Hornbeck v. Midwest Realty, Inc.

• Decision Date: 22 December 1938
• Docket Number: No. 17.,17.
• Citation: 287 Mich. 230,283 N.W. 39
• Parties: HORNBECK et ux. v. MIDWEST REALTY, Inc., et al.
• Court: Michigan Supreme Court

287 Mich. 230

283 N.W. 39

HORNBECK et ux.

v.MIDWEST REALTY, Inc., et al.

No. 17.

Supreme Court of Michigan.

Dec. 22, 1938.

Suit by Warren D. Hornbeck and wife against Midwest Realty, Inc., Midwest Construction, Inc., and others for specific performance of a land contract and in lieu thereof for a rescission of the contract and reimbursement of moneys paid thereunder, plus interest and taxes. From a decree for plaintiffs, the first-named defendant appeals and the second-named defendant and others cross-appeal.

Affirmed.Appeal from Circuit Court, Wayne County, in Chancery; Harry J. Dingeman, Judge.

Argued before the Entire Bench, except BUTZEL, J.

Thomas L. Poindexter, of Detroit, for appellant.

Thomas L. Poindexter and Howard F. Cline, both of Detroit, for cross-appellants.

Younglove & Chockley, of Detroit, for appellees.

BUSHNELL, Justice.

On January 21, 1925, plaintiffs, as vendees, entered into a written contract in which they agreed to pay $1300 for certain real estate described as follows: ‘Lot numbered four hundred thirty-two (432), Dasher Estates Subdivision, according to the plat recorded in Liber 52 of Plats, at page 13, Wayne County Records.’

Defendant Fort Eureka Land Company was the original vendor in this contract. The remaining defendants acquired legal title to the property subsequent to the date of the contract, the Currier Lumber Company being the owner of record when plaintiffs' bill of complaint was filed. Plaintiffs made payments on their land contract until 1932. In April of 1936 plaintiffs received a notice of forfeiture, signed by Harry W. Brower as attorney for defendants Dasher, in which it was claimed that there was due $155.93 on the contract. After a conversation with Mrs. Robinson, an agent of defendant Midwest Realty, regarding payment, the balance due was agreed upon as $153.91, and plaintiffs paid the sum of $53.91 and agreed to pay the remaining $100 in monthly instalments. On June 16, 1936, the $100 was paid by check; plaintiffs requested a deed and abstract and were informed by Mrs. Robinson that the Midwest Realty was very busy and it would be a month or six weeks before the papers could be delivered. However, that same night Mrs. Robinson called again on the Hornbecks and told them that their check for $100 could not be accepted. A discussion followed in which Mrs. Robinson told Mrs. Hornbeck that the Midwest was going to build some houses in the subdivision and ‘we wondered if * * * Mr. Robinson would kind of like your lot.’ The Hornbecks were urged to visit the property and see if they would exchange their lot for another in the same subdivision. The Hornbecks agreed to consider the matter and, a little later, did examine the property but were not satisfied with the lot that was offered in exchange. In August the Hornbecks, after again requesting delivery of their deed and abstract, were urged to come out and see if they could not agree upon another lot. The Hornbecks again visited the property on August 9, 1936, and discovered, for the first time, that a house was being built upon their lot. Mrs. Robinson called again on the Hornbecks, who declined to make any exchange. A conference was had the day following, between Brower and Hornbecks, but without result and, on the 19th, the vendees were served with a notice of default. The $100 check, however, had been deposited by Midwest Realty, Inc., and was paid on June 22, 1936. On August 25, 1936, plaintiffs filed a bill of complaint seeking specific performance of the land contract and, in lieu thereof, a decree entitling them to a rescission and the reimbursement of moneys paid on the contract, plus interest and taxes. The matter was referred to a circuit court commissioner, who took testimony, from which it appears that Harry Brower, agent of the Dashers and the president of Midwest Realty, Inc., apparently relied upon his assumption that the Hornbecks would take another lot and arranged with the Currier Lumber Company to furnish building materials and gave it a deed to the premises. This deed was recorded both as a deed and a mortgage.

The circuit court commissioner found that, from the date of the land contract to June 16, 1936, the Hornbecks had paid principal, interest and taxes totaling $1,713.33, and that the Currier Lumber Company had furnished building materials in the value of $1700.29. The decree entered in the circuit court states that the amount due plaintiffs is $2,459.33, and gives the Currier Lumber Company a mortgage lien in the sum of $1,792.50. During the pendency of the cause the parties agreed that an order might be entered appointing a receiver over the property with authority to complete the house at a cost not to exceed $1,500, and with power to sell the premises at not less than $5,700. This agreement was embodied in the decree, which provided that the receiver should have power to rent, mortgage and sell the property, but that no sale should be made for less than $5,700, except upon petition to the court, and that the proceeds of the sale should be disbursed in the following order: To the receiver for his services, $100, and, in addition, such necessary expenses as might be allowed; to the receiver the amount disbursed by him in completing the building and the costs of mortgage and sale; to Currier Lumber Company, $1,792.50, with interest and costs, less any moneys realized by it from the certain other transactions therein detailed; to plaintiffs, $2,459.33, with interest and costs; and then to Midwest Realty, Inc., any balance that might be remaining.

Defendants contend that the court should have held plaintiffs to their agreement to take some other lot in exchange for lot 432.

Appellants argued that, although an oral agreement of this nature would ordinarily be void, there was such sufficient partial performance of the agreement to require the application of 3...