Taylor v. S. S. Kresge Co., 70

• Decision Date: 07 January 1952
• Docket Number: No. 70,70
• Parties: TAYLOR v. S. S. KRESGE CO.
• Court: Michigan Supreme Court

Page 851

50 N.W.2d 851

332 Mich. 65

TAYLOR v. S. S. KRESGE CO.

No. 70.

Supreme Court of Michigan.

Jan. 7, 1952.

Foster, Cummins, Snyder, Cameron & Foster, Lansing (Sorling, Catron & Hardin, Springfield, Ill., of counsel), for plaintiff.

Kelley & Seelye, Lansing, for defendant and appellee.

Before the Entire Bench, except BUTZEL, J.

CARR, Justice.

Plaintiff brought suit in equity seeking the cancellation, or reformation, of a lease on business property in the city of Lansing, and for incidental relief. On motion the case was dismissed in circuit court and plaintiff has appealed, contending that he is entitled to a trial of the matters pleaded by him and a determination on the merits in accordance with facts established by proofs.

The bill of complaint alleged that in 1911 the then owner of the property in question, Elizabeth H. Stryker, leased the property to defendant for a period of 10 years for an annual rental of $1,500. In 1918 a new lease was negotiated between the parties, fixing the annual rental at $3,000 and the duration of the lease at 25 years from April 1, 1918. Mrs. Stryker died in 1919, leaving as her heirs at law as to said property her daughters, Louise S. Capps and Elizabeth S. Hart, and two minor grandsons, namely, plaintiff and his brother, Robert C. Taylor, Jr. The father of said minors was appointed their guardian by the county court of Cass county, Illinois, but there was no guardianship proceeding of any kind within the State of Michigan.

Desiring to enlarge its building, defendant, in 1925, obtained a 55-year lease from the owners of property abutting the land here in question on the north, and a lease for a term of 50 years from a party claiming to own land adjoining on the south. After some negotiations a new lease covering the land described in the lease between Mrs. Stryker and defendant, executed in 1918, with the exception of a parcel 22 feet square, was drawn. It was signed by Mrs. Capps and by Mrs. Hart, and by the father of plaintiff, purporting to act as his guardian and the guardian of Robert C. Taylor, Jr. It provided for an annual rental of $7,500 for a period of 50 years from March 1, 1926.

On January 17, 1929, plaintiff became of age. Shortly thereafter his father forwarded to him and Robert C. Taylor, Jr., who had previously become of age, the draft of an agreement providing for ratification or aboption by them of the lease. The instrument was duly executed, and presumably was returned to defendant. The bill of complaint averred that the lease executed in 1926 was void as to plaintiff and his brother, and that their purported ratification was a nullity. It also alleged that at the time of such transaction plaintiff and his brother did not have a copy of the original lease, had only partial knowledge of its provisions, and were not familiar with the rental value of properties in Lansing. It asserted that the rental fixed, $7,500 per annum, was materially less than the rental paid by defendant for the use of adjoining property, and that it was so grossly inadequate as to evidence fraud.

On November 16, 1944, Robert C. Taylor, Jr., died, leaving plaintiff as his only heir at law. The bill of complaint set forth that during his investigation of the value of property belonging to his brother he discovered for the first time that the 1926 lease was unfair and inequitable. In the prayer for relief he asked that the lease be cancelled as to the one-third interest owned by him in the premises, or, in the alternative, that the lease be modified so as to provide a reasonable rental covering plaintiff's interest from the time of the execution of the lease.

Plaintiff also filed a petition for discovery, referring to the suit for cancellation or reformation and setting forth his claim to the right sought as follows: 'That certain books, papers and documents relating to the merits of such action and of material importance in evaluating the same and the rights of the parties are in the possession and control of the defendant S. S. Kresge Company, discovery of which is required by petitioner in order to enable him to plead and properly declare his cause of action herein; and that the nature of such documents, insofar as petitioner is able to describe them from information available to him is correspondence, memoranda, files, records, data and information pertaining to negotiations and execution of the lease of said property, pertaining to the negotiations and execution of lease upon property adjoining on the north, from Nora Smith, Sue Deane and Clara L. Bradford, dated on or about April 2, 1925, and the lease upon property adjoining on the south from Robert T. Merrifield, dated on or about November 11, 1925.' The petition was supported by plaintiff's affidavit as to the situation indicated by the statement above quoted. It was formally denied by an order of the court filed May 1, 1951.

The suit was instituted October 21, 1949. Under date of November 10th following, defendant moved to dismiss, claiming as the bases therefor that the averments of the bill of complaint were insufficient to show fraud, that there was no fiduciary relation between the parties, that the facts well pleaded did not establish plaintiff's right to the relief sought, that plaintiff was guilty of laches, and that the averments of the bill of complaint did ot excuse the delay in asserting the alleged cause of action. By order filed June 6, 1950, the motion was granted on the ground of laches. The trial court in his opinion did not discuss the other matters raised by the motion to dismiss, nor did the order make reference thereto. On June 23, 1950, plaintiff moved to set aside the order dismissing the bill of complaint, referring in said motion to an application for leave to file an amendment to the bill of complaint, and setting forth that the allegations of such proposed amendment affected 'the grounds upon which said order was entered.' In form the amendment added to the averments of paragraph 13 of the bill of complaint as originally filed. It referred in some datail to plaintiff's efforts to obtain information, including correspondence from defendant relating to the details of arrangements made with plaintiff's father concerning the lease in question and the 22-foot parcel of whic plaintiff claimed to be part owner, and also information bearing on negotiations between defendant and the lessors under the other leases referred to in the bill.

It was further averred in the amendment that, in connection with a dispute between the heirs of Elizabeth H. Stryker and one Merrifield involving the ownership of said 22-foot parcel, defendant undertook to represent said heirs. Based on the claimed undertaking, the amendment asserted in effect the existence of such a relation between plaintiff and the defendant as placed a burden on the latter to disclose to plaintiff all information in its possession with reference to the lease here in question and the other leases, above referred to, covering contiguous property. After considering the amendment proffered, the trial court on January 11, 1951, filed an opinion that the averments of the bill of complaint as amended were not sufficient to establish any fiduciary obligation on the part of defendant requiring it to disclose to plaintiff information with reference to the matters specifically referred to by plaintiff in his pleading, and that the facts claimed did not establish a cause of action based on fraud. In accordance with the opinion, an order was entered January 20, 1951, dismissing the case on the basis of the following recital: 'The plaintiff having filed his motion to set aside the order heretofore entered dismissing the bill of complaint therein and his further motion for leave to file an amendment to his bill of complaint, and said amendment having been permitted; and the defendant having renewed its motion to dismiss said cause or in the alternative to strike, and the defendant's said motion to dismiss having been re-considered and the court having heard the oral arguments and considered the written briefs submitted in behalf of the respective parties, from all of which it appears that plaintiff has failed, by his amended bill of complaint, to state a valid cause of action in equity.'

On January 19, 1951, plaintiff filed amendments to different paragraphs of the bill of complaint, apparently seeking to strengthen the averments originally made by emphasizing the claim as to the alleged fiduciary obligation owing by defendant. Whether these proposed amendments were called to the attention of the trial court does not appear. The record does not indicate that a motion for leave to file was made, or that there was any order of the court with reference to them. It will be noted that the order for...