Digby v. Thorson, 66.

• Decision Date: 05 January 1948
• Docket Number: No. 66.,66.
• Citation: 319 Mich. 524,30 N.W.2d 266
• Parties: DIGBY et al. v. THORSON et al.
• Court: Michigan Supreme Court

319 Mich. 524

30 N.W.2d 266

DIGBY et al.

v.THORSON et al.

No. 66.

Supreme Court of Michigan.

Jan. 5, 1948.

OPINION TEXT STARTS HERE Appeal from Circuit Court, Alger County; Herbert W. Runnels, judge.

Suit by Lyle Digby and another against Julius Thorson and another to compel the named defendant to convey to the plaintiffs certain property fronting on a lake, on the ground that the named defendant held the property under a constructive trust, wherein the named defendant filed a cross-bill. From a decree dismissing the bill of complaint and granting the named defendant incidental relief on the cross-bill, the plaintiffs appeal.

Decree reversed and rendered and case remanded.

Before the Entire Bench.

Glenn W. Jackson, of Gladstone, for plaintiffs and appellants.

George S. Baldwin, of Munising, for defendant and appellee Thorson.

BOYLES, Justice.

Plaintiffs, husband and wife, filed the bill of complaint in this case to compel the defendant Julius Thorson to convey to them certain property fronting on Lake Au Train in Alger county, claiming that Thorson held the same as a trustee under a constructive trust for their use and benefit. The Peoples State Bank of Munising was joined as defendant for the reason that it holds a mortgage on the property. However, the rights of the bank as mortgagee are not an issue in the case. From a decree dismissing their bill of complaint and granting defendant Thorson certain incidental relief on a cross bill, the plaintiffs appeal. We review the record de novo.

For several years prior to April 10, 1945, one Alan B. McGregor, a resident of Detroit, was the owner of lots 2 and 3 section 7 town 46 north range 20 west, excepting the south 500 feet of lot 3, on Lake Au Train in Alger county. On a part of the property were several buildings-a club-house, a ‘studio,’ several lodges and cottages and other buildings, known as the Bar-M Camp. In November, 1943, McGregor in writing appointed plaintiffs as managers of the property for a 5-year term unless terminated on 30 days' notice in the event of a sale of the property. The writing provided:

‘If and when any portion of this property is to be sold, the Digbys (plaintiffs) will have the right to buy in preference to any other parties.'

Under this agreement the plaintiffs continued in possession, using the clubhouse for resort purposes, renting rooms and boats to tourists, fishermen and hunters. Plaintiffs received $25 per month from McGregor for caretaker services. Lyle Digby made improvements-built steps and approach to the studio, cleared out old stumps and trees, built steps and a dock down at the water, cleared lake bottom for swimming, built shelves, repaired eaves troughs and screen windows, painted doors and windows, removed brush, removed outhouses and built new ones, salvaged old lumber, tore down an old shed and repaired and improved the main house, leveled the tank house, renewed ten doors at the main lodge, repaired deep well pumps, insulated doors and windows, did some electrical work, kept the road in shape, built a building over the deep well pump, built a cesspool, built a pump house, and otherwise improved the property with the view of ultimately becoming the owner.

Defendant Thorson lived near Munising and was in the real estate business. He had known plaintiffs for about 20 years, had something to do with their getting the job from McGregor as caretakers. Mrs. Digby testified that after they had started living on the Bar-M property Mr. Thorson came to their place two or three times a week on friendly visits; that in the winter of 1945 he talked to them of purchasing the Bar-M, and that they (plaintiffs) should have where the buildings were and a certain amount of frontage and he was to give them all the time they wanted to pay for it. He asked her to contact McGregor about purchasing the entire property. She testified that she called Mr. McGregor long distance, that he came up to the Bar-M, that Mr. Thorson came also about the first part of April or latter part of March, 1945, and that Mr. McGregor said he would have to get the papers from his office before he could give them a price. Three or four days before April 10th Mr. McGregor had his reports back from Detroit and fixed the price at $12,700, including everything. She testified it was then talked that plaintiffs were to get the Bar-M land, buildings and furniture, that no price was fixed at that time as to how much they were to pay, that later they met at Attorney Nebel's office in Munising, with Mr. Thorson, Mr. McGregor and some others. She testified:

‘In Nebel's office, ‘Well it was talked that I was to get the buildings and furnishings and boats, everything that was out there, without about 200 feet on each side and all cottages, at a price of about $7,000. At that time Mr. Nebel wanted to draw my papers up. He mentioned it. ‘Why not draw your papers now.’ I said ‘Yes, we knew each other so many years.'

‘Q. What did Mr. Thorson say when you made that remark? A. That I was not afraid of him, that I was not worrying.

