Lendzion v. Senstock, 65.

• Decision Date: 06 January 1942
• Docket Number: No. 65.,65.
• Citation: 300 Mich. 346,1 N.W.2d 567
• Parties: LENDZION et ux. v. SENSTOCK et ux.
• Court: Michigan Supreme Court

300 Mich. 346

1 N.W.2d 567

LENDZION et ux.

v.SENSTOCK et ux.

No. 65.

Supreme Court of Michigan.

Jan. 6, 1942.

Action by Leonard C. Lendzion and Augusta Lendzion, his wife, against Joseph A. Senstock and Frances Senstock, his wife, for specific performance of an oral agreement to enter into a land contract, wherein the defendants filed a cross-bill. From an order appointing a receiver with directions to determine and collect a fair monthly rental from plaintiffs, the plaintiffs appeal.

Order vacated and set aside, and case remanded for hearing on the merits.

Appeal from Circuit Court, Wayne County, in chancery; George B. Murphy, Judge.

Argued before the Entire Bench.

Edward P. Echlin, of Detroit, for appellants.

Ray V. Richards, of Detroit, for appellees.

CHANDLER, Chief Justice.

It appears from the pleadings in this case that the plaintiffs desirous of obtaining a home for themselves, on March 30, 1939, entered into a preliminary agreement for the purchase of a certain house and lot in Grosse Pointe Woods with Robert G. and William J. Kitchen, title holders, for the sum of $8,500, expecting at that time that they would be able to obtain a loan for this amount from the Federal Housing Administration; that they anticipated that it would take about thirty days to obtain this loan. Plaintiffs then went to defendants, the defendant Frances being a sister of plaintiff Leonard, and also to another sister of plaintiff Leonard, a Mrs. Estelle Krebs, for financial assistance pending the negotiations to obtain the F.H.A. loan. Mrs. Krebs agreed to loan $4,000 and to take defendants' note for this amount, and defendants agreed to advance the balance of the purchase price, $4,500, and take title to the premises in their own names.

The premises in question were purchased with the $4,000 advanced by Mrs. Krebs and the $4,500 advanced by defendants, and title to same was taken in the names of defendants. Plaintiffs then moved onto the premises.

Negotiations for the F.H.A. loan fell through and defendants then executed to Mrs. Krebs a mortgage on the premises to secure the note they had given for the $4,000 that she advanced.

It is alleged in the pleadings that some payments of interest were made to Mrs. Krebs by plaintiffs and that plaintiffs also paid some taxes.

On June 28, 1940, the plaintiffs herein filed their bill of complaint alleging substantially the foregoing facts, but urging that defendants were to take title to the property as security for the money advanced by them, and further it is the claim of the plaintiffs that the defendants agreed orally to execute a land contract to plaintiffs for the sale of said premises for the sum of $10,500 with interest at 4%, and should allow plaintiffs a credit on said contract of $2,000, thus reducting the amount of the principal thereof to the amount that defendants and Mrs. Krebs had advanced in payment for said property. Plaintiffs further allege that after moving onto said property they paid interest to Estelle Krebs on the mortgage given to her by defendants, and also paid to defendants interest on the remaining $4,500 with the exception of the June 1, 1940, payment, and that their reason for refusing to pay this interest was because defendants refused to execute a land contract to plaintiffs in accordance with said oral agreement. The plaintiffs alleged that they always have been, and still are, ready and willing to enter into a land contract with the defendants in accordance with their said oral agreement, and in their amended bill of complaint they seek specific performance by defendants of such oral agreement to enter into a land contract.

For answer to said bill of complaint the defendants admit that plaintiffs went into possession of the premises described in the bill of complaint and made payments of interest, and admit that they refused to sign a land contract, which was prepared by plaintiffs, insisting that the agreement to make said contract is invalid and unenforceable because not reduced to writing and subscribed to by the party to be charged as required by 3 Comp.Laws 1929, sec. 13411 (Stat.Ann. 26.906).

Defendants file a cross-bill alleging that they took title to said premises as security for the repayment of their loan, and urge that it was expressly agreed between the plaintiffs and defendants that the defendants were to hold the title to said premises only until plaintiffs could obtain an F.H.A. loan for a sum sufficient to repay them the $4,500, which they advanced in payment for said premises. They also allege the execution and delivery of a promissory note to Estelle Krebs for the sum of $4,000, and also the execution to Mrs. Krebs of a mortgage to secure the repayment of said sum. Defendants further allege in said cross-bill that the proposed land contract was contrary to the agreement between the parties, and allege that the said plaintiffs are in default in the repayment to said defendants of the amount loaned to them, as well as in interest payments, and allege further default in not paying insurance premiums, and taxes assessed against said premises, and ask for a determination of the interest of the parties to this cause, including that of Estelle Krebs, and for a decree requiring plaintiffs to come to an accounting with the defendants, and in the event the court finds the deed to the defendants to be a mortgage lien on said premises, that foreclosure of same be decreed.

On April 21, 1941, the defendants herein petitioned the court for the appointment of a receiver, and the determination by the court of a fair rental value for the premises to be paid to said receiver during the pendency of this suit. Said petition alleged, amongst other things, that the defendants had made Estelle Krebs a party to their cross suit inasmuch as she had started foreclosure against them of the mortgage given to secure her loan of $4,000, but state they had been unable to secure service of process upon her, and that she has deliberately evaded service of process in furtherance of a scheme entered into...