M & D Robinson Co. v. Dunitz

• Decision Date: 25 June 1968
• Docket Number: Docket No. 2873,No. 1,1
• Citation: 162 N.W.2d 318,12 Mich.App. 5
• Parties: M & D ROBINSON COMPANY, a Michigan corporation, Plaintiff-Appellee, Lawyers Title Insurance Corporation, a Virginia corporation, Intervening Plaintiff-Appellee, v. Seymour DUNITZ and Ritz N. Dunitz, his wife, Defendants-Appellants
• Court: Court of Appeal of Michigan — District of US

Page 318

162 N.W.2d 318

12 Mich.App. 5

M & D ROBINSON COMPANY, a Michigan corporation, Plaintiff-Appellee Lawyers Title Insurance Corporation, a Virginia corporation Intervening Plaintiff-Appellee, v. Seymour DUNITZ and Ritz N. Dunitz, his wife, Defendants-Appellants.

Docket No. 2873.

Court of Appeals of Michigan, Division No. 1.

June 25, 1968.

Leave to Appeal Denied Sept. 24, 1968.

Released for Publication Nov. 22, 1968.

Irving M. Stahl, Detroit, for defendants-appellants.

Milton M. Maddin, Detroit, for plaintiff appellee; John C. Cook, Detroit, of counsel for Lawyers Title.

Before LESINSKI, C.J., and GILLIS and KAVANAGH, JJ.

GILLIS, Judge.

This is an action for specific performance of an agreement to enter into a land contract and of a second agreement to assign the land contract vendor's interest as security for a mortgage. The land contract purchase agreement was signed only by defendant Seymour Dunitz as vendor. Rita Dunitz, the codefendant herein and wife of Seymour Dunitz, signed the mortgage agreement but at the time of trial had not signed the purchased agreement. Defendants appeal from a judgment of specific performance of both agreements.

Thorough the tangled web of dealings and promises leading up to this lawsuit, we are asked to decide whether specific performance is proper. The main defense is that Mrs. Dunitz did not release her inchoate dower interest in the lands of her spouse. ¹

Sitting without a jury, the trial judge made the following findings of fact: Seymour Dunitz was the owner of an undivided 1/2 interest in certain vacant land situated in Oakland county, Michigan. On August 10, 1963, Mr. Dunitz entered into an agreement with the plaintiff, M & D Robinson Company, whereby be agreed to convey his undivided 1/2 interest in the land. The agreement called for sale to Robinson by land contract for the total price of $55,000. Mr. Dunitz and the Robinson representatives signed the agreement and at the same time Robinson tendered $6,000 (not to be credited against the purchase price) as consideration for the agreement. The tender was accepted by Mr. Dunitz, and has been retained by him up to, and including, the time of trial. Robinson has paid the taxes on the property since the date of the purchase agreement.

Mr. Dunitz and his cotenant in the property became indebted to the intervening plaintiff, Lawyers Title Insurance Corporation, subsequent to the above purchase agreement, but before execution of the land contract. Lawyers Title made an arrangement with Dunitz and the cotenant by which they agreed to execute a mortgage on the above parcel in favor of Lawyers Title and thereby save default on the obligation.

As a condition of accepting the mortgage on the vacant land as collateral, Lawyers Title informed Dunitz and the cotenant that they would also be required to furnish additional collateral. At this time Dunitz informed Lawyers Title of his agreement to execute the land contract with Robinson, and it was agreed that Lawyers Title would take an assignment of Dunitz' vendor's interest under the contract as the additional collateral they required. The terms of the agreement with Lawyers Title were reduced to writing on October 31, 1963 and stated in the indicated paragraphs that:

'6. Mr. Dunitz has heretofore executed a preliminary sales agreement for the sale on land contract of his undivided 1/2 interest in the mortgaged land, a copy of which is attached hereto. * * *

'7. Mr. Dunitz and Mrs. Dunitz hereby assign all their right, title, and interest in said preliminary sales agreement to Lawyer's Title * * *.

'8. (Land contract to be executed in January, 1964).

'9. Mr. Dunitz and Mrs. Dunitz shall, at the closing of said land contract, execute and deliver to Lawyers Title an assignment of the vendor's interest in said land contract.'

