Lowrey v. Finkleston

134 N.W. 344, 149 Wis. 222, 1912 Wisc. LEXIS 132

• Court: Wisconsin Supreme Court
• Decided: April 23, 1912
• Status: Published

Opinion

The following opinion was filed January 30, 1912:

KeewtN, J.

The facts in this case, except in some minor detail, are covered substantially by the findings of fact set forth in the statement of the case. We shall first treat the appeal of the defendant Mary Finkleston. Counsel claims ■that the proper remedy of plaintiff was at law in ejectment and that she cannot maintain the present action in equity, relying upon Mash v. Bloom, 130 Wis. 366, 110 N. W. 203, 268. The plaintiff insists that this point was waived by defendant. But whether it was or not is of no consequence, because plaintiff was in possession when she commenced the action; therefore, upon well established principles, her action was properly grounded in equity to set aside the conveyance and lease for breach of condition subsequent and remove the cloud from plaintiff’s title.

Defendant further contends that neither in an action at law nor in equity should the court have set aside the convey-anee, for the reason that the evidence does not warrant judgment in plaintiffs favor, because it is insisted (1) that the contract was fully carried out by James L. Jones during his lifetime; and (2) that it could have been carried out by the estate for the benefit of the estate. But on the first point the evidence and the .findings of the court below as well are against the defendant. As to the second point, the condition subsequent being personal in its nature and being exclusively with James L. Jones, the plaintiff was not bound to carry out the contract with the successors of Jones, and moreover, after an attempt by the administratrix to carry out the terms of the agreement, she concluded she could not do so and voluntarily surrendered it. The conveyance was made on the faith of James L. Jones performing the conditions named in the contract, some of which were to render her personal services, and principally because of the close relation existing between her and Jones. Some argument is made by counsel for defendant to the effect that the terms of'the condition upon its face show that it contemplated performance not alone by Jones, but “his heirs, executors, administrators, and assigns/’ therefore the contract was not considered a personal one. An examination of the contract will show that while the haben-dum clause, both in the lease and conveyance, contained the words “heirs, executors, administrators, and assigns,” no such words appear in the condition, but on the contrary the agreement as to performance of the conditions is expressly between plaintiff and James L. Jones, and he personally and individually was bound to perform such conditions on his part. So there is nothing whatever in the terms of the instrument which indicates any purpose to make the condition otherwise than personal.

The contract, after providing the conditions to be per-, formed by Jones personally, provides further that if said-Jones shall at any time during the natural life of the plaintiff fail faithfully to keep and perform it and all the said covenants, conditions, and agreements, then the instrument shall be thenceforth utterly void and of no effect, and the plaintiff shall have the right to so declare it and at once thereafter enter upon, use, enjoy, and own all of the lands and premises in the same manner in all respects as if the instrument had never been made. It appears, therefore, that a substantial part of the consideration was the agreement on the part of Jones to render to plaintiff personal services. In such case the agreement will be treated in equity as a condition subsequent, and, if substantially broken through failure of the grantee to perform, the conveyance will be set aside. Wanner v. Wanner, 115 Wis. 196, 91 N. W. 671; Glocke v. Glocke, 113 Wis. 303, 89 N. W. 118; Gall v. Gall, 126 Wis. 390, 105 N. W. 953. As said by this court in Glocke v. Glocke, supra, courts of equity take jurisdiction in such cases not to forfeit'a title, but to quiet a title already forfeited for nonperformance of a condition subsequent, and, to the end that a conditional grantor’s remedy may be complete, it will cancel all writings and records which might otherwise be used presently or in the future to his prejudice. The question has so often been before this court that any extended discussion of the principle involved would seem unnecessary. After it has been established, as in this case, by the findings of the court below, well supported by the evidence, that the agreement between the parties was personal in its nature, at least in a substantial part, the right to have the conveyánce set aside and the grantor restored as near as may be to her former rights follows.

It is claimed, however, that the setting aside of the conveyance operates as a-fraud upon Mary Finhleston, therefore a court of equity ought not to lend its aid to plaintiff under the circumstances. But it is sufficient to say in this regard that the agreement between plaintiff and Jones was a matter of record, therefore constructive notice to Finkleston when he took his mortgage. He got no greater rights by his mortgage than Jones had. This he was hound to know whether he had actual knowledge of the record of the instrument between plaintiff and Jones or not. The same is true as regards the •creditors of Jones, who were made defendants, but who are not complaining here. Bishop v. Aldrich, 48 Wis. 619, 4 N. W. 775; Jewell v. Reddington, 57 Iowa, 92, 10 N. W. 306; Quatman v. McCray, 128 Cal. 285, 60 Pac. 855 ; Eastman v. Batchelder, 36 N. H. 141; Ridley v. Ridley, 87 Me. 445, 32 Atl. 1005; Clinton v. Fly, 10 Me. 292.

