St. Norbert College Foundation, Inc. v. McCormick, 75-657

• Decision Date: 03 January 1978
• Docket Number: No. 75-657,75-657
• Citation: 260 N.W.2d 776,81 Wis.2d 423
• Parties: ST. NORBERT COLLEGE FOUNDATION, INC., Plaintiff-Respondent, v. Victor McCORMICK, Individually and as trustee of the Mary Minahan McCormick Memorial Trust, Defendant-Appellant and Third-Party Plaintiff, The Premonstratensian Fathers, a corporation, Third-Party Defendant- Respondent.
• Court: Wisconsin Supreme Court

Page 776

260 N.W.2d 776

81 Wis.2d 423

ST. NORBERT COLLEGE FOUNDATION, INC., Plaintiff-Respondent, v. Victor McCORMICK, Individually and as trustee of the Mary Minahan McCormick Memorial Trust Defendant-Appellant and Third-Party Plaintiff The Premonstratensian Fathers, a corporation, Third-Party Defendant- Respondent.

No. 75-657.

Supreme Court of Wisconsin.

Argued Sept. 2, 1977.

Decided Jan. 3, 1978.

Following a trial to the court a judgment was entered requiring the defendant-appellant, Victor McCormick, individually and as trustee of the Mary Minahan McCormick Memorial Trust, to transfer to the plaintiff-respondent, St. Norbert College Foundation, Inc., 14,000 shares of Proctor and Gamble Company common stock worth over $1,000,000, plus $106,000 of dividends, interest and costs. The third-party complaint against the third-party defendant-respondent, The Premonstratensian Fathers, a corporation, was dismissed on its merits.

Dates and facts relevant to the controversy between the litigants include the following:

The plaintiff, St. Norbert College Foundation, Inc., is a tax exempt Wisconsin corporation organized in 1965 without stock and not for profit under ch. 181, Stats., in anticipation of a donation from the defendant McCormick.

On June 29, 1965, McCormick informed Father Dennis M. Burke, then president of St. Norbert College, that he had decided to make a gift of $1,000,000 to the Premonstratensian Fathers for the benefit of St. Norbert College. Defendant signed a pledge card stating that the form and time of the gift would be determined in the future.

On August 6, 1965, MCormick advised Father Burke of his decision to make a second gift of $500,000 to the college to memorialize his deceased mother, Mary Minahan McCormick. The form and time of that gift was also to be determined in the future.

Between August 6th and August 17th, 1965, McCormick conferred frequently with Mr. David Fountain, his accountant and personal tax advisor, as to how to implement these gifts to maximize his tax benefits. These consultations led to the preparation of a memorandum by Fountain concerning the form of the gift. On August 17, 1965, McCormick and Father Burke discussed and approved Fountain's memorandum, referred to hereafter as the Fountain Plan. Fountain and E. L. Everson, a Green Bay attorney, were present at this meeting.

The Fountain Plan was implemented by a series of documents drafted by Attorney Everson and approved by Fountain. The two stock transfers were to be made by the terms of a trust and two buy-sell agreements. On September 17, 1965, McCormick and the Foundation executed the first buy-sell agreement. By the terms of that agreement McCormick agreed to transfer 14,000 shares of Proctor and Gamble stock, at the time worth $1,013,250, to the Foundation. The Foundation agreed to pay McCormick $20,000 upon transfer and $10,000 per year for life. This agreement was carried out by both parties.

On either October 7th or 8th, 1965, both the trust and the second buy-sell agreement were executed. The trust was executed first. It was an agreement between Victor McCormick as grantor and Victor McCormick as trustee of the Mary Minahan McCormick Memorial Trust. McCormick as grantor was to transfer 7,000 shares of Proctor and Gamble stock valued in 1965 in excess of $500,000, to himself as trustee to be held in a revocable trust under the conditions set forth in the agreement. In the trust agreement the grantor was specifically given the power to transfer the stock according to a second buy-sell agreement dated October 8, 1965.

The second buy-sell agreement was between McCormick as trustee of the above trust and the Foundation. Under it McCormick agreed to sell the Foundation the 7,000 shares of stock in the trust for $5,000 to be paid annually to the defendant for life. The sale was to take place on January 2, 1971. Both the trust agreement and the October 8 buy-sell agreement were executed in triplicate by McCormick as trustee and by Father Burke for the Foundation in the presence of both Attorney Everson and Fountain.

On October 3, 1965, the College dedicated a six-story women's dormitory to Mary Minahan McCormick's memory.

