Goldberg v. Cities Serv. Oil Co.

• Citation: 275 Mich. 199,266 N.W. 321
• Decision Date: 06 April 1936
• Docket Number: Nos. 3,4.,s. 3
• Parties: GOLDBERG v. CITIES SERVICE OIL CO. CITIES SERVICE OIL CO. v. GOLDBERG.
• Court: Supreme Court of Michigan

275 Mich. 199

266 N.W. 321

GOLDBERG

v.CITIES SERVICE OIL CO.

CITIES SERVICE OIL CO.

v.GOLDBERG.

Nos. 3, 4.

Supreme Court of Michigan.

April 6, 1936.

Action by Albert Goldberg against the Cities Service Oil Company, and suit by the Cities Service Oil Company against Albert Goldberg. From a decree and a judgment for the Cities Service Oil Company, Albert Goldberg appeals.

Affirmed.Appeal from Circuit Court, Wayne County; Arthur Webster, judge.

Argued before the Entire Bench.

William V. Capler, of Detroit, for Albert Goldberg.

Warren, Hill, Hamblen and Essery & Lewis, all of Detroit, for Cities Service Oil Co.

BUSHNELL, Justice.

The first case is an action at law to recover a balance claimed to be due upon the purchase price of real estate; the second is a chancery action to reform the instrument upon which the plaintiff at law relied. By agreement, the testimony in the chancery cause was introduced in the law action with slight additions. The parties in the two cases are the same.

The oil company obtained a decree for reformation and a judgment for no cause for action. The appeal in each case is covered by the same record.

In 1927, Goldberg, desiring to erect a gasoline filling station, entered into certain agreements with Cities Service Oil Company, an Ohio corporation (not a party hereto), whereby the oil company loaned funds and sold equipment, taking as security a real estate mortgage on other property and a chattel mortgage upon the installed equipment. Later, Cities Service Oil Company, a Michigan corporation, was formed and took over the operations of the Ohio corporation in this state, including the collection of its outstanding accounts. In 1930 the station was being operated by Goldberg's tenant, Radding. Goldberg had been slow in making his payments, and Radding was also indebted to the oil company. Suit was instituted against Radding January 10, 1930.

Negotiations for a settlement between the parties hereto culminated in a written agreementon January 20, 1930. It is conceded that the following was then due:

+-----------------------------------------------------+
                ¦Station construction, balance of Goldberg's¦         ¦
                +-------------------------------------------+---------¦
                ¦unpaid note                                ¦$3,000.00¦
                +-------------------------------------------+---------¦
                ¦Interest on same, approximately            ¦285.13   ¦
                +-------------------------------------------+---------¦
                ¦Balance due on equipment account           ¦600.00   ¦
                +-------------------------------------------+---------¦
                ¦Gasoline, oil, etc., account               ¦877.04   ¦
                +-------------------------------------------+---------¦
                ¦                                           ¦$4,762.17¦
                +-----------------------------------------------------+
                

In the agreement, Goldberg offered to sell the station to the oil company for $14,500 with the proviso that the foregoing items were to be deducted. His offer also stated that the mortgage and tax indebtedness against the property was as follows: A first mortgage of $4,000, a second of $3,000, upon both of which certain payments of principal and interest had been made, and unpaid taxes amounting to $1,324.13. He agreed to deliver a warranty deed subject to the mortgages and outstanding indebtedness, and to use the language of the offer ‘as above mentioned, all of which you shall assume and agree to pay.’

This offer was accepted by the oil company, and the deal was finally consummated on February 17th. Goldberg delivered his deed and received a check for a net balance of $3,421.56 and the parties executed a mutual release for $1 and other valuable considerations. A statement attached to the check recited that the amount paid was for ‘net equity after payment of mortgage and taxes plus accounts due Cities Service Oil Company on property at northeast corner of Canfield and Chalmers Avenues.’ The check read on its face, ‘in full of above account,’ and above Goldberg's indorsement on the reverse thereof appears: ‘Your indorsement constitutes a receipt on payment of statement attached.’

