William F. Nance Realty Co. v. Wood-Wardowski Co.

• Decision Date: 03 April 1928
• Docket Number: No. 85.,85.
• Citation: 218 N.W. 680,242 Mich. 110
• Parties: WILLIAM F. NANCE REALTY CO. v. WOOD-WARDOWSKI CO.
• Court: Michigan Supreme Court

242 Mich. 110

218 N.W. 680

WILLIAM F. NANCE REALTY CO.

v.WOOD-WARDOWSKI CO.

No. 85.

Supreme Court of Michigan.

April 3, 1928.

Appeal from Circuit Court, Wayne County, in Chancery; Parm C. Gilbert, Judge.

Bill by the William F. Nance Realty Company against the Wood-Wardowski Company. From a decree dismissing plaintiff's bill, plaintiff appeals. Affirmed.

Argued before the Entire Bench.Robert M. Dalton, of Detroit (Philo A. Hickey, of Detroit, of counsel), for appellant.

S. Homer Ferguson, of Detroit, for appellee.

FELLOWS, J.

The primary purpose of plaintiff's bill is to relieve it from an alleged defective foreclosure of a land contract, supplemental to which a decree against defendant for specific performance of said contract is asked. The contract in question, dated December 14, 1925, was given by defendant to William F. Nance. The property involved is described as:

‘Greater Detroit New City Park subdivision of part of the E. one-half of Sec. 5, T. 2 S., R. 10 E., Dearborn township, Wayne county, Michigan. Plat Liber 54 Plats, page 60, except the part vacated. Greater Detroit Fordson Highway subdivision of part of the E. one-half of Sec. 5, T. 2 S., R. 10 E., Dearborn township, Wayne county, Michigan, Plat Liber 57 Plats, page 89. Both subdivisions containing 60.347 acres, according to the survey thereof, more or less.’

The agreed purchase price for the property is $126,494, with a payment of $5,000 down, the balance payable in monthly installments of $5,000 each, beginning January 14, 1926, not less than that sum each month thereafter, with interest on deferred payments at the rate of 6 per cent. per annum while the purchaser is not in default, and 7 per cent. per annum if in default, with a provision that the entire purchase price, with interest, shall be fully paid within 11 months. The initial payment of $5,000 down was made by Nance, after which no further payments were made or tendered by him or any one else.

To exploit these subdivisions, Nance organized plaintiff corporation, under the name ‘William F. Nance Realty Company,’ with an authorized capital of $50,000. Its articles of incorporation were received by the secretary of state on November 21, 1925, entered and filed by him January 15, 1926, and on that date copy of same was filed with the county clerk of Wayne county. Three incorporators and stockholders are shown, consisting of himself and two associates, named Marshall and Tyson, with Nance as president, Marshall vice president, and Tyson secretary and treasurer. They state in their articles of association:

‘The amount subscribed is one thousand ($1,000.00) dollars and no shares of no par value. The amount paid in is one thousand ($1,000.00) dollars. * * * The amount of actual capital, in cash or property, or both, which this corporation owned and possessed at the time of executing these articles is one thousand ($1,000.00) dollars.’

On January 16, 1926, Nance gave a quitclaim deed of the property covered by his land contract to the corporation of which he was president, for a stated consideration of ‘one ($1.00) dollar and other valuable consideration to him in hand paid by the said parties of the second part.’ This deed was recorded in the office of the register of deeds for Wayne county on February 16, 1926.

Whatever his plan was for financing this project and paying up the $121,494 yet due on the contract within 11 months from its date is not made clear, but it did not materialize. After default in payments, defendant herein instituted two successive statutory summary proceedings against Nance to terminate the contract before circuit court commissioners of Wayne county, in each of which hearings were had, adjudications of amounts then due on the contract made, judgments for restitution rendered, and writs issued. The commissioners' records show the first was commenced February 25, 1926, adjournment was had on the return day, and case heard April 21, 1926. Both parties were present, defendant pleaded not guilty, amount due was determined, judgment of restitution rendered, and writ therefor issued on May 22, 1926. The second case was commenced April 9, 1926, adjourned for trial on the return day, and heard on April 30, 1926; both parties were present, defendant entered his appearance and pleaded guilty, amount then due was determined, judgment of restitution rendered, and writ therefor issued on June 12, 1926.

The instant case was heard before the Wayne county circuit court in chancery on November 1, 1926, resulting in a decree dismissing plaintiff's bill. Plaintiff's grounds for reversal on appeal are stated in its counsel's brief as follows:

‘The bill was filed for the purpose of setting aside a defective foreclosure of land contract for the following reasons: (1) That the proper parties were not made party defendants. (2) That after the commencement of the proceedings for possession, in the circuit court commissioner's courts before Samuel L. May and Henry G. Nicol, moneys due the vendee were collected by the vendor to apply in payment of the vendee's obligation by virtue of this contract. (3) That the property in question was vacant and unoccupied, and therefore not within the jurisdiction of the circuit court commissioner.’

The contract involved is in its entirety a pretentious instrument, covering some 10 pages of the printed record, with numerous provisions immaterial to the issues raised here. It is said to be of the ‘Union Trust revised form.’ Apparently a printed blank form of that kind was adopted and used until exhausted, when the subject was continued by a rider of about equal length, attached to and concededly made a part of the contract by proper wording. It is also signed by the parties, with the same witnesses and date as the Union Trust part. As a whole it follows the familiar phraseology and customary provisions of an ordinary land contract, with provisions interspersed or added as the parties desired and agreed. Amongst other things it expressly specifies that:

‘If purchaser shall fail to perform this contract or any part thereof, the seller immediately after such default shall have the right to declare the same void, and retain whatever may have been paid hereon and all improvements that may have been made upon the premises, and consider and treat the purchaser as his tenant holding over without permission, and may take immediate possession of the premises, and the purchaser and each and every other occupant remove and put out.’

Adverting to plaintiff's three reasons why the alleged defective foreclosures of the contract should be set aside, the first is based on the fact that plaintiff was not made a party to the statutory proceedings before the commissioners, though an interested party by virtue of its quitclaim deed from Nance. In...