Darby v. Freeman

• Decision Date: 23 February 1943
• Docket Number: No. 13.,13.
• Citation: 304 Mich. 459,8 N.W.2d 137
• Parties: DARBY et al. v. FREEMAN et al.
• Court: Michigan Supreme Court

304 Mich. 459

8 N.W.2d 137

DARBY et al.

v.FREEMAN et al.

No. 13.

Supreme Court of Michigan.

Feb. 23, 1943.

Suit by Claude O. Darby and Bernadette Darby, his wife, against Frank Freeman and Minnie Freeman, his wife, and others to restrain named defendants from occupying or taking possession of a portion of land purchased by named defendants at a scavenger sale and from collecting the rents therefrom, and for an adjudication that such land was held by defendants as trustees for the benefit of named plaintiffs. From an adverse decree, named defendants appeal.

Decree vacated and bill of complaint dismissed and cause remanded.

Appeal from Circuit Court, Genesee County, in Chancery; Philip Elliott, Judge.

Before the Entire Bench.

Cameron & Cameron, of Flint, for appellants.

Lewis Kearns, of Flint, for appellees.

STARR, Justice.

Defendants Frank Freeman and Minnie Freeman, husband and wife, appeal from a decree determining that their purchase of certain land in the city of Flint from the State land office board at scavenger sale constituted a redemption of a part of such land for the benefit of plaintiffs Claude Darby and Bernadette Darby, husband and wife.

From the record and stipulation of facts it appears that one Eva K. Cogshall, now deceased, at some time not shown, prior to May 3, 1938, had sold the following-described property to defendants Freeman on land contract: ‘Lot eight, and the westerly 20 feet of lot nine, block C of Mrs. Lucy Stewart's addition to the city of Flint’ (hereinafter referred to as the entire parcel).

In the land contract defendants Freeman agreed to pay the taxes on the entire parcel of land. They failed to pay such taxes, and at the tax sale on May 3, 1938, the entire parcel was bid in by the State of Michigan for delinquent taxes for 1935 and prior years.

About October 14, 1938, Eva K. Cogshall and defendants Freeman agreed to terminate their above-mentioned land contract and to divide the land and tax assessments between them. In pursuance of such agreement Eva K. Cogshall conveyed by quitclaim deed to defendants Freeman that part of the entire parcel described as folows: ‘Lot eight of block C, except the east 26 feet of the northerly 120 feet, also except the east 29 feet of the southerly 45 feet, of Mrs. Lucy Stewart's addition to the city of Flint. The east four feet of the westerly 120 feet of the above described property to be used in common with the west four feet of the northerly 120 feet of the property adjoining on the east as a joint driveway’ (for sake of brevity hereinafter referred to as parcel A).

On the same date, October 14, 1938, defendants Freeman conveyed by quitclaim deed to Eva K. Cogshall that part of the entire parcel described as follows: ‘The west 20 feet of lot nine, block C, also the east 26 feet of the northerly 120 feet of lot eight, block C, also the east 29 feet of the southerly 45 feet of lot eight, block C, all of Mrs. Lucy Stewart's addition to the city of Flint. The west four feet of the northerly 120 feet of the above described property to be used in common with the east four feet of the northerly 120 feet of property adjoining on the west as a joint driveway’ (for sake of brevity hereinafter referred to as parcel B).

As to the above-mentioned quitclaim deeds the stipulation provides, in part: ‘Both of said deeds were recorded. As a result of this agreement and the said conveyances, all contractual relations between said parties (Eva K. Cogshall and defendants Freeman) were terminated and each of said parties were in position to redeem their respective share if they so desired and were able.’

Eva K. Cogshall died November 27, 1938, and by will devised the above-described parcel B to plaintiffs Kiles, Knowles, Ellis, and Hillker. Neither Eva K. Cogshall, her heirs, legatees or administrator, nor defendants Freeman redeemed the entire parcel or any part thereof from the 1938 tax sale, and the State's title thereto became absolute November 3, 1939. 1 Comp.Laws 1929, § 3467, as amended by Act No. 325, Pub.Acts 1937.

The only asset inventoried in the estate of Eva K. Cogshall, deceased, was her interest, if any, in parcel B. The petition filed in probate court in the Cogshall estate for license to sell its interest in parcel B set forth ‘that the only right remaining in said estate was the right to bid at scavenger sale.’ In pursuance of probate court order the interest of the Cogshall estate in such parcel was sold to plaintiffs Darby on May 6, 1941. Report of such sale was filed May 9, 1941, and order confirming sale entered May 19, 1941.

