144 Wis. 564 | Wis. | 1911
Lead Opinion
Tbe following opinion was filed January 11, 1910:
There is ample evidence in tbe record to support tbe finding of tbe referee to tbe effect that if tbe stock certificate for $174,000 bad ever been issued it was surrendered and canceled prior to December 1, 1899. Whether there was any valuable consideration to support such a transaction is more debatable. Tbe argument of defendant’s counsel, that tbe cancellation of a debt amounting to about $48,000 and tbe assumption of certain interest obligations by tbe corporation constituted a good consideration, is not convincing in. view of tbe fact that tbe plaintiff turned over $326,000 worth of other property to tbe corporation and assumed an indebtedness to bis father of over $38,000, for which no consideration was paid except tbe settlement of tbe account referred to and tbe interest agreement. However, tbe question is not particularly material. Tbe plaintiff might make a donation of' a portion of bis stock to tbe corporation in this case if be saw fit, and tbe important fact is that be did surrender tbe stock and that it ceased to be a corporate liability on tbe date named.
'We find little in tbe way of evidence, or of inference to be drawn therefrom, to justify tbe contention that defendant took a decaying business and built it up. Tbe evidence fails-to show insolvency or anything approaching it when tbe defendant bought in, and it is difficult to discover wherein, after bis five-year term of service, be left tbe business in much better condition than be found it. Tbe only thing to indicate that be found nominal book assets and left actual ones is tbe fact that some bad accounts were charged off tbe books, but tbe amount was inconsiderable, and tbe net assets declined some $43,000 during tbe period of bis service. Tbe charging
It seems clear that when tbe parties made tbe contract of August 22d, by which plaintiff agreed, on tbe happening of a certain contingency, to repurchase tbe stock which defendant agreed to buy, tbe parties contemplated that if tbe business proved to be profitable and tbe surplus was increased by legitimate earnings during tbe term of defendant’s employment, tbe latter should be paid bis pro raía share of tbe increase, and that if loss resulted be should suffer his pro rata share of such loss. Tbe net surplus of tbe corporation was increased on November 30, 1899, $213,774.98 by entries made in tbe books of account. This increase did not add a single dollar to tbe financial strength of tbe corporation, unless tbe wiping out of tbe account of $38,917.22 in favor of Herman Zohr-laut reduced its indebtedness to that extent, and it is not at all certain that Mr. Zohrlaut ever agreed to forego bis claim against tbe corporation for this sum. It seems highly improbable that tbe plaintiff understandingly signed tbe agreement of December 1st with a full realization of tbe consequences that might result from such action. Tbe defendant paid par for $25,000 of the capital stock of tbe company. Had be been taken ill with some malady that would prevent bis performing tbe work required of him by tbe contract, tbe next day after its execution, be would be entitled to recover from tbe plaintiff not only tbe purchase price, but also about $17,000 in addition thereto. His heirs might do tbe same bad be died. Tbe recovery at such time would have amounted to about $2,700 more than tbe damages awarded in this action, because tbe book value of tbe stock bad declined over $43,000 in tbe meantime. Tbe improbability of a party
The only rational explanation of how this contract of De•cember 1st came to be made is suggested by the referee in his -decision, where he expresses the belief that when the second •contract was signed the parties ovérlooked the fact that the :stoek liability of the corporation, as shown on its books, had been reduced $174,000 between the dates of the two contracts, ■and that neither realized that in the meantime the book value •of the stock had been enhanced over forty per cent. It seems to us that this conclusion is correct, at least as to the plaintiff, ■•and that the contrary finding made by the referee is incorrect.
In order to properly construe a contract susceptible of more than one construction, the court should place itself as nearly as it may in the position of the parties who made it, by considering the surrounding facts and circumstances, the nature 'of the subject matter, the relation of the parties to the contract, and the objects sought to be accomplished thereby. 2 Page, Cont. § 1123; Mayer v. Goldberg, 116 Wis. 96, 92 N. W. 556, and cases cited. When the language used in a -contract is susceptible of more than one meaning, it is essential that the court should understand the conditions that existed when the contract was made, in order to adopt that construction which would express the true intent and meaning -of the parties.
However, it is the duty of courts “simply to enforce contracts, unexceptionable on other grounds, precisely as the par-lies have made them, instead of making new contracts for them to meet the emergencies of a particular case, or to avoid some supposed inconvenience or hardship arising from the •natural import of the written engagement. And the written Instrument furnishes the best possible evidence of the inten*576 tion, and determines the liabilities of tbe parties.” Heath v. Van Cott, 9 Wis. 516, 522.
