Hope Acres, Inc. v. Harris

• Decision Date: 27 April 1965
• Citation: 27 Wis.2d 285,134 N.W.2d 462
• Parties: HOPE ACRES, INC., a Wis. corporation, Appellant, v. Raymond P. HARRIS et al. d/b/a Harris Port Estates, a partnership, Respondents.
• Court: Wisconsin Supreme Court

Page 462

134 N.W.2d 462

27 Wis.2d 285

HOPE ACRES, INC., a Wis. corporation, Appellant, v. Raymond P. HARRIS et al. d/b/a Harris Port Estates, a

partnership, Respondents.

Supreme Court of Wisconsin.

April 27, 1965.

Rehearing Denied June 25, 1965.

Appellant, Hope Acres, Inc., is a Wisconsin corporation engaged in the building business. Russel J. Lesperance is the president and Joseph W. Restle the secretary of the corporation. Respondents Raymond Harris, Morton Harris, and Ira Burman are partners in a business known as Harris Port Estates. Respondent Lila Harris is the wife of Raymond Harris, and Together they are the record holders of the subdivision located in Port Washington and known as Harris Port Estates.

After some negotiations, an agreement was drafted on March 2, 1961, for purchase by appellant of all of the property in the Harris Port Estates subdivision from respondents. This contract was not acceptable to all parties and another agreement was drawn up on March 17th. An addendum was drafted including among other provisions an opinion to buy an additional subdivision of 100 lots. Buth the addendum and the revised agreement were then simultaneously executed.

Appellant purchased eleven lots in 1961 and another nine up to July of 1962. The parties then became involved in a series of disputes and respondents, despite repeated requests, refused to convey any more lots. In May of 1963 appellant commenced action for, among other things, reformation and specific performance of the contract and damages. After trial to the court, judgment was entered April 7, 1964: (1) Modifying the contract in a minor respect, (2) interpreting the contract in respect to when interest commenced and responsibility for sidewalk assessments, (3) decreeing specific performance, (4) denying damages, and (5) foreclosing the exercise of the option to acquire the additional subdivision. The part of the judgment relating to sidewalk assessments was amended on September 1st. Appellant appeals from the judgment in several respects, and respondents have moved to review the order of September 1st modifying the judgment.

Further facts will be stated in the opinion.

Sherman E. Stock, Milwaukee, Mark M. Camp. Wauwatosa, of counsel, for appellant.

Frank, Karl & Hiller, Milwaukee, Myron B. Katz, Milwaukee, of counsel, for respondents.

WILKIE, Justice.

Six issues are presented on this appeal:

First, did the trial court err in finding that interest commenced, according to the agreement, upon F. H. A. approval of the subdivision?

Second, did the trial court err in determining that December 1, 1961, was the date of final F. H. A. approval of the subdivision?

Third, did respondents breach the agreement by refusing to convey certain lots beginning in July, 1962?

Fourth, should accrual of interest and running of time to exercise option be tolled?

Fifth, did appellant sufficiently prove damages resulting from respondents' refusal to convey lots?

Sixth, did the trial court err in determining responsibility for the sidewalk assessments?

This whole controversy arises out of the agreement of March 17th, the addendum to that agreement, and the condduct of the parties in connection with those agreements, all relating to the development and sale of Harris Port Estates and the adjoining subdivision. After a long trial to the court, findings and conclusions were entered by the court, many of which are put in issue on this appeal. Of course, in reviewing these findings of the trial court, none will be upset unless they are against the great weight and clear preponderance of the evidence. ¹

Interest on Unpaid Balance.

Paragraph four of the basic agreement calls for interest to be paid:

'* * * on the unpaid balance of the aggregate purchase price twelve months from the date of final Subdivision approval by municipality and F. H. A. and approved by State of Wisconsin, improvements are completed and accepted by the City of Port Washington.'

