Nat'l Land Co. v. Ternes, 10.

• Decision Date: 30 June 1941
• Docket Number: No. 10.,10.
• Citation: 298 Mich. 455,299 N.W. 144
• Parties: NATIONAL LAND CO. v. TERNES et al. (PLATZ LAND CO., Intervener).
• Court: Michigan Supreme Court

298 Mich. 455

299 N.W. 144

NATIONAL LAND CO.

v.TERNES et al. (PLATZ LAND CO., Intervener).

No. 10.

Supreme Court of Michigan.

June 30, 1941.

Suit by the National Land Company against Mary Ternes and others to have a purchase-money mortgage and a foreclosure sale declared void and for an accounting, wherein the Platz Land Company intervened. From a decree dismissing the bill of complaint, plaintiff appeals.

Affirmed.

Appeal from Circuit Court, Wayne County, in Chancery; Lester S. Moll, judge.

Argued before the Entire Bench.

Harris W. Wienner, of Detroit, for appellant.

Edmund J. Stafford, of Detroit, for appellees.

CHANDLER, Justice.

On April 1, 1925, the defendants herein, being the owners of certain property in the City of Detroit, entered into a land contract for the sale thereof to the Stormfeltz-Lovely Company for a consideration of $350,000, $40,000 of which was paid down and the balance was to be paid within seven years. By various assignments the vendee's interest passed into the hands of one Samuel L. Kavanau who assumed and agreed to carry out the terms of the contract.

On December 30, 1936, the Stormfeltz-Lovely Company obtained from defendants an option to purchase the vendors' interest in the property in question for the sum of $30,000. On January 14, 1937, the company assigned its interest in this option to William W. Schenck for a consideration of $500. Schenck acquired this assignment on behalf of a corporation to be, and which was, subsequently formed known as the National Land Company, the plaintiff herein.

On March 16, 1937, the defendants pursuant to this option, and the assignment thereof, gave a quitclaim deed of the property, and assigned their vendors' interest in the land contract to the plaintiff. In consideration of which, plaintiff gave to defendants a purchase-money mortgage to secure the balance due, pursuant to the option, in the sum of $29,500.

The assignment by defendants of the land contract recited that the original contract had been reduced in principal to $170,177.78, and that that agreement had in turn been modified by certain amendments respectively executed and dated April 2, 1932, March 12, 1932 and January 19, 1933, relating to extension of time for making payments and manner and costs of obtaining releases. This assignment of the land contract also contained the following provision: ‘The modification of January19, 1933, providing for reduction of unpaid principal to $100,000 to be paid in annual installments of $20,000 each beginning April 1, 1935, with interest from and after April 1, 1933, payable semi-annually thereafter.’

Soon after acquiring title and assignment of the vendors' interest in the contract, plaintiff contacted Kavanau and requested him to make payments thereon. Further demands were made upon Kavanau by plaintiff but without success. On May 7, 1937, plaintiff, by Schenck, again demanded payment of Kavanau. At this time Kavanau gave to Mr. Schenck a photostatic copy of what Kavanau claimed was an agreement with defendants modifying the terms of the contract, by virtue of which he claimed he was obliged to make no payments at that time. This photostat, which bore date March 11, 1935, provided for waiver of all defaults, and further that no payments were to be made except for release of lots which were in the amount of $100 for residence lots and $65 for business lots. If there was in fact such an agreement, the total balance due on said contract would be the aggregate sum of these release prices which totaled only $48,490.

Plaintiff showed to the defendants the photostat it had received. Defendants denied that they had ever made such an agreement and denied taht the signatures as shown by the photostat were theirs.

The mortgage given by plaintiff to defendants by its terms was to be payable $6,500 each year. Plaintiff advised defendants that it would not make any payments on the mortgage until some determination was had as to the validity of Kavanau's claim.

Plaintiff made attempts to enforce the original contract against Kavanau by bringing actions to foreclose the same. The first action was dismissed because of plaintiff's inability to pay a $1,500 mortgage tax necessary to be paid in order to entitle the contract to be received in evidence. Subsequently another action was taken against Kavanau but plaintiff was unable to obtain service as the record shows the whereabouts of Kavanau were unknown. In fact there was evidence in the case that Kavanau had become a fugitive from justice. The plaintiff never paid any principal or interest on the mortgage and also defaulted in payment of taxes. Sometime during the winter or spring of 1939 defendants...