Knauf & Tesch Co. v. Elkhart Lake Sand & Gravel Co.

• Decision Date: 29 April 1913
• Citation: 141 N.W. 701,153 Wis. 306
• Court: Wisconsin Supreme Court
• Parties: KNAUF & TESCH CO. v. ELKHART LAKE SAND & GRAVEL CO. ET AL.

153 Wis. 306

141 N.W. 701

KNAUF & TESCH CO.

v.ELKHART LAKE SAND & GRAVEL CO. ET AL.

Supreme Court of Wisconsin.

April 29, 1913.

Appeal from Circuit Court, Sheboygan County; Michael Kirwan, Judge.

Action by the Knauf & Tesch Company against the Elkhart Lake Sand & Gravel Company and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Action for equitable relief, establishing title to certain real estate in plaintiff and remedying the wrong complained of.

The issues raised and the nature of the evidence are shown by the following abridgment of the findings:

April 17, 1911, negotiations were begun between Garvens,--secretary, treasurer and principal stockholder of the defendant Gravel Company,--and the president and vice president of the plaintiff, as to a sale by such company of its real estate and property to plaintiff; such property being then used by the former for the excavation and sale of gravel, which business, the latter, to the Gravel Company's knowledge, intended in case of purchase to continue. The Gravel Company's land consisted of about 38 acres describable as the south half of the northeast quarter of section 29, town 16, range 21 east, Sheboygan county, Wisconsin, northerly of the northerly boundary of the right of way of the Chicago, Milwaukee & St. Paul Railway Company, except that part on such side of such right of way, south of the east and west quarter line for a distance of 100 feet. The excepted part was used in common with the rest by the Gravel Company, but it belonged to Garvens, which, however, was unknown to plaintiff. For aught it knew, all belonged to such company. Such part is the land in controversy. It was bounded on the north substantially by fence. The 40 on the north of the east part of the Gravel Company's land was owned by Murphy, an officer of the company, but plaintiff supposed Garvens had some interest therein though he said nothing about his having any interest in any land south of the fence of any which plaintiff's agents examined as Gravel Company's land, which included all but the Murphy 40. Garvens solicited such agents to buy all the holdings. The following shows the situation as it existed in fact:

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During the negotiations with Garvens, representing the Gravel Company, they examined what was understood to be the latter's holdings, which included the 100 foot strip. Into such strip the Gravel Company's operations had extended in excavating gravel for sale. While the parties were exploring the premises Garvens pointed to the fence as the north boundary, saying nothing as to his having any individual interest south of it. Relying thereon, April 18th thereafter plaintiff contracted in writing to acquire the Gravel Company's property for $4,500, the business being done in behalf of the latter by Garvens and Murphy. In the written contract the property dealt with was thus described: “The lands known as the Elkhart Lake Sand & Gravel Company's sand and gravel pit, consisting of about 38 acres of land situated in the county of Sheboygan, state of Wisconsin, together with the personal property, tools and equipment needed to operate the same as it has been operated by us.” April 21st, thereafter, for his company, Garvens delivered to Knauf, for plaintiff, an abstract and conveyance with other papers in execution of such contract, representing that such conveyance included the lands agreed upon. The papers were received for examination with the understanding that another paper, showing corporate authority to sell would be furnished and that plaintiff should decide upon the sufficiency of the deed later. That was consented to by Garvens, but for accommodation of his company plaintiff then paid the purchase money. The lands were described in the conveyance thus:

“The following described real estate situated in Sheboygan county, state of Wisconsin, to-wit: Beginning one hundred (100) feet due east of the northwest corner of the southeast quarter (1/4) of the northeast quarter (1/4) of section No. twenty-nine (29) in township No. sixteen (16) north, of range No. twenty-one (21) east, and running thence east twelve hundred and eighty-nine hundredths (1200.89) feet to the northeast corner of said southeast quarter (1/4), thence due south to the southeast corner of said southeast quarter (1/4), thence due west six hundred seventy-six (676) feet to the east line of the right of way of the Chicago, Milwaukee & St. Paul Railway, thence northwesterly along said right of way to the west line of said southeast quarter (1/4), thence due north five hundred forty-three (543) feet to a point one hundred feet south of the northwest corner of the said southeast quarter (1/4), thence due east one hundred (100) feet, thence due north one hundred (100) feet, to the place of beginning, containing 33.77 acres of land.

