Collins v. Collins, 6

• Decision Date: 17 May 1957
• Docket Number: No. 6,6
• Citation: 68 A.L.R.2d 575,83 N.W.2d 213,348 Mich. 320
• Parties: , 68 A.L.R.2d 575 Marshall P. COLLINS and Jean Collins, Plaintiffs, Appellants and Cross-Appellees, v. John COLLINS, Defendant, Appellee and Cross-Appellant.
• Court: Michigan Supreme Court

Page 213

83 N.W.2d 213

348 Mich. 320, 68 A.L.R.2d 575

Marshall P. COLLINS and Jean Collins, Plaintiffs, Appellants and Cross-Appellees, v. John COLLINS, Defendant, Appellee and Cross-Appellant.

No. 6.

Supreme Court of Michigan.

May 17, 1957.

Allaben, Davids & Massie, Grand Rapids, for defendant, appellee and cross-appellant.

Vander Veen, Freihofer, Cook & Bryant, Grand Rapids, for plaintiffs, appellants and cross-appellees.

Before the Entire Bench.

SHARPE, Justice.

This is an appeal from a denial of a decree for specific performance of a land contract. Defendant also appeals for failure of the trial court to grant him relief under his cross-bill.

The essential facts are not in dispute and are as follows. Prior to 1938 the 180-acre farm in question was owned by Philander Collins. In 1938 he deeded a one-half interest in the farm to each of his two sons, Frank Collins and John Collins, reserving to himself a life estate in the property. Philander died in 1941, and shortly thereafter John Collins entered into a land contract with Frank Collins, whereby John Collins agreed to sell his one-half interest to Frank Collins for the sum of $5,000, payable at the rate of $50 per year and interest, with the provision that 50% of the purchase price was to be paid within a period of 10 years.

In March, 1950, there was a balance due on the contract in the amount of $4,700. It is apparent that the brothers considered this contract abandoned as on March 21, 1950, plaintiff, Marshall P. Collins, took over the obligation owed by his father by the execution of a new land contract running from defendant, John Collins, to Marshall P. Collins and Jean Collins, his wife. Under this contract plaintiffs were obligated to pay $50 or more per year commencing March 1, 1951, with interest at 5% payable semi-annually, the entire balance to be paid on or before March 1, 1960, with a provision for additional time under certain circumstances. Plaintiffs made the following payments: September 1, 1950, $142.50; March 1, 1951, $150; September, 1951, $150; March 1, 1952, $115; September 1, 1952, $150; May 4, 1953, $150; September 1, 1953, $150.

Insurance on the farm buildings since 1950 was in the name of plaintiffs, with loss payable clause to defendant.

Plaintiffs built an appartment on the home at a cost of approximately $4,000 and rented the same to third parties. During the period of the contract plaintiffs borrowed from defendant the sum of $2,300 for the purpose of paying a special assessment for a drain on the farm and some of the loan was used to defray expenses of building the apartment. In the spring of 1955 a discussion was had between Marshall and John Collins relative to the sale of timber on the farm. Plaintiffs sold this timber for the sum of $600 and defendant thought they should have sold it for much more.

It also appears that on or about June, 1955, the State Highway Department began negotiating with the parties for a right-of-way through the farm. As a result of these negotiations the State Highway Department offered the sum of $54,000 for the entire farm, $42,000 for the farm, excepting 23 acres which would include all of the buildings, or $39,000 for a 200 feet right-of-way. The offer of $39,000 was accepted and the money deposited in a bank awaiting the determination of who was entitled to it. With this fabulous sum of money in sight the parties activated themselves in taking a greater interest in the contract and in protecting their rights under the same. On or about August 12, 1955, plaintiffs filed a bill in chancery for specific performance of the contract, alleging in said bill of complaint:

'That plaintiffs have fully performed all of their obligations under said contract except as hereinafter stated; they have made payments thereunder, have paid for all taxes and insurance on the property, have made improvements thereon, have kept the property in good repair, and in general have fully performed all of their obligations thereunder, except that plaintiffs show that they have paid no monies to defendant thereunder since on or about September 1, 1953), at which time defendant, knowing plaintiffs were having financial difficulties told them he was in no hurry for his money and they could catch up on their other obligations. Therefore plaintiffs made no further payments to defendant until about July 13, 1955, at which time their attorney wrote to the attorney for defendant in order to set a time for closing the deal by payment of the entire unpaid balance of said contract to defendant. That as of the present date, the unpaid balance under said contract is $4,961.25, which includes interest to September 1, 1955.'

The defendant filed an answer and cross-bill in which it is alleged that plaintiffs have failed to pay anything on the land contract since September 1, 1953, and that ever since said date the contract has been terminated, abandoned and void, both by its terms and the actions of the parties. In his cross-bill defendant seeks damages for plaintiffs' acts of waste, negligence and failure to keep the buildings in good repair and for timber unlawfully sold from the farm.

Plaintiffs urge that defendant by his actions waived a strict performance of the contract in that no demand was made by defendant to make up any delinquent payments or to pay the full balance due under the contract; that defendant told plaintiffs in regard to the March 1954 payment, 'That's all right to let it go,' and that after plaintiffs received this assurance they borrowed $2,300 from defendant to help pay a bank loan and overdue taxes and assessments. Plaintiffs also urge that defendant never properly declared a forfeiture of the land contract.

It is urged on the part of defendant that plaintiffs abandoned the contract prior to the right-of-way purchase by the State of Michigan. In support of this claim defendant relies upon the failure of plaintiffs to keep up payments on the land contract for two years, in committing waste and in non-payment of taxes. Defendant also urges that plaintiffs' many defaults effectuated a forfeiture of the land contract.

The cause came on for trial and each of the parties offered evidence in support of their respective claims. The trial court entered a decree which provided:

'This matter having come on to be heard upon the plaintiffs' Bill of Complaint for Specific Performance of Land Contract and defendant's Answer and Cross-Bill and plaintiffs' Reply, and the court having heard the testimony produced in open court by both parties, the arguments of their respective counsel, and having read the briefs of their respective counsel, and the court having filed a written opinion therein, therefore in accordance with said opinion, the court here finds that plaintiffs did not comply with the terms of the land contract and under the facts presented should not be decreed specific performance, and that by plaintiffs' default they forfeited all right or claim under the contract and it was not necessary for defendant to give written notice of forfeiture, and therefore

'It is ordered, adjudged and decreed that plaintiffs are not entitled to specific performance and their bill of complaint is therefore dismissed.

'It is further ordered, adjudged and decreed that the $39,000.00 paid by the Michigan State Highway Department to the respective parties herein for the right of way across their farm and which sum is now on deposit at the...