Popielarski v. Jacobson, 39

• Decision Date: 08 June 1953
• Docket Number: A,No. 39,39
• Citation: 59 N.W.2d 45,336 Mich. 672
• Parties: POPIELARSKI et ux. v. JACOBSON et al. pril Term.
• Court: Michigan Supreme Court

Page 45

59 N.W.2d 45

336 Mich. 672

POPIELARSKI et ux. v. JACOBSON et al.

No. 39, April Term.

Supreme Court of Michigan.

June 8, 1953.

Edmund W. Tropp, Detroit, for appellants Forest Miller and Leonard badgely.

Shapero & Shapero, Detroit, for appellants Schreiber.

Joseph Freed, Detroit, for appellant Edward Jacobson.

Lee C. McManus, Detroit, for appellees.

Before the Entire Bench.

BUTZEL, Justice.

Martin Popielarski and Marie Popielarski, his wife, brought suit against Edward Jacobson and Mollie Jacobson, his wife, and Raymond Schreiber, Nathan Schreiber, Forest Miller and Leonard Badgley, claiming that they had conspired to induce plaintiffs by false representations to buy the Forest Theatre, a moving picture house situated on Woodward Avenue near the corner of West Forest Avenue, two main thoroughfares in the city of Detroit, Michigan. The case was dismissed as to Mrs. Jacobson, it being conceded that she had nothing to do with the sale. The theatre evidently was not a new one. Defendants Schreiber, as copartners, doing business as Midwest Theatre Company, owned a number of moving picture theatres, including the Forest Theatre, in the city of Detroit. Nathan Schreiber was an uncle of Jacobson, and Raymond Schreiber a cousin. They had given Jacobson and wife a five-year lease beginning July 1, 1948, for the Forest Theatre and personal property, consisting of accessories necessary to run a moving picture theatre, at a rental of $500 a month. The Jacobsons, as lessees, also agreed to pay the Schreibers, their lessors, an additional $2,000 for entering into the lease. There was also deposited with them the further sum of $3,000 as security for prompt payment of rent and performance of other covenants of the lease, the amount so deposited to be applied at the option of the lessees if they lived up to the terms of the lease on the last six months' rent to become due under the lease. The lessees further agreed to run only films that had not been previously shown at three other theatres owned by the lessors, unless such films had been rejected by lessors for such theatres, two of which were within three blocks of the Forest Theatre, and the third was not so near. Lessees thus agreed not to compete with the lessors on motion picture films which the lessors desired to display at three competing theatres.

On Sunday, January 8, 1950, plaintiffs Popielarski were attracted by the following advertisement in a local paper:

'Theater. Hot spot. Good money maker. Full price, $5000, $2500 down. Ask for Mr. Sherlock, B. & M. Realty, TR. 5-3350. 2294 West Grand Boulevard. Open 9:00 to 9:00.'

The B & M Realty Company was a copartnership, consisting of Leonard Badgley and Forest Miller, defendants herein. In the afternoon of the day the advertisement appeared, plaintiffs went to the office of the realty company and were told by Mr. Sherlock, mentioned in the advertisement and in charge of the office, that he did not have the keys, but he gave plaintiffs the location of the theatre so that they could see the exterior. The theatre was closed, but plaintiffs were attracted by its front. That evening they returned to the real estate office where they met defendants Jacobson and Badgley and also Sherlock, all of whom took plaintiffs to the theatre. It was dark, only one light in the lobby being lit. It was explained to plaintiffs that the fuses were disconnected. A cursory inspection of the premises was made. Plaintiffs saw that the lobby was upset the candy concession in disorder, and a section of the seats roped off, but nevertheless they were well impressed as far as they could determine. At that time it was also suggested that a film be run in order to try out the projection equipment. The Popielarskis accompanied Jacobson to the projection booth, where a film was run off. When Mr. Popielarski noticed that there was no sound, Jacobson explained that he did not have any sound film available, but he assured plaintiffs that the sound equipment was in good working order. This was not true, but it was subsequently put in good order at some expense. Jacobson at that time, reading from a memo book which he took from his pocket, made the statement that the theatre had grossed $28,000 in 1948 and also in 1949; that he had made a profit of $20,000 in the previous year; that the reason he was selling was in order to pool his resources with another person in order to open a large theatre in Texas; that as he did not have the time to look after the Forest Theatre he had closed it; and that he had run it on New Year's Eve and made $500 on that one night, an amount sufficient to pay a month's rent. After seeing the film Popielarski asked to see the heating system. Jacobson took him down the stairway, but they were unable to see the heating equipment because the basement was flooded. Jacobson explained that the sump pump needed repairs, but that he would take care of it. After this inspection, all of the parties returned to the real estate office. Plaintiffs testified that they then stated that they desired to look at the theatre the following day, when there would be better light, but they offered a $25 deposit on the purchase of the lease. At that time, Badgley stepped out of the room and returned with a check for $1,800, which he said had been left during their absence as a deposit for the purchase of the theatre. He told plaintiffs that their $25 was insufficient in view of the other check, and that they would have to deposit that amount or more. Plaintiffs responded with a check for $2,000. The following afternoon plaintiffs returned to the real estate office for the keys, intending to examine the theatre further. Jacobson, Badgley, Sherlock and Miller were present when they arrived. Badgley presented plaintiffs with a preliminary agreement of sale for their signatures, saying that before they could go any further they had to have the instrument signed and additional money before they could get approval of the landlord. Plaintiffs stated that they thought they should see a lawyer before they signed, but were told by Badgley that the signing of the agreement was standard practice and that they did not need a lawyer at that time because they (the realtors) were there to look out for them. Plaintiffs paid the additional $2,000 called for and signed the agreement, which reads as follows:

