Woodman v. Blue Grass Land Co.
104 N.W. 920
Wis.
1905
Check Treatment

Lead Opinion

Tbe following opinion was filed May 2, 1905:

WiNsnow, J.

While there were a "number of questions raised by tbe appellant in this case and ably argued by him in person both in bis brief and upon bis oral argument, it appears very conclusively to us that a single well-established legal principle adopted by this court establishes tbe correctness of tbe judgment. That principle is that,when one party to an executory contract, before tbe time appointed for performance, repudiates it by deliberately- declaring that be will not perform, tbe other party may treat tbe contract as terminated and recover tbe damages sustained by tbe other’s breach. Merrick v. N. W. Nat. L. Ins. Co. 124 Wis. 221, 102 N. W. 593. The injured party is not required to perform on bis part, unless, indeed, it be a contract of wbicb specific performance is desired and could properly be decreed; but be *494may cease bis own efforts to perform and demand damages for tbe other’s breach. In this state and in many jurisdictions that action may be maintained at once, but in some j u-risdictions it cannot be maintained until the day of performance has been passed. That question, however, is of no importance here. Merrick v. N. W. Nat. L. Ins. Co., supra; Davis v. Bronson, 2 N. Dak. 300, 50 N. W. 836; Gibbons v. Bente, 51 Minn. 499, 53 N. W. 756; Shaw v. Republic L. Ins. Co. 69 N. Y. 286; Leake, Contracts (4th ed.) 615-617; 9 Cyc. 637, 638, 698, 699. The principle is that, unless the contract be one of which a court of equity will decree specific performance, either party may terminate it pending its performance, subject only to the payment of the damages which the other party sustains thereby. The effect of such termination is to stop the performance at the point then reached, subject to the payment of damages, but not to undo what has •already been done thereunder. In other words, the act of termination or repudiation stops the progress of events just where it finds them, but has no retroactive effect, and cannot, in reason, have any such effect. Applying that principle to the present case, it is very plain that the plaintiff cannot recover. The earnest money was voluntarily paid by the plaintiff at the inception of the contract as a part payment thereon and was rightfully in defendant’s possession. The plaintiff repudiated the contract while there was still ample time for the defendant to perform. By that act he did not and could not affect the character of the acts which had already been performed in carrying out the. contract, and manifestly could not reinvest himself with the title to the earnest money. This is so plain that further discussion is unnecessary.

Francis B. Hart, for the motion. Harold Harris and John Barnes, contra.

By the Oourt. — Judgment affirmed.

The appellant moved for a rehearing.





Rehearing

*495Tbe following opinion, was filed October 3, 1905:

WiNsnow, J.

A motion for rebearing bas been made by tbe appellant in tbis case, and we have endeavored to give it tbat careful consideration wbicb tbe importance of tbe principles involved and tbe ability of tbe argument made demand. No serious fault is found with tbe legal principle stated in tbe former opinion. It is admitted tbat tbe court correctly stated tbat “when one party to an executory contract, before tbe time for performance, repudiates it by deliberately declaring tbat be will not perform, tbe other party may treat tbe contract as terminated and recover the damages sustained by tbe other’s breach.” But it is argued tbat (1) there was no absolute and unequivocal repudiation in fact, and, (2) even if there was such a repudiation, still tbe defendant did not treat it as a breach, and hence cannot now take advantage of it, but must show full performance on its own part.

As to tbe first of these contentions we shall spend little time upon it. Tbe frequent and emphatic written declarations of tbe plaintiff tbat be considered tbe contract rescinded or annulled, demanding return of tbe earnest money, and threatening immediate suit if it was not returned, seem to us as amounting to very clear, unequivocal, and absolute refusals to perform.

