Friedt v. City of Detroit

73 N.W.2d 211, 343 Mich. 610, 1955 Mich. LEXIS 350

• Court: Michigan Supreme Court
• Decided: December 1, 1955
• Docket: Calendar 46,474
• Status: Published

Opinions

Kelly, J.

The city of Detroit commenced condemnation proceedings for the purpose of slum clearance in 1947. Three lots owned by plaintiffs Glenn H. Friedt, H. E. Adelsperger, Jr., and Vincent B. Arnold, and one lot owned by United Platers, Inc., were involved in this condemnation proceedings. The United Platers, Inc., was owned by plaintiffs, and on October 11, 1949, United Platers conveyed its interest in said lot to plaintiffs, the deed being recorded October 14, 1949.

On June 14, 1950, a jury award of $140,000 was confirmed in favor of plaintiffs and United Platers, Inc., “as their interests may appear.” Defendant city treasurer, on July 26, 1950, filed an affidavit with the recorder’s court stating that funds were available to pay this award, and on the sáme date notified plaintiffs that the award would be made and paid on the following conditions:

“Before we can make payment to you it will be necessary that you furnish us with (1) a signed release, (2) a certificate of title, (3) a quitclaim deed. Payment will be made to you within 5 days after receipt of these 3 instruments properly executed to the city of Detroit.”

Plaintiffs’ first contact with the treasurer was on May 3, 1951, when their attorney made oral demand for payment on Mr. Repp, in charge of processing payment of condemnation awards. Plaintiffs’ attorney at this time informed Mr. Repp that he had with him a disclaimer of any interest in the award, executed by United Platers, Inc.

Mr. Repp asked for the 3 instruments mentioned in the treasurer’s letter of July 26, 1950. Plaintiffs’ attorney refused to furnish same and suggested that Repp contact the corporation counsel’s office. Between this date and July 31, plaintiffs’ attorney telephoned Repp and was informed by him that he had not heard from corporation counsel. On July 31, 1951, plaintiffs’ attorney contacted the treasurer’s office and was again informed that it had not heard anything from corporation counsel’s office, and that the money could not be paid until the requested instruments were furnished.

About September 1, 1951, plaintiffs’ attorney again contacted Repp and received the same information as was received on the previous visit. He then contacted Mr. Ingalls, of the corporation counsel’s office, who said that they would waive the quitclaim deed and title search, but would insist upon a signed release, said release providing that the plaintiffs “do hereby release, quitclaim and convey to said corporation, forever, the said piece or parcel of land as aforesaid, and do waive and relinquish all right of appeal of said verdict to the-Supreme Court of said State, and to [sic] waive and relinquish for their heirs, executors and administrators, all remedies or rights of action, either in law or in equity, which they may possess by reason of any informality or error of any nature in the proceedings.”

Plaintiffs’ attorney objected, stating that if at a later date the condemnation proceedings were found to be faulty his clients would have no remedy, having conveyed to the city their interest, and that his clients wished to retain that right if the city, for any reason, was not able to rely upon the condemnation award.

Discussions on this matter were held at various times between then and December, 1951. On December 31,1951, plaintiffs’ attorney offered the corporation a receipt which provided:

: “The said jury in the above-entitled matter did in their verdict and report award to the undersigned the sum of $140,000 as damages and compensation for the taking for the purpose detailed in the hearing.

“Now therefore, the undersigned hereby acknowledges payment by the city of Detroit of the sum of $140,000.”

Plaintiffs also offered corporation counsel the following disclaimer:

“United Platers, Inc., a Michigan corporation, hereby disclaims any interest or right to share in the sum of $140,000 to be paid to H. E. Adelsperger, Jr., Vincent B. Arnold and Glenn Friedt, but expressly reserves to itself and for its exclusive benefit, its rights expressed in an appeal now pending in the Supreme Court.”

Corporation counsel then agreed to waive the 3 instruments but refused to pay interest, and after a conference between corporation counsel, Repp, and plaintiffs’ attorney, the receipt and disclaimer were returned- to plaintiffs’ attorney. No further efforts were made by plaintiffs to collect judgment and interest until this petition for mandamus was filed on May 5, 1954.

