McArthur v. City of Cheboygan

Brooke, J. (after stating the facts). The defendant urges two grounds of reversal: First, that the complainants are not entitled to a decree by reason of their laches; second, that the contract is void by reason of the fact that the municipality, at the time it entered into the same, had no funds with which to discharge the debt created there [156] by. It is apparent that the defendant city was anxious to secure the building of a hotel which would tend to induce tourist trade which is common to the northerly cities of the State. A proposal was received by the city to the effect that such an hotel would be built if the land in question in this suit were purchased for a public park. The city thereupon entered into this contract in question. Between November 20, 1906, and January 15, 1907, the hotel proposition, which was the inducing cause for the purchase of the land, was abandoned, and thereupon the common council attempted to rescind its action of November 20th. During this time, nearly two months, the complainants had, so far as the record shows, taken no steps to carry out their part of the contract. They had tendered neither deed nor abstract to the defendant, and the record discloses no reason for their failure to do so. They became aware, through the public press, of the attempted rescission by the council at or about its date, but not until .March 5th did they undertake to perform their part of the contract they now seek to enforce. In the meantime the hotel project which constituted the principal, if not the sole, inducing cause for the purchase, had been abandoned. It is urged on the part of the defendant that it is inequitable, under these circumstances, to compel specific performance. We are unable to agree with the contention of defendant as to laches. It will be noted that the contract, enforcement of which is sought, is silent as to the time of performance. The law would, therefore, imply that the performance was intended by the parties within a reasonable time. We are asked to say that delay on the part of the complainants from November 20th to January 15th is an unreasonable delay. We cannot so hold, particularly in view of the fact that the record fails to show that the delay of the complainants in tendering performance in any way influenced the failure of the hotel project. Of course, the attempted rescission by the council on January 15, 1907, relieved complainants from the necessity of hurried action thereafter. The council by [157] that action notified complainants that defendant would not perform the contract on its part, and they were not obliged to make tender except as a prerequisite to their suit for specific performance. The second ground for reversal urged by defendant is equally untenable. The city of Cheboygan had raised by the sale of bonds, duly authorized, the sum of $25,000, “for the purpose of making public improvements in and purchasing land for park purposes for the city of Cheboygan.” Less than $1,000 of this fund was expended in the purchase and improvement of land for park purposes. It is unnecessary to determine whether the $11,173.69 transferred from this fund to the water fund on March 2, 1904, was or was not a legal transfer. Conceding its legality, upwards of $12,000 remained in the fund which was afterwards transferred to the general fund, and which was more than sufficient to cover the price of the land purchased. This last transfer was clearly an attempted diversion of the fund in part from the pioper and intended use. In contemplation of law, therefore, the money for this purpose is still in the fund, and the council must return to it so much as is necessary to carry out the contract under discussion. See Mitchell v. City of Negaunee, 113 Mich. 360 (38 L. R. A. 157). It is perhaps unfortunate that the defendant city be obliged to purchase this park at a time when the inducement which moved it to action has ceased to exist. It, however, acted through its proper officers with deliberation and certainty, and we see no good reason upon this record why it should be permitted to escape the consequences of its action. Decree affirmed. Grant, Montgomery, Moore, and McAlvay, JJ., concurred.