The agreement was signed by Mr. Dunitz and his contenant as well as by Lawyers Title. Just beneath the signatures the following addendum appears:

'Rita N. Dunitz consents to the foregoing agreement and agrees, for a valuable consideration, to the foregoing insofar as her agreement may be necessary and further agrees to join with her husband in the execution of any and all instruments called for by the above agreement.

/s/ Rita N. Dunitz

Rita N. Dunitz'

After numerous unsuccessful attempts on the part of Robinson to consummate the execution of the land contract, this action was brought. Robinson sued for specific performance of the purchase agreement. Lawyers Title intervened and was joined as party plaintiff asking specific performance of the purchase agreement as well as of the assignment to them of the ensuing land contract.

Defendants raise several issues on this appeal which deal with one or both of the aforementioned agreements. For clarity's sake we shall discuss these issues under appropriate groupings.

1. Enforceability of the Purchase Agreement

The trial judge, in his written opinion, ruled that the purchase agreement signed by Mr. Dunitz alone would be specifically enforceable, Mrs. Dunitz' inchoate dower rights notwithstanding. It was found that Mr. Dunitz, a man experienced in real estate transactions, knowledgeably signed the agreement and received valuable consideration in return. The trial judge reasoned that while Mrs. Dunitz could not be compelled to convey her dower interest, the agreement was a proper one for the award of specific performance with damages for the cloud on title represented by the inchoate dower rights. He ruled that the cloud on the title was properly compensable based on Mrs. Dunitz' life expectancy and that the agreement is enforceable at the election of the proposed land contract vendee.

Insofar as the enforceability of the purchase agreement is concerned, defendants assert that the terms of the agreement did not provide mutual equitable remedies for buyer and seller, and that the agreement is thus rendered unenforceable for want of mutuality of remedy. The terms of the agreement relied upon by defendants in support of this contention are:

'In the event of default by the purchaser hereunder, the seller may declare a forfeiture hereunder and retain the deposit as liquidated damages, as seller's exclusive remedy.

'In the event of default by the seller hereunder, the purchaser may, at his option, elect to enforce the terms hereof or demand, and be entitled to, an immediate refund of his entire deposit in full termination of this agreement.'

Defendants cite authority purportedly in support of the proposition that the court should not use its discretionary powers of specific performance in those cases where mutuality of remedy is lacking.

We agree with the trial judge that 'the rule is not properly stated in terms of mutuality of remedy, but that in the more modern version there need simply be a mutuality of obligation to the extent that both sides to the agreement have at least some remedy against the other in case of a breach of the contract.' This position is supported by Reo Motor Car Co. v. Young (1920), 209 Mich. 578, 177 N.W. 249, cited by plaintiffs. The rule has more recently been stated in Reinink v. Van Loozenoord (1963), 370 Mich. 121, 121 N.W.2d 689, pp. 124, 125, 121 N.W.2d p. 691, wherein the Court states:

'In considering whether a contract for the sale of land may be decreed to be specifically enforced, a distinction should be made between mutuality of remedy and mutuality of obligation. The early view was that specific performance would not be available to one party unless that remedy was also available to the other party. 49 Am.Jur., Specific Performance, § 35. In Reo Motor Car Co. v. Young, 209 Mich. 578, 177 N.W. 249, that rule was rejected by this Court as presently having little force.

'The modern view on mutuality of remedy is set out in 49 Am.Jur., Specific Performance, § 35, as follows:

"According to the reasoning of modern authorities, the fact that the remedy of specific performance is not available to one party is not a sufficient reason for refusing it to the other party. * * * Following this view it has been held that the rule of mutuality is satisfied if the decree of specific performance operates effectively against both parties and gives to each the benefit of a mutual obligation. It is where the element of mutual obligation is lacking that equity will refuse to decree specific performance on the ground of want of mutuality of remedy. Thus, specific performance will not be granted where the complainant may at his option refuse to carry it out. But the mere fact that remedy by way of specific performance is not available to one party is not of itself sufficient to justify refusal of a decree.'

'2 Restatement of the Law of Contracts, § 372, pp. 677, 678, states:

"(1) The fact that the remedy of specific enforcement is not...