The trial court, after hearing proofs, allowed interest of approximately $4,000 for 2 periods. The first period included the 63 days between December 31, 1951, and March 2, 1952. The court allowed interest for this period on the theory that it was plaintiffs’ duty to demand payment before interest would apply, and that such duty was not met by plaintiffs in conformity with the charter until December 31, 1951. The trial court further held that on January 2,1952, plaintiffs realized that the city’s position was final and it was their duty to seek a prompt decision by the court; that 2 months was ample time for plaintiffs to take such action, and that, therefore, plaintiffs were guilty of laches on March 2,1952, the expiration of the 2-months’ period.

The second period in which interest was allowed by the court was from the day suit was filed to the date of the trial court’s opinion and decree, namely: May 5, 1954, to October 8, 1954.

Plaintiffs appealed; the city of Detroit cross-appealed.

Question 1: Was a demand made as required by the charter of the city of Detroit?

The charter under title 8, eh 1, § 16, provides:

“And it shall be the duty of the treasurer to securely hold such money in the treasury for the purpose of paying for the property taken, and pay the same to the persons entitled thereto, according to the verdict of the jury, on demand, and not pay out the money for any other purpose whatever.”

Appellees rely on Connor v. State Treasurer, 333 Mich 219, and Marion v. City of Detroit, 284 Mich 476, holding that a claim for interest must be denied if plaintiffs fail to make a proper legal demand for the proper amount due. In the Connor Case this Court held (p 227):

“Connor’s claim for interest after the judgment and up to the present time should similarly be denied until proper demand is made. If Connor is correct in its contention that the award draws interest to date, it could have waited for years, refusing to accept the amount of the awards on some technicality or other, until it needed the money, in the meantime drawing 5% interest on the whole amount at the expense of the State.”

In the Marion Case, the question of demand was commented upon as follows (pp 488, 489):

“No demand was ever made until 7 months aftei the money for payment of the award was set aside, and after plaintiffs had been informed that it was available to them. The demand made by plaintiff’s counsel in September cannot be said to be a demand even as of that date, as it was not a distinct demand for the sum of money to which the party making it was then entitled. 33 CJ, p 235.

“In no event, therefore, would plaintiffs be entitled to interest on the award after February 23, 1937, when the funds for payment thereof were set aside and plaintiffs were notified to this effect.”

The record is silent as to why plaintiffs allowed a 9-month period (July 26,1950, the date of treasurer’s notification the money was available, and May 3, 1951, when plaintiffs first contacted the treasurer) to elapse without doing anything in regard to the award.

Plaintiffs seek to excuse this period of inaction on ,the theory that making a demand would constitute an idle ceremony. Supporting this position appellants cite Thal v. Detroit Board of Education, 316 Mich 351, holding that the law does not require either individuals or corporate entities to indulge in idle ceremony or demand performance of an act that would he a useless or idle gesture. The Thai Case did not involve a condemnation award but was an action by school teachers to recover unpaid salaries. The Thai Case does not here apply because the city charter requires that a demand be made.

Plaintiffs’ failure to make a demand for 9 months after receiving the treasurer’s notice cannot be excused on the grounds that the treasurer did not have the right to insist upon the conditions of payment. Therefore, the plaintiffs’ claim for interest on the award of $140,000 from July 26,1950, to October 8, 1954, is denied between July 26, 1950 (when plaintiffs received the treasurer’s notice), and May 3, 1951 (when plaintiffs first contacted the treasurer’s office).

Question 2: Did plaintiffs make a proper demand on May-3,1951?

