Bedford v. Tetzlaff, 36

• Decision Date: 27 November 1953
• Docket Number: No. 36,36
• Parties: BEDFORD v. TETZLAFF et al.
• Court: Michigan Supreme Court

Page 60

61 N.W.2d 60

338 Mich. 102

BEDFORD v. TETZLAFF et al.

No. 36.

Supreme Court of Michigan.

Nov. 27, 1953.

Henry E. Rice, Detroit, for appellants Tetzlaff.

Clark C. Coulter, Detroit, Victor H. Hampton, Detroit, of counsel, for appellee.

Before the Entire Bench.

ADAMS, Justice.

Arline Bedford, plaintiff and appellee, seeks to foreclose a land contract in chancery. In her bill of complaint she alleges a default by defendants and declares the full amount of principal and interest due in accord with an acceleration clause in the contract.

The decree of the lower court ordered the defendants to pay to plaintiff the entire principal due under the contract, together with accrued interest and unpaid taxes and insurance. In the event of nonpayment, the decree provided that the premises should be sold and the proceeds of sale applied on the amount found due. No period of redemption after sale was provided.

Paul J. Tetzlaff and Nellie C. Tetzlaff, defendants and appellants, appeal from the decree claiming that the lower court was in error in not requiring plaintiff to give prior notice of her election to declare the full amount of principal due under the contract and in failing to provide a period of redemption after the sale of the property.

On May 15, 1946, the plaintiff and her husband, now deceased, sold certain real estate in Charlevoix, Michigan, on land contract to defendants Jack and Edith Glick and Charles and Zelda Levitt. The sale price was $22,000, with $5,000 paid in cash and the balance of $17,000 payable over a peiod of years with not less than $1,000 principal due on October 1st of each year. Payments of principal and interest were regularly and promptly made through the year 1948. The 1949 payment was delayed nearly two months and the 1950 payment was late by approximately six weeks. In 1950 taxes assessed against the property and premiums on insurance covering the buildings were not paid and remained unpaid through 1951 in violation of the purchasers' covenants in the land contract.

On July 18, 1951, defendants Tetzlaff became the owners by assignment of the land contract purchasers' interest with knowledge that the taxes and insurance premiums were in arrears. Shortly afterwards they suggested to plaintiff that they would be interested in paying the full amount due under the contract if they were granted a discount. Plaintiff, however, gave no indication that she would accept less than the full amount and on September 10, 1951, counsel for the defendants Tetzlaff wrote the following letter to the plaintiff.

'Paul J. Tetzlaff and Nellie C. Tetzlaff, his wife, who recently purchased the Pine River Hotel by assignment of purchasers' interest in the land contract, have requested I send to you copy of their assignment, together with a copy of the assignment from the original vendees, the Glicks and Levitts, to Murl Dwortson and Geraldine Dwortson, his wife, which copies are enclosed herewith.

'The Tetzlaffs desire me to inform you that the October 1st, 1951, payment will be timely made, and that the past due taxes and insurance premiums will likewise be paid on or before October 1st, 1951.'

Defendants failed to make the October 1st payment and on October 12, 1951, plaintiff filed her bill of complaint to foreclose the land contract. In the bill of complaint she declared the entire balance of principal due. A decree of foreclosure was entered on August 1, 1952, decreeing the sum of $15,148.65 due the plaintiff from the defendants, ordering the defendants to pay said sum on or before August 30 and, in default of such payment, decreeing that the premises be sold at public sale under the direction of the circuit court commissioner at any time after August 30.

Defendants contend on appeal that it is inequitable to permit the plaintiff to accelerate the payments due under the contract without giving notice of her intention to accelerate prior to the institution of the chancery action. They point out that the bill of complaint in which plaintiff made her election to declare the full amount due was filed only 12 days after the payment of principal and interest for the year 1951 became due under the terms of the contract and that during the preceding months defendants had attempted to pay off the contract through a compromise settlement of the amount owed. They contend that because they were, to a degree, lulled into a sense of security during such negotiations, it would be inequitable to permit plaintiff to declare the full amount of principal due within the brief period of their default.

There are, however, other circumstances to be considered. A substantial amount of taxes and insurance premiums had become due and remained unpaid for the greater portion of a year preceding the commencement of suit. Defendants Tetzlaff acquired the purchasers' interest in the premises knowing of such default and subsequently advised plaintiff that the items would be promptly paid. Although the defendants suggested to plaintiff that the full amount due on contract would be paid if a discount were granted to them, there is nothing in the record which in any way...