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Kovarik v. Vesely - 3 Wis. 2d 573, 89 N.W.2d 279 (1958)

Rule:

The general rule is that the memorandum required by a statute of frauds may consist of several writings. It is also not essential to the validity of such memorandum that a particular writing shall have been made with the intention that it constitute a memorandum of the contract.

Facts:

The Kovariks, a husband and a wife, offered to purchase defendants’ land, such offer and acceptance being incorporated in one document. The Kovariks paid $4000 as down payment, but the Kovariks’ offer to purchase was contingent upon the buyers’ ability to obtain a mortgage from Fort Atkinson Savings & Loan Association. However, after the bank rejected the Kovariks’ loan application, the Kovariks demanded return of the $4000 down payment. The defendants refused, and asserted that they were willing to take back a first mortgage on the same terms and conditions as the Fort Atkinson Savings & Loan Association. The Kovariks then instituted an action to recover the down payment and the defendants counterclaimed for specific performance. The trial court ruled in favor of the defendants, holding that the defendants’ offer to take back a mortgage removed the loan contingency and entered an order for specific performance. The Kovariks sought review contending that the sale contract failed to comply with the statute of frauds, Wis. Stat. § 240.08, because the terms of the mortgage were not set forth in the contract.

Issue:

Did the sale contract fail to comply with the statute of frauds, Wis. Stat. § 240.08?

Answer:

No

Conclusion:

The Court held that the loan application to the bank was a separate writing, which was to be construed together with the original contract, and that together they constituted a sufficient memorandum to comply with § 240.08. The fact that the buyers' mortgage application came into existence subsequent to the contract's date was immaterial. The trial court's finding that the contingency clause of the contract was removed by the sellers' offer to accept a note on the same terms as the sought bank loan was not against the great weight and clear preponderance of the evidence. Hence, the Court affirmed the decision of the trial court.

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