Stephenson v. Golden

• Decision Date: 29 December 1937
• Docket Number: No. 129.,129.
• Citation: 276 N.W. 849,279 Mich. 710
• Parties: STEPHENSON v. GOLDEN et al.
• Court: Michigan Supreme Court

279 Mich. 710

276 N.W. 849

STEPHENSON

v.GOLDEN et al.

No. 129.

Supreme Court of Michigan.

Dec. 29, 1937.

On rehearing.

Former opinion modified, and decree of trial court reversed and case remanded for an accounting. Motion to take further testimony and retry case denied.

For former opinion, see 279 Mich. 493, 272 N.W. 881.

WIEST, J., dissenting. Appeal from Circuit Court, Wayne County, in Chancery; De Witt H. Merriam, Judge.

Argued before the Entire Bench except BUTZEL, J.

John R. Rood, of Detroit, for appellant.

Van Osdol, McGregor & Dixon, of Detroit, for appellees Irving Golden and Minnie Golden.

Butzel, Levin & Winston, of Detroit, for appellee Helen Jaffe.

POTTER, Justice.

Upon rehearing, it is ordinarily unnecessary to review the facts. The rehearing granted was not limited to a reconsideration of any specific question of fact or law.

The bill of complaint filed October 26, 1935, alleges defendant Irving Golden represented to plaintiff he was a licensed real estate broker authorized to engage in the business of buying and selling real estate in Michigan and elsewhere; that upon such representation plaintiff employed Golden to negotiate for the purchase by plaintiff of title to real estate described in the bill of complaint; that defendant Irving Golden undertook and faithfully promised plaintiff to represent him in negotiating for the purchase of the premises, title to be taken in the name of plaintiff; that, in violation of the rights of plaintiff, intending to cheat, wrong, and defraud him in the premises, and using private, confidential information furnished by plaintiff to defendant Irving Golden, he, in violation of the contract and without the knowledge or consent of plaintiff, purchased and took title to the premises in the name of Irving Golden and caused the same to be recorded in the office of the register of deeds; that afterwards Irving Golden, conspiring with his wife, Minnie Golden, and one Helen Jaffe, as conspirators, and acting with full knowledge of the rights of plaintiff in the premises, and intending further to cheat, wrong, and defraud plaintiff, did execute and cause to be recorded in the office of the register of deeds a quitclaim deed from Irving Golden and wife to Helen Jaffe; that defendant Irving Golden induced plaintiff to postpone obtaining conveyance of the premises by responding to plaintiff's repeated requests for conveyance with various excuses, promising soon to make such conveyance to plaintiff, which promises defendant Irving Golden refused to perform, to plaintiff's injury; that as a result of such transactions, defendants hold title to the premises under a constructive trust in favor of plaintiff. The bill of complaint was filed to obtain specific performance of such trust, and plaintiff offers and alleges he stands ready and willing to do and perform whatever to the court shall seem just and equitable. The bill of complaint prays that defendants be ordered and decreed to make conveyance of the premises to plaintiff on such terms as to the court shall appear just and equitable and, upon failure to make such conveyance, that the decree of the court operate as such; that defendants be restrained from selling, transferring, or incumbering the premises until the cause can be determined upon the merits, and from appropriating or receiving meanwhile any of the rents and profits thereof; that defendants come to a true and just account with plaintiff in the premises; and for other relief.

Upon filing this bill of complaint, lis pendens was filed and an injunction issued. December 18, 1935, defendant Irving Golden filed an answer to the bill of complaint of plaintiff in which he denies he used any private, confidential information furnished by plaintiff; alleges he never met plaintiff, never became acquainted with him; and denies any private or confidential information was ever given him by plaintiff. Further answering, he admits he purchased the title to the premises; alleges that, after he became the owner thereof, he had negotiations with John R. Rood, attorney of record for plaintiff, in relation to the sale of the property, but that the negotiations were never consummated; alleges ‘that at the time of purchasing the title to said property this defendant went into a partnership arrangement on this deal with Helen Jaffe for the reason that this defendant did not have the capital to personally handle the deal, and further says, that shortly thereafter he and Minnie Golden, his wife, executed a deed in blank to the said Helen Jaffe for the purpose of securing her against loss in the premises and that thereafter the said Helen Jaffe did pay out to this defendant his full share or interest in the property and that the said Helen Jaffe thereupon became the sole owner thereof.’ He denies all manner of conspiracy and denies that, as a result of any transactions, he, or any of defendants, ‘hold the premises under any constructive trust.’ He denies plaintiff is without remedy; and alleges the bill of complaint was filed to incumber or attempt to incumber the title in question. He alleges he never met, saw, or talked to plaintiff; denies there ever was any agreement, either verbal or in writing, between them with reference to the purchase of the title to the property; and ‘further shows that he has been informed by his attorneys that under the statutes of the State of Michigan any agreement with reference to real estate or sale and purchase thereof must be in writing in order to be mutually effective and binding.’

