McWilliams v. Urban Am. Land Development Co., Docket No. 10214

• Decision Date: 18 January 1972
• Docket Number: Docket No. 10214,No. 3,3
• Citation: 194 N.W.2d 920,37 Mich.App. 587
• Parties: Kenneth R. McWILLIAMS and Donelda A. McWilliams, husband and wife, Plaintiffs-Appellants, v. URBAN AMERICAN LAND DEVELOPMENT COMPANY, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 920

194 N.W.2d 920

37 Mich.App. 587

Kenneth R. McWILLIAMS and Donelda A. McWilliams, husband and wife, Plaintiffs-Appellants, v. URBAN AMERICAN LAND DEVELOPMENT COMPANY, Defendant-Appellee.

Docket No. 10214.

Court of Appeals of Michigan, Division No. 3.

Jan. 18, 1972.

Released for Publication March 9, 1972.

Elmer L. Radka, Rogers City, for plaintiffs-Appellants.

Richard G. Boyce, Henry, Knapp, Boyce & Yahne, Alpena, for defendant-appellee.

Before R. B. BURNS, P.J., and LEVIN and T. M. BURNS, JJ.

T. M. BURNS, Judge.

On November 18, 1967, plaintiffs granted to defendant a 90-day option to purchase '6 lots on the corner of Michigan and Fifth Street' in Rogers City. The option provided: 'Upon approval of project, this option will be converted to a sixmonth land contract.' The total purchase price was set at $15,000.

The 'project' involved was the construction by defendant of a public housing development for the elderly. The approval required was that of the Department of Housing and Urban Development and of the Rogers City Housing Commission. Upon completion of construction, the development was to be sold to the government.

On February 19, 1968, one day after the expiration of the 90-day option, plaintiffs and defendant executed a writing purporting to be a land contract for the sale of 'Lots 11, 12, 13, 14, 15 of Block 24,' in Rogers City. The writing acknowledged receipt by plaintiffs-vendors of $500 and provided that the balance of the $15,000 purchase price was to be paid by defendant-vendee on or before August 19, 1968. No provision was made for taking of possession by defendant prior to full payment of the purchase price. The writing, which was a standard form contract, expressly provided that there were to be no monthly payments. Paragraph 8 of the writing is a typical land contract forfeiture clause:

'If the Vendee shall fail to comply with the terms of this contract, the Vendor may take possession of said property and all the improvements thereon and treat the Vendee as a tenant holding over without permission and remove him therefrom and retain any money paid hereon as stipulated damages for nonperformance of this contract, and it is hereby expressly understood and declared that time is and shall be taken as of the very essence of this contract. Notice of said forfeiture may be given by registered mail, by depositing the same in post office, addressed to Vendee at his last known address.'

Because all of the signatures on the writing had not been witnessed, nor the writing acknowledged, the Register of Deeds could not, upon defendant's request, accept the writing for filing. However, the Register of Deeds could and, on February 28, 1969, did accept for filing an affidavit signed by Carl A. Myers, on behalf of defendant, claiming a land contract interest in 'Lots 11, 12, 13, 14, 15, of Block 24, Original Plat of Rodgers (sic) City.'

At no time has defendant paid to plaintiffs any money other than one dollar for the original 90-day option and the $500, receipt of which was acknowledged by plaintiffs in the writing of February 19, 1968.

On July 3, 1969, plaintiffs filed suit to remove a cloud from their title to 'Lots numbered 11, 12, 13, 14, 15 and 16 of Block 24, of the Original Plat of the Village, now City, of Rogers City.' The cloud sought to be removed was the affidavit of February 27, 1969, filed by defendant. On October 30, 1969, defendant counterclaimed for reformation of the writing purporting to be a contract for the sale of the same lots and for specific performance of the contract as reformed. On June 22, 1970, the trial court submitted a written opinion denying defendant's counterclaim for reformation, but ordering specific performance of the writing as written. On August 26, 1970, judgment was entered ordering plaintiffs to transfer a warranty deed to defendant upon receipt from defendant of the sum of $14,500 plus interest at the rate of 6% To the date of judgment. Defendant was also ordered to pay any taxes due on the five lots. The balance of the principal and interest were to be paid within 30 days from entry of judgment. The judgment also quieted title to Lot 16 in the plaintiffs.

In support of their complaint to remove a cloud on title, plaintiffs urged at trial that the writing of February 19, 1968, was a six-month extension of the original 90-day option, and that this extended option had expired on August 19, 1968. In response to defendant's counterclaim for specific performance, plaintiffs claimed that even assuming that the writing of February 19, 1968, was a land contract and not an extended option, defendant had abandoned the contract and, in the alternative, that defendant had failed to make any tender which is a prerequisite to a decree of specific performance.

Defendant responded to plaintiffs' complaint by contending that the writing of February 19, 1968, was a land contract. In support of its own counterclaim, defendant denied abandonment of the contract and claimed that its repeated offers to close constituted adequate legal tender.

In his opinion of June 22, 1970, the trial judge made the following determinations of fact: (1) the writing of February 19, 1968, was a land contract recognized as such by all parties; (2) defendant did...