Trumpf v. Shoudy

• Decision Date: 04 December 1917
• Citation: 166 Wis. 353,164 N.W. 454
• Parties: TRUMPF v. SHOUDY ET AL.
• Court: Wisconsin Supreme Court

166 Wis. 353

164 N.W. 454

TRUMPF

v.SHOUDY ET AL.

Supreme Court of Wisconsin.

Dec. 4, 1917.

Appeal from Circuit Court, Dane County; E. Ray Stevens, Judge.

Action by E. G. Trumpf against I. Shoudy and F. L. Melville. Judgment for plaintiff, and defendants appeal. Affirmed.

Action on contract for damages. Plaintiff was the owner of a hotel property located in the city of Madison, upon which there was a first mortgage of $30,000 and a second mortgage of $35,000, owned by the Hausmann Brewing Company. Defendants were interested in two tracts of land situated in Hidalgo county, Tex., one 396 acres in extent, known as the Edinburg tract, and the other 280 acres, known as the Mercedes tract. The defendants were real estate dealers living at Rockford, Ill. Plaintiff was engaged in operating his hotel. Negotiations were opened between the parties looking to an exchange of these properties, as a result of which the plaintiff, a representative of the Hausmann Brewing Company, the defendants, a man by the name of O'Hora, and a dealer in Texas lands by the name of Schulz, went to view the lands in Texas. It was understood that any disposition of the hotel property made by the plaintiff must be subject to the approval of the Hausmann Brewing Company. As a result of this visit and further negotiations, the parties on July 21, 1913, entered into a contract for the exchange of their respective properties. This contract, however, was never approved by the Hausmann Brewing Company, and was never carried out. Further negotiations were had, with the result that on September 6, 1913, the plaintiff and defendants entered into a contract expressly abrogating the contract of July 21, 1913, and providing for an exchange of the properties, by the terms of which the defendants were to take the hotel property subject to a mortgage of $30,000, and were to convey the two tracts of land in Texas to the plaintiff, the land to be likewise subject to a mortgage of $30,000, and as a part of the contract of exchange the defendants agreed to sell the Mercedes tract of 280 acres within a period of one year for $150 an acre; it being agreed that the defendants should have any sum received in excess of $150 an acre, and that they should receive a commission or compensation of $1,000 for making the sale. By the terms of the contract plaintiff agreed to assist in making the sale, to have certain roads cut, and to do certain other things not material here. Plaintiff being doubtful as to the value of the Mercedes tract, the defendants, in order to bring about the exchange, entered into a bond in the penal sum of $40,000, conditioned that they would perform fully and completely and in every particular each and every condition, agreement, covenant, matter, and thing by them to be performed in the contract of September 6th. The contract of exchange was carried out, a year elapsed, and no part of the 280-acre tract was sold, and plaintiff brings this action upon the bond, claiming that he is entitled to recover the difference between the agreed selling price of $150 an acre and the market value of the property. The defendants, with whom was joined one O'Hora, who died insolvent since the commencement of the action, answered, and set up as a defense that the real contract between the parties was the contract of July 21, 1913; that they entered into the contract of September 6th and gave the bond of even date therewith for the sole purpose of enabling Trumpf to make the necessary arrangements with the Hausmann Brewing Company to effect an exchange of the properties, and that it was agreed between the defendants and plaintiff that the contract of September 6th was not to be enforced against them; that Trumpf had not performed his part of the contract of September 6th; that he had misrepresented the value of the hotel property, and asked to have the contract of September 6th reformed so as to express the true agreement of the parties, and demanded judgment on the counterclaim setting up the facts fully for $40,000. The case was submitted to the jury on a special verdict, in response to which the jury found as follows:

(1) That the plaintiff did before September 6, 1914, give such time as he reasonably could to securing buyers and in assisting in selling the 280 acres near Mercedes.

(2) That the fair market value of the 280-acre tract near Mercedes on September 6, 1913, was $15 per acre.

(3) That the fair market value of the 280 acres of land near Mercedes on September 6, 1914, was $16 per acre.

(4) That before the contract and bond were signed plaintiff did not state to the defendants that the bond was never to be enforced, and that, if they did not sell the 280 acres of land near Mercedes before September 6, 1914, no liability would ever attach to the defendants because of the signing of the bond dated September 6, 1913.

(Question 5 not answered.)

(6) That plaintiff did not, after the bond and contract of September 6, 1913, had been executed by the defendants, state to the defendants that he would make no claim against them, and that the bond should be canceled and discharged if the 280 acres of land near Mercedes was not sold within the year.

