Brenner v. Duncan, 70

• Decision Date: 16 May 1947
• Docket Number: No. 70,Jan. Term, 1947.,70
• Citation: 27 N.W.2d 320,318 Mich. 1
• Parties: BRENNER et al. v. DUNCAN et al.
• Court: Michigan Supreme Court

318 Mich. 1

27 N.W.2d 320

BRENNER et al.

v.DUNCAN et al.

No. 70, Jan. Term, 1947.

Supreme Court of Michigan.

May 16, 1947.

Appeal from Circuit Court, Wayne County, in Chancery; Guy A. Miller, judge.

Suit by Harry Brenner and another against Russell C. Duncan and others for specific performance of provision of lease giving plaintiff lessees first preference in event of sale. From an adverse judgment, plaintiffs appeal.

Reversed and remanded with directions.

Before the Entire Bench.

George Bashara and George E. Brand, both of Detroit, for plaintiffs and appellants.

Walter A. Kuck, of Detroit, for defendants and appellees.

DETHMERS, Justice.

In 1938 Burleigh Randall was the owner of a parcel of land one hundred feet in width, the west seventy-five feet of which are the subject matter of this litigation. During the pendency of a suit which ultimately resulted in entry of a judgment against him for approximately $10,000 he conveyed the entire parcel to his stepson and wife, the defendants Duncan; they later conveyed to defendant Helen K. Kraker, who thereafter became Randall's wife. The judgment creditors levied on the property and filed a creditors' bill claiming that all of said conveyances, apparently made without consideration, were in fraud of creditors.

The Duncans, while they held title, granted to plaintiffs a lease for a term of seven and one-half years, covering the west seventy-five feet of the premises for use as a produce market. The lease required plaintiffs to erect a building thereon for such purpose, which, at the end of the term, would belong to the lessors. Also contained in the lease was the following provision:

That in the event the land is to be sold, the tenant will be given first preference and allowed to purchase said land if the parties can agree on the price.'

Plaintiffs went into possession, constructed the building at a cost of about $3,000, have paid the rent as due and continue in possession, operating their business thereon.

With the entire one hundred foot parcel subject to the $10,000 levy and about to be lost for unpaid taxes amounting to almost $5,000, defendant Helen E. Randall sold it to the defendants Powers for $15,000, using the proceeds to pay said judgment and taxes, She made the sale without giving plaintiffs the first preference and allowing Plaintiffs brought this suit for specific performance. Plaintiffs brought this suit for specific performance.

After plaintiffs had discontinued as to the defendants Duncan the trial court heard the matter, held tht the option clause constituted a covenant running with the land so as to bind defendant Helen E. Randall and defendants Powers, but dismissed the bill on the grounds that, first, the covenant was too vague and indefinite to be specifically enforced because it fixed no price, and, second, that the condition of the option ‘in the event the land is to be sold’ never occurred because Helen E. Randall had never desired to sell the west seventy-five feet alone, but instead desired to sell the entire parcel in order to be able to realize the $15,000 required to pay the judgment and taxes. But the record fails to disclose that Helen E. Randall ever attempted to realize the $15,000 either from a possible sale of the west seventy-five feet alone or by separate sales of the two parcels. Never did she afford the plaintiffs an opportunity to buy either the west seventyfive feet or the entire one hundred feet for $15,000 or for any other figure whatsoever. She proceeded to sell to others in utter disregard of the plaintiffs and their rights under the option. Be that as it may, the fact remains that the seventy-five feet were sold and consequently the condition of the option ‘in the event the land is to be sold’ did occur. As for the objection that socalled ‘preference’ or ‘first refusal’ option clauses, which leave price to the future agreement of the parties, are void under the statute of frauds and unenforceable for vagueness, such objection is met when the optionor fixes a price at which he is willing to sell. The option, if adequate in other respects, thereupon becomes a definite offer, which, when accepted by the optionee, ripens into a mutually binding contract, specifically enforceable. Garelik v. Rennard, 116 Misc. 352, 190 N.Y.S. 371;Jurgensen v. Morris, 194 App.Div. 92, 185 N. Y.S. 386;Robinson Co. v. Drew, 83 N.H. 459, 144 A.67;Parker v. Murphy, 152 Va. 173, 146 S.E. 254. While the case turns on a different question, adherence to this view is also expressed by this court in Nu-Way Service Stations v. Vandenberg Brothers Oil Co., 283 Mich. 551, 278 N.W. 683.

D...