Tbe second contention, however, is far more serious. Tbe law with regard to an anticipatory breach of an executory contract doubtless is tbat tbe other party must treat it as a breach, and-tbat if be do not do so, but continue to demand performance, be will be held to bave kept tbe contract alive for tbe benefit of both parties. In other words, be cannot treat tbe repudiation both as a breach and as no breach at tbe same time. Benjamin, Sales (Ith Am. ed.) § 568; Anson, Contracts (2d Am. ed.) 311; 9 Cyc. 698, 699; Dingley v. Oler, 111 U. S. 490, 6 Sup. Ct. 850. Tbe court found in tbe present case tbat tbe defendant ceased its efforts to remove tbe ob* *496jections to tbe title after receipt of tbe plaintiffs letter of September 2d. Had this been tbe only fact in evidence throwing-light on tbe conduct of tbe defendant, it might perhaps be said that it did in fact treat tbe plaintiffs repudiation as a breach; but it appears without dispute that tbe defendant notified the plaintiff by letter dated September 20, 1902, that it should carry out tbe contract on its part, and should expect tbe plaintiff to do tbe same, and again on September 25th sent a letter of like purport. Tbe defendant also alleges in its answer that it was at all times ready, able, and willing to carry out tbe provisions of its said contract, and that on October 1, 1902, it tendered to tbe plaintiff a satisfaction of tbe $8,000 mortgage and a duly executed contract of sale, as required by tbe option contract, and has ever since a date prior to said October 1st been ready, willing, and able to perform its part of tbe contract. On mature reflection we are of opinion that it very clearly appears by these facts and admissions that tbe defendant never treated tbe plaintiff’s repudiation as a breach, but has continued to demand performance, and has thus kept tbe contract alive, and must now show ability to perform on its own part' in order to defeat plaintiff’s claim for recovery of bis earnest money.

This brings us to the second branch of tbe ease, namely, tbe question whether tbe defendant bad marketable title to at least 8,500 acres on October 1, 1902. It will be noticed that tbe contract does not require tbe defendant to exhibit a marketable title. A number of defects in tbe title were claimed upon the trial, but only two deserve serious attention, and these two will be briefly considered.

(1) Tbe defendant’s title came through tbe Brown-Bobbins Lumber Company, a corporation, and tbe abstract of title failed to show that tbe articles of incorporation bad ever been recorded in tbe office of tbe register of deeds of Oneida county, as required by subd. 7, sec. 1772, Stats. 1898. It was shown by tbe evidence that the articles were duly made *497and filed and actually recorded as required by law, but bad not been indexed. Tbe mere failure of tbe register of deeds to properly index tbe record cannot be regarded as invalidating tbe corporation or suspending its legal powers. Tbis stems too clear to require argument.

(2) Tbe lands were incumbered by a mortgage for $8,871.85 to one Bisbop, executed March 3, 1902, being tbe mortgage referred to as tbe $8,000 mortgage in tbe statement of facts herein. Tbis mortgage contained a provision to tbe effect that tbe mortgagee, upon request, would release any portion of tbe lands at any time upon payment of $2.50 per acre. A release of tbe mortgage in full was signed by Bisbop on October 1, 1902, and acknowledged on tbe following day, and was in possession of tbe defendant’s attorney when be called on tbe plaintiff October 14, 1902. .It also appeared that twenty-seven forty-acre parcels of tbe land were sold for taxes in May, 1896, but that no tax deeds bad been issued .upon tbe certificates, and that tbe aggregate amount of the' tax certificates and interest did not exceed $200. These in-cumbrances may be treated together. They were all presently payable and aggregated a little more than $9,000. There: were 8,760 acres of land, tbe title to which was certainly marketable, subject to these last-named liens. Tbe purchase' price was $3.50 per acre, or $30,660 in tbe aggregate. One third of tbis sum, or $10,220, was payable on delivery of the land contract October 1st. Tbe defendant on that day could have brought and maintained bis action for specific performance of tbe contract, notwithstanding tbe existence of these liens, because they were presently payable, and tbe court could by tbe decree make provision for their payment and discharge out of tbe purchase money then due. 26 Am & Eng. Ency. of Law (2d ed.) 109; Guild v. Atchison, T. & S. F. R. Co. 57 Kan. 70, 45 Pac. 82; Frain v. Klein, 18 App. Div. 64, 45 N. Y. Supp. 394; Edmison v. Zborowski, 9 S. Dak. 40, 68 N. W. 288. Tbe idea is that a lien which may be paid *498out of tbe purchase money simultaneously with tbe delivery of the deed does not make an otherwise perfect title unmarketable.

By the Court. — Rehearing denied, without costs.