Chappus v. Lucke

• Decision Date: 29 March 1929
• Docket Number: No. 110.,110.
• Citation: 246 Mich. 272,224 N.W. 432
• Parties: CHAPPUS v. LUCKE et al.
• Court: Michigan Supreme Court

246 Mich. 272

224 N.W. 432

CHAPPUS

v.LUCKE et al.

No. 110.

Supreme Court of Michigan.

March 29, 1929.

Appeal from Circuit Court, Monroe County, in Chancery; Jesse H. Root, Judge.

Suit by Samuel Chappus against Ralph A. Lucke and Elmina R. Lucke, trustees under the last will and testament of Jacob J. Lucke, deceased, and others. From a decree of dismissal, plaintiff appeals. Affirmed.

Argued before the Entire Bench, except CLARK, J.Clark, Klein, Ferris & Cook, of Detroit, and George S. Wright, of Monroe, for appellant.

Golden & Nadeau, of Monroe, for appellees.

FEAD, J.

In the will of Jacob J. Lucke, who died January 1, 1925, a resident of Ohio, defendants, his children, were named as executors and also trustees. The estate was devised to them as trustees, in trust to pay their mother $3,500 per year for her lifetime, out of income if possible and out of principal if necessary. At her death, defendants are to take the residue. The estate was immediately probated in Ohio, administered; defendants were appointed trustees on February 18, 1926, and duly qualified as such. There being lands in Michigan, the will was admitted to probate in Monroe county, and defendants qualified as executors on April 28, 1925. As executors, they had no power to sell real estate except under special order of the probate court. They have never qualified as trustees in this state.

August 27, 1925, defendants, as trustees, contracted to sell 160 acres of land in Monroe county to plaintiff for $22,000, of which $7,000 was paid down, deferred payments to be $1,000 or more annually, with interest. The title was defective and defendants contracted to immediately institute action to quiet title, and, in the event it was not quieted within six months, plaintiff could take action to that end at defendants' expense. Defendants instituted suit as executors in December, 1925, and had decree quieting title in April, 1926.

Working with plaintiff in the transaction, and continuing to represent him after the contract was executed, was J. A. Marentett, of the Marentette Realty Company. Before the sale they had an abstract and opinion of an attorney, outlining defects in the title and calling attention to the necessity for probate of the estate in Michigan and assignment of residue to defendants as trustees before their title could be approved. When the contract was executed, plaintiff knew defendants had not qualified as trustees. He accepted the contract upon trust that defendants would complete it after their appointment. The deal was conducted with Ralph A. Lucke, who, upon a suggestion to that effect, refused to enter into a personal contract for the sale. His sister merely signed the papers.

On February 27, 1926, an interest installment was due. It was not paid. On March 12 and 13 defendants mailed notices of cancellation of the contract from Toledo, Ohio, to plaintiff, one to his home address at Windsor, Ontario, and the other to Marentette Realty Company, Inc., at Detroit. In the notice defendants declared the contract canceled and void for plaintiff's failure to pay the interest installment, and notified plaintiff they had deposited $7,000 to his order at a bank in Carleton, near the land. The money is still at plaintiff's disposal. Plaintiff had been sick, and had instructed Mr. Marentette to pay the interest. The latter offered no reason for not making the payment. After notice of cancellation was received, Marentette sent a check for the interest, which was returned to him. He later tendered the cash, and, in June, he and plaintiff made tender of the whole balance of the contract and demanded a deed. The tenders were refused.

Plaintiff commenced this suit to be relieved of the forfeiture, as a basis for a decree or separate action for damages against defendants individually for failure to perform the contract, and also asked specific performance.

As the property belongs to the trust estate, specific performance cannot be granted. A person named as testamentary trustee has no authority to convey trust property until he has qualified by giving bond and letters of trusteeship have been ordered. Comp. Laws 1915, § 14052 et seq.; Chapin v. Chapin, 229 Mich. 515, 201 N. W. 530. His assuming to act even in honest belief in his power does not confer authority upon him, and a purchaser of trust property from him is put upon inquiry as to the validity of the transaction, and cannot rely upon the claim of good faith. Gibney v. Allen, 156 Mich. 301, 120 N. W. 811. The contract had no validity as an engagement of trustees.

Plaintiff contends that defendants are individually liable for failure to perform the contract they made as trustees. Feldman v. Preston, 194 Mich. 352, 160 N. W. 655;Packard v. Kingman, 109 Mich. 497, 67 N. W. 551. Defendants do not controvert the proposition, but rely on...