Greenough v. Willcox

• Decision Date: 01 April 1927
• Docket Number: Jan. Term.,No. 2,2
• Citation: 238 Mich. 52,213 N.W. 175
• Parties: GREENOUGH v. WILLCOX.
• Court: Michigan Supreme Court

238 Mich. 52

213 N.W. 175

GREENOUGH

v.WILLCOX.

No. 2, Jan. Term.

Supreme Court of Michigan.

April 1, 1927.

Appeal from Circuit Court, Oakland County, in Chancery; Glenn C. Gillespie, Judge.

Suit for specific performance by A. O. Greenough against George D. Willcox. Decree for plaintiff, and defendant appeals. Reversed and cause dismissed.

Defendant owned approximately two acres of land in Royal Oak having a frontage of 284.3 feet. He did not live at Royal Oak. Harle Von Eberstein was a real estate broker living and operating there. For some time defendant's property was listed with him for sale at varying prices. Most of these listings were in substantially the same form as the one we shall presently quote. He had not been able to sell the Willcox property. The instrument here involved was actually executed in January, 1925, although bearing date of May 27, 1924. It was prepared by defendant or under his direction and is said to have been made to take the place of one of earlier date and to include a clause with reference to title insurance not found in the earlier one. The instrument is as follows:

‘Royal Oak Real Estate Board.

‘Standard Blanks. Form 3. Option.

‘It is hereby agreed between George D. Willcox, hereinafter designated as the owner, and the Acorn Realty Company, hereinafter designated as the purchaser, as follows: That said owner, in the consideration of the sum of one dollar ($1) to him in hand paid by the purchaser, the receipt whereof is hereby acknowledged, does hereby agree that at any time prior to June 1, 1925, at 12 o'clock noon, he will sell and convey to the purchaser or his assigns land situated in the city of Poyal Oak, county of Oakland, Michigan, described as follows: Commencing at a point on a line between section 15 and 22, town and county aforesaid, at a point on southeast corner of lands heretofore conveyed by Reuben Russel to Elmer Russel recorded in Liber 179, p. 329, Oakland county register's office, that being a point 7 chains 35.5 links east of the southwest corner of said section 15; thence east on section line 4 chains 30 links; thence north at right angles with said section line 4 chains 75 links; thence west parallel with section line 4 chains 30 links; thence south at right angles with section line 4 chains 75 links to place of beginning containing 2.04 acres, for the sum of (a) twenty-five thousand dollars ($25,000.00).

‘If the purchaser desires to exercise the foregoing option, he shall accept the same in writing on or before the day above fixed and at that time pay the sum of one thousand dollars ($1,000) upon the purchase price thereof. Upon the receipt of such acceptance and payment the owner will immediately procure a complete warranty deed or a quitclaim deed with policy of title insurance and abstract of title to such premises certified to a date not later than the date of the acceptance of this option showing an unincumbered marketable title to such premises in the owner, (b) subject to no incumbrances whatever, and deliver the same to the purchaser for examination as soon as such abstract can be procured from the abstractor.

‘If the title shown by such abstract is found marketable and unincumbered, the sale shall be closed within ten (10) days of after delivery of such abstract to the purchaser (c) by delivery of warranty or quitclaim deed and payment of balance of the purchase price in cash, or in lieu of all cash as above, provided owner agrees to accept a total of 50 per cent. of purchase price in cash and take back first mortgage for $12,500 on the property herein described, the same to bear interest at the rate of 6 per cent. and to be due and payable on or before five years from date, and to carry a release clause embodied therein whereby mortgagee agrees to give releases on parcels of property at the rate of 15 cents per square foot.

‘Said owner agrees that he will not during the life of the foregoing option sell, convey, mortgage, or otherwise incumber the said land, or any part thereof, or do or permit to be done any act of the thing whatsoever to diminish or incumber the title to the said land. Upon a failure to exercise the foregoing option within the time and in the manner above provided, the rights of the purchaser to said land and said payment shall cease and be void.

‘It is understood that the above-named purchaser is a broker, acting for an undisclosed principal, and if a sale of the premises is effected under the foregoing option, the owner agrees to pay to him a commission of five per cent. (5%) of the selling price of said land.

‘In witness whereof the said owner has hereunto set his hand and seal this 27th day of May, 1924.

‘In the presence of R. I. Simons.

‘George D. Willcox. [L. S.]

‘H. Von Eberstein. [L. S.]’

Some three weeks after Von Eberstein had procured defendant's signature to this renewal or substituted contract he executed an assignment of the ‘within option’ to plaintiff for a purported consideration of $1,250. The undisputed testimony shows that the property was worth at this time at least $50,000. Some time afterwards plaintiff tendered to defendant $12,500 in cash and a mortgage on the premises for like amount and demanded conveyance. This was refused and this bill for specific performance was filed. From a decree granting such relief defendant appeals.

Argued before the Entire Bench, except BIRD, J.

Perry & Lynch, of Pontiac, for appellant.

Andrew L. Moore, of Pontiac, for appellee.

FELLOWS, J. (after stating the facts as above).

In a supplemental brief filed in this court plaintiff's counsel urges that the pleadings are not sufficient to admit of the claim made by defendant, but no such objection was made in the court below. It is too late now to make such an objection. In the same brief counsel also informs the court of facts not in the record tending to explain the defendant's testimony on the question of value of the premises. This cannot be considered. In the court below defendant's counsel quite clearly outlined his position and the record is quite convincing that at first blush it did not appeal to either the court or to plaintiff's counsel. However, briefs were filed and the case was given careful consideration by the trial judge, who filed an exhaustive opinion, in the early part of which he states:

‘At the time of hearing I was of the opinion that there was but little doubt that the instrument must be construed as an option, but I am frank to say, after examining the authorities, that the question is a close one.’

The contention of defendant's counsel briefly stated is this: That this is a listing contract creating the relation of broker and principal; having been prepared by Von Eberstein should be most strongly construed against him; that the provisions with reference to the option are but incidents to the listing contract and designed to facilitate it and the sale of the property; that the relation of principal and agent having been created by the instrument, the relations were fiduciary in their character, and the agent may not take advantage of them to his own aggrandizement and to the loss of the principal.

That the contract must be construed most strongly against the party who prepared it is too well settled to require the citation of authorities. That the option provision was to facilitate the making of a sale, was but an incident to it, and that the contract was one of agency, must, we think, be held unless we are prepared to overlook the uniform holdings of this and...