Bleakley v. Oakwayne Farms Co., 50.

• Decision Date: 05 December 1933
• Docket Number: No. 50.,50.
• Citation: 251 N.W. 354,265 Mich. 268
• Parties: BLEAKLEY v. OAKWAYNE FARMS CO. et al.
• Court: Michigan Supreme Court

265 Mich. 268

251 N.W. 354

BLEAKLEY

v.OAKWAYNE FARMS CO. et al.

No. 50.

Supreme Court of Michigan.

Dec. 5, 1933.

Appeal from Circuit Court, Oakland County, in Chancery; Glenn C. Gillespie, Judge.

Suit by Lizzie Bleakley against Oakwayne Farms Company and Troyoak Land Company, to foreclose a mortgage. Decree of foreclosure was granted, and from a supplemental decree fixing the minimum price at which the property could be sold, and granting other relief, plaintiff appeals.

Supplemental decree set aside, original decree re-established, and cause remanded.

Argued before the Entire Bench.

Patterson & Patterson, of Pontiac, for appellant.

Robert E. Barber, of Detroit (Austin & Newman, of Detroit, of counsel), for appellees.

POTTER, Justice.

Upon a bill to foreclose a real estate mortgage a final decree was entered October 24, 1932, for $48,000 principal and $7,318.80 interest. Troyoak Land Company purchased the premises of the Oakwayne Farms Company and assumed and agreed to pay the mortgage. Defendants were by decree to pay the mortgage, interest, and costs on or before November 4, 1932, in default of which the lands were to be sold at circuit court commissioner's sale, purchasers be let into possession, and decree for deficiency, if the sale price was insufficient to satisfy the mortgage, interest, and costs, was authorized. April 21, 1933, defendants filed a petition stating a commissioner's sale of the premises was set for April 22, 1933; that plaintiff intended to bid in the property at a nominal price, grossly inadequate and far below the real value of the property; there was a complete absence of market for real estate, no competitive bidding at sales, and no method of determining the true value of the property; and it was necessary for the court to hold a hearing, take testimony, and determine the value of the real estate and fix a minimum upset price at which the property could be sold at commissioner's sale; that if plaintiff was allowed to bid in the property at a grossly inadequate price and take deficiency decree, a grave injustice would be perpetrated. They asked a date be set for hearing that testimony to determine the minimum price at which the property be sold, be taken, the sale be adjourned pending the hearing of the petition, and the decree be amended to insert therein a minimum upset price at which the property could be sold, and if such property was sold, such minimum selling price in any event be credited as payment on the mortgage, and for other relief. The sale was adjourned. The petition was heard, and May 18, 1933, several weeks before the effective date of Act No. 229, Public Acts 1933, the relief prayed for by defendants was granted. Plaintiff appeals.

The trial court found the allegations in defendants' petition were true; the fair market value of the property should be at least the unpaid principal balance due on said mortgage at the approximate amount of $320 an acre, or a total of $48,000, exclusive of unpaid taxes, and ordered:

‘(a) ‘That said lands, covered by said mortgage and as described in the amended bill of complaint and decree should not be sold for less than the sum of $48,000.00, exclusive of unpaid taxes.'

(b) ‘If it shall appear from the commissioner's report that such price of $48,000.00, exclusive of unpaid taxes, cannot be realized, the commissioner is hereby directed to adjourn said sale for a period of six months, unless sooner ordered by the court, upon payment by the defendants of all costs of the commissioner in connection with such sale and adjournment.'

‘(c) ‘Plaintiff may apply to this court for an order for the appointment of a receiver to take charge of said mortgaged premises and collect the rents and income therefrom, and after deducting reasonable expenses of said receivership and the maintenance of said mortgaged premises, to apply the remainder upon the indebtedness secured by said mortgage.'

‘(d) ‘Plaintiff shall have eight days from the date of this order within which to accept or reject the above determination of a minimum price of sale; provided that her failure to file and serve written rejection thereof within said time shall be deemed an acceptance of such determination.'

(e) ‘Upon such commissioner's sale being completed, not less than said sum of $48,000.00, exclusive of unpaid taxes, or such other sum as the court may determine as the minimum selling price, as hereinbefore provided, shall be credited on the indebtedness owing by these defendants as heretofore determined in the decree in this cause.'

(f) Nothing was said of additional taxes to accrue, insurance premiums to be paid, and interest charges to accumulate.

(g) As a condition precedent to an authorized receivership, the plaintiff must apply therefor, and the cost and expense of collecting the rents, income, and profits therefrom and deducting the reasonable expenses of the receivership and the maintenance of the premises, must be borne by the mortgagee.

The premises consist of a farm of 150 acres, and during the mania for speculation in real estate which has...