American Electrical Steel Co. v. Scarpace , 399 Mich. 306 ( 1976 )

Per Curiam.

American Electrical Steel Company, hereinafter referred to as American, brought this action in Wayne Circuit Court seeking specific performance of a land sales contract. The trial court denied relief and the Court of Appeals affirmed, Judge Gillis dissenting, 67 Mich App 189; 240 NW2d 755 (1976). In lieu of leave to appeal, pursuant to GCR 1963, 853.2(4), we reverse the Court of Appeals and remand the case to the circuit court for further proceedings in accordance with this opinion.

The defendant, Olga Scarpace, and her husband Laurence owned certain nonhomesteaded land in Taylor, Michigan, as tenants by the entireties. In 1969, Mrs. Scarpace entered into a contract with American for the sale of this land. Mrs. Scarpace signed the contract on her own behalf, and for her husband, who was ill at the time, under a power of attorney executed several months earlier. She indicated on the contract that she was signing her husband’s name under the power of attorney by adding the initials "P.A.” after his name. She showed both her real estate broker and American a document entitled "Power of Attorney” which she claimed her husband had executed. The broker advised her that the power of attorney gave her the authority to sell the jointly held land. There is no evidence that Mrs. Scarpace acted in bad faith.

American paid a deposit of $500 to the broker and, at some expense, sought and obtained a zoning variance for the property. Subsequently, however, Mrs. Scarpace refused to sell the land. She said that she meant to sell the property for the amount agreed upon when she signed the contract, but had changed her mind after learning that the property had increased in value.

Shortly after this, Laurence Scarpace died, and complete ownership of the land passed to Mrs. Scarpace. She still refused to sell the land. American then obtained the use of other land for the same purpose it had planned to use Mrs. Scar-pace’s land.

Approximately three years later, well within the statute of limitations, American brought this action for specific performance. Mrs. Scarpace defended on the theory that the power of attorney did not authorize her to sell her husband’s interest in the land; and, since the land was jointly held, her signature alone was insufficient to ratify the contract with American. The trial court accepted this theory. The Court of Appeals affirmed on the grounds that American had failed to show that it was harmed, and that its action was barred by laches.

The principle that controls this case is equitable estoppel. We have described it as follows:

"Estoppel is a bar which precludes a person from denying the truth of a fact which has in contemplation of law become settled by the act of the party himself, express or implied. If one’s conduct induces another to believe in the existence of certain facts, and the other acts thereon to his prejudice, the former is estopped to deny that the state of facts does in truth exist.” Detroit Savings Bank v Loveland, 168 Mich 163, 172; 130 NW 678 (1911).

Applying this principle to the facts of this case, we find that Mrs. Scarpace is estopped by her actions from arguing that the power of attorney under which she signed her husband’s name was invalid. She represented to American that she was empowered to sign for her husband. She signed the contract in her name and for her husband. American was led to believe that the power of attorney was valid. Mrs. Scarpace cannot now assert the contrary.

The finding by the Court of Appeals that American suffered no detriment as a result of Mrs. Scarpace’s failure to sell the land is incorrect. As Judge Gillis said in dissent:

"No citation need be given for the proposition that land is thought to be a unique commodity under our legal system. Plaintiff has a right to defendant’s land; it is harmed in not getting it. Furthermore, no testimony was taken as to plaintiff’s costs in securing the other piece of property because no one at the trial stage thought it relevant. There is no support in this record for the majority’s conclusion that plaintiff is unharmed.” 67 Mich App 189 at 197.

American suffers detriment by not getting the particular parcel of property it contracted to purchase from Mrs. Scarpace.

The Court of Appeals also held that American’s action for specific performance was barred by laches. The doctrine of laches was not raised by either party at the circuit court proceedings or on appeal. The majority opinion of the Court of Appeals improperly raised this issue sua sponte. If the defense of laches is not raised by a party in the trial court, the issue cannot be considered on appeal. Boden v Renihan, 299 Mich 226; 300 NW 53 (1941).

Reversed and remanded.

Williams, Coleman, Fitzgerald, Lindemer, and Ryan, JJ., concurred.