Judd v. Carnegie

• Decision Date: 18 May 1949
• Docket Number: No. 41.,41.
• Citation: 37 N.W.2d 558,324 Mich. 583
• Parties: JUDD et al. v. CARNEGIE.
• Court: Michigan Supreme Court

324 Mich. 583

37 N.W.2d 558

JUDD et al.

v.CARNEGIE.

No. 41.

Supreme Court of Michigan.

May 18, 1949.

OPINION TEXT STARTS HERE Appeal from Circuit Court, Cass County, in Chancery; Glenn E. Warner, judge.

Action to quiet title to land by Richard M. Judd, and others against Willian G. Carnegie who filed a cross bill. From the decree, defendant appeals.

Affirmed.

Before the Entire Bench.

Seymour & Seymour, Benton Harbor, Max C. Liss, Chicago, Illinois, Nat M. Kahn, Chicago, Illinois, of counsel, for defnednat-appellant.

Burns & Hadsell, Niles, for plaintiffs-appellees.

CARR, Justice.

Plaintiff brought suit individually and as executor of the will of his father, William F. Judd, deceased, to quiet title to certain lands in Cass county. It is his claim, as set forth in the pleadings and in his testimony on the trial in circuit court, that following the death of his father he became president of the Judd Lumber Company, a corporation carrying on business in the city of Dowagiac, that at that time he discovered that defendant was indebted to the company for building material purchased and delivered, that defendant was also indebted to other from whom he had purchased materials in the construction of certain buildings, and that attempts on his part to collect from defendant were unsuccessful. Plaintiff further claims that the buildings, in the construction of which the materials in question had been used, were located on land that defendant was purchasing under contract, and that defendant was also purchasing other real estate in like manner. Thereafter plaintiff, with the approval of defendant, paid to the respective vendors in said contracts the balances remaining and received deeds to the properties. Plaintiff and defendant then entered into a land contract by the terms of which the former agreed to sell the property to the latter for the sum of $8,000, which amount was determined by adding the payments made to the contract vendors by plaintiff and the obligations of defendant for materials purchased by him from the Judd Lumber Company. Said contract was executed on or about May 26, 1928.

Thereafter defendant made further purchases from the Judd Lumber Company, and on June 25, 1930, the parties entered into a second contract in the sum of $10,000, defendant agreeing to make payments of $1,000 on June 30, 1930, § 1,500 on June 30, 1931, § 1,500 on June 30, 1932, $3,000 on June 30, 1933, and the balance on June 30, 1934, with interest at 7% per annum. No payments were made as agreed other than a payment of interest on June 30, 1930. In January, 1932, plaintiff served on the defendant a notice of forfeiture of the contract. Under date of May 4th following, defendant signed a written instrument referring to the default and declaring the contract to be null and void, reciting therein also that he surrendered possession of the entire property described in the contract. The undertaking further released plaintiff from any and all liability thereon. The parties then entered into a lease of the property to defendant at an agreed rental of $1,000 for the season from May 1, 1932, to November 1st of the same year. The lease further specified that ‘It is further agreed that any and all of this property may be sold and possession will be given upon ten days notice.’ The payments specified in the lease were not made in full.

In 1935 plaintiff executed to defendant a deed of a lot and a portion of another lot on which defendant had previously constructed buildings. Application for a loan from the Home Owners' Loan Corporation was made, and a loan was finally obtained, but in an amount less than requested. Plaintiff, in connection with this transaction, executed a so- called mortgagee's consent to take bonds, indicating in terms that he held a lien or claim on the title to the property, and agreed to take bonds of the Home Owners' Loan Corporation in adjustment of his claim. Plaintiff insists that this action on his part was taken in order to enable defendant to finance the transaction.

In the fall of 1945 defendant filed in the office of the register of deeds fo the county an affidavit in which he set forth that he was on May 26, 1928, the legal owner of the lands involved in this case, and that the transactions with plaintiff above referred to constituted a mortgage. Defendnat further set forth that he claimed title to the lands, subject to said mortgage. Upon discovering in the fall of 1946 that the affidavit had been filed as indicated, plaintiff started the instant suit. Defendant filed an answer and a cross-bill, setting forth in his pleadings substantially the claims made in the affidavit. Specifically, he asserted in his pleadings and in his testimony on the trial that the original transaction, wherein deeds were executed to plaintiff by the vendors in the land contracts evidencing defendant's interest in the properties in question, involved merely the giving of security for the payment of his obligations to the plaintiff, that the character of the transaction was not subsequently changed, and that the discharge of the second land contract entered into between himself and plaintiff was executed in 1932 subject to a verbal understanding and agreement that the prior arrangement continued. Defendant claims further in this regard that the reason for executing such cancellation was to enable plaintiff to sell the property, and that the execution of the lease covering the season of 1932 did not, in fact, create the relation of lessor and lessee as between the parties. Defendant in his cross-bill asked that he be adjudged to be the owner of the premises, that an accounting between himself and plaintiff be had, and that upon the payment of the amount found due to plaintiff a conveyance of the real estate should be required.

On the trial of the case each party testified at some length in support of the respective positions taken in the pleadings. After listening to the conflicting testimony the trial court accepted plaintiff's claim that the contract evidencing defendant's interest in the property was cancelled by the instrument executed by defendant on May 4, 1932, and that all rights of the defendant in and to the property were thereby terminated. A decree was entered accordingly, granting to plaintiff Judd, and to grantees of a part of the property who were joined as plaintiffs before the entering of the decree, the relief sought by the bill of complaint. Defendant has appealed.

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