Aetna Mortg. Co. v. Dembs

• Decision Date: 23 October 1968
• Docket Number: No. 1,Docket No. 4297,1
• Citation: 13 Mich.App. 686,164 N.W.2d 771
• Parties: AETNA MORTGAGE COMPANY, a Michigan corporation, Plaintiff-Appellant, v. Manuel DEMBS, Legion Homes, Inc., a Michigan corporation, Defendants, and Detroit Federal Savings and Loan Association, a corporation, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 771

164 N.W.2d 771

13 Mich.App. 686

AETNA MORTGAGE COMPANY, a Michigan corporation, Plaintiff-Appellant, v. Manuel DEMBS, Legion Homes, Inc., a Michigan corporation, Defendants, and Detroit Federal Savings and Loan Association, a corporation,

Defendant-Appellee.

Docket No. 4297.

Court of Appeals of Michigan, Division No. 1.

Oct. 23, 1968.

Rehearing Denied Nov. 26, 1968.

Released for Publication Feb. 25, 1969.

Louis Rosenzweig, Rosenzweig & Goldman, Detroit, for appellant.

Eli Friedman, Detroit, for Dembs and Legion.

Butzel, Levin, Winston & Quint, Detroit, for Detroit Fed'l.

Before HOLBROOK, P.J., and LEVIN and PRATT ^*, JJ.

HOLBROOK, Presiding Judge.

Plaintiff, Aetna Mortgage Co., brought suit in the Wayne county circuit court against Legion Homes, Inc. (hereinafter 'Legion'), Manuel Dembs (principal shareholder of Legion), and Detroit Federal Savings and Loan Association (hereinafter 'Detroit Federal') seeking to recover a commission allegedly promised by defendants for plaintiff's services as a broker in connection with a mortgage loan made by Detroit Federal Legion and Dembs.

The pertinent facts are as follows: Plaintiff's officer, Isaiah Shafir, was contacted by Leo Sklar who purportedly represented defendants Legion and Dembs in attempting to obtain financing for the construction of a condominium and apartment complex. A memorandum in writing was given Shafir by Sklar indicating that a 1% Brokerage fee would be paid plaintiff for obtaining the necessary financing. Shafir took the application for financing to defendant Detroit Federal. Thereafter, on December 22, 1966, the 3 defendants executed a loan agreement whereby Detroit Federal agreed to loan defendants Legion and Dembs $3,476,000. A mortgage was executed by Legion and a guaranty agreement was executed by Dembs in favor of Detroit Federal. Detroit Federal immediately advanced $650,000, withholding however, $104,301, 3% Of the loan, as a service charge. Plaintiff, learning of the completion of the loan, demanded from defendants 1% Commission, $34,760, the same day, December 22, 1966. The demand was refused and plaintiff commenced suit.

Plaintiff filed in addition to an original complaint 2 amended complaints as to defendant Detroit Federal, but for all intents and purposes they can all be dealt with together as follows: Count 1, an agreement by Detroit Federal to pay plaintiff 1% Of the total loan made to defendants Legion and Dembs; count 2, an agreement by Detroit Federal to pay plaintiff a 1% 'finders fee' for mortgage applications brought to and accepted by it; and count 3, an agreement by Detroit Federal wherein plaintiff specifically alleged for the first time that Detroit Federal 'acting as a broker in placing the loan and charging a commission therefor * * * agreed * * * to share such commission by paying to the plaintiff 1% Of the amount of such loan.'

We are not concerned on this appeal with the denial of summary judgment as to defendants Legion and Dembs under GCR 1963, 117. Defendant Detroit Federal moved for accelerated judgment as to counts 1 and 2 and for summary judgment as to count 3. No appeal has been taken as to the other counts in plaintiff's complaint.

The trial judge granted accelerated judgment as to counts 1 and 2 because of the statute of frauds and granted summary judgment as to count 3 after an affidavit had been filed by one of the officers of defendant Detroit Federal setting forth the fact that it was not a broker nor had it acted as a broker in the transaction in question. Plaintiff failed to file a counter-affidavit and the trial judge granted summary judgment determining that defendant Detroit Federal was not a broker and therefore the transaction was subject to the statute of frauds. ^*

Plaintiff, in its 'statement of questions involved', presents to this Court the following single question for review:

'Does an oral agreement to share a commission made by a mortgagee (defendant Detroit Federal) with a broker (plaintiff), for the placement of a mortgage, come within the provisions of the statute of frauds, for the sale of an interest in real estate?'

This requires an answer to the question, was the alleged oral agreement between Detroit Federal and plaintiff to pay a fee for services in arranging a mortgage on real estate void under the statute of frauds, C.L.1948, § 566. 132 subd. (5) (Stat.Ann.1953 Rev. § 26.922 subd. (5))?

The primary law of the statute of frauds as to sales of land or interests therein is C.L.1948, § 566.108 (Stat.Ann.1953 Rev. § 26.908) and provides in part as follows:

'Every contract * * * for the sale of any lands, or any interest in lands, shall be void, unless the contract * * * thereof be in writing, and signed by the party by whom the * * * sale is to be made.'

The early case of Wardell v. Williams (1886), 62 Mich. 50, 60, 28 N.W. 796, 800, in construing How Stat. § 6181, presently C.L.1948, § 566.108 (Stat.Ann.1953 Rev. § 26.908), ruled as follows:

'An agreement to execute a mortgage upon real estate is an agreement concerning interests in lands, which, to be valid, must be in writing, or some note or memorandum thereof signed by ...