Hanley v. Porter

• Decision Date: 06 June 1927
• Docket Number: No. 76,Oct. Term.,76
• Citation: 238 Mich. 617,214 N.W. 179
• Parties: HANLEY et al. v. PORTER et al.
• Court: Michigan Supreme Court

238 Mich. 617

214 N.W. 179

HANLEY et al.

v.PORTER et al.

No. 76, Oct. Term.

Supreme Court of Michigan.

June 6, 1927.

Error to Circuit Court, Muskegon County; John Vanderwerp, Judge.

Action by Sharland J. H. Hanley and another against Glenn M. Porter and another. Judgment for defendants, and plaintiffs bring error. Reversed, and retrial granted.

Argued before the Entire Bench.

Carpenter & Jackson, of Muskegon, for appellants.

Cross, Foote & Sessions, of Muskegon, for appellees.

STEERE, J.

Plaintiffs are husband and wife. Early in June, 1920, they owned 61 lots in Earl's addition to Muskegon Heights in the city of Muskegon, Mich. Defendants were and are copartners in the real estate business under the firm name of Porter & Wyman. They solicited plaintiffs for the agency of handling and selling this property. The latter were willing to sell all but 5 of the lots. On June 8, 1920, negotiations resulted in the contract under consideration here, which defendants prepared. By it plaintiffs gave defendants the exclusive right for a period of 4 years to sell the 56 lots on time and collect the proceeds. Each lot was listed in the contract at a minimum price to plaintiffs, the total minimum amounting to $25,950. Defendants' commission was to be 60 per cent. of what they could sell the lots for in excess of the listed minimum price. Shortly after the contract was executed defendants put on a sale campaign of the lots at selling prices fixed by them amounting to at least twice the total minimum as listed in their agency contract. Their selling price for 53 of the lots was $50,665. The record does not show their selling price for the other 3, which do not figure in this controversy. Within two months after taking the agency defendants had negotiated sales of all of said lots on deferred payment contracts. Within the first year purchasers of 27 lots permanently defaulted and their contracts were subsequently forfeited.

Under the terms of their agency defendants were authorized to sell all but two of the lots on contract with a small cash payment down of 10 per cent. or less of their sale prices to purchasers. The balance was to draw interest at 6 per cent. per annum payable monthly, as the deferred payments fell due. Defendants did the conveyancing. Plaintiffs signed the contracts for sale of lots as prepared by defendants and presented for their signatures.

The questions raised and argued by appellants under their assignments of error are, whether under proper construction of the contract between these parties defendants are entitled to retain a portion of the interest collected by them on contracts not paid to plaintiffs, and whether they are entitled to retain any portion of the money collected by them on forfeited contracts upon which the minimum price was never paid. The portions of the contract involving those propositions are:

‘It is further agreed by the parties hereto that all payments made as a condition of purchase and as monthly installments and interest on contracts for the purchase of any lot or lots sold under this agreement shall be paid to Porter & Wyman at their office in city of Muskegon, Mich., and the proceeds from payments so made shall be divided and paid by said Porter & Wyman to the first and second parties hereto as hereafter specified.

‘Said first parties hereby agree that said second parties may sell the within described lots at any price they may choose, provided, that no lot shall be sold for a less price than listed herein. Further, said first parties agree to pay said second parties, and said second parties agree to receive and accept as full commission and compensation for their services, a sum equal to sixty (60%) per cent. of amount any lot may be sold for over and above the price such lot is listed at herein, and the remaining forty (40%) per cent. of the amount over and above the listed price, shall be added to the listed price and paid to said first parties according to the terms herein stated. And said first parties hereby authorize and instruct said Porter & Wyman to retain fifty (50%) per cent. of all payments received by them from the sale of each lot, until such time as they the said second parties, shall have received their full commission of sixty (60%) per cent. as stated above for each lot sold, and it is mutually understood and agreed between the parties hereto, that in case any lot is forfeited by a purchaser failing to pay or comply with the terms of contract under which said lot or lots are sold, the said second parties shall have the right to resell such lot or lots in the same manner as if the same had not been previously sold and under the same terms and conditions as stated herein for the sale thereof. * * *

‘Said second parties hereby agree, that they shall on or before the 10th day of each month, remit to said first parties the amount their due from collection received the previous month from lot purchasers, and accompany said remittance with an itemized monthly statement of the amounts paid by purchaser of said lots, giving date and name of each party paying number of lot and block paid on, and amount paid on each lot.’

Defendants were experienced real estate operators. They solicited this contract, prepared and presented it to plaintiffs, and the latter signed it. No fraud is charged in connection with it. With the advisability of either party entering into it the court is not concerned. Both parties are bound by its provisions. Its imperfections and ambiguities are to be construed most strongly against defendants, who drafted the instrument and are responsible for them. By it the price and terms of sale were left to them, except the minimum limit on price, down payment, and interest on balance due. They were made collectors, and all payments were to be made to them during the four years they were handling the property. They apparently intended to, and did,...