Carpenter v. Smith

• Decision Date: 21 March 1986
• Docket Number: 79279,Docket Nos. 78377
• Citation: 383 N.W.2d 248,147 Mich.App. 560
• Parties: Rosemary J. CARPENTER, Personal Representative of the Estate of Henry Lang, Jr., Deceased, Plaintiff-Appellee, v. J.D. SMITH and Ina M. Smith, Defendants-Appellants. 147 Mich.App. 560, 383 N.W.2d 248
• Court: Court of Appeal of Michigan — District of US

Page 248

383 N.W.2d 248

Rosemary J. CARPENTER, Personal Representative of the Estate

of Henry Lang, Jr., Deceased, Plaintiff-Appellee, v. J.D. SMITH and Ina M. Smith, Defendants-Appellants.

Docket Nos. 78377, 79279.

147 Mich.App. 560, 383 N.W.2d 248

Court of Appeals of Michigan.

Submitted April 9, 1985.

Decided Dec. 16, 1985.

Released for Publication March 21, 1986.

[147 MICHAPP 562] Paul V. Gadola, Flint, for plaintiff-appellee.

Charles R. Cole, Flint, for defendants-appellants.

Before ROBERT B. BURNS, P.J., and SHEPHERD and JASPER ^*, JJ.

SHEPHERD, Judge.

Defendants appeal as of right from [147 MICHAPP 563] a judgment of foreclosure on a land contract. The court granted acceleration of the payments remaining on the contract. Defendants have filed a separate claim of appeal from the trial court's subsequent order confirming the foreclosure sale and from a deficiency judgment against defendants of $88,559.34. We affirm.

The deceased, Henry Lang, sold defendants certain real estate in Genesee County. The land contract shows a price of $88,000, with a $30,000 down payment and monthly installments of $500. Lang also sold his bar business (conducted on the same property) and equipment to defendant J.D. Smith for $80,000, with a $20,000 down payment. Lang accepted a promissory note of $60,000, payable in $600 monthly installments.

Later, the bar building and equipment burned. There was a fire insurance policy with coverage up to $120,000. The parties agreed that Lang would receive $44,000 from the insurance proceeds, to be credited against the balance on the promissory note. The note was cancelled and the remaining balance added to the balance under the land contract. Defendants agreed to an increase of the monthly payments to $800. They also agreed to reconstruct the bar building in a manner equivalent to its former condition. Defendants received $76,000 from the insurance proceeds.

Before trial, defendants stipulated that they had no intention of fulfilling any of their obligations under the agreement written after the fire. They had made no payments on the land contract and no repairs to the building. They also failed to pay the property taxes as required by the land contract. Defendants had stripped the property of valuable fixtures. The local authorities condemned the building. In addition, defendants entered into a contract to sell the liquor license.

[147 MICHAPP 564] Though the land contract contained no acceleration clause, the trial court granted acceleration of the remaining payments. The court concluded that, since defendants had evinced an intention to renounce the contract, "the doctrine of anticipatory breach [was] clearly applicable".

The court entered the judgment of foreclosure on April 9, 1984, and fixed April 13 as the time for payment. The sheriff posted notice of the foreclosure sale on April 10. Publication began on April 20 and continued once each week until May 25. The estate of Henry Lang purchased the property at the foreclosure sale on May 29, 1984, Mr. Lang having died. On June 18, 1984, the trial court entered the deficiency judgment against defendants, "jointly and severally".

Defendants raise four issues.

I. ACCELERATION OF PAYMENTS IN ABSENCE OF ACCELERATION CLAUSE.

Defendants argue that the trial court erred by granting acceleration of the payments in the absence of an acceleration clause. We conclude that the court properly applied the doctrine of anticipatory repudiation to this matter.

Ordinarily, the court lacks authority "to decree the entire amount due in the absence of an acceleration clause in the contract". Lutz v. Dutmer, 286 Mich. 467, 488, 282 N.W. 431 (1938), Benincasa v. Mihailovich, 31 Mich.App. 473, 478, 188 N.W.2d 136 (1971). But "where there has been an anticipatory breach of a contract by one party * * * the other party may treat the entire contract as broken and may sue immediately for the breach". 17 Am.Jur.2d, Contracts, Sec. 448, p. 910 (citations omitted). An unqualified refusal to perform enables the other party to sue immediately for future payments.[147 MICHAPP 565] Mott v. Penoyar, 153 Mich. 273, 276, 116 N.W. 1110 (1908), Obenauer v. Solomon, 151 Mich. 570, 576, 115 N.W. 696 (1908), Hosmer v. Wilson, 7 Mich. 294, 304, 74 Am.Dec. 716 (1859). "In ascertaining whether an anticipatory breach of a contract has been committed by a party, it is the intention manifested by his acts and words which controls, and not his secret intention." 17 Am.Jur.2d, supra, p. 911.

