McLennan v. Church

158 N.W. 73, 163 Wis. 411, 1916 Wisc. LEXIS 274

• Court: Wisconsin Supreme Court
• Decided: May 23, 1916
• Status: Published

Opinion

Maeshall, J.

The first complaint made on behalf of appellant is that the court erred in finding that, at the time of making the contract with L. F. Church, plaintiff knew Bay Church held the title to one forty of the land. That does not ■seem to be material, so we will pass the question of whether the finding bas support in tbe evidence. L. F. Church contracted to sell both forties to appellant. That he might properly have done and expected to perform by procuring the title to the forty which was in Hay Church before maturity of the agreement or at such maturity procure co-operation of Bay Church to enable him to consummate his promise. Appellant, obviously, had a right to rely upon his executory vendor either having the title or procuring it so as to carry out his promise. The trial court probably thought the circumstance, as found, was material to whether appellant was so warranted in appealing to equity for relief as to be vital to the question of whether he could recover damages of a legal nature in the action in case of relief by judgment for specific performance not being proper.

It is not the law, as seems to have been thought, and as counsel for respondents suggest, that in all cases where specific performance is sought and is not obtainable because of facts known to the plaintiff when he commenced his action therefor, that the court cannot or should not grant other relief by way of compensation, even though it be such as would be a proper subject of an action at law for damages. There are decisions along that line, as Combs v. Bcoit, 76 Wis. 662, 45 N. W. 532, cited to our attention by counsel for respondents ; but they do not indicate the limitation of the rule on the subject. It may be broadly stated thus: In case of an action having been commenced in good faith to obtain equitable relief, and it subsequently appearing that such -relief cannot, or ought not to be, granted, but the facts disclosed by the evidence show that plaintiff has suffered-a remediable wrong in the transaction forming the groundwork of the action, entitling him to be compensated by money damages, the court may, and where justice clearly requires it under the circumstances, should retain the cause and afford such relief, and make the same efficient by provisions for a recovery as in an ordinary legal action or as are appropriate to a judgment for equitable relief, as may be best suited to the circumstances of the particular case. Stevens v. Coates, 101 Wis. 569, 78 N. W. 180; Gates v. Paul, 117 Wis. 170, 94 N. W. 55; Knauf & Tesch Co. v. Elkhart Lake S. & G. Co. 158 Wis. 306, 141 N. W. 701.

Tbe cases cited and many others wbicb might be referred to leave no manner of doubt as to the extent of the doctrine above mentioned as it has been applied in recent years. In the first case this language was used:

“The rule applies where a cause of action in equity once existed, but from the happening of some event it no longer exists, or a person, in good faith believing he has a cause of action in equity, alleges facts accordingly, yet fails as to some essential element on the trial because it never existed, but, nevertheless, establishes a good cause of action for recovery at law.”

In the next case this was held:

“If one sues in equity in good faith and fails to establish his cause but shows a state of facts entitling him to recover at law, the court, having rightfully obtained jurisdiction for a proper purpose, may retain the cause and grant just such relief as upon the facts the plaintiff appears entitled to, whether at law or in equity.”

In the last case the rule was thus stated in respect to the precise point here involved:

“The mere circumstance of itself that appellant knew the facts when the action was commenced would not require a dismissal because of facts not being established warranting equitable relief if, notwithstanding, good cause for legal relief was shown. Having properly acquired jurisdiction, in such a case, a court of equity has very broad power to wind up the entire controversy appearing from the pleadings and evidence, whether legal or equitable relief, or both, be required.”

Under our judicial system, there are no distinctions between actions at law and suits in equity. We have only the civil action of the Code as an instrumentality to redress or prevent wrongs, triable with or without a jury according to whether the nature of the relief demanded is legal or equitable. There is but one court and one form of action; therefore, up to the point where the constitutional right of trial by jury would be unduly prejudiced by going further, there is no want of power to grant legal relief in an action commenced to secure equitable relief only, and the practice, to grant such .relief, in the interest of a speedy and economical settlement of controversy has been so progressive that it can no longer be properly said that where the facts of a case warrant only legal relief and were known to the plaintiff when he commenced his action for equitable relief, the court will not, should not, or cannot afford the former. Though a person may know the facts entitling him only to legal relief when he commences his action for equitable relief, he may be excusably mistaken and invoke that judicial remedy without any design, or there being reasonable ground to suspect a design, to thereby invade his adversary’s right of trial by jury, and the ends of justice can best be attained by finally terminating the litigation in the pending action. In such a case there is no want of jurisdiction to retain the cause for that purpose. In many such cases there is no dispute about the facts. If it were dismissed and a new action brought for legal relief, in the finality, the controversy would turn on questions of law.

