Durda v. Chembar Development Corp., Docket No. 78-4375

• Decision Date: 04 March 1980
• Docket Number: Docket No. 78-4375
• Parties: Matthew DURDA, Sr., and Patricia Durda, Plaintiffs-Appellees, v. CHEMBAR DEVELOPMENT CORPORATION, Defendant-Appellant. 95 Mich.App. 706, 291 N.W.2d 179
• Court: Court of Appeal of Michigan — District of US

Page 179

291 N.W.2d 179

Matthew DURDA, Sr., and Patricia Durda, Plaintiffs-Appellees, v. CHEMBAR DEVELOPMENT CORPORATION, Defendant-Appellant.

Docket No. 78-4375.

95 Mich.App. 706, 291 N.W.2d 179

Court of Appeals of Michigan.

March 4, 1980.

Released for Publication April 30, 1980.

[95 MICHAPP 708] Alphonse Lewis, Jr., Grand Rapids, for defendant-appellant.

Darrel G. Brown, James R. Stariha, Muskegon, for plaintiffs-appellees.

Before V. J. BRENNAN, P. J., and BEASLEY and BOWLES, ^* JJ.

V. J. BRENNAN, Presiding Judge.

The defendant appeals a judgment of the district court awarding plaintiffs, land contract vendors, reasonable rental value of the premises sold to defendant during the period of redemption.

On February 14, 1971, the parties entered into a land contract for the sale of certain real estate. Defendant entered into possession of the premises on the date of the contract. Subsequently, defendant failed to make the installment payments and, in accord with a specific contract provision, was served on December 20, 1972, with a written notice of forfeiture providing 15 days to remedy the default. ¹ The default was not cured within the 15-day period and on January 4, 1973, plaintiffs instituted summary proceedings for possession in district court. A judgment for possession was entered on February 3, 1973, and a writ of restitution was eventually issued on June 5, 1973.

On June 8, 1973, pursuant to M.C.L. § 554.131 et [95 MICHAPP 709] seq.; M.S.A. § 26.1101 et seq., plaintiffs instituted the instant action for the reasonable rental value of the premises arising out of defendant's continued occupancy from January 4, 1973, the date the time for cure expired, to June 5, 1973, the date the writ of restitution was issued. On March 13, 1975, the district court entered a judgment in favor of plaintiffs for $10,000. Upon appeal, the circuit court affirmed. We follow suit.

The issue whether a land contract vendor may recover the reasonable rental value of the premises during the redemption period (the date of forfeiture until issuance of the writ of restitution) presents a question of first impression under the current summary proceedings statute, M.C.L. § 600.5701 et seq.; M.S.A. § 27A.5701 et seq. It is undisputed that defendant in the present case defaulted on the land contract, plaintiffs sent notice of forfeiture and properly instituted summary proceedings, and defendant remained in possession until the writ of restitution was issued.

Analogizing land contracts to mortgages, defendant argues that possession during the redemption period was not wrongful, Meyers v. Ermolik, 301 Mich. 284, 291, 3 N.W.2d 276 (1942), and thus plaintiff is not owed reasonable rent.

Plaintiffs assert, however, that the vendee's right to possession terminated at the time of forfeiture. Spaulding v. Wyckoff, 320 Mich. 329, 31 N.W.2d 71 (1948); John v. McNeal, 167 Mich. 148, 132 N.W. 508 (1911); Lafrance v. Griffin, 160 Mich. 236, 125 N.W. 34 (1910); McWilliams v. Urban American Land Development Co., 37 Mich.App. 587, 194 N.W.2d 920 (1972); Rothenberg v. Follman, 19 Mich.App. 383, 172 N.W.2d 845 (1969).

Notwithstanding the significant differences between a land contract vendee and a mortgagor [95 MICHAPP 710] addressed by Judge Levin in Rothenberg, supra, at 387, 172 N.W.2d 845, we note that the cases cited by both parties were decided before enactment of the present summary proceedings statute, M.C.L. § 600.5701, et seq.; M.S.A. § 27A.5701, et seq., and do not refer to the statutory right to redemption. Thus they do not aid in deciding the present case.

The threshold question, therefore, is at what point does the summary proceedings statute give the vendor the right to possession. Section 5726 states in part:

"A person entitled to any premises may recover possession thereof by a proceeding under this chapter after forfeiture of an executory contract for the purchase of the premises * * *." (Emphasis added.)

This language indicates that the right to possession shifts to the vendor sometime after forfeiture, and not on the date of forfeiture.

Section 5728(1) provides:

"Possession may be recovered under section 5726 only after the vendee or person holding possession under him has been served with a written notice of forfeiture and has failed in the required time to pay moneys required to be paid under the contract or to cure any other material breach of the contract. Unless the parties have agreed in writing to a longer time, the person served with a notice of forfeiture shall have 15 days thereafter before he is required to pay moneys required to be paid under the contract and cure other material breaches of the contract or to deliver possession of the premises." (Emphasis added.)

The meaning of the statute is clear: within 15 days after service of notice of forfeiture, the vendee must either pay what is owed under the contract or deliver possession of the premises. [95 MICHAPP 711] Since the parties' agreement did not provide for a longer period, possession of the property was due on January 4, 1973.

Section 5728(1), however must be read in context with Section 5741 which provides in pertinent part:

"If the jury or the judge finds that the plaintiff is entitled to possession of the premises, or any part thereof, judgment may be entered in accordance with the finding and may be enforced by a writ of restitution as provided in this chapter. If it is found that the plaintiff is entitled to possession of the premises, in consequence of the nonpayment of any money due under a tenancy, or the nonpayment of moneys required to be paid under an executory contract for purchase of the premises, the jury or judge making the finding shall determine the amount due or in arrears at the time of trial which amount shall be stated in the judgment for possession."

And section 5744(1) which states:

"Subject to the time restrictions of this section, the court entering a judgment for possession shall issue a writ commanding the sheriff, or any other officer authorized to serve the process, to cause the plaintiff to be restored and put in full possession of the premises."

When read together the logical construction of these provisions is that although the vendor has the right to possession immediately upon forfeiture (either the 15 days provided by statute or a later time if the contract so states), this right can only be enforced after the writ of restitution is issued, and not at all if the vendee prevents the writ from issuing by timely paying the redemption price.

We do not read the recent case of Gruskin v. Fisher, 405 Mich. 51, 273 N.W.2d 893 (1979), so [95 MICHAPP 712] broadly as to conflict with the results we achieve here. Gruskin addressed the question of whether a land contract vendor who sends notices of intent to forfeit and of forfeiture has made an irrevocable election requiring him to accept possession of the property when tendered by the purchaser in lieu of money damages for breach of contract. Finding no such irrevocable election on the part of the vendor, the Court went on to discuss the purpose of the modern statutorily required notice as serving as warning that "the seller is about to do something unless the deficiency is cured". 405 Mich. at 65, 273 N.W.2d at 900.

"The purchaser is protected. The seller cannot evict merely because he sent notice of forfeiture. The seller must, rather, send the notice as a condition precedent to commencement of summary proceedings. If summary proceedings are commenced, the purchaser may still cure the default at any time during the proceedings * * *." 405 Mich. at 65-66, 273 N.W.2d at 900.

This dicta does not change the statutory point in time at which the right to possession matures. Rather it delineates the...