Nelson v. Stephens

82 N.W. 163, 107 Wis. 136, 1900 Wisc. LEXIS 213

• Court: Wisconsin Supreme Court
• Decided: June 21, 1900
• Status: Published

Opinion

The following opinion was filed March 20,1900:

BaRdeeN, J.

The plaintiffs are entitled to judgment, unless the defendant has been discharged by their dealings with Jacobs. Under the facts shown, the defendant is entitled to no greater rights than the Jacobses would have had in a direct controversy between them and plaintiffs. At the outset, therefore, it is important to determine the exact legal status of the parties under the stipulations mentioned. It is virtually conceded that the stipulation of December 13,1898, was nothing more than a mere option. Mrs, Jacobs was not hound by it, because she was not a party to it. W. H. Jacobs was not bound by it any further than to deposit the sum ■•mentioned with the First National Bank, which was the consideration upon which the option was based. Without some •consideration to support it, the option could have been re-yoked, at will, at any time before acceptance. Connor v. Renneker, 25 S. C. 514; Sutherland v. Parkins, 75 Ill. 338; Borst v. Simpson, 90 Ala. 373.

It is insisted, however, that the instrument of January 9, 1899, was such a modification of the prior one as to rise to the dignity of a land contract, and under it arises the rights -of defendant as determined by the trial court. This is the important question in the case. ' 'Unless it can be said that these two instruments are -something more than a mere ■option to sell at a given price, it is clear, under the authorities, that the right to pay and demand a deed did not survive the time limited. But before ^discussing that question we will consider the terms of the paper of January 9th, a'nd its ‘'effect upon the prior one. Jacobs had had a prior contract for these lands from the plaintiffs, and had defaulted. It was in the action to foreclose that contract the undertaking in suit was given. The first stipulation indicates that the plaintiffs studiously avoided wording it so as to give Jacobs anything more than an option which would drop by its own weight at the expiration of the time limited. The first ■clause of the second instrument simply.extends the option to purchase for sixty days, and is based upon the consideration •of the deposit in the bank of $675 as- earnest money. The ■second clause says: “And, in consideration of such extension, it is agreed that Mary E. Jacobs or her assigns shall, •at the expiration of said sixty days, pay the sum of $11,000, with interest thereon at the rate of six per cent, per annum, .and on such payment shall be entitled to a conveyance of the land mentioned in said prior stipulation in fee simple; provided, however, that in case said sum is not paid upon said date, that the $1,000 paid into said bank shall be forfeited.”

There is not a word in this writing which changes the •duty or increases the obligations of plaintiffs, except that the title to the land shall be conveyed in fee simple. The signatures to this paper are significant. It is not signed by the plaintiffs’ attorneys. It is simply signed by the plaintiff' Thomas Nelson, by his agent, N. B. Van Slyke. It is not-signed by Mrs. Jacobs, or by any one in her behalf. The copy kept by the plaintiffs was not even signed by Mr. Jacobs, but it appears that the one kept by defendant’s attorney was so signed by him. No one enters into any engagement on behalf of Mrs. Jacobs. There is no claim that it was-ever delivered to her, or to any one for her. Neither is there any showing or finding as to the possession of the premises. It does not appear that Mrs. Jacobs had any separate estate,, or any interest in the property, except such as was sought to'be created bjr the negotiations then in progress. Neither does it appear that W. II. Jacobs was her agent, or had-any authority to bind her or her property, if she had any. Suppose the situation were reversed, and plaintiffs were seeking; to enforce the contract on their part; we imagine they would find it very difficult to find anything in the findings or the •record to support a claim that Mrs. Jacobs was bound by these writings, or that any one else was bound in her behalf. The signatures of Barker and defendant were put. there for the evident purpose of avoiding any complications, that might arise as to their obligations as sureties. As already noted, it was the purpose of the first stipulation to< give Jacobs a mere option on the land, to be exercised within a given time. Evidently, plaintiffs did not desire to-put themselves in a position to have to foreclose against, him again. In view of the fact that it does not appear from the second paper that any one of the signers undertook to* do anything for or on behalf of Mrs. Jacobs, or undertook or agreed themselves to pay any portion of the purchase-price of the land, we are unable to discover any of the elements of a contract to convey land beyond that of a simple option, which terminated at the expiration of the time limited. The payments made were to be no part of the purchase price, except upon the condition precedent that the remainder should be paid within the time specified. That the payment of the money at the time prescribed was a condition precedent is too clear for argument. A simple reading of the papers demonstrates the fact.

The law relative to this state of fact is so well stated in Donnelly v. Eastes, 94 Wis. 390, that we need not do more than refer to the case. One cannot secure relief from the failure to perform conditions precedent, even in equity, unless it is evident that the stipulation as to forfeiture is in the nature of seeurity. Gates v. Parmly, 93 Wis. 294. No such considerations are here presented. No interest was secured in the land by the payments stipulated, and none ivas to pass except upon the conditions stated. Those conditions never having been fulfilled, neither the Jacobses nor the defendant are in a position to secure relief as a matter of right. In Cummings v. Town of Lake R. Co. 86 Wis. 382, it is said that rights under an option to buy land on or before a certain date expire on that date without notice or declaration of forfeiture. In Richardson v. Hardwick, 106 U. S. 252, we find it stated that where one. has, by a contract, the privilege or option of buying an interest in lands by paying a certain sum within a limited time, the contract itself does not vest him with any interest or estate in the lands, and by his failure to pay the money, or any part of it, within the time limited, the privilege accorded him by the contract is at an end, and his rights under it cease. See the following cases to the same effect: Bostwick v. Hess, 80 Ill. 138; Bashor v. Cady, 2 Ind. 582; Steele v. Bond, 32 Minn. 14; Bohn Mfg. Co. v. Lewis, 45 Minn. 164; McManus v. D., C. & N. R. Co. 51 Minn. 30; Lord Ranelagh v. Melton, 10 Jur. (N. S.), 1141; Brooke v. Garrod, 3 Kay & J. 608.