“In construing a contract it must be observed that, while the office of judicial construction is to give effect to the intention of the parties, and that words and sentences should be so construed as to subserve such intention, this does not mean that violence may be done to the words the parties see fit to employ, but only that it is the duty of courts to look at the whole and every part of the contract, and to give that construction to it which will make it effectual to carry out the real intention of the parties so far as the words they see fit to employ will permit, without doing violence to the rules of language or the rules of law.” Braun v. Wis. R. Co. 92 Wis. 245, 247, 66 N. W. 196, 197.
And in construing contracts the courts “cannot give effect to the intention, however manifest, which plainly violates the rules of language or of law.” Mississippi River L. Co. v. Wheelihan, 94 Wis. 96, 98, 68 N. W. 878, 879; 2 Parsons, Cont. 494. '
Words may not be added to a contract unless obviously implied. ' Where the language used is not ambiguous the apparent import of the words must govern. .Where the words used! are of uncertain meaning, within certain limitations, that construction should be adopted which will best effectuate the intention; but words should not be constructively put into a contract that are not there. Mississippi River L. Co. v. Wheelihan, supra. When plain language is used in such a-connection as to leave no room to say reasonably that the parties may have intended either of two meanings, the apparent import of the words as generally understood must govern. Thurston v. Burnett & B. D. F. M. F. Ins. Co. 98 Wis. 476, 479, 74 N. W. 131; Wells v. M. & St. P. R. Co. 30 Wis. 605; 1 Story, Cont. (5th ed.) § 780.
In speaking of an improvident provision made in a conveyance this court in another case said:
“But so long as the parties saw fit to insert in the grant plain words of limitation, pointing to particular instruments for measuring the water, we must hold to such plain meaning,.*577 and not, for the purpose of relieving parties from difficulties which were not properly provided against at the proper time, put words into the grant by construction. That would be a violation of rules of law by judicial construction, and courts are not permitted to do that.” Appleton P. & P. Co. v. Kimberly & C. Co. 100 Wis. 195, 201, 75 N. W. 889, 891.
In answer to the contention of counsel that testimony of the circumstances surrounding and leading up to the making of a written contract are always admissible for the purpose of putting the court in the position of the parties at the time the contract was made, this court has said:
“Not so! Where there is no ambiguity in the contract, either in its literal sense or when it is applied to the subject thereof, it must speak for itself entirely unaided by extrinsic matters. Where such ambiguity does exist, then evidence of the circumstances under which the contract was made is proper to enable the court in the light thereof to read the instrument in the sense the parties intended, if that can be done without violence to the rules of language or of law.” Johnson v. Pugh, 110 Wis. 167, 170, 85 N. W. 641, 642.
Parties cannot use terms with a fixed and certain meaning and then disclaim such meaning; at least not without reformation of the contract. Murphey v. Weil, 92 Wis. 467, 473, 66 N. W. 532.
Under cover of construction a court cannot reform a written contract to make it express the real intention of the parties, which, by mistake, is not expressed in the words thereof. Robbins v. Rollins, 127 U. S. 622, 8 Sup. Ct. 1339; Te Poel v. Shutt, 57 Neb. 592, 78 N. W. 288; Sinclair v. Hicks, 116 N. C. 606, 21 S. E. 395; 2 Page, Cont. § 1130. Courts of equity may reform contracts for mistake or fraud when the modicum of proof required by the established rules of law is furnished to warrant reformation. Braun v. Wis. R. Co. 92 Wis. 245, 248, 66 N. W. 196, and cases cited.
Applying the foregoing rules of law to the facts in this case, is the plaintiff entitled to relief ? His contention is that the
It must be remembered, however, that the plaintiff, by the contract dated December 1st, did sell and convey to the defendant, subject to his lien to secure the payment of the purchase money, twenty-five shares of the capital stock of the company as it then was, without any reference being made in the contract to the fact that any particular fractional interest in the corporation was sold, and that nothing was done by the plaintiff for a period of more than five years thereafter to indicate that he had in fact intended to sell but a one-twentieth interest instead of the much greater interest that he did in fact sell. No implication can be drawn from the contract that it was intended to sell any other or different interest from that expressly provided for. By said contract the plaintiff agreed, “in accordance with the terms of the agreement entered into between the parties heretofore on August 21, 1899 [meaning, no doubt, August 22d], to sell to said Mengelberg twenty-five (25) shares of the capital stock of said Herman Zohrlaut Leather Company at par.” This provision can only be held to mean that the twenty-five shares of stock provided for in the former contract were to be sold by plaintiff to defendant. It cannot mean that the provisions of the former contract as to price should govern, because the parties specifically stated otherwise. If the amount of stock remained unchanged, the plaintiff would be entitled under the preliminary contract to receive about $2/700 above par for the stock sold, on the basis of any calculation, and over $2,000 more than that sum if there had been no change made in the stock
We are impressed with tbe belief that tbe evidence and tbe reasonable inferences to be drawn therefrom satisfactorily show that plaintiff mistakenly either sold a greater amount of stock than be would have sold bad be comprehended tbe effect of tbe book entries of November 30th, or that be sold tbe amount of stock which he did at a less price than be would have sold it bad be realized tbe extent to which tbe book value of tbe stock bad been so suddenly and so materially enhanced. It may be that, bad be seasonably applied to a court of equity for a reformation of tbe contract, be would have been entitled to relief. Tbe plaintiff, however, has brought an action at law on tbe note given in payment for tbe stock, and, if relief is given at all, it must be by a construction of tbe contract, which is not permissible as it stands. In other words, we see no escape from tbe conclusion that by tbe terms of tbe written contract tbe plaintiff did, on December 1st, sell twenty-five shares of tbe capital stock of tbe corporation, and obligated himself to repurchase it in tbe event of a certain contingency arising, and which did arise in this case, and to purchase tbe stock at its book value at tbe time tbe contingency arose.
