Ernest v. Schmidt

223 N.W. 559, 199 Wis. 440, 1929 Wisc. LEXIS 198
CourtWisconsin Supreme Court
DecidedOctober 8, 1929
StatusPublished
Cited by7 cases

This text of 223 N.W. 559 (Ernest v. Schmidt) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ernest v. Schmidt, 223 N.W. 559, 199 Wis. 440, 1929 Wisc. LEXIS 198 (Wis. 1929).

Opinions

The following opinion was filed February 5, 1929:

Doerfler, J.

Plaintiff’s complaint can hardly be commended as a model of pleading. In many respects it is vague and indefinite, and it is only by careful study of the various parts and of the pleading as a whole that the intentions of the pleader become reasonably apparent. Such pleadings are not conducive to a speedy administration of justicé, and have a tendency rather to impede the course of justice than to promote it. The brief states that the agreement set forth in the complaint in verbatim was drafted by a lawyer. This is hardly credible, but if it be assumed that such is the case, it would be nigh impossible for us to conceive of a more indefinite and faulty document.

The trial court sustained the general demurrer to the complaint. In the briefs filed by defendants’ counsel it is quite [446]*446apparent that they were confronted with the difficulties above referred to in their effort to construe the complaint and to determine the general purport, from a legal standpoint, of such pleading. However, they are of the opinion that the agreement should be construed as an offer on the part of the defendants individually to purchase their proportionate share of the property in the event that it should become neces‘sary for the plaintiff to take over the property to protect his loan at the dug date of his note. In order to meet any other plausible theory of the complaint, they have also treated it as an agreement of guaranty and as one of indemnity. We are persuaded that the opinion as expressed by defendants’ counsel as to the legal aspect of the transaction is correct; that is to say, that it constitutes an offer to purchase a proportionate share, of the property by the individual defendants upon the happening of certain incidents and upon the performance of certain conditions precedent.

. The first condition set forth in the agreement has reference to the necessity of the plaintiff taking over the property in order to protect his loan at the due date of the note, which was March 1, 1926. That necessity must exist appears from the face of the agreement, and such necessity is not expressly pleaded. However, we are satisfied that by taking all of the provisions of the agreement and of the allegations in the complaint together, under our liberal rules of Code pleading, it can be said that the facts appearing are such as may be construed to mean a condition of necessity.

It is further argued by counsel for the defendants that it must appear definitely in the complaint that the property was taken over by the plaintiff either at the due date of the note, viz. March 1, 1926, or within a reasonable time thereafter. In this respect defendants’ counsel argues that assets like those involved in this case are of a very highly speculative nature; that their value consists in what is actually produced upon the property or upon the apparent prospects of [447]*447production; that unless the title to the property be acquired at the earliest possible date in which it can reasonably be acquired, the defendants might sustain substantial • losses. Here again it appears to us that good pleading would have required more definite allegations than are contained in the complaint, for it is there alleged that after the trust deed became due (which was in part executed to secure the plaintiff’s note) an action was commenced in the district court of the county of Harris, state of Texas, for the purpose of foreclosing under said trust deed, and such* proceedings were thereafter had in said action that said property was sold and bid in at the sale by the plaintiff and others, arid said sale duly confirmed by the said court. We can take judicial cognizance of the fact that the foreclosure of the trust deed, culminating in the sale of the property, involves much labor and consumes considerable time. It is true that the note of the plaintiff fell due on March 1, 1926, and that this action was not begun until 1928. In the meantime the foreclosure proceedings were prosecuted, with the result above referred to. It cannot be assumed, under this state of the pleadings, that the plaintiff was negligent or was guilty of unnecessary delay in procuring the title to the property as above stated. The pleading thus excepted to by defendants’ counsel is one which the court would have ordered to be mack; more definite and certain had a motion to that effect been made.

The agreement itself, and particularly when taken in connection with the allegations in the complaint, indicates quite clearly that the title to the property was ta be bid in by the plaintiff if he deemed it necessary to protect his loan at the .time when the property was sold under proceedings brought to foreclose the trust deed. The agreement recites, among other things, that the loan of $11,500 was made by plaintiff to the corporation in order that the corporation might continue in the development of its property. In consideration of such loan, each defendant agreed to pay his pro rata part [448]*448of the sum of $11,500 upon condition, among other things, that it became necessary for the plaintiff to take over the property to protect his loan. The portion of the agreement just referred to is definite; it constitutes one of the principal conditions precedent which must be performed before the defendants incur a liability. This liability did not consist of a repayment of the amount of money loaned by the plaintiff to the corporation, but of the payment by each of a pro rata share in order that by such payment each defendant would obtain his pro rata share of the property. This included not only a portion of the property, but the entire property. If the procurement of less than half of the property by the plaintiff would amount to a compliance with a prerequisite to secure title to the property, then it can with equal force and plausibility be argued that if the plaintiff had procured a quarter or a tenth interest in the property the defendants would be equally bound to pay their pro rata share of the loan and interest, in order to procure a pro rata share of the acquired interests of the plaintiff in the property.

In the consideration of the demurrer now before us we must be confined to the language employed in the agreement itself. When the offer was made by the plaintiff to deed to each of the defendants his pro rata share o’f plaintiff’s interest in the property acquired, this offer was not accepted. The title to the property then was transferred by the company to the Wisconsin Production Company, a corporation, and the latter thereupon issued its capital stock to the extent of 500 shares of no par value, and distributed the same among the various persons from whom it obtained title, in proportion to the respective interests they had acquired under the foreclosure sale. It is here alleged that the plaintiff received 233j/2 shares, which is less than one half of the capital stock of the corporation. While the defendants were under no obligation, under the terms of the agreement, to accept capital stock of a corporation instead of a pro rata [449]*449interest in the property itself, nevertheless the distribution of this stock is clearly indicative of the proportionate share of the title acquired by the plaintiff upon the foreclosure sale.

. The agreement itself seems rather harsh. It does not fix the amount which plaintiff was authorized to pay for the property upon the foreclosure. To obtain such title as is required by the agreement might involve a very heavy obligation.

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Cite This Page — Counsel Stack

Bluebook (online)
223 N.W. 559, 199 Wis. 440, 1929 Wisc. LEXIS 198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ernest-v-schmidt-wis-1929.