Consolidated Properties, Inc. v. Henry Ford Trade School Alumni Ass'n

151 N.W.2d 884, 7 Mich. App. 383, 1967 Mich. App. LEXIS 586

• Court: Michigan Court of Appeals
• Decided: July 10, 1967
• Docket: Docket 1,535
• Status: Published

Opinion

Lesinski, C.J.

The plaintiff appeals from an order granting defendants’ motion for accelerated judgment pursuant to GCE 1963, 116, and dismissing the plaintiff’s cause of action.

The court below did not state which of the three grounds asserted in the motion constituted the basis for its decision. It is therefore incumbent upon us to search the pleadings, the exhibits, and the motion, along with the respective answers thereto, to determine the one issue before us, namely, the propriety of the granting of the motion for accelerated judgment under the facts of the instant case.

In a letter dated May 19, 1964, and addressed to “Tb whom it may concern?” the defendant Asso ciation 1 notified various real estate brokers in the greater Detroit area that it was “in a position to offer the property” here in controversy “for sale at a minimum price of not less than one million dollars ($1,000,000) net to the Henry Ford Trade School Alumni Association.” This communication was signed by one B. G. Grimes, purported thereon to be the “Beal Estate Chairman.” All purchase agreements or requests for additional information were to be directed to the said Mr. Grimes.

One of the brokers who received this notification was Carl S. Andrews, Sr., who interested Consolidated in this property. According to Consolidated’s pleadings and brief, it then made an offer for the purchase of the real estate to the Association which was not accepted.

In a letter dated May 11, 1965, counsel for the Association outlined the following information to Mr. Andrews, Consolidated’s agent:

1. That he (counsel) had examined the Association records and was satisfied that there was proper authorization for a sale of the property and that if a sale were in accord with this authorization, no further membership action would be necessary.

2. That there was an existing question as to whether legal fees resulting from the hiring of special counsel by the Association in connection with the proposed sale were “a cost involved in closing the transaction” which must be paid by the buyer. Counsel stated that it “would be unwise to leave it [this question] outstanding”, and suggested some alternatives for its resolution.

3. That the purchaser might not wish to assume the burden of the stock of Bonnie Brook, Inc., as included in the assets to be sold.

In a letter dated June 3, 1965, Consolidated’s counsel informed Mr. Andrews that “Mr. Korchak’s offer” 2 had been accepted by the board of the Association “subject to one exception and some matters of clarification” which he then proceeded to set forth.

Consolidated alleges that the Association’s then attorney prepared an offer in accordance with the provisions of his letters discussed above which were signed by the Association’s officers and which are now in its possession.

On the basis of the above facts and documents, Consolidated brought an action whereby it sought to have the court below order either a mandatory injunction compelling the Association to execute the offer, or in lieu thereof, that the court enter a judgment that certain of the exhibits before it constitute an offer and acceptance and that the judgment order be recorded as a judgment with the like effect of duly executed documents, or other relief.

The Association’s motion for accelerated judgment asserted that the court lacked jurisdiction for three reasons. 3 These were alleged to be that the claim was barred by the statute of frauds; that the court could not compel specific performance because of lack of mutuality of obligation and remedy under facts set forth in the plaintiff’s complaint and pleadings; and that the complaint and alleged listing offer relied on by the plaintiff are illegal pursuant to the rules and regulations of the Michigan corporation and securities commission, real estate division.

GrCR 1963, 116.1(5), permits a party to demand that judgment be entered dismissing a claim asserted against it on the ground that said claim is barred by the statute of frauds. This was the first of the three reasons set forth in the Association’s motion. The applicable statutory provision is CL 1948, § 566.108 (Stat Ann 1953 Rev § 26.908), 4 which requires a memorandum signed by the vendor. No such memorandum is before us. Consolidated alleges that the documents discussed above constitute an offer, that the statute requires no memorandum of acceptance, and concludes that under the authority of Michigan case law it (Consolidated) has accepted the offer.

Assuming, arguendo, that some of the documents do constitute an offer, and that the statute requires no memorandum of acceptance, it would require mental gymnastics to conclude that Consolidated— which made the offer — had the power, as well, to do the accepting thereof, without finding a new offer— this one from the Association to Consolidated.

To recapitulate, it is clear that the initial communication was a notice (not an offer) from the Association that certain property was available for sale for a certain price. It is also apparent that Consolidated made an offer which all admit was refused; and. that further negotiations between the parties ensued.