We do not think tbe defendant bad done anything to forfeit bis right to insist that tbe plaintiff purchase bis stock under tbe terms and conditions provided in tbe contract between tbe parties. Neither do we think any error was committed in refusing to allow interest on tbe note sued upon. No divi-
The evidence offered was directed to the book value of the stock of the corporation on December 1, 1904. The defendant continued in the employ of the company until January 1, 1905. It is argued that the evidence offered did not establish the book value of the stock of the corporation as of the proper date. The date of December 1st was selected, presumably, because the corporation closed its books on that date. The variance in time between the two dates is slight, and it is highly improbable that there was any substantial difference between the value of the assets between December 1st and January 1st, or that the assets were less on the latter date than on the former. The books were within the immediate control of the plaintiff, and if any substantial difference existed it might readily have been shown by him. Technically the plaintiff was entitled to recover on the basis of the book value of the stock on January 1st. But we think the evidence offered substantially proved that value, and that no good purpose would be served by prolonging this litigation in order to determine whether there was a slight variation in the surplus of the company between these two dates.
By the Court. — Judgment affirmed.
A motion by the appellant for a rehearing was granted on April 5, 1910, and the cause was again argued on October 29, 1910.
For the appellant there was a brief by Nath. Pereles & Sons, attorneys, and Quarles, Spence & Quarles and Glicksman, Gold & Corrigan, of counsel, and a separate brief by T. W. Spence, of counsel; and the cause was argued orally by Mr. IF. L. Gold and Mr. Spence.
Tbe following opinion was filed November 15, 1910:
A motion for a rehearing was granted in this case and tbe same has been reargued. Chief Justice WiNslow and Justices BaeNes and Vietje are agreed that tbe former decision was correct. Justices Marshall, Sie-becKee, and KeewiN reach a contrary conclusion. Justice TimliN, having been of counsel in the case, did not sit. This situation results in an affirmance of the judgment.
By the Oourt. — Judgment affirmed.
The following opinion was filed November 19, 1910:
Dissenting Opinion
(dissenting). Three of the six justices, Justice Siebeckee, Justice KerwiN, and the writer, who participated in this case believe the judgment to be unjust and that it should be reversed. It is regrettable that appellant cannot have a decision, the whole bench participating. The situation is out of the ordinary class of cases disposed of by a divided court. Generally no opinion is filed. Here the equal division developed after an opinion had been filed which now stands as showing the reasons for the affirmance. So the case particularly calls for an opinion, stating the reason why one division of the court, equal in number with the other, now believes the judgment to be wrong.
There is no very good room for differences of opinion respecting the legal questions involved. The authorities cited in the opinion by Justice BaeNes state the law as regards the situations with which they dealt. They announce mere elementary principles, as do many other cases that might have been referred to, specially, but were not, perhaps, because it was thought they were not in full harmony with those which were cited. .We refer to cases of which the following are good samples: Steele v. Schricker, 55 Wis. 134, 12 N. W. 396;
If there were any warrant for doubting the existence of harmony between these authorities and the others and reacting a conclusion upon the theory that if a contract, looking at its words alone, means clearly one thing, it cannot be shown to be ambiguous by applying it, with or without the aid of extrinsic evidence, to the subject with which it deals, and then given a different meaning if necessary to effectuate the intent of the parties; it seems there was not such warrant when the cause was taken up for consideration, since any such misconception as existed respecting such want of harmony had been, in the meantime, cleared up. Klueter v. Joseph Schlitz B. Co. 143 Wis. 347, 128 N. W. 43.
