Petoskey v. Home Owners' Loan Corp.

1 N.W.2d 584, 300 Mich. 391, 1942 Mich. LEXIS 632
CourtMichigan Supreme Court
DecidedJanuary 6, 1942
DocketDocket No. 74, Calendar No. 41,615.
StatusPublished
Cited by2 cases

This text of 1 N.W.2d 584 (Petoskey v. Home Owners' Loan Corp.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Petoskey v. Home Owners' Loan Corp., 1 N.W.2d 584, 300 Mich. 391, 1942 Mich. LEXIS 632 (Mich. 1942).

Opinion

North, J.

Upon hearing defendant’s motion to dismiss plaintiffs’ bill of complaint, the trial court permitted plaintiffs to amend. Thereafter defendant renewed its motion to dismiss. It was heard and granted on the ground that the amended bill of complaint did not state a cause of action. Plaintiffs have appealed. They seek relief because of two acts of defendant. One was that the foreclosure sale by defendant of plaintiffs’ mortgaged property was as two separate parcels whereas plaintiffs, possessing the rights of the mortgagors, claim it was only one parcel and should have been so sold. The other was the acceptance by defendant of the proceeds from the condemnation of part of the mortgaged property during the redemption period; which, plaintiffs claim, reinstated and put in full force and effect the mortgage involved herein.

Plaintiffs are Mary A. Schlaff, widow of Anthony Schlaff, deceased, and Viola E. Petoskey, administratrix of the estate of deceased. Mr. and Mrs. Schlaff purchased the premises herein involved in 1902. At that time they occupied a small house on the westerly portion of the lot. In 1912, they built *394 a larger home on the easterly 60 feet of the lot and occupied it. Mrs. Schlaff is still living there. The smaller residence on the westerly 4ft feet of the lot has been rented to tenants. On January 24, 1934, Mr. and Mrs. Schlaff obtained’ a mortgage loan of $13,991.21 on their premises from defendant. This mortgage covered the entire lot described as: “Lot No. five (5) Detroit Arsenal Grounds, town 2 south, range 10 east.” Mortgagors being in default, defendant foreclosed the mortgage by advertisement.. A sheriff’s sale was held December 22,1939. Notice was served on plaintiffs that the property was to be sold. Apparently attempting to comply with the statute (3 Comp. Laws 1929, § 14431 [Stat. Ann. § 27.1227]), defendant at the foreclosure sale bought in the property by means of two bids, one for the easterly portion occupied by plaintiffs’ own home, and one for the westerly portion occupied by tenants. The statute above cited*is as follows:

“If the mortgaged premises consist of distinct farms, tracts, or lots not occupied as one parcel, they shall be sold separately, and no more farms, tracts, or lots shall be sold than shall be necessary to satisfy the amount due on such mortgage at the date of the notice of sale, with interest and the costs and expenses allowed by law but if distinct lots be occupied as one parcel, they may in such case be sold together. ’ ’

The sale in two parcels is claimed to be invalid by plaintiffs. They insist that the lot is but one unit and not two. The trial court based its decision principally on the ground that pláintiffs’ allegations in their bill show the lot was used as two separate parcels. However, plaintiffs do allege that the property was but one piece; and in pleading, inconsistent allegations are not fatal. Court Rule No. 17, § 6 (1933). See 1 Searl, Michigan Pleading and *395 Practice, § 137. All facts well pleaded in a bill of complaint must be accepted as true under a motion to dismiss. Butts v. Ruthven, 292 Mich. 602. Therefore, we must assume that the property is but one piece.

The question of whether a sale of one piece of land as two parcels under foreclosure by advertisement is void is novel in this jurisdiction. It has been decided many times that if mortgaged premises consist of distinct tracts or lots they shall be sold separately, Jerome v. Coffin, 243 Mich. 324. The above-quoted statutory provision as to separate sales is for the benefit of the mortgagor. Keyes v. Sherwood, 71 Mich. 516. But in the instant case the situation is the converse of that covered by the statute. Plaintiffs herein complain of a statutory foreclosure sale of mortgaged property in two separate parcels which was mortgaged as a single parcel. Neither by the statute nor by any decision of this Court has such a sale been held ipso facto void or voidable. Plaintiffs are seeking relief in equity. They are not entitled to prevail unless some equitable ground of relief is alleged. Except plaintiffs assert in their pleadings that they have suffered damage by reason of the manner of the sale, they cannot be granted relief. One of the reasons assigned in defendant’s motion to dismiss plaintiffs’ amended bill of complaint is: “Because the amended bill of complaint sets forth no damage to plaintiff by reason of any of the acts alleged therein.” In granting the motion to dismiss, the circuit judge said: “And in any event the court is of the opinion that the plaintiff has failed to allege or demonstrate any damage resulting to it by reason of the sale in parcels.”

. Careful review of this record is convincing that the trial judge reached the correct conclusion. It clearly appears that in a practical sense the property could be and was occupied as two separate and dis *396 tinct parcels. This is true notwithstanding the allegation that certain ontbnildings such as a barn, which was destroyed prior to this suit, a shed, et cetera, located on one .of the parcels were formerly used in connection with the other parcel. While the bill of complaint contains allegations that the mortgaged premises were sold for less than the fair value, this alone would not entitle plaintiffs to relief. The least that would constitute a cause of action under plaintiffs’ theory is a proper allegation of loss to plaintiffs caused by sale in two parcels instead of in a single parcel. The bill does not contain such an allegation. In so holding, we are mindful of the following allegation in the amended bill of complaint:

“That the defendant corporation in considering [sic] the sale of the premises as aforementioned damaged the plaintiffs to the extent that they not only lost their homestead and interest in said premises but that they were damaged to the extent that no one was interested in the purchase of the above-described premises for the reason of the manner in which the foreclosure sale was conducted by the sheriff, that is to say no one considered that after the sale was conducted that anyone could receive a proper title to the premises in two parcels instead of one and that for the reason that no one believed that your plaintiffs, if they did redeem, could give proper title, no one was interested in the purchase of the above-described premises.”

On every foreclosure, except there is redemption, the mortgaged property is lost notwithstanding it may have been a homestead. That portion of the quoted allegation which sets forth that no one during the period of redemption was willing to buy the property because good title could not be given obviously is merely an allegation of a conclusion which arose from a mistaken understanding of the law. *397 Clearly either or both parcels could have been redeemed and good title restored to the mortgagors or their grantees. Defendant is not chargeable with the consequences of such an erroneous assumption as that alleged by plaintiffs.

While there may be instances where it would be injurious to a mortgagor to have a single lot sold as two separate parcels, plaintiffs here have not,alleged such an injury or damage.

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Bluebook (online)
1 N.W.2d 584, 300 Mich. 391, 1942 Mich. LEXIS 632, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petoskey-v-home-owners-loan-corp-mich-1942.