People's Sav. Bank v. Geistert

Decision Date07 April 1931
Docket Number59.,Nos. 58,s. 58
Citation235 N.W. 888,253 Mich. 694
PartiesPEOPLE'S SAV. BANK v.v GEISTERT et al. VAN RAALTE v. SAME.
CourtMichigan Supreme Court

OPINION TEXT STARTS HERE

Appeals from Circuit Court, Ottawa County, in Chancery; Fred T. Miles, Judge.

Separate suits by the People's Savings Bank, administrator of the estate of Patrick McCarthy and another, and by Abbie Van Raalte against Lewis A. Geistert, assignee of the Grand Rapids Trust Company, as receiver, and another. From the decree, defendant named appeals.

Reversed.

Argued before the Entire Bench.Dunham, Cholette & Allaben, of Grand Rapids (Knappen, Uhl, Bryant & Snow, of Grand Rapids, of counsel), for appellant.

Leo C. Lillie, of Grand Haven, for appellees.

POTTER, J.

Fred Z. Pantlind, as trustee, bought the lands involved herein on several land contracts. The contracts contained a covenant against assignment without the written consent of the vendors indorsed thereon. No indorsement of vendor's consent to their assignment was made on any of the contracts. Pantlind as trustee transferred his vendee's interest in the land and contracts by quitclaim deed to the Sunset Terrace Resort Company, a corporation. The articles of association of the Sunset Terrace Resort Company state it is assignee of the vendee's interest of Pantlind, trustee, in the land contracts. The Sunset Thrrace Resort Company became insolvent. The Grand Rapids Trust Company was appointed receiver for it by the circuit court of Kent county, in chancery, and the property and assets of the corporation were offered for sale by the receiver and sold at receiver's sale. Defendant Geistert made an offer in writing for the assets and property of the Sunset Terrace Resort Company which contained the following:

‘This offer will be sufficient to pay in full all claims now allowed, except claims arising upon land contracts, mortgages, taxes and other liens upon real estate, which I will assume and will pay or make such settlement as may be possible after receiving proper conveyances or assignments from the receiver.’

Geistert's offer was accepted, an appropriate order entered by the court in the receivership proceedings, the sale made, approved, and confirmed by order of the court. Plaintiffs seek specific performance of the land contracts and the right to a decree for deficiency against defendant Geistert. From a decree for plaintiffs, defendant Geistert appeals.

1. Are plaintiffs entitled to specific performance and a decree for deficiency against defendant Geistert? ‘The principle which is material to be considered is, that the court gives specific performance instead of damages only when it can by that means do more perfect and complete justice.’ Wilson v. North-hampton, etc., Ry. Co., L. R. 9 Ch. 279.

It is strictly an ancillary and supplementary remedy and ‘is confined to those classes of agreements for whose breach the mere payment of pecuniary damages is acknowledged to be either impracticable or inadequate.’ McCall v. Atchley, 256 Mo. 39, 164 S. W. 593, 597. Pomeroy Specif. Perf. par. 4.

‘The only thing due to the vendor is his money, and this is due as an ordinary money debt, which it is the object of the suit to collect. * * * While at law the title remains in the vendor, yet in equity the contract conveys it to the vendee, and the only principle which allows the vendor to sue for his money, and at the same time seek security against the land, is the one which recognizes the analogy to a vendor's lien. * * * A bill by a vendor is always to get his money, and the lien on the land is only a means of collecting it in whole or in part.’ Fitzhugh v. Maxwell, 34 Mich. 138.

‘It is in the nature of a bill of foreclosure, and when the rights under the contract are determined, the court will have full power to provide for the protection of all equities, and to order a sale for the satisfaction of moneys due, if necessary.’ Day v. Cole, 56 Mich. 294, 22 N. W. 811, 812.

‘It is well settled that specific performance is granted in favor of the vendor of land as freely as in favor of the vendee, though the relief actually obtained by him is the recovery of money, the purchase price.’ Pearson v. Gardner, 202 Mich. 360, 168 N. W. 485, 486, L. R. A. 1918F, 384.

2. It is fundamental that the contract between the parties must be mutual and the rights thereunder reciprocal in order to entitle either to specific performance.

‘The contract or agreement sought to be enforced, must be mutual, and the tie reciprocal, or a court of equity will not enforce a performance.’ McMurtrie v. Bennette, Har. 124.

‘It is a general rule that a court of equity will not decree a specific performance where the remedy is not mutual, or one party only is bound by the agreement.’ Hawley v. Sheldon, Har. 420.

Where there is no mutuality of obligation or no mutuality of remedy, a specific performance will be refused. Gillette v. Metzgar Register Co., 243 Mich. 48, 219 N. W. 644;Gannon v. Stansfield, 216 Mich. 440, 185 N. W. 705.