In the Klueter Case the court endeavored to set at rest, as it often had before, all questions as to what aids may be called in for the purpose of discovering ambiguity and how obscurity of meaning, when discovered, can be cleared up. We are safe in saying that the court was successful, especially as regards the bearing of principles on this case, since eminent counsel for the respective parties frankly conceded on the re-argument that the rules were stated in all respects correctly, and as they had always been maintained in this and other courts. It was rather conceded, as we supposed, when the case was decided, that if it be legitimate to show that a contract which is plain, looking at the words only, is not so when applied by the aid of extrinsic evidence to the subject with which it deals, and then for the purpose of clearing up the obscurity, the facts and circumstances characterizing the making of the contract may be shown by extrinsic evidence; thus
Counsel for the respondent on the reargument necessarily had to come out from, if they before went into, hiding behind the idea that ambiguity cannot be disclosed and cleared up in the manner indicated, which was, seemingly, the refuge here of the court on the former occasion. Counsel on the second argument planted themselves firmly on the ground that the contract is not ambiguous either in its literal sense, or when, applied, with or without extrinsic evidence, to the subject with which it deals; and that taken either way the only meaning which can be read out of it is the one which forms the basis for the judgment complained of; that if the minds of the parties did not meet on that precise meaning, which counsel would not concede, they failed to use language from which, by the rules laid down in the Klueter Case> any other reasonable meaning can be fairly gathered than the one discovered by the trial court. We must assume that such is the attitude of the justices who adhere to the former affirmance.
From the foregoing we assume the doctrine of the Klueter Case and those therein referred to not be open to question. Therefore the right of the matter in controversy is to be tested by these rules:
1. A written contract cannot be varied by parol evidence.
2. A written contract, if plain in its literal sense and when applied to the subject with which it deals, must speak without the aid of extrinsic evidence.
3. The intent of the parties to a written contract, so far as it can be read, by aid of construction, out of the writing, but not otherwise, must be taken to be, in the legal sense, the contractual intent.
4. In the construction of a contract no meaning can be properly attributed to it other than one which by rules of construction can be found in it, but all words necessarily or rea
5. If a written contract, either looking to the words alone or when applied, with or without the aid of extrinsic evidence, to the subject with which it deals, is ambiguous, the court may, aided by evidence of the facts and circumstances characterizing the making of it, give effect to the real intent, so far as it can reasonably be read out of the writing without violating the rules of language or of law.
6. It is to be presumed that the parties to an agreement did not intend to make an absurd or a very unreasonable one,— one that two men, acting understandingly, could not fairly be expected to make. Therefore when the apparent meaning of an agreement, either in the words by themselves or by applying them to the subject matter, is unreasonable or absurd, ambiguity exists requiring to be solved by judicial construction.
Now let us give a brief resume of the facts and then apply the foregoing thereto.
June 18, 1899, a certificate for 114 shares, making up the full capital stock of 500 shares, was duly made by the officers of the Herman Zohrlaut Leather Company in favor of Herman Zohrlaut to carry out a contract between him and the corporation in respect to its purchasing certain property of him. The contract was, in the end, substantially carried out but not at all in the manner contemplated. At or about the date of the contract Edward Zohrlaut took over the interest which Herman owned in the corporation, including his right to the 174 shares. Whether the certificate for such shares was delivered does not appear. The indications are rather to the contrary, and that no formal transfer was made to Edward, but that the certificate remained with the corporation till canceled as hereafter stated. However, appropriate entries were made so that, August 22, 1899, the books showed the 500 shares to be outstanding and that equitable ownerships in the corporate assets existed accordingly. It was then agreed between Edward, president of the corporation, and defendant, first, that
October 4th, at a meeting of directors, both parties being present, it was agreed to reduce the capital stock to 326 shares by canceling certificate for 174 shares. No change was made in the books till after the date fixed for determining the book price of stock under the agreement to sell the twenty-five shares. The books then showed that the stock was worth about 110. Thereafter th,ey were changed in accordance with the agreement of October aforesaid, thus increasing the book value of twenty-five shares somewhere around $14,000.
After such change Zohrlaut and defendant made a contract, supplementary to that of August 22d and without any negotiations varying the essential terms of sale and purchase as aforesaid. In such second agreement Zohrlaut promised, among other things, “in accordance with the terms of the agreement of August 22d,” to sell defendant twenty-five shares of the capital stock of the corporation, taking his notes therefor substantially according as before stipulated.
Tin's supplementary agreement was made December 1, 1899, though not executed till the following January. Thus the first agreement as to taking back the stock without change survived the supplementary agreement. The sale was consummated on the basis of the first agreement, i. e. the book value of November 30, 1899, before the 174 shares were canceled.
