Keller v. Paulos Land Co.

• Decision Date: 22 November 1966
• Docket Number: No. 1509,No. 3,1509,3
• Citation: 5 Mich.App. 246,146 N.W.2d 93
• Parties: Joseph KELLER and Ethel Keller, Husband and Wife, Plaintiffs and Appellants, v. PAULOS LAND COMPANY, a Michigan Corporation, Defendant and Appellee. Cal
• Court: Court of Appeal of Michigan — District of US

Page 93

146 N.W.2d 93

5 Mich.App. 246

Joseph KELLER and Ethel Keller, Husband and Wife, Plaintiffs and Appellants, v. PAULOS LAND COMPANY, a Michigan Corporation, Defendant and Appellee.

Cal. No. 1509.

Court of Appeals of Michigan, Division No. 3.

Nov. 22, 1966.

James Thomson, Dearborn, for appellants.

James R. Zerafa and Richard J. Zerafa, Elk Rapids, for appellee.

Before HOLBROOK, P.J., and BURNS and HOFFIUS, ^* JJ.

HOLBROOK, Presiding Judge.

This is a suit for the balance due on a land contract, executed March 8, 1962, by Joseph and Ethel Keller, husband and wife, plaintiffs, and Frank G. Paulos, president of the defendant corporation, Paulos Land Company, for the sale of land located in Traverse City for a purchase price of $40,000. A down payment of $15,000 was made when the contract was executed.

Plaintiffs' complaint sought: (1) a $25,000 balance due, (2) interest from the date of execution of the contract to the date of judgment and (3) an injunction against defendant's parking of automobiles on an easement. ¹

Defendant's answer: (1) admitted owing the $25,000 balance, (2) alleged that interest had been stopped by an unaccepted tender on September 29, 1962, and (3) contended that the intention of the parties--as indicated both by language in the contract and by prior agreement and understanding--was that the easement could be used for parking.

Circuit Judge Charles L. Brown, sitting without a jury, heard testimony in the cause on August 4, 1964, and March 29, 1965. By opinion filed August 4, 1965, Judge Brown decided: (1) that the September 29, 1962 tender was valid and binding, (2) that plaintiffs were entitled to judgment for $25,000 with interest to date of tender in the amount of $710.17 and (3) that defendant was allowed to use the easement for parking.

At some undisclosed time, between execution of the land contract on March 8, 1962, and commencement of suit on August 3, 1963, defendant entered the land, razed the three buildings, constructed and leased other buildings, and black-topped a 103 1/2 33 foot strip of the easement which has been used for parking of cars since the buildings were constructed.

The pertinent facts appear to be as follows: Preliminary negotiations on the subject contract began on or about February 13, 1962, when the Kellers' duly-authorized agent for the sale of the property, Leo Vachow, a realtor, executed an option with Frank Paulos to purchase the property. The option was drawn by Mr. Vachow.

The option agreement offered by defendant contained the following hand-written language: '207 ft of Front street frontage including 33 ft easement along north line For parking of said Keller property * * *.' (Emphasis added) However, the copy of the option agreement offered by plaintiffs did not contain the words 'for parking.'

Mr. Paulos testified that those words were added by Mr. Vachow at a later date after they had discussed the parking problem. He said that adequate parking was the essence of the purchase and that that is why he asked for the 33 ft. easement. Mr. Vachow denied that he added the words 'for parking' or that there was ever any discussion about using the easement for parking. However, Mr. Vachow later testified that it was he who suggested an easement and he did so because: 'You would have to have access in the back there for garbage and snow removal access, Parking cars, and so on * * *.' (Emphasis added)

The land contract, which was drawn by the Kellers' former attorney, created an easement in the following words:

'together with a non-exclusive easement for purposes of ingress and egress in connection with the aforesaid parcel of land, said easement being described as 33 ft. lying north of said parcel of land, it being agreed that if seller in the development of his land north of said parcel of land, desires an alley to be established for Front Street, then such part of said easement as shall not be required for said alley shall revert to the seller. * * *'

The parties do not agree as to the meaning of the phrase 'non-exclusive.' At the court's direction, testimony was taken from both sides as to the meaning of the phrase 'non-exclusive.'

Mr. Paulos testified,

'We needed additional room for parking of cars, etc., around the building; so the attorney set this thing up, and he gave us a non-exclusive use of this property--this 33 ft. easement. We could do anything we wanted with it; we could blacktop it, we could pave it, we could do anything with the exception of building on it.'

