Gates v. Parmly

• Decision Date: 18 February 1896
• Citation: 66 N.W. 253,93 Wis. 294
• Parties: GATES v. PARMLY ET AL.
• Court: Wisconsin Supreme Court

93 Wis. 294

66 N.W. 253

GATES

v.PARMLY ET AL.

Supreme Court of Wisconsin.

Feb. 18, 1896.

Appeal from circuit court, Clark county; W. F. Bailey, Judge.

Action by James L. Gates against Samuel P. Parmly and Hattie S. Parmly, executors of Henry C. Parmly, deceased. Decree for plaintiff, and defendants appeal. Reversed.

This was an action brought by the plaintiff against Henry C. Parmly, as trustee for the defendants Charles A. Avery, Samuel K. Gray, Aaron M. Wilcox, Z. S. Wilson, and against him individually, to reform a certain contract concerning the sale and conveyance of about 20,600 acres of land in Clark county, and for a construction thereof, and for relief against an alleged penalty therein, and for judgment for the amount due the plaintiff for purchase money, and for strict foreclosure and other relief. It was alleged that the plaintiff was the owner in fee of the lands in February, 1888, described in the complaint, and that, in the transactions between him and the defendants, said Henry C. Parmly acted as such trustee for and represented his codefendants as well as himself; that on the 29th of September, 1888, the plaintiff executed and delivered to the said Henry C. Parmly, as trustee, a contract, which is set out at length, in which it was recited in substance that June 16, 1888, a previous contract had been made between the parties by which the plaintiff sold and agreed to convey by warranty deed to said Henry C. Parmly the said lands for $45,000, one-half cash, and the balance in one, two, and three years, in equal payments, with interest as therein stated, and guarantied to warrant and defend the title to said land, and that there were 10,000,000 feet of pine timber and lumber and 15,000,000 feet of hardwood timber and lumber, including basswood thereon, and had further agreed to furnish said Parmly, trustee, an abstract of title to the said land, showing perfect title in him (said Gates), and that he had a good and lawful right to convey the same; that there had been delay in furnishing abstracts of title, and the plaintiff had previously executed to Parmly, trustee, a warranty deed of a portion of the lands, and had on that day, September 29, 1888, delivered to him a warranty deed of all said lands, confirming said prior deed, and desired to receive the cash payment of $22,500. The said second contract recited that the plaintiff had furnished to Parmly, trustee, an abstract of a portion of the land, and had transferred to him certain outstanding tax certificates thereon, and that Parmly, trustee, had paid the plaintiff $22,500 in cash, and it was stipulated in consideration of the premises that the plaintiff should within four months furnish and deliver a complete abstract of title to said lands, and by August 15, 1889, he would furnish and deliver to said Parmly, trustee, an abstract of title thereof showing a perfect title in said plaintiff at the date of said deed to Parmly, trustee, or showing the title to have been made perfect prior to the making of such abstract; that in case of failure “to furnish such abstract, or if the abstract furnished failed to show a perfect title,” as stipulated aforesaid, “no further sum of money whatsoever shall be held due from said Henry C. Parmly, trustee, to the said James L. Gates, for or on account of said property under this contract, or under the contract of June 16, 1888, or otherwise, but that the said Parmly, trustee, shall hold the title to the lands free and discharged of any claims whatsoever for further purchase money, and the said $22,500 paid at this date shall be in this event the full consideration and purchase price of said property, unless the title should be defective as to 800 acres or less,” in which event Parmly was to have a deduction at the rate of five dollars per acre therefor, or as much more as it should be worth. In case the plaintiff complied with the terms of the contract as stipulated, Parmly, as trustee, was to pay him the further sum of $22,500, in payments and with interest as therein stated; and said named agreement was to take the place in all respects of the one of June 16, 1888. It was further stipulated that the second contract should be, and be construed “to be, a personal contract between the parties, and its terms and provisions shall constitute no lien on any real estate mentioned therein”; and the second contract contained the same guaranty as the former one as to the quantity of lumber and timber, and that, if the amount of land fell short of 20,000 acres, the plaintiff was to pay five dollars per acre for each acre it fell short, and pay on demand to Parmly, trustee, the actual value of any deficiency of lumber and timber. It was alleged that Gates, at the date of said second contract, then being the owner in fee simple of said lands, sold the same to the defendants for $45,000, and by his deed set out in the complaint conveyed the same to Henry C. Parmly, trustee. The deed was one of special warranty only, as against persons claiming under the grantors. It was alleged that the plaintiff had fully performed said contract, and that the entire amount of purchase money had long since become due; that, although he had not performed to the fullest extent within the time expressly required, yet that time was not of the essence of the contract, and that extensions of time had been given after the four months specified in the contract; that the plaintiff had been to an expense of $3,000 in furnishing abstracts, and that the lands conveyed to the defendants in respect to the title of which there is no dispute, at the date of the deed, were and are of the value of $75,000; that the defendants had only paid the plaintiff $18,000, and the recital in the contract to the effect that the sum paid was $22,500 did not truly state the facts, and was retained therein by mistake and oversight; that the clause therein declaring the contract to be a personal one, and its terms and provisions should constitute no lien on the lands, was inserted therein through fraud, false representations, and connivance of the defendant Henry C. Parmly, trustee; “that, when the contract was read to the plaintiff, his attention was directed to it especially, and he inquired of said Parmly and his attorney, and was assured by both of them, falsely and fraudulently, that the clause cut no figure whatever in the contract, that it was merely formal, and that by it plaintiff released to the defendants no rights he had, either in law or equity,” and he signed it relying on such statements. The plaintiff averred that, in an action commenced in the circuit court for Clark county by him against the defendants, wherein judgment was rendered March 7, 1891, it was adjudged that the said deed so executed as aforesaid was a full compliance with and performance by the plaintiff with the contract on his part; and the plaintiff insisted that the condition precedent stated in the contract should be construed and held to operate by way of penalty or forfeiture, and not as liquidated damages, and did not impose on the plaintiff the loss of $22,500, but only such damages as the defendants might show that they had in fact sustained, but the defendants were insisting upon said clause and a forfeiture of $22,500 under the same, and judgment was asked as above stated.

