River Rouge Sav. Bank v. Fisher

• Citation: 372 Mich. 558,127 N.W.2d 426
• Decision Date: 06 April 1964
• Docket Number: No. 27,27
• Parties: RIVER ROUGE SAVINGS BANK, a Michigan Banking Corporation, Plaintiff and Appellee, v. Eugene J. FISHER and William E. Williams, Co-Executors of the Estate of Alfred J. Blanke, Deceased, Defendants, Cross-Plaintiffs and Appellees, and Martin C. Riehl and Myrtle M. Riehl, his wife, Deceased, Defendants, Cross-Plaintiffs and Appellants.
• Court: Michigan Supreme Court

Page 426

127 N.W.2d 426

372 Mich. 558

RIVER ROUGE SAVINGS BANK, a Michigan Banking Corporation Plaintiff and Appellee, v. Eugene J. FISHER and William E. Williams, Co-Executors of the Estate of Alfred J. Blanke, Deceased Defendants, Cross-Plaintiffs and Appellees and Martin C. Riehl and Myrtle M. Riehl, his wife, Deceased Defendants, Cross-Plaintiffs and Appellants.

No. 27.

Supreme Court of Michigan.

April 6, 1964.

Kenneth J. Logan, River Rouge, for plaintiff-appellee Bank.

Eugene J. Fisher, Detroit, for cross-plaintiffs-appellees, co-executors of the estate of Alfred J. Blanke, deceased.

Joslyn, Joslyn & Dean, Detroit, for cross defendant & Appellant.

Before the Entire Bench.

ADAMS, Justice.

The question presented on this appeal is whether the trial judge was in error in granting reformation of a deed because of circumstantial evidence found to be so compelling as to overcome the direct evidence as to what took place between the grantee and the deceased grantor a the time the deed was delivered.

In 1925, Riehl and his wife took up residence in a 2-family flat owned by Alfred J. Blanke. The Riehls continued as tenants until 1951. Riehl was a nephew of Blanke and there was a close family relationship between them. On January 30, 1951, Blanke contracted to sell the property to the Riehls for $12,000 with a $4,000 down payment and monthly payments of $40 with 3% interest. The Riehls took over the collection of rent from the upstairs apartment, improved the property, and treated it as their own.

In 1952, Blanke mortgaged the property for $8.074.56 and in 1957 he refinanced it with plaintiff for $8,500. In September, 1958, for the first time the Riehls learned there was a mortgage against the premises. They visited Blanke who admitted its existence, broke down, cried, and stated he had financial problems.

A few evenings later, on September 25, 1958, the Riehls again visited Blanke at his request. Blanke's financial difficulties were further discussed. There was talk of his needing $40,000, possibly $46,000. During the evening:

(a) Blanke, grantor, wrote on the land contract, on the payment record, 'Discharged 9/25/58 A. J. Blanke.' The principal balance due on the contract was $5,906.17.

(b) Blanke, grantor, delivered to the Riehls a warranty deed to the premises. The deed warranted '* * * that they are free from all encumbrances whatever Except mortgage to River Rouge Savings Bank, River Rouge Michigan. In present principal amount of $7470.00 and that he will, and his heirs, executors, and administrators shall warrant and defend the same against all lawful claims whatsoever, * * *'. This was followed by four blank lines and the usual 'In Witness Whereof' conclusion of a deed. The deed did not contain an assumption of the mortgage by the Riehls. It was on a standard form and was not prepared by an attorney.

(c) Blanke delivered to Riehl a promissory note for $1,563.83. This amount equalled the difference between the balance due by the Riehls on the land contract and the balance owed by Blanke to plaintiff on the mortgage.

(d) Blanke instructed Martin C. Riehl to advise plaintiff bank of the transaction.

Riehl showed the deed to the bank before recording it. Blanke died unexpectedly on October 2, 1958.

On January 30, 1959, a statement and proof of claim was filed in the Blanke estate by Riehl, in which he made claim against the estate on the promissory note for $1,563.83.

On July 2, 1959, plaintiff bank filed its bill of complaint against the executors of the Blanke estate and the Riehls to foreclose the mortgage. The executors cross-claimed for reformation of the deed and assumption of the mortgage by the Riehls. The Riehls cross-claimed seeking to have the mortgage declared null and void as to them.

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