McCormick claims that on February 21, 1969, he executed, from himself as an individual to himself as trustee, two signed notices of revocation of the trust. The terms of the trust allowed it to be revoked by the grantor, McCormick, by filing a signed notice of revocation with the trustee, who was also McCormick. The defendant's exhibits included two such signed notices an original with the signatures torn off and a copy with signatures conformed by the defendant. The copy showed Alex Wilmer, a retired attorney, and Agnes Hujet, defendant's one-time secretary, as witnesses. Neither of the witneses remember seeing the documents or witnessing them, but the exhibits were admitted into evidence.

On September 16, 1969, McCormick, in a letter to Father Burke, stated that he intended eventually to make three times the donation to the College called for in the first buy-sell agreement. But on October 1, 1969, McCormick wrote to the vice-president of the college, that he had ". . . 'taken a walk' permanently so far as St. Norbert's is concerned." On February 6, 1970, he met with Father Burke but said nothing about revoking the trust or not delivering the shares of stock. Again on December 12th or 13th, 1970, he met with Father Burke and told him that he would not be transferring any more stock and that he, McCormick, had the right to revoke the trust.

On February 4, 1971, McCormick met with Father Burke and Abbot Killeen of the Premonstratensian Fathers and told them that he had complied with the second pledge because in April, 1970, the Proctor and Gamble stock split two for one so that the shares already transferred were worth more than the combined amount of the two pledges and buy-sell agreements. McCormick asked for the return of the October 8 buy-sell agreement. Father Burke informed the directors of plaintiff Foundation-corporation that defendant wanted the agreement back in order to make a codicil to his will. Plaintiff's directors sent defendant one duplicate-original of the buy-sell agreement but retained another. When McCormick received the copy of the buy-sell agreement, he tore the signatures off.

On November 4, 1971, the Foundation commenced this suit against McCormick, alleging that McCormick never transferred the 7,000 shares (following the stock split, 14,000 shares) of Proctor and Gamble stock, as provided for in the October 8 buy-sell agreement.

On January 2, 1976, judgment was entered requiring McCormick to specifically perform the October 8 buy-sell agreement, including the transfer of the stock, plus payment of dividends, interest and costs. From this judgment, the defendant appeals.

Kaftan, Kaftan, Kaftan, Kuehne and Van Egeren, S. C., Green Bay, on brief, for defendant-appellant and third-party plaintiff; J. Robert Kaftan, Green Bay, argued.

Lester S. Clemons, Frank J. Daily (argued) and Quarles & Brady, Milwaukee, on brief, for plaintiff-respondent.

ROBERT W. HANSEN, Justice.

While the defendant in his brief on appeal lists eight issues, the last one of which he subdivides into six separate challenges to the judgment, we find the following to be dispositive.

LACK OF CONSIDERATION.

The agreement of the parties challenged here is their buy-sell agreement of October 8, 1965. By the terms of that contract, defendant agreed to sell and plaintiff agreed to buy certain shares of Proctor and Gamble stock. Defendant contends that such sales contract is not enforceable because it lacks consideration. The contract was under seal, so consideration is presumed. ¹ However, the presence of consideration is clear from the document. Defendant agreed to sell the stock. Plaintiff agreed to pay the stipulated price $5,000 per year for life to the defendant. It is not the amount of consideration that determines the validity of a contract. As our court has held, " . . . a valuable consideration however small is sufficient to support any contract; . . . inadequacy of consideration alone is not a fatal defect." ² The law concerns itself only with the existence of legal consideration because " '(t)he adequacy in fact, as distinguished from value in law, is for the parties to judge for themselves.' " ³ A consideration of even an indeterminate value, incapable of being reduced to a fixed sum, can be sufficient to constitute legal consideration. ⁴ However, in the case before us, the dollar amounts to be paid annually for the life of the defendant were fixed by contract, and the attack upon the contract for lack of legal consideration fails.

EXISTENCE OF AN ENFORCEABLE CONTRACT BETWEEN THE PARTIES.

In the defendant's view, the October 8 buy-sell agreement between the parties was not a contract at all, but "overall a promise to make a gift in the future, which is unenforceable." ⁵ In support of that contention the defendant asks this court to consider "the conduct of all of the parties and all of the writings." ⁶ The invitation to look at all the writings and all previous charitable transactions between the parties is declined. The written sales contract between the parties is full and complete, clear and unambiguous. As our court has held in such a situation, "It is presumed that after the parties negotiate the terms of a contract the negotiations are merged therein when written and signed." ⁷ Prior writings or promises not embodied in a written contract " . . . are deemed to have been abandoned, unless it appears that the parties did not intend that the writing should express the whole contract." ⁸ Since no ambiguity is claimed to be present in the written contract of the parties, there is neither right nor reason to resort to prior transactions between the parties to erase the written contract of the parties and substitute a promise to make a gift in the future in its stead....