When Consolidated speaks of the documents which constitute an offer, it has reference to the initial offer of Consolidated (a copy of which is an exhibit) and the letters from the Association’s attorney. Consolidated alleges that an agreement embodying the contents of the above documents was then prepared by the attorney pursuant to the Association’s authorization therefor and that named officers of the Association were instructed to execute the necessary papers. Consolidated alleges that it has reason to believe that one of these officers executed the document, and that it has been prevented from accepting the offer by the attorney who refused to tender the papers encompassing this offer. Consolidated states that by bringing action prior to the withdrawal of the attorney’s authority, it has accepted the offer. The relief sought and denied below is thus clarified.

Consolidated cites this Court to case law which is of no precedential aid to it. 5 The statute of frauds is not overcome where there is no memorandum signed by the vendor.

If the theory is that the offer was made by Consolidated, then there is no acceptance by the Association in the documents presented this Court. The counsel’s communications refer to the offer as being made by Consolidated’s president and, until the various questions raised in those communications wore resolved and the agreement so resolving them was signed by the vendor or his authorized agent, there was not a sufficient memorandum to satisfy the statute of frauds.

If the other theory asserted by Consolidated is taken, and we assume that an offer was prepared by the Association pursuant to the initial offer by Consolidated as amended by the changes suggested in counsel’s letters, then it is Consolidated’s position that the only statute of frauds question is whether the attorney had authority to act for the Association and it suggests on appeal that the lower court erred in its failure to utilize GrCR 1963, 116.6, 6 as mentioned in a supplemental affidavit filed in opposition to the motion for accelerated judgment, to cause evidence of the attorney’s authority to be brought into court.

We cannot agree. If we assume that the offeror is now the Association, the authority of the attorney to make an offer, and even its preparation for submission to the offeree, are not relevant. It is not alleged that such an offer was ever tendered to Consolidated. It is hornbook law that an offer must be communicated. Without this communication there is no offer for the potential offeree to accept or for this Court to consider.

The alleged agreement for which Consolidated seeks judicial enforcement is within the mischief sought to he prevented by the statute of frauds.

Since the accelerated judgment could properly have been granted on the ground that the claim was barred by the statute of frauds, we need not discuss the merits of the other two grounds which were a part of defendant’s motion for accelerated judgment.

Affirmed. Costs to appellees.

Fitzgerald and J. H. Gtllis, JJ., concurred.

1 The defendant, Henry Pord Trade School Alumni Association, hereinafter will be referred to as the Association, and the plaintiff, Consolidated Properties, Inc., will be referred to as Consolidated.

2 Meyer Korehak is president of Consolidated.

3 We note that the choice of language, “lack of jurisdiction,” was technically incorrect; however, it is clear from a reading of the motion that one of the grounds relied upon was that covered by GOB 1963, 116,1(5), as will be discussed infra.

4 “Every eontraet for the leasing for a longer period than 1 year, or for the sale of any lands, or any interest in lands, shall be void, unless the contract, or some note or memorandum thereof be in writing, and signed by the party by whom the lease or sale is to be made, or by some person thereunto by him lawfully authorized in writing: Provided, That whenever any lands or interest in lands shall be sold at public auction and the auctioneer or the elerk of the auction at the time of the sale enters in a sale book a memorandum specifying the description and price of the land sold and the name of the purchaser, such memorandum, together with the auction bills, catalog or written or printed notice of sale containing the name of the person on whose account the sale is made and the terms of sale, shall be deemed a memorandum of the contract of sale within the ineaning of this seetipp,”

5 In White v. Evangelical Lutheran Salem Church (1927), 239 Mich 216, the Court held that the vendee’s parol acceptance of an agreement signed by the vendor made a binding contract between the parties.

In Frischkorn v. Fitzgerald (1921), 215 Mich 106, the Court affirmed a decree of specific performance of a 90-day option contract which was in writing and signed by the parties thereto, where, upon refusal of the defendant to perform and, within the 90-day period, the plaintiff commenced an action, paid the down payment into court, and tendered a note and mortgage as provided in the contract with a written statement that he was ready to sign same when a deed was made to him.

Neither a White nor a Frischlcorn situation is before us.

6 “When Affidavits are Unavailable. Either party may state in his affidavit that he cannot present the material facts essential to justify his position because such faets are known only to persons whose affidavits he cannot procure.

“The affidavit shall name such persons and state why their testimony cannot be procured, together with a belief and reasons therefor as to the nature of their probable testimony. Thereupon the eourt may make such order as may be just, either denying the motion or ordering a continuance to permit the affidavit to be supported by further affidavits to be obtained, or depositions to be taken, or answers- to interrogatories to be furnished, or discovery to be had.”