'Detroit, Michigan,

January 8, 1950.

'Received from Martin H. Popielarski and Marie Popielarski, his wife, the sum of two thousand (2,000.00) as deposit and part payment for Forest Theater Lease and deposit. Business located at 4635 Woodward Ave. in the city of Detroit, County of Wayne, State of Michigan, which the above mentioned party has offered to purchase (subject to approval of owner) for the sum of Five Thousand ($5,000.00) in the manner as specified below, viz.: down payment $4,000.00 and monthly payments of see below, per annum.

'Remarks: Seller is to take notes for the One Thousand ($1,000.00) dollars balance to be paid as follows: $500.00 within 60 days from date--$500.00 within 120 days from date. Seller agrees to put sump pump in basement and plumbing in good working order so that it will pass city inspection. Money to be held in escrow until license has been secured. Lease Dated Feb. 1st. If opened before Feb. 1st rent to begin on opening date.

'It is further agreed that an additional deposit of $2,000.00 will be paid by the purchaser when this agreement is accepted by the owner, or if business place is under lease, sub-lease on similar terms shall be given, or lease assigned at option of seller, and in any event sale shall be contingent upon approval of landlord; if assignment of lease involves escrow deposit, seller shall be reimbursed therefor and assign same.

'Deal to be closed on or before Jan. 19th, 1950, and possession given the purchaser by the owner immediately on closing of said deal, and a complete adjustment of all rents, insurance, taxes, etc., complying with the Bulk Sales law as required by the State of Michigan.

'The stipulations aforesaid are to apply to and bind the successors, heirs and assigns of the respective parties.

'The commission of 10 per cent shall be paid by the owner to B & M Realty & Investment Company out of the first money received, whether paid as a deposit or for any other purpose.

'It is hereby understood that all terms, conditions, and representations in the listing contract executed and signed by the owner prior to this agreement are hereby made a part of this agreement and are binding to the said owner.

'I have read the above receipt and agreement and agree to purchase the said business and/or property in accordance with all the terms and conditions as herein set forth. Both parties hereby acknowledge receipt of a true copy of this agreement.

'(Sgd) Martin H. Popielarski

'Martin Popielarski

'(Sgd) Marie Popielarski

'Marie Popielarski

'(Sgd) Edward Jacobson

'Edward Jacobson.

'Witness: (Sgd) F. L. Miller.

'Purchaser's Receipt of Accepted Offer.

'The undersigned purchaser hereby acknowledges the receipt of the seller's signed acceptance of the foregoing offer to purchase.

'(Sgd) Martin H. Popielarski

'(Sgd) Marie Popielarski

'Dated: 1-9-1950.'

After the agreement was signed, and plaintiffs thus were bound, plaintiffs and Jacobson went to the office of the Schreibers, doing business as the Midwest Theatre Company, the lessors, whose consent was necessary to the assignment of the lease, which contained some restrictions. On the way Jacobson told plaintiffs that they could not go wrong in their purchase, that he had made money while he operated the theatre, and he showed them a picture of an uncle who, he stated, had made large profits from the theatre and who was a retired millionaire living in Florida. Upon arriving at the office of the Midwest Theatre Company, plaintiffs were asked to wait in the lobby while Jacobson went into talk with Nathan Schreiber. What transpired...