(7) That the plaintiff did not before the contract of September 6, 1913, was signed represent to the defendants: (a) That the Trumpf Hotel was worth $85,000 in cash; (b) that the Trumpf Hotel was worth $100,000 in trade; (c) that he was offered $75,000 in cash for the Trumpf Hotel; (d) that he had a bona fide purchaser for the Trumpf Hotel who was ready, able, and willing to pay $65,000 therefor at any time; (e) that the Trumpf Hotel was a good paying property on the basis of a valuation of $100,000; (f) that the Trumpf Hotel was a solid brick building.

(Questions 8 to 19, inclusive, were not answered.)

(20) That the Hausmann Brewing Company did not approve of the contract of July 21, 1913, and consent that the properties described therein might be exchanged upon the terms therein stated.

(21) That the fair market value of the Trumpf Hotel on September 6, 1913, was $65,000.

Defendants moved for judgment notwithstanding the verdict, to set aside the answers to questions in the special verdict, to change the answers to questions in the special verdict, and for a new trial, all of which motions were denied. Plaintiff had judgment on the verdict for the difference between the agreed selling price of $150 an acre and the value of the land on September 6, 1914, $16 an acre, less the $1,000 commission, being a total of $36,520, damages, and costs, and disbursements. Defendants appeal.

Marshall, Kerwin, and Eschweiler, JJ., dissenting.W. H. Frawley, of Eau Claire, and Aylward & Olbrich, of Madison, for appellants.

Richmond, Jackman, Wilkie & Toebaas, of Madison, for respondent.

ROSENBERRY, J.

Appellants assign error on the admission and rejection of testimony and in several particulars which we will not discuss here. Suffice it to say that we have carefully considered them, and find no prejudicial error.

[1] It is contended that the contract made by the defendants is unconscionable, and therefore should not be enforced. It is pointed out that the contract which the defendants made was to sell the Mercedes tract for $150 an acre, that the jury found that on September 6, 1914, it was worth but $16 an acre, and that to hold the defendants for the difference less the $1,000 commission is to hold them to a bargain which no man in his senses and not under delusion would make. The premise is wrong. Plaintiff parted with his property upon the representation of the defendants that the Mercedes tract was worth $150 an acre and marketable. The character of the contract therefore cannot be determined solely with reference to the contract price and the actual market value of the land, but must be considered in its relation to the entire transaction. There is no finding and very little evidence as to the value of the Edinburg tract. The defendants are experienced real estate men. There is nothing in the record to indicate that they were in any way misled by the plaintiff. They claimed at the time the trade was made, claimed in their answer, and throughout the trial that the land was worth $150 an acre. Plaintiff would not effect an exchange whereby he received this property except upon written assurance given in the form of a contract and bond by the defendants as to the value and marketability of the land. It cannot be said upon this record that the contract sued upon is an unconscionable one, and for that reason not to be enforced.

[2][3] Appellants make the further claim that the contract is void as against public policy for the following reason: That by the terms of the contract the plaintiff and the defendants were joined in an enterprise which, if the contract had been performed, would have resulted in the sale of land to third parties at a price of $150 an acre or more, the market value of which was in fact, as found by the jury, but $16 an acre, citing Morrison v. Bennett, 20 Mont. 560, 52 Pac. 553, 40 L. R. A. 158;Twentieth Century Co. v. Quilling, 130 Wis. 318, 110 N. W. 174;McNamara v. Gargett, 68 Mich. 454, 36 N. W. 218, 13 Am. St. Rep. 355;Knight v. Linzey, 80 Mich. 396, 45 N. W. 337, 8 L. R. A. 476;Schmueckle v. Waters, 125 Ind. 265, 25 N. E. 281;Merrill v. Packer, 80 Iowa, 542, 45 N. W. 1076;Shipley v. Reasoner, 80 Iowa, 548, 45 N. W. 1077;Hubbard v. Freiberger, 133 Mich. 139, 94 N. W. 727. Upon the strength of these cases we are asked to declare the contract void as against public policy.

The term “public policy” is admittedly one of a vague and uncertain meaning, and the power to declare a contract void as being against public policy should be exercised only in cases free from doubt. 6 R. C. L. p. 710; Page on Contracts, par. 326.

In this case there is no evidence to show that the plaintiff, Trumpf, supposed at the time he entered into the contract that the land was of less value than $150 an acre. He...