‘Q. That you were not afraid of Mr. Thorson? A. Yes.

‘Q. Wasn't that mentioned more than once about drawing the papers? A. Yes, Mr. Nebel mentioned it a couple of times.

‘Q. You had known Mr. Thorson a good many years? A. Yes, sir.

‘Q. Did you then have confidence in him? A. Yes, Sir.'

At the time (April 10, 1945) a deed was executed whereby McGregor deeded the entire property to Thorson and gave him a bill of sale of the personal property, for $12,700. Mrs. Digby testified that after leaving the office they went back to the Bar-M and while she was preparing a meal Mr. McGregor, Mr. Thorson and Mr. Digby and others talked about the property at which time Mr. McGregor said he wanted Mr. Digby to have the Bar-M, Mr. Thorson said $7,000 would be the price, they talked about the lake frontage which was to be 200 feet on both sides of the cabins. She testified:

‘After this I had some talk with Mr. Thorson, probably about in May. ‘Will, I asked him if we should not draw up some papers, some agreement, so we should know where we were at and then he told me he could not let me have it then for $7,000, but wanted $8,000.'

‘Q. Was that in May? A. Either in April or May, I am not positive on the date.

‘Q. Did you give Mr. Thorson any money? A. Yes, I did.'

Plaintiffs' exhibit 4 was received in evidence, as follows:

‘June 6-1945.

‘Received from June Digby $800 Eight Hundred Dollars to apply on option of Bar M buildings and land.

‘Julius Thorson.'

Mrs. Digby testified to several later conversations with Mr. Thorson regarding making out the papers for the property. Exhibit 5 was received in evidence, as follows:

‘August 8, 1945.

‘I hereby agree to sell Camp Bar M-property with all Bldg- thereon and personal property as agreed here before for the consideration of $8,437.

‘The above property is located on Au Train Lake, Alger Co. The consideration herein includes the timber cut thereon in question. Interest on contract 7% to be executed Aug. 9, 1945 from date.

‘Julius Thorson.'

Concerning the above exhibit, Mrs. Digby testified as follows:

‘Mr. Gillan handed this paper to me in John Tervo's. Mr. Gillan and Mr. Thorson were talking. I didn't hear very much of the conversation between them. I didn't pay much attention, but then later on Mr. Gillan handed me this paper. Several times before this I came in town looking for Mr. Thorson to get the papers. I asked him if we should not make out the papers. This was both before and after this paper, exhibit 5. He said first he was waiting until the deed came back and then he could not get a surveyor. It would be hard to say how many times I talked with him, possibly sevem or eight times. I wrote him a letter. I asked him for a certain date and he did not appear. I asked him to meet me at a certain time and he was not there.

* * *

‘I talked to Thorson in November before hunting season. Mr. Thorson came out and he had another gentleman with him. I don't know who the other gentleman was. He was a stranger to me. They had been looking over some lots. I said, ‘Well, when am I going to get my papers.’ He said, ‘I can't get a surveyor. This man, if he buys, he will not have a surveyor either. He will have to take my word.'

‘Q. Well did he ask you to produce or pay any more money or anything? A. Yes, then he wanted me to pay some more money.

‘Q. How much money? A. He wanted me to pay it all.

‘Q. How much? A. That would be $6,200.

‘Q. $6,200? A. He didn't say. He said he wanted the money. I need the money.

‘Q. When you first talked about getting this place was there anything said about when the money should be paid? A. No. Mr. Thorson said he would give us all the time we wanted to pay for it. He referred to Mr. Chaffee, all the years he trusted him.'

Plaintiff Lyle Digby testified as follows:

‘I remember when Mr. McGregor and Mr. Thorson came to my place. The association was friendly. Thorson said that he would take it over and turn our part over to us at $7,000. There were present at that time Ed. Hanson and his wife and Skaug and his wife, Mr. McGregor and a Miss, I cannot think of her name, Julius Thorson and my wife. This conversation was before they went down to Mr. Nebel's office. * * * We were to pay $7,000 for our share, for 800 feet, 200 feet on either side of the outside of the south building and 200 feet outside of the north building.

‘Q. Was there anything said in the conversation about the $7,000 to Mr. Thorson? A. We could have all the time we wanted. * * * In addition to the real estate there was to be included all our personal belongings. We considered that everything in there was ours. * * * Mr. McGregor and Mr. Thorson were out to our place after they had gone to Mr. Nebel's office. At that time there was almost the same conversation that was on this deal of ours in between there.

‘Q. Well, tell us what was said? * * * A. Well that we were to get this place for $7,000, this 800 feet, for $7,000, unless you want me to go...