Minnie Golden, wife of Irving Golden, alleges the only interest she ever had in the property was a dower interest and, at the request of her husband, she signed her name to a deed of the property. She denies she ever met, knew, or talked to plaintiff, or ever had any dealings with him, or ever signed any agreements with him in writing pertaining to the property.

The defendant Helen Jaffe, February 8, 1936, filed a motion to dismiss the bill of complaint for the reasons, among others: Because the agreements set forth by the plaintiff in his bill of complaint are void under the statute of frauds of this state in such case made and provided; because any rights claimed by the plaintiff under the allegations contained in the bill of complaint are void by reason of the statute of uses and trusts of the state of Michigan in such case made and provided. Helen Jaffe, for answer, says the alleged agreement set forth in plaintiff's bill of complaint is void under the statute of frauds and other statutes of the state of Michigan. She says she purchased this property as a bona fide purchaser, without notice of any of the rights, if any, of plaintiff in the property. She says any contract or agreement relied upon by plaintiff with Irving Golden is void, contrary to public policy, by reason of the statute of frauds, and by reason of the provisions of the statute of uses and trusts. As to the other allegations contained in the bill of complaint, she alleges she has no knowledge.

The case came on for hearing before a circuit court commissioner March 30, 1936. Counsel for defendant Jaffe said: ‘I would like to point out to the court the issues that would be involved upon a motion to dismiss. The bill of complaint states the facts that I have just stated and then continues further with the allegation that Golden, notwithstanding the alleged agreement that he made with Stephenson, bought the property and took the title in his own name, and then sold the real estate to the defendant Jaffe, and there is the blanket allegation of conspiracy. Now the bill of complaint says nothing about Stephenson's furnishing the money for the acquisition of this property; says nothing about Stephenson's furnishing the consideration, or any consideration for the acquisition of this property; says nothing about any instrument in writing being entered into and executed by the defendant Golden in connection with that alleged agreement that is set forth in the bill of complaint. The bill of complaint is defective. * * * Because it is, this is an attempt to create a trust or impose a trust upon the defendants involving real estate and that by way of oral evidence, parole testimony. That is prohibited by the statute of frauds. There can be no resulting trust in this situation; in the first place, the plaintiff doesn't claim that he furnished any money for the acquisition of this property, and secondly, even if he had, the statute has abolished the resulting trusts in this state, section 12971, Compiled Laws of 1929. The bill is defective. I think your honor should give us an opportunity to argue the motion.’

Counsel for defendant Golden said: ‘I represent one of the defendants here, and I would like to add a word in support of Mr. Quint's request. I believe this case should be disposed of on a motion for dismissal.’

‘The Court: You base your defense solely on the question of law, Mr. Quint?

‘Mr. Quint: Yes.

‘The Court: Since Mr. Rood is from out of town, I see no harm in his putting in his testimony, and then arguing the matter together, either here or in the Circuit Court.

‘Mr. Quint: If testimony is taken at this time without waiving our objections to the testimony, our motions to dismiss that have been filed, we would want to go ahead and put in such proof as we want to.

‘The Court: The testimony would be taken with the understanding that your motion to dismiss is before the court undisposed of, and it would be taken into consideration with the testimony, and if it is a question of law any testimony put in wouldn't affect the motion.’

John R. Rood testified he was acting as attorney and agent for plaintiff; that Irving Golden came to him in the spring of 1935 to negotiate for the purchase of certain bonds on property not involved in this suit; as a result of that negotiation, Golden stated he was a real estate broker engaged in buying and selling properties in Detroit, that was in May or June...