The foregoing does not need support by citation of precedents. In most, or in all, cases where legal relief is granted in an action for equitable relief, legal issues are involved appropriate to an action of a legal nature; so that was never, necessarily, regarded as going to the jurisdiction of the court to grant the latter. It was not so regarded before the consti-' tution was adopted guaranteeing the right of trial by jury and such guaranty did not change the situation. Stilwell v. Kellogg, 14 Wis. 461; Dane Co. v. Dunning, 20 Wis. 210. The holdings to the effect that where the facts entitling the plaintiff to only legal relief were known to him when he commenced his action for equitable relief, the court will not grant the former, followed an ancient judicial rule which it was perfectly competent for the court to modify so as not to exclude cases commenced in good faith, and with reasonable ground therefor, to obtain one form of relief when another form only is obtainable, and it has been so extended as we have indicated.

Complaint is made because of the finding that defendant Gurby purchased the land of the Ghurches in good faith without any intention of defrauding appellant.

Gurby knew when he negotiated with the Ghurches and dealt with them that plaintiff held the contract in question, and knew all the circumstances requisite to charge him with knowledge that such contract had not lapsed. The fact that he did not know the legal effect of such circumstances, and ignorantly supposed that a mere default of appellant terminated his contract rights, and in that state of mind dealt with the Ghurches, may relieve him from any taint of moral turpitude, but not of remediable responsibility. Fraud in law is remediable as well as fraud in fact. It was certainly a fraud on appellant for Gurby and the Ghurches to collude, as they evidently did, to consummate a sale to Gurby and thus to rob appellant of the value of his bargain under his contract. ■With knowledge of the obligation to appellant under such contract, Gurby offered the Ghurches an advance upon the price named therein, as an inducement to L. F. Church to break his agreement and to sell to him. He was improperly held guiltless of any fraudulent intent. The breaking of the contract was an unlawful act rendering all who concerted together to that end liable for thé damages caused thereby to appellant. Martens v. Reilly, 109 Wis. 464, 84 N. W. 840; White v. White, 132 Wis. 121, 111 N. W. 1116; Hull v. Doheny, 161 Wis. 27, 152 N. W. 417; Ditberner v. Bess, ante, p. 264, 157 N. W. 817.

Did the trial court err in holding that appellant was not entitled to specific performance of the L. F. Ghurch contract by Gurby ? From what has been said, it is clear that Gurby merely took the place of the Churches; having taken title to tbe land with knowledge of all the facts, he came into possession of no greater right as against appellant than they had. According to the facts found, appellant could not have successfully maintained specific performance against them because the one who signed the contract to sell the premises only owned one of the forties. Whether Bay Church became a party to the contract was not found and no specific objection is presented in the argument of counsel for appellant on that score. We must assume that the trial court was of the opinion he did not become such party so that specific performance could be enforced against him. There is testimony tending to prove the contrary but it is not clear and satisfactory. In any event, counsel only raise the question, in general, as to whether, on the facts found, the court erred in not granting specific performance as against Curby, for the two forties of land. On that it is considered that the answer must be in the negative because there is no finding to the effect that appellant’s contract was binding "on the owners of both forties. The most the court could do under those circumstances was to grant appellant judgment for such damages as would, as fully as practicable, repair the wrong done him by the failure to convey the land according to such contract.

What has been said results in the conclusion that the court erred in limiting appellant’s compensatory damages, recoverable in this action, to the money he paid out for purchase money of the land and interest to the date of the judgment, aggregating $1,801.49, and in making that the personal liability of L. F. Church only, and the costs a liability of him and Bay Church. All were equally liable, under the circumstances, and the entire interest which appellant had in the contract according to its terms, so far as the same could be ascertained from the evidence, should have been allowed to him. That included the reasonable value of the land to him over what he owed thereon, and what was awarded to him. What he paid out for work on the land was included in such value, so tbe same need not be dealt with in tbe several features called to our attention. As tbe damages must be determined as of tbe time of tbe breach of tbe contract, tbe use of tbe land thereafter does not cut any figure. Neither does tbe use of tbe money which it is claimed by appellant be allowed to remain idle from tbe time be made tbe tender, which was soon after tbe maturity of tbe contract, until tbe termination of tbe litigation.