Years after the last occurrence mentioned, upon the contin
The result indicated convicts the parties of having made a contract so very unreasonable that probably all would readily agree the minds of such parties never met upon a transaction which could produce it. That renders the meaning of the writings obscure if otherwise they would be plain, a situation for judicial construction under the aforementioned elementary principles.
True, if a meaning leading to such an absurd result is the only one which can reasonably be discovered within the scope of the language used in the writings, then that meaning, as indicated in one of the rules, must prevail if the contract be enforced at all as written. True, however, as also indicated, the intention of the parties must prevail and their words be bent to that end, if need he, so far as that can be done reasonably. True, also, as indicated, no meaning can be properly ascribed to such words other than such as can be found within the scope thereof. So far as the parties failed by mutual mistake, or fraud on one side and mistake on the other, to embody their real meaning in the writing, the mutual purpose cannot be effectuated without equitable interference.
The foregoing certainly calls for extending or restricting the meaning of the language of the writings to the utmost reason will permit in order to find therein a reasonable one in-harmony with the intent of the parties. That intent, independently of the writings, must be conceded to be unmistakable, viz.: that the stock should be sold to respondent on a particular basis and bought back, upon a contingency mentioned,, upon precisely the same basis, subject to change in the meantime, one way or the other, according to the profitableness or otherwise of the business; that there was no thought of any probability, or even possibility, of the value being enhanced or depreciated by mere bookkeeping, stock being increased in value without any increase in value of assets. That seems too clear for reasonable doubt. We do not understand there-is any serious difference in respect thereto. The difference-is in whether such manifest intent can be read out of the writings by aid of rules for construction which the court has recently held, and which counsel for both parties, as before indicated, agree our books lay down plainly and harmoniously. We now turn to the writings.
It is significant that both papers contemplate a sale price according to the state of the books November 30, 1899, and upon a basis of there being 500 shares of stock, and that the-idea was to give respondent during his term of employment a share of the profits on the basis of his having twenty-five of' five hundred shares of stock. It is not probable, it was-thought respondent would ultimately pay for the stock. It was set aside merely to represent his proportion of the prospective profits or losses of the business on the basis of one to-twenty. The stock was retained with the note, one being-
No rule for construction of contracts, statutes, and constitutions is more firmly established than that, while words cannot be arbitrarily interpolated into a writing, even to carry out the manifest purpose of the authors thereof, that purpose may and should be effectuated by reading as in place all words which are there by reasonable or necessary implication. All
Time, under cover of construction, the court cannot relieve parties from a mistake in not expressing their real intention in their written agreements. But should that plain rule, which all admit, blind us to the rule of equal dignity, that the court can give effect to the intent of the parties so far as it can be read out of their writings within the uttermost scope of the language thereof, and by the aid of the broad power of judicial construction, — and that it is its duty to do so ? Does it not seem that one rule, to which all agree, is given such prominence by one division of the court that its overshadowing dignity, for the time, has obscured that other rule, which all must agree is of equal significance, that words can be given a very narrow or very broad meaning, departing far distant, in some cases, from the ordinary meaning, and words can and should be deemed to be in place which the context and subject matter reasonably suggest, in order to prevent the injustice of the real purpose not being carried out, giving one party an advantage over the other which was not within their mntual contemplation as within reasonable probabilities ? Must we not, in all such cases as this, bear in mind that, while a meaning not within the scope of a contract cannot be put there by construction to help out a party who through mistake failed to use language to express his purpose, the very office of judicial construction is to save parties from their failure, through negligence or mistake, to express unambiguously their purpose, if they expressed it discoverably ? Upon that valuable instrumentality the rightful vitality of writings commonly depends. It is by no means an instrumentality to be re
Doubtless apparent conflicts seem now and then to come from comparing instances where the court has, seemingly, applied rules for construction with apparent reluctance, with others where the same rules were applied with the utmost liberality, the court in the latter appearing to be more keenly alive than in the former to its great function to administer justice in fact as well as in form, sweeping aside the mere literal sense of words as forming no obstacle whatever to the supremacy of mutual intention, if expressed at all, however obscurely. Many instances of this might be given, but they are so numerous and so well known and the underlying principle is -so familiar that citations are omitted.
The ultimate duty in construing contracts is well phrased in 2 Parsons, Contracts (9th ed.) 496, thus:
“The rule of law is not that the court will always construe a contract to mean that which the parties to it meant; but rather that the court will give to the contract the construction which will bring it as near to the actual meaning of the parties as the words they saw fit to employ, when properly construed, and the rules of law will permit.”
