City Lumber Co. v. Hollands

Brooke, J. (after stating the facts). The principal objection to the decree urged on behalf of defendant is that the amount fixed by the court to be paid by defendant upon redemption includes the sum of $1,000 agreed upon between the parties as a bonus and constituting a part of the consideration of $14,158 mentioned in the contract. At the time this contract was entered into complainant held a deed of the property from the circuit court commissioner dated August 2, 1910, a quitclaim deed from A. & E. Peters dated August 12, 1910, and a warranty deed from defendant dated September 1, 1910. Defendant had failed to exercise his option to purchase under the contract of September 1, 1910, and a judgment awarding possession of the premises to complainant had been entered in the circuit court. Under these circumstances, we are of opinion that complainant could lawfully agree to sell the property to defendant for any sum which defendant was willing to pay. It was the owner of the property and entitled to its possession. The theory of defendant that the contract should be treated as a mortgage (adopted by the learned circuit judge) is, in our opinion, not borne out by the [536] admitted facts and written evidence in the case. Defendant urges this theory for the purpose of insisting upon the claim that complainant practiced usury in compelling him to pay a bonus of $1,000 to secure a conveyance. Upon this phase of the case the court below (while holding the transaction to constitute an equitable mortgage) said: “As far as the other claims are concerned, I think the settlement of January 19, 1912, was an agreement between the parties providing for a consideration moving to each one. Whether the consideration was adequate or not cuts no figure. It was a valuable consideration, and that the amount of indebtedness of Hollands to the City Lumber Company was the amount then and there agreed upon and whether that was made up of items that had no proper place therein cuts very little figure, because the value to one or the other of the parties to the agreement of the discontinuance and settlement of the various debts or litigation that was then being conducted would be difficult of ascertaining, and, as they agreed as to the amount of the indebtedness and entered into a contract, it is not for the court to set aside the settlement that they voluntarily entered into, because a mistake was made in regard to some of the items that went to make up the aggregate. I am now stating my reasons for finding that there is nothing in this litigation that could be called usurious to the extent of preventing a recovery.” The deed of September 1, 1910, from defendant to complainant and the contract of even date between complainant and defendant constituted an absolute conveyance with a lease and an option to repurchase. Stahl v. Dehn, 72 Mich. 645 (40 N. W. 922); Reed v. Bond, 96 Mich. 134 (55 N. W. 619), and cases cited. Defendant next objects to the inclusion in the decree of the sum of $4,798.38, which is secured by a note and mortgage given by complainant to Mr. Peters. Touching this item it is sufficient to say that the decree fully protects defendant’s rights. Section [537] 19 of the decree provides that, in case of redemption by defendant, complainant shall forthwith pay the Peters mortgage and deliver to said Hollands a discharge thereof. The same may be said as to the item of $306.75 for radiators in the building, payment of which item has been assumed by complainant. In fixing the amount to be paid by defendant in case of redemption, it became necessary to determine how much complainant should be allowed for insurance. The court allowed complainant to recover for insurance only to the extent necessary to protect its debt. Complainant urges that it should recover for the cost of all insurance placed by it upon the property because the contract provides that Hollands shall keep the buildings insured “by insurers and in manner and amount approved by said. first party.” We are of opinion that upon this point the court below reached a proper conclusion. Inasmuch as the decree in a mortgage foreclosure differs from a decree upon the foreclosure of a land contract in but one material respect — that involving the time limited for redemption (Jones v. Bowling, 117 Mich. 288 [75 N. W. 611]) — we see no reason why the decree of the court below should not be affirmed with the following modification. By the decree of this court a new date will be fixed after which a sale may be made. Defendant will be allowed 30 days after sale in which to redeem. Modified as above, the decree of the court below is affirmed, with costs to complainant. McAlvay, C. J., and Kuhn, Stone, Ostrander, Bird, Moore, and Steere, JJ., concurred.