All recoverable matters seem to have been included in tbe judgment except tbe difference between what tbe land stood appellant at tbe time of tbe breach and what tbe property was then reasonably worth to him. Ordinarily, tbe damages recoverable for breach of a land contract by failure to convey, over and above payments made, is tbe difference between tbe contract price and tbe market value at tbe time of tbe breach, with interest to tbe date of tbe judgment. Muenchow v. Roberts, 77 Wis. 520, 46 N. W. 802; Maxon v. Gates, 136 Wis. 270, 116 N. W. 758; Arentsen v. Moreland, 122 Wis. 167, 99 N. W. 790; Brink v. Mitchell, 135 Wis. 416, 116 N. W. 16.

There has been much discussion in cases on this subject, yet there is no conflict but what full compensatory damages are recoverable where tbe vendor refuses to convey according to bis promise and there is any element of bad faith involved, or be did not have tbe title when be contracted, but took bis chances of obtaining it. In Muenchow v. Roberts, tbe court held:

“The plaintiff is entitled to recover, if at all, tbe frill value of bis bargain. Tbe true measure of such value is the value of tbe land tbe defendant contracted to sell to him, estimated at tbe time tbe contract was broken, less what tbe plaintiff agreed to pay therefor. This is tbe general rule in this state in an action by a purchaser to recover damages for tbe breach of an executory contract to sell either real or personal property, where no part of the. consideration has been paid.”

It would be varied of course to suit the situation created by partial payment. Tbe court recognized that there might be exceptions to that rule. If there are any, this case is not within them.

The above rule is based on the general principle of liability for breach of contract that the limit of recovery is such damages as may be reasonably considered to have been in contemplation by the parties at the time of making the contract as the probable result of a breach of it: Where the breach is of a tortious character, the liability extends, to such as are the natural and ordinary consequence of the act, whether they might have been in the contemplation aforesaid or not. That is elementary. Here there was such tortious element, in that the three persons concerted together to break the contract.

The natural and ordinary consequence of the wrongful conduct of defendants was to prevent appellant from consummating his deal with Gurby. Por that purpose the land was worth to appellant, at the time of the breach, $5,200. That Gurby would have taken the land at that price had L. F. Church kept his contract, is clear from the evidence. When the former found that the latter was willing to break his contract and to sell to him direct, he induced appellant to accept a surrender of the $5,200 contract and, straightway, entered into the transaction which led to this litigation, and divided the profits with his co-conspirators. So it is considered that the value of the land to appellant at the time of such transaction was $5,200.

At the time indicated the cost of the land to appellant, as wo have computed it, taking the amount due on the contract with the payments which had been made, making up the $1,555.81, mentioned in the findings, with interest to such time, was $4,276.02, or $923.98 less than he would have obtained for the land had it not been for the wrongful conduct of defendants. Those figures may not be exactly right, but they are as nearly so as can be ascertained from the evidence with reasonable certainty. That sum fairly represents the value of appellant’s bargain under his contract, which he lost as the natural consequen.ee of the breach of it. Such sum with interest thereon down to the date of the judgment, making in all $1,051.69, should have been awarded appellant in addition to the $1,801.49, making in all $2,853.18.

The judgment appealed from must be modified so as to be against all the defendants for damages, and the costs as heretofore taxed, and so such damages will be $923.98 for plaintiff’s loss of his bargain, with interest thereon from the date of thé breach of contract to the date of the judgment, in addition to the $1,555.87 for money paid out, and $245.62 interest thereon, making the aggregate $2,853.18, and by such other changes in the judgment as will make all its parts harmonize with the change of $1,801.49 damages to the larger amount,' and so the judgment for such damages will be enforceable by execution against all defendants and be a lien upon ong forty of land superior to the $3,000 mortgage, as originally provided, — the rights of all parties to be protected as to such mortgage and otherwise also as originally provided. The judgment might be made otherwise enforceable, but since the manner indicated' will, as it' seems, fully remedy the wrong to plaintiff, it is thought best not to disturb the disposition of the matter by the trial court any further than is necessary to accomplish that end. Upon the case reaching the trial court, the judgment may be recast and re-entered, as of its original date, so as to harmonize, in terms, with this decision.

By the Court. — The judgment appealed from is modified as indicated in the opinion and affirmed as modified, plaintiff to have the right to a re-entry of it in the court below, as of its original date, so it will be in form, as so modified. Plaintiff is awarded full costs in this court.