Baraboo Land, Mining & Leasing Co. v. Winter

110 N.W. 413, 130 Wis. 457, 1907 Wisc. LEXIS 293

Opinion

Kerwin, J.

Whether tbe complaint states a cause of action is tbe question for determination upon this appeal. Tbe other grounds of demurrer appear to have been abandoned, since they have not been urged either in brief of appellant or upon oral argument. Upon demurrer tbe facts set up in tbe complaint must be regarded as admitted; and tbe question is, Do they constitute a cause of action upon contract? Tbe question turns on whether, under tbe allegations of tbe complaint, tbe plaintiff sold tbe options to defendant Winter and agreed to deed tbe lands covered thereby, in consideration of which defendant agreed to assume tbe liabilities under tbe options and pay $300 per acre for tbe land within nineteen months, or whether tbe contract between plaintiff and defendant was a mere option by which defendant bad tbe privilege of buying within nineteen months but was under no obligation to do so. It is strenuously insisted by counsel for appellant that tbe transaction amounted to a mere option and that tbe complaint fails to show tbe existence of any contract of purchase, but, on the contrary, shows that tbe contract between tbe parties was in effect merely an option contract which lapsed without acceptance, and hence no liability accrued thereunder. Tbe defendant’s liability upon tbe facts admitted by tbe demurrer turns mainly upon tbe construction of tbe contract set up in tbe complaint. Tbe options to the plaintiff upon tbe lands covered by them confessedly gave it a valuable right. It was entitled under them to a conveyance of the property covered by the options upon compliance with the conditions thereof. This was a property right which the plaintiff could convey for a valuable consideration. It could perfect its title through the options and thereby acquire and convey title to the property. The main question, therefore, is, Did it contract to do so, or did it give appellant Winter an option to purchase ?

The complaint alleges the ownership of the options and the contract with appellant. The contract provides that, for a valuable consideration, the plaintiff

“does hereby grant, bargain, and sell, assign, set over, and deliver unto the said second party all of their right, title, and interest in and to the said options hereinabove described, upon the following terms and conditions, to wit: With the express understanding and agreement that this contract is to be in force for and during the period of nineteen months from the date hereof, and that on or before the expiration of said nineteen months the said second party is to pay to the said first parties for such options for all the lands described therein the sum of three hundred dollars for each and every acre thereof, ... in other words, the whole one hundred and ninety-four and three-fourths acres to be taken and paid for at the rate of three hundred dollars per acre. At which time and upon the payment of which said sum the said first parties are to deliver to or cause to be delivered to the said second party a deed of the premises described in said options.”

The contract further provides that all liabilities attendant as on the options imposed upon the first parties are assumed by the second party. It is difficult to see how this instrument can be held to be an option to purchase. There is an express sale and transfer of the plaintiff’s right, title, and interest in the options to defendant, and an assumption of liabilities thereunder by him, and an express promise to pay $300 per acre for each and every acre covered by the options on or be fore nineteen months from date of contract of sale, and a promise on the part of plaintiff to deed the lands to defendant. The agreement by express terms to pay is not optional, but is “with the express understanding and agreement . . . that the whole one hundred and ninety-four and three-fourths acres to be taken and paid for at the rate of three hundred dollars per acre” on or before nineteen months from the date of the contract. Nor is the provision that the contract is to be in force for nineteen months repugnant to or inconsistent with the express agreement to pay. It may have been inserted to emphasize the fact that the transaction was to be carried out within the period of nineteen months, and was doubtless surplusage. But it can easily stand with the express provisions of the contract. The words in the contract to the effect that the sale and delivery of the options is “upon the following terms and conditions” have reference, obviously; to the time and manner of payment and the assumption of liability on the part of the second party under the options. If the purpose was to grant an option and not make a contract to sell •the option and real estate covered thereby, it seems a different instrument would have been executed. The contract in question upon its face has virtually none of the elements of an option. It in effect sells and delivers all the right, title, and interest of the first parties in the options to the second party on the terms and conditions that the contract shall be in force nineteen months, during which time the second party is to pay the first party for all the lands described in the options, being 194J acres at $300 per acre, the first party to deed the premises to second party at the time of payment. The covenants in the contract are mutual — on the part of the second party to buy, and on the part of the first party to sell. So we fail to see how it can be construed an option to purchase.

But it is claimed that the construction contended for by plaintiff results in an unreasonable and improbable business transaction, inconsistent with the language of the contract, and renders its most important provisions meaningless and ineffective. In tbis connection stress is placed upon the fact that plaintiff was not the owner of the land; that possession was not delivered; that the contract was made upon a valuable consideration aside from the purchase price of the land; and that an enormous price was stipulated in the contract. This contention goes to the question of construction, and we fail to discover the significance attributed to it by counsel for defendant. It is contended that the options give no right of possession. True, it does not appear from the complaint whether the options give the right of possession or not. But this seems wholly immaterial. The contract of sale and agreement to deed the property to defendant was as effectual and binding as if immediate possession' was agreed to be given. Whatever rights plaintiff had under the options were transferred, and, although plaintiff was not the owner of the lands, the options secured to it the right to acquire such ownership and transfer the title to defendant, which it agreed to do'. The recital of a “valuable consideration” in the contract does not necessarily mean that the parties stipulated for a consideration separate and outside of the alleged purchase price of the land. It may have been intended as the formal recital of consideration usually inserted in contracts. A nominal consideration would satisfy the call. However, it cannot be inferred for the purpose of giving a different construction to the contract than it otherwise would have that the mere recital that the contract was made upon a valuable consideration means that some substantial consideration moved the parties to contract, independent of the mutual covenants stipulated expressly on both sides to be performed. So we do not think that the mere recital of a “valuable consideration” raises any inference that any consideration in fact was paid or to be paid other than the purchase price of the land. But, even if there was some other or additional consideration, it would not, in our opinion, alter the situation so far as the construction ■of the contract is concerned. The contract on its face is either an option or a contract of sale and cannot be changed by construction.

Nor do we think the fact that plaintiff would make a large profit significant. The defendant doubtless agreed to pay what he regarded the property worth. At least, it cannot be inferred, for the purpose of construing a contract to purchase into an option, that the stipulated price was unreasonable.

It is argued by counsel that the explicit promise to take and pay for the whole 194§ acres at $300 per acre means “in the event of purchase” the land is to be taken and paid for. But this is importing by construction into the contract words not found there, and which change the express agreement to purchase into a mere option to purchase, which we think by no rule of construction can be done.

We are cited to Nelson v. Stephens, 107 Wis. 136, 93 N. W. 163, as authority for appellant’s position. But the words relied upon there were used in an extension of an option. There was no question but that the original instrument was a mere option, and it was held that, while the agreement extending the option contained words amounting to a promise to pay the consideration, still the subsequent agreement did not change the character of the option agreement, construing the option and the extension of it together. True, as argued by counsel for appellant, the intention of the parties must govern. “Courts give effect to contracts according to the intention of the parties — do not malee them.” But an intention cannot be read out of a contract contrary to the plain and ordinary meaning of the words. Effect must be given to all the provisions of the contract if they can stand together. Courts “cannot substitute a new contract for the one the parties see fit to make because nonperformance on the part of one ■.of the parties thereto becomes difficult or the question of such nonperformance onerous.” We confess the contract referred •to in the complaint is not as clear and explicit as it might be, but we think a cause of action is stated in the complaint, and-therefore the court below was right in overruling the demurrer.

By the Court. — The prder appealed from is affirmed.

Timlin, J., took no part.