The trial court’s opinion contains the following:

“This court would be inclined to find that a sufficient demand for payment was made by the plaintiffs in the conferences between counsel for the plaintiffs and the condemnation award clerk of the city treasurer and Mr. Ingalls on either May 3, 1951, or a date in the vicinity of September 1, 1951, or on September 7, 1951, or on September 26, 1951, or December 28, 1951 (all of these dates representing dates of conferences in 1951 between various of the attorneys for the plaintiffs and various representatives of the city of Detroit), if it were not for the fact that at none of these conferences does the testimony indicate that plaintiffs’ representatives supplied any written or satisfactory evidence that the demand was being made in conformity with the provisions of the city charter, which required the treasurer to ‘pay the same to the persons entitled thereto, according to the verdict of the jury, on demand.’ ”

There is no charter provision requiring a written demand. The record establishes that on May 3, 1951, plaintiffs made their demand. The fact that plaintiffs and the city treasurer differed as to what should be done before that demand would be met does not affect the fact that a demand was made. Plaintiffs met charter requirement as to demand on May 3, 1951.

Question 3: Did the city’s offer to pay the award under certain conditions stop the accrual of interest¶

The trial court held that while the treasurer’s notice of July 26, 1950, was a proper notification that the money was available to pay the award, that said notice provided for unlawful demands and conditions, namely, plaintiffs furnishing a signed release, a certificate of title, and a quitclaim deed.

The city became the title holder and took possession of plaintiffs’ property on July 26, 1950, when the affidavit that the funds were available for payment was filed with the recorder’s court, as provided for by the city charter. The city admits that it must pay interest from the date of the award (June Í4, 1950) to the date of the treasurer’s notice that money to pay the award was available (July 26, 1950).

The jury directed the payment of $140,000 to the 3 plaintiffs and United Platers, Inc., “as their interest may appear.”

The city was advised on May 3,1951, that plaintiffs had in their possession a written disclaimer of any rights to, or interest in, the award, signed and executed by United Platers, Inc. The quitclaim deed of United Platers, Inc., to plaintiffs was a matter of record. Under these conditions it is difficult to understand appellees’ position, as stated in their brief, that: ■ • • ' - ■

“The appellants were only 3 of the former owners named in the verdict roll; United Platers was the fourth. ■ Any and all demands made in behalf of less than all of the parties to whom the award was made payable by the jury were not legal demands under the charter.”

Appellees contend it was not the treasurer’s duty to determine who should be paid the condemnation award. The charter placed upon the treasurer the responsibilty of paying tíie money as directed by the jury as is disclosed by the following provision of the city charter:

“And it shall be the duty of the tréasurer to securely hold such money in the treasury for the purpose of paying for the property taken, and pay the same to the persons entitled thereto, according to the verdict of the jury, on demand, and not pay out the money for any other purpose whatever.”

The record sustains the trial court’s conclusion that the city imposed conditions not provided for by the charter or statute. The city treasurer’s representative, Mr. Eepp, admitted that while these conditions were generally imposed, when objections had been made in the past he had paid the award without insisting that the conditions be complied with. In the instant case the city abandoned the conditions, and the award would have been paid if plaintiffs had agreed to the city’s demand that they relinquish any right to interest. The offer to pay was a conditional offer, not required by charter or statute, and to rule otherwise would be to conclude that the city had in the past, and was willing in this case, to waive mandatory conditions required by law or by the charter.

This Court has recognized for many years the legal principle that a person making a tender, attaching conditions thereto, does so at his peril, and that when the conditions imposed exceed’ the requirements, such tender'does not put the opposite party at fault. The plaintiffs’ right to interest from May 3, 1951, when demand was made, to the date of the decree, was not estopped by the city’s conditional offer.

Question 4: Does laches bar plaintiffs’ claim for interests

In the trial court’s opinion we find at the outset the following:

“This is almost a classic case where the immovable object confronts the irresistible force.

“In this particular example the established technicalities of the procedures of a large municipal corporation encountered the legal technicalities of one of our foremost law firms.”

One of the attorneys arguing the case before this Court conceded that perhaps none of the attorneys representing plaintiffs or the city had exercised the best of judgment and that tempers were involved. ’

From January 2, 1952, the plaintiffs knew that they could only obtain interest through a court decree. Twenty-eight months passed without plaintiffs instituting action, and the record is silent as to why they allowed so much time to pass. The trial court held that plaintiffs were guilty of laches, stating:

“It is the belief of this court that where a sum of money as large as this is in dispute and interest at 5% is asserted to be running thereon, that the claimants would have a duty to seek a prompt decision by a court of competent jurisdiction.”

