Piotrowski v. State Land Office Bd.

• Citation: 302 Mich. 179,4 N.W.2d 514
• Decision Date: 10 June 1942
• Docket Number: No. 30.,30.
• Parties: PIOTROWSKI et ux. v. STATE LAND OFFICE BOARD et al.
• Court: Supreme Court of Michigan

302 Mich. 179

4 N.W.2d 514

PIOTROWSKI et ux.

v.STATE LAND OFFICE BOARD et al.

No. 30.

Supreme Court of Michigan.

June 10, 1942.

Action by Walter Piotrowski and Sophia Piotrowski, his wife, against State Land Office Board and David Baum to compel defendant Board to execute and deliver land contract to plaintiffs, to decree that defendant Baum has no interest in the property entitling him to match the bid received by defendant Board at scavenger sale, to enjoin defendant Board from issuing a land contract to defendant Baum, and to enjoin defendant Baum from interfering with plaintiffs' possession of the property. From a decree dismissing bill of complaint with prejudice, plaintiffs appeal.

Affirmed.

Appeal from Circuit Court, Wayne County, in Chancery; Harry B. keidan, judge.

Before the Entire Bench.

McKenzie & Hamilton, of Detroit, for appellants.

Alvin D. Hersch and Samuel H. Weisman, both of Detroit, for appellee David Baum.

STARR, Justice.

Plaintiffs appeal from an order entered December 4, 1941, denying their motion for a rehearing on an order entered May 22, 1941, dismissing their bill of complaint.

In 1916 plaintiffs acquired title to the land in question, located in the city of Hamtramck. In about 1926 they constructed a two-story building thereon, the upper story being used by plaintiffs for residence purposes and the ground story for commercial purposes. In 1926 they executed a mortgage on such property in the amount of $5,000 to the Peoples State Bank of Detroit. Such mortgage was assigned to the First National Bank and later passed to B. C. Schram, receiver of the bank.

Plaintiffs defaulted in the payment of taxes on the property for 1935 and prior years. At the tax sale in May, 1938, the property was bid in by the State of Michigan. Neither plaintiffs nor receiver Schram redeemed from such tax sale, and the State's title became absolute on November 3, 1939 (1 Comp.Laws 1929, § 3467, as last amended by Act No. 325, Pub.Acts 1937). In 1939 receiver Schram began foreclosure of the mortgage by advertisement and at sheriff's sale on August 9, 1939, bid in the property for $1,900 and received sheriff's deed. Plaintiffs did not redeem from such foreclosure sale, their right to redeem expiring on August 9, 1940.

On September 3, 1940, about 25 days after plaintiffs' right of redemption from the foreclosure sale had expired, the property was sold by defendant State land office board at public auction (commonly known as the scavenger sale) in pursuance of Act No. 155, Pub.Acts 1937, as amended by Act Nos. 29, 244, and 329, Pub.Acts 1939 (Comp.Laws Supp.1940, § 3723-1 et seq., Stat.Ann.1941 Cum.Supp. § 7.951 et seq.). At such sale the property was bid in by a third party, not named in the record, at a price of $3,750. On September 27, 1940, receiver Schram executed quitclaim deed of the property to defendant Baum for a price of $1,500. Within 30 days after the scavenger sale, plaintiffs and defendant Baum each filed matching bids with defendant board, made the required payments, and requested land contracts. The board determined that defendant Baum was entitled to match the bid received at the scavenger sale. The board further determined that, because the period of redemption in the foreclosure proceedings had expired August 9, 1940, plaintiffs had lost their right and privilege as former owners to present a matching bid.

Defendant Baum began proceedings before a circuit court commissioner to obtain possession of the property. On November 30, 1940, plaintiffs began the present chancery action asking that defendant board be required by decree to execute and deliver land contract to plaintiffs; that defendant Baum be decreed to have no interest in the property entitling him to match the bid received by the board at the scavenger sale; that the board be enjoined from issuing land contract to defendant Baum; and that Baum be enjoined from interfering with plaintiffs' possession of the property. An order to show cause and restraining order were issued. Defendant Baum answered denying plaintiffs' right to relief sought and asked dismissal of their bill. Defendant board answered and moved to dismiss plaintiffs' bill. On March 6, 1941, the court entered an order dismissing plaintiffs' bill of complaint with prejudice and dissolved the restraining order. On plaintiffs' motion the court, on April 14, 1941, granted a rehearing. The parties stipulated as to certain facts for the ‘purpose of decision on defendants' motion to dismiss':

‘1. * * * that mortgage foreclosure sale under advertisement was held August 9, 1939, and (plaintiffs') equity of redemption from same expired August 9, 1940; that public (scavenger) sale was set for July 12, 1940, by State land office board but same was not held at that time; said premises being offered for sale on September 3, 1940, and that public (scavenger) sale under the land board act was held on September 3, 1940, and property bid in by a stranger at $3,750; that defendant Baum received his deed from the receiver of the First National Bank-Detroit on September 27, 1940, and both plaintiffs and defendant Baum filed matching bids within the period of 30 days from said sale as provided by the statute; that the State land office board rejected plaintiffs' bid and accepted bid of defendant Baum.

‘2. That plaintiffs claimed that they had an investment of $20,228 in said premisesand defendant, David Baum, claimed that in addition to agreeing to meet the bid made at public sale of $3,750, he had paid $1,500 to the receiver of the First National Bank -detrOit, purchaser at mortgage foreclosure sale, for the title to said premises and right to match the bid, or a total of $5,250. Defendant Baum claimed that this figure represents the present fair market value of said premises, inasmuch as $1,500 was the highest price that said receiver could secure for the right to match the bid at open sale at which plaintiffs made a lesser offer, which was refused.

‘Plaintiffs claimed that the present fair market value of said premises is at least $9,000.’

On May 22, 1941, the court dismissed plaintiffs' bill of complaint on the ground that it failed to state a cause of action. The court's finding stated, in part:

‘The court does hereby make the following findings for the purpose of decision upon the said order to show cause and motion to dismiss bill of complaint and vacate restraining order:

‘1. That the bill of complaint filed herein fails to state or present a cause of action and, therefore, the motion to dismiss is granted and the said bill of complaint dismissed and the restraining order vacated, with costs to defendants to be taxed.

‘2. That the decision of the State land office board that defendant, David Baum, is the only person entitled as ‘owner’ to exercise the privileges granted to former owners by the pertinent provisions of the land board act, Act No. 155, § 7, Pub.Acts 1937, as amended, with regard to the premises in question and to meet the bid made at the public sale on September...