Crolius v. Lorge

| Wis. | Feb 8, 1927

Doerfler, J.

There are two crucial questions presented in this case. The first involves the construction of the agreement, and the second involves the question of whether the provision of the agreement requiring a written notice by mail has been waived.

Ordinarily in an agreement of this kind the amount paid for an option consists of a nominal sum paid to bind the bargain and to make the option legally operative. The sum paid on this agreement was substantial, notwithstanding the total consideration for the land amounted to $42,500. The sum of $2,500 paid when the option was extended is some evidence that the plaintiffs did not merely enter the transaction for speculative purposes, but that they acted in good faith, with a view of purchasing.

We must confess that, in view of the conflicting and inconsistent provisions of the agreement, it is rather difficult to determine the real intentions of the parties. By the very first paragraph of the agreement the option is extended to the plaintiffs to purchase the property within ninety-five days from the date thereof. The option also contains a provision that time shall be of the essence of the agreement. It also provides that if the plaintiffs shall fail to make payment of $30,000 in cash and $10,000 by mortgage within ninety-five days, such failure shall be held to be a complete surrender by them of all rights and privileges conferred by the option. Had the agreement stopped at that point, no contention could be made that it contained any uncertainty or ambiguity. The agreement then continues by defining the method to be pursued by the plaintiffs if they elected within the ninety-five-day period to consummate the deal. The notice of election was to be in writing, and served upon the defendants by mail. Upon service of the election to purchase within the time provided for by the agreement, the parties of the second part agreed to deliver to the parties of the first part, within ten days of such election, an abstract of title showing good and merchantable title, and thereupon there was extended to the plaintiffs an additional period of ten days within which to examine such title and to close and complete the purchase.

The defendants contend that under the terms of the option the notice of election should have been served no later than August 3d, which would have afforded the defendants ten days within which to furnish the abstract, and the plaintiffs an additional ten days to examine the title and to consummate the deal. The agreement, however, provides that the notice of election to purchase shall be served “within the time above limited,” and the time as so limited is ninety-five days from the date of the option. Then the agreement in express language provides for the two ten-day periods for the benefit of both the defendants and of the plaintiffs. Under these circumstances it is incumbent upon the court to consider not only one or two distinct provisions of the agreement, but the whole thereof, in order to ascertain, if possible, the true intention of the parties. Furthermore, in case of an ambiguity or inconsistency we must not overlook the rule that in construing contracts courts may be largely governed by the acts of the parties themselves, in so far as they have a tendency to show the intent of the parties. When the plaintiffs by long distance, on the 14th day of August, notified defendants’ agent, Bicheler, that they were going through with the deal at once, and demanded an abstract, no contention was made that the election of option to purchase was too late or that the method pursued was not m accordance with the agreement, and that it would therefore not be recognized; but, on the contrary, the abstract was procured, completed, and transmitted to the plaintiffs on the 21st day of August. In fact, the first intimation on defendants’ part that all rights under the agreement would expire on the 23d day of August was not given to the plaintiffs until that date, and the evidence does not disclose that the defendants insisted thereon, but, on the contrary, Mr. Lorge suggested that before he could make any change as to the cash payment he would first be obliged to confer with his wife on the subject.

The ninety-five-day period, and the provision in the agreement for a written notice of election to purchase, were inserted in the agreement for the benefit of the defendants, and they could at any time, if they, desired, waive both the provision as to time and the manner of giving notice. Assuming, therefore, that defendants’ position is correct with respect to the time when the notice of election to purchase should be made, by complying with the request for an abstract after the notice on plaintiffs’ part that they were ready to proceed with the deal forthwith, and by the delivering of the abstract for examination, the defendants effectually waived their rights upon these subjects. The plaintiffs did not have ten days after delivery of the abstract within which to examine the title and to consummate the deal, for but two days remained between the date of the delivery of the abstract and the expiration of the ninety-five days.

In the statement of facts we have not attempted to set forth all of the objections made by plaintiffs’ counsel to the condition of the title. The abstract clearly did not show a good and marketable title; in fact, it was in such a condition that no prudent person could be expected to accept title as thus shown. See Curtis Land & L. Co. v. Interior L. Co. 137 Wis. 341" court="Wis." date_filed="1908-12-15" href="https://app.midpage.ai/document/curtis-land--loan-co-v-interior-land-co-8189371?utm_source=webapp" opinion_id="8189371">137 Wis. 341, 118 N. W. 853; Harrass v. Edwards, 94 Wis. 459" court="Wis." date_filed="1896-11-26" href="https://app.midpage.ai/document/harrass-v-edwards-8185354?utm_source=webapp" opinion_id="8185354">94 Wis. 459, 69 N. W. 69; Geray v. Mahnomen L. Co. 143 Minn. 383, 173 N. W. 871.

The plaintiffs, upon examination of the title, forwarded the opinion of counsel to the defendants, informing them at the same time that the title was not good, and also requesting that the amount paid for the option be returned. To this the defendants responded in substance that the plaintiffs had lost all claim to the $2,500. paid, because they did not exercise their option to purchase in accordance with the terms of the agreement.' No offer was made to rectify the defective abstract within a reasonable time. In other words, the defendants clearly left the impression with the plaintiffs that the $2,500 was forfeited and that they would stand upon their rights under the agreement, in accordance with their expressed views.

Under these circumstances we conclude: First, that the agreement taken as a whole required the plaintiffs to elect to purchase within the ninety-five days. Second, that the plaintiffs did not elect to purchase in accordance with the method prescribed by the agreement, but that the defendants, by accepting the parol notice and delivering the abstract, waived their rights to a written notice by mail. Third, that the defendants, by their acts in delivering the abstract pursuant to the oral request, made manifest their views as to the meaning of the agreement; in other words, construed the agreement, and such construction is favorable to the position taken by the plaintiffs. Fourth, that the abstract furnished did not show good and marketable title; and that the defendants made no offer whatsoever to rectify the title within a reasonable time, but insisted that the agreement was breached by the plaintiffs because they did not elect to purchase in accordance with the terms of the agreement.

By the Court. — The judgment of the lower court is reversed, and the cause is remanded with directions to enter judgment in plaintiffs’ favor according to the prayer of the complaint.