Appellees call attention to Yeomans v. Board of Supervisors of Ionia County, 174 Mich 451; and Supervisors of Cheboygan County v. Supervisor of the Township of Mentor, 94 Mich 386, wherein this Court established the principle that mandamus being a discretionary writ, stale claims are 'not favored. This, however, is an action at law and there is ho claim that the statute of limitations had run.

The city did not offer to pay the award and allow the court to determine the right to interest. Iii fact, the city refused plaintiffs’ suggestion on January 2, 1952, that this procedure he followed. A few. days before this, however, oh December 31, 1951, corporation counsel had approved plaintiffs’ receipt form and the United Platers’ disclaimer, and had stated that that was all that was necessary to close the deal.

Repp called attention that there was due the city 17 months’ rent at $1,000 per -month for occupancy of the condemned premises by United Platers, and their check for $17,000 was presented to the treasurer on January 2, 1952. The following from appellees’ counterstatement of facts discloses what occurred after this check was presented:

“Mr. Ingalls said that the city would not admit any liability for back interest on this award. Mr. Weaver said that he did not want to attempt to settle that question at that point, that he thought the award ought to be paid so in any event there would be no further interest run on it; they could leave to future discussion or possibly a test case the question of whether they were entitled to the interest. Ingalls .said the payment of $140,000 would be a waiver on their part of any right to interest, and Weaver said that the purpose of the letter was to prevent any such interpretation as that in the transaction. They would take the $140,000, but without prejudice to the question of interest.”

Appellees’ statement as to this discussion concludes :

. “He handed the papers back and refused to give Weaver the $140,000, so he walked out. That was the last attempt that 'Mr. Weaver made to collect the money. The discussion terminated and all papers and check for rental were returned to Weaver. The check for the rental was mailed to the Detroit housing commission later that same day and was accepted.

“Repp testified that he had no recollection of the above conversations, but would not deny that they might have occurred.”

In Campau v. City of Detroit, 225 Mich 519 (32 ALR 91), it was held that a confirmed condemnation award is a judgment and bears interest as provided by statute for money judgments.

. Detroit Trust Co. v. State Highway Commissioner, 295 Mich 449, 454, dealt with petitioner’s writ of mandamus to compel payment of an award on condemnation of property. This Court, in rejecting respondents’ claim that petitioners were barred by laches, stated:

“Respondents contend further that the doctrine of laches applies to petitioner’s writ which is brought approximately 7 years after the award was finally determined on appeal. This contention must be denied. There is no showing of a change of position of the parties which is unduly affected by the lapse of time, and further, the award when confirmed has the legal effect of a judgment and is enforceable for a period of 10 years.”

In the instant case the city failed to pay or offer to pay the liquidated and conceded amount of $140,-000, without first obtaining from plaintiffs a waiver of claim to interest. In the trial court’s opinion, after deciding that interest should be paid for approximately a 7-month period (December 31, 1951, to March 2, 1952, and May 5, 1954, to October 8, 1954), the court said:

“The writ should likewise provide for immediate payment of the principal sum, $140,000, to the plaintiff in order to stop the running of interest during the course of any subsequent appeals which may be taken by either party.”

The question before this Court is not whether appellants would have exercised better judgment if this action had been started within a reasonably short time after they knew that court action was necessary. Instead, the question is: Did they bar their right to interest by laches? We conclude they did not.

Plaintiffs’ appeal in the nature of certiorari is granted. Defendants’ cross bill is dismissed. The trial court’s order of October 8, 1954, shall be modified allowing interest at 5% for the period from May 3, 1951, to October 8, 1954.

Modified and remanded. No costs to either party.

Carr, C. J., and Butzel, Boyles, Reid, and Dethmers, JJ., concurred with Kelly, J.