Pfeiffer v. Marshall

EjsbwiN, J. Upon the established facts we see no escape from affirmance of the judgment, and therefore consideration of many of the alleged errors discussed by the appellants is rendered unnecessary. Aside from the findings of the jury set out in the statement of facts to the effect that the defendants knew, or by the exercise of due vigilance ought to have known, that Hie representations were false, it is established without substantial dispute that in July, 1904, the defendants had knowledge that the representations respecting the value of the land in question were false and that such value was not $50,000, but only about $22,000. Notwithstanding, — 59 — tli© defendants continued to prosecute tbe action for reformation of tbe contract for nearly two years after obtaining such knowledge and until judgment was rendered against them in tbe action. Now tbe question arises whether such action in the prosecution of tbe reformation suit did not amount to a waiver of tbe fraud or an election to stand upon tbe contract made. Tbe false representations relied upon to reverse tbe judgment are: (1) Tbe soil was a rich and fertile, etc.; (2) tbe value of tbe land was more than $50,000; (3) tbe Gentlemen’s Driving Club bad offered him $52,000 for such land; (4) $3,000 bad been paid for one acre near tbe plaintiffs’ land to tbe east, meaning the Merryman land; (5) the land adjoining plaintiffs’ land on tbe west bad been sold for $1,500 and was held by tbe owner at $2,000 to $2,500 an acre. Tbe jury found that these representations were made, and that plaintiffs knew, or ought to have known, they were false, and that they induced tbe making of the contract, but that defendants did not exercise due vigilance in relying upon the representations as to tbe character of tbe'soil, value of tbe property, and offer of the Gentlemen’s Driving Club; that they did exercise due vigilance in relying upon tbe representations as to tbe price paid for tbe Merryman tract and tbe Shenner tract, and what- tbe Shenner tract was held at; that tbe defendants, in tbe exercise of due vigilance, ought to have known the falsity of tbe representations as to value, offer of Gentlemen’s Driving Club, price paid for tbe Merry-man tract, price paid for tbe Shenner tract, and what the Shenner tract was held at when they paid tbe interest May 7, 1904. Tbe jury also found upon sufficient evidence that tbe defendants obtained knowledge of the falsity of the representations as to value of the premises in question in July, 1904. It will be seen that tbe value of tbe property was tbe material question, and that the other representations respecting tbe Merryman and Shenner tracts and offer of tbe Gen — 60 — tlemen’s Driving Club were evidentiary of tbe main fact, namely, tbe value of the property covered by the contract. On March 18, 1904, the defendants served a written notice upon plaintiffs Pfeiffer and Mayer and their wives, demanding that the written agreement between the parties entered into on the 1th and 8th of May, 1903, be reformed so as to conform to the intention of the parties thereto, and provide that the defendants herein should have the use of the premises described in the agreement during the period of five years from date of the contract unless sold in less time, upon payment of interest on a $15,000 mortgage upon the property at the rate, of five per cent, per annum and taxes not exceeding $100 a year, and further, among other things, that the agreement be subject to termination at the end of any year at the election of the second parties, defendants herein, ■defendants to acquire or have no title to the premises, but to forfeit all moneys paid in the event of termination of the ■contract by them before the expiration of five years. On April 1, 1904, an action was commenced to reform the agreement in accordance with the demand in such notice, and the ■defendants in that action, plaintiffs here, answered, denying any mistake or right of reformation, and averring that the agreement reduced to writing on the 7 th and 8th of May, 1903, expressed the true agreement of the parties. On or about May 6, 1906, the defendants here offered by letter to surrender possession of the premises on the alleged ground that they had a right under the contract to terminate it at the ■end of any year by forfeiting amounts paid, and sent a check for $375, being the amount then due, together with the key to the premises. Plaintiffs through their attorneys acknowl■edged receipt of the check and key and stated that they held the key subject to the order of the defendants, and further that the plaintiffs Pfeiffer and Mayer would hold the defendants Marshall and Wilbur to the terms of their contract of May 7 and 8, 1903. — 61 — The reformation action was afterwards tried, and on September 20, 1906, judgment