Goodspeed v. Nichols

• Decision Date: 18 June 1925
• Docket Number: No. 146.,146.
• Citation: 204 N.W. 122,231 Mich. 308
• Parties: GOODSPEED v. NICHOLS et al.
• Court: Michigan Supreme Court

231 Mich. 308

204 N.W. 122

GOODSPEED

v.NICHOLS et al.

No. 146.

Supreme Court of Michigan.

June 18, 1925.

Appeal from Circuit Court, Kent County, in Chancery; William B. Brown, Judge.

Mortgage foreclosure suit by Theron H. Goodspeed against Mortimer C. Nichols and others. From the decree rendered, plaintiff appeals. Affirmed.

Argued before McDONALD, C. J., and CLARK, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ.Corwin & Norcross, of Grand Rapids, for appellant.

Colin P. Campbell, of Grand Rapids, for appellees.

STEERE, J.

This bill was filed to foreclose a $15,000 mortgage given to secure part of the purchase price for a property located at the northwest corner of Cherry street and College avenue in the city of Grand Rapids, Mich., known as the ‘Fox homestead,’ and sometimes called the ‘castle’ owing to the size and architecture of a pretentious stone residence located upon it. Although indicated interests led to making all the named parties defendants, Mortimer C. Nichols is conceded to be the real defendant in interest, and may be referred to as the defendant in discussion of the case.

Plaintiff Goodspeed had become owner of the Fox homestead, and being desirous of selling it, so informed Mr. Howard Brown, a real estate dealer and broker with offices in the Michigan Trust building in Grand Rapids, requested his services in disposing of it, and told him the price he asked.

Some time later Brown met and called the attention of defendant Mortimer C. Nichols, of Hastings, Mich., to this property, and interested him in it. After examining the property, which had been vacant for some time, defendant submitted an offer to Brown of $22,500 for the place. Brown submitted this to plaintiff, who refused to accept the offer or to take less than his price of $25,000. After considering and discussing the matter with Brown for some time, defendant finally went to Brown's office and made a further offer agreeing to pay plaintiff's price on certain terms. Brown reduced the offer to writing on a form of an ‘authorized agreement of the Grand Rapids Real Estate Board’ which, omitting formal parts and description of the property, reads as follows:

‘The terms of purchase to be as follows: $10,000 on delivery of warranty deed, and balance to be paid by mortgage back for $15,000, interest at 6 per cent. per annum, payable semiannually, terms to be mutually agreed upon.

‘It is understood that the plumbing, heating, and lighting system in above-described premises is in proper usable condition. An abstract showing good title written up to date, also abstract of taxes to be furnished me clear of expense.

‘I hereby agree to give to Howard Brown one day to get the owner's signature to the written acceptance of this proposition appearing below, which, when signed, will constitute a binding agreement between purchaser and seller, and herewith deposit $1,000 as earnest money to apply on the purchase price. If proposition is not accepted or the title is not good, this amount to be refunded, otherwise to be retained. Sale to be closed on or before August 15, 1922.’

After defendant had signed it and made the deposit, Brown promptly submitted the proposed agreement to plaintiff for his acceptance and signature. Brown testified that plaintiff first objected to the provision relative to the plumbing, heating, and lighting system being ‘in proper usable condition,’ and he discussed the matter with him at length, pointing out that the building had been vacant so long nobody knew the precise condition of those three equipments; defendant had insisted on protection from the necessity of any unanticipated elaborate outlay upon them, and made that clause a condition of his paying the full price of $25,000 which plaintiff demanded for the property; that after a full discussion plaintiff ‘finally said, ‘All right; I will accept that proposition,’ which he did,' and signed the agreement. Apparently following the authorized form used, this addenda or postscript appears on the instrument over plaintiff's signature:

‘The above proposition is hereby accepted. I also agree to pay Howard Brown a commission of $950 for negotiating this sale, but if not closed on account of purchaser's default, the commission shall not exceed the amount of the deposit.’

This writing so executed constituted a binding contract of bargain and sale between the parties for the real estate therein described, which both parties thereafter recognized and acted upon. Nichols then took possession of the unoccupied property he had contracted for, with a payment of $1,000 down, and took steps to make repairs upon the long vacant ‘castle’ and put it in habitable condition. On overhauling the old plumbing, heating, and lighting equipment in it, he found that it was necessary to make various repairs upon the same to put it in proper usable condition, which he did and kept separate accounts of the cost of labor and material applied to that purpose.

On August 12, 1922, three days before the time limited, the papers were in Brown's hands to close the sale, and Nichols paid Brown $9,000 more, signed a note to Goodspeed for $15,000 secured by a mortgage to him on the property, and received from Brown in exchange therefor a deed of the property executed by Goodspeed, both of which instruments were duly recorded. He at the same time gave Brown the bills he had for necessary repairs to put the plumbing, heating, and lighting system in proper answer and cross-bill that he then demurred to paying the full balance of the purchase price and giving the mortgage in question until the repairs were completed, costs therefor allowed by plaintiff and deducted from the purchase price, but that:

‘Howard Brown, the agent of the plaintiff, then said to the defendants that it would be best to pay the balance of the purchase price, take the deed, and give the mortgage for the foreclosure of which this suit is brought, and when the repairs were completed that the plaintiff would then, upon the presentation of the bill therefor, pay the defendants what they expended in the repair of the plumbing, heating, and lighting system,’ etc.

The transaction took place in Brown's office. Goodspeed was not present. His answer to this allegation is a denial that any such demurrer was ever made to, or any such assurance given by, him or his authorized agent.

Nichols did not know and never saw Goodspeed until long after...