of the foreclosure.

Bunbury also testified that he had asked Florence Krauss and her attorney when they would be able to assume payments of $217.50.

It is undenied that this pattern of payments, $175 per month by Krauss and the balance made up by Bunbury, continued for almost four years, without any evidence that during that period Bunbury contended Krauss was not living up to the payment schedule. While the evidence is conflicting, under the test to be applied the evidence supports the trial judge's finding that the original agreement appearing in the written land contract was never assented to but was modified by an oral substitution and, as so modified, the defendants were not in default.

The plaintiffs would have us exclude testimony relevant to showing the substituted terms of the contract because some of these terms arose in discussions that either preceded or were contemporaneous with the signing of the land contract. He relies on the parol evidence rule. It is stated thus in Corbin, 3 Contracts, page 357, sec. 573:

'When two parties have made a contract and have expressed it in a writing to which they have both assented as the complete and accurate integration of that contract, evidence, whether parol or otherwise, of ante cedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing.' (Emphasis supplied.)

Corbin, in the same paragraph of his text, points out that the parol evidence rule, as stated above, implies the existence of a written contract expressing the intent of the parties without any question of fraud or mistake, and to which the parties assent as a complete integration of their understanding.

Corbin, Vol. 3, pages 359, 360, sec. 573, supra, states that on the following issues evidence, oral or written, may be submitted:

'(1) Have the parties made a contract? (2) Is that contract void or voidable because of illegality, fraud, mistake, or any other reason? (3) Did the parties assent to a particular writing as the complete and accurate 'integration' of that contract?

'In determining these issues, or any one of them, there is no 'parol evidence rule' to be applied. On these issues, no relevant evidence, whether parol or otherwise, is excluded. No written document is sufficient, standing alone, to determine any one of them, however long and detailed it may be, however formal, and however many may be the seals and signatures and assertions. No one of these issues can be determined by mere inspection of the written document.'

In the instant case the trial judge found as a fact that the parties did not assent to the land contract as the complete and accurate 'integration' of the contract.

In his opinion he summarized the testimony of Florence Krauss pertinent to the question of whether the parties had ever assented to the terms of the written contract:

'In the instant case Miss Krauss testified flatly that at no time did she ever agree to make payments of Two Hundred Seventeen and 50/100 Dollars ($217.50) per month. Her testimony was clear on this point for she stated that under the circumstances she and her brother could not possibly afford to pay more than One Hundred Seventy-five Dollars ($175.00) per month on the contract. She did indicate, however, that should there be a profit from the farm operations then the payments might be increased to the Two Hundred Seventeen and 50/100 ($217.50) figure. It is undisputed that the farm operations were consistently in the red for each year from 1963 through 1966.

'In addition, defendants' attorney testified that at the closing, or immediately thereafter, Mr. Bunbury agreed to accept One Hundred Seventy-five Dollars ($175.00) per month until such time as the farm earnings could make up the difference.

'It seems obvious to this court that the parties did not assent to the land contract executed on December 17, 1962 as the complete and accurate 'integration' of the contract.'

Although the testimony is disputed, we cannot conclude that the trial court's finding that the land contract was not assented to is contrary to the great weight and clear preponderance of the evidence. Corbin, Vol. 3, page 366, supra, points out that when there is the assertion that a writing offered as a completely integrated contract was not assented to as an accurate or complete statement of agreed terms, the assertion may or may not be worthy of belief. Under the rules of this court, whether the evidence is credible is a question to be determined by the trier of the facts, in this case the circuit judge. In the event the trial judge gives credence to the testimony, as he did here, that the written contract was not assented to, and the testimony to that effect is not contrary to the great weight and clear preponderance of the evidence, the court's finding will be sustained, for, as Corbin, Vol. 3, page 366, supra, states, 'This is mainly a question for the trial court.'

As this court at an earlier date said of another trial judge:

'No comment we might make upon the conflicting evidence could add materially to the lucid and highly judicial analysis thereof contained in the opinion filed by the circuit judge. We must, therefore proceed upon the established existence of the facts so found as a basis for consideration of other questions.' Jost v. Wolf (1906), 130 Wis. 37, 40, 110 N.W. 232, 233.

It is thus apparent that under these circumstances the parol evidence is admissible not only to show that the writing was not assented to as an integrated contract (i.e., that there was no agreement on the disputed terms) but also as evidence of a separate and partially oral contract that was arrived at as a consequence of the negotiations that followed execution of the land contract dated October 10, 1962.

As set forth above, the statements of Florence Krauss, the statement of the defendants' attorney that Bunbury agreed to accept payment of $175 per month until the farm operation became profitable, the loan agreement with the Mortgage Company which reiterated that Krauss was to pay $175 per month and Bunbury was to pay the balance, together with a course of conduct--i.e., the pattern of payments of $175 per month for Krauss and the balance paid by Bunbury, is highly probative evidence of the formation of a modified contract for the sale of the land. The trial judge's conclusion that the evidence is sufficient to support that finding is clearly not against the great weight and clear preponderance of the evidence.

The plaintiffs assert that an oral modification of a land contract is within the Statute of Frauds ¹ and, hence, is unenforceable. The argument of the plaintiffs is buttressed by the statement in Corbin, Vol. 2, pages 102, 103, sec. 306, supra:

'An oral modification of a contract for the sale of land is within the statute if it provides for the substitution of other land; for payment by a conveyance of other land instead of money; for an increase or other change in the legal interest in the land that is to be conveyed; for an additional quantity of goods sold; or for a change in the terms and conditions of conveyance or payment by the parties. Any oral modification that is itself a contract for the sale of land is within the statute wholly irrespective of whether the contract modified was within the statute or not and was in writing or not.'

It is thus apparent that the oral contract is not valid unless there exist extraneous factors that have the effect of satisfying the Statute of Frauds or of making its provisions inapplicable. The...