So it will be seen that the first question in construing a contract of double meaning is, What was the intention of the parties ? That, as indicated, may be determined by applying the writing, with or without the aid of extrinsic evidence, to the subject with which it deals. Here the intention is manifest, i. e. to sell and buy back, if necessary, a certain interest in the corporation, measured by twenty-five out of five hundred shares, so that the person holding the title in the meantime would participate in the profits of the business in the
The next question is, To what extent was such intent embodied in the writings by the most liberal treatment thereof which rules of language and of law will permit ? Any failure to go to that extent to save the intent, is a failure of justice attributable to the court. Any failure after going to such extent to find that the real intent was embraced in the writing, is a failure of justice attributable to the parties themselves, which only equity can relieve them from. Manifestly there should be no failure to discover such intent to be expressed where it is perfectly manifest, as here, without first exhausting the whole arsenal of weapons for construction which the law has furnished us with.
It seems to us that the fair meaning of the writings upon ■their face is that the transfer and retransfer of stock referred to the same interest as compared with the same whole, or assets subject to change in value of the latter by operations of the business. If that were not so it seems to us that by the rules for construction to which we have referred) such meaning can be very easily found embodied in the language of the parties, and that the result of the litigation below left binding ■on appellant because of the equal division is to make for the parties and enforce a contract which they had no thought of making.
If we could not otherwise come to the conclusion above indicated, the treatment of the contract by the parties at the time the notes were given would settle the matter. The notes, -as before indicated, were not given until long after the entries were made reducing the capital stock to 326 shares. As said, -they were obviously given and taken as the equivalent for the twenty-five shares, as the fact was, on the basis of such shares representing such proportion of the assets of the corporation ■••as one to twenty. They were not, however, by some $14-,000,
We will not discuss the matter further. We have no apology to make for discussing it at so great length. Since the opinion on the former hearing is to remain on file, once, but not now, concurred in by a majority of the court, it has. seemed quite necessary for us to adequately emphasize our dissent from the result which stands, under the circumstances, only upon the dignity of the trial court’s decision.
The injustice, from an equitable standpoint at least, of the-result of this litigation, is such that, doubtless, there would be a prevailing inclination to open the way to avoid it if there-were a prevailing idea that judicial power existed to do so. That opens up an important field of inquiry which duty calls-upon us, it seems, to explore.
Attention has been called to Wis. M. & F. Ins. Co. Bank v. Wilkin, 95 Wis. 111, 69 N. W. 354, as suggesting the way to-opportunity for yet presenting an equitable defense. There plaintiff recovered on' the hard-and-fast lines of a Contract-Defendants, through excusable mistake of counsel, depended, as here, upon a favorable construction of the agreement. Only after an expensive trial below in which they prevailed,., and a review on appeal in which they failed and judgment was ordered for plaintiff, was it discovered that no relief was obtainable from the harsh results of the writing except by successfully invoking equity authority of the trial court for reformation. In that situation a motion was made here in the nature of a motion for a rehearing for a modification of the mandate so as to permit the trial court, in its discretion, to allow the answer to be amended setting up the appropriate equitable defense. The motion was granted, likewise was the motion in the trial court for leave to amend, the case was tried in its new aspect, the defendants prevailed, and on appeal to-this court the judgment was affirmed. [Wis. M. & F. Ins.
True, in the former case the judgment appealed from was at first reversed. That feature alone we do not think barred the way to the application for leave to amend. Further, in that case, a motion was made here, specially, for a modification of the mandate. But the fact that the case now will go back with a judgment, while in the former it did not, cannot make any difference, in our judgment, if the time has not expired below — beyond any relief even by aid of this court, to set aside the judgment on terms. Neither can the fact that appellants have not specifically asked for a modification of the mandate, and authority to the trial court to entertain a motion to set up a new defense which, by mistake, was omitted to be timely made,- — since the case is fully under control of the court to grant such relief on the motion for a rehearing, or even without any motion at all. The hands of this court are by no means otherwise tied so as to prevent it from doing justice in a case over which it has jurisdiction. It need not wait to be invoked for the special relief, or invoked at all. The common and ordinary way is for the court to wait to be moved, but it need not, necessarily, and in a case of exceptional hardship it ought not to. The sacred thing which this great court should preserve and conserve, at all times and under all circumstances, is the real right of the matter in controversy.
