Summary
explaining that a contract may be effective even though it is not signed by parties
Summary of this case from Carroll v. Stryker Corp..Opinion
No. 221.
Argued October 8, 1970. —
Decided November 6, 1970.
APPEAL from an order of the circuit court for Milwaukee county: JAMES W. RICE, County Judge of Monroe County, Presiding. Affirmed.
For the appellant there were briefs by Clyde E. Sheets and Frank Hiller, all of Milwaukee, and oral argument by Mr. Sheets.
For the respondents there was a brief by E. H. Snyder and Allan Polacheck, both of Milwaukee, and oral argument by Mr. Snyder.
This is an appeal from an order overruling a demurrer. The demurrer, for failure to state a cause of action, is by the plaintiff to the complaint of intervening defendants.
The underlying action is by Chudnow Construction Corporation, hereinafter referred to as Chudnow, against Commercial Discount Corporation, hereinafter referred to as Commercial. Chudnow alleges that Commercial is the assignee of Great Lakes Homes, Inc.; and that, as such assignee, it became obligated to Chudnow on a contract previously made between Great Lakes and Chudnow. Commercial answered the complaint, but affirmatively alleged an agreement between Great Lakes and Chudnow which set forth the basis for settling the accounts. The defendants, Rod G. Brunton, Sr., and Rod G. Brunton, Jr., on their own motion have intervened, claiming that the agreement settling the accounts between Great Lakes and Chudnow provided that they be paid a previously earned sum of $7,238.26. They rely upon Exhibit A, which is appended to the answer of Commercial, and which is incorporated by reference in the Brunton complaint.
Exhibit A provides that certain balances, listed on the writing, form the basis for settlement of accounts among plaintiff Chudnow, Great Lakes, Commercial, Rod G. Brunton, Sr., and Rod G. Brunton, Jr. It then recites that Great Lakes agrees to deliver six loads of materials to certain jobsites and to honor legitimate and reasonable charges for errors of the manufacturer, damaged materials and defective materials. It then reads as follows:
"Great Lakes Homes further agrees to the following method of payment of the account.
"On Wednesday September 21, 1966, contingent on delivery of the above mentioned 6 loads of materials, satisfactory evidence of valid assignments of Great Lakes Homes accounts receivable to Commercial Discount Corporation, and properly executed lien waivers from Great Lakes Homes, Commercial Discount Corporation, and Rod G. Brunton, Jr., and R. G. Brunton, Sr., the sum of $57,238.86, said amount to be payable by issue of a check payable to Great Lakes Homes, Commercial Discount Corporation, and R. G. Brunton, Sr., and requiring the endorsement of all three parties to whom the check is payable. Great Lakes Homes and Commercial Discount Corporation agree to pay to R. G. Brunton, Sr., and Rod G. Brunton, Jr., the sum of $7,238.86, for services rendered and for endorsement of the check."
The document, Exhibit A, is unsigned.
Chudnow demurred to the complaint of the Bruntons, Jr., and Sr., on several grounds, including its alleged failure to state a cause of action. The demurrer was overruled without opinion. On appeal the only ground asserted is the failure to state a cause of action.
A demurrer admits the truth of all the allegations of fact in the complaint. Interstate Fire Casualty Co. v. Milwaukee (1970), 45 Wis.2d 331, 333, 173 N.W.2d 187. A complaint should be liberally construed upon demurrer, and sustained when it expressly or by inference states any cause of action. Rogers v. Oconomowoc (1962), 16 Wis.2d 621, 632, 115 N.W.2d 635; sec. 263.27, Stats.
Demurrant contends that the writing, Exhibit A, is not a legally binding agreement because no signatures appear upon it and there is no allegation that it was signed. Demurrant does not raise the statute of frauds and specifically disclaims that statute as the basis for its attack. It merely asserts that a written agreement cannot be effective unless it is signed by the parties.
The law is to the contrary:
"So far as the common law is concerned, the making of a valid contract requires . . . no signature unless the parties have made them necessary at the time they express their assent and as a condition modifying that assent." 1 Corbin, Contracts, p. 114, sec. 31.
In Albright v. Stegeman Motor Car Co. (1919), 168 Wis. 557, 560, 170 N.W. 951, this court followed the general rule holding:
"It is quite fundamental that parties may become bound by the terms of a contract even though they do not sign it, where their intention to do so is otherwise indicated."
In the instant case the allegation that the intervening defendants are parties to the written agreement, and the inferential statement that the other parties named in the document are bound by it, is sufficient under our liberal rules of pleading to allege the existence of an agreement. Whether the proof at trial will sustain the intervenor's contention that an agreement was intended even in the absence of signatures is, of course, another question, but the allegations of the complaint are sufficient to withstand attack on demurrer.
Demurrant also contends that a reading of Exhibit A fails to reveal any promise to the Bruntons. The complaint specifically alleged a promise by Chudnow to issue a check in the sum of $57,238.86 to Rod G. Brunton, Sr., Great Lakes and Commercial, and alleges that the sum of $7,238.86, the amount claimed in intervenors' complaint, and obviously a portion of the larger figure, shall be paid over to Rod G. Brunton, Sr., and Rod G. Brunton, Jr. It is stated that the endorsement of a larger check is a consideration for the promise of Great Lakes and Commercial. It is apparent that this is but a part of the whole transaction.
A fair reading of the facts can lead only to the conclusion, on demurrer, that the transaction specifically spelled out a promise to Rod G. Brunton, Sr., and impliedly to Rod G. Brunton, Jr. The apparent reason for the separate promise by Great Lakes and Commercial was to assure that all parties obligated themselves to endorse the check by which Chudnow made payment of the agreed sum.
It is also argued that the agreement was without consideration in respect to any promise made by Chudnow to the Bruntons. It is contended that the only consideration for the plaintiff's promise was work the Bruntons had in the past performed for Great Lakes.
It is hornbook law that "`past consideration' is no consideration." 1A Corbin, Contracts, p. 275, sec. 210; 1 Williston, Contracts (3d ed.), pp. 620-624, sec. 142.
If the only consideration is for past services, then the agreement must fail; but we do not so interpret the contract. The purported agreement specifically provided that "properly executed lien waivers from Great Lakes Homes, Commercial Discount Corporation, and Rod G. Brunton, Jr., and R. G. Brunton, Sr." shall be delivered to the plaintiff, Chudnow.
Surely this clause constituted a promise by both the Bruntons in exchange for the promise of Chudnow. It is as much hornbook law that mutual promises are sufficient consideration as is the axiom that past consideration is no consideration. Thomsen v. Olson (1935), 219 Wis. 145, 151, 262 N.W. 601, states, "It is elementary that in executory contracts the promise of one party is a consideration for the promise of the other and validates the contract." See also: 1 Corbin, supra, pp. 611-614, sec. 142; 1 Williston, supra, pp. 385-396, sec. 103.
Plaintiff appears to contend that the waiver of liens by the Bruntons was a worthless promise, since they were merely salesmen and had no lien rights. Nowhere in the complaint do we find the assertion that the Bruntons were salesmen or any fact from which as a matter of law we could conclude that they had no lien rights.
On a demurrer the court cannot go beyond the complaint to test its sufficiency. Perhaps the facts will show the lien waiver was valueless. If so, Chudnow, if it relied upon the value of the waivers in making the agreement, simply made a bad bargain. However, since the waiver of the liens is made a part of the contract, it must be assumed that the promise had some value to Chudnow at the time it was made.
The demurrer was properly overruled.
By the Court. — Order affirmed.