in favor of defendants, plaintiffs here, dismissing the complaint, entered. Afterwards a motion to reopen the reformation action and permit the service of an amended complaint was denied. Upon denial of this motion defendants here commenced an action to rescind the contract on substantially the same grounds as set up in the answer in the instant action. The action to rescind was brought on for trial some time before the present action, and after defendants rested the plaintiffs in the rescission action, defendants here, by leave of court discontinued, and an order of discontinuance without prejudice was entered on May 16, 1907. The present action was commenced in October, 1906, and came on for trial May 21, 1907. It will be seen from the established facts that for a period of two years after discovery that the representations as to the value of the land in question were false defendants prosecuted the reformation action to judgment. This we think amounted to an affirmance and ratification of the contract and to an election to stand upon it, and after being defeated in the reformation action defendants cannot be heard to set up the fraud in order to avoid the contract. We have not deemed it necessary to consider the numerous findings of the jury in favor of the respondents further than they bear upon the questions of election and waiver. It is established without substantial dispute that defendants took and held possession of the property for at least a year under the contract, paid taxes and interest, the last interest being paid about a year after execution of the contract, and further prosecuted an action for the purpose of making certain changes in the written agreement so as to make it conform with the true agreement between the parties in the particulars heretofore referred to. This action in the prosecution of the reformation suit, we think, upon well-settled principles amounted to an election to stand upon the contract and a waiver of the — 62 — fraud, without considering other grounds urged for affirmance of the judgment below. Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246; Kingman & Co. v. Stoddard, 85 Fed. 740; Conrow v. Little, 115 N. Y. 387, 22 N. E. 346. It is argued that the defendants did not affirm the contract or waive the fraud because they insisted that a different contract was made than the one evidenced by the writings. But they affirmed the contract actually made and asked that the writings be made to conform to the contract. The fraud induced the making of the contract, whether that was the one evidenced by the writings or the one claimed by the defendants, so that in asking reformation defendants affirmed the contract actually made and waived the fraud. Some point is made by the appellants respecting the intention of waiver, and cases are cited which it is claimed hold that waiver depends upon the intention to waive, and that where there is no intention to waive there can be no waiver. But an examination of the authorities will show that where, as here, the facts are known to the party, and he acts in affirmance of the contract with knowledge of such facts, or takes steps inconsistent with the nonexistence of the contract, he cannot be heard to say that he did not intend to waive. Taking any step to enforce a contract is a conclusive election not to rescind it on account of anything known at the time. Conrow v. Little, supra. In Rasmusen v. New York L. Ins. Co. 91 Wis. 81, 89, 64 N. W. 303, this court said: “Doubtless, the act out of which the waiver is deduced must be an intentional act, done with knowledge of the material facts, but it cannot be necessary that there should be an intent to waive. Such a rule would allow a secret intention to defeat the legal effect of unequivocal and deliberate acts.” Intent to waive may be shown by conduct. Fraser v. Ætna L. Ins. Co. 114 Wis. 510, 90 N. W. 476. It was wholly immaterial, so far as waiver was concerned, whether — 63 — the contract was reformed as claimed by defendants or permitted to stand as set out in the written agreement, because the same fraud induced the making of the contract whether it contained the terms claimed by defendants and not inserted in it or whether it was in fact made as written. "We see no escape from the conclusion that the action to reform, prosecuted as it was for a period of two years after discovery of the fraud, was an unequivocal affirmance of the contract and a waiver of the fraud. Dawes v. Harness, 44 L. J. (C. P.) 194; Rasmusen v. New York L. Ins. Co. 91 Wis. 81, 64 N. W. 301; Fraser v. Ætna L. Ins. Co. 114 Wis. 510, 90 N. W. 476; Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246. It follows from what has been said that the judgment of the court below was right and should be affirmed. By the Court. — Judgment of the court below is affirmed.