In speaking of options to purchase, 1 Warvelle, Yendors, 181, says: “It is not a contract of salej within any definition of the term, and, at best, but gives to the option holder a right to purchase upon the terms and conditions, if any, specified in the agreement or proposal. The right, to be made available, must be exercised at or within the time specified in the agreement, and the conditions precedent, if any are annexed, must be faithfully and punctually performed. A partial performance of some of the stipulations which it is intended shall form a portion of the future contract of sale, while they may indicate an intention to mate the. purchase, does not confer any additional rights upon the prospective purchaser, where the conditions upon which the option and right of purchase depend have not been complied with, and the noncompliance with such conditions is a sufficient ground for a denial of any claim of right in the land under the agreement.”

And writing of the right to recover money paid, the same authority (vol. 2, p. 831) says: “ And when it is not a question of penalty or forfeiture, but only a privilege conferred upon payment of money at a stated period, the privilege is lost if the money is not paid, and the court will not restore it to the party.”

Relying upon the authorities.cited, we conclude that, construing both writings with the greatest liberality, they amounted to nothing more than an option to buy upon the. terms stipulated, and, the conditions prescribed not having been complied with within the time limited, neither the Jacobses nor the defendant can obtain any relief therefrom. 'The payment of money ($1,300) on February 7, 1899, did not in any way change the rights of the parties. It was expressly stated that it was received subject to the terms and conditions of the agreement. That it may be retained by plaintiffs as a forfeiture is doubtful. There was no consideration for its payment, except in fulfillment of the original agreement, and to retain it as a further forfeiture under it would be taking money without any consideration passing-to the payer or any disadvantage to the payee.

After the time limited by the agreements had expired, and before Mr. Jacobs had held any communication with Mr. Van Slyke, Nelson’s agent, Nelson notified the agent, in effect, not to have anything more to do with Jacobs, and that he considered the deal closed. This was virtually annulling his authority to further deal with Jacobs. Yan Slyke was a special agent, and his authority must be strictly pursued, or his principal is not bound. Dodge v. Hopkins, 14 Wis. 630. His authority to deal with Jacobs having been revoked, the giving of the slip of paper to Jacobs containing a computation of the amount due on the land would not bind plaintiffs as a waiver, unless ratified by them. But, «ven if he possessed plenary authority in the matter, it is doubtful if a waiver could be predicated upon so trivial a ■circumstance. In the letter from Nelson to Yan Slyke, referred to, the former had signified his willingness to negotiate to convey, if Jacobs could secure some one who would take up the deal in his own name and on his own responsibility ; but it was expressly stipulated that, in case that was done, the purchaser must pay all losses and expenses incurred. Both Jacobs and defendant had been notified of the principal’s instructions, and the giving of the memorandum mentioned is perfectly consistent with the attempt of Jacobs to secure a purchaser. The fact that, when the tender on behalf of Mrs. Jacobs was eventually ihade, the plaintiffs insisted upon the payment of taxes and expenses before the deed would be delivered, cannot be considered as a recognition of the binding force of the original option after its expiration. Jacobs was at all times the moving spirit. Either through misfortune or perversity, he'had failed to comply with any of the stipulations in a timely manner. The plaintiffs had a right to stand upon the letter of their contract, •and a willingness to convey upon payment of the additional ■costs and expenses cannot be said to be waiver or resurrection of the right that had been lapsed. The principles «ought to be invoked by defendant’s counsel as to relief from .forfeitures apply to land contracts.pure and simple, and can have no application to a mere option to purchase. The error made in the court below was in treating the transaction on the former basis. As we view it, the payment of the money clue for the land was a condition precedent to the vesting of any interest or title therein, and, not having been clone' within the time limited, the contract ended, and has never been revived. As stated in Donnelly v. Eastes, 94 Wis. 390: “ This appears to be a harsh doctrine, when viewed apart, from’ the reasons for it. Courts give effect to contracts according to the intention of the parties,— do not make them. They cannot substitute a new contract for .the one the parties see fit to make, because nonperformance on the part of on'e of the parties thereto becomes difficult, or the consequences of such nonperformance onerous. If one agrees that full performance of all obligations on his part shall be requisite to the enjoyment by him of any benefit under Pre-contract, he is presumed to know the legal effect of assuming such obligation, to have done it for a consideration, and must abide the consequences of it, and not expect, by the-aid of a court of equity, to shift the burden onto others-, rvhich he has voluntarily agreed to bear himself.”

It follows, from the conclusions suggested, that the judgment entered cannot stand.

There being no dispute in regard to the facts upon which the plaintiffs’ cause of action is based, the judgment of the-circuit court will be reversed, and the cause remanded with directions to enter judgment for the plaintiffs for the amount, demanded in the complaint.

By the Court.— So ordered.

A motion for rehearing was submitted for the respondent, on the brief of H. W. Chynoweth, attorney, and James G. Flanders, of counsel, and for the appellants on that of Bashford, Aylward & Spensley, attorneys, and W. F. Vilas, of counsel.

The motion was denied June. 21, 1900.