It is suggested that to affirm a judgment, making it that of this court, and then empower a trial court to open up the case would be without precedent. Granted. But are the wheels of justice to be efficiently impeded, or are we to hold that the instrumentalities to attain justice have been exhausted, because of no precedent being in sight ? In Wis. M. & F. Ins. Co. Bank v. Wilkin, supra, and many other cases which might be mentioned where very valuable rights were involved, the power of the court to deal efficiently was challenged, not
One pretty good answer to the suggested anomaly of affirming a judgment and then permitting the trial court to proceed in the case in a way to disturb that judgment, is that the judgment as affirmed is, in effect, conditional. Moreover, the court is not without precedent to proceed in an action in the trial court, after judgment, without disturbance thereof till it appears to be so inequitable that it should not be enforced. Why may not an issue, in the peculiar circumstances, by permission of this court, under the statutes hereafter referred to, be made up in the nature of the remedy by audita querela and tried, having the same effect, in the ultimate, upon the judgment rendered as an independent action to prevent the enforcement thereof upon the ground of its inequitable character ?
At this point, we are discussing the question of power. That may exist and yet should be very sparingly exercised so not to invade the wise public policy and that of the written law, that judicial controversies should be terminated without exact justice being reached rather than be prolonged unreasonably.
But it is suggested that this court is powerless to give any efficient relief by modifying the mandate so as to permit the trial court to hear an application to excuse the mistake, as our associates would claim, of failing to set up an equitable defense to respondent’s claim seasonably, because the time for granting such relief is limited by sec. 2832, Stats. (1898), to one year after notice of the entry of the judgment, which time has obviously expired.
Is it true that there is absolutely no remedy in tbe action affordable in tbe trial court in a case of this sort after tbe expiration of one year from tbe entry of tbe judgment, even supplemented by all tbe boundless supervisory power of this court ?
Sec. 2831, Stats. (1898), provides that exceptas “otherwise specially prescribed by law, tbe court . . . may also, on motion and good cause shown, in discretion and upon sucb terms as may be just, allow any” proceeding to be done “after tbe time limited by or in pursuance of tbe statute or by any order of court.” That is a very broad provision. It is difficult to mention any case falling within tbe term “otherwise specially prescribed by law” except tbe time for taking appeals. That is so prescribed in tbe section itself. It has been held to apply to sec. 3766, which, in language quite as mandatory as that in sec. 2832, provides that tbe circuit court shall dismiss a case appealed thereto from justice court unless brought to trial before the end of tbe second term after tbe filing of tbe return of tbe justice therein, or continued by special order for cause shown. However, it has been held that, long after tbe expiration of tbe time limit and after actual dismissal of tbe appeal on that ground, tbe court has power to reinstate tbe case under sec. 2831. It may be that and similar cases are
So it may be conceded for the purposes of the discussion that a trial court should, unless aided by this court, regard itself as without jurisdiction to open a case for further hearing unless the motion therefor is made within the time limited in sec. 2832.
Notwithstanding the foregoing, can this court properly act in the circumstances before us? Its power of superintending control is very great. It is as boundless, this court has said, as aré the possibilities of need of its activity to direct and control trial courts to the end that justice may be done between parties. It is commonly invoked by use of some appropriate writ, this court by such instrumentality taking to itself the situation to be dealt with. But where the situation is here no writ need be used to bring it here, and where the court has been invoked for relief which it cannot grant, it has in many situations power to grant some appropriate relief in place of that asked.
With these observations as to the scope of the power of this court and that of the trial court, we will state our conclusion as to what may legitimately be done, and ought to be done, in the situation before us.
The appeal to this court was made promptly after the judgment was rendered. A supersedeas bond was given and the
The following opinion was filed December 5, 1910:
The members of the court who have reached the conclusion that the judgment should be reversed having
Whether the decisions of this court are in harmony or not, as to when an ambiguity should be found to exist in a written contract, is not very material. Those who have occasion to study the cases will form their own conclusions, and judicial assertion of harmony or of lack of it is inconclusive and wholly immaterial.