The stipulation of facts, which is quite incomplete, does not show what consideration plaintiffs Darby paid to the Cogshall estate for its interest, if any, in parcel B. However, in their answer defendants Freeman alleged that plaintiffs Darby paid the Cogshall estate $50 for ‘the right remaining in said estate to bid at scavenger sale.’ It appears that on February 7, 1941, the administrator of the Cogshall estate had executed a conveyance of the estate's interest in parcel B to plaintiffs Darby. It also appears that on February 21, 1941, plaintiff Margaret Kile had conveyed her interest in such land by quitclaim deed to plaintiffs Darby.

Supplementary stipulation of facts filed herein shows that the entire parcel was offered for sale as a unit and sold at the scavenger sale on March 20, 1941, by the State land office board to defendants Freeman, the highest bidders, for $3,500, Act No. 155, Pub.Acts 1937, as amended by Acts Nos. 29, 244, and 329, Pub.Acts 1939, Comp.Laws Supp.1940, § 3723-1 et seq., Stat.Ann.1940 Cum.Supp. § 7.951 et seq.

Plaintiffs Darby did not present a bid for the entire parcel at the scavenger sale but requested the board to divide the property and to offer parcel B separately. Such request was refused. Plaintiffs Darby did not offer to meet the highest bid for the entire parcel but, subsequent to the sale, demanded the right to meet the bid of defendants Freeeman as to that part of the property described as parcel B. The board denied such demand. The stipulation of facts states further that ‘no taxes have been paid upon the property since May 3, 1938, and the taxes for the year 1938 were not paid and there was no division of the assessment on the entire property prior to October 14, 1938.’

On July 26, 1941, plaintiffs Darby filed bill of complaint alleging, in substance, that they had been deprived of their property by the action of the State land office board (1) in refusing to divide the entire property and offer parcel B for sale separately, (2) in denying them the right to present a separate bid for parcel B, and (3) in denying them the right to meet that part of the highest bid for the entire parcel that was applicable to parcel B. In their bill they ask that defendants be permanently restrained from occupying or taking possession of parcel B and from collecting the rents therefrom. In amendments to their bill plaintiffs alleged further that under the original land contrac with Eva K. Cogshall (terminated October 14, 1938) defendants Freeman were obligated to pay the taxes on the entire parcel for 1935 and prior years; that because of their default in the payment of taxes their purchase of the entire property at the scavenger sale constituted a redemption of that part described as parcel B for the benefit of plaintiffs; and that defendants Freeman held such parcel B as fiduciaries and trustees for the benefit of plaintiffs. Plaintiffs alleged further that they were ‘owner’ of the land described as parcel B within the meaning of Act No. 155, § 5a, Pub.Acts 1937 as added by Act No. 363, Pub.Acts 1941, Comp.Laws Supp.1942, § 3723-5a, Stat.Ann.1942 Cum.Supp. § 7.955(1), effective June 19, 1941, and that they, as such ‘owner,’ were deprived of their right to meet that part of the bid of defendants Freeman at the scavenger sale, that was applicable to parcel B.

Defendants auditor general and State land office board and defendants Freeman filed separate motions to dismiss plaintiffs' bill of complaint. From the trial court's opinion it appears that by consent of all parties the suit was dismissed as to the auditor general and land office board.

Defendants Freeman filed answer, denying plaintiffs' right to the relief sought and alleging, in substance, that all contractual relations with Eva K. Cogshall were terminated by their mutual agreement and exchange of quitclaim deeds on October 14, 1938, and that they were thereby relieved of their obligation to pay the delinquent taxes on parcel B for 1935 and prior years. In their answer defendants Freeman also alleged that plaintiffs Darby had no interest in the land described as parcel B at the time of the tax sale on May 3, 1938, and that they acquired no interest until after the State's title became absolute November 3, 1939.

The record indicates that no testimony was taken and that the matter was heard by the trial court upon the pleadings, briefs, arguments of counsel, and stipulation of facts. The trial court entered decree May 28, 1942, providing, in part, as follows:

‘That the defendants, Frank and Minnie Freeman, his wife, by virtue of their purchase at scavenger sale of property described as: (parcel B) * * * redeemed said property for the parties, and their successors and assigns, from whom they were purchasing said property as contract vendees on April 1, 1935, and to whom they were bound, under...