Also that part of the southwest quarter (1/4) of the northeast quarter (1/4) of said section lying northeast of the right of way of the Chicago, Milwaukee & St. Paul Railway, excepting the north one hundred (100) feet, and described as follows:

Beginning one hundred (100) feet due south of the northeast corner of said southwest quarter (1/4) and running thence west parallel with the north line of said southwest quarter (1/4) seven hundred eighty-two (782) feet, more or less, to the east line of the right of way of the Chicago, Milwaukee & St. Paul Railway, thence southeasterly along said right of way to the east line of said southwest quarter (1/4), thence due north five hundred forty-three (543) feet to the place of beginning, and containing 4.87 acres of land.”

A careful examination of the conveyance and abstract would have disclosed that the premises in controversy were not included in the deed or according to the representations made leading up to the contract, nor to such contract, as plaintiff understood it in the light of such representations and that the gravel company never owned the strip. Such careful examination was omitted by consent of Garvens, because Mr. Knauf was required, for the time being, to give attention to sick relatives. Some few days thereafter, and before plaintiff had made the full examination of the papers contemplated, Murphy endeavored, as Garvens had before ineffectually, to have plaintiff purchase his 40, threatening that, if it did not, there would be competition in the gravel business; the 100 foot strip in controversy, which he then asserted belonged to Garvens, being used in reaching shipping facilities. That was the first intimation to plaintiff that the deed did not describe the 100 foot strip. Therefore, pursuant to the understanding had when the contract was made, plaintiff took possession of what it supposed was the Gravel Company's property, described in the land contract, and has ever since remained in such possession, carrying on the gravel business. Seasonably after the intimation aforesaid, plaintiff discovered the facts and demanded conveyance of the disputed premises, which was refused. Under the circumstances plaintiff was not negligent in failing to discover the true state of things earlier than it did. May 11th, after the transactions aforesaid, Garvens notified plaintiff in writing to vacate the strip, Murphy then negotiated with defendant Feldmann to sell it with his 40, resulting in the latter arranging to take such property and transfer the strip to defendant Laun for $700; both Feldmann and Laun having knowledge of plaintiff's occupancy and claim to have purchased the strip supposing it was a part of the Gravel Company's property, described in the contract. Feldmann and Laun caused the records to be examined, resulting in confirmation of Murphy's claim that the title to the strip was in Garvens and never had been in the Gravel Company. Relying thereon and the representations by Murphy that Garvens owned the strip, Feldmann purchased it with the Murphy 40, taking the paper title thereto. May 16th thereafter he conveyed the strip to Laun. Neither of the parties made any inquiry of plaintiff's officers in respect to their claim to the property. A few days later Laun and others formed the defendant Concrete Company which, June 22d thereafter, acquired paper title to the disputed strip. All the deeds vesting the record title in the Concrete Company were duly recorded. Feldmann and the parties who formed the Concrete Company did not combine to defraud plaintiff. They acted in the belief that Murphy's claim as to the plaintiff not having any right to the disputed premises was true and upon the record title. Garvens, in the transactions with plaintiff, acted solely for the Gravel Company, making no representations in his own behalf.

On such facts the court concluded that plaintiff was not entitled to hold the Garvens land because he acted solely for his company, and that the cause could not properly be retained for legal relief because plaintiff knew the facts when the action was commenced.

Judgment was ordered for defendant on the grounds stated in the opinion referred to. There were no conclusions of law embodied in the paper filed in execution of the statutory requirements for findings of fact and conclusions of law to be filed by the trial judge. In place thereof, and denominated “conclusions of law,” there was an order dissolving a temporary injunction granted at the commencement of the action and an order for judgment dismissing the action on the merits, each party to pay its or his own costs.

Exceptions were filed requisite to save for review the questions discussed in the opinion.

J. E....