Home Acres Co. v. Swenson-Dibble Land Co.

Jones, J. In the decision of this motion it is necessary to some extent to construe the contract set forth in the pleadings. It is a familiar rule that: “A contract must be construed as a whole, and the intention of the parties is to be collected from the entire instrument and not from detached portions, it being necessary to consider all of its parts in order to determine the meaning of any particular part as well as of the whole. Individual clauses and particular words must be considered in connection with the rest of the agreement, and all parts of the writing, and every word in it, will, if possible, be given effect.” 13 Corp. Jur. 525. On motion to strike out a portion of a pleading, if the trial court denies the motion an appellate court should be less ready to disturb the ruling than when the motion is granted. This is for the reason that in such case the action of the court is to a considerable extent discretionary. If the allegations objected to are allowed to remain in the pleading the trial court still has the power" at the trial by proper — 566 — rulings to prevent their being detrimental. But if allegations vital or important to the cause of action or defense are stricken out the pleader has no remedy except by appeal. Hence in determining whether averments in a pleading should be stricken out they should be construed in a manner most favorable to the pleader, and if they are not irrelevant or scandalous or redundant they should be allowed to remain. In determining whether the allegations objected to are entirely irrelevant we are compelled to consider to some extent the language of the contract referred to and other allegations in the pleadings. It appears from the recitals that defendant had invested $17,500 in the property, and besides other debts owed the Boyd Company $55,607.85. It was anticipated that there would be necessary expenses of $10,000 extending through the succeeding two years and that the defendant desired the aid of the Boyd Company and the City Land Company to save its enterprise, and that it was deemed advisable by all parties that the lands be deeded to the City Land Company with the broad powers stated to deed and control the lands until converted into cash, but subject to a duty for division of profits. In the first paragraph of the contract, after providing that a warranty deed should be executed, the broad powers of sale and control conferred were to be for the best interests of all the parties. The defendant had the right to confer and advise as to matters of policy; a minimum price per acre was fixed, and the power or control given to the City Land Company was to continue in furtherance of the enterprise until all the lands were, sold and cash realized or until the termination of the agreement. The City Land Company was to aggressively push and develop the sales. Of course the agreement might have been terminated in various ways. It might have been ended by mutual consent, or without any express agreement by the salé of all — 567 — the lands and a proper distribution of profits, if any, as provided in other terms of the contract. The ¿econd and third paragraphs related to the preparation and sale of a bond issue; payment of a note to the Bank of Wisconsin; payment to the Boyd Company of $55,607.85; and the balance of the proceeds of the bond issue was to be credited on the account. The fourth paragraph also related to the disbursement of $10,347.15 as might be best for the development and sale of the property and for distribution as profits. The fifth paragraph provided that after the sale of the lands and the payment of the obligations incurred in the management, sale, and development of the lands, including the sum of $17,500 to the defendant, the balance should be equally divided between the City Land Company and the defendant. The sixth paragraph is, the one chiefly relied on by the respondent. It contains this sentence: “This agreement shall terminate at the end of two years from the date hereof,” and provides that the City Land Company may have extensions of the agreement until all the lands are sold. The seventh paragraph gives to the defendant the privilege for thirty days of paying the bond issue with interest, and the right on such payment to receive a quitclaim deed; and securing a relinquishment therefor of any claim which the Boyd Company or the City Land Company may have from all sources. The eighth paragraph provides that in the event that the City Land Company should not obtain extensions of the contract, then the defendant might have thirty days, beginning sixty days and ending thirty days prior to the termination of the contract, or an extension thereof, in which to secure a quitclaim deed and release from the other parties of all their claims by paying to the City Land Company, in addition to the par value and accrued interest — 568 — of the City Land Company bonds, $10,000 as liquidated profits in lieu of other profits provided for in the contract. Counsel for respondent greatly rely upon the sentence in the sixth paragraph declaring that the agreement should terminate at the end of two years. They argue that there was no provision for reconveyance except the two options, as they are called, of thirty days each, for paying the bond issue and $10,000 as liquidated profits. They argue that all contractual right expired at the end of the two years ; that defendant had no right to any profits after August 8, 1919. The question is presented whether the strict construction of the termination clause is to prevail and whether it is the dominating and controlling term of the whole agreement. It was. probably the expectation of the parties that if the sales were pushed aggressively as agreed by the City Land Company the whole enterprise could be closed before August 8, 1919, the end of the two-year period. But there are features in the whole contract which lead us to the conclusion that it was not intended that all the rights of the defendant in the land and in profits should absolutely cease on a given date. It was evidently a contract designed to aid the defendant in its embarrassment, and incidentally to secure to the Boyd Company the payment of a large indebtedness. There runs through the entire contract the thought that there is to be a division of profits after all the lands have been sold; that the agreement was made for the best interests of all the parties; that the City Land Company was to be liberally paid for its services; that very liberal privileges of extending the agreement were given to the City Land Company. It seems quite evident that although it may have been hoped that all the lands could be sold within two years this was uncertain, and it was recited that disbursements were to be provided for through the years. 1918 and 1919. — 569 — It is argued that the defendant had no right to an extension of the contract beyond the two-year period. The situation did not call for extension so far as it was concerned. Defendant had given over the control of the property and could only await the acts of the City Land Company until the land was sold. Defendant had, it is true, two thirty-day periods for paying up the indebtedness, but in view of the complicated situation this seemed a privilege more nominal than real. The' privilege of extension might be very important to the City Land Company and its successor unless the theory should prevail that all rights of defendant in the land and property were summarily cut off by the termination clause. This clause, in connection with the other terms of the contract, is susceptible of several interpretations. The one given to it by respondent’s counsel seems inconsistent with the whole scope and meaning of the rest of the contract. It will be observed that, the clause is accompanied with no express words of forfeiture, and, even if it were, a court of equity would look upon the language with some disfavor. Counsel for defendant claim that the contract should not' be so construed as to cut off the rights of either party to the land and the profits until the contract was terminated by consent, or until the lands were sold and the profits, if any, accounted for. In the alternative, it is claimed that the City Land Company was merely an agent for the Boyd Company for the purpose of holding the deed in order that the Boyd Company might act as trustee of its own bond issue, and that the only effect of the termination clause was to put an end to the right of the City Land Company to sell the land. As another, alternative it is claimed that the whole transaction amounted to a mortgage and that in any event defendant is entitled to an accounting, and many cases are cited to that contention. There is no claim that the averments objected to are — 570 — redundant or scandalous under the statute, but it is urged that they are irrelevant. Allegations in a pleading should not be stricken out as irrelevant if there is serious doubt on the question. This is especially true in complicated cases where evidence of the acts and conduct of parties not necessarily stated in the pleadings may have a bearing in arriving at the real meaning of parties in their contracts or relations with each other. After hearing the evidence the trial court will have a better opportunity than we have for determining the legal effect of the contract, and for that reason we only decide that as we construe the contract and the pleadings the rights of the defendant in the land and in profits, if any, did not cease August 8, 1919. It may be added that preceding the averments stricken out there are other allegations of violation of the contract after August 8, 1919, of the same general character, although not so specific as those which were stricken out. If the allegations objected to had been omitted from the answer, and if on motion by plaintiff an order, had been made to make the pleading more definite and certain and these allegations had been added, they would have ■ been quite consistent with the other averments in the answer and counterclaim. We hold that the portions of the pleadings stricken out were not irrelevant. By the Court. — Order reversed, and cause remanded for further proceedings according to law.