Roberts v. Rubin

J. H. Gillis, J. Plaintiffs brought an action to foreclose a land contract, the purchaser’s interest of which was allegedly held by defendant by way of assignment. Plaintiffs alleged that defendant defaulted in the payment of sufficient monthly sums to cover principal, interest, and tax escrow deposits as called for by the contract. Defendant answered that the default was not his but plaintiffs’ in that plaintiffs had defaulted in their mortgage payments and payments for taxes on the property. Thereupon defendant counterclaimed for rescission. Plaintiffs admitted the defaults but maintained that they were precipitated by the default of defendant. There was disagreement by the parties regarding the balance due on the land contract. The trial judge resolved the issue in favor of plaintiffs and determined further that defendant was first to default. Judgment was entered in favor of plaintiffs on their [654] complaint to foreclose the land contract and against defendant on his counterclaim to rescind. Defendant was ordered to pay the balance of tbe debt and, failing such payment, it was ordered that tbe property be sold with defendant adjudged personally liable for any deficiency. Defendant failed to pay and tbe property was in fact sold. On appeal, tbe defendant urges that there was no factual support for tbe judgment. After a careful study of tbe record, we are convinced that there was sufficient evidence to support tbe findings by tbe trial judge. Tbe one issue defendant raises on appeal which, in our opinion, deserves further consideration is tbe question of tbe basis of tbe personal liability of defendant for tbe deficiency. Before defendant can be held personally liable, it must be shown that defendant, as an assignee of tbe purchaser’s interest in tbe land contract, expressly assumed tbe obligation. Winsor v. Ludington (1889), 77 Mich 215; McCurdy v. Van Os (1939), 290 Mich 492. If defendant is not personally liable for tbe debt, a deficiency judgment against him was improper. Tbe first assignment to defendant was by tbe purchaser and dated April 4, 1951. Tbe assignment was of an undivided 7/10 interest in tbe land contract and indicated a balance owing upon tbe contract of $172,500. The standard clause calling for tbe assignee to assume and agree to pay tbe balance was crossed out. A similar assignment was made to Mr. Arthur Gr. Rosser of an undivided 15/100 interest in tbe land contract. The balance was indicated and tbe assumption clause was crossed out. Tbe remaining 15/100 interest was presumably retained by tbe original purchaser. In their complaint, plaintiffs alleged that tbe entire vendee’s interest was assigned to defendant and that defendant assumed and agreed to pay tbe debt by virtue of an assignment dated April 28, 1951. [655] Attached to the complaint ivas an alleged copy of that assignment as it appeared in the Wayne county records. The supposed copy, however, was dated April 28, 1954 and purported to cover the entire purchaser’s interest. No balance owing on the contract was shown and the assumption clause was not crossed out. In his answer, defendant admitted that he bought the purchaser’s interest in the land contract having a balance of $172,500 and that on April 28, 1951, an assignment of the purchaser’s interest was executed to him. In answer to one of plaintiffs’ pre-trial interrogatories, defendant replied: “I began negotiating to acquire the vendees interest on April 4, 1951 and obtained an assignment from Clarence Stevenson and Mable [sic] Stevenson on August 5, 1951, but apparently said assignment was misplaced and I received a duplicate on April 28, 1954.” On direct examination defendant reiterated that the assignment of April 28, 1954 was only intended to be a duplicate of the assignment of April 4, 1951 which he claimed he had lost. As noted above, however, the two assignments were substantially different. And on cross-examination defendant imputed an entirely different meaning to the later assignment: “Q. You got more than one assignment from Stevenson, didn’t you? “A. Yes. “Q. What is the correct date; is it 1954, or 1951? “A. 1951. I think the 1954 assignment covers the balance of his interest.” As to this issue of whether defendant is personally liable to plaintiffs for a deficiency, the record lacks sufficient evidence to establish with certainty to [656] what extent, if any, defendant expressly assumed and agreed to pay the debt. Moreover, we are not directed to any finding of the trial judge on this point. We therefore remand to the trial court to make such a finding pursuant to G-CR 1963, 517, either based on the present record or by the taking of additional testimony. This Court shall retain jurisdiction until the final outcome shall be determined. Costs to abide the proceedings on remand. Quinn, P. J., and Holbrook, J., concurred.