When Goldberg received the check he made a separate memoranda of the various amounts which entered into the computation, having before him the discharge of the chattel mortgage, a bill of sale, the warranty deed, an assignment of the Radding account to Goldberg, and voucher check, and the mutual release.

Goldberg testified that he was not represented by counsel, and that ‘I checked over the amount and found it not correct.’ In explanation he said: ‘I had given them possession in the morning, and I knew that if I refused to take the check they had given me, they could hold possession of the station under the deed, or the first lease they claimed to have. * * * I told them that very night that these figures are not correct,’ etc.

The oil company's counsel testified: ‘When I gave this check in the amount of $3,421.56, to Mr. Goldberg he made no comment whatsoever in connection with it. He said he was glad to get it, he wanted to pay off some bills he had, he was very anxious to get it. In fact, he came into my office several times before, just for that reason, to see how soon he could close the deal.’

Goldberg claims he returned the next day to protest, was offered $36 more, ‘and after a few harsh words I told him, he ordered me out of the office.’

The company's witness says there was a conversation on the 20th about $36 which Goldberg claimed was still due him as a premium for the discharge of one of the mortgages.

The check was paid on February 18th, and Goldberg commenced his law action on March 19th without making any other demands.

The trial judge said: ‘The meritorious issue before the court is whether or not at the time the option agreement of January 20th, 1930, was entered into there was a mutual mistake of fact with reference to the assumption of the mortgage on the property, or if not a mutual mistake of fact if there was a mistake of fact on the part of the defendant company and conduct on the part of the plaintiff which estops him from asserting his claim at this time.’

Following a careful review of the testimony, the court said:

‘The conduct of Goldberg at the time of closing the transaction and shortly thereafter is testimony which strongly corroborates the claims of the Cities Service that there was a mutual mistake of fact. In this respect it is very much like the situation presented in the case of Osterhout & Fox Lumber Co. v. Rice, 93 Mich. 353, 357, 53 N.W. 540.

‘I cannot conceive of a man who honestly thought he had some $9,000 due him on the closing of a deal walking out of the other man's office with $3,000 in the form of a check which recites that it was in full payment. Certainly the ordinary man finding himself with only $3,000 instead of $9,000 would have returned at once and protested vigorously. He would never go to the bank and cash the check and remain quiescent as did Goldberg in the case at bar. This conduct convinces me that the parties mutually understood they were dealing on the basis of a gross price for the property of $14,500, from which not only the accounts but the first and second mortgages as well were to be deducted.’

Were certain documents pertaining to transactions between Goldberg and the Ohio corporation admissible? Four of the five exhibits mentioned in this question are not included in the record.

‘Questions not properly raised upon the record will not be considered.’ Wiers v. Shaw-Walker Co., 171 Mich. 324, 330, 137 N.W. 145, 147. See, also, Lafevere v. Corneail, 229 Mich. 178, 201 N.W. 193.

The remaining exhibit is the original agreement between Goldberg and the Ohio corporation, dated May 19, 1927. No question is raised about the admissibility of the agreement upon which the bill of complaint was founded, viz. that of January 20, 1930. Goldberg insisted upon ‘a release in full to me on any obligations of any sort or nature arising out of my dealings with you and the assignment of your account with Bernard Radding.’ The exhibit in question was received conditionally, and, when examined, appeared to control the relations between Goldberg and the Ohio corporation out of which the claim of the Michigan corporation arose. It bears directly upon the terms of the settlement and the release, and is therefore material to the issue.

It is claimed that certain office records and a copy of a ledger sheet of the oil company were inadmissible because not properly identified. We do not understand that the amounts shown thereon as due were disputed by Goldberg, and their correctness seems to be admitted in his bill of particulars. This disposes of the alleged error and makes an extended discussion of the admissibility of this class of evidence unnecessary.

Objection is urged as to the...