However, the second paragraph of the addendum provides:

'Paragraph Four in offer to purchase is amended to read that interest of six percent (6%) per annum on the unpaid balance of the aggregate purchase price from time of final subdivision approval by municipality and approved by state of Wisconsin and F.H.A. approval and improvements completed and accepted by City of Port Washington. * * *'

The trial court found that the addendum controlled the commencement of interest on the purchases in the original subdivision, and that interest was to run from the time of F. H. A. approval of the subdivision and not from one year after such approval. Relying on the doctrine that qualifying phrases refer to the next preceding antecedent, ² appellant contends that the provision relied on by the trial court pertains to the first paragraph of the addendum, which in turn deals with an option for the purchase of land in an entirely different subdivision and not to paragraph four of the agreement. However, this rule of construction cannot be invoked if 'the context clearly shows the contrary.' ³ That the provision in question expressly recites that 'Paragraph Four in offer to purchase is amended to read * * *,' without specifically referring to the other paragraph demonstrates that a qualification of the preceding paragraph was not intended.

Appellant next contends that evidence of surrounding circumstances, practical construction by the parties, and declarations of the parties indicate that interest was to start a year after F.H.A. approval. In order to resort to this evidence, the contract must be ambiguous. ⁴ . Had there been two provisions in the agreement, one declaring that interest was to begin a year from an event and the other requiring commencement at the time of the event, the agreement would clearly be ambiguous. But the paragraph which was inserted in the addendum specifically stated that the previous reference to the running of interest was to be amended. Thus there is nothing ambiguous about the terms of the agreement on this particular point. Even assuming ambiguity, the evidence in the record is insufficient to shed any light on the meaning to be attributed to the conduct of the parties.

There was testimony that respondents had demanded interest payments prior to December 1, 1961, the time from which the court ultimately found it was to have run At least one later demand was made. This is consistent with their position that interest was to begin then. On the other hand, appellant refused to pay any interest. This is in accord with Lesperance's version of the terms. Other testimony concerning the interpretation and construction of the agreement by the parties is likewise of little value because it is either contradictory, self-serving, or both.

In arriving at its decision, the trial court placed weight on the fact that the secretary of Hope Acres, Joseph W. Restle, was not called to testify. ⁵ Appellant contends that this was error because Restle did not participate in the negotiation which produced the final agreement. However, the record disclosed that Restle played a significant role in the discussions. Lesperance testified that the March 17th agreement which 'Joe Restle had negotiated' was not acceptable to him. Lesperance added that 'the strike-outs and substitutions [in the March 17th agreement] were at my direction either done by my secretary or Joseph W. Restle * * *.' There are many other similar references in the testimony to situations where Restle participated in contract discussions, both before and after its execution.

It cannot be said that the finding of the trial court is against the great weight and clear preponderance of the evidence.

F. H. A. Approval.

The addendum called for interest on the unpaid balance 'from time of final subdivision approval by municipality and approved by state of Wisconsin and F.H.A. approval and improvements completed and accepted by City of Port Washington.' The trial court found that all these conditions had been met by December 1, 1961. Appellant assails this finding in regard to the F. H. A. approval.

In the first place, appellant argues that the agreement calls for an unconditional commitment before the interest provision is even triggered. Nor only does the agreement fail to expressly call for this, but according to Robert Fetherston, the assistant director of F. H. A. for Wisconsin, an 'unconditional commitment' would be impossible to obtain in the present case. The agreement merely requires 'approval' and in the F. H. A. vernacular, this means 'acceptance.'

Appellant next contends that the F. H. A. issued a subdivision report on July 1, 1961, and that compliance was not had with certain requirements contained in that report until much later than December 1, 1961. It is true that the F. H. A. noted on the report the dates the particular requirements were complied with and that many of these dates were later than December 1, 1961, but testimony showed that these notations were not designations of the exact time of compliance, but were merely affixed by F. H. A. as matter of routine to show when they learned that the requirements had been met. Furthermore, although the date of compliance with one or more of the requirements may have been later than December 1st, there was no evidence to show that the F. H. A. approval could not have been obtained by that date if a concerted effort had been made to obtain the approval.

According to the report, a subdivision plat had been received as of August 8, 1962. Fetherston testified in effect that this date was unimportant since the F. H. A. actually had knowledge that the requirement had been satisfied--which is all the plat would show--prior to December 1, 1961.

Several separate specifications relating to utilites and street improvements were labeled 'city letter' and dated as having been performed in September of 1962. The words 'city letter' mean that correspondence had been received from the...