The defendants, in their answer, denied that the plaintiff was at any time the owner of all the lands described, and alleged that he had no title nor right of possession of a large part thereof, and could not and did not convey the same by said deed, and specified defects and failures of title of various kinds to a great part of the lands described therein, and that he had not since conveyed them to the defendants. They alleged that they paid on said purchase $22,500, and denied that any mistake in the recital of the contract on that subject occurred, or that any other sum ever became due, and denied that the plaintiff fully performed the said contract, and insisted that the condition precedent in respect to the second sum of $22,500 had not been performed, and pleaded the terms of the contract in that respect in bar of the plaintiff's claim, denying that the plaintiff delivered as required abstracts of title showing perfect title in all said lands, and that, as shown by said abstracts, the title to 6,000 acres of said lands had failed; that, as to over 100 40-acre tracts, the plaintiff had sold all the pine timber thereon to the Northwestern Lumber Company, and since the contract with said Parmly, trustee, it had entered thereon, and cut and removed a large quantity of valuable timber therefrom; that the title to a considerable portion of the lands was by tax deeds which had not been recorded three years, and they were liable to be attacked and held void; and that there were liens and incumbrances on other portions; and that some of said lands belonged to other parties,--all of which appeared by the abstracts. The defendants insisted that there had been a breach of the contract as to the amount of pine and hardwood timber on said lands at the time of the sale, and alleged that the plaintiff had sold and conveyed away such timber, so that, at the time of the execution of the contract, there were on said lands not to exceed 3,000,000 feet of pine timber or lumber, and 5,000,000 feet of hardwood, including basswood, and the defendants had been damaged, by reason of premises, $14,000. The defendants further pleaded in bar a part of the same judgment in the previous action by the plaintiff against the same defendants, rendered March 7, 1891, mentioned in the plaintiff's complaint, alleging that said action was for the same cause as the present action, and that judgment was given thereon on the merits dismissing the plaintiff's complaint, and that such judgment remained in full force, etc.

The court found, among other things, that the plaintiff, prior to January 1, 1889, delivered to the...