It is further contended by defendant that there was no proper accounting, and that Mary Finkleston should have a lien upon the real estate in question for a larger amount than ■that given by the court below, and counsel suggests that this amount should be increased by interest on the excess each jear between the amount paid by Jones and the amount of rental value, and states that the amount is $233.09, and argues that this amount was paid each year on the basis that there was $733.09 paid annually, while the rental value was but $500, leaving a balance in favor of Jones of $233.09, and that the owner of the mortgage, Mmy Finkleston, is entitled to interest on this balance from the time such amount was paid, and he estimates the amount due to be $2,259.78 by ■the addition of this interest, instead of $1,864.78 as found by the court. We think the principle contended for by counsel is correct, but we do not see how he arrives at the exact amount of $233.09 as a basis for interest each year, beginning September 10, 1901. This conclusion of course presupposes that the payments made each year by Jones were identical, not only for taxes, but other items required to be furnished and services performed. Perhaps it may be said that, aside from taxes, the other items paid and furnished, namely, hay, •oats, corn, and firewood, were the same each year, but it appears from the record that the taxes varied, and very materially. Eor example, tbe taxes paid, as appears from tbe ree-ord, were as follows:

1899 . $67 60

1900- . 61 44

1901 . 76 90

1902 . 87 72

1903 . 86 92

1904 . 89 36

1905 . 143 76

1906 .:. 152 46

1907 . 125 94

1908 .■. 99 72

Aggregating.-.. $991 82

It seems tbe amount of taxes paid, as found by tbe court,, conceded to be correct by counsel for appellant, and not sufficiently excepted to, is $864.18. We are unable to understand tbe inconsistency, from tbe record. But in any event, whether tbe amount of taxes paid be $864.18 or $991.82, it is clear that tbe annuál payments would not be tbe same, so the appellant’s theory of casting interest on tbe sum of $233.09 as tbe sum paid each year more than tbe rental value-would not be a correct method. Tbe amount of excess paid each year over and above tbe rental value should be ascertained as near as may be and interest cast upon that amount, from tbe time of payment to tbe date of tbe judgment, and tbe aggregate of these several'sums added to $1,864.18.

There is also another item which should be added to the-amount of tbe Finhleston equitable lien, namely, tbe percentage which she should have received bad she filed her claim, against tbe Jones estate, which she declined to do believing her mortgage to be valid. Tbe percentage paid to creditors-on claims filed, as appears from tbe record, was between thirty and thirty-one per cent. It is obvious, however, that bad the Finhleston claim under tbe mortgage been filed tbe percentage would have been reduced, and of course she would only be entitled to such reduced percentage, because her claim would increase tbe liabilities, thereby reducing tbe percentage. We-bare been, unable to discover from tbe record wbat interest tlie FirikUsion claim bore, therefore cannot determine the amount due upon the mortgage at the time of judgment. But whatever that amount may be, it was entitled to be filed against the estate and participate with other claims filed. Notwithstanding that it was not filed, and in view of the facts in this case on this equitable accounting, such amount should be charged against the land in question. In view of the condition of the record, we deem it best to remit the case for a statement of the account by the court below in accordance with this opinion, to the end that, if necessary, additional testimony may be taken.

It is further claimed by counsel that the finding of $300 for permanent improvements was not sufficient and that the amount should be larger. But we think this finding must stand, not only because it is supported by the evidence, but because there is no sufficient exception to it.

On the plaintiffs appeal it is insisted that the amount for which Mary Finlclesion is given an equitable lien is too large, and that the credits allowed to Jones, aggregating $5,864.18, should not have been allowed, with the exception of the $300 for permanent improvements. This contention is based upon the idea that, since Jones paid these amounts in carrying out his contract, he is not entitled to credit for them after termination of the contract, and this upon the ground that he had not kept his contract, therefore could not be allowed for amounts paid during the performance of it and before breach by him. The plaintiffs contention is based upon Morgan v. Loomis, 78 Wis. 594, 48 N. W. 109, which counsel claims is directly in point. We cannot think, however, that that case is controlling. There the breach was wholly by the grantee, while in the case before us the death of Jones entitled plaintiff to rescission and restoration to her former rights, therefore no reason is apparent why in an equitable accounting, under the circumstances of the case, the Jones estate should not be credited with, the amounts paid out under the contract in question. We therefore hold that the judgment should be modified on the defendant’s appeal by giving the defendant Mary Finleleston an equitable lien upon the land for the same percentage on the amount due on her mortgage at date of judgment that the general creditors would have received on their claims had her claim been filed; also the difference between the rental value of the land, $4,000, and the amount paid under the conveyance, together with interést on the excess paid each year over amount received such year from time of payment to date of the judgment below.

By the Gourt. — The judgment of the court below is affirmed on plaintiff’s appeal and reversed on defendant’s appeal, and the cause remanded with directions to the court below to award the defendant Mary Finleleston an equitable lien for the amount which may be found due upon a proper accounting as indicated in this opinion.

Upon a motion by the plaintiff for a rehearing there was a brief by T. M. Priestley and O. F. Osborn in support of the motion, and a brief by Grotophorst, Evans & Thomas in opposition thereto.

The motion was denied April 23, 1912.