Young v. Zavitz, 57

• Decision Date: 28 December 1961
• Docket Number: No. 57,57
• Citation: 365 Mich. 354,112 N.W.2d 493
• Parties: George H. YOUNG and Meryle S. Young, his wife, Plaintiffs and Cross-Defendants-Appellants, v. Russell G. ZAVITZ and Clifford C. Wood and Florence L. Wood, his wife, Defendants and Cross-Plaintiffs-Appellees.
• Court: Michigan Supreme Court

Page 493

112 N.W.2d 493

365 Mich. 354

George H. YOUNG and Meryle S. Young, his wife, Plaintiffs and Cross-Defendants-Appellants, v. Russell G. ZAVITZ and Clifford C. Wood and Florence L. Wood,

his wife, Defendants and Cross-Plaintiffs-Appellees.

No. 57.

Supreme Court of Michigan.

Dec. 28, 1961.

Robert O'Boyle and Platt & Platt, Houghton Lake, for plaintiff and cross-defendants-appellants.

John R. Hembree, Prudenville, for defendants and cross-plaintiff-appellees.

Before the Entire Bench.

KELLY, Justice.

Plaintiffs filed a bill of complaint (September 28, 1959) to rescind a land contract on the ground of fraudulent representation, and defendants Wood filed a cross bill to foreclose the contract. Plaintiffs appeal from a decree dismissing the bill of complaint and allowing foreclosure.

Plaintiffs signed a contract (May 22, 1959) to purchase defendants Wood's Houghton Lake resort property for $31,500, with a down payment of $6,000, the balance to be paid $3,000 annually with interest.

Plaintiffs took possession of and operated the resort during the summer of 1959. Plaintiffs' letter of rescission was sent to defendants on July 30, 1959. Plaintiffs vacated and surrendered the premises on September 7, 1959.

Plaintiff Meryle S. Young testified that in April, 1959, she and her husband were interested in purchasing resort property in northern Michigan and they personally contacted defendant Zavitz, a real estate broker with his principal office located in the village of Houghton Lake; that defendant Zavitz told them that defendants' cabins were occupied during June, July and August and the deer hunting season, and that the rental rates were $75 each for the 2 lake front cottages, $70 each for 2 other cottages, and $35 for a smaller cottage, on a weekly basis; that Zavitz' statement was later confirmed in conversation with defendant Florence L. Wood; that they asked to see defendants' books but were told that the books were in Detroit and that plaintiffs made no further inquiry because they trusted defendants; that their gross income from rentals during the summer of 1959 was only $1,395 and that the rentals would have amounted to approximately $5,000 if the cottages were fully occupied for the 3 months at the rate of rentals defendants stated they had obtained in previous summers; that some previous renters of the cottages refused to pay the rental price defendants stated they had previously obtained, stating the rate was more than they had theretofore paid.

Defendant Wood testified they were never asked and had never made any representations to plaintiffs in regard to rental income or periods of occupancy or any statements regarding their books of account; that Zavitz was not their agent and was not authorized to make such representation and they were not advised by Zavitz or plaintiffs that said representations had been made.

Defendant Zavitz did not testify and there is no reference to that fact in the record or briefs.

During the summary of 1959 construction on highway M-55 made it impossible, or difficult, to enter the resort property in question.

In commenting upon this fact, the court stated:

'The court doesn't feel that there is sufficient misrepresentation of fraud in this case to rescind this land contract. The court bases its opinion on the fact that this road was torn up; that the Youngs when they went to this property on April 18th and 19th to inspect it that they allege, or claim, that it was told to them that that road would be repaired, or would be completed by June 1, 1959; it seems to me that if that claim were made to them that when they came back there on May 22, 1959 when they either had $50 deposited, or had a thousand dollars deposited that at that time, as reasonable people, that they could have determined then and there for themselves whether or not that road would be completely improved and open for business, or open for traffic.'

Proofs were not introduced in regard to defendants' earnings during the time they operated the resort. Plaintiffs did not insist that defendants' books and records be produced for inspection, either prior to purchase or during trial.

In Smith v. Taber, 362 Mich. 619, 107 N.W.2d 761, in considering plaintiff's action for rescission of a contract to purchase a summer resort business because defendant falsely represented that the annual income was $6,000, we said (p. 662, 107 N.W.2d p. 762):

'At no time prior to consummation of the purchase did plaintiff examine defendants' books and records for the resort business. He testified that he requested them but that he was not shown any of such records. He...