Before passing from the subject I desire to call attention to. the sixth paragraph of the opinion of Mr. Justice Marshall. In short, that paragraph means that if a contract is unreasonable it is ambiguous, and the court will proceed to fit the language used to its idea of what the contract should have been.. There is some advantage in adopting this method for construing contracts, because the courts have the benefit of hindsight, while the parties must content themselves with using foresight. The main trouble with judicial action of this kind is-that it is liable to lead the courts into making contracts for parties which they never contemplated. Such supervisory-action might well be more intolerable than the injustice that will sometimes result from a party making an improvident contract, which he can always have reformed in a court of equity for fraud or mutual mistake, if he is able to establish either to the satisfaction of the court. If the minds of the parties do not meet on the contract as written, there may be a rescission, if timely steps are taken to rescind and the parties, can be placed in statu quo. Da Vain v. Da Voin, 76 Wis. 66, 44 N. W. 839; Meinecke v. Sweet, 106 Wis. 21, 24, 81 N. W. 986; Zoerb v. Paetz, 137 Wis. 59, 64, 117 N. W. 793. In one sense it is unfortunate that we cannot always decide cases in accordance with the equities of a particular case. But the rules of law must be as fixed and definite as is reasonably possible in order that men may know what the law is and govern themselves accordingly in their actions and in the conduct of their affairs. So, as there must be a choice of meth
Tbe opinion first filed proceeds upon tbe ground tbat there was no ambiguity in tbe language of tbe written contracts, either in a literal sense or when applied to tbe subject thereof. If we interpret those contracts in view of all tbe testimony in the case and after considering every fact and circumstance shown by tbe evidence, I think tbe result must be tbe same,, because it cannot be said tbat tbe parties ever contemplated a sale of less than twenty-five shares of tbe capital stock of tbe company. Tbe August contract provides for a sale of twenty-five of tbe then outstanding five hundred shares of tbe capital stock of tbe corporation. Tbe December contract called for a sale of twenty-five shares of tbe capital stock of tbe company outstanding when tbe August contract was made. Those twenty-five shares were delivered to tbe defendant. Tbe final contract, though dated December 1st, was not in fact made until tbe following January. Tbe surrender of tbe 114 shares of stock was made in tbe preceding October. Tbe book entries in reference thereto were made in November. Tbe plaintiff held these twenty-five shares of stock as collateral for more than five years. There is nothing in tbe evidence from which it can be assumed tbat Mengelberg ever intended to take or accept less than twenty-five shares of tbe stock. He bad tbe right to insist on it, but not to insist ora paying only the price which be did for it. If there is anything in practical construction, then tbe parties here have placed an intensely practical construction on their agreements in this case, by tbe one delivering and tbe other accepting and paying for tbe property described in tbe contract, by tbe vendor receiving back tbe stock sold as collateral security for its purchase price and by bis retaining it for five years.
It may be true tbat if Mengelberg bad insisted when tb©
Aside from what has been said, I think an examination of the record in this case well nigh demonstrates that the minds of the parties never met on any contract whereby the defendant was to receive less than twenty-five shares of the capital stock of the corporation as it existed when the stock was delivered. The case was tried before a referee, and, as is usual in such cases, no very close line was drawn on the admission of evidence. The plaintiff was examined under sec. 4096, Stats. (1898), under sec. 4068, Stats. (1898), and was examined as a witness in his own behalf and cross-examined at length in reference to the transactions involved in the case. He nowhere intimates or says that he sold or intended to sell anything other than twenty-five shares of the capital stock of the corporation as it stood on November 30, 1899. What he does say is very different. He testifies that he had no particular knowledge of the condition of the business when the
Furthermore, that keen, resourceful, and able lawyer, Mr. Charles Quarles, who tried the case for the plaintiff, did not seem to he able to satisfy himself that, where a man had agreed to sell twenty-five shares of the stock of a corporation and had in fact transferred and delivered it and received his pay therefor and retained the pay and permitted the transaction to stand for five years, he had in fact only sold sixteen and three-tenths shares. In opening his case he stated that the theory of the plaintiff was that from December 1, 1899, on a statement which Mengelberg had made up, it appeared that the stock of the corporation was in fact worth par, and that on January 1, 1905, the same was true, and that in determining these facts all of the books of the corporation should be considered and taken into account and not simply those that had been manipulated by the defendant. The statement of Mr. Quarles as to his theory of the case is preserved in the record, and there is no suggestion in it that he considered the contract as being susceptible of a construction that some fractional interest in the corporation was intended to be sold rather than the twenty-five shares of stock specified therein. Of course Mr. Mengelberg’s testimony negatives any idea that any other or different interest was sold than twenty-five shares of the capital stock of the corporation as of November 30, 1899. So I think it clearly appears from their
Whether the contract be treated as ambiguous or unambiguous, I think there is nothing in the record which shows, any intention on the 'part of the plaintiff to sell or the defendant to buy less than twenty-five shares of the corporation stock, and that to construe the contract otherwise would amount to-making an agreement between the parties on which their minds never met.
This court exercised and could exercise only its appellate jurisdiction in this case. In the exercise of that jurisdiction it reverses judgments only for error, and no error having been discovered the judgment should be affirmed as a matter of course. As to what rights the plaintiff may have in the trial court after the record is remanded, I do not desire to express any opinion, because that question is not before this court.
I am authorized by the Chief Justice and by Mr. Justice Viktje to say that they concur in this opinion.
On December 14, 1910, the appellant moved that the court “(1) grant a rehearing on the question as to what the writings-mean; (2) modify the mandate (a) by reversing the judgment and directing a new trial, (b) or in case both motions-be denied, then that it be modified by adding thereto permission to the circuit court to entertain a. motion to set aside the judgment and for leave to amend the reply to the counterclaim.”
The motion was denied January 31,1911.
