Pellerito v. Weber

• Decision Date: 26 February 1970
• Docket Number: No. 3,Docket No. 6728,3
• Parties: Peter PELLERITO and Rosaria Pellerito, his wife, Plaintiffs-Appellants, v. Wilmer L. WEBER and Anne Weber, his wife, and Eldon J. Dreher and Mrs. Eldon J. Dreher, his wife, Defendants-Appellees
• Court: Court of Appeal of Michigan — District of US

Page 236

177 N.W.2d 236

22 Mich.App. 242

Peter PELLERITO and Rosaria Pellerito, his wife, Plaintiffs-Appellants, v. Wilmer L. WEBER and Anne Weber, his wife, and Eldon J Dreher and Mrs. Eldon J. Dreher, his wife Defendants-Appellees.

Docket No. 6728.

Court of Appeals of Michigan, Division No. 3.

Feb. 26, 1970.

Released for Publication June 4, 1970.

T. George Sternberg, Bay City, for plaintiffs-appellants.

Paul Harvey, Bay City, for defendants-appellees.

Before LESINSKI, C.J., and McGREGOR and V. J. BRENNAN, JJ.

LESINSKI, Chief Judge.

Plaintiffs appeal a circuit court judgment in favor of defendants denying foreclosure and sale of certain land and property in Tawas City, Michigan. The stipulated facts are as follows:

On September 24, 1953, plaintiffs, as vendors, and defendants Wilmer L. Weber and Anne Weber, as vendees, executed a land contract for the sale of a motel and land. The $36,000 contract (hereinafter referred to as the 1953 contract) provided for a down payment of $13,500 and payments of $125 per month (principal and interest). Inter alia, the 1953 contract contained the following provision:

'9. The Purchaser covenants and agrees that he will not assign or convey his interest, or any part thereof, in this contract without having first obtained the written consent of Seller. Any violation by the Purchaser of this condition shall be considered a default of one of the conditions of this contract.'

The Webers have tendered and plaintiffs have accepted all monthly payments from September 24, 1953 to and including January 16, 1967 (leaving a balance, at the latter date, of $13,634.35).

On January 17, 1967, the Webers, without plaintiffs' consent, executed a land contract for the sale of the Tawas City site to defendants Mr. and Mrs. Eldon J. Dreher. This contract (hereinafter referred to as the 1967 contract) provided for a $5,100 down payment (to the Webers), and a balance of $14,000 payable at $125 per month (principal and interest). On February 18, 1967, the Drehers sent plaintiffs a check for $125 and a note stating that 'until further notice, we will be making the (1953) land contract payments for Mr. and Mrs. Weber.' Plaintiffs refused to accept this check. However, the Webers again tendered that payment and the next payments (from February 18, 1967 to and including the date of this action) to plaintiffs, who retained but did not cash the checks.

Subsequently, on March 16, 1967 and on May 5, 1967, 'notices of intention to declare forfeiture' ¹ were sent to the Webers by plaintiffs. When no response was received, the plaintiffs brought the foreclosure action resulting in this appeal.

We are asked first to determine whether paragraph 9 of the 1953 contract is valid, and second, whether the 1967 contract constituted a violation of paragraph 9. Defendants' contention, concurred in by the trial court, is that paragraph 9 is an unreasonable restraint on the alienation of property and hence null and void. We do not find it necessary to decide this issue at this time.

DB1[094][1,2 Assuming Arguendo ² that paragraph 9 is valid and that the 1967 contract constituted a default thereunder, we fail to see where plaintiff has been damaged or his position as vendor-creditor made less secure. It is axiomatic that a person cannot convey greater title than he possesses. ³ \The Webers possessed only the equitable title to the property and the facts indicate that the Drehers entered into the 1967 contract with notice of this fact. Thus the Webers and the land itself remain primarily liable upon the 1953 contract and the Drehers are estopped to deny the plaintiffs' legal title until the full purchase price (of the 1953 contract) has been paid. See Cutler v. Lovinger (1920), 212 Mich. 272, 180 N.W. 462.

Restraints on alienation of property are strongly disfavored in Michigan. Mandlebaum v. McDonell (1874), 29 Mich. 78, 107; Fratcher, 'Restraints on Alienation of Equitable Interests in Michigan Property,' 51 Mich.L.Rev. 509 (1953). Where they are permitted, they are strictly construed to prevent a forfeiture. Ortmann v. First National Bank of Monroe (1882), 49 Mich. 56, 12 N.W. 907; Hodges v. Buell (1903), 134 Mich. 162, 95 N.W. 1078; Hull v. Hostettler (1923), 224 Mich. 365, 194 N.W. 996. Here plaintiffs have not made any allegations of waste or impairment or loss of security. They continue to enjoy the benefit of their 1953 contract. See Jankowski v. Jankowski (1945), ...