Wheeler v. Martin , 364 Mich. 41 ( 1961 )

364 Mich. 41 (1961) 110 N.W.2d 635

WHEELER
v.
MARTIN.

Docket No. 47, Calendar No. 48,738.

Supreme Court of Michigan.

Decided September 21, 1961.

Raymond H. Benedict, for plaintiffs.

Atkins & Drillock, for defendants.

PER CURIAM:

Plaintiffs, husband and wife, appeal from dismissal of their bill for rescission of their purchase of defendants' lumber yard business and from decree on cross bill foreclosing a mortgage and land contract executed by plaintiffs. Plaintiffs claim they were induced to enter into the transaction with defendants by fraudulent representations made by defendants and their real-estate agent.

In March of 1958, in response to a newspaper ad, plaintiffs offered defendants $12,000 for their lumber yard business, including the real estate, and $12,000 for its inventory. The fraudulent representations upon which plaintiffs rely in support of their bill for rescission are that there was an inventory worth $17,000 in the business at the time of its purchase by plaintiffs; that the lumber was kiln dried; that the roof of the lumber shed was in good condition and that the lumber yard did a good business.

None of the representations claimed to have been made, under the facts of this case, constitutes actionable fraud. Mr. Wheeler had been a carpenter and acknowledged at trial that he knew good lumber when he saw it. Before purchase he spent 3 half days examining the premises and counting the lumber, during which time he had the benefit of a written inventory. From such opportunity to examine what he sought to purchase, he should have been able to determine the value of the lumber and whether it was kiln dried, and he could have determined the condition of the tarred roof, if not from the roof itself, from the open and unplastered ceiling below it. In any event, as to the inventory alone, during plaintiffs' operation of the business, their sales totaled $5,800 and an additional $8,000 was realized at forced sale. Considering the fact that plaintiffs added only $1,100 to the value of inventory during their operation of the business and that they paid $12,000 for the inventory purchased from defendants, we conclude plaintiffs received at least as much in value as they agreed to pay. The remaining representation claimed to be fraudulent relates to the business done by the lumber yard before its purchase by plaintiffs. In plaintiffs' counsel's words, it was: "That it was nothing for a great number of people to be waiting to be waited on at the Martin lumber yard." Such a statement, even if characterized as a representation, is hardly worthy of reliance and under no circumstances could we base rescission thereon.

From our examination of the evidence produced by plaintiffs, we cannot say that the falsity of the representations made was proved, nor can we say that plaintiffs were entitled to rely thereon, plaintiffs having themselves examined the premises and the inventory with reference to which the representations were made. Smith v. Taber, 362 Mich 619, and Candler v. Heigho, 208 Mich 115, 121.

We likewise affirm the chancellor's decree of foreclosure entered on defendants' cross bill. The transaction involved in this case was consummated by plaintiffs' purchase of the real estate for $12,000 and of the personal property, including the inventory, for an additional $12,000. Purchase of the inventory was effected by plaintiffs' execution of a chattel mortgage in the full amount of the purchase price, no cash or other payment having been made. The real estate was purchased on land contract in the amount of $12,000, a promissory note in the amount of $10,000 being recited therein as down payment, the balance of $2,000 being required to be paid within a period of 6 years. The promissory note by which plaintiffs made down payment on the real estate was in turn secured by a mortgage upon real estate plaintiffs owned in the village of Peck. It is the land contract on the lumber yard and the mortgage on the Peck real estate sought by defendants' cross bill to be foreclosed.

The fact is that plaintiffs at no time subsequent to purchase made any payments, either on the land contract or on the mortgage. Indeed, from the time of this transaction in March of 1958 until May of 1959, only $2,700 had been paid by them, all of which was paid on the chattel mortgage covering the inventory. Under the circumstances, the chancellor had no choice but to order foreclosure of the land contract and real-estate mortgage.

Affirmed. Costs to defendants.

DETHMERS, C.J., and CARR, KELLY, TALBOT SMITH, BLACK, EDWARDS, KAVANAGH, and SOURIS, JJ., concurred.