‘That as a requisite to specific performance there must be mutuality of the obligation and of remedy has been made in innumerable cases and is accepted by the textbooks as a cardinal principle.’ 36 Cyc. 621.

3. The assignment of a land contract is a mere release of interest. The vendor may not compel specific performance by the assignee of the vendee.

‘Where an agreement has been assigned, the vendor cannot compel the assignee to perform, there being no contract between them. * * * In such case the vendor must enforce the contract against the original vendee.’ Waterman, Spec. Performance, par. 68.

‘The assignee of the vendee is not a proper party to a bill for specific performance.’ Anon v. Walford, 4 Russ. 372; Corbus v. Teed, 69 Ill. 205; Waterman, Spec. Perf. par. 59.

‘The vendor cannot have specific performance against his vendee's assignee, although he has paid part of the consideration; it is optional with the assignee whether or not to complete the contract.’ 36 Cyc. 760.

‘The purchaser of the vendee's interest at a judicial sale on a decree against the vendee may sue in his own name, and this principle would include the assignee in bankruptcy or insolvency, if the contract is itself assignable. While the assignee of the vendee may thus sue the vendor to enforce a specific performance, the vendor cannot, upon a mere assignment, maintain a suit against the assignee; his remedy is against the original vendee alone, unless in the change of parties the whole transaction amounts to a novation.’ Pomeroy, Spec. Perf. par. 487.

In Corbus v. Teed, 69 Ill. 205 the vendee sued his assignee to compel him to perform. It was said:

Complainant could not compel him to perform. Should he file a bill for such purpose, the answer would be, that he had made no contract with complainant. Hastings, by the assignment, had right to pay the money and demand a deed. In such case a court of equity would, undoubtedly, compel a conveyance, if the transaction was bona fide. The offer of the deed to Corbus was according to the contract.’

4. There was no agreement by the Sunset Terrace Resort Company, in writing or otherwise, to pay the amount due or to grow due on the land contracts. Geistert, as purchaser at receiver's sale, could acquire no other or greater interest than that possessed by the receiver, which in turn had no other interest than that of the Sunset Terrace Resort Company. Reliance by plaintiff to sustain its proposed decree for deficiency against defendant Geistert is based upon the language of his bid above quoted, accepted by the trustee of the sale, its approval by the court, the sale made, and the order of confirmation entered.

5. There is no doubt but the purchaser of mortgaged lands, who assumes and agrees in writing to pay the mortgage, may be held by a personal decree for any deficiency which may result from the sale of the premises. Crawford v. Edwards, 33 Mich. 354;Miller v. Thompson, 34 Mich. 10;Taylor v. Whitmore et al., 35 Mich. 97;Higman v. Stewart, 38 Mich. 513;Winans v. Wilkie, 41 Mich. 264, 1 N. W. 1049;Booth v. Conn. Mutual Life Ins. Co., 43 Mich. 299, 5 N. W. 381;Gage v. Jenkinson, 58 Mich. 169, 24 N. W. 815;Sheldon v. Warner's Estate, 59 Mich. 454, 26 N. W. 667;Winsor v. Ludington, 77 Mich. 215, 43 N. W. 866;Corning v. Burton, 102 Mich. 86,62 N. W. 1040;Union Trust Co. v. Detroit Motor Co., 117 Mich. 631, 76 N. W. 112.

This liability did not exist at common law, but is based upon the statute, section 14368, Comp. Laws 1929, which provides:

‘If the mortgaged debt be secured by the obligation or other evidence of debt of any other person besides the mortgagor, the plaintiff may make such person a party to the bill, and the court may decree payment of the balance of such debt remaining unsatisfied, after a sale of the mortgaged premises, as well against such other person as the mortgagor, and may enforce such decree as in other cases.’

It has been repeatedly held by the court that this statute is the sole basis of the right to a decree for a deficiency against a purchaser of mortgaged premises who assumes and agrees to pay the mortgage. Booth v. Conn. Mutual Life Ins. Co., 43 Mich. 299, 5 N. W. 381;Gage v. Jenkinson, 58 Mich. 169, 24 N. W. 815;Winsor v. Ludington, 77 Mich. 215, 43 N. W. 866;Corning v. Burton, 102 Mich. 86,62 N. W. 1040.

In Gage v. Jenkinson, 58 Mich. 169, 24 N. W. 815, 817, it is said:

‘The practice in this class of cases of allowing a personal decree against even the mortgagor himself comes from no original equitable jurisdiction, but springs from quite recent statutory authority.’

In Winsor v. Ludington, 77 Mich. 215, 43 N. W. 866, 867, it is said:

‘The power to make a personal decree against the makers of a mortgage upon real estate, or against others interested in its payment upon a foreclosure in chancery, comes entirely from the statute.’

In Corning v. Burton, 102 Mich. 86,62 N. W. 1040, 1041, it is said:

‘A personal decree may be rendered in a foreclosure case against a grantee of the...

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