Malone v. Kugel

• Decision Date: 04 October 1937
• Docket Number: No. 108.,108.
• Citation: 281 Mich. 351,275 N.W. 169
• Parties: MALONE et ux. v. KUGEL.
• Court: Michigan Supreme Court

281 Mich. 351

275 N.W. 169

MALONE et ux.

v.KUGEL.

No. 108.

Supreme Court of Michigan.

Oct. 4, 1937.

Suit by Thomas Malone and wife against Katherine Kugel, which was consolidated with an action by Katherine Kugel against Thomas Malone and wife. From the judgments rendered, defendant Kugel appeals.

Affirmed.

Appeal from Circuit Court, Kent County; Willis B. Perkins, Judge.

Argued before the Entire Bench.

Grant Sims and Laurence W. Smith, both of Grand Rapids, for appellant.

Knappen, Uhl, Bryant & Snow, of Grand Rapids, for appellees.

SHARPE, Justice.

Prior to 1932, Carl Kugel and wife, Katherine Kugel, operated a dry cleaning and dyeing establishment in the city of Grand Rapids. After Mr. Kugel's death, Katherine Kugel, wishing to return to Germany, sold the business and property on May 25, 1932, to A. F. Jannausch and Kathleen B. Jannausch, husband and wife, for the sum of $10,000 on a conditional sales contract with a down payment of $3,500 represented by a note and mortgage given in favor of Katherine Kugel upon certain property owned by Mr. and Mrs. Jannausch. The balance of the purchase price, namely $6,500, was to be paid in monthly installments of $100 and interest upon the unpaid principal at 6 per cent. June 14, 1932, Katherine Kugel sold her interest in the above-mentioned conditional sales contract to Thomas Malone and Stella Malone, husband and wife, for the sum of $5,500. The Malones paid the purchase price with four $1,000 bank certificates and their promissory note for $1,500 due in four years without interest.

The Jannausches paid the first five monthly installments and the interest on the unpaid principal down to and including November, 1932, and thereafter only paid the interest on the unpaid principal down to August 1, 1934. On September 1, 1934, the Malones instituted an action either in assumpsit ‘to recover the balance due on the purchase price of all tools, machinery, automobiles, fixtures, supplies, office equipment and all chattels of every name and nature’ sold to the Jannausches or an action in replevin to recover possession of said personal property. The action thus started remained pending until May 4, 1936, when it was dismissed pursuant to statute. On November 14, 1934, the Malones filed a bill against the said Jannausches in chancery praying for forfeiture of the conditional sales contract, and on December 31, 1934, a decree was rendered in favor of the Malones by which the ownership and possession of the articles mentioned in the conditional sales contract was vested in said Malones. Malones took possession January 2, 1935, and have continued to operate said business down to the trial of this cause.

On October 15, 1935, the Malones filed a suit by declaration against Mrs. Kugel in which it was charged that Mrs. Kugel promised that if the Jannausches did not make the payments as their contract provided, Mrs. Kugel would ‘cancel’ the note, and pursuant to said agreement they did pay Mrs. Kugel $4,000 in cash and did execute and deliver the note for $1,500. This declaration was later amended and the claim made that the note was ‘conditionally’ delivered to Mrs. Kugel. On August 14, 1936, Mrs. Kugel brought an action of assumpsit against the Malones on the $1,500 promissory note and by stipulation the cases were consolidated together. It is the claim of Mrs. Kugel that she made no promises or agreements whatsoever, and that she simply sold the conditional sales contract to the Malones at a discount of $1,000; while the Malones contend that the note was conditionally delivered and was not to be binding until the Jannausches paid $4,000 upon the sales contract, and that if the Jannausches failed to meet the payments as provided in the sales contract, then Mrs. Kugel was to return to Mr. and Mrs. Malone the $4,000 or such part of it as had not been paid and the business was to be returned to Mrs. Kugel.

The trial court held that the note had been conditionally delivered and dismissed Mrs. Kugel's suit; and also held in regard to the Malone suit that the failure of Mrs. Kugel to return to Malones the $4,000, as agreed upon, resulted in a loss to Malones; that $1,000 was a liberal value of the business upon November 14, 1934, and this amount plus the $500 paid to Malones by Jannausch should be deducted from the $4,000 and judgment was entered in favor of Malones for $2,500. Mrs. Kugel made a motion for a new trial and upon its denial has appealed.

The first question presented for review by Mrs. Kugel is that parol evidence was not admissible to vary the terms of a written instrument, namely, the promissory note and she cites the following cases: Frischkorn Real Estate Co. v. Hoskins, 226 Mich. 30, 196 N.W. 888;Haynes v. Hobbs, 136 Mich. 117, 98 N.W. 978;Cook...