He stated that parking facilities were required by the General Service Administration, one of his tenants on the purchased property, and that he was required to furnish seven places to Standard Oil Company, another tenant. The Traverse City chief inspector testified that a city ordinance required that between 20 and 25 parking spaces be provided for the building.

Mr. Keller testified on two occasions that he did not know what the phrase meant but, at another time, said that 'non-exclusive' meant: 'Just room to turn around, and that is all; not to park.' He said that 'for purposes of ingress and egress' meant, 'Just to turn around.' He further testified that he objected to parking on and paving of the easement during the September closing and at other times. However, he couldn't remember specific dates and places.

On August 7, 1962, Mr. Paulos wrote to the Kellers' attorney, Mr. James Thomson, enclosing three copies of what was titled 'Supplement to Land Contract.' His letter stated in part, 'However, before we continue on any further closing negotiations, I must first have in my possession these supplements to land contract agreements which we all agreed to.' The Supplement provided in pertinent part:

'Whereas it was orally agreed between the parties at that time (March 8, 1962) that the said purchaser could cause the above referenced easement to be graded and surfaced with blacktop bituminous paving.

'Now, therefore, for the purpose of clarity and in consideration of the mutual benefits to both parties, it is specifically agreed:

'That until an alley is established on the said easement property, that the said easement may be used by the purchaser, or its assigns, for the parking of motor vehicles.'

This supplement was never executed. It appears from the record that Mr. Paulos made no further attempt to have the supplement executed. At the time of the closing, Mr. Danford, Mr. Paulos' attorney, made no mention of the supplement and did not demand it.

Mr. Paulos attempted several times to arrange a closing date with plaintiffs. On September 5, 1962, Mr. Paulos made a trip to Detroit and talked to Mr. Thomson in an attempt to arrange a closing. Mr. Thomson said he would be in Traverse City the following week. Mr. Thomson did not show. Later Mr. Thomson indicated that he would be in Traverse City with the Kellers the week of September 17th. They did not show. Again on September 24th, during a telephone conversation, Mr. Thomson said he would call Mr. Paulos on Wednesday. He did not call. Later, Mr. Paulos called Mr. Thomson who indicated he would be up on Saturday. He did not show up on Saturday.

Finally, on September 29, 1962, Mr. Paulos went with his attorney, Mr. Danford, to Mr. Thomson's office in Detroit 'to close the transaction.' The Kellers were also present.

Mr. Paulos testified that Mr. Danford gave Mr. Thomson two Certified checks, one for $25,000 and the other for $710.17 for interest from the date of purchase. He testified that Mr. Thomson took the checks, laid them on his desk, picked them up again, got into an argument with the Kellers, and then set the checks down again. When Mr. Thomson left the room with the Kellers, Mr. Danford picked up the checks.

Mr. Danford testified that, 'It was stated that these checks took care of everything.' He said that he handed the checks to Mr. Thomson, but never let go of them completely 'because I didn't trust letting them go under the circumstances.' He testified that he did give Mr. Thomson 'partial possession' of the checks and that his purpose in going to Thomson's office was to make tender.

Mr. Keller said that he didn't see anyone give checks to Mr. Thomson, but he did admit that Mr. Danford had checks in his hand, that he did offer them to Mr. Thomson, that 'he said he was going to pay us up' and that Mr. Danford did offer him $25,000 and $710.17 in interest.

Mr. Paulos testified that at no time was a deed offered although one was requested. Mr. Danford testified similarly and also stated that at no time did he refuse to accept a deed. Plaintiffs did not deny that they did not offer a deed and did not explain why they didn't.

Plaintiffs made no objection at the closing or in their pleadings that the attempted payment was made by means of checks. In fact, this point doesn't seem to have been raised until trial.

On the same day, after the closing failed, Mr. Paulos and Mr. Danford discussed the possibility of purchasing the 33 ft. easement strip. Mr. Paulos offered $500 for it. Subsequently, the Kellers quoted a figure of $8,000 for the strip. No further attempts to purchase the strip were testified to thereafter.

Even after the unsuccessful closing, the parties nevertheless continued to negotiate for the completion of the sale of the principal property under the land contract. These negotiations included attempts to change the legal description which was contained in the land contract. The description was found to be erroneous as a result of a survey which was made by agreement of the parties on March 27, 1962. The survey was requested by Mr. Paulos 'because we wanted to establish the correct description of the property * * *.'

At one time, when defendant was trying to arrange a closing, Mr. Danford told Mr. Thomson to send the deed to the ...