Trombley v. Koestlin

• Decision Date: 09 March 1934
• Citation: 266 Mich. 357,253 N.W. 326
• Parties: TROMBLEY v. KOESTLIN et ux.
• Court: Michigan Supreme Court

266 Mich. 357

253 N.W. 326

TROMBLEY

v.KOESTLIN et ux.

Supreme Court of Michigan.

March 9, 1934.

Appeal from Circuit Court, Wayne County, in Chancery; Victor D. Sprague, Judge.

Bill by Mable E. Trombley against Herman F. Koestlin and wife. From a decree dismissing the bill, plaintiff appeals.

Reversed and rendered.

Argued before the Entire Bench, except BUSHNELL, J.

C. Upton Shreve, of Detroit (John G. Libbers, of Detrot, of counsel), for appellant.

John H. Dohrman, of Detroit, for appellees.

NORTH, Justice.

In June, 1928, plaintiff and her husband, the latter being now deceased, purchased on contract from defendants a two-family flat in the village of Grosse Pointe Park. Total consideration was $22,000, down payment $200, monthly payments $125 each, and $3,000 payable within six months from date of contract. While the vendees made the monthly payments, they did not pay the $3,000 when due. To meet this situation the vendees gave a mortgage of $3,000 on their undivided one-fourth interest in certain lots located in Trombley Park Subdivision, Detroit, which mortgage was payable within one year from its date, January 19, 1929. Simultaneously with the execution of this mortgage the parties entered into a written agreement which was made a part of the land contract and attached thereto; and which, so far as material, reads: ‘Said land contract provides that the sum of $3,000 was to be paid as a down payment and the sum of $125 per month. Said first payment has not been made by said parties of the second part and said parties of the second part have given said first parties a note and mortgage on their undivided 1/4 interest in following property: Lots 2, 18, 31 and 34, Trombley Park Subdivision to guarantee the payment of said $3,000, within one year from the date hereof. ‘Parties of the first part therefore agree not to foreclose said land contract within one year from date provided said monthly payments of $125 are paid and all other provisions of said original land contract. This agreement to be made part of said land contract and attached thereto.’' Both the note and the mortgage contain the following recital: ‘This note and the Mortgage collateral hereto is given to secure the faithful performance of a certain land contract in which Herman F. Koestlin is the seller, and Napoleon J. Trombley is the purchaser, covering * * * (the contract property), which contract is dated June 8, 1928. If at the end of one year from this date all sums then due on said contract are fully paid, then this note and mortgage shall be of no force and effect, but if the Payee in this note is compelled to foreclose said contract, then this note and mortgage shall be in full force and effect.’ Subsequent to giving the mortgage, the vendees under the land contract defaulted in payments thereon, they also defaulted in payment of taxes, and failed to meet the mortgage obligation when due. Thereafter defendants served plaintiff which notice of forfeiture of the contract, prosecuted summary proceedings before a circuit court commissioner, and regained possession of the contract property. After recovering possession, the defendants started foreclosure of the mortgage by advertisement. Thereupon plaintiff filed the bill of complaint herein, praying that the mortgage be declared to be a cloud upon plaintiff's title to the land described therein, that the mortgage be held to be null and void, and that defendants be restrained from prosecuting foreclosure.

The ground upon which plaintiff seeks to sustain her position is set forth in her bill of complaint as follows: ‘That your plaintiff charges and alleges that said purported mortgage is totally void and of no effect by reason of the fact that the rights of the parties in and to said contract have, by the action of the...