In this case, defendants' conduct shows an intention not to perform their contractual obligations. They made no payments and did not begin to reconstruct the building. They paid no property taxes and arranged to sell the liquor license. These actions amount to a complete renunciation of the contract. In addition, defendants stipulated that they had no intention to perform at any time in the future and chose to rely solely on the absence of an acceleration clause in the land contract.

In their reply brief, defendants cite Restatement Contracts, 2d, Sec. 243 for the proposition that the doctrine of anticipatory repudiation does not apply where the only remaining obligation is payment of money in installments. This rule may also be found in Jackson v. American Can Co., 485 F.Supp. 370 (W.D.Mich., 1980). Defendants cannot find refuge there, however, since their contractual obligations include restoration of the building in addition to the monthly payments.

II. ADEQUACY OF NOTICE AND PUBLICATION.

Defendants argue that the notice of foreclosure sale was inadequate under M.C.L. Sec. 600.6052; M.S.A. Sec. 27A.6052:

"Prior to the sale of any real estate taken on execution, notice of the time and place of holding the sale, [147 MICHAPP 566] the notice to describe the real estate with common certainty by setting forth the name or number of the township in which it is located, and the number of the lot, or by other appropriate description of the premises shall be given as follows:

"(1) A written or printed notice shall be displayed in 3 public places in the township or city where the real estate is to be sold at least 6 weeks prior to the sale, and if the sale is in a township or city other than that wherein the premises are located, notice shall also be displayed in 3 public places in the township or city in which the premises are located.

"(2) A copy of the notice shall be published once each week for the 6 successive weeks prior to the sale in a newspaper printed in the county in which the premises are located * * *." (Emphasis added.)

Also noteworthy is GCR 1963, 745.3:

"Sales under judgments of foreclosure shall not be ordered on less than 6 full weeks or 42 days' notice, and publication shall not commence until the time fixed by the judgment for payment has expired * * *."

See also, MCR 3.410(C).

Each of these provisions requires a full 42 days notice of some sort. Plaintiff contends that notice was sufficient because the sheriff posted a written notice on April 10, 49 days before the sale, and a copy was published once during each of the six weeks in advance of the sale. Defendants argue that publication, as well as posting, must begin at least six full weeks before the sale.

We hold that publication was sufficient in this case because it was made once in each of the six weeks prior to the sale and there were more than 42 days notice by posting. The statute and court rule each allow for a distinction between posting and publication. The statute clearly requires a full six weeks notice by posting, but does not clearly [147 MICHAPP 567] require the same of publication. M.C.L. Sec. 600.6052. The Legislature could have easily used the same language with respect to publication as with the posting requirement, but it did not. The court rule is no clearer. It requires "6 full weeks" notice, but discloses nothing as to the method.

The courts of other jurisdictions are split in their resolutions of this precise issue:

"The statutes regarding foreclosure sales usually specify the length of time for which a notice thereof must be given or published. Where notice of a mortgage sale is required to be given for a certain number of weeks successively, there is a difference of judicial opinion as to whether or not 7 days must be given as a week's notice. In some jurisdictions such a provision is considered to be complied with if notice is published once in each week for that number of weeks, although the number of days from the first publication to the day of sale is not equal to the number of days in that number of weeks. But other authorities take the view that a publication for a certain number of weeks must be made for as many days before the day of sale as there are days in the number of weeks required." 55 Am.Jur.2d, Mortgages, Sec. 638, p. 599 (citations omitted).

A statement in 16 Michigan Law & Practice, Mortgages, Sec. 313, p. 543, supports defendants' interpretation of the statute, but is itself supported only by reference to a single, ancient circuit court opinion. Goodwin v. Burns, 1 Mich.NP 228 (1870), aff'd, 21 Mich. 211 (1870). In Wesbrook Lane Realty Corp. v. Pokorny, 250 Mich. 548, 550, 231 N.W. 66 (1930), the Supreme Court held that, in calculating the number of days of notice given, the first day of publication does not count but the date of sale should be counted. The Court appeared to assume that the first publication must be made at least 42 days before the sale. However, the Court's opinion does not disclose whether in that case, as here, [147 MICHAPP 568] notice was posted well in advance of the initial publication. We are satisfied that a reasonable interpretation of the statute makes publication sufficient if it occurs one time in each of the six weeks prior to sale even if 42 days do not elapse between the first publication and the date of sale--provided that the 42 day notice requirement has been met.

Although we hold that there was sufficient notice in ...